[Newsletter] Declining Birthrates: A Competitive Challenge for Businesses in Asia

3 min read

I hope this newsletter finds you well.

As you know, Asia is facing a demographic crisis. The region's birthrates are declining, and this is having a major impact on businesses.

In this newsletter, I will discuss the implications of declining birth rates for businesses in Asia. I will also share some tips on how businesses can adapt to this changing demographic landscape.

The Impact of Declining Birthrates on Businesses

Data and statistics:

  • According to the United Nations, the average fertility rate in Asia has declined from 4.9 children per woman in 1960 to 2.1 children per woman in 2020.
  • This decline is expected to continue, with the average fertility rate projected to fall to 1.7 children per woman by 2050.
  • This means that the number of people entering the workforce in Asia will decline, while the number of people retiring will increase.
  • Labor shortages could make it hard to find and retain qualified employees.
  • It could also lead to increased costs for businesses, as they may need to pay higher wages to attract and retain employees.

Shifting consumer demand:

  • As the population ages, there will be a shift in consumer demand toward products and services that appeal to older people.
  • This could include products and services for healthcare, such as nursing homes, long-term care, and adult day care, retirement planning, and leisure activities.
  • Businesses will need to adapt their product offerings to meet the needs of this changing demographic.

Increased government spending:

  • Declining birthrates will put a strain on government finances.
  • This is because there will be fewer taxpayers to support the social safety net, such as pensions and healthcare.
  • Businesses may need to pay higher taxes to help offset the cost of this increased government spending.

How Businesses Can Adapt to Declining Birthrates


  • A study by the NLI Research Institute found that businesses in Asia that have adapted to declining birthrates are more likely to be profitable and sustainable.
  • The study found that these businesses are more likely to invest in automation and other labor-saving technologies, and to redesign their products and services to appeal to older consumers.

Tips for businesses:

  • Invest in automation, such as robots, self-checkout machines, chatbots, and other labor-saving technologies.
  • Redesign their products and services to appeal to older consumers.
  • Expand into new markets, such as countries with younger populations.
  • Partner with other businesses to share resources and expertise.
  • Focus on employee retention by offering competitive salaries and benefits, as well as opportunities for career development.
  • Create a flexible work environment that allows employees to work from home or flextime hours.
  • Invest in employee training and development to keep employees up to date on the latest skills and technologies.
  • Promote a culture of diversity and inclusion to attract and retain a diverse workforce.

Chinese Invade Japan for the First Time in Three Years

While Japan’s Prime Minister Kishida was in the US for a summit with Korea and the US, the Chinese were preparing an invasion of the Japanese Isles. Yicai Global, a Chinese media site in English, reported on the first Chinese group tour to land in Japan since the pandemic cut off travel in 2020. Group tour travel to Japan from China was reinstated on August 10, and air tickets to popular destinations in Japan sold out the same day.

On the same day, Beijing allowed travel to South Korea, Australia, and the United States. There has been some question as to how much demand for travel there will end up being to Korea and Japan, given the hiatus, the weak economy in China, and geopolitical rumblings, but if the first group’s arrival is any indication, pent-up demand is high.

According to numbers from the Japan National Tourism Organization, some 10.7 million tourists traveled to Japan in the first half, of which 600,000 were from mainland China. This is small compared to 2019, when Japan received 31.8 million tourists, of which 30 percent came from mainland China, but the fact that 310,000 tourists came from China in July alone, it is easy to see the ramp up.

Having said that, ramping up won’t be so easy. ANA and Japan Airlines only served China with 35% and 55% of the flights available, respectively, in 2019.

In conclusion, declining birth rates are a major challenge for businesses in Asia. However, by taking steps to adapt to this changing demographic landscape, businesses can position themselves for success in the years to come.

If you are a business leader in Asia, I encourage you to take the time to learn more about the impact of declining birth rates on your industry. By understanding the challenges and opportunities, you can make informed decisions about your business's future.

I also encourage you to share this article with your colleagues and network. Together, we can help to raise awareness of this important issue and build a more sustainable future for businesses in Asia.

Subscribe to this newsletter here

Article originally published in Steve's LinkedIn Newsletter HR Asia August 21, 2023

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