Canada is not the only country watching the deep end of its HR pool evaporate.
China, that seemingly inexhaustible land of cheap labour, is on a similar drought watch.
But consistent with anything involving China, its manpower squeeze will be on an epic scale. And its repercussions will rattle windows of executive offices around the globe. The rattling will be especially loud in the boardrooms of Canadian companies, because labour and manufacturing competition from the Asian giant is about to be ratcheted up several notches.
Consider, for example, some charts from the merry band of data collectors and analysts down at Vancouver’s Urban Futures Institute (UFI). Their fingers are on the pulse of what’s happening now, but more importantly they’re on what will be happening several years down the road.
Head UFI data man, demographics buff and former Business in Vancouver columnist David Baxter has been analyzing business and human resource demographics for more than 40 years.
Not surprising then that he’s become somewhat of an international celebrity in the numbers game. Gets invites from countries all over the globe to roll out UFI insights, charts and statistical predictions for government bureaucrats and deep-thinking decision-makers.
Baxter’s big in China.
Business and political leaders there see a lot of value in UFI forecasts. Its numbers, for instance, show that keeping the country’s economic engines humming and its increasingly affluent populace pulling in the same direction on the productivity rope is going to require some mammoth policy retooling. A country that has spent much of the past 100 years mired in political turmoil and abject poverty has a rare appreciation of the values of a harmonious populace.
As Baxter points out, “From a policy perspective [China has] an enormous desire to avoid internal conflict.”
That, he adds, requires continuing to make lives better and raise standards of living. But UFI charts show challenges dead ahead in the form of aforementioned human resources deficit seeded by the one-child policy China initiated in the late 1970s.
As Baxter’s data shows:
- the number of children in China under the age of 15 will continue a decline that began in that demographic in 1975;
- the number of people in China of working age (15 to 64) will peak at about a billion in 2015 and decline thereafter; and
- the growth of the 65-plus seniors population will accelerate over the next three decades.
Too bad for China, say you?
Not so simple.
With a shrinking workforce, China must improve the skills and productivity of its populace if it hopes to maintain its economic growth and that all-important domestic harmony.That, as Baxter says, means Chinese companies must increasingly become international players: makers of their own brands, not just manufacturers of other companies’ brands. That’s already well underway.
Baxter points out that a decade ago there were next to no Chinese construction companies that generated international earnings.
“Now in the top 100 of international construction firms, 15 are Chinese and 14 of those moved up the list over the last two years.”
The good news for Canada is that China, being resource-poor like Japan, needs natural resources. But Canadian business needs to appreciate the opportunity in that equation and adjust its approach to the Chinese market accordingly because the competitive realities from the Chinese demographic sea changes are here to stay.
As Baxter says: “[China is] going to be markets for our stuff, so we have to approach them with a level of sophistication that we’re not doing now.”