The world is entering a new economic era where demographic and technological forces are reshaping the foundations of growth. According to the latest report from the Pictet Research Institute, titled Demographics and Technology, the twin trends of population ageing and declining birth rates in advanced economies will profoundly redefine global productivity and investment patterns.
The End of the Demographic Dividend
The data leaves little room for doubt: the working-age population is shrinking across most developed nations. By 2050, countries such as China, Japan, and much of Europe will face significant declines in labor supply, while fertility rates continue to fall. Although immigration may offset part of this decline in places like Canada and the United States, the so-called “demographic dividend” has effectively run its course.
This demographic shift is already reshaping consumer behavior. Spending is moving toward housing, healthcare, and food, and away from transport, clothing, and leisure — sectors that are essential yet increasingly ripe for automation.
Automation and Artificial Intelligence: The New Growth Engines
As the labor pool tightens, technology is stepping in. Automation and artificial intelligence (AI) are emerging as the next drivers of productivity and resilience.
Japan — an early victim of demographic pressures — has already transitioned from substitution (replacing labor) to productivity (enhancing efficiency). Other economies in Europe and Asia are still catching up.
According to the Pictet Research Institute, if adoption continues, AI alone could add between 0.4% and 1.5% to annual GDP growth in advanced economies by the 2030s.
“Aging economies have a choice: do nothing and decline, or reinvent themselves through technology,” said Maria Vassalou, Head of the Pictet Research Institute. “What we are witnessing is not merely a demographic transition, but a fundamental redefinition of the economic structure.”
The Winners of the Transformation
The sectors best positioned to thrive in this new era are those that cater to the needs of an ageing population: smart housing, connected healthcare, medical devices, pharmaceuticals, and automated food production.
The report urges investors to look beyond traditional sector classifications and instead build portfolios around themes aligned with demographic and technological shifts.
Companies that successfully integrate AI and robotics while serving older consumers will not only grow faster but also strengthen their long-term resilience.
Infrastructure: The Decisive Factor
Yet innovation alone is not enough. The quality of digital infrastructure — including cloud capacity, data systems, workforce training, and regulatory frameworks — will determine which economies can turn demographic headwinds into competitive advantages.
Japan, which rapidly embraced automation, has already moved from labor substitution to productivity gains. By contrast, underinvestment in enabling technologies has left parts of Europe lagging behind.
For investors, the message is clear: focus on regions and companies with the institutional capacity to adopt and scale automation and AI. Investment in digital infrastructure and human capital will be key indicators of future strength.
Toward a More Resilient Global Economy
Ultimately, the Pictet Research Institute advocates for an investment approach grounded in structural resilience — the ability of economies to adapt to demographic and technological change.
In a world where growth depends less on the quantity of labor and more on the quality of innovation, the winners will be those that combine strategic foresight, robust infrastructure, and technological adoption.
