Why shrinking populations may be no bad thing ... FATHER, mother and two children: surely the perfect family size. For those concerned, it is neither too big nor too small. For the national economy, it ensures that two new workers will replace the parents in the labour force. And eventually the children will have children of their own and keep the population stable. ... For that happy state to be achieved, the “total fertility rate” (a measure used by demographers for the number of children a woman is likely to have during her childbearing years) needs to be above two: around 2.1 in the rich world and more in poorer countries, because some children, particularly in the developing world, die before adulthood. For many years the United Nations’ population forecasts—the gold standard in the demography business—have assumed that, in the long run, fertility the world over would converge on the replacement level and populations would stabilise. But fertility rates everywhere have been declining for decades. Even in Africa, where large families are still the norm, the number of children per woman in 2010-15 is forecast to fall to 4.7, compared with 5.7 in 1990-95. Global average fertility is already down to about 2.5.

The developed world’s workforce will start to decline next year, threatening future global growth ... Ever since the global financial crisis, economists have groped for reasons to explain why growth in the U.S. and abroad has repeatedly disappointed, citing everything from fiscal austerity to the euro meltdown. They are now coming to realize that one of the stiffest headwinds is also one of the hardest to overcome: demographics. ... For the first time since 1950, their combined working-age population will decline, according to United Nations projections, and by 2050 it will shrink 5%. The ranks of workers will also fall in key emerging markets, such as China and Russia. At the same time the share of these countries’ population over 65 will skyrocket. ... reflects two long-established trends: lengthening lifespans and declining fertility. Yet many of the economic consequences are only now apparent. Simply put, companies are running out of workers, customers or both. In either case, economic growth suffers. As a population ages, what people buy also changes, shifting more demand toward services such as health care and away from durable goods such as cars. ... Demographic forces are assumed to be slow-moving and predictable. By historical standards, though, these aren’t ... it took 80 years for the U.S. median age to rise seven years, to 30, by 1980, and just 34 more to climb another eight, to 38. ... There is no simple answer for how business and government should cope with these changes, since each country is aging at different rates, for different reasons and with different degrees of preparedness.

Like the population, the business sector of the U.S. economy is aging. Our research shows a secular increase in the share of economic activity occurring in older firms—a trend that has occurred in every state and metropolitan area, in every firm size category, and in each broad industrial sector. ... The share of firms aged 16 years or more was 23 percent in 1992, but leaped to 34 percent by 2011—an increase of 50 percent in two decades. The share of private-sector workers employed in these mature firms increased from 60 percent to 72 percent during the same period. ... Perhaps most startling, we find that employment and firm shares declined for every other firm age group during this period. We explore three potential contributing factors driving the increasing share of economic activity occurring in older firms, and find that a secular decline in entrepreneurship is playing a major role. We also believe that increasing early-stage firm failure rates might be a growing factor. ... We are unable to find strong evidence of a direct link between business consolidation and an aging firm structure. Though we document a clear rise in consolidation during the last few decades, it doesn’t appear to be a major contributor to business aging directly—which has been occurring across all firm size classes, and the most in the smallest of businesses. ...This leaves some questions unanswered, but it clearly establishes that whatever the reason, it has become increasingly advantageous to be an incumbent, particularly an entrenched one, and less advantageous to be a new entrant. ... The trends described here raise some cause for concern in our view. Holding all factors constant, we’d expect an economy with greater concentration in older firms and less in younger firms to exhibit lower productivity, potentially less innovation, and possibly fewer new jobs created than would otherwise be the case.

Let us say it plainly: Monsanto is almost surely the most vilified company on the planet. To its diehard critics it embodies all that is wrong with big, industrial agriculture—the corporatization of farming, the decline of smallholders, the excessive use of chemicals, a lack of transparency, and, of course, the big one: the entry of genetically modified organisms into our food supply. The tri-letter acronym GMO has become a four-letter word to millions of people, from earnest middle-schoolers to purist Whole Foods shoppers. ... The United Nations’ Food and Agriculture Organization estimates that we must double the current level of food production to adequately feed a population predicted to hit 9.7 billion by 2050—and we’ll have to do it on less land (much of it scarce of water), using fewer resources. ... Historically, Monsanto has tried to increase farm yields through advancements in seed technology alone. Grant calls this “hubris”: “Twenty years ago,” he says, “we thought biotech was going to be the panacea.” In the past half-decade the company has begun to look beyond seed for answers. ... Breeding better seed has contributed to a more than 1% annual increase in corn yields, experts say. Biologists, for instance, have created corn plants that can be clustered closer together, meaning there can be more stalks per acre. Still, that yearly growth rate would leave the U.S. average below 200 bushels by the end of the decade—far from Hula’s corn bonanza and nowhere near enough to feed the planet. ... Combined, those seeds now fill some 400 million acres around the globe. That’s a fraction of the nearly 4 billion acres of land the UN estimates is being cultivated. Climate Corp.’s chief technology officer Mark Young doubts that that Monsanto could ever get to a billion-acre footprint just by being a seed company, “but as a decision-based company, it seems to have a really good shot.” Monsanto, for example, doesn’t sell grape seeds, but it could some day advise grape growers on how to increase their yields.