Business Case for Sustainability: Reason #1

 

(This series is about making the business case for sustainability).

REASON #1: GROWING POPULATION

The world’s growing population is one of the drivers – if not the reason – that tilts the balance of economic power from the West to the East (Asia). All other reasons for sustainability is linked to population growth.

It is estimated that the world’s population will reach 9 billion people by 2050. More than half of the population will be living in urban cities. In 2010, 50.5 percent or 3.5 billion people are living in cities. Northern America, Latin America and the Carribean, Europe and Oceania are highly urbanized, with proportions ranging from 70 percent in Oceania to 82 percent in Northern America.

Cities vs. rural

By contrast, Asia and Africa remains mostly rural with just 40 to 42 percent of the population living in urban cities. Population growth expected to rise reaching to a level of proportion urban of 65 percent in Africa and 65 percent in Asia.

According to McKinsey Quarterly, each week, nearly one-and-a-half million of people move to cities, almost all in developing markets. More people are working in urban jobs away from the traditional agrarian economies.

World Urbanization trend in 2009

World_urbanization_un_population_2009

World Urbanization projected for 2025

World_urbanization_un_population_2025

With growing population comes demand for better urban infrastructure.

This migration trend from rural areas to cities, affect the economic output that increase labor productivity, which then contributed – in the process – to the growing sector of  manufacturing and service for countries in the emerging markets.

Furthermore, increasing population in emerging markets affect the balance of supply and demand for natural resources – water, food, energy – and products in the world. We’re competing for the same resources we’re drawing from: the earth.

How_many_earths_do_we_use_carbon_ecological_footprint

There’s only one earth that we are drawing supply of natural resources from. We’re depleting resources faster than we can grow them. If it continues at the pace we’re in, by 2050, we will need 2.3 earth.

This changing pattern in the world’s consumption will disrupt business models, consumers, pricing and other aspect of business. Doing business-as-usual will not help companies to stay sustainable tomorrow.

So, start rethinking.

images: United Nations, Dept. of Economic and Social Affairs, Global Footprint Network

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Author: Dewita

Co-founder Ecotwist Labs.

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