Trends across the 25 economies are alarming. An equilibrium in supply and demand is rapidly becoming the exception, not the norm. Between 2020 and 2030, the consultants project significant worldwide labour-force imbalances – shortfalls, in particular. One significant implication is the potential aggregate value of GDP squandered, because either these nations cannot fill the jobs available or they cannot create enough jobs for the workers they have. This loss represents a stunning 10 trillion dollar —around 60 per cent of the GDP of the United States and more than 10 per cent of total world GDP.

The impact on Germany for example will be severe. BCG calculated that Germany’s labor supply will shrink from roughly 43 million people today to 37 million in 2030. The consultants compared this supply picture with two labour-demand scenarios: the first assumes that labour productivity and targeted GDP will continue at the same rate of growth in the future as in the past 10 years; the second assumes that labour productivity and targeted GDP will match that of the past 20 years. In each case, the supply of Germany’s labour in 2030 falls short of demand by 8.4 million to 10 million people. The supply and demand curves will intersect – in effect, signalling full employment – as early as 2015. Remedies could be: Ramping up productivity through technological investment and innovation, education initiatives, increasing the labour force participation rate of women and the elderly, changing immigration policy, increasing the number of hours each person works per year.

Contrasting to that, the US will experience a surplus. Again, two sets of GDP and productivity growth rates for the past 10 and 20 years were applied. In each scenario, the supply of labour in 2030 will exceed demand. In the best case supply will exceed demand by at least 7.4 million people.

The US must find ways to better utilize its workforce as well as increase its economic activity – for example, by repatriating much of the manufacturing it outsourced in recent decades. Also improvements in training and education are needed to produce workers with skills and education that match the need. More generally, the U.S. must do a better job of encouraging entrepreneurialism.

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