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Insights from JMR

Japan's population goes south --
Just 67 million forecast by year 2100

Population trends are of prime importance to marketers of mass-market consumer goods -- it is hard to grow profits when there are fewer potential buyers. Not so long ago, the worry in Japan was about population overcrowding. Read about how the picture is inexorably changing.

1. First decline in population in 100 years

Japan is becoming a society with a declining population. The population of Japan in 2005 is estimated at 127 million people. But it is now clear that Japan's population decline is 1 to 2 years ahead of earlier forecasts. The population decrease and the low birthrate will have a large impact on the pension system and economic factors, such as consumer consumption. Worst case estimates based on the current trend put the population at less than 67 million in 100 years from now. However, this dire projection is only one of several possible scenarios that could play out. (See the chart below with the range of forecasts).

Population forecasts for year 2100

2. Population growth was a big concern -- no longer the case in Japan

About 110 yeas ago in 1895, when Japan had just started to modernize, the biggest problem of the era was not population decrease but increase. The famous social scholar Tokutomi Sohou forecasted the rapid growth pattern saying, "In the past several hundred years, Japan's population has increased, but in the next couple of hundred years, there will be an explosion in population growth." Japan's population at that time was just under 40 million while the annual population growth rate was 1.1%. Based on this, officials of that era projected that 85 years later in 1978, Japan's population would climb to 112.3 million. The forecast was uncannily accurate.

In the Meiji era (1868-1912), living space for 2 people was equivalent to 6 tatami mats (19.8 sq. meters; 213 sq. feet), a very tight allocation by Western standards. To keep pace with even this minimal requirement of 213 sq. feet-per-2-person family, based on projected population growth, meant Japan would need an annual addition of 4,000 sq. kilometers of living space. In scholar Sohou's view, this meant that if Japan didn't double its national territory in 60 years, the country will be "too tight" to accommodate its people. Anxiety over this issue drove some Japanese to emigrate abroad and was one of the factors behind its military seeking to expand Japan's territory. So, while Tokutomi Sohou's overall population forecasts were on the mark, the details turned out a bit differently: Fortunately, his calculation that a citizen of Japan would be forced to live in a mere 35 sq. ft. space (6 persons per 213 sq. feet, 6 mat room) did not materialize. So after a run of several hundred years, over the recent 110 years, the expansion of Japan's population has come to a halt.

3. Meanwhile, worldwide population grows apace

Among 179 countries with data, only 23 are faced with the problem of a population decline. The other countries must deal with the troubling problem of rampant population growth. The world's population is estimated at some 6.4 billion people, expanding at 1.34% per year. The lack of resources, such as food and energy, to support this growing population is a vexing global issue.
Consider the population of China, the world's largest. Over a 2,000 year span of history, its people have represented anywhere from one-third to one-fifth of the world's population. So, on average, the Chinese have accounted for one-quarter of the humanity. Based on these numbers, China, thus viewed, exceeds the maxim of "one race, one nation." On the other hand, Japanese, even when counted at the current population peak level, account for only one-fiftieth of the world's population. Not to be left behind, India is expected to outstrip China in population within this century.

Japan, a representative of the world's developed nations, has arrived at a turning point after a 100 years transition period in population trends. Social planners as well as marketers of consumer goods will no doubt debate whether the population decline is a social problem or a new opportunity. In any case, viewing the world population explosion from the vantage point of Japan's population decline should give social planners a different, and perhaps hopeful, view of the world's population situation.

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