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Labor market study forecasts a decade of instability

A rapidly growing labor shortage, massive investments in automation and digitization, increasing regulation and rising taxes - the recent study by Bain & Company predicts eventful 2020s.

28 Jul. 2018
Labor market study forecasts a decade of instability (Chart: Bain & Company)

In its study „Labor 2030: The Collision of Demographics, Automation and Inequality“ , the consulting firm Bain & Company sees "a storm" on the horizon. From 2020 onwards, the management consultants see a rapidly aging population clash with an unprecedented technology boom and increasing inequality. As a result, a long-lasting phase of massive economic and political upheaval is expected to set in. Social upheaval also poses significant risks for companies: governments may respond with stricter regulation of markets, tighter antitrust rules or higher taxes.

The study expects the middle class to erode towards the end of the 2020s. The associated fall in demand and a simultaneously expected decline in investments could lead directly into a recession. The management consultants do, however, see good opportunities for companies whose product portfolio covers a broader socio-economic spectrum. "Relying exclusively on demand from a relatively wealthy middle class will no longer suffice," says Walter Sinn , Head of Bain & Company in Germany.