If you own, or manage a business in Thailand, particularly in manufacturing, and you’re not concerned about dropping birth rates, you’re either living under a rock or have your head buried in the sand.
Now I understand what you are thinking. “Birth rates?” Seriously? I have supply chain challenges, regulatory concerns, and a slew of additional fires to put out. “Why should I care how many babies are born?”
Well, this demographic problem, which is barreling towards Thailand like a freight train, will have a significant impact on your business.
The Numbers Don’t Lie
Let us start with the cold, hard facts. Thailand’s fertility rate has decreased rapidly. According to the World Bank, we’re currently looking at 1.3 births per woman, which is way lower than the replacement rate of 2.1. To put that in context, that is on par with Japan, the poster child for ageing populations.
But wait, things get worse. Thailand’s population is projected to drop by 50% over the next six decades, according to the most recent forecasts. That is not a typo, guys. We are talking about losing half the country’s population.
Now, you could be thinking, “Great! “Less traffic in Bangkok!” You might want to rethink. Because this demographic trend is about to turn your business upside down.
This phenomenon is not just in Thailand though. It’s just about everywhere around the world with the exception of Africa. We are heading for a global population decline. Years ago, we were all fretting about population growth, now we are worried about the decline.
The Labor Crunch: It’s Not Just Coming, It’s Here
This is where the rubber meets the road for firms, particularly in manufacturing. Perhaps you’ve been depending on a pool of young, eager staff. Gone.
We are already experiencing labour shortages in crucial areas. And it is not only about numbers; it is also about quality. As the workforce decreases, competition for competent workers will get fiercer.
So, if your company plan is based on an unlimited supply of inexpensive labour, that ship has sailed.
Fewer People, Different Needs
Not only is your workforce shifting, so is your customer base.
As the population ages, consumer wants and behaviours will vary substantially. That 18-35 age group you’ve been targeting? It’s shrinking. Meanwhile, the population above the age of 60 is rapidly increasing.
This means you’ll have to reconsider everything, from your product offers to your marketing tactics. Unless, of course, you sell zimmer frames or denture cream, in which case you may be doing well.
Squeezing the Economy
Thailand, like many developing nations, has benefited from the “demographic dividend” – the sweet spot in which a high working-age population supports a small number of dependents.
So, guess what? That dividend is soon to become a debt. As the population ages, the tax base shrinks, healthcare expenses rise, and the pension system becomes even more stressed than it currently is.
And who will feel the squeeze? Businesses. Higher taxes, anyone? How about increasing social security contributions? There will be fun days ahead.
So, What’s a Humble Business Owner to Do?
Okay, enough with the doom and gloom. Yes, the situation is critical, but it is not hopeless. Here’s how you can begin preparing your firm for the demographic storm that’s coming:
Embrace Automation Like It’s Your Long-Lost Soulmate
Okay, I understand it. Robots are expensive, and there’s something fulfilling about seeing a manufacturing floor full with busy workers. But, if you don’t want to be left behind, you should carefully consider automation.
This is not about replacing all of your employees with Terminators. It is about leveraging technology to increase productivity and make the most of your dwindling personnel.
It also does not mean that you have to go out and buy a factory full of articulated robots tomorrow. You need to look at the product lifecycle and redesign what you are making so that it is ‘designed for automation’, then go and invest in robotics.
Invest in Your People (Because Soon, They’ll Be Worth Their Weight in Gold)
With workers becoming a precious resource, you must ensure that you are making the best use of those you have. This entails investing in training and development, providing appealing career routes, and maybe – prepare yourself – offering competitive compensation.
Why not start viewing elderly workers as assets rather than liabilities? With the right training and support, they might be the hidden weapon that keeps your company going while competitors struggle to find employees.
Rethink Your Product Lines and Target Markets
If your organisation is primarily reliant on youthful customers, it’s time to diversify. Consider products and services geared for an ageing demographic. And I’m not simply talking about larger text sizes on your box (though that would not be a terrible idea).
This might include anything from age-friendly workplace solutions to goods that assist individuals remain active and independent as they age. Get imaginative; there is a world of untapped possibilities in the silver market.
Think Regional, Act Local
Like it or not, handling this demographic transformation will necessitate collaboration between the public and private sectors. Stay current on government policy concerning ageing, labour, and immigration. Better yet, take part in developing such policies.
Thailand is not the only Southeast Asian country confronting similar difficulties. Consider chances to enter labour markets or customer bases in neighbouring nations. Remember, however, that each country has its own demographic profile and difficulties. There are no one-size-fits-all solutions.
Cultivate a Multi-Generational Workforce
It’s time to abandon the notion that only young people can be active, inventive employees. Create an atmosphere in which 20-somethings and 60-somethings may collaborate, learn from one another, and bring unique ideas to the table.
This is not simply feel-good HR fluff; it is a survival strategy. You need young people’s vitality and technological savvy, as well as the expertise and steadiness of older personnel.
The Way Forward?
Thailand’s dropping birth rate isn’t some distant issue for future generations to cope with. It is occurring right now, and it will have an impact on your business sooner than you realise.
Burying your head in sand is not an option. Neither hopes for a miraculous baby boom.
What you need is a precise evaluation of how demographic changes will affect your particular firm, as well as a comprehensive plan for adjusting. It will involve imagination, adaptability, and maybe a few restless nights.