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2014 is a very special year for me:

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20 years as a consultant,

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20 years of marriage,

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and I'm turning 50 in one month.

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That means I was born in 1964

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in a small town in Germany.

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It was a grey November day,

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and I was overdue.

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The hospital's maternity ward
was really stressed out

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because a lot of babies were born

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on this grey November day.

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As a matter of fact, 1964

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was the year with the highest
birth rate ever in Germany:

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more than 1.3 million.

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Last year, we just hit over 600,000,

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so half of my number.

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What you can see here

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is the German age pyramid,

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and there, the small black point
at the top, that's me.

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(Laughter) (Applause)

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In red, you can see the potential
working age population,

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so people over 15 and under 65,

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and I'm actually only interested

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in this red area.

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Now, let's do a simple simulation

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of how this age structure will develop

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over the next couple of years.

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As you can see,

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the peak is moving to the right,

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and I, with many other baby boomers,

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will retire in 2030.

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By the way, I don't need any forecasts

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of birth rates for
predicting this red area.

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The red area, so the potential working age

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population in 2030

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is already set in stone today,

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except for much higher migration rates.

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And if you compare this red area in 2030

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with red area in 2040,

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it is much, much smaller.

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So before I show you
the rest of the world,

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what does this mean for Germany?

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So what we know from
this picture is that labor supply,

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so people who provide labor,

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will go down in Germany,
and will go down significantly.

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Now, what about labor demand?

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That's where it gets tricky.

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As you might know, the consultant's

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favorite answer to any question is,

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"It depends."

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So I would say it depends.

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We didn't want to forecast the future.

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Highly speculative.

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We did something else.

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We looked at the GDP and
productivity growth of Germany

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over the last 20 years

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and calculated the following scenario:

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if Germany wants to continue
this GDP and productivity growth,

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we could directly calculate

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how many people Germany would need

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to support this growth.

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And this is the green line: labor demand.

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So Germany will run into a major

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talent shortage very quickly.

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Eight million people are missing,

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which is more than 20 percent
of our current work force,

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so big numbers, really big numbers.

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And we calculated several scenarios,

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and the picture always looked like this.

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Now, to close the gap,

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Germany has to significantly

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increase migration,

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get many more women in the work force,

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increase retirement age.

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— by the way, we just
lowered it this year —

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and all these measures at once.

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If Germany fails here,

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Germany will stagnate.

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We won't grow anymore. Why?

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Because the workers are not there
who can generate this growth.

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And companies will look

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for talents somewhere else.

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But where?

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Now, we simulated labor supply

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and labor demand

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for the largest 15 economies in the world,

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representing more than 70 percent

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of world GDP,

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and the overall picture looks like this

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by 2020.

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Blue indicates a labor surplus,

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red indicates a labor shortfall,

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and grey are those countries
which are borderline.

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So by 2020, we still see a labor surplus

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in some countries,

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like Italy, France, the U.S.,

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but this picture will change

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dramatically by 2030.

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By 2030, we will face
a global work force crisis

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in most of our largest economies,

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including three out of
the four BRIC countries.

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China, with its former
one-child policy, will be it,

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as well as Brazil and Russia.

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Now, to tell the truth,

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in reality, the situation

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will be even more challenging.

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What you can see here
are average numbers.

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We de-averaged them

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and broke them down

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to different skill levels,

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and what we found

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were even higher shortfalls

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for high-skilled people

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and a partial surplus

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for low-skilled workers.

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So on top of an overall labor shortage,

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we will face a big skill
mismatch in the future,

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and this means huge challenges

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in terms of education, qualification,

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upskilling for governments and companies.

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Now, the next thing we looked into

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was robots, automation, technology.

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Will technology change this picture

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and boost productivity?

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Now, the short answer would be

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that our numbers already include

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a significant growth in productivity

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driven by technology.

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A long answer would go like this.

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Let's take Germany.

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The Germans have a certain
reputation in the world

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when it comes to productivity.

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In the '90s, I worked in our Boston office

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for almost two years,

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and when I left, an old senior partner

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told me literally,

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"Send me more of these Germans,

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they work like machines."

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(Laughter)

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That was 1998.

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Sixteen years later, you'd
probably say the opposite.

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"Send me more of these machines.

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They work like Germans."

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(Laughter) (Applause)

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Technology will replace

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a lot of jobs, regular jobs.

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Not only in the production industry,

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but even office workers are in jeopardy

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and might be replaced by robots,

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artificial intelligence,
big data, or automation.

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So the key question is not

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if technology replaces some of these jobs,

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but when, how fast, and to what extent,

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or in other words,

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will technology help us

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to solve this global work force crisis?

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Yes and no.

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This is a more sophisticated
version of "it depends."

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Let's take the automotive industry

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as an example,

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because there, more than 40 percent

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of industrial robots are already working

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and automation has already taken place.

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In 1980, less than 10 percent

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of the production cost of a car

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was caused by electronic parts.

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Today, this number is more than 30 percent

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and it will grow to more than 50 percent

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by 2030.

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And these new electronic parts

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and applications require new skills

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and have created a lot of new jobs,

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like the cognitive systems engineer

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who optimizes the interaction

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between driver and electronic system.

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In 1980, no one had the slightest clue

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that such a job would ever exist.

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As a matter of fact,
the overall number of people

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involved in the production of a car

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has only changed slightly

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in the last decades,

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in spite of robots and automation.

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So what does this mean?

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Yes, technology will
replace a lot of jobs,

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but we will also see a lot of new jobs

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and new skills on the horizon,

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and that means technology will worsen

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our overall skill mismatch.

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And this kind of de-averaging

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reveals the crucial challenge

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for governments and businesses.

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So people, high-skilled people,

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talents, will be the big thing

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in the next decade.

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If they are the scarce resource,

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we have to understand them much better.

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Are they actually willing to work abroad?

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What are their job preferences?

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To find out, this year we conducted

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a global survey

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among more than 200,000 job seekers

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from 189 countries.

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Migration is certainly one key measure

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to close a gap, at least
in the short term,

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so we asked about mobility.

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More than 60 percent

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of these 200,000 job seekers

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are willing to work abroad,

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for me a surprisingly high number.

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If you look at the employees aged 21 to 30

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this number is even higher.

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If you split this number up by country,

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yes, the world is mobile,

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but only partly.

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The least mobile countries

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are Russia, Germany, and the U.S.

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Now, where would these
people like to move to?

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Number seven is Australia,

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where 28 percent could imagine moving to.

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Then France, Switzerland, Germany,

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Canada, U.K., and top choice worldwide

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is the U.S.

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Now, what are the job preferences
of these 200,000 people?

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So what are they looking for?

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Out of a list of 26 topics,

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salary is only number eight.

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The top four topics
are all around culture:

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number four,

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having a great relationship with the boss;

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three, enjoying a great work-life balance;

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two, having a great
relationship with colleagues;

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and top priority worldwide

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is being appreciated for your work.

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So do I get a thank you?

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Not only once a year

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with the annual bonus payment,

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but every day.

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And now, our global work force crisis

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becomes very personal.

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People are looking for recognition.

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Aren't we all looking for recognition

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in our jobs?

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Now, let me connect the dots.

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We will face a global work force crisis

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which consists of
an overall labor shortage

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plus a huge skill mismatch

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plus a big cultural challenge.

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And this global work force crisis

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is approaching very fast.

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Right now, we are
just at the turning point.

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So what can we, what can governments,

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what can companies do?

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Every company,

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but also every country,

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needs a people strategy,

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and act on it immediately,

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and such a people strategy consists

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out of four parts.

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Number one, a plan

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for how to forecast supply and demand

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for different jobs and different skills.

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Work force planning

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will become more important
than financial planning.

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Two, a plan for how to
attract great people:

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generation Y, women, but also retirees.

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Three, a plan for how to educate

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and upskill them.

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There's a huge upskilling challenge

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ahead of us.

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And four,

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for how to retain the best people,

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or in other words,

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how to realize an appreciation

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and relationship culture.

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However, one crucial underlying factor

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is to change our attitudes.

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Employees are resources, are assets,

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not costs, not head counts,

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not machines, not even the Germans.

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Thank you.

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(Applause)