Consultants were also worried about the baby shortage: The decline in the birth rate is “a very, very big problem”

London

Birth the decline is no longer just a concern of demographers and national governments. Now even business management consultants are worried about the baby shortage.

According to the senior partner of the international consulting company McKinsey, the decline in the birth rate is one of the most fundamental challenges of our time.

“At least there is no solution to the problem yet, but we know that the problem is very, very big,” says the chairman of the McKinsey Global Institute (MGI), which studies economic trends Sven Smith said in an interview with HS in London.

MGI talks about a “growing youth deficit” (growing youth deficit).

in Finland it is often thought that people’s financial worries are a significant reason for postponing childbearing.

However, McKinsey’s Smit doesn’t think it’s just about money.

”[Kehittyneissä maissa syntyvyyden laskua] tried to solve it with money, but without success.”

Nor have incentives, family leave or daycare services brought a solution.

From the point of view of national economies, the decline in the birth rate is a big problem. That’s why even consultants are now interested in it: birth rate is an economy.

Usually it is considered that an average of 2.1 children should be born per woman so that the population does not start to decrease.

According to Smit, the total fertility rate in the “old world” is only 1.4-1.5. The whole world’s figure is on its way to 2.1.

“And if sub-Saharan Africa is left out of the bills, we are already below this so-called renewal threshold.”

Smit compares the birth rate to economic growth:

”[Talous]growth always creates more money for solving problems than growth creates new problems. And the same applies to population growth.”

McKinsey & Company was founded in the United States in 1926.

The privately owned company operates in more than 70 countries. It has more than 43,000 shareholders and employees and more than four thousand customers. In 2023, the company sold its consulting services for more than 15 billion euros.

With artificial intelligence, even consultants have to reinvent at least part of their work. Customers are quick to think about how artificial intelligence could replace consulting and other services.

At the same time, “consultative power” has been criticized from both the left and the right.

Economists Mariana Mazzucato on criticized how big and expensive consulting companies sell themselves as public sector advisors. According to him, at the same time, civil servants’ ability to develop their own specialty is lost.

In the US, on the other hand, Republicans are concerned that McKinsey has worked for both the US Department of Defense and China.

According to Republican politicians, there is a conflict of interest here. That’s about it reported among others, the British financial magazine Financial Times.

McKinseyn According to Smit, artificial intelligence will not take the jobs of consultants, but will even increase opportunities.

The difference from before is that now technology must always be part of the strategy and organization. Technology and data skills are much more important than ever.

The deterioration of the contract-based world system has also increased the demand for consulting services.

Between 1990 and 2020, business leaders didn’t have to worry about politics all the time. We believed in globalization and an open world.

Now the situation is different. Companies need to think carefully about where to place their operations. Decentralization is important.

“The more complex the world becomes, the more demand there is for us,” says Smit.

McKinsey has also made misjudgments in its customer selections. One of them is assisting the Purdue Pharma company, which has continued for years.

Purdue Pharma let’s remember for its powerful painkiller OxyContin, which belongs to the opioid drug group. In the United States, the opioid epidemic has caused the death of hundreds of thousands of people.

McKinsey and the US judicial authorities recently reached to the agreement about how the consulting firm is coming to terms with its part in the OxyContin scandal. McKinsey committed to pay approximately EUR 620 million in compensation.

Fresh in his statement McKinsey apologizes for its actions:

“We deeply regret that we served our former client Purdue Pharma and that our former partner destroyed work-related documents.”

According to the statement, McKinsey should have realized that opioids are causing frost to society. The company admits that it should not have done the sales and marketing work for Purdue Pharma.

Smit does not want to comment on the Purdue scandal.

Today the consulting company chooses its clients even more carefully.

McKinsey list industrieswhich it does not serve: tobacco companies, opioid manufacturers, technology companies of certain countries, whose products can also be used militarily, and pharmaceutical companies that take their own line in pricing.

Defense, intelligence, judicial and police services of the public sector of non-democratic countries are also on the prohibited list.

But what about energy companies using non-renewables? Should consultants be blacklisted too?

In Britain, climate activists have demanded, among other things, asset management companies to give up their investments in fossil companies.

Smit does not see the rejection of energy companies as appropriate. Rather the opposite.

Oil and gas will be used at least until 2050, if not longer. Now the consultants’ task is to speed up the green transition.

“And if you want to reduce emissions, you have to work where the emissions are.”