In 2000, the average age of the Mexican population was 22 years old. In 2025, that average age has reached 29.6 years. Demographic experts tell us that means we are no longer a young country. Do you remember the demographic dividend? We’re about to run out. In 2030, in Mexico there will be more people over 60 years of age than children in the age group from 0 to 14 years.
The implications of this change are enormous. The federal budget already dedicates 2 billion pesos to pensions for older adults. That’s about 20% of the total; As a percentage, it is more than double what was allocated at the beginning of the century. Beyond pensions, public spending and investment must allocate more resources to develop the infrastructure and services required by the elderly population. Now there are 17.9 million. In 2020, there were 7.5 million.
What does this new demographic landscape mean for companies? One of the best answers corresponds to Marina Cigarini, senior partner at McKinsey in Mexico. “Companies will have to change many of the practices they have in human resources. We are going from a situation in which they had a large young population available to one in which there will be less… this has enormous implications for salaries, but, above all, it must bring a new culture focused on achieving greater productivity.”
What Cigarini says implies an uncomfortable truth: The abundance of young labor and minds was conducive to generating a vicious circle. To the extent that companies found many people available at relatively low salaries, they did not have many incentives to focus on dramatically raising productivity.
The numbers are brutal. Productivity in Mexico rose just 0.2% annually between 1998 and 2023. This growth is one of the lowest in the world and helps explain the low rates of the Gross Domestic Product. In the same period, China increased its productivity at a rate of 7.9% annually and India did so at 5.1 percent.
We are far from the most dynamic, but we are also far from the performance of our region, which is the one with the lowest productivity growth in the world. In Latin America and the Caribbean, annual productivity growth between 1998 and 2023 was 0.8% (four times higher than in Mexico). In one of the poorest regions in the world, Sub-Saharan Africa was 1.1% (5.5 times higher than Mexico). The data was presented by Andrés Cadena, at the McKinsey Forum in Mexico City.
Is the demographic transition a problem or part of the solution? Companies will have to adapt to the new reality, says Cigarini. Many of the large companies have been doing it for years and there are countries where the substantive changes in productivity are explained by the “pull” produced by a group of large driving companies. “There are countries where we are talking about a hundred companies that make a difference,” the specialist explains to me. The biggest challenge is in the medium and small companies. They are investments in technology and changes to simplify processes.
Will we be able to make the leap in productivity? We need to do it. The difference between yes and no is enormous, according to what McKinsey experts have stated. Mexico’s GDP is now 1.4 trillion dollars. If our productivity continued to grow at the current rate, we would not reach 1.6 trillion in 2020. If the productivity rate rose at a rate of between 1.7 and 2.6% annually, we would exceed 2.0 trillion annual GDP in 2040. The difference between doing tasks or following inertia has to do with a growth of 30 or 40% in 15 years. It’s 500,000 million dollars, can’t we just do it?
