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World Economy Is 'Run from the Bedroom': Academic

The real secret to economic growth lies in the bedroom because smaller families, as a result of improving child survival rates, provide the advanced workforce that can boost countries' development, Hans Rosling, director of Gapminder, told CNBC Wednesday.

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"The world is run from the bedrooms. The young couples who decide to have two children; they decide to work hard for these children. And that's where the emerging markets start," Rosling said.

Child survival has been improving sharply over recent decades in the developing world, which has allowed families to reduce the number of children they have, Rosling pointed out.

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"You don't have small families until you have less than 10 percent of your children dying. But with small families you can care even better for children and… you can put all children – boys and girls – into school," he said.

"With education then you have the advanced workforce that can grow the economy," Rosling said.

The difference between what is referred to as the 'developed world' and the 'developing world' has shrunk because of the trend toward smaller families, according to Rosling.

"The Islamic Republic of Iran today has fewer children per woman than Sweden. There are two-child families in Iran, in Vietnam and in Brazil; that's the basis of the emerging markets," he said.

A strategic investment in education and health care to improve child survival rates would also benefit the environment, he added.

"Investment in child survival is the best for the environment because that's what will stabilize world population," Rosling said.

Dr. Irwin Stelzer, senior fellow and director at the Hudson Institute, pointed out that declines in family size could bring pension problems as a relatively large elderly population would rely on a shrinking workforce.

Rosling agreed, but said pension issues would be decades off for the poorer developing countries.