Are you wondering what the global aging trend is all about? Dr. Noel Greis (Director of the Center for Digital Enterprise and Innovation at the University of North Carolina’s Kenan-Flagler Business School) shared her insights about the causes and implications of the “silver tsunami” as well as some of the exciting technological innovations that may help solve some of the challenges of the aging trend.
- Why are many countries around the world experiencing an aging demographic shift?
An aging population—one in which the median age is increasing—is a global phenomenon. With the exception of Africa, pretty much every region of the world is experiencing an aging population. But the shift in Asia has been faster than anywhere else. Today, as more and more people survive to even more advanced ages, people are now distinguishing between the old and the oldest old, often defined as people age 85 and over.
The aging phenomenon is one of our most significant global challenges today. The irony is that some of the most important successes of the 20th century are contributing to some of the most significant challenges for the 21st century. From medical advances in curing disease to improvements in water and sanitation, technical achievements improved the physical and economic lives of people around the globe. At the same time, these welcomed advances have resulted in a confluence of three factors that are contributing to this aging demographic shift—increasing longevity, falling mortality rates, and declining fertility rates.
People are living longer. Many years ago, most people died young, usually from starvation or epidemics, not from age-related diseases. Today, not only are people living longer, but mortality has been reduced due to things like prevention of death in low birth weight infants and regulations in the workplace that reduce occupational deaths. Developed and richer countries tend to have a lower fertility rate due to lifestyle choices associated with economic affluence. In the United States, and many countries around the world, the fertility rate is currently below replacement.
These three factors will continue to shape the world for the foreseeable future. Globally, the number of people in the world who are older than 65 is expected to more than double by 2050, increasing from 617 million today to 1.6 billion. And among this group of seniors over 65 years of age, the percentage older than 90 years is expected to increase from 4.7% today to 10% by 2050.
- What is the economic impact on countries that are aging?
The growing “silver tsunami” can be expected to have a significant impact on the global economy—and may already be contributing to slower growth around the world. The common wisdom is that the older a population is, the slower its economy grows. While considerable research is being devoted to understanding these issues, many countries are already experiencing these impacts—from an aging workforce with reduced productivity to lower labor participation rates. Companies are having a difficult time finding sufficient workers to hire for their factories.
Maintaining economic productivity is a primary concern of a country with an aging population. From an economic standpoint, a country’s productivity is the single most important determinant of its standard of living. A number of researchers have tried to quantify the impact of population aging on future productivity growth in Asia. Their findings suggest that aging could reduce the annual per capita GDP growth rate by as much as 0.50 percentage points below its potential. And a shrinking labor force means that fewer workers are available to support greater numbers of retirees with social and health benefits since these workers must pay taxes for social security, health care programs, and public pension benefits.
And not only will there be more people requiring health care services, but the costs of providing health care and other services to an aging population will also be higher. The chronic and age-related diseases and afflictions of older citizens often require more complex and costlier treatments. Our central—and very difficult—challenge will be to devise innovations that both provide social security and public services, such as health care, for an aging population while maintaining economic growth and productivity.
- We hear a lot about new technology, such as AI, virtual reality, and blockchain, in general. What is the potential for technological advancements to improve the lives of seniors and perhaps help societies deal with the economic impacts of an aging society?
Technology will continue to help societies deal with the social and economic impacts of an aging population. Importantly, Silicon Valley and Wall Street are no longer ignoring the senior market. Start-ups and tech companies that target the needs of seniors are creating more and more innovative products and services that increase the safety, social engagement, and overall quality of life for seniors. And seniors themselves are becoming entrepreneurial. In the United States, a new class of entrepreneurs called “Encore Entrepreneurs” is one of the fastest growing groups of entrepreneurs. These enterprising seniors understand first-hand which innovations seniors will actually use.
Today’s innovations have the potential to change the aging experience—to eliminate constraints that seniors (or their caregivers) confront in daily living. Every day, products are being introduced that enable seniors to stay connected with family and friends, to stay safe in their homes and communities, and to stay healthy and well. New voice communication technologies, combined with at-home monitoring systems, are not only enabling seniors to age-in-place but reducing costs to society. Digital solutions that allow remote tracking of vital health information are also reducing health care costs and allowing seniors to stay at home longer. But there are still challenges. Technology is expensive, especially for many seniors across the world. And seniors may not be comfortable with new technology so adoption can be slow.
But the good news is that many of today’s “smart” products benefit all ages of society. Concepts of universal design in housing and industrial products can be functional and also beautiful. Urban investments in age-friendly technologies will improve everyone’s access to and mobility within their communities. From smart homes with voice controls to self-driving cars—these innovations will improve the everyday experience for everyone—senior and non-senior alike.
You can learn more about the challenges and opportunities of an aging society from Dr. Greis and other experts at NextGen Aging – Shaping a Smart Future for an Aging Society on November 7th in Bangkok. Register now by visiting https://www.kenan-asia.org/nextgenaging/.