Living in today’s society, where the average life expectancy continues to increase, and healthcare continues to improve, most developed economies will be affected by an ageing population. This can be seen as an opportunity, with new markets emerging, or as a threat to a countries GDP and productivity rate. Living in Germany, which has one of the oldest populations, I am sure that my country will have to deal with this problem soon. Personally, I am concerned about my retirement, since the public retirement fund will have too few working adults, meaning that I will have to pay large fees for current retirees, and have little left once I reach the retirement age.
By 2050, the WHO has calculated that there will be 2.1 billion seniors, meaning individuals 60 and over (Irving, 2018). In the US alone, Americans over 50 control 80% of the household wealth, and will have a spending power of 15 trillion USD by 2020 (Irving, 2018). This will force existing industries and new industries to be established, as there will simply be a need for them to flourish. This can be anything, from care-homes to new foods (easier to chew), lifelong learning on campus, smart homes, and many more. Studies have also shown -completed by BMW-, that intergenerational work teams are more productive, with older workers mentoring younger employees (Irving, 2018). This not only benefits society, but also companies bottom line.
However, it can also be argued that it will be tough to provide social security and public services to an ageing population, while maintaining economic growth. A Chinese study has found that an ageing population can reduce the annual per capita GDP growth rate by 0.4% below its potential, due to a decline in labour participation and a slowdown in productivity (Dhaliwal, 2016).
I believe that an ageing population will bring forth new challenges for society as a whole, especially in developed nations. It is our generations future problem, and therefore it is essential that we are aware of it, and we need businesses and governments to be aware of the ageing populations, and create strategies and solutions to effectively continue future economic and social growth.
Credits to:
Dhaliwal, K. (2016). Harmful effects of the ageing population on the economy – University of Kent. [online] The University of Kent. Available at: https://www.kent.ac.uk/news/society/11994/harmful-effects-of-the-ageing-population-on-the-economy [Accessed 6 Mar. 2020].
Irving, P. (2018). Aging Populations: A Blessing For Business. [online] Forbes. Available at: https://www.forbes.com/sites/nextavenue/2018/02/23/aging-populations-a-blessing-for-business/#163b8bcd7a77 [Accessed 6 Mar. 2020].
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