The world population is ageing. Is your business ready?

While political, economic and technological changes can be difficult to predict, the demographics don’t lie. Over the next 10 years, more than 60 countries will have a median age over 35, and in 25 of those countries, half the population will be over 45. The aging of the world’s population is virtually inevitable, but its impact on business depends on what leaders do today. In this article, political demographer Jennifer D. Sciubba explores the implications of this shift for businesses and policymakers, including its impact on the workforce, customer base, retirement expectations, and more. Ultimately, she argues that to adapt to our aging populations, world leaders must recognize the reality that is evident today, understand which factors are certain and which can be influenced, and proactively invest in shaping the ‘coming.

According to the latest UN reports, two-thirds of the world’s population live in countries where fertility rates are below replacement level, while average life expectancy continues to rise. This means that many populations are aging rapidly and will soon begin to decline (if they haven’t already). At the beginning of this century, 32 countries had a median age above 35 years. By the end of this decade, that number will more than double. And in 25 of those countries, half the population will be over 45.

In many ways, we may think the future is uncertain. But unlike so many technological, political and economic shifts, demographic trends are extremely predictable. Our aging population is almost inevitable – and it will have a substantial impact on global labor pools, markets and the future of work, with several important implications for business leaders:

1. An aging workforce

Due to declining fertility rates, countries like China, Canada, Italy and many others now have fewer new entrants to the labor market each year. As a result, companies increasingly find themselves asking older employees to stay longer. This will require increasing investment in training and development to help these older workers learn new skills, as well as additional accessibility and safety measures such as wearable exoskeletons to help older workers safely lift heavy loads in farms and factories.

Additionally, as new, younger talent becomes harder to find, many companies are turning to automation to replace or augment certain roles. Many companies have started developing “digital workforce” tools that offer fully virtual salespeople, customer service representatives, and even companions for seniors. Between the growth of AI capabilities and changing demographic trends, these new technologies have the potential to become an increasingly important component of the modern workforce.

2. An aging clientele

Over the past decade, the world’s population aged 70 and over has increased by 627 million, rising from 5% of the total population to 12%. In another decade, 16% of the eight billion people on the planet will be over 70 years old. This means huge opportunities for products and services aimed at this older demographic.

The most obvious growth sector is healthcare, where the demand for geriatric, primary and specialty care medicines and related products, such as portable glucometers or electrocardiograms, is expected to continue to increase. While life expectancy has increased, in many places, in good health life expectancy is lagging, which means finding ways to support the health and wellbeing of this growing demographic isn’t just a business opportunity – it will also be essential for policymakers and leaders of government. For example, older people in the United States are more likely to live in rural areas, where health care is often less accessible. In Arkansas, Maine, Mississippi, Vermont, and West Virginia, more than half of the senior population is rural, suggesting a large and growing demand for senior-focused health care services in these markets.

Beyond health care and businesses focused specifically on seniors, the aging of the customer base can also impact a wide variety of industries. For example, in real estate, aging owners may be looking to downsize, or adult children may be looking to buy homes with room to accommodate aging parents. As demographics shift, real estate agents can increasingly benefit from developing and signaling expertise to help buyers and sellers through these transitions, whether by obtaining professional development certifications or through professional development. other specialized efforts.

3. Changing pension standards

Of course, age is just a number. When it comes to retirement standards, expectations about how long workers expect to stay on the job do not necessarily correspond to lifespan. For example, purely based on age, Japan is the oldest country in the world, with 31% of its population aged 65 or over. In contrast, only 22% of the French population is aged 65 or over. As such, one would expect a greater proportion of Japan’s population to be retired – but in fact a combination of differences in work cultures, social contracts between governments and their citizens , and a host of rules and policies mean that the average retirement age in France is 10 years younger than in Japan: 61 versus 71. Thus, around 29% of the French labor force has actually retired , compared to only 24% in Japan.

Despite these shortcomings, legal changes to the retirement age are slow to take effect. In recent years, the Netherlands and Ireland have canceled plans to raise the retirement age for pensions to match rising life expectancy. This is understandable, as legislation denying pensions is hardly popular – but in the decades to come, creating some sort of mechanism to help older workers who choose to delay their retirement will be essential for employers, governments and citizens.

For example, many older workers who are not yet ready to retire have begun to show growing interest in semi-retirement. In a recent survey of working baby boomers, the vast majority said they would like to pursue some form of semi-retirement, with 79% expressing interest in flexible working hours, 66% in transitioning towards a consulting role and 59% for working part-time. But only one in five said their employer offered one of these semi-retirement options, suggesting a substantial opportunity for employers to differentiate themselves in the competition for talent by offering non-traditional career paths. And when seeking to understand a given labor market, leaders must consider not only people’s ages, but also the flexibility of employment options and the various cultural rules and norms that can influence age. real retirement in different countries.

4. Developments in world markets

Finally, it is important to recognize that our common assumptions about the demographic composition of different countries may be outdated. At the turn of the century, countries like Japan, Italy and Germany were among the oldest populations in the world, but today Thailand and Cuba are just as old, closely followed by Iran, Kuwait, Vietnam and Chile. Within a decade, it can be expected that smaller cohorts of young people in these countries will begin to enter the market as workers and as customers, thus increasing the average age of these populations.

These are key considerations when identifying new investment markets. Different countries will react differently to these changes, and business leaders would be wise to pay attention not just to the demographic trends of a given market, but how its leaders are likely to react to them. With more and more seniors to care for, will governments take on the financial responsibility? Or will businesses or individuals have to bear the burden? A country’s approach to managing its aging population can influence its potential as a talent pool or customer base in substantial and nuanced ways.

The future is clear

Business leaders and policy makers today face countless sources of uncertainty, but when it comes to demographics, the future is clear. The reality of our aging population globally is now evident, because once a population’s fertility rate drops below replacement level (an average of two children per woman), it stays there. Barring massive immigration from places that still have young and growing populations, like Ethiopia or Nigeria, this most likely means a less populated future for the majority of countries on our planet.

This clarity enables foresight and planning of a kind not possible in many other areas, where change may be more difficult to predict. There are many fears about the aging population and deterministic and pessimistic rhetoric are increasingly prevalent, but the effects of this trend on our businesses and our governments will depend on how we prepare today. To adapt to our aging populations, business leaders and policymakers must recognize these realities, understand which factors are certain and which can be influenced, and invest proactively to shape the future.

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