strategy+business is published by PwC Strategy& Inc.
 
or, sign in with:
strategy and business
Published: February 23, 2010
 / Spring 2010 / Issue 58

 
 

Facing Up to the Demographic Dilemma

The discussion was moderated by s+b Executive Editor Rob Norton and took place on September 12, 2009, at the World Economic Forum’s third Annual Meeting of the New Champions in Dalian, China.

S+B: What would you consider the most significant challenge that political and business leaders face related to aging populations?

HORI: We’re seeing a very big generation gap opening up, between the older people who are enjoying government benefits and the younger generations that are bearing the financial burden. Japan is a rich country, as are many of the other countries where the population is aging, and people today seem to feel we can afford the policies we have; there is no apparent urgent need for policies to change. But people are not aware enough of what’s going to happen in 10 or 15 years’ time. Budgets and resources are limited, and at some point you have to make decisions: Is the priority of the country to care for the elderly or to look to younger generations for innovation? It will be an issue in the future, and there will be a need for much discussion.

LEHMANN: One of the things unique to the period that we’re living in now is that we must think in terms of centuries rather than decades. When people talk about long-term issues like climate change, they often say, “Well, we’re talking about 2100, and that’s so far away.” But life expectancies today often extend to 100 years. When I look at my grandchildren, I realize that they will be around in 2100.

One of the things that concerns me about aging populations is that older people — to make a big generalization — tend to be more self-centered. In Europe, for example, the politics are very short-term, and that’s because politicians know that old-age pensioners vote and have money, whereas young people don’t vote, and in any case don’t have much money. So I would agree, in addition to all the other “divides” we have in this world, such as the North–South divide and the digital divide, there’s also going to be a big generational divide. We are going to need a tremendous number of innovations and creative approaches to address this challenge.

MA: I am concerned that governments, businesses, and people in general are not well prepared to think about the implications of aging societies. I attended the first United Nations Assembly on Ageing in Vienna, in 1982. A lot of topics and issues we’re discussing now had already been brought up, and people were talking about the need for preparation. But 20 years later, at the U.N.’s Second Assembly on Ageing in Madrid, in 2002, the same topics were brought up again, and since then they keep being repeated. Meanwhile, we have continued to see increases in longevity and evidence that populations are aging, and the preparation has still not been done. I feel that we all are not well prepared, not only physically, but psychologically, morally, and spiritually.

WANG: I’ve been involved in a project with the World Economic Forum on the study of demographic shift issues, and the business I run takes me from Japan to India. I’ve seen many different retirement systems and innovative things that governments and industries are doing. I feel the demographic issues today are where climate issues were five or 10 years ago. Everybody had heard about it, but nobody cared. We have seen the risks in the academic studies, and we see the risks in the business environment. But if it doesn’t feel like an opportunity, there’s no urgency. As Mr. Ma said, the topics keep repeating and repeating, but everybody still says we are not ready to address them.

 
 
 
Follow Us 
Facebook Twitter LinkedIn Google Plus YouTube RSS strategy+business Digital and Mobile products App Store

 

Resources

  1. David E. Bloom, David Canning, and Jaypee Sevilla, The Demographic Dividend: A New Perspective on the Economic Consequences of Population Change (RAND Corporation, 2003): A review of the effects of demographic change on economic growth.
  2. Chiemi Hayashi et al., “Transforming Pensions and Healthcare in a Rapidly Ageing World: Opportunities and Collaborative Strategies” (World Economic Forum, 2009): A detailed look at the question of aging societies and their implications for health care and pensions.
  3. Florian Kohlbacher and Cornelius Herstatt, eds., The Silver Market Phenomenon: Business Opportunities in an Era of Demographic Change (Springer, 2008): Leading experts examine the business opportunities and implications of aging societies in this collection of 33 essays.
  4. George Magnus, The Age of Aging: How Demographics Are Changing the Global Economy and Our World (Wiley, 2008): How low birthrates and rising life expectancy are leading to rapid aging and a stagnation or fall in the number of people of working age in Western societies.
  5. Nandan Nilekani, “India’s Demographic Moment,” s+b, Autumn 2009: The economic force of a burgeoning population.
  6. Richard Rawlinson and Natasha Kuznetsova, “50-plus: A Market That Marketers Still Miss,” s+b, Spring 2009: Why companies miss out by failing to market to aging baby boomers in the U.S. and western Europe.
  7. For more thought leadership on this topic, see the s+b website at:
    www.strategy-business.com/organizations_and_people.