To unleash productivity, innovation, and growth in the 21st century, we must realign discussions about the future of work to recognise the importance of aging and longevity – unprecedented, accelerating trends that are reshaping economies, societies and individual lives around the globe. Human history has never seen such a dramatic demographic transformation, with a billion over 60 – doubling by mid-century – lives reaching 100 as a matter of course and a world that has more old than young. This megatrend opens an opportunity to power historic prosperity, but only if employers and others across global society lead innovative strategies to transform the future of work for the era of longevity. As the World Economic Forum put it over a decade ago in their seminal Peril or Promise, the paths are clear and stark.
Despite the wide-reaching impacts of aging and longevity, conversations about the future of work typically focus on other trends. These are certainly important, but they’re not the whole story. Digitalisation is changing how we work – new tools enable virtual work, and artificial intelligence and other advanced technologies drive automation that is creating, disrupting and changing how we work and at what. There’s also an ongoing transformation of who works, as women have entered the workforce in huge numbers and employers focus on diversity and inclusion. Additionally, new types of enterprises are changing what work people do, with the rise of new industries like home care and new work models like the gig economy. Twentieth century manufacturing is being replaced by 21st century services.
Each of these reflects a broader trend in society, yet expert discussions still too often ignore perhaps the most fundamental shift in today’s world. This is population aging – a historic shift that impacts nearly every aspect of life and is only now picking up speed. As S&P Global warned in their equally prescient report about the same time as WEF’s, “No other force is likely to shape the future of national economic health, public finances, policymaking [and markets] as the irreversible rate at which the world’s population is aging”.
In the growing number of “super-aged” countries, like Japan and Germany, older adults already make up more than 20% of the population – and counting. At the same time, lives are longer than ever, routinely reaching into our 80s, 90s, and beyond.
Though this demographic shift has often been framed as an economic and workforce challenge, it actually opens up a number of opportunities. According to Aegon’s global survey of more than 16,000 people, nearly 70% of respondents envision working in some capacity later in life – transforming the traditional retirement model to create a new period for productivity and income. In fact, OECD countries could realise a cumulative USD 2 trillion long-term increase in GDP if they raised the employment rate for those over 55 to match that of Sweden, the best in the OECD.
Research has found that these older workers bring different perspectives, important institutional knowledge and valuable mentoring skills. They can drive innovation and help to design products and services for the massive “silver market” of older consumers. And by extending their careers, they can support the fiscal sustainability of public and private institutions. Moreover, as the data around activity and healthy aging accumulates, working longer is also good for people’s health, and therefore societies’ exploding health costs.
However, there are several barriers to this longevity opportunity. To shape the future of work through the lens of aging, employers and partners in government must implement forward-looking responses to address three challenges.
First, while a growing number of employers recognise the demographic shift, few are actually taking action. Workplace policies that support later-life employment – new and creative benefit structures and innovation on work itself, such as phased retirement and new roles for older workers – have been adopted by some innovative organisations, but remain relatively rare.
Second, ageism is widespread in both the workplace and society. According to Deloitte’s global survey of business leaders, just 18% said that age is viewed as an advantage at their organisation, and 20% see it as an outright disadvantage. This reflects ageist attitudes across society, where it’s often assumed – falsely – that a 70 year old should not be working, is a drag on their employer and is taking the job of a younger person. Wrong, but a persistent myth.
Third, our underlying societal and policy structures are not aligned with aging and longevity. Consider education: currently, our institutions support learning until our early 20s, but then stop entirely. In the era of longevity, we need new models to support lifelong learning. And we need to reinvent a number of other social structures, including work and retirement, healthcare delivery and housing. In short, we need a new social contract.
Employers can overcome these challenges, and there are rich incentives to do so. Leaders in this area will tap into an underutilised, valuable talent pool, reach a huge consumer market and realise key competitive advantages. In the near future, not having an aging strategy – guided by principles for the multi-generational workplace – will seem as outmoded as not having a digital or green strategy.
The opportunity – for employers, policy-makers and society – is to design a new social contract that aligns to our 21st century’s demographic realities. Reimagining the future of work in light of aging, and then translating that vision into concrete changes, is an essential step forward.
We need a new conversation about aging and the future of work – including voices like yours.
- How do you think work, jobs and careers will change as a result of aging and longevity?
- What are the most important changes that employers and employees can take?
- What are the wider social and policy efforts needed to realise the economic potential of longevity and the silver economy?
- What are the most important opportunities and challenges for workers, employers and other stakeholders?
- Where does the balance stand between employer and employee responsibilities for action?
Source: OECD Forum Network