Five Phenomena Explain How the Aging of the World is Revolutionizing the World Economy – Not Just in a Bad Way

“Some people call them silver, but I call them white. And they are beautiful,” said Christine Lagarde, 63, CEO of the International Monetary Fund.

She referred to her hair and the name of the conference this week in Helsinki, the Silver Economy Forum. The international conference on aging is one of the major events of the Finnish EU Presidency.

The conference is intended to change the traditionally problem-oriented perspective on aging. Life expectancy is a welcome thing. While challenging the economy, it also creates completely new markets and opportunities for the economy.

Lagarde, who has been virtually elected as the next Governor of the European Central Bank, is herself the best advertisement for his message. In her video greeting, she reminded that those over 65 have huge untapped production potential that needs to be unlocked.

The conference raised many other interesting ideas.

  1. The aging of the population affects a large part of the world

Aging has been a topic in Finland for decades. In 2030, a quarter of Finns will be over 65 years of age. Finland is indeed one of the fastest aging countries, but not the only one.

In China, for example, there will be about 100 million people over 80 in 2040.

Singapore has just approved a comprehensive health and care program for the elderly, which extends public sector responsibility for funding the health and care of the elderly. According to Amy Khor, the Minister of Health of the country, this has been necessary.

In the Netherlands, we are trying out villages and neighborhoods for the elderly. The idea is that the residents form a cooperative to help others and procure services together.

“We have a fairly generous care insurance system and we have to try different solutions,” said Reinier Koppelaar, Program Director at the Dutch Ministry of Health.

  1. Life expectancy is a welcome thing

Behind the worries of aging is often the fact that extending life expectancy is a triumph for humanity. In Western countries, life expectancy has increased by 25 years since World War II.

This is due, among other things, to medical progress, education and the rise in the standard of living.

Stefano Scarpetta, Director of the OECD, pointed out that most of these extra years are for quality of life. The challenge is that pension systems or working life have not taken sufficient account of longer life expectancy.

For various reasons, the employment rate is falling well before the legal retirement age in many countries.

  1. The elderly are a large group of consumers and a source of labor

“Every business should have an aging strategy,” said Jeff Huber, CEO of Home Instead, a home care provider.

According to Huber, the decline in the birth rate means that all companies will suffer from a shortage of labor before long. Businesses need to decide how to keep people in work and productive for much longer.

“We need to think about how to re-educate 60-70s and re-create themselves because young people are unavailable,” Huber said.

The United States already has a particularly acute labor shortage in the care sector.

Solutions can also be structural. The employment rate of women in their 50s is already declining in many European countries as they leave work to care for their aging parents.

At the same time, the growing number of older people is creating completely new markets.

“The home care business in which we operate did not exist 25 years ago and is now one of the fastest growing. Banks are investing in new types of investment products, the pharmaceutical industry is investing in preventing disease rather than treating it,” Huber said.

He calls for new inventions in many other fields.

The foundation for high-quality years of life is created at a young age

Many experts stressed the importance of youth as the basis for quality years of life. For both working capacity and the quality of life of old age, the level of education and the lifestyle of young people are crucial.

The OECD’s Scarpetta listed research evidence that higher education means significantly better working capacity in middle age and longer life expectancy, especially for men.

Young people’s lifestyles are central to preventing long-term illness.

  1. Services for the elderly should be developed together with the elderly

Complex services are too difficult for many older people to use.

Therefore, older people should be involved more extensively in product development, said Anne-Sophie Parent, Secretary-General of the AGE Platform in Europe.

“For example, the digitalisation of banking services has made it difficult for many older people to use,” she said.

Source: Helsingin Sanomat

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