BEIJING – The elderly are a crucial link in the chain that binds generations and sustains civilized society. Today, however, older people are largely considered to be out of touch with the modern, technology-driven world, and incapable of paying their own way. But much evidence shows otherwise: if aging were framed as an economic opportunity, the growing number of older people worldwide could become modernity’s gift, rather than society’s burden.
The world’s fastest-aging societies – particularly countries in Europe (including Belgium, France, the Netherlands, Norway, Sweden, and the United Kingdom) and Asia (South Korea and Japan) – are leaders in international competitiveness and innovation. According to the World Economic Forum’s Global Competitiveness Index, more than half of the world’s 25 most competitive economies are among the 20 countries with the oldest populations. And INSEAD’s Global Innovation Index shows that two-thirds of the world’s 25 most innovative countries are among the most aged societies.
To be sure, these rankings do not prove that aging drives countries’ competitive advantage. Rather, they suggest that an unfavorable demographic profile can be offset by other advanced-country characteristics, such as a well-developed physical infrastructure, a highly educated workforce, sophisticated technological capabilities, mature financial markets, and stable governing institutions.
As these countries’ median age continues to rise, microeconomic evidence indicates that they will remain competitive – particularly if they capitalize on people’s ability to remain productive for longer. Although older workers’ health, disability, and life-insurance costs are higher, innovations in health-care treatment and access mean that age-related health problems do not impede one’s capacity to contribute economically or socially as much, and not until much later in life.
In fact, older people have better accident and attendance records, and are more loyal, reducing employee turnover and replacement costs. They learn new processes, adopt new technology quickly, and are more willing to share knowledge than their younger counterparts are.
Beyond the workplace, older people provide education, care, and financing for their families, and frequently serve their communities as unpaid labor. Crucially, confident and secure older people share, invest, and pass on more to their children, helping to secure the long-term stability of their country’s assets.
Moreover, contrary to popular belief, entrepreneurship is not a preserve of youth. A study found that Americans aged 55-64 had a higher rate of entrepreneurial activity than those aged 20-34 in every year from 1996 to 2010. And a longitudinal survey of nearly 5,000 companies that began in 2004 shows that two-thirds of firm founders are 35-54.3 years old.
Even in technology start-ups, older people are surprise winners. The average age of technology company founders in the United States is a surprisingly high 39, with twice as many over 50 as under 25.4. First Solar, named by Forbes magazine America’s fastest-growing tech start-up in 2009, was founded by a 68-year-old serial inventor in 1984.
Nevertheless, older people’s crucial role is continually undermined, as opportunities are created and technology is deployed in ways that exclude them from employment, public life, and even family affairs. If older people are unproductive, it is because society disables them through its attitudes, laws, and institutions.
Without a fundamentally different approach to aging, the gift of extended longevity could become a curse. Yet there is little indication of progress.
Europe’s attitude toward old people, founded on a paternalistic view of their welfare, exacerbates the problem. While those who cannot cope on their own should be supported, regardless of their age, treating all citizens beyond a designated age as an economic burden is not only wasteful, but also unsustainable.
Likewise, America’s youth fetish reinforces negative attitudes toward older people. Each year, 90 million Americans purchase products or undergo medical procedures to hide physical indicators of their age. Contrary to Americans’ frequently espoused “active aging” credo, the US excludes old people, particularly blue-collar and low-end professionals, from economic opportunity.
While populations are aging faster in the developed world, emerging countries are also beginning to feel demographic pressure – yet none has developed a comprehensive strategy to address it. For example, as China’s median age rises from 34.5 today to 42.5 by 2030, its one-child policy and high rate of internal migration will present unique challenges. Yet, like its developed counterparts, China remains mired in the perception of aging as a fiscal challenge, rather than as a matter for economic policy reform and improved business practices.
Today, life expectancy exceeds 70 years in most countries; in some, it has risen beyond 80. Further advances in medical technology could extend this lifespan by 30% or more during this century. In many countries, babies born today are expected to become centenarians.
In order to cope with these demographic shifts, the vicious cycle of making older people unproductive by labeling them so must be broken. Countries must acknowledge older people’s economic potential, create opportunities for them, and value their economic and social contributions properly. Indeed, when seeking economic opportunity in aging populations supersedes the current narrow focus on financing them, the financing problem will solve itself.