We have identified seven common myths surrounding aging populations and highlight how organizations can find growth where others see only cost and limitations. Realizing Opportunities Both business leaders and policymakers must recognize that now is the time to address population aging. Have we quantified the opportunities arising from population aging? Do we offer flexible, tailored work models that support the changing needs of older workers? Do we have programs and incentives that encourage the exchange of knowledge between generations?
Do we have detailed customer profiles and market intelligence on consumers aged 55 and over? Do we have an innovation strategy focused on the needs and preferences of older consumers? Policymakers can make a start by focusing on the following questions:. Does our education policy include a strategy for supporting lifetime skill formation? Are tax and pension systems aligned to encourage older people to stay in the workforce?
Do our digital policies sufficiently address the needs of an aging population? Are we stimulating and leading discussions among researchers, business leaders and policymakers on the issues arising from an aging population? Are we addressing the barriers—such as access to capital, or regulation—that frequently stymie the entrepreneurial potential of the older population? Get Ready for the Silver Economy in criticaleye. The Accenture Institute for High Performance develops and publishes practical insights into critical management issues and global economic trends. Mark Purdy.
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In Asia, portraying aging in a more positive light has been identified as an important marketing opportunity. Advance public health efforts to improve nutrition quality of care for older adults [ 61 ]. Product packaging and labeling is another area where the needs of the older consumer may not be very well understood or met. Similarly, the APEC Workshop organizers identified that systemic innovation is important as governments build policy frameworks to support commercial business expansion and develop public-private partnerships focused on population aging. Goal 3: Generate clinical research on nutrition quality of care for older adults. Further, in the newest UN Sustainable Development Goals, aging and nutrition are relevant to many of the goals; older adult nutrition is specifically addressed in the target for Goal 2 Target 2.
English Deutsch. As people get older and reach their retired age approximately years old , their behavior switches to spending less due to income constraint and fixed spendings only on necessary goods and services 1. In parallel, shrinking working population due to population aging creates an impact through changing financial pattern of savings and investments. On one hand, a smaller base of spenders i. On another hand, less aggregate income results in lower domestic savings, which limits new investment.
At an early phase of the demographic transition, an increase in a proportion of workers enhances aggregate consumption, cumulative investment, total labor input, thus output, which is called demographic dividend.
As the transition progresses, a significant drop in labor supply, due to lowering fertility and mortality rates lowers aggregate output as well as domestic savings; thus, a decrease in investment. This change in economic behavior can cause sluggish economic growth and potentially threaten national reserves as well as economic stability. It is well documented that aging population leads to capital deepening and hence higher output per worker Lee et al.
Generally, elderlies are comparatively slow learner for new technologies or approaches, which can hamper overall productivity in the face of fast-changing global economy with rapid technical progress. Without such capacity, there is a risk that productivity and economic growth will reduce.
That said, aging is not necessarily adverse to growth given a longer life may require more saving and make investment in education more attractive. In such scenario, a decline in labor force due to aging can be offset by higher productivity with increased capital, physical and human, accumulation and technological innovation. Indeed, some studies claim that there is no evidence of a negative relationship between aging and GDP per capita e. As such, there is a clear need for further works to more accurately identify economic impacts population aging could bring.
A rapid growth of aging population can pose a serious structural challenge to fiscal sustainability. Two main channels are referred to; 1 shrinking working population who are tax payers, and 2 increasing government expenditures for aged related programs, particularly healthcare expenditure. In many high-income countries, pension also plays a crucial role, as important as the healthcare spending. Complementary nature of these two factors will create serious burden on public finance. The side effect also comes from a reduction in economic growth in corresponding to the diminishing productivity.
With this circumstance, the tax collection would be jeopardized.
ufn-web.com/wp-includes/44/iphone-video-surveillance-security-camera-system.php As a foundation of economic and social development and the fundamental source of fiscal revenue, low economic growth will lead to a reduction in national revenues and savings, which in turn generates negative impacts on economic sustainability. In addition to the consequences from the recent financial flux and the global economic turbulence, a substantial increase in government spending can pose a further challenge to fiscal balance. If we consider the government expenditure on public health, most of these countries have increasingly spent a big proportion of health expenditure Figure 7.
As the fiscal revenues are getting smaller and the government expenditure is continuing to increase, massive burden on public finance will be further reflected. Source: World Bank Consequently, sluggish economic growth can threaten economic and financial stability. Lower economic growth implies a reduction of national revenue and savings that are a foundation of economic and social development as well as the fundamental source for government revenue.
With low national income and reserves, a country can put itself at risk of insufficient social development and economic insustainability. On the other way around, the current high level of both public and private debts in many economies would leave them poorly positioned to handle the coming effects of population aging.
Besides its impact on economic performance, population aging weakens the effectiveness of traditional macroeconomic — fiscal and monetary — policies as evidenced by Yoshino and Miyamoto For the fiscal policy side, the effectiveness is lessened through lower total labor supply in the economy. The fiscal balance relies heavily on ability of the government to collect tax. Generally, income tax is the biggest proportion of total government revenue. In principle, aging population pushes down number of workers, who are tax payers, in the economy, which diminishes tax revenue collected by the government.
Additionally, when it comes to a pension scheme, retirees receive pension benefits that are financed by taxes and contributions imposed on active workers and issuance of government bonds. Given a fixed amount of pension benefits per retiree, overall burden per worker is substantially raised with a decreasing working population. In terms of monetary policy, the study shows that the positive impact of the expansionary policy on consumption is reduced in an aging economy.
This is because a consumption decision of the aged is not affected by a change in interest or inflation rates. Unlike working population, the consumption behavior of elderlies is inelastic to price changes due to their limited income and their fixed spending behavior.
As a result, a ratio of population directly affected by the monetary policy shock decreases. It also implies the declining effect of monetary policy due to diminished marginal productivity of capital faced with an aging population.
Taking into account such lowering policy effectiveness, more structured responses and reforms should be in place to address challenges posed by population aging. Any successful policy responses to population aging should be geared to encourage economic growth, higher productivity, and higher income for workers. As such policy proposals to address challenges of macroeconomies and fiscal sustainability arising from population aging are presented in three areas of quantity and quality of labor supply, public finances and pension.
To cope with the diminishing working population, more participation of senior and female workers should be encouraged in order to maintain the size of labor force.
A resultant higher proportion of working population will maintain or enhance tax-payer base as well as help reduce the amount of tax paid by worker transferred pension benefits. With these two factors combined, the results can lead to i an increase in government ability to collect more tax revenues, and ii a potential increase in productivity, which will be followed by rising consumption, savings, investment, hence, economic growth.
There are several ways to facilitate longer works by the elderly including the postponement of retirement by removing mandatory retirement laws, prohibiting discrimination against the elderly, and encouraging government-job creation for the elderly.