How Companies are Shifting Focus Toward the Aging Population

The world’s aging population has worried economists and governments for decades, and for good reason. Rising life expectancy and falling fertility have paved the way for a dramatic shift in the way society is structured.

Globally, the number of older people is expected to exceed the number of children for the first time by 2047. The shift in Asia is especially pronounced—the population of those aged 65 and above is projected to increase by 314% over the next 50 years.

This poses some serious challenges. Older people require higher levels of healthcare spending and there are increased pension costs. Plus, of course, when people stop working and earning, it is inevitable that countries’ income tax revenue will decline.

A changing reality
Many of the expectations of working life patterns which developed after the Second World War are now having to be adjusted.

The retirement age is being raised in many advanced economies; in the future we will all simply have to work for longer. This has often been viewed primarily as a way of reducing the burden on the state’s pension commitments but, actually, the economy desperately needs the skills that older people have too.

Retirement deprives companies of critical experience and knowledge which undermines productivity across the entire economy, according to new research. The academics who carried out the work note: “An older worker’s experience increases not only his own productivity but also the productivity of those who work with him.”

All else being equal, experienced workers are more productive. One study found that productivity did not peak until the age of 50, a time when it is 60% higher than that of the average 20-year-old.

In addition, the average 60-year-old in the 2000s was as healthy as the average 55-year-old in the 1970s, and in many occupations, cognitive skill matters more than physical stamina.