From an Ageing Society to a Longevity Economy
For the first time in history, a transformative shift in the age of the world's population is taking place. This milestone means that there are now more people over the age of 65 than under the age of 5.
Andrew Scott reflects on this upward trend in life expectancy, and how this change should be linked to a series of improvements in longer lives: a) In living longer, the environment can influence the way we age; b) Investment by governments in healthy ageing and c) ensuring that long lives become productive.
The long heralded ageing of the world’s population is already far advanced.
We live in a world where for the first time in human history there are more people alive over the age of 65 years than under 5 years.
Declining birth rates and more people living into older ages mean that across the world the number and proportion of people aged over 65 and 80 years is rising. According to the UN in 2020 9.3% of the world’s population were aged over 65 years and this is projected to reach 22.6% by 2100. This isn’t just an issue for high income countries either. Of the 728 million people alive today over the age of 65 years, around a quarter live in low and middle income countries.
A Longevity Transition
However, as well as this shift in the age structure of populations something else is happening. The demographic transition has become a longevity transition as gains to life expectancy are increasingly occurring in later years. Amongst high income countries the majority of life expectancy gains are now occurring in years after 80. If society is adapting to a shift in the number of older people it also needs to adapt to the fact that the majority of children born today in richer nations can expect to live into their ninth decade, if not beyond.
This longevity transition represents not just a new stage for a demographic transition but also creates a new epidemiological transition. Longer lives and larger older cohorts mean that tackling a wide range of age related diseases (such as cancers, dementia, diabetes, cardiovascular illnesses, arthritis, etc) will increasingly dominate research and medical systems.
More fundamentally it also represents a new challenge for humanity. For most of human history the expectation has been that only a minority will reach into older ages.
That however is no longer the case so that a new human imperative has been created - the importance of ageing well.
That isn’t a task that begins when people become old but requires changes across the life course. If an ageing society is about meeting the needs and challenges of a rising share of older people, longevity requires a focus on all of life and not just end of life.
The consequence is that this longevity transition creates a new challenge for individuals and society.
Increases in life expectancy need to be matched by improvements in healthy life expectancy as well as longer more productive careers.
If these three improvements can be achieved simultaneously then a longevity dividend is realised.
Achieving this longevity dividend requires major changes in how we structure the life course, how firms support workers, how health systems are structured and how governments view employment. Past reductions in mortality and health lead to major gains in life expectancy by reducing infant and midlife mortality. These health gains all translated into economic gains as a larger proportion of healthy educated workers boosted the economy. Achieving a longevity dividend will ensure that the same economic boost arises from improvements in mortality and health at later ages too.
More time and the Malleability of Age
Key to realising this longevity dividend will be maximising the opportunities that arise from two features of longer lives. The first is the fact that longer lives means more future time. That means at every age greater incentives to invest in your health, skills, relationships and sense of purpose. The second is to recognise the malleability of age – how we age is not deterministic but can be influenced by a wide range of behaviours, policies and changes in our environment.
These two features – more time and age malleability – are both absent from the usual ageing society narrative.
The ageing society narrative focuses on changes in the age structure of society and focuses on chronological measures of age. However, chronological measures of age abstract from both these key features of longevity.
By focusing on time since birth chronological age fails to highlight the longer future that longer lives bring. Further, by measuring age chronologically it rules out the notion of age malleability. Because of this the ageing society narrative is incomplete and misses the positivity of a longevity dividend.
The presence of an extended future and age malleability also implies that demography isn’t destiny. Whilst changes in the age structure of the population will exert an important impact on societies, changes in how we age can have an offsetting effect. Crucially the magnitude of an ageing society effect varies dramatically across countries. In nations such as China and Singapore, where the fertility rate has fallen dramatically, the share of older people is rising rapidly. In other countries, where fertility has fallen less and more slowly, this ageing society effect is less dramatic. Whilst seizing a longevity dividend is important for all countries in some the need is more urgent.
Healthy Ageing
Increasing healthy life expectancy requires a major shift towards preventive health. To achieve this, governments must raise the importance of healthy life expectancy as a goal.
Boosting healthy life expectancy requires a major shift toward preventative health. As society ages the disease burden is shifting towards chronic and not infectious diseases, making intervention both expensive and less effective. Far better to focus on prevention. This in turn will require major reallocations of existing health budgets. It will also require a health system that stretches far beyond the conventional components of hospitals and local doctors. As the importance of ageing well increases and the need to invest in preventative health rises expect a growing number of companies providing products to support healthy ageing. From cosmetics to wearables, big data through to food and supplements the health sector is set to grow substantially.
A new imperative of ageing well places a premium on healthy ageing. In particular, achieving a compression of morbidity – whereby healthspan matches lifespan – is of the utmost importance. To achieve this, governments need to elevate the importance of healthy life expectancy as a target. With a rising share of the population above working age an ageing society requires different measures of welfare that go beyond GDP. The more successful governments are in boosting healthy life expectancy the more the economy will benefit in terms of lower health costs and longer working careers. A focus on measures of healthy life expectancy will also require a much greater focus on reducing health inequalities.
Productive Ageing
The third dimension of a longevity dividend requires ensuring that healthy longer lives are also productive ones. In the absence of substantial wage growth, longer lives require longer working careers. Due to pressure on public finances, OECD governments are already taking steps to raise the age at which the state pension is payable. The result is a rising share of workers aged over 65 amongst OECD countries. As shown in Figure 1, the growth in older workers explains the majority of employment growth amongst the OECD the last ten years. Around 40% of this increase in older workers can be explained by their growing numbers but the majority is explained by a rising likelihood of older people to still be involved in the labour market.
Source : OECD https://data.oecd.org/emp/labour-force.htm
This contribution of older workers is an example of a longevity dividend but too much debate around an ageing society focuses around the issue of retirement age. As life lengthens, working careers need to extend but they are also likely to change their structure. In the Twentieth century a three stage life of education, work and retirement emerged. However, as life expectancy increases and the probability of living to a 100 becomes a plausible scenario for many, simply stretching out a three stage life by pushing back retirement age is sub-optimal (Gratton and Scott (2016) “The 100 Year Life – Living and Working in an Age of Longevity”). Instead multi-stage careers are likely to emerge as older workers continue working for longer but in different roles, potentially different sectors and making greater use of part time and flexible work. Careers will lengthen in response to longer life expectancy and be characterised by more transitions and more stages.
As life expectancy increases and the likelihood of living to 100 becomes a plausible scenario for many, simply extending a three-stage life by delaying the retirement age is not the best option.
The consequences of this are numerous. Firstly, retirement as a simple phenomena whereby everyone at a certain age came to a sudden stop in terms of employment is rapidly disappearing. More people are working past retirement age, the age at which people stop work now shows considerable variation and most often the change is not a sudden stop but a shift towards flexible and part time work. Older workers in particular are more likely to be engaged in the gig economy.
The second implication is around education and skills. As careers lengthen and the threat of technological disruption accelerates the need to focus on education in later life increases. Some of this adult education will be around upskilling and enhancing existing skills to preserve current employment. There will also be a need for reskilling where individuals learn new skills for new roles as they transition into new jobs either voluntarily or as a result of technological disruption.
The third implication is around the needs and motivations of older people in the work place and the type of roles they are looking for and where their skills are most valuable. Boosting employment of older workers will be about creating jobs with age friendly characteristics eg around flexibility, part time and health demands, as well as roles that emphasise the comparative advantage of older workers.
The final implication is around the reduced importance of retirement. For most of the twentieth century life expectancy gains resulted in increased leisure after retirement. As life expectancy gains occur increasingly in later years of life and as retirement extends in response the consequence is likely to be more leisure before retirement age. This will be supported by multi stage careers with shifts between full time and part time work and career gaps during transitions.
Figure 2 – Labour Force Participation Rates (%) By Age, 2019
Source : ILO https://ilostat.ilo.org/topics/population-and-labour-force/
All of this has important implications for achieving the third part of a longevity dividend – productive ageing. As shown in Figure 2, employment begins to fall from around 50 years of age, well before retirement. An urgent priority is to support longer working careers not just after state pension age but from the age of 50. That involves tackling health issues and health inequality, so that poor health is not a reason to withdraw from the labour market. It will involve extensive provision of adult education in an easily accessible form that ensures it isn’t just those with past high level of education who benefit. Part of this mass provision of adult education should include schemes helping individuals assess their skills, health and finances and their preparedness for the years ahead. Also needed is better access to flexible working to help those who for family reasons have to care for relatives. It will also require greater focus on tackling age discrimination, especially around hiring.
Labour market policies focused on raising employment rates for the 50+ age category are therefore a key driver for economic growth, reducing the economic challenges of an ageing society and supporting a longevity dividend.
Past improvements in health and life expectancy at earlier age groups have led to gains in welfare and supported economic growth. The priority is now to achieve the same as the demographic transition becomes a longevity transition. Supporting healthy ageing is key so that longer lives are healthier ones. Healthy ageing is crucial for seizing the welfare gains of longer lives. Healthy ageing is also necessary to support longer productive lives. Whilst considerable attention is placed around postponement of retirement age the most pressing issue for high income countries is supporting raised employment amongst those aged 50+. The key issue is what policies to implement to achieve this?
Supporting healthy ageing is key to healthier longer lives. Healthy ageing is crucial to reap the wellbeing gains of longer lives and is also necessary to support longer productive lives.
Pregunta
Respuestas de los expertos
In my opinion the key steps would be the following, in correlative order and iterative sequence:
- Evangelise: undertake social pedagogy to make the whole society aware of the reality and imminence of demographic change and the transition to longer-lived societies.
- Constructivism: Subsequently, it is necessary to construct the problem. That is, to provide technical data and arguments so that society understands the implications of demographic change. These go beyond ageing - which restricts the scope of action to older people - and focus on longevity - which affects society as a whole, and especially younger people who must plan their decisions for longer lives. The scientific community has a very important role to play in this agenda-setting phase, as its opinion is legitimised in the eyes of public opinion as a whole, based on the objectivity and rigour of scientific knowledge.
The organisation of large international summits or events on the subject of longevity would facilitate the dissemination of the issue to the forefront of social debate. Similar constructivist techniques have been used to raise social awareness of climate change or poverty.
- Pragmatism: The next phase requires proposing practical solutions that address the issue from different areas and from different groups. In the specific case of the labour market, the following supports would be necessary:
Cognitive
- Awareness of the need for lifelong learning throughout adult life (individual responsibility).
- Understanding careers horizontally rather than vertically: longer careers, in several sectors of activity and several employers. The previous point (lifelong learning) facilitates these horizontal careers.
- Assuming that social security will not be able to provide the same benefits as current generations, and therefore it is necessary to work longer and encourage private savings (responsibility of the individual).
- Work in the business environment against ageism, justifying the productivity of intergenerational workforces and the value they bring to the company.
Structural
- Facilitating longlife learning training using technological platforms, MOOCs, etc..
- Provide flexibility in the labour market in terms of types and forms of contracts to favour work-life balance in the different stages of life.
- Provide relevant financial education so that people can make informed decisions on savings management.
- Compulsory private savings, promoted by structures that encourage savings.
Monitoring
- Publish regular data on the progress of economic structures to encourage an extension of working life.
In a world on the road to the fourth industrial revolution, personal and professional skills take on a unique relevance. As Professor Scott rightly points out, we face the challenge of harnessing the longevity dividend, and that comes from combining healthy ageing with productive ageing.
Faced with an opportunity such as the one we are facing, arising from the fact that we are going to live longer and in a world with accelerated technological growth, in my opinion a response is required that goes beyond the public sphere, which is still focused on a global debate on what the retirement age should be. This highlights, to agree with Scott, the insistence on a three-stage model of life - learning, production and retirement - which will clearly become obsolete, if it is not already. The myopic view that it is just a matter of stretching out the working years is not enough to address the new era. We need to think "out of the box", for which Scott's indispensable work, together with co-author Linda Gratton, is crucial.
And that is where the global society comes in, and globally considered.
Businesses, universities, medical research centres are a vital part of the new cycle of long-lived societies and healthy and productive ageing, and must push public authorities to look beyond.
Universities need to broaden their focus, they have a great opportunity to become centres for the development of people's skills. They have to go beyond training young people and academic research, they have to train people throughout their life cycle and they have to collaborate more with companies in applied research. If they don't do this, it will be the big companies (probably technology companies) that will take this role away from them. And it would be optimal for universities to do so because they are and should always be neutral training centres, based on meta-learning, and focused on people's skills.
Companies are gradually changing their purpose, and are increasingly incorporating criteria that go beyond short-term profit. Concern for the environment must be reinforced by a growing concern for the social environment, including relations with their own workers, which must be more open, more collaborative, with commitments on both sides that facilitate the interaction of quasi-permanent training with its application and development at work, appropriate to people's skills (which change with age and training itself).
And, succinctly, the public authorities must adapt the legal frameworks to this new environment that we have already entered, especially by allowing, also with public financial support, sabbatical periods for training and very flexible retirement systems.
Flexibility and experimentation will be the key to seizing opportunities in the future. We have a vague idea that long-lived societies present challenges linked primarily to older people. We also consider what challenges we have to face as individuals, perhaps also as organisations.
There are many prejudices surrounding active ageing and longevity, but what is clear is that the fact of living longer in better conditions and having grown younger1 does not only imply a different model in pension or long-term care systems, but also shows the need for new balances in all areas and in all markets.
In this sense, in a long and fulfilling life, the work cycle is one of the areas of prime consideration.
From a life-cycle perspective, no longer linked to watertight, pre-fixed links, the advantages of being able to choose changes in one's career path at any time are enormous.
Likewise, current and future generations, together with the years "gained in life", will have the advantage of acquiring ever greater flexibility in terms of work and life opportunities in general. As we allow ourselves to move from one career to another, to experience new skills and new roles, we will be able to move nimbly from one profession to another, to exercise a leadership role as well as a more participative or collaborative role, and thus to link ourselves in an increasingly different way to the labour market. People will have the capacity to be service providers for the market, they will provide solutions. These services or projects will combine in an increasingly different way, and of course in a personal and dynamic way, being entrepreneurs, with being employed, with volunteering or training, with the possibility of working as consultants, etc.
Each person will choose his or her way of being active in the labour market, according to a different ratio of employment and self-employment, including volunteering, care and participation.
But for this scenario to come about, there is a need for important work at the personal level, as well as collectively, to review priorities, to reflect on what we want to experience, to imagine future scenarios, to understand what sustainability and interdependence mean, and to accept that some scenarios are exclusive, in certain terms, with respect to others. It will also be necessary for society to include community work, volunteering, care and participation as necessary and essential tools for not only life and work transitions to be possible, but also for the communities in which we live to be sustainable and interdependent.
In terms of the work cycle, we will essentially have to take a hard look at what work means versus what employment means.
- Do we need to have two different terms and meanings, or would one suffice?
- How can we facilitate this flexibility and experimentation for all people?
- How can we work on equal opportunities?
Respuestas de los usuarios
Estamos invitados a continuar interviniendo en los cambios que permitan los mejores destinos para la humanidad. Partiendo de la premisa de asumir el control de nuestra salud. El envejecimiento saludable es un privilegio que comienza olvidando a conveniencia nuestra fecha de nacimiento que define solo nuestra edad cronológica y nos califica en lo social. Más hacia dentro de nuestras vidas está un mundo de libertad por descubrir que Dios ha puesto a nuestra disposición desde siempre y al cual debemos prestar atención. Esta afirmación por demás disruptiva nos abrirá la mente hacia experiencias que ninguna otra generación ha vivido en plenitud.