Across East Asia, populations are greying faster than anywhere else in the world, and while younger generations shrink, older workers are often toiling well into their 70s and beyond.

New York Times | January 2023

The so-called ‘demographic time-bomb’ of an ageing population – people living longer and younger folk having fewer babies – is exploding in the East Asian nations of Japan, Korea and China. And the rest of the developed world is not far behind this population crisis, hence the increasing media visibility afforded to this issue.

Megatrends: the future forewarned

This story has already been foretold in the demographic change megatrend. While the forces producing this trend have been unfurling since the start of this century their consequences are now rising fully to the surface. The ‘urgency’ attached to the policy response speaks to a blissful ignorance of the facts that are hiding in plain sight.

The megatrend tells us that as fewer people enter the workforce, companies need the older workers to stay on. The older workers need to stay in place because their rising numbers mean that governments are not willing or able to pay retirees a liveable pension, in particular in those jurisdictions that rely on a transfer systems whereby older workers are directly supported by the working population.

As a result, in South Korea the poverty rate among older people is around 40 percent and 36 percent are either employed or looking for work, while this is also the case for a quarter of Japanese 65+.

Crisis – what crisis?

Attempts to raise birth-rates in what demographers call “super ageing societies” have not succeeded and pro-immigration programs remain culturally unpopular in most developed countries.

The NYT says governments in Japan, Korea and China have all experimented with policy changes such as corporate subsidies and retirement age adjustments. What lessons will other governments pick up? Plans by the French Government to raise the pension age from 62 to 64 years have brought millions of protestors to the streets across that country.

But should this development be treated as a crisis? Maybe a push for later retirement is not all that bad. In fact, the notion of ‘retirement’ has recently been challenged as outdated medically and socially. Some medical experts even state that retirement is “bad” for us and that people should never retire and are better off remaining in the productive and engaged structures offered by regular work. This is of course not a hard and fast rule: work requiring hard physical labour usually and fairly has a cut-off age, but for many professions in our increasingly services-oriented developed economies, the notion of retirement might well be ready for retirement.

Apart from African countries, this megatrend of “super ageing societies” will sweep the globe. Policy responses need to adapt to this change and do so in ways that are culturally, economically and physically sustainable.

Megatrends watch: demographic change

Subverting
Stable
Accelerating

This update is part of our Megatrends Watch series, which tracks developments that inform our six global megatrends….

Image: Mike Swigunski

Sydney Business Insights is a University of Sydney Business School initiative aiming to provide the business community and public, including our students, alumni and partners with a deeper understanding of major issues and trends around the future of business.

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