Aging and Economic Growth: Connecting the Dots
By MICHAEL HODIN,
Posted: November 25, 2011
As the American debt crisis threatens our economic future and the Europeans mismanage the epic struggle over theirs, let’s connect some important dots – or rather, point out that key connections were already made in the recent Asia Pacific Economic Conference (APEC) summit, as announced in the ministerial statement out of the Honolulu heads of state meeting, hosted by President Obama. The relevant paragraph from APEC reads, “We recognized that the rise in chronic, non-communicable disease due to aging populations and lifestyle changes in the region is constraining our economic growth potential. We welcomed APEC’s cooperation with the World Health Organization to develop an APEC strategy on aging. We will encourage efforts to develop age-friendly economies using innovative policy, practices, and technologies to support healthy lives.”
Connecting economic growth with the challenges of aging populations is at the core of the Greek, Italian, and Spanish financial crises – and increasingly, at the core of ours as well. That’s the soft underbelly of our longevity miracle. As Dr. John Lechleiter, CEO of Eli Lilly, pointed out recently, “Longer, healthier and more productive lives and more of them [are due to a] virtuous medical-economic cycle… [It has been] generating equally staggering growth in China and elsewhere in the region… Wealth follows health.”
Certainly, we’re living longer: Witness the recent report on the increasing number of 90-year-olds in this country. Aside from that, traditional working-age populations are plummeting, a consequence of low fertility rates. But the APEC brilliance was to articulate that the entitlement and social-welfare benefit structures put in place for aging populations in the previous century are no longer sustainable. The need is great for innovative solutions across the life course that keep people healthy longer – which will allow us to be more active and productive as we age – and help fuel a new 21st-century model.
Consider that Japan has the oldest population on the planet, followed by South Korea, Singapore, Taiwan, Hong Kong and China. Many of these countries will see a staggering 40 percent of their populations grow older than 60 in the next several decades. It’s critical to avoid the crisis that unsustainable dependency by older populations will bring economically.
APEC leaders were essentially announcing their support for a new social contract. Healthy aging allows people 60 years and older to remain active and employed and to avoid the presumption of disability and dependence associated with 60-, 70-, or even 80-year-olds. And it’s a shout-out to all others as well to change the way they think. If we get this right, we’ll be able to get back to affording the health care needs of the growing number of 90-year-olds as the century progresses.