Why Rapid Aging Can Enable Rapid Economic Growth

Why Rapid Aging Can Enable Rapid Economic Growth

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There is not much light on the economic horizon for most OECD nations – while the developing world appears to have a bright future, according to the International Monetary Fund’s new report, World Economic Outlook. Perhaps what the IMF analysts have in mind is the inability of Europeans to find a formula for growth ever since the Great Recession, which hit the continent especially hard.

Demography, however, is not destiny. The countries that are thriving, excluding China, are aging slowly. And those that are struggling are aging quickly. The Europeans have some of the oldest populations on the planet, yet they continue 20th century-era benefits.   

Slow economic growth is the consequence of a mismatch between old systems and new population structures, the IMF report suggests. There’s been a failure to realign societies to population aging and the new demographics of the 21st century. With the right policies and practices, rapid aging and rapid growth can become parallel phenomena.

This point is essential not only for the high-income nations struggling today, but also for low- and middle-income countries that are growing. In Vietnam, Peru, and dozens of other emerging nations, fertility rates are plummeting and life spans are increasing at far more dramatic rates than they ever did in Japan or Germany. And the so-called “demographic dividend” that is paying healthy rewards today will be gone tomorrow.

So what’s to be done? As fertility rates drop and life spans increase, older adults must continue to contribute to economic life rather than become dependent, as previous generations have. It’s a lesson Japan and Europe are learning fast.

“Healthy, productive aging” is, of course, easier to articulate than execute. But it remains a global imperative to find the substance behind the phrase. Part of the answer may come from one of the hottest trends of the day: Big Data. There is ample reason to believe Big Data can revolutionize the ways people age.

The giant wave of technology-driven information can trigger health and medical breakthroughs – and the implications are huge. Take Alzheimer’s, for example, which is poised to become the nightmare of the 21st century. We don’t know the molecular basis for the disease, and, with so much ground to cover, a correlative approach to research may hasten our timeline to therapies. The OECD, Oxford University, and the Global Coalition on Aging are soon holding a summit to discuss these possibilities – and the potential can’t be overstated.

If Big Data can “de-link” aging and Alzheimer’s through correlative research, a tremendous obstacle to healthy, productive aging can be overcome. It’s a tall order, but so was curing HIV/AIDS. Other age-related non-communicable diseases (NCDs) like diabetes, heart disease, and cardiovascular disease pose both health and economic burdens as populations age. Both the UN and the WHO have recognized NCDs as barriers to growth and success.

The IMF’s new report confirms that the balance of global economic power is shifting and the aging of “rich” societies is accelerating this new world. Global economic fortunes, however, do not need to be a zero sum game. One nation doesn’t need to get poor for another to get rich. It’s a debate over growth – and particularly, how aging populations can become new sources of that growth. 

Executive director of the Global Coalition on Aging, Michael W. Hodin, Ph.D., is also managing partner at High Lantern Group and a fellow at Oxford University's Harris Manchester College.