The Demographics Time Bomb - Problem or Opportunity ?

I read an extremely interesting report today from Booz & Co concerning the demographics time bomb that is facing business and society looking at some of the metrics that can be used to measure where an organisation (or country) fits.  One of the metrics that they present is that of dependency (the "non working" proportion of the population that is dependent upon the "working" population).  Obviously, there is a difference between young dependents who will soon grow up an join the working population and older dependents that will continue to rely on the working population through until they pass away.  The report also identifies the strong link between dependency and the degree of "development" of the region.


From a UK and European perspective, the data presented makes a lot of sense and highlights the urgent and ongoing need to change our approach to the aging population and ensure that we continue get the best possible contribution from the older members of our society.


To quote from the report:


".....countries must redefine the notion of aging. Some governments have begun by attempting to raise the retirement age, but that measure is just a starting point. The real challenge is cultural. Countries need to raise a new generation that considers work to be a lifelong endeavor, with periods of varying intensity, rather than an activity that they perform for a preset number of years and then stop altogether at retirement. Developing this concept of work will involve the public and private sectors as well as civil society and academia. It must be introduced as early as preadolescence — embedded in the education system, and reinforced by flexible career paths that allow employees to gradually ramp down in their 60s and 70s instead of retiring."


I feel that there are two key areas that are missing from the report:


Skills Development:  As regions move into periods of "high old age dependency" then the industry in that region must be one of high revenues from relative few employees, i.e. using advanced technology and industrial concepts.  Such industry is likely to have a significantly more demanding skill set than less developed industrial regions, not only for employees entering the workforce out of "youth dependency" but also for workers who are already employed and need to "up skill" to maintain their value and contribution in the workplace.  Associated with this is a cultural change away from "a job for life" and towards "lifelong learning".


Strategic Thinking:  The report talks extensively about planning for the future and describing time scales of between 20 and 40 years.  However, countries and companies are not used to planning on these sorts of timescales.  For a politician, a long term view is thinking about what is required to get him re-elected into the next parliament...typically no more than 5 years away.  For business and industry, the relatively short term needs of the shareholder often take priority over long term reinvestment strategy and in this case, a 5 year view is often seen as sufficient.  Also impact upon this in a significant way is the position within whatever economic cycle is in place for the country or company and it's ability to pay today for the future plans...the current situation in Greece being an excellent example.


All countries (and organisations operating in therein) need to recognise where they are upon the "dependency curve" and take appropriate action to ensure that they are strategically prepared for their future (on a 5 to 25 year time frame) and this process will take time and energy.....and in my view MUST be completed with the buy in of the people affected by the changes that are being proposed !


Read the article here.  (Note that you may need to register a free account in order to see the report).