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22 Apr 13 09:10

Population Dynamics Everywhere: How do we Preserve Wealth and Health?
By Hans Groth, Chairman of the Board, WDA Forum, St.Gallen / Switzerland

We live in a world of unprecedented demographic dynamics. Approximately 800 million people aged 60 or older lived on planet Earth in 2012, and it could be 2 billion by 2050 . For the first time in history, senior citizens will outnumber children. This will change our ways of life, economies, environment, resource consumption and the governance of business and society.

However, population and generation dynamics are not uniform across the 196 nations . While 32% of Japan’s population has already surpassed the age of 60, this will increase at less than 1% a year between now and 2050. This flat growth indicates that Japan will encounter soon a new equilibrium between generations. A recent Economist article suggests that demographic shifts in the USA play a major role in their current slow economic recovery . Furthermore, the power of demographic ageing will impact the long term economic growth there. A list of 36 selected nations and their expected increase of the 60+ cohorts by 2050 gives an insight into the magnitude of future ageing for families, societies and social security systems.

All these nations have this in common: They are striving for sustainable strategies to make sure people can live peacefully with decent wealth and in good health. But how can these goals be achieved? How do we start to act? Who are the key stakeholders? Experts, academics and members of global society increasingly spread awareness of demography's challenges. But how can they become more effective?

The WDA Forum – a leading platform to address demographic and ageing issues in an interdisci-plinary way – proposes five pillars to be managed by each country according to their population dynamics. These five “St. Gallen Pillars“ are:

• Work-life balances – adjusting to demographic realities of the 21st century
• Pension & retirement schemes – longevity as an ingredient of saving plans
• Financial markets – earning or regaining trust
• Public & individual health – longer, healthy lives translating into productivity increases
• Competitive advantages – avoiding a decline of business and society

These pillars cannot be sustained if considered in isolation. We must tackle them altogether, but in line with the unique demographics of different countries.

To conclude: Longevity is the great achievement of the 20th century. The task of the 21st century is to translate the "power of demography" into a new social, economic and governance order. This new order can only be built if the inhabitants on this planet make an unprecedented leap in the way they live and work.

Category: Funding longer lives: Long-term care, Longevity risk, Pension/retirement


Matt Singleton - 25 Apr 2013, 8:30 a.m.

The five St Gallen pillars are logical but are clearly challenging to deliver. Which key parties should be involved to make this happen? Is one stakeholder more involved than another in any particular pillars - or is it a collective effort?

Hans Groth - 26 Apr 2013, 7:56 a.m.

The fundament of our model are business & society which need 5 pillars to build a sustainable roof called sustainable demography or population dynamics. As always in construction: building a new house is an effort of many parties and experts involved. As such it is an collective effort with leadship depending on the construction phase of the project.

Nicholas Eberstadt - 26 Apr 2013, 1:02 p.m.

I very much like this approach to the matter of thinking through a strategy for dealing with population dynamics. There is one area where I would like to press you though:

--It seems to me that a key factor in maintaining growth and prosperity in the generations ahead will be expanding the horizons of economically useful knowledge: not just through technological progress via research and development, but also through innovation in business, society, family life etc. (Note as well that such knowledge-based development will tend to be gentler on the environemnt as human ingenuity is an intrinsically inexhaustable resource whose exploitation does not cause climate change, deforestation, etc!)

--Where does this critical aspect of coping with our future potential fit within your five pillars schema?

Hans Groth - 22 May 2013, 9:23 a.m.

This question raises two important dimensions. The first addresses the definition of progress and innovation. I think we should make the leap to think in broader terms about the meaning of progress. We need both technical innovations ( for example better healthcare provision, food production etc. ) and a wide range of unprecedented social innovations (work life balance, updated generation contract, new family models, desired fertility rates etc.). The second questions is about the proper positioning of progress in any of our five pillars. I think progress and innovation are ingredients of any pillar – not just a single one.

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