The current financial crisis is not the only serious global threat these days. Irrespective of the present market turmoil, the global population will continue to grow and age dramatically. By 2050, the world's population is projected to have reached nine billion. This can be attributed, to a high fertility rate in some parts of the world whereas in others life expectancy is constantly increasing. As some of the world's societies are aging dramatically, they are thereby changing decisively. Elderly people are increasingly playing a part in every aspect of life, and influencing it alike. To meet these challenges, politicians and governments but also every individual have to find reasonable solutions.
The population pyramid is upside-down
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In its new demography documentation Shape your future, Allianz is addressing the phenomenon through the lens of several core questions: What levers are at the disposal of established industrial nations for safeguarding their social systems? Will increasing age lead to shifts in the consumer goods industry? And, what effect will demographic change have on international capital markets? "Demographic change is one of the key issues for Allianz in living up to the responsibility towards our customers. Education, workplace design, changes in consumer patterns, provision for retirement and illness, and capital market trends - all are factors in the equation for future planning in aging societies," says Michael Diekmann, Chairman of the Board of Management, Allianz SE.
Markku Wilenius: "The collective experience gained during the lifetime of the older generation represents a substantial asset for society and must not be squandered"
Expected effects on consumption patterns require long-term strategies
Likewise, renowned experts allude to this challenging situation: "Our newest statistics show that the worldwide process of aging is rapidly occurring. Politicians and economists therefore have to contribute long-term strategies. Otherwise we will be overrun and unprepared by the potential developments," says Professor Wolfgang Lutz, one of the world's leading demographers and head of the World Population Program at the International Institute for Applied System Analysis in Vienna.
A world where elderly people are engaged in every aspect of life requires companies to adjust their businesses and find age-based solutions for their clients. The lifestyle, consumption patterns, demands, and investment strategies between the elderly and the young are vastly different. "The products of the future are increasingly being designed to allow people to achieve everything that they would like to at anytime and anywhere. You do not need a crystal ball to describe the next generation of notebooks and mobile phones: their operation will be simpler and at the same time more user-friendly," says Professor Markku Wilenius, trend researcher at Allianz Group Economic Research & Corporate Development.
Experience of life is becoming one of society's prime resources
Companies will not only have to deal with an older client-base, but an older workforce as well. The correlation between innovation and age is still unclear, yet it is of concern particularly to "older economies" such as Germany, France, and Japan, where the median age will be over 50 by 2050. This means that the majority of the workforce in these countries will be senior citizens, meaning there could potentially be some very serious economic repercussions.
The declining physical capacity of an older workforce could present an additional hurdle; however, it is not a foregone conclusion that productivity declines with age. "The collective experience gained during the lifetime of the older generation represents a substantial asset for society and must not be squandered. In the markets of the future, successful companies will know how to efficiently mobilize the knowledge and experience of the elderly," says Wilenius. It is therefore essential to raise awareness of how important it is to invest into the workforce via suitable training and fostering.
'Shape Your Future' aims to provide detailed information and thus a better understanding of global demographic shifts and their consequences. This special edition includes the most important demographic key figures of different countries, trend indicators with regards to business, education, consumption, old-age and health provisions and capital markets.
Even though questions which arise from this development cannot be answered easily and are often inconvenient, politicians, governments and every individual cannot avoid them either. Instead, they are worthy of being addressed with sustainable concepts, as they are too important to ignore.
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