The world is about to experience a fundamental shift in demographics for the first time in history - "there are about to be more elderly people than young children". According to data from the Office for National Statistics (ONS) - in 20 years “one in 12 people is projected to be aged 80 or over” .
These new statistics build on data offered around UK, European and US labour force participation rates  - suggesting that global businesses and economies are sitting on a 'demographic time bomb' which has the potential to radically affect their very livelihood.
The Demographic Time Bomb
Firstly, the pressure the aging population puts on national economies is huge. According to the European Commission, “a rise in age-related government expenditure is projected to cost the equivalent of 2pc of GDP in 2060” . In the US, experts believe that “Medicare, Social Security, and the Medicaid funding for long-term care are projected to grow from 6.8% of GDP in 2000 to 13.2% in 2050. Health and long-term care programmes are projected to increase from 2.6% of GDP in 2000 to 6.7% of GDP in 2050” . In the UK, to compound a similar issue, about one third of nurses are set to exit the market in the coming 10 years, resulting in an immediate recruitment drive. However, due to a skills shortage for nurses in the UK, the NHS are being forced to expand their recruitment efforts internationally – which will be increasingly difficult given tighter EU/UK migration policies .
Second, with significant skilled workers leaving the market, the need to codify and map the knowledge and insights of the existing workforce over the next decade is a strategic imperative for global businesses. The scale at which the demographic shift will occur means that new entrants in the market simply won’t have the capacity to handle the same level of work NOR will they carry out the work in the same way. Millennials, who are burdened with high student debt and a weak job market, are better educated and more capable of dealing with rapid advancements in technology – meaning we should not expect this group to see the world the same way as the previous generation .
The demographic challenge will continue to compound every year for the next 10 to 20 years, when it will become a global crisis.
Rising to the Demographic Challenge
There are two core focal points which aim to, in my view, overcome the above issues – and in fact, they are both very connected.
One being ensuring education programmes are adequately equipping the next generation with the right balance of technical and social skills. As technology plays a greater role in our day-to-day lives, there is a critical need to ensure that the next generation truly understands how it works, why it works the way it does and what the implication of technology is on our way of life – today and in the future. The next generation will be responsible for defining the rules, ethics and structures for technology in which education needs to ensure tomorrow’s have a balanced IQ and EQ to make the best decisions.
The second being automation. Automation will play a critical role in helping national economies and businesses seamlessly manage the phasing out of the exiting (ageing) workforce while new entrants gain the necessary experience and insights to decide how and why things should be done going forward. I hear a lot of noise around how robots and automation will eliminate human work, but I simply do not see it that way. I see a major problem in that to maintain our way of life, the way we define jobs / work and to continually push human progression forward, we WILL need to constantly evolve the way we work with technology. Automation (RPA, Cognitive Systems and AI) is one of the very interesting technologies that will help us along the way.
These are indeed some exciting times we live and no doubt set to become even more exciting over the coming years.
I welcome your views on this as a topic.