Demographic Megatrends and the Challenge of Aging Societies
What this covers
On May 1, the American Council on Germany and the Global Coalition on Aging hosted the first in a series of online webinars in the run-up to the Silver Economy Forum in Berlin. Dr. Nicholas Eberstadt, Henry Wendt Chair in Political Economy at the American Enterprise Institute, and Prof. Dr. Andrea Maier, Professor of Medicine at the National University of Singapore, discussed the trends, challenges, and opportunities of the demographic megatrend that is our aging population.
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Demographic aging—driven by increased longevity and below-replacement fertility—presents both serious challenges and substantial opportunities that require coordinated public policy, private sector innovation, and cross-ministerial collaboration to achieve healthy, productive aging societies.
- Global life expectancy has risen from 30 years in 1900 to 73 today, while fertility rates have fallen below replacement in most regions except sub-Saharan Africa, creating unprecedented aging with depopulation in East Asia and Europe
- Health span (years lived in good health) lags lifespan by ~30 years in industrialized countries, meaning societies must invest in prevention, productivity, and Elder care simultaneously
- Successful aging societies require integrated strategies spanning healthcare, labor markets, urban design, nutrition, family structures, and business models—not siloed health ministry responses
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Low birth rates, not long lifespans, are the primary driver of population aging; small families make for gray societies, not longevity itself.
“what we have to bear in mind is that low birth rates are the main driver of population aging of graying small families make for gray societies not long lives it's great to have the long lives there but it's the small amilies that are driving the extraordinary aging that we're going to see in some of the depopulating societies”
Human resources and potential need to be augmented at every stage of the life cycle—from babies through childhood, adolescence, working age, middle age and beyond—through better nutrition, healthcare prevention, education and skills development, and research and development that enables doing more with less.
“if we're going to have aging and shrinking societies uh we need to be alert to human resources and human potential at every step of the life cycle so of of course healthy aging but as Andrea said you want to start looking at that from very early on and so the the different sorts of opport unities and Investments uh depend upon the age of uh persons so from from babies through childhood through Youth and Adolescence to early uh working age and then on to middle age and then beyond uh so very generally speaking uh human resources are going to be augmented by better nutrition Better Health involves a lot of prevention uh better education and skills”
East Asia (China, Japan, South Korea, Taiwan) and Europe (including Russia) have already entered depopulation, and East Asia is on a trajectory where one out of ten people will be age 80 or older by 2050.
“the uh the parts of the world that are already in depopulation that have already entered into depopulation are the region of East Asia uh not just China but other countries Japan South Korea Taiwan and the continent of Europe as a whole if you include Russia although not all countries within Europe obviously are depopulating yet um what we have to bear in mind is that low birth rates are the main driver of population aging of graying small families make for gray societies not long lives it's great to have the long lives there but it's the small amilies that are driving the extraordinary aging that we're going to see in some of the depopulating societies it's hard to think of this yet but East Asia is on a track where one out of 10 people in 2050 maybe 80 years or older”
India faces a particular demographic concern because despite below-replacement fertility and projected aging, approximately 90% of tested young people in India do not meet international basic skills standards, meaning India will experience population aging without adequate human capital.
“India I think is a particular concern because the level of skills and education for the general population is uh is weaker than it should be something like almost 90% of the young people in India who are tested do not meet international basic skills and a gray Society without basic skills is going to have some challenges”
To have a healthy aging society, investment in children and youth from early life (even conception and preconception) is critical because health trajectories established early determine aging outcomes decades later.
“the aging process which starts very early in life even many thing uh during conception or even preconception it's very important to also uh take Children's Health into account um think about obesity at in younger ages”
Ageism is pervasive in aging societies and needs to be addressed through narrative change, as people are increasingly aware of demographic trends but policy and cultural frameworks have not adapted to recognize the contributions and value of older workers.
“agism is pervasive um and the other was that a new narrative needs to be written to make people a little bit more aware both of the trends that Nick is talking about but also the kinds of developments that you're talking about Andrea”
The 20th-century three-phase life model (education, work, retirement) has been overtaken by demographic events, and current models are being pressured and adapted rather than evolving proactively, with retirement age paradoxically falling while lifespan lengthened.
“I think we've been o uh I think we've been overtaken by events and I think uh our models are kind of being uh pressured and kind of like we're being dragged along into reality because we we're not ahead of this curve I mean until relatively recently we had this um obvious Paradox of longer lifespans uh coinciding with uh lower and lower average ages at retirement now you know you don't have to be a demographer to know where that goes”
Retirement at a fixed age creates health risks: one-third of people entering retirement are at greatest risk for developing health-related diseases because disruption to daily cycles induces low physical activity, bad eating, and poor sleep.
“another Factor many do not know is uh people who are entering the retirement age onethird is at greatest risk of developing H related diseases because the entire cycle of the day um is Disturbed um very often inducing low physical activity bad eating habits bad sleep ET ET so retirement age and having that that clear-cut number is actually a risk for the health of the individuals”
Mental health is declining globally with approximately 20% of individuals across all ages experiencing depressive symptoms, and social structures (family, community) are critical for mental health as aging progresses, requiring environmental and architectural adaptation.
“we really have to see the Ed of the human being and in the end very often this is the family structure and I think we have to adapt and where do we actually age we are we are aging in an environment uh which is built based on on structures and very often architecture is involved I think if I um would be asked to invise uh governments I think architecture is a very very important Point how do we design where we live because our environment is not hugely not only hugely influencing our health our physical health but especially also our mental health and how easy it is to reach others and there with our friends and our our family”
Governments should incentivize individual health behaviors through urban design and food policy: designing cities with accessible transportation (bus stops), walkability, and partnering with food multinationals to improve nutrition could extend lifespan and health span by 8-10 years at the population level.
“incentivizing behavior of individuals which could be let by governments and that is partly based on the structure of City where do you have bus stops Etc how far do you have to walk what kind of solutions do you give um to have a healthy healthy life span um but another next to physical activity is food how do you actually work with big multinationals together to have healthy food on the table how do we avoid the hamburger every day and how do we get the fruit and the vegetables on the plate because we already know that if we would shift people on group level from a normal diet uh towards a healthy diet that individuals would live 8 to 10 years longer and healthier”
Health span—the number of years lived in good health without age-related diseases and with ability to care for oneself—is distinct from lifespan, and in industrialized countries there is approximately a 30-year gap between first appearance of age-related diseases (age 50-55) and death (age 80-85).
“very importantly is not only to looking what the lifespan is but especially the health span so how do we age and uh we aging quite differently compared to decades ago um just for a little bit of clarification the heal spand is the the years somebody has on Earth with reasonable Health where somebody has some definitions no h related diseases think about cardiovascular disease think about dementia there was not having these diseases also being able to care for themselves which is I think what we what we want we want a long Health span and we want a also quite a long lifespan at least um many of us want it so the lifespan is the the AG as at death um very importantly is that the health SP and the lifespan if you're looking at different countries around the globe the Gap is in industrialized countries is roughly 30 years so when do we have um our first age related diseases that's at the age of 50 55 how long do individuals live that's uh 80 85 years which means there is a is a gap”
The world has likely passed the milestone of below-replacement fertility globally as of 2023, with every continent except sub-Saharan Africa now below replacement level, meaning depopulation pressures are becoming a defining global trend.
“if we actually had uh final data for the year 2023 which we won't have for a while given the weakness in stat numbers in different places it's quite possible that the world as a whole has passed the Milestone of below replacement fertility because every continent but the sub Sahara where birth rates are still very high is now below replacement”
Japan is at an extreme point demographically where women born in 1990 have slightly more than a 50% chance of completing life without any biological grandchild, illustrating the magnitude of family structure change in depopulating societies.
“Japan is kind of at the point on the spear here some of the demographic projections for Japan suggest that a woman born in 1990 is slightly more than 50% chance of completing life without any biological grandchild”
Pay-as-you-go public finance systems (e.g., social security, pensions) work well with a population pyramid (more young workers supporting fewer retirees) but fail when the pyramid inverts due to aging; this is not a surprise unless policymakers choose to ignore the issue.
“one of the obvious uh questions is going to be how we address the old pay as you go system of public Finance it's great when you've got an actual population pyramid it's not so good when the population pyramid's been turned upside down but these are not these are not things that are going to be surprises unless we want them to be surprises and for them to be surprises we have to close our eyes”
Some countries have more social glue, social cohesion, and social trust than others, and high trust enables better collective response to demographic challenges; low trust and confidence in civic institutions makes aging adaptation harder.
“some uh some countries are going to do this better than other countries because some countries have more social glue more social cohesion more social trust um less uh less social trust and less confidence in Civic institutions and government is obviously a negative in trying to deal with any sort of challenge that demands resilience”
The lump of labor fallacy—the misconception that a fixed number of work hours exist and older workers taking those hours prevents younger workers from working—is wrong because market economies create demand and labor demand is not zero-sum.
“there are some basic economic misconceptions that most people have and it's maybe not surprising but the misconceptions and one of these you might is referred to when you learn economics as the lump of Labor fallacy it's as if the good Lord uh went around the different continents sprinkling a certain limited number of work hours on North America and Europe and Asia and if the greedy old 70 year olds are at work taking up these hours that means that people in their 20s aren't going to get the chance to work taking jobs I mean the essence of a market economy is that you create more things through demand that the the labor creates more demand which creates more demand for work and it's not a zero sum game”
Sub-Saharan Africa has birth rates approximately 100% above replacement level and will experience very rapid population growth over the next generation, with an increasing share of global labor force growth coming from youthful sub-Saharan Africa.
“the last uh the last of course is subsaharan Africa where births are about 100% above the replacement uh uh line at this point we're going to see very rapid population growth there in the over the next generation incre an increasing share of the world's labor force growth is going to be from youthful subsaharan Africa um basic skills are going to be the name of the game and we still have a big lag there”
Modern medicine has created a situation where longevity has advanced dramatically due to hospital systems, healthcare infrastructure, research, and medication—to the point that 'it's really hard to die' because of the many disease interventions available.
“we are living longer because we have beautiful hospitals we have a beautiful Health Care System um that we have due to the Healthcare System due to the research basic research but but also applied research we now have medication we didn't have 50 years ago or 80 years ago um if you're looking at medical books they really changed they had to be Rewritten we now are solving things we couldn't solve 20 or 30 years ago so what we are looking at is I would say the success of modern history of Medical Services sometimes if I'm being challenged I say it's really hard to die because we have so many opportunities”
Global life expectancy was approximately 30 years in 1900 and has risen to approximately 73 years today, representing an improvement of roughly three months per year for the last 180 years with no sign of stopping.
“back in 1900 world life expectancy was about 30 years try to imagine that uh today global life expectancy is maybe about 73 years it's probably higher than many people appreciate given the health benefits that lowincome countries have had and there seems to be no stop to this trend for the last 180 years uh the highest life expectancy country in the world has changed over time but the slope has been an improvement of about three months for every year and it hasn't stopped yet”
Approximately 60% of 60-year-olds have at least two or more chronic diseases and take five or more medications; by age 80, this rises to approximately 80% of the population.
“there is a huge amount of individuals if you're looking at 60y Old 60% of a 60y old population has at least two or more chronic diseases and takes five or more medications at the age of 80 this is 80 year uh 80% so there's a huge amount of individuals if we would not have medication like an insulin or other injection vaccination that the population would really look very very differently”
Dementia and cognitive decline represent a serious unsolved challenge for aging societies; while eventual medicalized solutions may address Alzheimer's and dementia, progress has stalled unlike other life sciences domains.
“one of these is the question of cence um I mean I'm quite optimistic about the prospects for uh healthy uh economic activity for people in their 60s and 70s one gets into 80s uh things tend to get a little bit more uh complicated in particular the question of dementia uh I expect that eventually we will be able to uh have a medicalized answer to the challenge of Alzheimer's and Dementia we can note that over the last Generations we haven't made much progress in this area unlike practically all the rest of the life sciences”
The global population number of 8 billion reached in November 2022, after jumping from 7 to 8 billion in just 12 years, is important, but is less important than understanding the aging and demographic composition of different regions.
“the global population passed the milestone of8 billion people in November of 2022 with the jump from 7 to 8 billion taking only 12 years and although this number and the rapidly growing global population is important one of the demographic challenges that does not seem to get enough attention is the fact of the Aging of society globally”
The global silver economy is estimated at $17 trillion, representing a huge market opportunity for companies that develop products for aging populations and adapt existing products for age-specific challenges.
“know that one of the sort of important talking points from the the global Coalition on Aging is that there's a 17 trillion doll Global silver economy um which is a huge number”
The London Business School has conducted economic calculations showing that living longer and healthier would reduce healthcare costs and benefit the economy overall, and this is particularly important given the economic necessity created by low fertility rates: productivity from older workers is an absolute necessity.
“the London business school did lots of Cal calculations really seeing okay if we would live longer in healthier what would that mean for the economy and it's not only to to reduce the healthcare costs but it's because you also have to invest something to to maintain Health but especially also productivity which is important and that under uh the umbrella of of lowering fertility rates around the world so it's an absolute necessity to talk about when people St should stop working”
Family structure is increasingly scarce for older people due to declining fertility, and historically the family has been indispensable for Elder care and support; without family as the care unit, societies must develop substitutes and responses to this structural change.
“declining fertility and sub repacement fertility that is mostly driving the graying uh it's it's a Trends in health that's making it for healthy aging but driving the graying and that means that family is going to be increasingly scarce on the ground for older people uh Japan is kind of at the point on the spear here some of the demographic projections for Japan suggest that a woman born in 1990 is slightly more than 50% chance of completing life without any biological grandchild um up until now family has been the indispensable unit for Elder Care and Elder support and that is going to be changing in different places in a sort of a disperate way within Society”
Approximately 30% of the population aged 70-80 years old have dementia, representing a huge threat to individuals and society.
“very often 30% of a population being 70 to 80 uh years old have dementia which is a huge threat to individuals but also to society”
North America (USA and Canada) still have growing labor forces and moderate population aging due to immigration inflows offsetting below-replacement fertility, unlike East Asia and Europe.
“in North America we've got up below replacement fertility but uh due to the immigration flows so far the uh the the North American countries uh USA and Canada still seem to be growing their labor forces are still growing their uh their population aging is continuing but it's at a more moderate Pace”
Demographic trends constrain the realm of possible policy options and human adaptability operates within a demographic framework—population changes 'slowly but quite unforgivingly change the realm of the possible for everything.'
“the big changes in birth Trends and death Trends slowly but quite unforgivingly change the realm of the possible for everything there's a lot of leeway we have human agency human beings are adept adapting we're the most adaptable of all of the species but within the framework that population change imposes upon us we have uh limits in our options”
Products must account for intergenerational use cases and differences in how people from different cultures, ethnicities, and genders age, because aging is not uniform and product adaptation is necessary rather than treating aging as a monolithic demographic segment.
“especially the intergenerational aspect if you have a product how do you make it and how to tweak it um to make it even better for C and populations and we are just talking about age um but I may want to to say there are so many differences also in terms of culture ethnicity how people age that products have to be adapted and not that alone that we also have to to separate in in some of the topics also females from males so uh half of the population is is very often in terms of the products being produced not comparable to the other half because of the different features based B on our chromosomes we we have which are very different between males and females”
Policy should create incentives for people to remain economically active in their 60s and 70s, and while people should not be forced to work, they should not be discriminated against for choosing to work, representing a major economic opportunity for aging societies.
“there's a huge huge Economic Opportunity for aging Societies in unlocking the value of healthy aging and the not that people might choose to be working in their 60s or in their 70s uh is something that uh policies and businesses and workforces ought to be thinking about and preparing to adapt for”
Governments should evaluate other governments' performance on aging using similar criteria as labor markets, public finance discipline, and research and development investment—areas where governments already demonstrate competence and that directly impact aging outcomes.
“I'd say look at what governments are doing uh with regard to labor markets with regard to uh to Public Finance and discipline of Public Finance with regard to research and development the governments that are good on those things are probably also going to be good on the questions of healthy aging as well”
Leadership in both public and private spheres has the advantage of knowing with high confidence what demographic profiles of industrialized societies will look like 10, 15, even 20 years out (barring fertility prediction errors), making demographic trends more forecastable than most other major risks.
“the advantage that um serious leaders have in business and in government is that these Trends are not exactly secret we've got a very good idea of what the demographic profile of the industrialized societies will look like 10 years from now 15 years from now even 20 years from now once you start to get into trying to guess how many babies people are going to have you get a little bit off track but we've got a very good uh sense of where we're going”
Every company should develop an aging strategy because demographic aging is predictable—companies can project the aging trajectory of their consumer base over the next 10 years and the proportion facing age-related challenges.
“I think everybody every company should actually think about who is my my consumer of course and and how does the consumer look like in the next 10 years and uh during the next 10 years this consumer if you want to keep the consumers uh will have different challenges based on the Aging trajectory and we can predict now how people age that's very easy so we can predict how many of the 10,000 consumers somebody has what the proportion actually will have uh what kind of of diffic difficulty”
In a world of increasing health, education, and technological capacity with shrinking populations, prosperity can be maintained and even increased if societies demonstrate foresight and deliberate coordination across policy areas.
“in a world that is increasing with health increasing its education increasing technological possibilities uh I can see the path where we not only maintain but increase prosperity in a shrinking aging World it doesn't happen automatically it doesn't happen spontaneously necessary uh we we need to have foresight and considerable uh deliberation on many many different areas”
The problem of aging policy is cross-sectoral but is often confined to health ministries; effective aging policy requires collaboration between ministries of health, education, labor/manpower, transport, and finance to address nutrition, education, incentives, and structural factors.
“health is just an outcome of of policies um it's not the determinant... I will get just give you an example from Singapore where I live and partly I left Australia at a certain uh point in my life to choose to live in Singapore of course the ministry of Manpower the ministry of um of health and of Education which is very important and transportation are working together so it really starts with the awareness what do you want to tackle and how broad do you want want the approach to to tackle a certain certain issue”
Different countries are making different investment choices in response to aging: some invest heavily in higher fertility rates and attractiveness of parenthood (Singapore, Japan), while others invest primarily in making middle-aged individuals healthier and more productive to remain in the workforce longer.
“it depends on the lifespan it depends on the health span and it also depends of CES at the trajectory and we just mentioned fertility rates so how many children are going to be born so how is a projection uh of these countries and what kind of uh political agenda uh for example we immigration does certain countries have and this really influences uh the the necessities of some people to either invest for example as in Singapore in higher fertility rates making more attractive like also in Japan or investing much much more in middle-aged individuals to become more healthier to be in labor to be productive much much longer in other countries still invest heavily also and we have to invest in nursing homes Etc how do we care for individuals at the later stage in life”
We are currently living in the UN Decade for Healthy Aging, representing a significant achievement in getting aging recognized as a global policy priority, though a limitation is the lack of standardized measures of what 'healthy aging' actually means across countries.
“we are living at the moment uh in the United Nations decade for healthy aging and I think that's a huge success uh after lots of debate if that should be a topic for the United Nations and the wh and I think positively yes they made the decision we're already living in the decade now for for three uh years there is an agenda to really increase the awareness um and there was hopefully knowledge of all uh countries around the world what is the moment a little bit hampering the the success I would say is that we do not have many measures to to see what healthy aging is we know how long people live but how what their quality of life is what they can do in daily activities if they can rise from a chair for example if they can feed themselves”
Countries must decide how much of their GDP to spend on health, with current variation ranging from 5-6% (some countries) to 15% (US), and rising; determining this limit and shared responsibility for health maintenance requires inter-ministerial coordination that most countries lack.
“per country if we are zooming in countries have to make a decision how much of the GDP to spend for health um there is already dispy there are some countries spending five or six% some like the US 15% there is a huge huge difference but it's it's rising all the time during the last uh in the last decades so where is actually the limit where we want to spend our money on and it's not only um that we are talking about health insurers where people want to spend their money on but whose responsibility is it to stay healthy and that's even a broader topic um and it's I would say a a shared responsibility but here none of the countries has a good plan or even not um a plan how to discuss it uh with the different parties with the ecosystem uh being involved in primary prevention”
There is a growing consumer movement toward personalized health monitoring and longevity products (wearable devices, startup drugs, health-focused dating apps), creating opportunities for industry to address the silver economy, but this ecosystem requires good regulatory structures to maintain quality.
“what I see is this huge increase of consumers who understand that they are aging on individual level who are trying to find solutions for themselves which led to to an a a huge increase of Industry Partners in the ecosystem um think about variable devices to check how healthy you are your heart rate varability your sleep think about startups who are finding and searching for new drugs to to to somebody who wants to live longer think about um even Industries who want to match individuals in terms of dating a third generation dating app now exists so there is a huge amount of Industry Partners who are entering now the health and the Wellness Arena because of the search of individuals to live longer and very often also to live healthier and I think that's an opportunity and we just have to build an ecosystem with good structures um in the different countries to nurture that”
Products like Google Nest are marketed for home safety but miss the opportunity to serve as tools for monitoring elderly relatives, and similar opportunities across consumer technology remain untapped by major companies.
“one of our viewers um just said that that you know products like Google Nest um seem to be targeted to the safety of our homes but not necessarily as a tool for monitoring our grandparents and and sort of asks whether Google isn't missing an important opportunity”
Public servants need the ability to explain and convince voters about demographic pressures and opportunities ahead, and the private sector has a major role in providing real-world examples of flexible adaptation that others can learn from.
“that's why you need uh public servants who can explain and uh convince and begin the dialogue with voters about uh where we're going the sorts of pressures we're going to be facing also the sorts of opportunities that we're going to have as Andre was saying um but there's a huge role for uh for the private sector here because uh businesses can be much more flexible they can have a much more leeway in um in taking leadership and in providing uh real world examples that others can see and learn from”
If countries do nothing to prepare for aging, they will be like 'picnickers down at low tide'—trapped by circumstances they could have anticipated and managed, but societies can 'get ahead of the curve' if action is deliberate rather than spontaneous.
“if we do if we do nothing uh we're going to be like picnickers down at low tide and we kind of don't want to do that we can get ahead of the curve but it's not going to happen spontaneously”
A first-generation baby boomer volunteer in hospitals for 25 years demonstrates the value of continued contribution; older workers and volunteers make essential contributions that hospitals rely on, showing that extended engagement in later life is both meaningful and necessary.
“the viewer writes that that they are a firste baby boomer and found their calling by volunteer ing in three hospitals over the last 25 years and this person always tells new volunteers that without the help of the volunteers it would actually be hospital employees who are doing the work that they are doing and that this work is greatly appreciated”
Information dissemination and persistent advocacy on aging topics can shift awareness and outcomes incrementally, like gardening: starting with small steps may yield larger returns over time with sustained effort.
“where we can come in is trying to help bring information to people who are receptive to it and uh like anything else in life uh it it's like it's like gardening um May it may start out with very small increments but it may be big returns later on if one is kind of persistent with it”