Asia Summit 2015 - Hyper-Aging: What Leaders Should Know About the Global Demographic Shift

Global Demographic Trends and Urgency

• Aging is described as a global phenomenon comparable in magnitude to climate change, driven by low birth rates, cultural shifts, and increased longevity where average life spans have nearly doubled in the last 150 years.
• Asia is experiencing the most rapid demographic shifts, with the population over 60 projected to increase significantly between 2010 and 2040.
• Japan is identified as the "canary in the coal mine," with 26% of its population already aged 65+, a figure projected to rise so that one-third of the population will be 65+ by 2030.
• Emerging Asian economies, specifically Thailand and Vietnam, are aging faster than China, raising the critical concern that some nations may become "old before they get wealthy."
• Unlike Western nations which took 56 to 77 years to double their senior population proportions, Japan, Hong Kong, and South Korea are undergoing this shift within a single generation.
• Healthcare spending in major Asian economies is projected to rise drastically, with China's projected spending reaching $1 trillion by 2020, likely understating true costs by excluding productivity losses and caregiving burdens.

Economic and Investment Implications

• The traditional growth narrative for Asia, historically driven by expanding working-age populations, is fracturing; China's working population is projected to decline by 157 million by 2050, while India's will grow by 361 million.
• Pension funds, particularly in Canada, face sustainability challenges as aging populations shift from net borrowers to net savers, potentially depressing global interest rates and equity returns.
• Andre D'Anjou notes that Canada's public pension system sustainability was secured by increasing contribution rates from 3% to 10% and insulating funds from political misuse.
• Don suggests that establishing robust pension and insurance systems in emerging Asian markets is urgent, as these systems can mobilize domestic capital for long-term investment rather than short-term bank deposits.
• Investors are urged to consider the "longevity dividend," recognizing that older populations will seek continued engagement and work, creating new markets for products and services.

Human Capital and the Redefinition of Retirement

• A Global Aging Institute survey across ten Asian markets reveals majority support in Malaysia, Singapore, Thailand, Indonesia, Hong Kong, and Korea for governments raising the mandatory retirement age, with the Philippines as a notable outlier at 20% support.
• The panelists argue that "retirement" is a 20th-century invention, proposing "revention" (continuous reinvention) as a mindset for adapting to life stages spanning 90 years.
• Jackie highlights the concept of "relevance capital," emphasizing that investing in one's mind, curiosity, and adaptability is a more durable asset than material wealth in a volatile economy.
• Significant gaps exist in education systems, which fail to teach children financial literacy, health planning, or life-course management, creating a vulnerability for future generations.
• The panel identifies ageism in high-growth sectors like financial services and Hollywood, where senior professionals often face unexpected displacement despite high financial security.

Policy Recommendations and Strategic Wishes

• Government Policy Priorities:
  • Andre calls for political courage to address unsustainable pension and healthcare costs, noting healthcare spending in Canada could reach 15% of GDP.
  • Hiroko advocates for flexible employment systems that accommodate diverse physical and cognitive abilities rather than rigid mandatory retirement ages.
  • Don urges the immediate establishment of insurance and pension systems in emerging Asian markets to ensure financial security.
  • Andre and Jackie support liberal immigration policies and measures to increase female workforce participation (equal pay, opportunity) to mitigate shrinking dependency ratios.
• Business Practice Changes:
  • Hiroko calls for businesses to lead innovation in the "longevity economy," designing products and services that appeal to diverse older demographics.
  • Jackie proposes that businesses foster intergenerational teams, which research shows yield better results, and integrate human capital deployment continuously rather than seasonally.
  • Don suggests businesses must simplify medical system navigation for the elderly, reducing the complexity of engaging with healthcare providers.
• Individual Behavior Shifts:
  • Jackie and Hiroko emphasize individual responsibility for maintaining "health span" (years of healthy life) to align with increased lifespan, thereby reducing societal healthcare costs.
  • Don and the panel urge individuals to start saving and planning for aging as early as possible, ideally starting conversations with children.
  • Jackie advocates for a cultural shift to "replenish filial piety" and redefine aging to prevent isolation and ensure seniors remain integrated in family and community life.

Future Outlook and Philosophical Considerations

• The panel distinguishes between "lifespan" and "health span," noting that in Japan, 80% of seniors remain healthy until their mid-70s, suggesting that extending health span is the most effective policy for economic and social sustainability.
• Questions regarding the purpose of extreme longevity (e.g., 200 years) were raised, with the consensus that the focus must shift from merely extending life to improving the quality and purpose of those years.
• The panel suggests that as medical technology advances, society must prepare for a "geometric" rather than "arithmetical" increase in life, requiring a fundamental redesign of life planning from early childhood.
• Andre notes that diversity in the workforce must now include age diversity, treating older workers as an asset for decision-making processes.
• The session concludes with a call for "mindfulness" regarding life purpose, urging individuals to continuously reflect on their value and contribution at every life stage rather than awaiting retirement.