The article discusses the economic consequences of demographic decline, particularly in relation to innovation and economic growth. It highlights the shrinking workforces, rising costs of healthcare and pensions, and the negative impact on productivity. The declining birth rates in countries like Italy, Japan, and South Korea are seen as examples of this trend. The article suggests that the falling number of educated young workers entering the labor market will reduce innovation and hinder economic growth. It also explores the potential solutions, such as focusing on education and technology, to mitigate the effects of demographic decline on innovation.
| Signal | Change | 10y horizon | Driving force |
|---|---|---|---|
| Greying economies innovate less | Decline in innovation | Decreased economic growth | Ageing population and shrinking workforce |
| Shrinking workforces and rising bills | Decreased labor force | Higher retirement ages, higher taxes | Demographic decline and fiscal strain |
| Rapid ageing of countries | Economic consequences | Reduced innovation, higher costs | Declining fertility rates |
| Fertility rates declining globally | Demographic decline | Reduced innovation, shrinking population | Global convergence in women’s aspirations |
| Decline in young workers entering labor | Reduced innovation | Decreased productivity growth | Falling birth rates and aging population |
| Demographic decline affects innovation | Reduced innovation | Decreased productivity growth | Ageing population and declining birth rates |
| Demographic decline reduces innovation | Reduced innovation | Smaller economy, decreased productivity growth | Ageing population and declining birth rates |
| Ageing population affects interest rates | Uncertain impact on rates | Decreased investment, lower real interest rates | Demographic decline and retirement |
| Older population affects productivity | Decline in productivity | Decreased innovation, slower economic growth | Ageing population and declining birth rates |
| Demographic decline and entrepreneurship | Decreased entrepreneurship | Reduced innovation, less dynamic economies | Ageing population and declining birth rates |
| Education to offset demographic decline | Increase productivity | Maximized output, offset ageing population | Shrinking workforce and declining birth rates |
| Technology to cope with demographic change | Mitigate ageing effects | Eased difficulties, automation of roles | Ageing population and declining birth rates |
| Shortfall in human innovation | Impact of AI on innovation | Decreased human innovation, AI-generated ideas | Ageing population and declining birth rates |