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Ageing and Innovation

Joint expert workshop on Consequences of the Demographic Change held by the BiB and the KfW on 9 May 2012 in Berlin

The effects that the profound change in the demographic structure has on work and life and the role of elderly people in society and in the economy, also in an international comparison, were investigated by the expert workshop of the BiB in cooperation with the KfW on 9 May 2012 in Berlin under the supervision of the director of the BiB, Prof. Dr. Norbert F. Schneider and Dr. Norbert Kloppenburg, management board member of the KfW banking group.

In his introductory speech, Prof. Norbert Schneider emphasized the major challenges of demographic aging for prosperity and quality of life both in industrialized and developing countries. Our understanding of ageing is usually associated with two assumptions that have not yet been adequately scientifically proven, according to Professor Schneider: firstly that ageing societies suffer from a decline in productivity, innovative ability and thus a lack of competitiveness and secondly that the productivity of a people inevitably decreases with increasing age. Whether these assumptions are true was examined again and again in each of the presentations.

Ageing: From Demographic Dividend to Demographic Burden?

The first session was dedicated to the question of how the demographic dividend changes in the course of aging. In her presentation, Daniela Weber from the International Institute for Applied Systems Analysis (IIASA) examined the productivity of the elderly from a global perspective. She first stated that demographic change, with the consequences of fewer people of working age and aging of employees, will have a strong impact on the labour markets. Her projections showed that the most effective response to an aging population is a longer working life, in order to maintain financial sustainability. The productivity potential and cognitive abilities of an aging workforce play a major role here, for it has been shown that countries that invest more in education, health and lifelong learning are frequently effectively younger, even if they have an older population. The burden of aging is thus lesser for northern Europe and the United States, while countries like India or China have a relatively high age burden, although their populations are relatively young.
The importance of education for profiting from the demographic dividend was also stressed by Prof. Gavin W. Jones from the Asia Institute and Department of Sociology at the National University of Singapore. It is clear that the developing countries with continued high fertility rates (e.g. Nigeria, Pakistan, and the Philippines) are faced with significant challenges in educating their rapidly growing young populations. The countries with fertility rates close to the reproduction level like Indonesia and India can, by contrast, more easily raise their educational levels and the quality of their educations, especially since they can profit from the demographic dividend of a younger population. The educational level of the younger cohorts in particular must be raised as quickly as possible – ultimately the available indicators of educational quality such as reading and writing in developing countries continue to lie considerably below the OECD average.

Ageing and Innovation

The percentage of employees aged 50 and over will more than double in many industrialized countries within the next 20 years, explained Dr. Matthias Weiss from the Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy. This development raises the question of the productivity of many older employees. Does it change over the life course? A study of the correlation between the age of employees and their work productivity shows no reduction in productivity to the age of 60 years, summed up Dr. Weiss.
The picture is different with regard to innovative ability, as Dr. Hans-Dieter Schat from the Fraunhofer Institute for Systems and Innovation Research (ISI) showed. He asked the question of whether the innovative ability of companies is at risk due to the aging workforces. Analyses revealed that older employees participate less in idea management, which leads to enterprises being less successful economically. All in all, the correlation between the age of the staff and innovations showed a reduction in innovative ability among 35-year-olds and older, according to Dr. Schat. How the mixture of older and younger people in workforces affects productivity can presently only be suggested, since research is in early stages here. It could, however, be said that age diversification in teams can be advantageous in some situations, and in others disadvantageous.

Ageing and its Consequences for Well-Being

How will a shrinking population impact prosperity and subjective well-being? This question was explored by Dr. Reiner Klingholz from the Berlin-Institut für Bevölkerung und Entwicklung. He stressed that demographic change has a direct or an indirect effect on subjective well-being. For example, the qualification and the value of each individual will increase in times of a lack of well-educated employees. The same applies for physical fitness as a prerequisite for the high productivity of older employees. All in all, people in a stagnating or shrinking economy can live more happily. A high employment rate with a high degree of subjective satisfaction is not impossible under the conditions of rapid demographic change, stressed Dr. Klingholz.

The Consequences of Migration for Countries of Origin and Host Countries

In their talk, Peter Bonin (Centre for International Migration and Development (CIM), Frankfurt) and Vinod Thomas (Asian Development Bank, Manila) dealt with the question of the consequences of migration for countries of origin and host countries. They showed that migration has many dimensions and should not only be seen as a one-way street that leads to a brain drain of the well educated from the countries of origin. Migration offers considerable potential both for the country of origin and host country. German development policy works together with originating, transit and host countries as well as with immigrant organizations to take advantage of the development potential that migration offers and to minimize risks.
All in all, the talks and the ensuing discussion revealed that the correlation between aging and economic innovative ability will continue to gain significance in the light of ageing societies.

“Fewer! Older! Poorer? – 63rd Berliner Fachgespräch zur Globalisierung

Following the workshop, the 63rd Berliner Fachgespräch zur Globalisierung (Berlin Expert Meeting on Globalization) was held, and attended by the director of the BiB, Prof. Dr. Norbert F. Schneider, parliamentary state secretary at the Federal Ministry of the Interior, Dr. Christoph Bergner, the deputy chair of the parliamentary wing of the Bündnis90/Die Grünen, Kerstin Andrae and the director-general of the Asian Development Bank, Dr. Vinod Thomas. The focus of the talks moderated by Dr. Melinda Crae from Deutsche Welle TV was on the question of how a market economy system with fewer, but older employees can increase its productivity and generate growth. What social and operating adaptations are required to make use of the potentials of the older population? The discussion also looked at the global developments and what experiences the industrial countries can share with developing and threshold countries about the integration of older people.

The photo shows the participants of the 63rd Berlin Expert Meeting on Globalisation on 9 May 2012 in Berlin.Ever fewer and ever older employees are confronting the economic systems with new challenges. What consequences does this have for productivity and the economic growth, in particular in a global respect? These questions were debated at the 63rd Berliner Fachgespräch zur Globalisierung on 9 May 2012 by (from left to right) Dr. Christoph Bergner (not pictured), Kerstin Andrae, Dr. Melinda Crae, Dr. Vinod Thomas and Prof. Norbert F. Schneider. Source: Photo: Michael Kirsten, Copy: Bernhard Gückel

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