The populations of almost all Western countries are getting older, as the Baby Boomers, born in the 1950s and 1960s, live longer and have fewer children than previous generations. Population aging of this dimension is possibly unique in world history. No surprise, then, that it poses serious challenges for the health care systems, pension schemes, and public debt management of modern societies.
What a Study of 33 Countries Found About Aging Populations and Innovation
The populations of almost all western countries are getting older and are predicted to age even further. As the active labor force declines over time, so does GDP. This poses serious challenges for the health care systems, the pension schemes, or the public debt management of modern societies. Innovation could come to the rescue by boosting the productivity of the remaining labor force. But can we plausibly expect aging societies to be as innovative as they need to be? We studied a panel of 33 OECD countries over the period 1960-2012 to find out the actual relationship between population aging and inventive activity across countries and time. It turns out to be hump-shaped. What explains such a pattern? Other studies have shown that individuals tend to decrease in creativity as they age. Our hypothesis is that after a certain point, societies grow aware of the dire consequences of their aging populations and the resulting increase in willingness to innovate, as well as governments’ efforts to systematize innovation, lead to more innovation overall.