ARC 2.0 Small, Innovative Economics

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Introduction
Percentage of population
Pillars
Countries
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Introduction

The inaugural 2017 ARC report established a baseline understanding of the state of global aging policies, with in-depth assessments of a group of 12 countries that are geographically, culturally, and socioeconomically diverse and that, together, represent 61 percent of the global GDP and nearly half of the world’s population of people age 65 and older. For the 2018 ARC report, we shifted our focus to 10 small economies around the world that are leading their regions in responding to demographic change.

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Percentage of Population Age 65 and Over

(Source: United Nations, Department of Economic and Social Affairs, Population Division)

For each country, the ARC looked at not just what it was doing, but how it was doing it, by assessing the conditions and approaches that had facilitated the generation of successful policies and programs. Across the board, five consistent themes emerged that shaped best practices in aging policy innovation: person-oriented, bottom-up, holistic, interdisciplinary, and evidence-based.

Person-Oriented

The most successful programs and policies are built on the direct engagement of users, not limited to older adults, but including their families and caregivers.

Bottom-up

While national governments set strategic priorities and dedicate funding, the most innovative programs are born out of the local agencies, NGOs, and individuals on the front lines of aging.

Holistic

Integrative solutions that serve the needs of a range of stakeholders were found when older adults were seen as a vital and valued part of a community, with resources to contribute, not just needs to be met.

Evidence-Based Solutions

Data collection and clear metrics for success are being employed by leading countries to measure the relative value of these investments, and replicate and scale the most successful models.

Pillars

As in the 2017 ARC report, countries were assessed on four pillars: (1) Community Social Infrastructure, (2) Productive Opportunity, (3) Technological Engagement, and (4) Health Care & Wellness. In-depth research and interviews with subject matter experts were supplemented with a survey of 125 aging experts.

Community Social Infrastructure

After health care improvements, the greatest momentum in aging policies and programs is found in developing a robust community social infrastructure (CSI), as societies grasp the economic imperative and enhanced well-being associated with aging in place. Thirty-six percent of experts surveyed cited CSI as the area of most significant progress in the past three to five years. CSI can be understood as the connective tissue of a society, broken down by three key elements: accessibility, engagement, and assistance. Taken together, these elements enable older adults to remain not only independent, but also active and contributing members of their community.

Productive Opportunity

As the share of the conventional workforce— defined as working ages 15 to 64 according to the OECD— shrinks, tapping older people’s skills, experience, and, most importantly, desire, to remain productively engaged will be vital to the competitiveness of countries and the sustained prosperity of their citizens. However, with few exceptions, countries are failing to effectively unlock the productive potential of their older populations, focusing instead on narrow pension sector reforms. When experts surveyed for this report were asked which of the four pillars was in greatest need of improvement, productive opportunity was the most popular response, cited by 31 percent. Only eight percent, though, saw it as the strongest pillar and a mere six percent thought it showed the greatest improvement in recent years.

Technological Engagement

2018 ARC countries consistently stand out in their regions for their early and extensive investments in information and communications technology (ICT) infrastructure and in the digitization of their economies. The unintended consequence of this is a heightened risk of digital exclusion as governments and companies move services online.

Healthcare and Wellness

While in countries like the United States providing access to affordable, high-quality health care is viewed by many as an incredibly complex challenge, among the 2018 ARC countries it is considered an area of strength and one that they’ve been able to take concrete actions to further improve. Most experts cited health care and wellness as the area in which their country is strongest, with 54 percent of respondents choosing this category. 38 percent of respondents cited health care and wellness as the category that has seen the greatest improvement over the last three to five years.

Countries

The 12 countries selected for this debut report – Brazil, Canada, China, Germany, Israel, Japan, Korea, Mexico, South Africa, Turkey, the United Kingdom, and the United States – are the largest economies by region, with the exception of Africa, where the largest upper middle-income economy was chosen. Together, they represent 61 percent of the global economy and nearly half of people aged 65 or older, and include a diversity of economic, social, and cultural contexts.

Australia

Australia is relatively well-positioned to adapt to societal aging, with one of the healthiest and best-educated older populations in the world. The country is shifting to a super-aged society within the next two decades, with the share of people age 65 and older exceeding 21 percent of the total population. While aging at a relatively moderate rate, Australia is in a strong position to compete in the global aging era. In recent years, Australian society has become remarkably engaged at all levels—the federal, state, and community—to actively adapt to demographic change.

As of 2017, people age 65 and older accounted for nearly 16 percent of the total population, and the percentage is due to cross 21 percent by the year 2039.

Chile

An economic leader and high-income powerhouse within Latin America, Chile’s commitment to social service programs and robust health care are increasing longevity and hastening the country’s transition toward becoming a super-aged society in which over one in five people is age 65 or older.

Those age 65 and older represented 6.2 percent of the population in 1990, which had jumped to 11.1 percent in 2017. This share is projected to grow steadily, and will hit 21 percent by the year 2041.

Costa Rica

With a long history of political stability, greater than average economic growth, and commitment to social welfare, Costa Rica has become a regional leader, with its proactive approach to human welfare and aging, pioneering broad-based investment in health care, education, and programs for the poor. Serving the evolving needs of older adults is a source of pride on the part of the Costa Rican people.

The number of older adults in Costa Rica will triple by 2050 to roughly 1.37 million, necessitating the expansion and adaptation of policies to support this demographic and foster its continued productive engagement in society.

Lebanon

Home to the oldest population in the Arab region, Lebanon is seeking to adapt to demographic change by providing innovative solutions amid continuing economic and geopolitical instability. The non-governmental sector is central to the country’s ability to accommodate the aging population. A multitude of programs led by non-governmental organizations (NGOs) are facilitating vibrant social lives for older adults and providing much-needed social support. Some efforts led by NGOs are also emerging to engage older adults in economic activities, volunteer activities, and education and digital training opportunities.

As of 2017, 8.5 percentof Lebanon’s population was age 65 and older, and the number of older adults in Lebanon was projected to more than double through the year 2050, at which time it will account for 23.3 percent of the total population.

Mauritius

The smallest country covered in this study, Mauritius, is leading the African region in proactively identifying aging as a critical issue for the health and competitiveness of its society and its economy. With a diverse population, deep historic ties internationally, a track record of political stability, effective governance, and rapid economic growth, it has embraced international best practices by defining a holistic approach to aging policy that reflects the unique resources and needs of its population.

The country became an aging society in 2008, crossing the threshold of 7 percent of its population over age 65, and is projected to become an aged society in just five years, with 14 percent of its population 65 and older.

Netherlands

The Netherlands is a prosperous, densely populated country of 17 million people that prides itself on openness, entrepreneurship, and innovation. The last Western European country to become an aged society, in 2005, it is now among the region’s fastest-aging societies. Since World War II, the country has built a comprehensive social safety net that has helped to create a healthy and active older population. However, the financial crisis and economic recession 10 years ago strained government finances and led to deepening concerns about the long-term financial burden on the social safety net due to the increasing number of older adults.

A small but densely populated country, the Netherlands is one of the most rapidly aging countries in Western Europe, becoming a super-aged society within the next decade. The speed of aging has accelerated over the past decade as the 2.4 million baby boomers born between 1946 and 1955 started turning age 65 in 2011.

New Zealand

New Zealand is experiencing the largest generational shift in its history, and is rapidly moving toward a super-aged society. With a strong, collaborative, and multi-stakeholder approach to aging, New Zealand is addressing the needs of its older population through an interwoven system of supports including a universal pension system, a localized social medicine system, robust nongovernmental programs, and individual efforts. A recurring theme in New Zealand is the government’s channeling of money to nongovernmental organizations (NGOs) familiar with their respective communities.

Today, more than 700,000 people age 65 and older make up more than 15 percent of the country’s population of 4.7 million. By 2032, New Zealand will become a super-aged society, when the percentage of people age 65 and older exceeds 21 percent.

Norway

Today, Norway faces transformations both demographic and economic. Its resource-rich economy, which has for decades successfully supported a robust social safety net, is being challenged by low oil prices as well as long-term risks from climate change and resource depletion. Already an aged society, Norway has been experiencing a dramatic increase in the pace of aging since 2010, when its baby boomers began to turn 65.

Within the next 15 years, Norway is expected to enter a super-aged society, when the share of people age 65 and older exceeds 21 percent of the total population.

Singapore

Singapore, a sovereign city-state in Southeast Asia, is known as the 20th century’s most successful development story, having transformed from a low-income country to holding the third highest per capita income within 50 years. Today, the economy is at the outset of another transformation— this time demographic. Singapore is one of the fastest aging high-income societies and its older population will double by 2030.

In 2019, Singapore will become an aged society, having crossed the United Nations threshold of 14 percent of its population age 65 and older. Over the next decade, Singapore will become a super-aged society, defined as people age 65 and older exceeding 21 percent of the total population.

Taiwan

Today, Taiwan stands at a demographic turning point for which it is proactively adapting through both policy and social innovations. It became an aged society in 2018 and Taiwan is projected to become a super-aged society within the next decade. Taiwanese society’s ability to adapt to its demographic shift lies in a strong government commitment coupled with extensive grassroots engagement.

Becoming an aged society this year, Taiwan is projected to be a super-aged society within the next decade. By 2050, close to 35 percent of the population will be age 65 and older, with nearly 20 percent of that group age 80 years and older.