The Aging of our Small World
“It’s a small world…I wouldn’t want to paint it.” I still laugh thinking about Stephen Wright’s deadpan delivery of this classic one-liner. Returning from Lockton’s Global Benefits Forum, my head was still spinning from all the great content that was delivered at these sessions in Chicago (more on that content at the end of this blog).
During the sessions, at breaks and meals, clients kept sharing that while the world may be small in Stephen Wright’s view, it is growing immensely complex regarding Human Resources and employee benefits. Global growth is accelerating and as markets, clients and competitors expand, employers are having to meet their constituents where they are. Increasingly, they are meeting them outside the United States.
It would be nigh on impossible for me to sum up all the content of this forum in a short blog, however, I saw 2 major themes echo over the few days which center on the changes to the world’s demographics…
The world is aging incredibly fast and this aging is reshaping the global workforce. By the end of the 21st century, the populations of the Americas, Europe and Oceania will remain relatively flat while the populations of Asia and Africa will continue to rise. The African population will see the largest increase and by the end of the century, it should be roughly the same size as Asia. Nigeria will be the world’s 3rd most populous nation behind India (#1) and China (#2). These shifts will set up 3 stratifications of a) lower income nations / geographies, b) middle-income nations / geographies and c) higher income nations / geographies.
For the lower side of the scale, the struggles will center on internal conflicts and how to invest in education as well as productivity. Those in the middle will likely struggle over savings rates, productivity gains, labor force participation and increasing health care costs. At the higher end of the scale, the struggles will include pension / retirement costs, intergenerational polarization and rapidly rising health care costs.
Regardless of income stratification, all nations, geographies and continents will have to embrace the challenges of longer life expectancies. Pension costs are going to soar and it is likely that governments and employers have not fully projected for this growth. Naturally, as we age, we incur more healthcare expenses. Once again, governments and employers will feel these health care pressures. Case in point, most Germans are covered by statutory medical insurance system and care is delivered with reasonable cost and quality. However, in recent years, reductions in statutory benefits saw the development of private medical insurance markets to fill this gap. Employers are offering these solutions due to the positive impact on the employee experience despite the lack of favorable tax treatment.
And Germany is not the only nation struggling to provide wide access to quality yet affordable health care. Here in the US, it will be a central issue of our national conversation for the foreseeable future.
Technology and productivity will be more globally abundant and could be a solution to many of our problems. However, technology and productivity will carry risks and problems of their own. Through infrastructure advancements, nearly everyone on the planet will have access to the web regardless of location. Healthcare will be accessed online. Surgeries will be performed via remote connections through human, AI and robotics integration. Pharmaceuticals will be delivered via drones. Wearables and sensors will give us broad information on our bodies and so much more. Governments will strive to stay on top of these developments but will lag technology’s innovation. Even in nations where access to health care is universal, as the emerging private health insurance market in Germany proves out, these are challenges which will require public and private partnerships, cooperation and coordination. Employers will continue to play a pivotal role in these developments
I wish I could share all of the terrific content from the Global Forum in this post. Well, here’s the next best thing: the session topics (a photo from the conference app - great tool, btw). If you see something that peaks your interest, please reach out and I can send you additional information.
Small world: sorry Stephen, not so much.
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