What Japan Can Teach Us About The Opportunities Of An Ageing Society

An ageing society isn’t necessarily a bad thing. Yes, there are more older people but there is plenty to be had from more longevity
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Prime Minister Abe’s recent visit to the UK was a chance for the two countries to talk about common issues affecting their future. Let’s hope one of the topics they discussed was how to deal with an ageing society.

In the 1970s and 1980s the world looked to Japan to learn about lean manufacturing. After the 2007-8 global financial crisis it looked to Japan to see how to deal with the aftermath of a financial crisis.

Japan is a pioneer in dealing with an ageing society, and countries faced with similar challenges like the UK should look to it for innovative solutions. According to the ONS, 26% of our population will be 65 or above in 2041 – up from 18.2% in 2017.

Currently one in twelve people globally are over 65, in 30 years it will be one in six. By 2020 there will be more people aged over 65 than under five. Japan is leading the way in this demographic transition. It has the highest life expectancy at birth, 84 and still rising; a population that is expected to decline, from 128million in 2004 to 109million by 2050 and already has more than 8% of its population aged over 80 and this is expected to rise to 18% by 2050.

Intriguingly the impact of an ageing society has to date been more positive than many predicted. Shifts in government policy and corporate behaviour have helped Japan perform better than expected. With an ageing society one of the key priorities of the UK government’s Industrial Strategy Grand Challenge its worth looking to see what lessons can be learnt.

The usual narrative around an ageing society consists of three negative strands – firstly, despite knowing about the problem for a long time, governments aren’t doing anything about it; secondly, an ageing society is bad news and finally demography is destiny, there isn’t much that can be done. Whilst an ageing society undoubtedly throws up serious challenges, Japan is showing this doom-laden trilogy is wrong.

Firstly, things are happening in Japan. Prime Minister Abe has launched several initiatives including: ‘Japan’s Plan for Dynamic Engagement of All Citizens’, which has set out to define specific policy agendas on how to create a cycle of growth and distribution, and the ‘Council for Designing a 100 Year Life Society’, which has focused on investment in human resources. These include promoting flexible working-styles for the elderly and leveraging advanced technologies to be a world leading healthcare nation. These are initiatives that every country should follow.

At a similar time to these policies my book The 100 Year Life – Living and Working in an Age of Longevity was published. Whilst selling well globally, it was a major hit in Japan (under the title Life Shift), which reflected the Japanese public’s awareness of the changes that have occurred to life expectancy, and how they must behave differently from their parents if we are to avoid the worst of an ageing society.

The debate engendered by the book and the narrative created by the Prime Minister’s initiatives also tackled the second gloomy statement. An ageing society isn’t necessarily a bad thing. Yes, there are more old people but the really important factor is we are in general ageing better and living longer. How do we change our social, economic and corporate practices to make sure we seize the opportunities this provides? Making the most of longevity gains requires a life shift.

If we do nothing then we have an ageing society, if we adapt to healthier longer lives then we reap a longevity dividend. Starting a national debate and considering how to enact reforms that seize these advantages and minimise the costs is crucial.

This leads to the third error – demography is destiny. Since 2012 the Japanese working age population has fallen by more than five million, but employment has risen by nearly 4.5million. This is one of the major reasons why Japan’s ageing society has been more positive than many expected. Reforms have included empowering the elderly by providing a choice to work beyond the official retirement age, flexibility for women to continue working through various life stages, and accepting more foreign professionals, which have all served to boost employment.

Firms too have been adjusting. Japan has led the way in using robotics to support workers in manufacturing as well as redesigning work to make it more flexible, which have served to boost productivity. Firms have also been seizing the commercial advantages of an ageing society - investigating the opportunities for robotics in senior care, recasting the leisure industry to support active ageing, developing a life sciences sector to promote healthy ageing and increasing support for financial planning for the old. It is perhaps no surprise that as a consequence of Prime Minister Abe’s visit a joint UK-Japan initiative was announced on research into chronic degenerative diseases as well as AI initiatives to develop new products and services to support assisted living.

Japan lives longer and more healthily than most countries. Understanding why that is the case is one lesson the world can learn from Japan. Creating a positive narrative that helps individuals and corporates benefit from those longer healthier lives is another. We do not yet know how to live a 100 year life so there is plenty to learn from the country most furthest advanced in living longer lives.

Andrew Scott is Professor of Economics at London Business School, co-author of The 100 Year Life – Living and Working in an Age of Longevity and co-founder of The Longevity Forum

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