We are all getting older. That was okay when everyone got their allotted three score years and 10, but we’ve long since moved on from that rule. Scientists are predicting that the first person to live for 200 years has already been born. In those terms, 70 is a midlife crisis, not anywhere close to dying.
The pyramid structure that typically depicts the age and sex distribution of the world’s population is gradually morphing into something that looks more like a lollipop, with a big blob of oldies where the sharp apex used to be.
Population growth is slowing, from about 2% 50 years ago to around 1% now, dropping to 0.5% by mid-century. This is mathematically inevitable in a population that has experienced almost vertical growth since the steam engine was invented 321 years ago.
We now have an increasing proportion of the population in the 65-and-older bracket that will further double from about 10% now to 20% in 2050, for the world average. For developed countries (those with better health care and populations that can afford to pay for it) the over-65s will approach one-third of the population.
Beyond the economics, though, the real question is who is in charge?Who’s telling who what to do? Who owns the future strategy? Is the wisdom of old age an asset or a liability?
This is problematic across almost all dimensions of modern society.
The economic strain is already obvious, but it’ll get much worse. The productive youth, such as it is — SA is not looking good at a 40% youth unemployment rate — are having to increasingly subsidise the elderly when it comes to health care, pensions, or even something as basic as a place to live. Actuarial pricing of medical aid and life insurance premiums and pension fund contributions is based on the aggregate expected experience of the population and I’m not sure how often those tables are updated for the changing longevity landscape — the subsidy grows.
Whichever way you cut it, we are supporting an increasing number of older people, not to mention the kids who can’t find jobs.
Beyond the economics, though, the real question is who is in charge?
Who’s telling who what to do? Who owns the future strategy? Is the wisdom of old age, yesterday’s wisdom, an asset or a liability?
It’s probably a liability. Experience should be available, as it is to the young pilot flying the plane under the watchful eye of the wise captain, but the youngster should fly the plane.
Positions of leadership are increasingly being retained by seemingly entrenched, older incumbents. This is particularly true of politicians. Less so, but still so, in business. In business, however, the common interest in returns on shareholders’ funds means mistakes aren’t tolerated for long. The evidence is regular and objective, so if it is not working, it gets fixed or left behind.
You don’t have to run the show to own the returns, and shareholders vote all the time, not only once every five years. Popularity is measured in the price at which you can buy or sell shares, every day. The gap between the age of the employees of the firm and the clients they seek to satisfy may widen, but it’s clear who comes first. In politics, it’s not so simple.
In the quest to find balance between experience and exuberance, we will need more of the latter if we are to favour progress over preservation. In business, this has proved to be the right risk-return profile, the outperformance difference, and it’s starting to filter through into the choice of sovereign leaders. The 40-somethings are going to do a better job (with a little guidance from us oldies, of course).
There is an increasing divide between the social media connectivity of the millennials and the behind-closed-doors, members-only, decision-making structures of their leaders.
These kids don’t know what they’re doing, right? Maybe so, but they do have the protest vote and will end up with the economic vote, and we will end up depending on their productivity to support our longevity. We’d better muck in and support them. We’d transfer knowledge and partner into prosperity. The risk is that we stay too long, not that they start too early. We don’t have to abdicate, but we certainly better start incubating.
Economic votes are going to count more than political votes eventually.
The real issue, though, is productivity, the output that will need to come from diminishing inputs. That result will not be achieved without technology, extracting more out of less — less resources per capita, less energy, less salaried workers, more brains, more systems, more integration.
We’ll need less fear and no favours.
• Barnes is CEO of the Post Office.
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