Ageing and increasing life expectancy are causes for celebration, as they reflect a country’s success in healthcare and medical advancements. But population ageing presents significant economic challenges, especially as it is often accompanied by low birth and fertility rates causing the population to decline. It will make it harder to generate economic growth while putting a huge strain on pension and social security systems.
Ageing populations also present business opportunities. The need to mitigate against a shrinking labour force also spurs technology innovations and product developments aimed at the senior consumer.
Euromonitor has identified the world’s top 5 ageing populations, based on a ranking of old-age dependency ratios (that is, the share of the population aged 65+ in relation to the working-age population).
Japan is the oldest country in the world
Japan is home to the world’s oldest population. The Japanese population is decreasing, with almost all age groups (except the 65+) set to experience steep declines in the period through to 2030. By 2030, the old-age dependency ratio in Japan will reach 53.6%.
Immigrants are the only driver of Italy’s population gain
Italy’s old-age dependency ratio is the second highest among all major economies and the first highest in Europe. The 65+ age group in Italy is set to reach 16.2 million in 2030. Given a fertility rate of 1.4 births per female, well below the 2.1 needed for natural replacement, net migration is providing some relief to Italy’s ageing and declining population.
Immigrants, most of whom are of working age, are the only driver of the country’s population gains. It is expected that foreign citizens will make up 9.9% of the total population in Italy by 2030 when the old-age dependency ratio is forecast at 44.3%.
Greece will overtake Italy to become the second oldest country in the world
By 2030, Greece’s old-age dependency ratio will reach 44.3%, up from 32.3% in 2015. With this, the share of people aged 65 and older in relation to the working-age population in Greece will overtake Italy to become the second highest in the world (behind Japan), putting increasing pressure on the country’s shrinking workforce. As a result of large government cuts in social spending (including pension payments), Greeks aged 65 and over have been particularly hard hit.
Finland’s 65+ age group to expand
Of the top ageing populations, Finland – one of the oldest countries in Western Europe – is expected to experience the most dramatic expansion in the population aged 65. Yet, as a result of positive net migration, Finland’s total population is set to expand at the fastest rates among the top ageing nations.
Portugal overtakes Germany to become the fifth ageing country in the world
Portugal’s population is shrinking due to extremely low fertility rates and emigration. Portugal has eased its immigration policy in an effort to attract immigrants and reverse the depopulation trend, but it is still expected to see a strong increase in its population aged 65+ through to 2030.
Although all the top markets with the highest old-age dependency ratios are developed nations, population ageing is not an issue facing the developed world alone. Population ageing is a truly global trend and businesses that can respond, adapt and innovate accordingly can expect to thrive and prosper.