Aging populations could be a boon to economies in the Asia and Pacific region if governments adopt technological policies that improve elderly people's health, extend their skills and working lives, and facilitate job matching
The Asian Development Bank (ADB) on Wednesday made this observation in its report titled "The Asian Economic Integration Report 2019/2020: Demographic Change, Productivity, and the Role of Technology."
Asia is home to over half (55%) of the world's population in 2019, and is undergoing rapid demographic change, the report said.
According to the report, the average healthy life span increased by nearly seven years, from 57.2 to 63.8 years between 1990 and 2017, for economies in Asia and the Pacific.
The average years of education among 55 to 64-year-old people also increased from 4.6 in 1990 to 7.8 in 2015.
"The aging trend is irreversible in much of Asia and the Pacific, but governments could turn that into a 'silver dividend'," said ADB Chief Economist Yasuyuki Sawada.
He explained that today's elderly people are better educated and healthier than in the past.
"The right policies on technologies could extend working lives, generating a substantial contribution to the overall economy," he added.
As a share of Asia's total population, the working age population – between ages 15 and 64 – peaked at 68 percent in 2015. The regions working age population stood at 2.9 billion in 2019, and is expected to peak at 3.1 billion by 2045.
The ADB report said that countries with fast aging populations and above-median education levels would benefit from adopting automation and labour augmenting technology to supplement the low supply of labour for routine work.
Countries with slow aging and below-median education levels could prioritize technical applications in education to help a younger population access high-quality education, the report observed.
Regardless of the aging and education profiles, the report called for rethinking education and skills training to include lifelong learning as well as the adoption of technologies and approaches to make work and workplaces more suitable for older employees.
The labour market, social security, and tax system reform would also encourage older people to continue working.
Policies that ease the movement of capital, labour, and technology across borders would help countries at different stages of demographic transition and technological adoption, said the report.
The report notes that regional economic cooperation remains strong in Asia and the Pacific, providing a buffer against the effects of global trade tensions.
The latest Asia-Pacific Regional Cooperation and Integration Index, based on data from 2017, shows that infrastructure and connectivity made the largest advance but overall regional integration fell nonetheless due to a drop in the financial measure.
Asia and the Pacific's trade is expected to decelerate further in 2019 amid slowing global economic growth.
The region's share of intraregional trade by value remained a robust 57.5% of global trade in 2018, up from the average of 56.3% in 2012-2017. Asia's inward and outward foreign direct investment grew in 2018, while remittance inflows hit a record $302.1 billion last year.
The ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty.
In 2018, it made commitments of new loans and grants amounting to $21.6 billion. Established in 1966, the ADB is owned by 68 members – 49 from the region.