Theory and countermeasures of the era of longevity
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Author:
Chen Dongsheng (Wuhan University Dong Furong Economic and Social Development Research Institute, Taikang Insurance Group)
Original article published: "Manage the World" 2020 Issue 4
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Abstract: Human society is entering the era of longevity, which will be a major issue related to the future development of mankind. The characteristics of the longevity era are low mortality, low fertility, and prolonged life expectancy. Over a considerable period of time, people's life expectancy will increase by 2 to 3 years every 10 years. After several years, a considerable number of people may enter a hundred-year-old life. At the same time, the population age structure has changed from a pyramid structure to a columnar structure, and the proportion of the elderly population in the platform period exceeds 1/4. This article improves the concept of the longevity era, believes that the longevity era will be a new equilibrium under the population transformation, and on this basis, summarizes and studies related academic theories, systematically explains the characteristics and formation of the longevity era, and then proposes that the longevity era will bring about the health era and the wealth era, which will have an impact on the economic model, industrial structure and various aspects of the society. This article looks at the current situation of human society's response to the increase in the proportion of the elderly population from a dynamic perspective, analyzes the possible impact of the longevity era on the social economy, and points out that a new form of longevity economy will emerge in the longevity era, which will profoundly change the individual's lifestyle and healthy wealth planning at the micro level, prompting enterprises to change their business methods, maintain organizational vitality, and assume social responsibilities. Based on this, this article discusses the solutions of the longevity era from three levels: society, government and enterprise, and emphasizes that enterprises should innovate business models, introduce sharing and ecological concepts, which has theoretical and practical significance for guiding industrial transformation and enterprise transformation in the longevity era.
Keywords: The era of longevity, demographic dividend, longevity economy, industrial structure,
. Introduction
As the proportion of the world's aging population is becoming increasingly obvious, the academic community generally believes that its speed will bring about a series of social problems, and some countries such as Japan have experienced economic recession. However, there are also empirical studies that have found no negative relationship between the increasing aging population and economic growth, which economists attribute to the scientific and technological development of relevant countries and the rapid adaptation to aging (Acemoglu and Restrepo, 2017). Faced with the increasing life span of humans, some scholars have focused on the changes in life and employment brought about by the substantial increase in life span and proposed the concept of the Age of Longevity (Linda Gradton et al., 2018). We believe that although the concept of "longevity era" contains some typical population phenomena described by "aging", it points more to a relatively stable state of human society after the increase in the proportion of the elderly population, and has a richer meaning. First of all, the "Era of Longevity" is more forward-looking, emphasizing the new equilibrium after the transformation of the population structure and its impact, inspiring individuals and society to base themselves on the entire life cycle and actively respond to this change. Aging is mostly about the phased processes and development difficulties of changes in the elderly population. Its perspective often focuses on the elderly population itself and the problems it arises, and tends to passively respond. Secondly, the "Era of Longevity" covers a wider range of areas, including the inherent relationship between longevity and themes such as health and wealth, which contains a series of challenges and opportunities behind the population phenomenon. Finally, when elaborating on the characteristics of the "longevity era", we not only focus on the two factors that lead to "aging" that cause "aging", but increase the prediction of the long-term trend of life expectancy growth and population structure changes, and define the long-term, relatively stable population and socio-economic forms referred to by the "longevity era" more clearly. This article aims to systematically explain the connotation and extension of the "Longevity Era", expand and improve its academic theory, and explore the response ideas for the Longevity Era at the social, government and enterprise levels.
data shows that the world is getting older rapidly. The United Nations Population Division's World Population Outlook 2019 shows that the average life expectancy of the world population in 2019 has reached 72.6 years, an increase of 8.4 years from 1990. It is estimated that the global average life expectancy is expected to reach 77.1 years in 2050.In 1990, the number of elderly people aged 65 and above accounted for about 6.2% of the total population. In 2019, this figure rose to 9.1%, and is expected to reach 15.9% by 2050. At the same time, the growth rate of the population over 80 years old will exceed that of the elderly. In 1990, the world's population over 80 years old was only 54 million, and reached 143 million in 2019, and is expected to reach 426 million by 2050. At the same time, UN data also shows that almost all the world has experienced a decline in fertility rates over the past few decades, with the total fertility rate falling from 3.2 in 1990 to 2.5 in 2019, and may drop to 2.2 in 2050. This has also led to the growth rate of global birth population becoming very slow, and it is expected that the global birth population will begin to decline year by year after 2045. According to the forecast of the moderate assumption level of the United Nations Population Division, the global population size may reach its peak around 2100 and begin to decline. Some demographers believe that it is possible to usher in the population turning point in 2050 (Darell Brick et al., 2019).
The trend of median population changes given by the United Nations shows that the elderly population in East Asian countries is growing faster than many European and American countries. Among them, Japan's elderly population has surpassed Nordic countries since 2005, ranking first in the world, and its elderly dependence ratio has now reached 48%. Between 2010 and 2019, the death toll in Japan was 2.6 million more than the number of births. It is estimated that Japan's population will decrease to about 100 million by the middle of the 21st century and will further shrink to 75 million at the end of the 21st century. In recent years, Japan's situation has repeated in the Asia-Pacific region (South Korea, Singapore , Hong Kong, Taiwan, etc.), and its development context is of reference significance.
Similar to developed countries and regions in East Asia, China's per capita life expectancy is increasing, the growth rate of the elderly population is accelerating, and the population age structure is undergoing profound changes. China's life expectancy in 2016 was 76.3 years, ranking 68th among 195 countries. Some scholars believe that if this trend continues, China's ranking will rise to 39th in 2040, and its life expectancy will reach 81.9 years (Foreman et al., 2018). In terms of the structure and growth rate of the elderly population, according to data released by the National Bureau of Statistics, the proportion of the population aged 65 and above in China has increased from 7.0% in 2000 to 12.6% in 2019. According to the United Nations, the proportion of China's population aged 65 and above will rise to 14% by 2025, and by 2045, it is expected that 1 in every four Chinese people will be elderly.
Compared with developed countries in the world, China will face more challenges. China's large population base and rapid decline in fertility rate have led to an accelerated growth process of the elderly population; the national medical insurance system and welfare security system are difficult to match the coming social population age structure; the population life expectancy has grown rapidly, but the per capita income and savings are not as good as developed countries at the same time, making it difficult to support the consumption level of individuals during their retirement period, and may lead to the social phenomenon of "old before being rich" and "old and poor". In 2019, China's population aged 65 and above accounted for 12.6%, with per capita GDP exceeding US$10,000, while the proportion of the elderly population in the United States, Japan and South Korea reached 12.6%, was above US$24,000. Some foreign experts have suggested that China's future aging population is likely to grow faster than Japan, and the problems caused are more serious.
As humans entered the mid-18th century, especially after the Industrial Revolution, life expectancy began to grow unprecedentedly, and the long-term relatively constant population age structure has undergone profound changes, which aroused great interest and theoretical thinking among scholars (Angus Deaton, 2014). Since the birth of modern demographics, it has gone through three main theoretical development stages: one is the Malthusian theory that has developed from the end of the 18th century to the present, the second is the population failure theory that emerged in the late 20th century, and the third is the extensive discussion and related research on "active aging" in the past 20 years. However, in the face of the current wave of aging population growth worldwide, various theories are difficult to effectively respond to challenges.
The first type of theory is the Malthusian school. Malthus, a pioneer in modern population research, elaborated on the restrictive role of resources on population growth in agricultural society in his population theory, and later derived the Malthus school, emphasizing the necessity of controlling population.In the 1970s, the famous private academic organization Rome Club made model predictions on excessive population growth during the industrial period and its economic growth limits (Denella Meadows et al., 2019), believing that Malthusian population growth and resource utilization will lead to uncontrollable exhaustion and should be taken seriously. This type of prediction has been proven to be biased by real data in recent years, and has not fully considered the resource liberation brought about by the technological revolution and the reduced willingness to give birth to urbanization, which has excessively amplified the potential risks of population growth.
The second category of theories closely monitor the growth of the elderly population and put forward expectations of population failure. Since the end of the 20th century, the world has entered a stage of rapid growth of the elderly population and countries lack effective response plans. Analytical research on aging population structure and declining population size has begun to emerge in large quantities. In 1987, Dirk Van de Kaa proposed the "Second Demographic Transition" to explain the phenomenon that fertility rates are lower than population substitution rates (Van de Kaa, 1987). In terms of analyzing the causes and impacts of the growth of the elderly population and the decline in population size, scholars from many countries have pointed out that population aging and negative population growth will put pressure on consumption, productivity, employment, innovation, competitiveness, fiscal savings and the inheritance of civilization. Such studies emphasize the burden of the elderly population and the challenges brought by negative population growth (Bloom et al., 2003; Maestas et al., 2016; Yanyi Daimae, 2017; Liang Jianzhang, Huang Wenzheng, 2018; Darrell Brick et al., 2019).
Since the 1990s, "active aging" has caused widespread discussion. International organizations such as the United Nations and the World Health Organization began to advocate "healthy aging", and later proposed the concept of "active aging". People realized that the growth of the elderly population should be viewed from multiple angles, and the research areas are gradually diversified and subdivided. The growth of the elderly population has begun to be seen as a progress in science and technology, medical care, health care, public health, etc. It is generally believed that the problem "opportunities and challenges coexist." At the same time, China's research results on elderly care have increased since 2000, with a significant upward trend (Cao Xianyu, Sui Dangchen, 2018).
In the context of the increasing proportion of the elderly population in various countries, classic demographic theory shows many flaws. On the one hand, the research on the problems of the elderly population mainly focuses on fragmented results and lacks systematic theoretical guidance. On the other hand, it focuses on data analysis and prediction and deduction, and lacks practical experience and systematic solutions for future population age structure. Looking at the future from the past will be subject to the development logic of the current social stage and it will be difficult to effectively respond to challenges. This article interprets the global population development context, points out the irreversibility of the age of longevity, analyzes the interaction between various factors based on future population and social forms, and deduces reasonable and effective countermeasures. The article will extend the theoretical value of the longevity era, establish a theoretical analysis framework that is developed that conforms to the long-term trends of future lifespan and population age structure, deeply analyze the challenges and opportunities of the longevity era, and point out the response ideas of enterprises and individuals.
article first explains the main characteristics and causes of the longevity era, and discusses population phenomena such as low mortality, low fertility, and the growth of life expectancy, the tendency of the population age structure to be columnar, and the proportion of the elderly population in the platform period exceeds 1/4. Second, from a micro perspective, we point out the correlation between the age of longevity and the age of health and wealth: the extension of life expectancy, the improvement of quality of life and changes in social functions in the age of longevity will create a healthy industry and a healthy economy. At the same time, the social saving structure and wealth accumulation form will change. The demand for sufficient pension replacement rate will promote the second demographic dividend (Mason and Lee, 2004). Third, from a macro perspective, explain the impact of the longevity era on production, demand, employment, growth, and social equity. Finally, the article focuses on the adjustments that individual society needs to make in the era of longevity, the role of the government, and how enterprises should innovate business models, maintain corporate vitality, assume corporate social responsibilities, solve social problems through a market economy, and actively meet opportunities and challenges.
2. Characteristics of the longevity era and the formation of
(I) Characteristics of the longevity era
0000s The industrial revolution that began in the mid-18th century broke the limitations of the ability of agricultural social resources to carry population, and the world's population started an unprecedented large-scale growth at that time. Based on the study of changes in birth rate and mortality during population growth, in 1929, American demographer Warren Thompson proposed that countries can be divided into three categories according to population growth model. On this basis, in 1945, Frank Notestein further summarized the population growth model into three categories: potential decline, transform growth, and potential high growth. Since then, the description of population growth patterns has gradually developed and formed a population transformation theory. At present, population transformation is generally divided into four stages, namely, the first stage is high birth rate and high mortality rate, the population size remains unchanged or the growth is extremely slow; the second stage is high birth rate and mortality rate, and the population growth is rapidly growing; the third stage is low birth rate and low mortality rate, and the population growth rate is slowing down; the fourth stage is low birth rate and low mortality rate, and the population size tends to stabilize.
The current world is rapidly moving from the third phase of population transformation to the fourth phase, but what state will it enter in the fourth phase and afterwards? Here we propose the concept of the era of longevity, believing that it will be the new equilibrium after the population transformation. This era is accompanied by five major characteristics: low mortality rate, low fertility rate, continuous increase in life expectancy, population age structure tends to be columnar, and the proportion of the elderly population in the platform period exceeds 1/4.
. The mortality rate dropped to low level
19th century human mortality rate began to decline significantly. Improvement of living standards and nutrition improvement were the decisive factors at that time. The Industrial Revolution brought about a significant improvement in the level of social productivity, gradually getting rid of the troubles of hunger and enhancing the ability to resist diseases. Life expectancy in Britain and France increased from 37 and 26 in 1750 to 48 and 46 in 1900, respectively. British scholar Thomas McKeown proposed that the decline in mortality in the UK in the 19th century was due to improved economic and living conditions, the most important of which was improved diet (McKeown, 1962). American scholar Robert Fogel also proposed that people's ability to control the surrounding environment and create technological innovations promotes the continuous reduction of mortality (Fogel, 2004).
Improvement of public health conditions also plays an important role in the decline in mortality, especially in the control of infectious diseases. Take the United States as an example. As infectious diseases transmitted through water and air were effectively controlled, the overall mortality rate in the United States dropped by 40% from 1900 to 1940, and life expectancy increased from 47 to 63 years old. The problem of higher mortality rates in cities also disappeared during this period. Research has found that the widespread use of water purification filtration and chlorination systems has played a huge role in this, bringing this unprecedented and fastest decline in mortality to the United States (Cutler, 2005). In addition, the use of antibiotics in the 1940s further reduced the mortality rate of infectious diseases. For example, according to data from the US Centers for Disease Control and Prevention, the mortality rate of tuberculosis during this period dropped from 399/100,000 in 1945 to 91/100,000 in 1955.
By the second half of the 20th century, medical and technological advances were increasingly related to the decline in mortality. Some studies have pointed out that the decline in mortality rate in the United States since the 1950s is more due to the reduction in mortality rates of cardiovascular diseases such as heart disease and stroke caused by medical progress. Life expectancy in the United States increased by 11 years from 1950 to 2016, and more than half of the increase was related to the increase in survival rates among people aged 65 and above (Catillon et al., 2018). In addition, the knowledge of public health and the spread of modern medical technology to developing countries in Europe and the United States has driven a rapid decline in global mortality rates. From 1960 to 2000, public health infrastructure, immunization, and special disease prevention and control became important factors that drove the decline in mortality rates in developing countries, and the impact of income and nutrition improvement is no longer as significant as those experienced by developed countries in Europe and the United States in the early days (Soares, 2007).
After the founding of New China, the government attached great importance to the field of health and made great achievements, achieving a rapid decline in the mortality rate.The national health campaign launched in the early 1950s greatly improved China's public health situation and significantly improved its ability to prevent and control infectious diseases. The "Report on the Development of China's Maternal and Child Health Care Industry (2019)" shows that compared with before liberation, China's maternal mortality rate dropped from 15 million/100,000 to 183/100,000, the infant mortality rate dropped from 200‰ to 6.1‰, and the average life expectancy increased from 35 years to 77.0 years.
Figure 1: Trends of mortality among children under 5 years old in the world, China, Japan, and the United States
Data source: United Nations World Population Prospects 2019 database, https://population.un.org/wpp/Download/Standard/Population/. The same as in Figure 2 to Figure 5.
. The fertility rate dropped to a low level
In agricultural society, people are the most important economic resource, and children are the source of life security and labor. Therefore, in a living environment with high mortality, high fertility rate is the need to maintain social development. The arrival of the industrial revolution accelerated the process of urbanization. In this process, the status of women was fundamentally improved, and their willingness to give birth changed.
First, a significant reduction in child mortality has changed people's willingness to have children. The quality of a child is related to the parents' investment in time and money, and couples need to seek a balance between the supply and demand for potential children (Becker, 1960). Secondly, the continuous improvement of women's education level has enhanced women's ability to participate in society and work, changed women's attitude towards childbirth, and to a certain extent, the age of marriage and childbirth has been postponed accordingly. In addition, the mastery of effective contraception knowledge and the popularization of contraceptive tools separate sex behavior from fertility. With the rapid popularity of cheap and convenient birth control pills in the United States and Europe in the 1960s and since then, effective birth control tools have become simple and easy to obtain (Paul Moran, 2019).
Since the 1970s, the decline in fertility rate has become a global trend. Not only developed countries, but also low-income countries have developed, their fertility rates have also decreased. From 1950 to 2017, the total fertility rate in all countries and regions decreased to varying degrees, with the global total fertility rate falling by 49.4%, from 4.7 live births to 2.4 (Murray et al., 2018). According to the United Nations' medium assumption level, the global fertility rate will continue to decline, with the number of children per woman born to drop to 2.2 by 2050 and 1.9 by 2100.
China has experienced a rapid decline in fertility since the 1970s. By 1980, the total fertility rate had dropped from around 6 to below 3, and by the 1990s, it had dropped below the replacement level. Among them, the impact of fertility policy is only one aspect. In fact, the development and changes of society, population and economy are increasingly becoming the dominant factors affecting fertility rates (Duyang, 2005). In recent years, China's opening of the second-child policy has not brought about a rebound in the fertility rate. Judging from international experience, some policies that encourage fertility in low-fertility countries also take a long time to accumulate before the results can be seen (Yang Xin, 2016).
Figure 2: Trend of changes in total fertility rates in the world, China, Japan, and the United States
. Life expectancy continues to extend
Continuous innovation of emerging drugs, popularization and application and progress of advanced medical technologies, has gradually changed from lethal disease killers to controllable chronic diseases, and human life expectancy has been continuously extended. In the past half century, major developed countries have maintained a trend of 2 to 3 years of growth every 10 years. Taking cancer as an example, research data shows that compared with 1991, the US cancer mortality rate has dropped by 29% in 2017, of which the average annual decrease of 1.5% from 2008 to 2017, and it fell by 2.2% from 2016 to 2017, setting a record high (Siegel et al., 2020).
From a global perspective, the life expectancy of the population has increased significantly since 1950. From 1950 to 2017, the global life expectancy of men increased from 48.1 years to 70.5 years, and from 52.9 years to 75.6 years for women (Dicker et al., 2018).There is no doubt that human life expectancy will continue to grow steadily. Some predicted studies point out that life expectancy for both men and women around the world will increase by 4.4 years by 2040. By then, Japan, Singapore, Spain, and , Switzerland, are expected to exceed 85 years old, and another 59 countries will also exceed 80 years old (Foreman et al., 2018). It should be pointed out that in recent years, studies have found that a slight decline in life expectancy in the United States and the United Kingdom, which is caused by social problems such as drug abuse, alcoholism and suicide among young people. It is not that the elderly die early, nor does it represent a long-term trend (Ho and Hendi, 2018).
In China, life expectancy has also been greatly improved with the rapid decline in mortality rate. Life expectancy in China increased by 22 years from the 1960s to the 1970s, and then steadily increased at a rate of about 3 years every 10 years, reaching 77 years by 2018. Some studies predict that China's life expectancy will reach 81.9 years by 2040, which means that it will maintain a trend of about 2.5 years of growth every 10 years in the next 20 years (Foreman et al., 2018). Although the United Nations' forecast is relatively conservative, China's life expectancy in the next 30 years will still steadily increase at an average growth rate of 1.6 to 1.7 years per 10 years.
has no conclusion yet on whether there is a limit on whether human life span has increased. Some studies have reviewed data from multiple countries since 1900 and suggested that human lifespan is limited by various natural factors and exists in the ceiling (Dong et al., 2016). However, some studies have found that after age over 105, the risk level of death basically does not change, and the mortality rate no longer increases with age (Barbi et al., 2018). From an empirical perspective, the development of economy, society and medicine will continue to promote the extension of human lifespan, and human life expectancy can continue to grow (Oeppen and Vaupel, 2002; Vaupel and Kistowski, 2005).
Figure 3: Life expectancy trend in the world, China, Japan and the United States
. The population age structure tends to be "columnary", and the peak proportion of the elderly population exceeds 1/4 of the platform period. 2
Under the dual effects of the decline in mortality and fertility, the world's population growth rate has slowed down. The global population age structure is changing from the traditional pyramid form to the columnar, that is, the proportion of the population in each age group is developing equally, and the number of elderly and adolescent population is equalized (Haub, 2013). From a more long-term perspective, due to the continued decline in fertility, the population age structure may also have an inverted trapezoid.
United Nations data shows that from 1960 to 2020, the proportion of the global population aged 0 to 14 years old continued to decline, from 37.2% to 25.4%; the proportion of the elderly population aged 65 and above continued to rise, from 5.0% to 9.3%, and it is expected that the two will tend to be equal in 50 years. At the same time, the rate of population age structure changes in various countries in the past 60 years has been different. For example, under the influence of the continuous influx of immigration in the United States, the median population age has increased from 29.7 to 38.3 years, an increase of only 8.6 years; while Japan has suffered from the rapid decline in fertility rate and a long-term sluggishness, the median population age has jumped from 25.4 to 48.4 years, an increase of 23.0 years. Compared with the world average, China's population age structure has also undergone a rapid change. The median population age increased from 21.3 years to 38.4 years from 1960 to 2020, of which only increased by 3.6 years from 1960 to 1990, while the increase was 13.6 years from 1990 to 2020.
In economics, economic growth caused by the growth of the number and proportion of the working-age population is faster than that of the population in other age groups, called the demographic dividend (Bloom et al., 2003). It usually occurs at the end of the third phase of population transformation, as a rapid decline in fertility rates leads to a significant decrease in the dependent youth population (Bloom and Williamson, 1998). The mortality rate in the first 20 years after the founding of New China dropped significantly, while the fertility rate continued to remain high until the early 1970s. This led to an explosive growth in the working-age population after the reform and opening up. The demographic dividend brought by the decline in dependency ratio and the full supply of labor have promoted China's rapid development. However, with the further change in the population age structure, China's demographic dividend is fading rapidly. Data from the National Bureau of Statistics shows that China's total dependency ratio has dropped to a low point in 2010, and the working-age population has also peaked in 2013.As the mortality and fertility rate drop to low levels and stabilize, life expectancy steadily increases and the proportion of the elderly population increases, China's population age structure begins to gradually become columnar.
Figure 4: China's population age structure forecast in 2020 and 2050
Most countries that have experienced the third stage of population transformation have experienced long or short baby booms, and the fertility rate has dropped rapidly after that. When the baby boom grows, it happens that the population will cross the third stage and reach the fourth stage. The low mortality rate, extended life expectancy and sharp decline in fertility have caused the rapid growth of the elderly population in the later stage. Countries that have experienced a large baby boom will accelerate their share of the elderly population and will continue to maintain a relatively stable proportion due to the stable low fertility rate and the continuous extension of life expectancy.
is consistent with this rule, and the number of elderly people in China and their share are entering a period of rapid growth. Data from the National Bureau of Statistics shows that China's population reached 1.4 billion in 2019, of which 176 million were aged 65 and above, accounting for 12.6%. In 2017, 2018 and 2019, the number of people aged 65 and above increased by 8.28 million, 8.27 million and 9.45 million respectively. The United Nations predicts that China's population aged 65 and above will continue to maintain high growth, and the average annual growth rate will not drop to less than 5 million people after 2040. By 2057, the number of people aged 65 and above and the number of people aged 80 and above is expected to peak, at 400 million and 130 million, accounting for 29.6% and 9.8% respectively. At the same time, from a global perspective, China is the country with the largest number of elderly people in the world. By around 2030, the proportion of China's population aged 65 and above in the world will exceed 25%.
Figure 5: Change trend of the proportion of population aged 65 and above and 80 and above in the total population in China
(II) The era of longevity and health
In the era of longevity, human life expectancy has been extended, and at the same time it is also facing a completely different health challenge from before. Health has become a more urgent need, and this demand will be more diversified and long-term, becoming a strong driving force for the growth of the health industry, and the era of health will come.
. The disease spectrum of the longevity era has undergone major changes
The epidemiological transformation of human disease types (Omran, 1977) is coming simultaneously with the longevity era. The Second World Congress on Aging held in 2002 pointed out that at that time, all regions around the world were in an epidemiological transformation, that is, from mainly suffering from infectious diseases and parasitic diseases to mainly suffering from chronic diseases and degenerative diseases (Song Xinming, 2003).
The Institute of Health Index and Assessment of the University of Washington (IHME) in 2017 showed that from 1990 to 2017, the number of premature deaths caused by infectious diseases such as neonatal diseases, intestinal infections, respiratory infections, tuberculosis, etc., decreased, while chronic diseases such as ischemic heart disease, stroke, and COPD increased significantly, especially ischemic heart disease, which became the world's leading cause of death (Roth et al., 2017).
Table 1 Changes in the world's major causes of death from 1990 to 2017
Data source: Institute of Health Indexes and Assessment of University of Washington
China is also facing the same transformation. China's top 5 death and life loss disease spectrum from 1990 to 2017 have changed from acute diseases such as infectious diseases, neonatal diseases, and childhood diseases to chronic diseases such as cardiovascular and cerebrovascular diseases, tumors, and degenerative diseases (Zhou et al., 2019).
Table 2 China's top five disease spectrum death and life loss from 1990 to 2017
Data source: China Center for Disease Control and Prevention, Institute of Health Indexes and Evaluation of University of Washington
It is precisely because of the change of epidemiology that the biggest threat to prolonging the average life expectancy of humans has shifted from infectious diseases to degenerative and artificial diseases caused by aging (such as road injuries, accidental deaths, etc.). In the future, those chronic degenerative diseases will coexist with humans in the era of longevity as human lifestyles become healthier, medical technology innovation is accelerated, and the age of final death will be extended.
Various non-communicable chronic diseases are becoming the main cause of human longevity and health losses.According to the definition of the World Health Organization (WHO), the Disability Adjusted Life Year (DALY) is used to estimate health losses caused by various fatal and non-fatal diseases, which is equal to the sum of the life of life (YLL) and the life of life with disability (YLD) (Murray, 1994). The results calculated using data from the Institute of Health Index and Assessment of the University of Washington show that from 1970 to 2016, health losses caused by infectious diseases and malnutrition decreased by 40.1%, while the health losses caused by various non-communicable chronic diseases increased by 36.6%, of which cardiovascular diseases increased by 32.4% and neurological diseases increased by 59.4%; during the same period, health losses contributed by the population over 80 years old worldwide increased by 98% (Wang et al., 2017). The same data shows that the health losses caused by the increase in the elderly population to China are more severe than the global average.
. The age of longevity has prolonged the survival time with illness
In the age of longevity, more diseases will coexist with the elderly, and survival with illness has become a common phenomenon in the age of longevity. If the life expectancy of elderly people over 60 years old is divided into health status and disease-related state, it will be found that the increase in life expectancy of the population is mainly due to the extension of the survival time with illness, especially the health losses caused by various non-hereditary chronic diseases will not cause death in a short period of time, but will coexist with people for a long time. Research by the Institute of Health Index and Assessment of the University of Washington on 195 countries and regions showed that the growth rate of healthy life expectancy in most countries around the world between 1990 and 2017 was lower than that of life expectancy, with life expectancy increasing by 7.4 years, while healthy life expectancy increased by only 6.3 years (Kyu et al., 2018). British scholars based on data from 25 European countries show that from 2005 to 2011, the life expectancy of 65-year-olds increased by 1.3 years, while healthy life expectancy did not change during the same period (Brown, 2015). In China, a survey of the Chinese elderly support system in 1993 showed that about 3/4 of the life expectancy of elderly people over 60 years old is in a state of various chronic diseases after the age of 60 (Wang Mei, 1993). The results of the fourth sample survey on the living conditions of urban and rural elderly people in China in 2018 show that China's average life expectancy in 2018 was 77 years, and the healthy life expectancy was only 68.7 years, which is a big gap.
We can see that global development trends show that the longer we live, the more common survival will become. Although our lifespan is increasing, the quality of life may not necessarily become better. Therefore, the question of whether the additional life expectancy is in a physical health or a disease state is becoming increasingly important. How to face the burden of disease in the longevity era will have a significant impact on the planning of the health system, health-related expenditures and the development of the health industry in the future.
. The era of longevity will promote the development of the health industry
The survival with illness in the era of longevity has caused people's health-related expenses to increase dramatically. According to relevant domestic and foreign data, per capita medical expenses are closely related to age. Generally speaking, the medical expenses in the age group over 60 are 3 to 5 times the medical expenses in the age group under 60 (Li Jiange, 2002). At the same time, the increase in the size of the elderly population will inevitably lead to an increase in the total social medical expenses. Japanese research shows that the progress of medical technology, increased economic wealth, aging population and the continuous changes in the disease structure of the people have led to a continuous increase in medical and health expenditure, with technological progress accounting for 40%, the primary factor, while other factors account for 26%, 18% and 16% respectively (Hu Suyun, 2013).
Medical technology innovation is one of the most important reasons for driving the growth of medical expenses in recent years. Looking back at the development path of medical technology, we can see that research investment and medical resources are more tilted towards acute or fatal diseases, but insufficient investment in eliminating or delaying age-related chronic diseases and cellular degeneration diseases. This unbalanced investment is largely due to the different population structures of the early research institutes. At that time, the average life expectancy of no more than 80 years was the norm, and the proportion of the population living with illness was small, and the impact on society was limited. At the current stage, the population structure has begun to undergo major changes, so it is necessary to re-examine the way social resources are allocated.A study in the UK showed the mismatch of this resource. Taking respiratory and neuropsychiatric diseases as an example, it pointed out that the proportion of disability-adjusting life year (DALY) of the two diseases was 8.3% and 26.7%, respectively, while the proportion of research funds was only 1.7% and 15.3%, indicating that these two diseases caused a large social burden but did not obtain equivalent resource investment; in addition, the proportion of disability-adjusting life year (DALY) of cancer was 15.9%, which was significantly lower than that of neuropsychiatric diseases, but the proportion of research funds was as high as 19.6%. At present, mainstream medical technologies are mainly used in hospitals for treatment methods for major diseases. The cost and threshold for use of such technologies are high, resulting in expensive costs. Driving patients from hospitals to basic medical institutions, using more low-cost medical technologies, and strengthening disease prevention and health management will not only benefit patients' own health, but also play a positive role in curbing the rapid rise in medical expenses.
We can foresee that the era of longevity will promote the upgrading of the health industry structure. In the era of longevity, with the aging of the human body, related health problems inevitably arise, survival with illness becomes the norm, and health will become the first element and most valuable asset for individuals to pay attention to. The fourth sample survey on the living conditions of urban and rural elderly people in China showed that the demand for care services for the elderly continued to rise: in 2015, the proportion of urban and rural elderly people in my country who reported self-reported care services was 15.3%, an increase of nearly 9 percentage points from 6.6% in 2000; the top three items for home-based elderly care services for urban and rural elderly people are home-based medical treatment, home-based housework and rehabilitation care, with the proportions being 38.1%, 12.1%, and 11.3%, respectively. These are the huge potential demands of the elderly. At present, only some communities provide these services, and most communities have supply shortages (Yang Xiaoqi, Wang Lili, 2019).
In the era of longevity, huge health needs will promote the great development of the big health industry. Providing healthy living solutions to people is the biggest business opportunity for the big health industry and will also push society into the age of health. In the United States, total health expenditure accounts for 17.9% of GDP, and big health is the largest industry. The proportion of the elderly aged 65 and above in the United States accounts for 16% of the total population, and the proportion of total health expenditure reaches 36%. If calculated from the age of 55, 29% of the population spends 56% of health expenditure. At present, real estate accounts for the highest proportion of China's economic structure, followed by automobiles, and total sanitation costs account for only 6.4% of GDP.
The most core industries in the health era are the pharmaceutical industry, health services and health insurance. In the 2019 Fortune Global 500 list, there are 15 big health companies in the United States, and only 2 in China are considered big health companies. According to the goals of the "Healthy China 2030" Plan Outline, by 2020, the total scale of China's health service industry will exceed 8 trillion yuan, and will reach 16 trillion yuan by 2030. It can be seen that China's big health industry has huge growth space and opportunities for industrial structure transformation, and is expected to become one of the pillar industries in China's economy in the future.
(III) The era of longevity and wealth
The era of longevity, people's life expectancy is extended, and residents are paying close attention to whether pension funds are sufficient. With limited public pension funds, rational people will have more motivation to increase the total amount of wealth and extend the period of wealth accumulation to reserve pension funds, forming a strong demand for wealth management. Therefore, the era of wealth is born with the era of longevity.
. In the era of longevity, the pension substitution rate is the key
According to life cycle theory, a person's saving behavior is affected by the age stage (Ando and Modligliani, 1963). Provide labor to increase savings when young, and spend it in old age. With the increase of life expectancy and the increase in the expected dependency ratio, individuals will respond to the extended consumption needs of elderly people by adjusting consumption and saving behaviors and increasing capital accumulation when they are young (Lee and Mason, 2006), so as to ensure that the sufficient replacement rate (the ratio of average pension to average social wage) meets smooth consumption and achieves cash flow of the same length as life.
In the context of an increase in the proportion of the elderly population, public pensions will continue to be under pressure. The increase in the elderly dependency ratio and the extension of the pension period will inevitably lead to a decrease in the narrow pension substitution rate.The broad-based pension savings capital (including public pensions and personal pension reserves) can increase with the increase in the proportion of the elderly population under the premise of planning and early reserves in advance. The sample national data of the 2019 Melbourne Mercer Pension Index Report shows that the pension adequacy index shows a positive correlation with the proportion of the elderly population, with a correlation coefficient of 58%. The top three pension indexes, the ratio of pension surplus capital to GDP of the Netherlands and Denmark, is 173.3% and 198.6% respectively, and it is showing an upward trend as the proportion of the elderly population increases. The elderly population accounts for a higher proportion in countries such as the Netherlands and Denmark, but due to the existence of policies to encourage pension savings, pension funds reserves have maintained a high adequacy ratio.
According to data from the National Bureau of Statistics, since the reform of the basic pension system for urban residents in China in 1997, the average pension social wage substitution rate has dropped from 71.51% to 45.92%. In terms of the total amount of pensions in broad sense, China's pension fund reserves need to be improved compared with developed countries. China's three pension pillars account for only 8% of GDP, the average OECD countries account for 49.7%, and the United States also accounts for 146% (Sun Bo, 2018). In terms of pension structure, China's pension reserves rely heavily on the first pillar, and the proportion of the second pillar and the third pillar is too low. Due to the differences in corporate burden and economic structure, China's second pillar pension system has been slow to develop, and it is urgent to increase the proportion of the third pillar to allow individual pension insurance to play a greater role.
. The growth of wealth brought about by the era of longevity
After the demographic dividend theory, population economists proposed the second demographic dividend theory, that is, rational people will adjust their consumption and saving behavior, human capital investment behavior, and labor supply behavior to cope with various challenges in the era of longevity (Disney, 2000; Lee and Mason, 2006; Cai Fang, 2009).
Human capital plays an important role in the formation of the second demographic dividend. Economist Lucas defines human capital as “the effective labor whose quality depends on education” (Lucas, 1988). Important components of human capital include health and education. We have discussed health in the previous section, where we will focus on education. At the individual level, improving education level is conducive to improving the competitiveness of educated people, promoting career development and improving wage income. Increased life expectancy can inspire investment in education. Adjustments to individual rational expectations include years of education and adjustments to education investment based on human capital accumulation (Yang Ying, Lin Huanrong, 2013). Increased life expectancy has increased the benefit of educational investment, and individuals are more motivated to invest in education (Hansen and Løstrup, 2012; Cervellati and Sunde, 2013). At the macro level, the increase in the proportion of the elderly population has accelerated the adjustment of the industrial structure, and labor-intensive industries have been transferred to capital and technology-intensive industries, so the value of human capital is even more important. World Bank data shows that countries with longer life expectancy have higher education levels. It is expected that the average number of years of education for Chinese working people will increase from 10.5 years in 2018 to 12 years in 2035. In short, the improvement of the quality of human capital will promote the improvement of labor productivity, and the income level of residents will also increase, thereby promoting the development of the total social wealth.
The extension of the accumulation period for elderly care wealth will also promote the development of the total social wealth. With the extension of life expectancy of the population and the improvement of health levels, the number of healthy and young people will increase significantly. Coupled with the improvement of the quality of human capital brought about by the increase in education investment, the depreciation of human capital will slow down. This group has the basic conditions for extending the working years. If the working population has a longer working life, the wealth reserve period for their pension will be extended. In fact, many countries with a high proportion of elderly population have adopted the method of delaying the legal retirement age as one of the response measures. In addition, in order to cope with the era of longevity, rational people will start planning wealth reserves for retirement earlier in their youth. Both of the above methods will extend the period of pension wealth reserves and increase the total social wealth.
Table 3 Retirement age and its share of the elderly population in some countries
Data source: OECD Pension Policy Notes
. In the era of longevity, residents' wealth management needs lead the wealth era
longevity era, residents will rely more on investment returns and wealth accumulation to support their elderly care. The demand for wealth management is strong, and the era of longevity will bring wealth era. With the rapid growth of the total and proportion of the elderly population, the rate of public pension subsidy is showing a downward trend. At the same time, the possibility of relying on children to support their elderly care has decreased. Therefore, the importance of individual and family returns on investment for residents' elderly care has increased. Taking the data from countries with a high proportion of elderly populations such as China, the United States, Japan, the United Kingdom, and Germany in the past 20 years as an example, as the proportion of elderly population continues to increase, the scale of the personal wealth market continues to increase. Moreover, the multiple relationship between a country's personal wealth market size and GDP has basically stabilized or even increased. For example, according to Credit Suisse's 2019 Global Wealth Report (Global Wealth Report 2019), in the past 20 years, the proportion of the elderly population in China has increased from 7% to 12%, the size of the personal wealth market has increased from US$4 trillion to US$64 trillion, and the proportion of GDP has increased from 3.1 times to 4.7 times, and the multiple has continued to rise; during the same period, the proportion of the elderly population in the United States has increased from 16% to 19%, the size of the personal wealth market has increased from US$42 trillion to US$106 trillion, and the proportion of GDP has increased from 4.1 times to 5.2 times, and the multiple has shown an upward trend.
In the era of wealth, the wealth structure of Chinese residents will be more diversified. Resident wealth management will directly affect residents' consumption, including consumption in old age. According to the "2018 China Urban Family Wealth Health Report" jointly released by Southwest University of Finance and Economics and Guangfa Bank, the structure of wealth management of Chinese residents is unreasonable, mainly manifested in the excessive proportion of family housing assets (70%), far higher than 31% in the United States, seriously squeezing financial asset allocation. In the next step, the transfer of Chinese residents' wealth from real estate to financial assets is expected to be a major trend, and the wealth structure of Chinese residents will be more diversified. In addition, after experiencing the baptism of the capital market, individual investors have begun to become more rational, more mature, and more inclined to seek investment advice from professional wealth management institutions. Credit Suisse's 2019 Global Wealth Report also pointed out that China's per capita wealth increased from US$4,293 to US$58,500 in the past 20 years, an increase of 13 times; during the same period, compared with the United States, China's per capita wealth level rose from 1/49 to 1/7.5 in the United States, and there is still a lot of room for improvement. With the continuous development of China's economy, China's per capita income level will continue to increase, and the scale of the personal wealth market will continue to grow.
To sum up, the population age structure will gradually form a new balance in the era of longevity, and the main characteristics are low mortality rate, low fertility rate, continuous increase in life expectancy, the population age structure tends to be columnar, and the proportion of the elderly population in the platform period exceeds 1/4. In the era of longevity, the human disease spectrum will turn to chronic non-communicable diseases, and the focus on healthy lifespan will create a huge demand, which will promote the upgrading of the health industry structure and promote the society to enter the healthy era. At the same time, pension replacement rate becomes the key in the era of longevity. Improvement of human capital quality and extension of pension wealth accumulation period will promote the development of total social wealth, and the way personal consumption, savings, and wealth accumulation will change. The strong demand for wealth management will lead the wealth era. As human beings enter the era of longevity, the era of health and wealth will inevitably come, and it is necessary to systematically analyze the relationship between the three from the perspective of big health.
3. The impact of the longevity era on the social economy
In the longevity era, social and economic development faces challenges and opportunities. According to the Cobb-Douglas production function, economic growth is mainly affected by labor, capital and technological advancements. In the age of longevity, the above variables will change significantly, which will have a profound impact on the macro economy. Some studies believe that an increase in the proportion of the elderly population will lead to a slowdown in economic growth, either due to insufficient labor supply, or due to a decrease in social savings rate, or due to insufficient innovation in aging society (Lu Yang, Cai Fang, 2014; Ma Xueli, Chen Zhiheng, 2014; Zhou Zhuping, Liu Haibin, 2016).Society in the longevity era also faces the challenge of intensifying wealth inequality. The situation of low-income groups may further deteriorate in the longevity era. Their survival needs and health needs put higher demands on social security, and public finance also faces greater pressure.
But on the other hand, when people live longer and healthier, and continue to actively participate in economic activities, longevity will also become a source of wealth for society. The latest research shows that the economic growth rate may not necessarily decline in the era of longevity, mainly because the popularization and application of automation technology effectively replaces the declining labor force (Acemoglu and Restrepo, 2017). Longevity is defining the future, bringing new supply and demand to the economy and society, and providing new opportunities for innovation, employment and economic growth for people of all ages. The American Geriatric Association's "Economics of Longevity" project hosted by Peter Cappelli, director of the Wharton Human Resources Center, proposes that society and the economy should make the most of longevity, eliminate age discrimination, and promote the development of the longevity economy.
(I) Challenges faced by the social economy in the era of longevity
. In the era of longevity, the population supply of labor force has decreased, and impacting the traditional industrial organizational form
Labor force is one of the core factors of economic growth. On the one hand, as the main factor of production, labor force has a growth in quantity that can drive production growth; on the other hand, the labor force population can also provide society with a wide range of terminal demand and drive the development of related industries (Shi Jinfang, 2015). However, after entering the age of longevity, the birth rate has dropped significantly, the proportion and even the absolute number of young people have decreased, and the size of the new labor force has declined, which will have a negative impact on economic development.
The long-term decline in labor force may have an impact on the traditional industrialized organizational form of human beings. In the industrial era, the production organization form gradually evolved from families to factories and enterprises, and the aggregation of production was significantly improved. The large gathering of labor force drives industrialization and urbanization. At the same time, large-scale social production has promoted social division of labor, labor efficiency continues to improve, labor demand continues to rise, and output levels continue to increase. When humans are still in the stage of high fertility, labor supply is continuous, which can meet production needs. At the same time, a high proportion of the labor force will also lead to a situation of high savings and high investment, which is called the first demographic dividend. Historically, most countries that have successfully achieved industrialization, whether it is the United Kingdom, the United States, Japan, or China since the reform and opening up, have enjoyed the first demographic dividend and their economy has also achieved rapid development.
The era of longevity faces the challenges of labor supply. As the birth rate continues to decline, the number of young labor will shrink over the long cycle, and some factories and enterprises will face a situation where no one is available. This trend has been reflected in Japan. Data from the Tokyo Commercial and Industrial Survey Institute, a Japanese private enterprise reputation survey agency, showed that in 2019, the number of companies in Japan that were in debt of more than 10 million yen and went bankrupt due to "insufficient manpower" reached 426, an increase of 10% over the previous year, which is the largest number since this factor was included in the statistics. The reduction of available labor will have a profound impact on human production. On the one hand, it will force traditional industrial enterprises to accelerate intelligent and automated transformation, thereby reducing the demand for labor in production activities. On the other hand, long-term labor shortages may also have an impact on industrialized organizational forms. As technological advances will reduce the dependence of production on human resources, it is possible for humans to evolve new forms of organizations and production to cope with the challenges brought about by the decline in new labor resources, which we will discuss in the later section.
. The savings rate in the age of longevity has decreased, resulting in a decline in the capital formation rate
Traditional economic theory believes that as the number of elderly people continues to rise, the consumption rate increases, and the savings rate decreases, which has a negative impact on the capital formation rate. Some studies have pointed out that with the increase in the proportion of the elderly population and the decrease in the proportion of the young population, the population dependency ratio will increase, leading to an increase in dependency expenditure and a decrease in the savings rate (Lu Yang, Cai Fang, 2014), and a decrease in the savings rate will lead to a decrease in the capital formation rate (the proportion of capital formation to GDP).Other studies have also shown similar views: population aging will eventually lead to a relative or even absolute decrease in productive population and a relative or even absolute increase in consumer population (Li Jun, Liu Shenglong, 2017). Therefore, the higher the proportion of an elderly population in a society, the higher the proportion of its share of output results, and the relatively small proportion of output that can be used for production investment will lead to a decline in the national savings rate and an increase in the consumption rate, which is not conducive to capital accumulation. From a global perspective, former Federal Reserve Chairman Greenspan even proposed that population aging has reduced global investment resources.
corresponds to it. The second demographic dividend theory believes that during the change of population structure, the level of human capital returns becomes higher, and individuals will adjust consumption and saving behaviors, deal with future uncertainties through personal asset allocation and extending the labor supply period, and promote the increase in social wealth accumulation. Further, an increase in the proportion of the elderly population will lead to a decline in social labor, so an increase in capital/labor ratio can drive economic growth, and this process will hedge the effect of the decline in the overall social savings rate. However, whether the second demographic dividend can be truly released still depends on many external and institutional factors. On the one hand, the elderly have changed from producers to pure consumers, constantly consuming their capital accumulation. Reducing the capital consumption of the elderly requires the society to establish a more comprehensive and inclusive elderly care system and service system. On the other hand, the improvement of per capita capital needs to be transformed into economic growth that requires external institutional construction, especially the construction of the capital market.
. The labor aging in the era of longevity affects the efficiency of social innovation
The era of longevity faces the challenge of the efficiency of the entire social innovation. Human innovation activities are not evenly distributed throughout the life cycle. Research shows that individual innovation ability will show an inverted "U" curve with age. The learning ability, innovation ability and pioneering ability of the elderly are not as good as those of young people. The aging of labor force will have an adverse impact on the improvement of labor productivity and the improvement of technological innovation driving force (Ma Xueli, Chen Zhiheng, 2014). In addition, the age of longevity will extend the working years of human beings, and the length of time the elderly are in an important position in the organization will increase accordingly. It is more difficult for young people to advance, which may limit the development of innovative talents and willingness to innovate. In summary, the era of longevity may have a negative impact on the overall innovation efficiency of society.
. The degree of social inequality in the era of longevity deepens
The arrival of the era of longevity itself may also intensify wealth inequality. In order to study its mechanism of action, the social population can be divided into two groups: young and elderly population. From the perspective of the group, the age of longevity may lead to the widening of the difference in income and consumption over time. The differences in consumption and income among peers will expand with age because individuals’ income and consumption are affected by factors such as their own education, occupation, health status, family background, etc., and these differences will continue to amplify over time (Deaton and Paxon, 1997; Chen et al., 2017). For example, the scissors gap in the income of brain-body workers has existed for a long time. The above situation has been alleviated in recent years due to the rise in labor costs. However, mental workers can reduce the decline of human capital through experience accumulation and continuous learning. The labor ability of physical workers is directly affected by their physical health. As they age, the risk of losing their ability to work continues to increase. Therefore, in the long run, the income gap between the two may widen. China's income and consumption data from 1996 to 2009 show that population aging does exacerbate income inequality within the group (Tong Zhiqiang et al., 2012).
From the perspective of the group, the longevity era may widen the income gap between the young and the elderly. Under the current working model and retirement system, the longevity era will produce more elderly people who do not directly participate in production. This part of the population will not participate in the first allocation, but will mainly participate in the second allocation. However, due to social construction factors, the elderly do not dominate the second distribution, so the economic status of the elderly population mainly depends on the wealth accumulation at a young age.With the continuous growth of the elderly population, the wealth gap between young people participating in social production and the elderly people not participating in social production will continue to widen, which will lead to the deepening of social inequality.
is accompanied by income inequality. Low-income groups have relatively worse health conditions due to multiple factors such as lack of nutrition and inability to effectively access medical resources. Research points out that health inequality among the elderly population in China is also becoming increasingly prominent (Du Benfeng, Wang Xuan, 2013). To sum up, some elderly and vulnerable groups may face poverty and illness in the era of longevity. They need more attention and support from society, and at the same time put forward higher requirements for the current welfare system and public finance.
(II) Opportunities for social and economic development in the era of longevity
. The technological progress in the era of longevity increases the replacement rate of labor
In the previous analysis, we list some of the possible negative effects of the increase in the proportion of the elderly population on economic growth from a theoretical level. However, empirical studies in OECD countries from 1960 to 2011 showed that the relationship between changes in per capita GDP and the proportion of the elderly population was not significant (Gehringer and Prettner, 2017).
The deviation from the theoretical level and empirical analysis may be due to people underestimating the substitution effect of technological progress on labor in the era of longevity, while countries with faster aging are often countries with faster automation technology development. Acemoglu and Restrepo (2017) theoretical article discusses the impact of labor reduction on the economy from two aspects. On the one hand, the decline in labor force leads to a decline in total output. On the other hand, the decline in labor force will endogenously stimulate the development of industrial automation and robotics industries, and the final total output does not necessarily decline. The latter happens mainly when the gap between capital and labor is large enough, capital becomes cheaper than labor, and it becomes profitable to replace labor through capital-transformed machines. Another study pointed out that longevity has a positive impact on technological progress and productivity growth, and its empirical analysis of OECD countries confirms this theory (Gehringer and Prettner, 2017).
. "Longevity Economy" creates new supply and demand
With the increase of the elderly population, consumption of the elderly has become an important part of the economy. However, this consumption concept is currently established in the industrial era, and it is believed that the only way for the elderly to withdraw from the labor market and maintain the health of the elderly is to rest. According to a study by the European Commission, health care products and care services are dominated by the elderly. Under this concept, some scholars call this silver economy. Although this is an important part of the overall consumption of society, it is undeniable that this part of consumption has a greater effect on the overall investment and consumption of society, and it also competes for young labor in the labor market, triggering a crisis of human resources. Consumable consumption of the elderly accelerates the crisis of overall social resources. In turn, the crisis of overall social resources has exacerbated the difficulties of the elderly population's living difficulties, so the positive impact of the silver economy on the economy is extremely limited (Caplan, 2014).
is different from the silver-haired economy that emphasizes the consumption of the elderly. What truly adapts to the social and economic structure of the longevity era is the more dynamic longevity economy. Under the concept of a longevity economy, in addition to being consumers, the elderly also play the role of producers and innovators, promoting economic growth and social progress at the same time on the consumer and supply sides. We are in a technology-driven transformation period, with the demand for manual labor continuing to decrease or being replaced by robots, the Internet is recombining production factors, greatly reducing the demand for mobile in space, and artificial intelligence is combining with human intelligence. The value of the elderly will be re-understood, positioned and explored, rather than staying at the stereotyped positioning of consumers of social resources. Use new ideas to allow the elderly to participate in the labor market in a more flexible way, impart knowledge and skills, transfer experience or carry out social services, so that the elderly can "continue" production and innovation, and create their own "third demographic dividend".As Professor Joseph Coughlin of the Age Lab of the Massachusetts Institute of Technology (AgeLab) pointed out in his book "The Longevity Economy", the future of the longevity world depends on the actions of the elderly in it (Coughlin, 2017).
The longevity economy is the sum of all economic activities driven by the elderly population and their chain reactions. On the one hand, the proportion of the elderly population in almost every country in the world will increase, and the market demand is very large and predictable growth. The elderly promote and fund a large number of new products and services through changing needs, especially those that adopt technologically innovative products and services, forming and changing markets in a direct, indirect or guiding manner, and creating a new longevity economy. Boston Consulting Group expects that by 2030, the U.S. population over 55 will account for 50% of the U.S. consumption spending growth since 2008, with the figures rising to 67% and 86% respectively in Japan and Germany. The American Association of Retirees (AARP) predicts that the elderly will have a significant contribution to the economy and society, and will continue to rise with the increase of the elderly population by 2050. For example, in 2018, the direct consumption expenditure of the U.S. population aged 50 and above was US$7.6 trillion, accounting for 56% of the total population, and will reach US$27.5 trillion by 2050, with a share of increasing to 61%. These trends will lay the foundation for economic growth over the next 30 years. On the other hand, people continue to participate in the labor market after they have passed their retirement age, continue to work or start businesses, continue to earn and spend wages, and their contribution to economic activities continues to increase, which continues to drive economic growth. In many cases, the productivity and creativity of older people may even increase with age. A common phenomenon is that older workers are mostly employed in knowledge-intensive industries, possess more knowledge skills and experience, and therefore more valuable. In fact, the accumulation of these knowledge, skills and experience can also help start a business. According to statistics from the American Association of Retirees (AARP), in the United States, the entrepreneurial rate of people aged 50 and over is the highest, about twice that of people in their 20s. They have established nearly one-third of startups in the United States. Respect for older people and give them the opportunity to continue to use their knowledge, skills and experience for employers, or start a business, which will make them a stronger force in revitalizing the economy.
The longevity economy contains huge business opportunities, and its economic returns are immeasurable and will attract more and more companies, institutions and investors to participate. These business opportunities go beyond our existing normative boundaries, as older people in the new era are richer in average than the previous generation and are more educated, their wealth levels and spending methods continue to evolve, and they are accustomed to innovation-driven markets. In the process of breaking through traditional thinking modes and continuously innovating products and services for the elderly, enterprises, institutions and investors need to truly understand the diversified needs of the elderly. In addition to meeting basic physiological or safety needs, they should better meet the higher-level needs of the elderly, such as aging-friendly technology products, consumer medical products that improve the quality of life, and educational and cultural products that meet the needs of continuing development.
Enterprises, institutions and investors need to fully empower the elderly to participate in economic activities, create value, build and influence the world around them, such as encouraging the elderly to participate in innovation, providing jobs and an age-friendly environment for the elderly, creating conditions for the elderly to improve their competitiveness, etc., thereby increasing the income of the elderly. Taking automakers as an example, in order to retain skilled and experienced elderly workers, BMW transforms production lines and creates a suitable working environment so that they can continue to work. In 2011, the new production line was applied to its large new factory in Dingolfing, Germany, which is operated entirely by workers aged 50 and older. In addition, automobile manufacturers such as BMW, Audi , Volkswagen are all innovating to experiment with wearable robots - exoskeletons, which enhance the productivity and competitiveness of elderly workers by reducing joint burden and enhancing strength. The longevity economy has performed particularly significantly in certain specific fields, mainly including financial services and insurance (Migliaccio, 2019), medical and health and technology. These specific industries are being pushed into new directions of innovation and expansion, such as ageless smart home technology, driverless driving, etc.
Developing a long-lived economy is conducive to alleviating social inequality. The market will form a rich business model around the diversified needs of the elderly, providing more detailed services and support for the healthy life and smooth work of the elderly. At the same time, more elderly people will participate in production creation. The extension of the working hours and income growth of the elderly can alleviate the problem of insufficient pension substitution rate to a certain extent, and also help alleviate concerns about the widening wealth gap caused by the decline in the proportion of the working population.
Based on the continuous progress of technologies such as the Internet, artificial intelligence, and robots, the longevity economy, as a new economic model, will become the driving force of the global economy in the general trend of increasing proportion of the elderly population in the world and benefit all ages and generations. With the extension of life expectancy of the population, the way individuals learn, produce and live in a longer life cycle has undergone tremendous changes, and the economic and social values have also changed as a whole. The long-lived economy has become more common, fully stimulating the "third demographic dividend", and thus becoming one of the cores of the economy and society.
(III) Analysis of the social and economic changes in Japan under the age of longevity
Japan is currently one of the countries with the most serious population aging in the world. World Bank data shows that in 2014, its proportion of the population over 65 years old reached 25%, which can be said to be the first to enter the age of longevity. The social economy of Japan under the age of longevity has undergone profound changes. Based on the theoretical perspective provided in the previous article, our analysis of Japan's changes will give China a deeper inspiration.
demographic dividend declined, savings rate decreased, and economic growth was slow. After World War II to the 1970s, Japan's economy entered a period of rapid growth. World Bank data shows that in 1970, the proportion of the elderly population aged 65 and above in Japan reached 7%, and society began to officially enter the aging process. The turning point of population also marks the end of the rapid development model of labor-intensive economy. In 1994, the proportion of the elderly population in Japan reached 14%, and it entered severe aging. Correspondingly, since the 1990s, Japan's economy has generally declined and has been in a state of depression for a long time. During this period, Japan's savings rate reached its peak at the same time as the population aged 15 to 64 aged 2 at the same time around 1991, and then began to enter a long decline channel. The shrinking of savings also brought about a shrinking investment in Japan. The growth rate of Japanese investment has also begun to fluctuate and decline since the early 1990s, and has been hovering around 0%. Japan's interest rates continued to decline, and even entered the era of negative interest rates. The main reason behind this is that the demand for funds (investment) declines faster than the decline in capital supply (savings).
The growth of labor productivity in Japan slows down, and technology substitution accelerates. Labor productivity represents the average output of each unit of effective labor and is a landmark indicator that determines whether a country's economy has future growth. Japan's labor productivity growth rate showed a significant downward trend after 1970. Labor productivity comes from three aspects: capital deepening, labor quality, and total factor productivity. Capital deepening means an increase in the capital-labor ratio. Data from the Asian Productivity Organization shows that the three factors that affect Japan's labor productivity have all declined to varying degrees in the past 40 years. In terms of capital substitution, rising labor costs and shortages have prompted capital to increase the replacement of labor. However, with the decreasing marginal replacement rate of capital to labor and the shrinking investment, capital deepening has even dragged down labor productivity in recent years. In terms of total factor productivity, the increase in the proportion of the elderly population has stimulated the substitution of technology, and the rapid development of cutting-edge technologies such as robotics and automation in Japan. In the 1970s and 1980s, Japan's total factor productivity strongly supported labor productivity, but this support weakened after the bursting of the bubble. The gradual downturn in total factor productivity is also related to the solidification of Japanese social class and the suppression of innovation in the management structure of paternalistic enterprises in the era of longevity. In terms of labor quality, the world's leading penetration rate of higher education has made Japan's population overall higher quality, and high-quality labor has become an important factor in hedging the downward trend of labor productivity.
Figure 6: Decomposition of labor productivity growth rate in Japan from 1970 to 2017
Source: Asian Productivity Organization Report APO productivity Databook 2019, https://www.apo-tokyo.org/publications/ebooks/apo-productivity-databook-2019/
Japan's silver-hailing economy has increased, but it has not fully ushered in a longevity economy. Consumption is the most important driving force for Japan's economic growth in the era of longevity. Data from the Japanese Cabinet Office shows that consumption contributes nearly 60% of GDP. Although Japan's total population has declined in recent years, Japan's total consumption has generally shown a steady and low-speed growth trend. The proportion of health care and nursing consumption expenditure related to the elderly in Japanese society gradually increases. The elderly in Japan play more the role of consumers and promote economic progress through consuming consumption. Although Japan is also adapting to the challenges of aging, and some elderly people still participate in the labor market after retirement, we believe that their participation is not enough to make Japanese elderly people a role of producers and innovators, and the longevity economy has not been fully realized in Japan.
The elderly poverty has also increased the income gap in Japan. With the intensification of the phenomenon of "aging and aging and childbirth" and the increase in medical costs, the problem of elderly poverty in Japan is becoming increasingly prominent (Ding Yingshun, 2017). At the same time, the decline in the working population has led to an expansion of the pension gap year by year, putting heavy pressure on public finance. As the proportion of the elderly population with relatively low incomes continues to increase, the overall income gap in Japanese society is showing a widening trend. Judging from the Gini coefficient, which reflects the degree of difference in income distribution, the Gini coefficient in Japanese society rose sharply between 1985 and 2015. Data from other developed countries also show that as the aging process deepens, social inequality will deepen.
Figure 7: Trends of aging and Gini coefficient changes in various countries from 1985 to 2015
Source: OECD database, https://stats.oecd.org/
(IV) Implications for China
. Improve human capital through education to offset the impact of decline in labor and productivity
Similar to Japan in the 1970s, China is in the process of economic structure transformation, and consumption has gradually become the driving force of the economy. Correspondingly, the ratio of the tertiary industry to GDP has increased, and the proportion of the secondary industry has decreased after experiencing a peak. The transformation of the industrial structure directly affects the labor demand structure, and the labor demand in the tertiary industry represented by the service industry has also increased accordingly.
serves society, education brings up human capital, which can offset the impact of the decline in some labor supply and labor productivity. Whether from personal income or from a macroeconomic perspective, the return on investment in education is extremely high (Psacharopoulos, 1994). Education is an important reason for the gap in productivity in various countries. The higher the education level of the labor force, the more developed the productivity (Mankiw et al., 1992). Just as Japan's high-quality labor force is an important factor in hedging the downward trend in labor productivity, education dividends have a strong alternative to labor demand. The negative impact of the increase in the proportion of the elderly population in the longevity era on the economy is mainly concentrated in industrial society, and increasing human capital through investment in education can effectively offset the negative impact of labor shrinkage on the economy while serving the society.
. Accelerate technology substitution and guide economic growth through technological innovation
Automation and robot application will become important means to solve the decline of labor force. In Japan's case, the automation and robotics industries flourished in line with the era of longevity, and many industries accelerated the replacement of manpower by machines and technologies. With the continuous development of technology, the era of robots that economists predicted to replace artificial labor is approaching. World Bank data shows that 57% of workers in OECD countries will be replaced by machines. From 1993 to 2007, the number of robots that have been invested in economic production in Europe and the United States has increased by 4 times, with the number of about 1.5 million to 1.75 million. Boston Consulting estimates that this number will grow to 4 million to 6 million in 2025.The use of robots in various industries is: the automotive industry uses 39% of robots, ranking first among all industries; the electronics, metals, and plastics chemical industries are 19%, 9% and 9% respectively (Acemoglu and Restrepo, 2017). Robots replace traditional human resources will improve production efficiency, accelerate the development of automation and related industries, and further guide innovation and promote economic growth.
. Improve the efficiency of the second demographic dividend by building an effective capital market
Effective capital market is the best channel to release the second demographic dividend. Reform and opening up promote the release of China's first demographic dividend. With the improvement of labor quality and the improvement of social public environment, the window for opportunity for the second demographic dividend has been opened. The conditions for the second demographic dividend are higher. To transform per capita capital into economic growth, it needs to rely on external institutional construction, especially the construction of the capital market. If the capital market is low in marketization and single financing channels will lead to high financing costs and difficult to effectively allocate resources. Japanese examples show that society enters the age of longevity and will directly affect interest rates and investment returns. If global emerging markets enter the era of longevity in the future, global capital markets and investment returns will inevitably enter a new equilibrium state. On the other hand, the continued growth of pension assets has made it more difficult to obtain high returns. The above functions will challenge whether the long-term investment return rate of China's pension wealth can continue to significantly surpass inflation and achieve value preservation and appreciation. Therefore, China's pension investment institutions need to pay attention to equity asset allocation and improve the level of direct financing to the capital market.
. Introducing the longevity economy and creating the third demographic dividend
Introducing the longevity economic concept, allowing the elderly to "continue" to produce and innovate, and create their own "third demographic dividend". It is necessary to change the original three-stage industrial era employment methods of education, work and retirement, and it is necessary to use new ideas to create consumption and production methods for the elderly.
Traditional theory believes that the negative effects of aging on the economy mainly come from labor shortage, the hindrance to innovation by the consumption of resources and class solidification. In the longevity economy, the situation may change. First, labor shortages can be replaced by robots and artificial intelligence, while the well-educated elderly population has the ability and willingness to participate in production, which can some extent relieve the pressure of traditional labor decline. On the other hand, the elderly have rich experience, experience and knowledge, which can increase the supply of intellectual elements. Secondly, resource consumption can reduce resource crowding by developing emerging health industries. The squeeze-out effect of aging in the past on investment mainly comes from the consumption of resources in medical care and nursing. These departments provide products from the perspective of acute diagnosis and treatment, causing waste of resources and even hindering economic growth. After realizing the survival problem of the elderly with illness, the new health industry will focus on basic medical care and chronic disease management, which reduces the crowding of resources. Finally, the obstacles to innovation may be alleviated under the new organizational form of the longevity economy. When the world enters the era of longevity, a longevity economy around the elderly population will be generated outside the traditional economy. Its scope and structure, organizational form and production mode are all new and can be regarded as an increase in the social economy. Under the influence of incremental economy, social conflicts and conflicts among populations of different age groups may ease.
In the context of the continuous increase in the proportion of the elderly population in China, on the demand side, innovations to adapt to the needs of the elderly will drive the economy to a greater extent, such as driverless driving and smart homes may become important industries; medical and nursing communities can better meet the living needs of the elderly, and the related elderly care industry chains will also flourish. On the supply side, how to enable the elderly to "continue" production and create their "third demographic dividend" is also worth exploring. Under the theme of the era of longevity, longevity economy and technology may produce unprecedented production methods. Automation and artificial intelligence technology further replace primary labor, informatization and Internetization strengthen the supply of intellectual factors, new economic forms and production methods will emerge, and labor productivity may be greatly improved.The labor quality required by a brand new production will be different from tradition, putting forward the demand for lifelong education for the education sector and promoting a new balance in the age structure of the labor market.
. Reshape government functions and promote social fairness in the era of longevity
In the era of longevity, the biggest challenge facing society is the intensification of wealth inequality and the accompanying health inequality. How to ensure that low-income people can also maintain healthy and longevity is a key issue that policy makers need to consider. Although Japan's relatively complete social security system for the elderly population can be learned from, we must also see that due to the slow and rapid aging of Japan's economic growth, public pension expenditure has continued to rise, which has caused heavy fiscal pressure to the government and brought government debt risks (Zhang Shibin et al., 2012). We believe that the more important function of the government is to stimulate economic vitality in the era of longevity and promote the accumulation of wealth in individuals at different stages of life, such as improving education level, advocating lifelong learning and vocational education, encouraging enterprises to innovate for the elderly population, and allowing more flexible employment and employment forms; at the same time, improving the level of basic medical and health services, improving the efficiency of health services, and meeting multi-level medical and health needs; reasonably redistribution on the basis of comprehensively improving the accumulation of human capital and wealth, narrowing the income gap, and improving the quality of life and health level of vulnerable groups.
4. Countermeasures for the era of longevity
The era of longevity is a major issue related to the future development of mankind. How to deal with the challenges brought by the era of longevity and how to prevent the era of longevity from being accompanied by poverty and diseases is a global major problem faced by the entire mankind, and even a problem related to the future development direction of mankind and life and death. The age of longevity and the age of health and wealth that followed affect not only individuals in the aging stage, but life planning involving the entire life cycle. Replanning the entire life cycle of individuals in the era of longevity so that individuals can better cope with the challenges of the era of longevity is an issue that society, government and enterprises need to consider.
. At the social level, the personal needs of the longevity era need to be met through changes in the industrial structure
Individuals are the basic unit of society. In the longevity era, personal needs will show new characteristics. In the industrial era, people usually divide their lives into three stages, education, employment and retirement. With the advent of the age of longevity, life will be composed of multiple stages rather than a single linear dimension of the industrialized era (Linda Gradton et al., 2018). With the extension of life and the changes in life stages, individuals need to re-examine the life process of longevity and re-plan the accumulation and consumption of human capital and wealth. In this context, individual needs will show three characteristics: First, health needs, effectively extend the quality of life, and have full vitality to face changes in life stages, rather than wasting a long life in weakness and illness; Second, financial and pension needs, reserve more funds for the expected increase in life, maintain financial stability, meet the needs of pension and health, and thus obtain a quality long-lived life; Third, the need to acquire new knowledge and new skills. The knowledge and skills required by individuals in the longevity era will continue to change, and they need lifelong learning and master new skills as the times change, so as to better accumulate wealth to cope with a long-lived life. These changes in individual needs challenge all existing socio-economic, political, cultural, educational, employment and other structures.
Changes in personal needs will drive the social industrial structure to move from industrialization to post-industrialization. In this regard, China can learn from the experience of transformation in many developed countries. According to the data from the Bureau of Labor Statistics , entering the 21st century, the proportion of service-related tertiary industries in the economy has increased. Agriculture accounted for nearly 40% of the U.S. GDP in 1869, and by 2013, it was only 1%. Compared with agriculture, the service sector's share in the economy rose from 40% in 1929 to around 65% in 2013. Similar to this trend, the three most core personal needs in the Changshou era correspond to the current high-end industries in the service industry. In the future, the growth rate of health, elderly care, education industries related to longevity and corresponding technology and R&D industries will be significantly higher than the average.
. At the government level, it is necessary to improve the social security system, promote the supply-side reform of medical care, guide the transformation of the longevity economy and individual behavior transformation
Facing the arrival of the era of longevity, the financing and payment of the social security system will face greater challenges. From the perspective of maintaining the stability of the social security system, the government can take measures such as appropriately postponing employees' retirement age, increasing the social security payment years, and increasing the social security funding base. At the same time, the government should adapt the social security system to changes in the era of longevity, such as optimizing the proportion of the three pillars of pension, developing the third pillar of personal pension, and promoting market-oriented investment in long-term broad pensions; at the same time, reasonably spending medical insurance funds, improving the benefits of chronic disease management, and establishing a wide coverage long-term care mechanism. In addition to maintaining the stability and efficiency of the basic social security system, the government should focus on reducing the supply side costs in the era of longevity, expand the supply of medical and nursing services through various policies, give full play to the role of the market, and make up for the gap in elderly care and health services. The government can reduce the construction and operation costs of medical and nursing service providers through land and tax policies and price preferential policies for basic energy consumption such as water, electricity, and gas; further relax access to social capital investment in the establishment of health services and nursing institutions, and expand investment and financing channels for the medical and nursing industry; strengthen the market-oriented supervision and standard system for medical and nursing operation services, and promote social offices and public medical and nursing service providers to enjoy the same development and support policies. At the same time, the government should continue to guide the insurance and finance fields to improve the payment and product system, effectively promote the consumption of health and elderly care related services, so that suppliers can gain momentum for continuous innovation and development while meeting the service needs of the longevity era. In addition, the government should encourage the education and Internet industries to provide a platform that is more adapted to the people's multi-level vocational education, interest learning and social exchange needs in the era of longevity.
At the economic policy level, as analyzed in the previous article, in order to reduce the impact of the elderly population on the economy, in addition to continuously promoting technological upgrading, the government also needs to vigorously promote the development of the longevity economy, innovate employment positions, improve employment flexibility, and provide conditions for the elderly to continue to participate in economic activities and create social value. On this basis, it comprehensively stimulates the diversified needs of the elderly population, improves the quality of industrial structure transformation and adapts to the longevity era.
Finally, the government should actively guide individuals to change their understanding and behavior, so that individuals can plan their longevity life more actively and proactively. The arrival of the era of longevity is an irreversible proposition. The government can increase education and publicity efforts to help the people more clearly and clearly recognize the arrival of the new era and the challenges that individuals will face, encourage individuals to continue to accumulate human capital, and start wealth planning earlier. As mentioned earlier, in the era of longevity, individual life will no longer be a single linear dimension, and individuals will have more flexibility in education, career choices, etc. In this regard, it is necessary for the government to consider more flexible social governance models and policies to help individuals achieve the transitions required for nonlinear life and improve adaptability.
. At the enterprise level, it is necessary to accelerate the transformation of business models and organizations to cope with the challenges of the era of longevity
As the cell of the national economy and the main participant in market economic activities, the role that enterprises can play in the era of longevity is of great significance to society, government and individuals. At the same time, the future development of enterprises will be affected by the era of longevity. The era of longevity is an era in which enterprises resolve prominent contradictions, meet the people's yearning for a better life, and create core values. The social needs of the longevity era are based on the needs of the elderly population. The needs of the elderly will not only be to maintain survival, but to realize their own vision. Enterprises must deeply understand this change in demand and innovate in business. Harvard Management Scholar Clayton Christensen proposed the theory of disruptive innovation in 1997, pointing out that disruptive innovation is to win with simpler, cheaper, more trustworthy and more convenient technologies than existing technologies (Clayton Christensen, 2014). In order to meet the needs of the elderly in the longevity era, enterprises need to continuously reduce costs, making products and services for the elderly more convenient and affordable.For example, the development of the elderly care community in the United States follows such an innovative principle, such as "Sun City", which turns golf clubs into the daily life of the elderly by selling large elderly care community houses that the elderly can buy with loans, and opens up the consumption of active retirement in the United States (Trolander, 2011). At present, the new generation of elderly care communities are turning consumer-oriented communities into a small long-lived economy, which not only meets the basic and developmental consumption of the elderly through large-scale and intensive methods, but also encourages the elderly to use their silver-haired intelligence to continue to create and produce, which greatly reduces the cost of high-quality long-lived life.
corresponds to demand changes and supply-side innovation. We believe that sharing and ecology will become the new organizational form of enterprises. In order to cope with the challenges of the longevity era, enterprises in the longevity era need to establish a sharing mechanism to stimulate organizational vitality and improve organizational efficiency. Enterprises in the industrial era are accustomed to standardized, process-based, easy to execute and manage working mechanisms. With the advent of the era of longevity, multi-stage life makes people's work and life more flexible, and this flexibility will make it difficult for traditional enterprises to meet their demands for process, standardization and predictability. In order to adapt to this change, the internal shape of the company itself also needs sufficient flexibility to adapt to more diverse personal career development needs in the future. The traditional employment model of the enterprise will be transformed into a partnership model, establishing a profit sharing mechanism, allowing members to find a sense of belonging and value, reflecting the entrepreneurial spirit, and thus showing enthusiasm and creativity to the greatest extent. At the same time, due to the columnar characteristics of the population age structure in the Changshou era, the population distribution of each age group is evenly distributed, and demand within and between age groups tends to diversify, which will lead to a decline in market concentration and diversification of market demand. In the face of market changes, only enterprises that establish an ecological industrial system can meet the diverse needs of customers in the Changshou era. In the era of longevity, with the convenience brought by information technology, traditional large enterprises will be surrounded by more specialized enterprises in small and sophisticated subdivisions. Large enterprises will form an ecosystem with more and more small enterprises to meet future challenges together.
We noticed that compared with other companies, commercial insurance companies have unique advantages in participating in building an industrial system in the era of longevity. Insurance is the financial service industry, and it is also the people's livelihood industry, and it has a natural intersection with the elderly care and health industries. On the one hand, commercial insurance companies can solve the long-term pension and health fund needs of customers at different levels through the accumulation of different types of insurance funds; on the other hand, in the era of longevity, commercial insurance companies can not only be an important bearer of personal and family medical and nursing payment funds, but also a product provider of enterprise and government procurement pension and health security plans, and can also become a powerful promoter of the innovative development of the medical, pension and health service industries. Borrowing the long-term and stability of insurance funds, commercial insurance companies' long-term investment in supporting the development of pension real estate and medical and health industries can not only solve the financing problems of the above-mentioned industrial development, but also achieve diversification of insurance funds investment, but also an extension of the insurance industry chain and establishing an industrial ecosystem to achieve synergistic effects.
China is ushering in the era of longevity, and China's leading insurance companies are exploring corporate solutions to varying degrees. In 23 years of business practice, Taikang Insurance Group has gradually transformed, transformed and transformed a traditional life insurance company into a big health ecosystem, and explored a set of corporate solutions to meet the needs and challenges of the longevity era. It is typical, and the industry has followed suit and has become a teaching case for Harvard Business School . Here we will study it as a case. Taikang Insurance Group Co., Ltd. was established in 1996 and has developed into a large insurance financial service group covering three core businesses: insurance, asset management, and medical care. As the first pilot enterprise in the insurance industry to invest in elderly care communities nationwide, the company has completed the layout of elderly care communities in 19 key cities in the country including Beijing, Shanghai, and Guangzhou, becoming one of the largest high-quality chain elderly care groups in the country. Adhering to the concept of integrating medical care and nursing, rehabilitation hospitals featuring rehabilitation and geriatric medicine are built in the elderly care community.Focusing on the theme of the era of longevity, the company has built a large health industry ecological system by creating three closed loops of longevity, health and prosperity. Among them, the closed loop of longevity refers to the closed loop composed of life insurance and elderly care services. Customers purchase life insurance and annuity protection to enjoy their old age in the pension community; the closed loop of health refers to the closed loop composed of health insurance and medical services. Customers purchase health insurance and enjoy medical treatment and other health services in the medical system; the closed loop of richness refers to the closed loop composed of pension and asset management. Customers purchase various wealth management products to achieve the preservation and appreciation of wealth, and ensure their medical and pension needs. We believe that through payment plus services, combined with the intermediate investment to accumulate time value, Taikang's business model has built a new dimension different from traditional insurance competition, creating comparative advantages.
From the perspective of business model, the essence of innovation is convenience and affordability. Faced with the challenges of the era of longevity, Taikang combines insurance with physical medical care and nursing, and through the exclusive annuity insurance product "Happiness and Appointment" attached to the elderly care community guarantee letter, it not only provides sufficient funding for customers' future longevity life, but also locks in high-quality elderly care community resources in advance, realizing the link between insurance customers and elderly care services. On this basis, Taikang further proposed a full-life cycle business model of "vibrant elderly care, high-end medical care, excellent financial management, and ultimate care", and achieved the integration of the elderly's life chain in terms of physical services. The goal is to enable the elderly to obtain the best quality medical care and care services and experience with the best cost and the highest efficiency. At the same time, in order to cooperate with the sales and services of this business model, the company has created a new profession of "Healthy Wealth Planner". The Happiness Youyue series of products, Taikang Home Elderly Care Community and Healthy Wealth Planner all meet people's yearning for a better life in the era of longevity. We believe that the efficiency improvement and cost reduction brought by Taikang's model are reflected in the following aspects: First, the elderly care community is designed to be aged-friendly (such as adopting small apartment design), and intensive in construction and operation. In chain operations, from brand promotion to supply chain, all of which reflect the essence of commercial innovation; Second, the chain operation of the elderly care community is conducive to the innovation and application of elderly care technology, replacing part of the expensive manpower, which helps further improve efficiency and enable residents to enjoy higher quality and convenient services; Finally, community residents save in advance through Taikang's insurance products and enjoy compound interest effects, which can greatly reduce financial pressure after moving in. Taikang's business model will enable more middle classes to afford high-quality elderly care life, improve payment ability, reduce consumption costs, and better pursue the vision of the era of longevity, which will promote a elderly care revolution.
As an enterprise's exploration towards the era of longevity, we have also found that it will have a profound impact on government policies and social development. In recent years, the state has issued a series of documents to encourage and support insurance companies to provide long-term equity financing for the social service field, participate in the construction and operation of elderly care service institutions, and lead the reform and development of medical and nursing fields. For example, the "Opinions on Promoting the Development of Commercial Insurance in the Social Service Field" issued by the China Banking and Insurance Regulatory Commission in 2020 and jointly issued by the 13th ministries and commissions point out that commercial insurance institutions are allowed to invest in the establishment of medical and Western medicine and other medical institutions and health service institutions such as rehabilitation, care, and medical and nursing integration; insurance funds are encouraged to cooperate with other social capital to establish elderly care institutions with integrated medical and nursing services, and increase the supply of diversified elderly care services, etc. The practice of Taikang's plan and the formulation and promulgation of national policies promote and confirm each other. At the social level, Taikang elderly care community is empowering the society by providing longevity services and trying to become a test field for the longevity economy. On the demand side, the elderly care community is committed to providing health consultation, health management and other medical services, providing high-quality cultural activities and exchange places, and creating more aging-friendly facilities through technological applications to achieve healthy elderly care, cultural elderly care, and smart elderly care; on the supply side, the elderly care community makes use of its spare time to feed back to the society to build a new platform, and allows the elderly to accumulate knowledge and experience to continuously guide social production and create value through providing distance teaching and building expert platforms.
To sum up, the essence of Taikang's plan is to promote a pension revolution through commercial methods, use market economy methods and business innovation to continuously improve efficiency and reduce costs, and provide response ideas for human society to enter the era of longevity. This is not only a corporate solution for the longevity era, but also a solution to promote society and government to solve the challenges of the longevity era with the power of enterprises. Under the wave of the longevity era, China needs more enterprises to invest in the construction of social and people's livelihood projects and grow into the core backbone enterprises of the big health and people's livelihood projects.
. Conclusion
All kinds of data indicate that the world is getting older rapidly, human society is entering the era of longevity, and the population age structure will gradually form a new balance. Low mortality rate, low fertility rate, steadily increasing life expectancy, the population age structure tends to be columnar, and the proportion of aging population in the platform period exceeds 1/4 constitutes the five major characteristics of this era. With the advent of the era of longevity, survival with illness will become a common phenomenon. In order to make a long longevity career more quality, the cost of individuals investing in health will increase dramatically, and the huge health needs will promote the development of the health industry and the changes in the structure of the health industry; at the same time, the social saving structure and personal wealth accumulation form of the longevity era will change, and individuals will rely more on investment returns and wealth accumulation to meet the needs of elderly care and health. The longevity era will surely bring about the era of health and wealth. From a macro perspective, there are currently different views on the impact of the longevity era on the macro economy: some believe that an increase in the proportion of the elderly population will lead to a slowdown in economic growth, and some latest research shows that the longevity era may not necessarily lead to a downward economic growth rate. The development of social and economic development in the longevity era faces challenges, such as the limitation of social innovation efficiency and the deepening of wealth inequality, and there are opportunities. Especially, the more dynamic longevity economy is adapted to the social and economic structure of the longevity era, and the value of the elderly will be re-understood, positioned and explored. Japan is currently one of the countries with the most serious population aging in the world. The Japanese labor force and social economy under the age of longevity have undergone profound changes, which has empirical inspiration for China to cope with the impact of the age of longevity. From Japan's experience, we can infer that economic development can be effectively promoted by improving human capital, accelerating technological guidance, promoting social fairness, building an effective capital market, and introducing a longevity economy to create a third demographic dividend. The era of longevity has arrived. Compared with other countries, China has a large population base and the growth process of aging population is accelerating, but its per capita income and savings are not as good as those of developed countries at the same time, and it is difficult to support the health and pension consumption levels of individuals after retirement. The arrival of the era of longevity has a greater impact on China's society and economy. Re-planning the arrangements for the entire life cycle of individuals in the era of longevity is an issue that society, government and enterprises need to consider. Chinese companies are already actively exploring solutions to the era of longevity, providing a sustainable and stable development solution for China and the world to face the challenges and opportunities of the era of longevity through corporate practices to promote social change.
This article systematically expounds the characteristics and formation of the longevity era, expands and enriches its connotation and extension, conducts detailed research on related academic theories, and explores the challenges and opportunities of the longevity era from a dynamic perspective, puts forward suggestions for China's response strategies, and initially proposes solutions and specific business practices. Under the theoretical framework of the longevity era, the next step is to further expand and improve the research on academic theories such as demographic, health economics, and longevity economy related to the longevity era, deeply analyze the demand structure and production mode of the longevity economy, extend practical exploration of enriching solutions to the longevity era, and focus on exploring how to foresightedly promote changes in social industrial structure based on the theory of the longevity era, lead the development and transformation of commercial enterprises, and solve various social problems that may be brought about by the longevity era in the context of China's social and economic development.
Original text published:
Chen Dongsheng: "Theory and Countermeasures of the Longevity Era", "Management of the World", 2020 Issue 4, pp. 66~85, 129.
