Tapping Technology toMaximize the LongevityDividend in Asia

Aiko Kikkawa Takenaka, ADB

Inception Workshop

Asiatic Research Institute, Korea University

May 18 2018

Asia is Aging at Accelerating Rate

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1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 2055 2060 2065 2070 2075 2080 2085 2090 2095 2100

Perc

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Bil

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Senior population Total population Share

Source: ADB calculations using data from United Nations, Department of Economic and Social Affairs, Population Division.

Aging Asia: Shrinking and Aging Workforce

Percentage Change in the Population of Ages 15-64 between2017 and 2030

Mean Age of the Working-Age Population in Asia and the Pacific

14.6

6.8

(1.3)

(3.6)

(5.8)

(8.7)

(10.3)

(10.4)

-15 -10 -5 0 5 10 15 20

Malaysia

Viet Nam

Singapore

PRC

Thailand

Japan

Korea, Rep. of

Hong Kong, China

29

31

33

35

37

39

41

43

1990 2015 2030 2050

World Asia-Pacific East Asia Southeast Asia

South Asia Central Asia Oceania Pacific

Source: ADB calculations using data from United Nations, Department of Economic and Social Affairs, Population Division.

Demographic changes and the implication on growthSequential gains from demographic dividends

• First demographic dividend through the expansion of workforce

• Second demographic dividend through investing in human capital, leading to higher productivity.

• Third demographic dividend or longevity dividend, i.e. the gains from investing in longevity and longer working life

3 Roles of Technologies

Role of Technology Examples

1. Technology for health and longevity Biotechnology, automated diagnosis, surgery and therapies. IOT (medical equipment and wearable sensor devices), and health-related big data analysis.

2. Technology for transforming work and workplace:

Industrial robots, automation, AI, machine learning, and human function aiding devises at workplace (adaptive technologies), remote work

3. Technology for workers and supportive labor market infrastructure

Technology-based education/lifelong training, human resource and age diversity management, cloud-based job matching service.

Research Agenda

• Future Jobs and workplace for seniors (incl. those above 65)

• Evaluation of specific technologies that can improve LFP of seniors or increase their productivity

Impact assessment (productivity, wage, employability) and cost/benefit analysis

o Lifelong training career planning targeting middle to older workers

o Technology-based learning for elderly

o Cloud and algorithm based job assessment and matching services targeting older workers

o Ergonomically designed age-friendly workplace

Diversity in Changes of Working Age Population over years in Asia

Percentage Change in the Population of Ages 15-64 between2017 and 2030

33.0

25.1

21.9

20.6

16.5

16.0

14.6

13.6

12.5

6.8

(1.3)

(3.6)

(5.8)

(8.7)

(10.3)

(10.4)

-15 -10 -5 0 5 10 15 20 25 30 35 40

Papua New Guinea

Lao PDR

Philippines

Cambodia

Mongolia

India

Malaysia

Indonesia

Myanmar

Viet Nam

Singapore

PRC

Thailand

Japan

Korea, Rep. of

Hong Kong, China

Harvesting demographic dividends from Population Diversity in the Region

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Mill

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Working-Age Population in Asia and the Pacific, by Aging Group

Aged group Aging group Young groupSource: ADB calculations using data from United Nations, Department of Economic and Social Affairs, Population Division.

Varying Openness to migration across Asia and other key estimations in APEC

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5%

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35%

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45%

50%

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AUS BRU CAN PRC HKG JAP KOR MAL MEX NZD RUS SIN THA USA

mill

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Number of migrants (left) Share of population (right)

Migrants in APEC economies, 2015 (number and share of population)

Migrants other than PRC and Korean origin are growing in Japan

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500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

2008 2009 2010 2011 2012 2013 2014 2015 2016 Jun-2017

Total Foreign Residents in Japan

PRC Korea Philippines Viet Nam Brazil Others

Source: ADB calculation using data from the Ministry of Justice, Japan

Share of intra-Asiamigration declining over time

30.24 30.18

83.60 86.88

38.0736.17 34.74

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100

1990 1995 2000 2005 2010 2013 2015 2017

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Mill

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Asia to Asia Asia to World Ratio

11

Notes: % share = migrants from Asia to World / total global migrants * 100Source: ADB calculations using data from "Trends in International Migrant Stock: The 2017 Revision", United Nations Population Division.

Asia is a region of net emigration

12

Asia and the Pacific34.9%

European Union9.4%

Middle East27.0%

North America17.8%

Others10.6%

Source: ADB calculations using data from "Trends in International Migrant Stock: The 2017 Revision", United Nations Population Division.

Destination Region of Migrants from Asia

Barriers to temporary labor mobility

▪ Some skills are not portable - Skill recognition mostly rely on host country schemes except for some skills that are standardized through international and regionally standardization (APEC/ASEAN, Commonwealth etc.)

▪ Where skills are portable, they are not linked to job opportunities, not widely known to professional organizations

▪ Cost of oversea employment is high

▪ Imperfect competition- restricted entry of recruiters in some country of origin of migrants, information asymmetry due to distance/language

High Cost of Migration

4,000

2,328

1,374 1,2601,094

880674 656 624

506388

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1,500

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2,500

3,000

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Source: World Bank. 2017. Migrating to Opportunity. https://openknowledge.worldbank.org/bitstream/handle/10986/28342/9781464811067.pdf?sequence=22&isAllowed=y

Migration Cost to Malaysia by Source Country

Policy Implications

• Active promotion of technological innovation and adoption through sufficient funding for research and development.

• Encourage all workers including seniors to attend lifelong learning and continue upgrading their skill

• Enhance cross-border mobility for workers, which can help reduce labor shortages and the skills mismatches experienced across much of developing Asia.

Gray DivideInternet Use by Age Group (%)

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2010 2011 2012 2013 2014 2015 2016

Japan

20-29 30-39 40-49 50-59 60-69 70-79

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100

2013 2014 2015

Republic of Korea

15 to 24 25 to 34 35 to 49 50 to 59 60+

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100

2013 2014 2015 2016

Singapore

20-29 30-39 40-49 50-59 60-70 70+

Sources: Ministry of Internal Affairs and Communication, Japan (accessed March 2018); Statistia. 2018. www.statista.com (accessed April 2018); Infocomm Media Development Authority. 2017. “Annual Survey on Infocomm Usage in Households and by Individuals.” www.imda.gov.sg (accessed April 2018).

Way Forward

• ADB New Research Program on Aging, Technology, and Aging in partnership with co-organizers

• Policy-relevant Research Papers

• Policy Dialogue (Aug 20- 22 2018) at Australian National University also in partnership with Asian Think Tank Network (ATTN)

• Dissemination of findings and policy recommendations (ADB Reports, Academic Publications, and Policy Briefs, Blogs and Social Media)

• Asian Economic Integration Report 2019: Theme Chapter

Education Level of Workers

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100%2

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AUS HKG INO JPN KOR MAL NZD PNG PHI SIN VIE THA VIE

Basic Intermediate Advanced

Source: ADB calculations using data from International Labour Organization.

Policy-relevant Research Agenda

Role of Technology 1. Technology for health and longevity

• Delayed aging process (health, physical and cognitive capacity, non-cognitive abilities etc) and changes in the seniors’ human capital today. Optimum retirement age?

• Aging and human capital accumulation. Longer working life broadens skills and employability?

• Revisiting terms “old workers’, “senior workers”. “mature workers” and “working age population”.