The shock of the old: ageing, participation and technological change

This is an article that Elija Perrier wrote for the Labor Herald published 11 September 2015.

Last week, The McKell Institute released a report I wrote about labour market participation in the context of Australia’s ageing population.

The report addresses the convergence of two great disruptive transformations facing Australia: the ageing of the population and technological innovation.

What’s going to happen to our economy?

A useful way to understand the disruptive economic shock of an ageing population is via its impact on the ‘three Ps’ underpinning economic growth: population, productivity and participation.

  • Population: over the next forty years, Australia’s population is anticipated to grow to around 40 million. Our nation will become older on average as Australians live longer and healthier lives.
  • Productivity: the engine of economic growth, productivity growth, is expected to decline with a flow-on effects upon living standards.
  • Participation: an ageing population will cause the labour force as a proportion of the total population, to decline, with Australians spending more of their lives out of work. Australia’s capacity to support large swathes of people outside the labour market will be pushed to its limit.

Older workers face additional push and pull factors affecting their participation. They are more likely to withdraw completely from the labour market if unemployed, require more flexible employment, suffer age discrimination and experience declining health.

Furthermore, computerisation and automation of the economy will alter older workers’ job opportunities, with routine occupations more likely to be replaced by technology.

Let’s leave no person behind

Technological change has the capacity to enable more productive lives as we age, yet much of the discussion around innovation in the popular press is ‘youth centric.’

The future of work is presented as a young person’s game, while representations of old age languish in stereotypes familiar to my grandparents’ era: halcyon days of suburban retirement with its daily rituals of pot roasts, the Midday Show and Wheel of Fortune.

At a recent forum I attended on innovation reforms needed to foster Australia’s startups, there was an awkward silence from the panel in response to a question about what can be done to help older workers adapt.

It’s not much fun being structurally adjusted out of work and it becomes more devastating the older you are. Despite the theoretical elegance of economic ‘creative destruction,’ the reality is that losers from structural economic change often stay losers, particularly those in older cohorts. Many people who became structurally unemployed in the 1990’s never worked full-time again.

An aging population

Unsurprisingly, declining physical and mental health is a primary factor determining labour market participation as Australians age.

Australia has a good healthcare system. However, the ageing of Australia will put more strain on its fiscal sustainability. Living longer increases the prevalence of chronic health conditions which impact our ability to work and are expensive to treat.

The challenge facing Australia is how to ensure our healthcare system remains economically sustainable, maximises old-age participation and is able to deliver amazing health-technology innovations to all Australians, not just the rich. One example of this innovation is personalised care based on genetic makeup and big data health like IBM’s Watson Health.

Integration across the nation is the key

A key to achieving such outcomes and ensuring innovation can permeate throughout society is technological integration.

At the moment, Australia’s health system suffers from a lack of informatics integration. Information in one sector is often not accessible in another due to insufficient connectivity, interoperability barriers or outdated technology.

Experts I spoke to regarded Australia as nearly two decades behind international best practice.

Other experts provided vivid accounts of integration failures. In one instance, an emergency nurse had to manually type in patient information from an ambulance officer’s computer because the systems weren’t linked. In another case, a doctor treating an elderly woman had no idea she’d been diagnosed with cancer because the information wasn’t available on a personalised health record. Such anecdotes would come as a surprise to most Australians: we assume we have a world-leading health system.

The lack of integration affects the extent to which new innovations can be taken-up within the health system: the latest gadgets mightn’t be of much use if they’re not integrated into centralised, online, up-to-date personalised healthcare accounts which patients and clinicians can easily access.

So what do we do now?

Some of the report’s recommendations on how to address challenges of older-age healthcare and participation are set-out below.

Importantly, we must recognise that even small reforms can have big impacts.

Better IT protocols to mandate user-orientation and interoperability across government: technologies used by government should be designed to be user-focused and ensure interoperability.

Open door innovation policy: government should consider ‘opening its doors’ to innovators at the early stages, allowing them to collaborate with frontline staff and propose solutions implementable in partnership with public services.

Adopt best practice integrated care models: Australia should examine international approaches for ways to improve its integrated care informatics and better integrate healthcare into workplaces to keep older people in jobs longer.

Personalised career portals and big data driven labour market programs for older Australians: we should be looking at utilising technology in developing personalised and intensive retraining and participation programs in partnership with industry and innovators.

An ageing Australia innovation hub: many startups have been founded by older individuals, there is no reason why older Australians can’t get in on the action, particularly given increasing demand for older-age products. This hub could foster a startup ecology that’s tailored to older people (who, let’s face it, might not want to spend all day hanging around teenagers and 20-somethings at Fishburners).

Above all, the report aims to help re-frame ageing from a paradigm of decline to one of positive opportunity.

The extraordinary increase in lifespans over the last 150 years should be cause for celebration, testament to the ingenuity of technological development and what can be achieved by progressive, inclusive, politics.