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How an Aging Work Force Can Thrive in the Digital Economy

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The aging population and growth in digital innovations are global phenomena, according to a paper from the Organization for Economic Cooperation and Development (OECD) and the Global Coalition on Aging (GCOA), and the “smart use” of one opens opportunities for the other.

“Digital technology – done right – can keep the world’s aging populations independent, active and working longer than previously possible,” according to the paper. In addition to improvements in transportation and health care, including tele-health solutions, technology can help employers create more inclusive work forces; that benefits employers by maintaining a more experienced work force, and older workers by keeping them engaged and productive for longer.

“Long-term economic growth and sustainability relies on governments, industry and individuals getting this right,” the paper noted, but social and political approaches to aging are still centered on “20th- and even 19th-century ideas.”

Successfully adopting a “digital economy,” as the paper called it, requires changes in how we approach education, work policies, financial planning and social security programs.

“It also means adopting a new outlook in which aging populations are seen as more than just beneficiaries of technology, but also as drivers of technological innovation and economic growth in their own right,” according to the paper.

The findings in the paper come from a two-day conference in September between the OECD and GCOA at Harris Manchester College, University of Oxford. They found that as a result of lower fertility rates and increasing lifespans, there will be 1 billion people over age 60 by 2020. Furthermore, in OECD countries there will be more people retiring than beginning careers over the next two years.

Sarah Harper, professor of gerontology and director of the Oxford Institute of Population Ageing, moderated a keynote at the conference, noting that “in demography, we tend to underestimate what is going to happen, while with technology we overestimate how quickly change will unfold,” according to the paper.

Key to addressing these issues is collaboration between public and private interests, including making career models and work environments more flexible.  The paper pointed to the sharing economy as an example. In the United States, more than 30% of Uber drivers call themselves retired, and a 2015 PwC report said a quarter of people over 55 consider themselves part of the sharing economy, compared with 7% of Americans overall. The Bureau of Labor Statistics found 82% of independent contractors prefer their way of working over a “traditional job” with a salary and fixed hours.

A Transamerica survey found most Americans plan to work past age 65, and among those who were already in their 60s, over half plan to work at least part time after they officially retire. However, few employers are prepared for an older work force, according to the paper. Almost a quarter of employees said their employer wasn’t age-friendly, and another 32% said they weren’t sure.

Policymakers could encourage an older work force by eliminating retirement ages and encouraging employers to extend retirement benefits to all employees, including part-time workers.

There are infrastructure changes that could encourage older workers, too, like mixed use zoning policies that allow a mix of residential and commercial properties to reduce commuting.

“Reskilling” to keep up with technology is an important part of maintaining a valuable older work force. “Unleashed learning” that can be customized to an individual’s needs can be valuable, but there are several challenges, the paper found: quality assurance, lack of standards and interoperability, trust and privacy, cross-border, patent, copyright restrictions, cost and access. The paper identified priorities for reskilling programs, such as focusing on higher level cognitive skills over how to operate digital tools.

“Although digital skills for using computers and other digital devices are also important,” the paper noted, “the past two decades shows that these skills are relatively easy for most adults to learn without much formal instruction once they have reason to do so.”

With increased use of digital tools, the need for privacy and security measures rises. Current security systems aren’t designed to meet the needs of a constantly connected “Internet of Things” environment, and “regulators are responding by holding back innovation because of liability concerns.”

The paper suggested a “Goldilocks” approach to balancing security and innovation. “Taking users’ trust for granted will kill innovation as effectively as overregulation,” it argued. “The goalpost should be building fully privacy- and data protection- compliant products and services, designed to be compliant by default as well as robust security risk management practices.”

Digital innovation’s impact on health care is also an important part of making the work force more inclusive of older workers. Wearable devices that monitor health information and share it with the user’s doctor enable aging in place.

— Read Who Wants to Retire at 72? on ThinkAdvisor.