We are an aging species in the western world. This is a fact. In the EU we are facing a drastic decrease in the working age population. By 2050, we will have 48 million fewer adults of working age. At the same time, public spending is increasing and 10% of that increase is to support the needs of an aging population.
All the factors I mentioned above are taking place at the same time as forecastsfor GDP growth are due to halve during the same period.
These are worrying facts and beg the question what are we doing to address this? How can we keep public finances in Europe sustainable at the same time as guaranteeing adequate social security and equity between the generations?
Can we, as the EU is suggesting, address this by:
- • Increasing the birth rate – I think this is a long term fix that is needed, but it will not make a difference the next 30 years.
- • Prolonging working life – this is also a long term strategic measure. It’s also likely to involve more public spending since we would not only legislate for longer working lives but also improve the population’s health to cope with longer working lives.
- • Increasing the working population through immigration – the political strains on the EU’s open market for employment as well as immigration policies will be likely to limit the pursuit of this strategy.
- • Increasing productivity – working harder will not fill the shoes of 48 million people. A more significant change is required.
For me it is clear that we are missing an essential strategy for overcoming these challenges; technology. Clearly, technology evolution brought us to where we are, and the technology revolution can help us transition to a sustainable future.
Many of today’s knowledge work activities can be managed by technology or made more efficient by being supported by autonomic and cognitive technologies. Self-driving cars exemplified by Google Car will unleash a new wave of interesting alternative services in the transport sector. In the healthcare sector, IBM Watson’s advanced analytics activities are uncovering new ways to speed up diagnosis of illnesses. In the finance sector, Amelia from IPsoft is capable of automating business processes activities such as loan origination, insurance claims management and absorbing large volumes of repetitive customer queries.
Let’s look at some data points to show the possibilities of how this could impact our productivity. Roughly 204 million people are working in the EU out of 300 million in the working age. According to McKinsey, 45% of activities can be automated with existing technologies. If we accept a linear relationship between time and activities this would mean that we could automate the current workload gap of 46 million people while still being able to reskill and re-deploy the existing workforce to take on more productive and creative roles.
The combination of revolutionary technology automating knowledge work and the initiatives already started by the EU makes a huge difference to our future. People will be more productive when they are coupled with cognitive colleagues who absorb mundane chores or help improve critical decision-making. Even extending work life will be more palatable as people will be exposed to more creative activities. Last but not least, the inclusion of digital labour as part of the political plan will make it possible to sustain GDP growth and finance the increase in public spending needed to protect a quality standard of living for our growing number of pensioners.
In summary, embrace the Watsons, the Google cars and the Amelias. They will play a crucial role in helping the EU cope with its demographic challenge. Let’s leverage them to make it possible for people to enjoy their retirement while cognitive technologies keep working.
 “The demographic future of Europe – from challenge to opportunity” European Commission Directorate-General for Employment, Social Affairs and Equal Opportunities, Luxembourg: Office for Official Publications of the European Communities, October 2006 ec.europa.eu/social/BlobServlet?docId=2023&langId=en