Integrated Humanity Paper Ageing Population

This essay will discuss the implications of aging population on Singapore’s future economy, where future here is defined as 2011-2025. Future economy expects the developments of new sectors such as technology. Thus, it is likely to experience digital disruption which means certain jobs are no longer relevant and new skills needed. Therefore, economic restructuring is an important part of the future economy. In addition, Aging population would affect Singapore’s future economy significantly.

Aging population happens when the society as a whole grows older, with old dependents (aged 65 and above) become a larger proportion of the society. By 2017, Singapore transited from an aging society to an aged society, which means there are 14 in 100 citizens aged 65 and above (population.sg team, 2016). Aging population is due to increase in life expectancy and low fertility rate. With advancements in technology and medical facilities, better healthcare, treatments, nutrition and living standards become available. Thus, people can become healthier and live longer. According to research, Singapore's life expectancy at birth in 1957 was 60 years; in 2013, it increased to 80 years (population.sg, 2013) , and the life expectancy is continuously increasing by two years per decade (Ng, 2018). Total Fertility Rate(TFR) decreased through decades, it is now stagnates at 1.3, far less than the TFR replacement rate 2.1, which means we would not have enough children to replace ourselves in the future (population.sg, 2015)

Aging population would shape the future economy. Implications of aging population would affect Singapore economy in various ways. With lower fertility rate, the size of workforce would shrink. If productivity per work remains the same, less workers would result in lower overall output (Ho, 2018). Research has shown that annual GDP growth would slow down in America 1.2% due to aging population (Lee, 2016). Secondly, People generate ideas and more people would generate more ideas. As for Singapore, a country whose people are considered as ‘resources’, a shrinking workforce means a shortage of people, ideas, and more importantly, the shortage of skilled and talented people who contribute those ideas. Thirdly, by law of supply and demand, same demand but less ‘supply’ of working people would result in a wage rise. The situation of decrease in productivity, less talented people locally and rise in wages is completely to the disadvantage of Singapore economy, as Multinational Corporations (MNCs) even local companies may shift their business out of Singapore because of the higher cost and lower return. As mentioned above, a main part of future economy is investing in technology because high-tech products can make huge profits. With few companies or investors present in Singapore, Singapore would not be able to invest much in advanced technology, while other countries are all making good use of it. Thus, Singapore may suffer huge losses due to the lack of investment in technology and eventually, decreases the economic competitiveness in future economy.

In addition, there will be fewer working age adults for every person aged 65 and above because of low fertility rate too. Comparing to 8.4 working-age to one senior citizen in 2000, and 4.7 working-age to one in 2006, it is believed in 2030, 2.3 working adults need to support one (Ho, 2018). The pace of aging in Singapore is also too rapid. While French took 115 years to transit from an aging society to an aged society, it is believed that Singapore only needs 19 years (population.sg team,2016) . This urgent situation would impose additional strain for working-age adults, because they have fewer time for adaption and preparation. Having to support more old people, it is likely that a lot of citizens would cut down expenses striving to make a living. Therefore, there will be less consumer spending, and thus, less demand for products and services. Older consumers are also likely to prefer products from established companies, and therefore, making it very hard for new brands and products to gain traction (Lee, 2016). A smaller pool of demands means lesser profits made because there would be fewer chances to make profits. Seeing profits decrease, many companies may shift their operations and business out of Singapore. As a country which lacks of natural resources and relies on businesses to a great extent, the shift would be devastating to Singapore’s future economy because investors of technology are lacked and there would be few money making opportunities, which directly decrease Singapore’s economic competitiveness.

Diabetes, Alzheimer’s or heart disease are old-aged related as older people are more likely to suffer these diseases. More older people in the society could cause more old-age related health issues. More health issues would result in more treatments needed. As government pay for most of the treatment fee, aging population would eventually lead to a rise in healthcare costs, which also means the government need to spend more on healthcare sector than before. The increase expenditure in non-monetary sector such as healthcare, would result in a diversion of government expenditure. Less money could be invested in business and infrastructure, and thus Singapore may be unable to sustain the fast changing landscape and MNCs would have