Aging and population decline affect the structure of the economy and public debt (256% of GDP). The decline in the number of young people in the workforce has led to a labor shortage in manufacturing and the aging of the workforce has resulted in a decline in production and innovation. The growing elderly population reduces savings, while the decrease in the workforce translates into a decline in the return on investment and the investment rate.
According to the OECD, Japan’s pension expenditure (9.4% of GDP – 2017 data) is above average (7.7%), but lower than European countries such as Italy (15.6%), France (13.6%) or Germany (10.2%).
In 2018, then Prime Minister Shinzo Abe called the aging of Japanese society and the low birth rate as “the most significant challenge to the survival of the nation.”
Economics of the elderly and robots
The demographic structure has stimulated the development of the elderly economy: Japan is at the forefront of services for the elderly. Several companies, including home appliance manufacturers, are adapting their products to this consumer segment. Years ago, incontinence diapers were expected to sell more than baby diapers.
At the same time, Tokyo pushes on robots and artificial intelligence and is at the forefront ofagetech. Robots are increasingly present in nursing homes, an increasing number of which are facing the shortage of health workers for an increasing number of residents. In 2014, Abe proclaimed the achievement of a “new robot-driven industrial revolution” as one of the measures of his strategy to revitalize Japan.