5 Smart Policies Fueling the Global Longevity Economy
As the global population ages at an unprecedented pace, countries are grappling with both challenges and opportunities. The ”longevity economy” — the sum of economic activity generated by older adults and the industries that support them — is projected to grow into the trillions in coming decades. But reaping its benefits requires smart, forward-looking policies. Here are five areas where governments are taking bold action, reshaping not only the future of aging but also the trajectory of global growth.
1. Align Retirement Age with Life Expectancy
When retirement ages remain static while life expectancy rises, pension systems become strained and labor markets shrink. Aligning retirement age with longer, healthier lives is critical for sustainability and for ensuring that older adults continue contributing to society. Denmark has emerged as a pioneer, linking its retirement age directly to life expectancy with plans to raise it to 70 by 2040. France has taken a similar step by raising its statutory age to ease pension deficits, despite widespread protests. Meanwhile, both the Netherlands and Norway have tied retirement to longevity data, with Norway offering one of the most flexible systems in the world—allowing retirement between ages 62 and 75, with benefits adjusted fairly to reflect the timing of exit. Together, these reforms show how governments can balance fiscal responsibility with personal choice.
2. Create Flexible, Age-Friendly Work Environments
Older workers bring valuable skills and knowledge, yet many are pushed out of the labor market too soon by rigid workplace structures. Countries that promote flexible work are proving the benefits of inclusion. In Iceland, more than 84% of people aged 55–64 remain employed, the highest rate in the OECD, thanks to policies and cultural attitudes that encourage older adults to stay active. New Zealand and Israel have also implemented frameworks that support phased retirement, part-time roles, and workplace training programs, giving older workers options that match their capacities and ambitions. In addition, tools such as the Later Life Workplace Index are being used internationally to help organizations assess and improve their age-friendliness. These approaches highlight how valuing older workers as assets strengthens both businesses and society.
3. Boost Elderly Care Services and Infrastructure
No society can thrive without robust systems of care for its older population. Expanding eldercare infrastructure not only preserves dignity and wellbeing but also drives new industries in healthcare, housing, and technology. China has made this a national priority, with the eldercare market projected to reach as much as $3 trillion by 2030, supported by investments in nursing homes, dementia centers, and subsidized home services. Japan, which has one of the most advanced aging demographics, has taken a different but complementary approach by building integrated community care systems that combine health, housing, and welfare to keep older adults independent for as long as possible. Both models illustrate how investments in care can address social needs while generating economic growth.
4. Reform Pensions to Ensure Sustainability and Fairness
Pension systems are the backbone of financial security in later life, yet without reform they risk collapsing under demographic pressure. Brazil moved decisively in 2019, introducing a landmark reform that raised the retirement age to 62 for women and 65 for men in order to rein in unsustainable costs. The Netherlands has taken a hybrid approach, combining public pensions with mandatory occupational schemes to create one of the most balanced and sustainable systems in the world. Norway’s model stands out for its flexibility, allowing retirement between 62 and 75 while automatically recalculating benefits to reflect changes in life expectancy. Though politically challenging, these reforms demonstrate that fair and sustainable pensions are possible when governments adapt systems to demographic realities.
5. Expand Age-Friendly Infrastructure and Tech Innovation
The longevity economy depends not only on pensions and care, but also on the environments in which older adults live. Age-friendly infrastructure and technology empower people to remain independent, active, and engaged in society. China has unveiled a sweeping “silver economy” plan that invests in industrial parks, smart healthcare, and senior-focused housing to meet the needs of its rapidly aging population. South Korea, which faces one of the fastest demographic shifts, is reshaping its social policies on housing, retirement, and labor while fostering universal design industries that create products suitable for all ages. At the same time, the European Union has promoted “age-friendly cities” initiatives to improve transportation, public spaces, and digital inclusion. Together, these efforts show how innovation and inclusive design can transform aging from a challenge into an opportunity for society at large.
The global longevity economy is not just about managing aging populations — it is about unlocking the potential of longer, healthier lives. From pension reform to age-friendly cities, these five approaches show how governments can turn demographic shifts into engines of resilience and growth. Countries that act now with bold reforms will not only meet the needs of older citizens but also position themselves at the forefront of a new economic era.
