Presentation by Johannes Meier given at Tufts University, May 2008. Higher life expectancy and declining fertility are not new trends. Demographic change will intensify cohesion issues of the German society over the next few years. The global demographic trend is calling for new mechanisms of resource allocation and accelerated adaptation processes. Deal constructively with demographic change calls for adaptive leadership.

1. Demographic change from a European perspective
- An adaptive leadership challenge
Johannes Meier, Ph.D.
Boston, 8 May 2008

2. Demographic Change
This could not have happened with a family!
page 2

3. Demographic Change
Agenda
Higher life expectancy and declining fertility are not new trends
Demographic change will intensify cohesion issues of the German
society over the next few years
The global demographic trend is calling for new mechanisms of
resource allocation and accelerated adaptation processes
The need for adaptive leadership to deal with demographic change
page 3

4. Demographic Change
Agenda
Higher life expectancy and declining fertility are not new
trends
Higher life expectancy and declining fertility are not new trends
Demographic change will intensify cohesion issues of the German
society over the next few years
The global demographic trend is calling for new mechanisms of
resource allocation and accelerated adaptation processes
The need for adaptive leadership to deal with demographic change
page 4

5. Demographic Change
Demographic trends are long-term phenomena in their
genesis and impact – and are not over yet
Norway
New Zealand
Iceland
Sweden
Japan
Netherlands
Switzerland
Australia
Life expectancy for women
(in the country where the expected figure was highest in each year)
Source: MPI Rostock, 2005 page 5

6. Demographic Change
Relevant global trends
More old people!
They’re living longer!
The number of first-time marriages is falling.
The age of those marrying for the first time is increasing.
The average age of first-time mothers is increasing.
More babies are being born out of wedlock.
The number of divorces is increasing.
More women are active in the world of work.
Inequalities within and between countries are increasing.
The total fertility rate is declining.
Demographic change must be analyzed in the context of sociological,
technological and economic megatrends.
page 6

7. Demographic Change
As wealth increases, the birth rate falls at first
Children per woman
Bangladesh
France
Germany
The fertility rate is defined as the average number of births per women
(age-specific birth figure, total fertility rate)
Source: World Bank, 2001 page 7

8. Demographic Change
Declining fertility in Germany
Children per woman
The fertility rate is defined as the average number of births per women
(age-specific birth figure, total fertility rate)
Source: Institut für Bevölkerungsforschung und Sozialpolitik, 2001 page 8

9. Demographic Change
Growth segment elderly:
Germany 2000-2050 (per 100 persons in 2000)
200
180
160
140
120
100
80
60
2000 2010 2020 2030 2040 2050
65+ 15-64 high variant (an additional fertility of 0.5 children)
Source: Heran, 2007 page 9

10. Demographic Change
France 2000-2050 (per 100 persons in 2000)
200
180
160
140
120
100
80
60
2000 2010 2020 2030 2040 2050
65+ 15-64 high variant (an additional fertility of 0.5 children)
Source: Heran, 2007 page 10

11. Demographic Change
Poland 2000-2050 (per 100 persons in 2000)
200
180
160
140
120
100
80
60
2000 2010 2020 2030 2040 2050
65+ 15-64 high variant (an additional fertility of 0.5 children)
Source: Heran, 2007 page 11

12. Demographic Change
China 1950-2050 (%)
25
20
15
10
5
0
1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050
Percent of elderly (65+)
Source: World Population Prospects: The 2004 Revision (2005) page 12

13. Demographic Change
The bad news: fewer people of working age ceteris
paribus
20 %
17 % 16 % 16 % 2000-2020 2020-2050
7%
2%
2%
-5 %
-7 %
-9 %
-14 % -13 %
-21 %
-28 %
USA Canada UK France Germany Japan China
Quelle: U.S. Census Bureau International Data Base page 13

14. Demographic Change
Agenda
Demographic change will intensify cohesion issues of the
German society over the next few years
Higher life expectancy and declining fertility are not new trends
Demographic change will intensify cohesion issues of the German
society over the next few years
The global demographic trend is calling for new mechanisms of
resource allocation and accelerated adaptation processes
The need for adaptive leadership to deal with demographic change
page 14

15. Demographic Change
1. How robust is intergenerational cohesion?
24.500
under 20 65 and older 22.786
22.240
21.615
21.000
18.219
17.500 16.589
17.259
14.066 15.524
14.000 14.552
13.927
12.874
12.094
10.500
2001 2010 2020 2030 2040 2050
The population of Germany by age group (in thousands)
medium life expectancy, medium migration balance
Source: Federal Statistical Office 2003, 10th coordinated population projection, variant 5 page 15

16. Demographic Change
State spending and income 2004 and
population profile 2004
1.600 25.000 €
1.400
20.000 €
1.200
Population in 1,000
1.000 15.000 €
800
600 10.000 €
400
5.000 €
200
0 0€
1 5 9 13 17 21 25 29 33 37 41 45 49 53 57 61 65 69 73 77 81
Age
Population 2004 Taxes and contributions per head
Transfer payments and state consumption per head
page 16

17. Demographic Change
State spending and income 2004 and
population profile 2020
1.600 25.000 €
1.400
20.000 €
1.200
Population in 1,000
1.000 15.000 €
800
600 10.000 €
400
5.000 €
200
0 0€
1 5 9 13 17 21 25 29 33 37 41 45 49 53 57 61 65 69 73 77 81
Age
Population 2020 Taxes and contributions per head
Transfer payments and state consumption per head
page 17

18. Demographic Change
State spending and income 2004 and
population profile 2030
1.400 € +285 bn 25.000 €
1.200
20.000 €
Population in 1,000
1.000
800 15.000 €
600 10.000 €
400
5.000 €
200
0 0€
1 5 € -118 bn 21 25 29 33 37 41 45 49 53 57 61 65€ 69 73bn 81
9 13 17 -403 77
Age
Population 2030 Taxes and contributions per head
Transfer payments and state consumption per head
page 18

19. Demographic Change
Complication: lack of accruals for pension obligations
123 125
117
99
88
70
66
58
50 53
34
19
11 15
6 7 9
5 4 4 3
AU
K
S
H
L
O
FR
BE
ES
SE
Z
JA
A
K
E
IS
IE
AT
FI
IT
D
N
N
U
U
C
D
D
C
N
EC
O
Pension fund savings, % GDP, international, 2005
Source: Salverda 2007, OECD page 19

20. Demographic Change
2. How robust is regional cohesion?
Below 20 years of age 1991 Over 60 years of age
Share of total population accounted for by age groups in %
under 17 20 - 23 26 - 29 32 and above
17 - 20 23 - 26 29 - 32
Source: BBR page 20

21. Demographic Change
2. How robust is regional cohesion?
Below 20 years of age 2020 Over 60 years of age
Share of total population accounted for by age groups in %
under 17 20 - 23 26 - 29 32 and above
17 - 20 23 - 26 29 - 32
Source: BBR page 21

22. Demographic Change
Shrinkage and growth are found in close proximity
Population trend 2003-2020
in towns and municipalities with
more than 5,000 inhabitants (in %)
very strongly declining (under -12)
strongly declining (-12 to under -7)
slightly declining (-7 to under -2)
stable (-2 to under 2)
slightly increasing (2 to under 7)
strongly increasing (7 to under 12)
very strongly increasing (12 and more)
Source: Wegweiser Demographischer Wandel (2006) page 22

23. Demographic Change
The age quotients (%) in the municipalities will change
dramatically even by 2020
2003 2010
2015 2020
All German municipalities > 5,000 inhabitants (n=2,959)
0–18 years 65 years and older
Source: Bertelsmann Stiftung, Wegweiser Demographischer Wandel 2006 page 23

24. Demographic Change
3. How is Germany tackling the integration task?
80 900
75 600
70 300
65 0
1980
1970
1990
1960
2000
-300
Population (m) Migration balance (in thsd.)
Actual population trend Natural population trend
Migration balance (excl. migration)
Source: Eurostat, Federal Statistical Office page 24

25. Demographic Change
Graduation rates of German and immigrant youths
in 3-tier school system in percent
50
45 42 42
40
35
31
30
25 25
25
20 18
15
10 8 8
5
0
upper tier middle tier lower tier drop outs
Germans Immigrants
Quellen: Statistisches Bundesamt, Abgänger 2004/2005 page 25

26. Demographic Change
Children’s desired educational level: Percentage of
children who hope to graduate from a Gymnasium, by
socioeconomic background
(Surveyed: 8- to 11-year-olds)
100%
81%
80%
68%
60%
40% 36%
32%
20%
20%
0%
Lower class Lower middle Middle class Upper middle Upper class
class class
Source: 2007 World Vision study on children page 26

27. Demographic Change
From postponing the problems into the future to
encouraging more co-responsibility from the generations
Operational challenges
Transparency and accountability
Critical question
Consolidation and expansion of the
“room to maneuver”; debt limitation How can generations of
automatisms politicians and citizens who were
socialized in the distribution
Regional differentiation of the mode face up to today’s practical
adaptation strategies challenges that derive from a
long-term logic?
Early integration of children with
migration backgrounds and from
population strata with low parental
education level
page 27

28. Demographic Change
Agenda
The global demographic trend is calling for new
mechanisms of resource allocation and accelerated
adaptation processes
Higher life expectancy and declining fertility are not new trends
Demographic change will intensify cohesion issues of the German
society over the next few years
The global demographic trend is calling for new mechanisms of
resource allocation and accelerated adaptation processes
The need for adaptive leadership to deal with demographic change
page 28

29. Demographic Change
Global projection for 2050
2050: 9.1 billion people
Trebling in Afghanistan, Burkina Faso, Burundi, Chad, Congo, East Timor, Guinea-Bissau, Liberia,
Mali, Niger and Uganda
More than half of the absolute growth will be in India, Pakistan, Nigeria, Congo, Bangladesh, Uganda,
the USA, Ethiopia and China alone (countries sorted by absolute growth)
Ratio of population numbers in developed/non-developed regions will develop from 1:2 in 1950 to 1:6
in 2050
Developed countries Less developed countries
Slowdown in economic growth Environmental and resource problems due to
the overburdening of urban regions
Cost dynamics in the health, nursing care and
pension systems Costs of ageing and nursing care accumulate
before the creation of a capital stock
Risk of innovation deficiencies
At the same time, relatively high
“revolutionary” potential
page 29

30. Demographic Change
1. complication: Shrinking periods for adjusting to ageing
Number of years for percentage of population aged 65 or more to rise from 7% to 14%
More developed countries Less developed countries
France 1865-1980 115 Azerbaijan 2000-2041 41
Sweden 1890-1975 85 Chile 1998-2025 27
Australia 1938-2011 73 China 2000-2026 26
United States 1944-2013 69 Jamaica 2008-2033 25
Canada 1944-2009 65 Tunisia 2008-2032 24
Hungary 1941-1994 53 Sri Lanka 2004-2027 23
Poland 1966-2013 47 Thailand 2003-2025 22
United Kingdom 1930-1975 45 Brazil 2011-2032 21
Spain 1947-1995 45 Colombia 2017-2037 20
Japan 1970-1996 26 Singapore 2000-2019 19
Source: K. Kinsella and Y.J. Gist, Older Workers, Retirement and Pensions: A Comparative International Chartbook (1995) and
K. Kinsella and D. Phillips, “The Challenge of Global Aging,” Population Bulletin 60, no. 1 (2005).
page 30

31. Demographic Change
2. complication: Do old societies have enough
“creative bite”?
180.000
160.000 USA
140.000
120.000
100.000
80.000
Germany
60.000
40.000
20.000
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
Patent applications of domestic origin
Source: German Patents and Trademarks Office 2002 page 31

32. Demographic Change
3. complication: The link between demography and
climate change
1. Scenario 2050
Developed countries: -40% CO²
Developing counties: same CO²/per capita Future?
Total emissions at current level
Likely global warming:
2. Scenario 2050 Regionally different
impacts
Developed countries: no reduction CO²
Developing counties: double CO²/per capita Floodings
Total emissions + 90% Droughts
Migration waves
3. Scenario 2050
Developed countries: -40% CO²
Developing counties: double CO²/per capita
Total emissions + 66%
page 32

33. Demographic Change
Agenda
The need for adaptive leadership to deal with
demographic change
Higher life expectancy and declining fertility are not new trends
Demographic change will intensify cohesion issues of the German
society over the next few years
The global demographic trend is calling for new mechanisms of
resource allocation and accelerated adaptation processes
The need for adaptive leadership to deal with demographic change
page 33

34. Demographic Change
The life of a Thanksgiving turkey
Surprise!!
6 kg
5 kg
4 kg
Weight
3 kg
2 kg
1 kg
0 kg
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov
Source: N. Taleb, The Black Swan page 34

35. Demographic Change
Demographic change calls for adaptive leadership
Nature of challenge Who does the work?
Not just technical; application of Authorities/traditional regulation
current know how not enough architectures are stressed
Adaptive challenge: Adaptive leadership needs to bring in
We need to learn new ways the people with the problem
• Young immigrant leaders
• Municipal leaders
• Aging citizens,
i.e. everybody
Source: R.Heifetz/M.Linsky: Leadership on the Line page 35

36. Demographic Change
Dimensions of adaptation:
1. New forms of living and service delivery
Sun City, Arizona www.pflegeinthailand.de
Voluntary segregation of the elderly 24-hour care for Alzheimer’s patients,
residence, catering and support for
approx. € 1,300 per month
page 36

37. Demographic Change
Dimensions of adaptation:
2. Leverage of technologies
Nursing care robots, exoskeletons,
and artificial intelligence for monitoring
the elderly are being developed,
especially in Japan.
Paro – a therapeutic robot for cognitive
illnesses, which can behave and move
proactively and reactively by means of
artificial intelligence.
Caregivers Assistant (Intel Research
Seattle, USA) analyzes behavior and
gives out warning signals by means of
RFID chips on everyday objects.
page 37

38. Demographic Change
Dimensions of adaptation:
3. A developmental psychology viewpoint
Self-Pragmatics
Cog. Pragmatics
Performance
Self-Mechanics
Cog. Mechanics
Idealized Lifespan Curves
ca. 25 ca. 75 Life Course
Life Mechanics Life Pragmatics
:= biology-based patterns of perception, information := the factual and procedural „knowledge“ about the world
processing, emotionality, motivational expression and one‘s self gained through interactions with life contexts
Source: Staudinger 2007 page 38

39. Demographic Change
The individual’s development opportunities depend on
the structure of the individual’s resources
Plasticity
Development path
Plasticity
Cultural and biological resources
Options for new work
Educational histories
Social commitment
Lifestyle
Childhood Old age
Source: Staudinger 2007 page 39

40. Demographic Change
How can the ethics of a successful life be given a more
concrete form in the face of demographic change?
Television consumption in minutes per day in Germany
250
234
195 197
181
168
14-29 Y. 30-39 Y. 40-49 Y. 50-59 Y. 60-69 Y. 70+ Y.
Source: Media-Perspektiven 6/2005 page 40

41. Thank you for your attention
johannes.meier@bertelsmann.de