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Aging

Germany’s Demographic Dilemma

By 2035, Germany will be the oldest country in the world, with every second inhabitant over age 50. It is already the second oldest country, with the lowest birth rate in the EU.

Thanks to quite a good standard of living and healthcare system, the average duration of life increases every year in Germany. That’s great news for the individual. After retirement, men can expect to enjoy an average of 17 years of life, while women have 21. Retirement pensions are safe for now and, for the majority, are high enough to sustain a standard of living comparable to what they experienced while in the workforce. Life is probably looking pretty good for them right now.

However, the pyramid is upside down. While up until a couple of years ago 3 people worked to support the retirement of 1 person, now 1.5 working people take care of 1 retired person—and it will only get worse. The German social system will have to undergo massive change, but, even if it does, the future for older people will be less bright for sure. And that will bring with it the need for new products and services.

Just think of the immense demand for retirement places and nurses and doctors—which already are in short supply. New insurance and banking schemes will have to be developed to ensure people save sufficiently for their own retirements (for now, the retirement system is automatically integrated into the work world). Our future elders will have needs like no generation before: Among other things, they will have a zest for mobility and will want to remain part of the digital world. What will an older, “always on” person demand from brands?

Even more important: How will German culture, values, and innovation change when there is not enough fresh blood to inspire change and future development?

Germany, like almost all countries in the world, celebrates youth culture—and that is especially true of the advertising world. One can’t help but wonder whether the fixation on youth in brand communications, which is rationalized by brands eager to reach younger consumers, makes sense from a business point of view. Then again: If you cannot fight the demographics, perhaps the only way out is illusion.

Dominique Lewis is head of strategic planning at Euro RSCG Germany.

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