Previously published on February 3, 2023 in
By Milton Ezrati, Chief Economist at Vested
Part one discussed tech opportunities in areas like 5-G, cloud computing, health care, and finance, especially in insurance. This article examines opportunities for tech in meeting two huge issues facing the world’s economies: the growing number of older retirees in populations, and the ever-present anxiety over climate change.
Whether all the answers to these problems lie in technological solutions remains an open question—they probably do not. But tech certainly will have a huge role to play.
The growing average age of the population is indisputable and will present difficult economic challenges. Because birth rates in the United States and most of the rest of the developed world have remained low for such a long time, this country and others have a dearth of young workers to replace the retiring baby boom generation. The U.S. Census Bureau estimates that the proportion of the population at retirement age rose to 17 percent in the 2020 census from 9.4 percent in 1960. Not all of those over 65 have stopped working, but the bureau reports that the country now has approximately four people of working age available to support each person of retirement age.
The medical burden this demographic situation will impose on the economy gives only a hint of the ramifications. Still more fundamental is the implied labor shortage. There’s also the question of whether these four people of working age can produce enough to support themselves, their personal dependents, and one retiree and still offer the surplus needed for investments in economic growth. Without some change, these demographics threaten to slow growth or even stop it. Technology can, however, provide significant mitigations.
Here, the advances in artificial intelligence and robotics come to the fore. To date, these technological strides have saved on labor costs and, by making wage differentials less of a factor, facilitated the reshoring of several industries from abroad. The nation’s demographic need will add to opportunities for artificial intelligence and robotics, which can substitute for labor and enable older Americans to work longer than they otherwise might. Because these sophisticated devices require more training and retraining over time, their existence will also offer tech opportunities to satisfy those needs.
Climate change will also enhance tech opportunities on several levels. One lies in finding alternatives to and enhancing the effectiveness of solar and wind power. Wind and solar, though always mentioned first in discussions of climate change, have proved themselves to be unreliable and otherwise inadequate for the task of fueling the world’s power needs. They’re also expensive, as is evident in how their development has long depended on heavy subsidies. No doubt, tech can find ways to improve their effectiveness and lower their costs, but even greater opportunities lie in developing alternatives. Nuclear power is gaining attention, especially smaller reactors that seem to remove the public fear of disaster. Hydrogen technologies are still largely experimental but have a distant promise. Fission lies on a much longer timeline.
While such alternatives get attention and certainly offer promise, opportunities also lie in efforts to manage fossil fuels. Certainly, gains are available in substituting natural gas for other fuels, in carbon capture, and in emissions control that can make fossil fuels less ecologically threatening or, eventually, not ecologically threatening at all. Even if such solutions fall short of this ideal, they can fuel economies less harmfully during the time needed to develop and apply more radical answers.
Although it’s hardly ever mentioned in the media, a tremendous field in which tech can act is in mitigating the ill effects of climate change. Techniques of flood control, for example, could provide an answer to the greater frequency and severity of storms supposedly caused by climate change. Additionally, there might be opportunities in bioengineering crops that do a better job of removing carbon dioxide and other emissions from the atmosphere. There might be still other opportunities in designing crops that cope better with the excess dryness or wetness supposedly caused by climate change. The urge to return the planet to some balance, one with which people will be happier, is understandable. But short of such an ideal, tech can find ways to allow people to live more comfortable and safe lives despite a changing climate.
It’s admittedly anodyne to say things like “technology is the future,” but it’s no less true for that fact. Today’s world—because of its many troubles and not despite them—offers a wide range of opportunities for technological experimentation and application. With those opportunities lies the potential for great gain, to the world at large and to those technologists who can bring it the needed answers.