World Economic Forum, 2010
The Winners and the Rest: This is a world in which high global growth delays the financial consequences of the growing demographic crisis. Despite growing liabilities from ageing populations, most governments are able to maintain scaled-back versions of existing social security systems, which they do as a matter of political expediency. However amid growing inequality and underinvestment in the public sector, such systems are seen as increasingly inadequate by those forced by low incomes to rely on them, creating a conflict-ridden climate of “The Winners and the Rest” on a global scale.
Global context:
- Emerging economies drive strong global growth, averaging 4.5% to 2030
- Robust capital markets provide consistently solid returns
- Diverging returns on capital and labour lead to burgeoning inequality
- Resentment grows due to rising income and wealth inequality between the highly educated and the less educated
- Broad societal support for a capitalistic model with a strong focus on individual responsibility and grasping economic opportunities exists
Pensions and healthcare in general
- Tax-rich governments repeatedly postpone fundamental pension system reforms, supported by strong economic growth
- Public social security in many developed countries is considered as a (bare) minimum safety net; the well off focus on private market pension and healthcare solutions
- The gap in sophistication between public and private healthcare grows; new medical technologies are aimed primarily at high earners
- Unskilled workers and poorer countries see few improvements in pension and healthcare, in both quality and coverage
We Are in This Together: This is a world distinguished by a concerted effort on behalf of leaders and electorates to rein in growing inequality and reassert the idea of collective responsibility and accountability for social services. In this world, growth is moderate, but lower-than expected returns on capital are compensated for by an emphasis on finding innovative, efficient and inclusive ways to manage the financial implications of the demographic shift, including family and community-based solutions.
Global context:
- Global downturn in early 2010s provokes a backlash against extreme income and wealth inequality
- Global economic growth averages 3% to 2030
- Global sentiment of solidarity and togetherness as opposed to individualism develops
- Strong focus on intergenerational equity is apparent
- The effects of climate change and a pandemic demonstrate global interdependence
- International action simplifies and increases harmonization in tax and pension systems
- E-government and Internet activism fuel resurgence of local civic engagement
- Developed countries step up structural aid to tackle world poverty
Pensions and healthcare in general:
- In developed countries, pension and healthcare reforms are enacted in the name of sustainable, adequate security for all
- International cooperation helps manage effects of ageing societies, e.g. migration and macro-swaps
- Back-to-basics health approach emphasizes prevention and healthcare effectiveness
- Medical improvements focus on mass market
- Governments focus on enabling community-based care
- Many developing countries implement pension and healthcare reforms, yet lack the financial means to significantly improve coverage and quality
- Public-private initiatives extend pensions and healthcare coverage to the poor
You Are on Your Own: This is a world in which an economic recession is prolonged in the early 2010s, causing fiscal difficulties for most state-funded pension and health systems. Individual responsibility is forced upon many people by the failure of existing social security systems under extreme financial pressure. Struggling to borrow or raise taxes sufficiently, many governments take aggressive measures to push healthcare and pension liabilities onto individuals and the private sector, maintaining only an absolutely minimal role in social security provision for the very needy.
Global context:
- Prolonged recession and stagflation hit public finances
- Financial crises and serious natural resource constraints hold growth to approximately 2% into the 2020s
- Governments take aggressive action to reduce public spending and reluctantly adopt a “social security provider of the last resort” approach
- Liberalizing reforms leave many people resentful
- In late 2020s, growth recovers as the benefits of liberalization kick in
- Younger people adopt aggressively self-reliant mindset and take strong individual responsibility for finance and health
Pensions and healthcare in general:
- State-funded, universal care systems end in many countries; governments focus on minimal social security for the most needy only
- The traditional concept of “retirement” is replaced by the “lifestyle planning” paradigm. Many people remain employed/active in their 70s and beyond
- Children of baby boomers are considered the “lost generation” as they must finance their own pensions and those of the previous generation
- Strong focus on financial and health education empowers people to take individual responsibility
- Despite efforts, quality of basic public healthcare systems steadily deteriorates
- Private healthcare becomes an “expensive necessity” and oversubscribed; the focus on prevention becomes strong
