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As people live longer and birth rates fall, are governments truly prepared for the demographic shifts reshaping our future? On this episode of #ConsiderThis to mark World Population Day 2025 Melisa Idris speaks with Dr Amlan Roy about why demographics must be treated as strategy and not just statistics. Dr Amlan Roy is a leading expert on macro-economics and demographics and the author of ‘Demographics Unravelled’. He was a speaker at the International Social Wellbeing Conference 2025, which has the theme of ‘Living to 100: Are We Prepared?’
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00:00Hello and good evening. I'm Melissa Idris. Welcome to Consider This. This is the show
00:15where we want you to consider and then reconsider what you know of the news of the day. I'm delighted
00:20to introduce my guest today, Dr. Amlan Roy. He's a leading expert on macroeconomics and
00:26demographics and the author of Demographics Unraveled, which we're here today at Shangri-La
00:33Hotel KL. He's one of the speakers at the International Social Wellbeing Conference 2025, which has
00:39the theme of living to a hundred. Are we ready? So Dr. Roy, that's a really interesting theme
00:45to be covering at the conference today. And I know you have said before that demographics
00:50is really more than just looking at the birth rate and looking at the breakdown of
00:56different ages, the aging category. So when we think about demographics, what is it and
01:04why is it that we need to pay attention to it?
01:08Thank you very much, Melissa, and great to have me on the show. I'm very delighted and honoured.
01:15Demographics is a fascinating subject that I've studied over the last 25 years. Peter Drucker,
01:21the biggest management guru of the 20th century, basically said, demographics is the single
01:27most important factor that we do not pay attention to. But when we do pay attention, we miss the
01:32point. I argue most of the world, including me in the past, missed the point because we
01:37associate demographics with age. That's right. Age is not the single summary statistic of an
01:43individual, be it Melissa, be it Joanne, be it myself, Amlan. We are much more than our age. Two individuals
01:50the same age, my wife and me, we have very, very different consumption characteristics.
01:55Demographics comes from two roots, demos, people, characteristics. To me, the two most important
02:00characteristics of everyone is, from the time we are born till the date we die, we are a
02:05consumer. And we are consuming different things. Two individuals of 50 years, 60 years, 40 or
02:1130, or even six years nowadays, two children don't buy exactly the same toys. So we consume differently,
02:18we consume, work differently. To understand that, we need to understand gender, age also. We need
02:25to understand family background. Are you the single child? Are you three children? Do you live in rural
02:32Malaysia? Do you live in urban Malaysia? What's your income? What's your wealth? All these things change
02:37your makeup. Which neighborhood do you live in? And therefore, anything which affects consumer psychology
02:42and worker psychology has to do with demographics. It's much more than one characteristic.
02:48Okay. So if we're not paying attention to demographics the way we ought to, and we're not really understanding
02:55the different compositions of different demographies, what do you think are the biggest misconceptions then?
03:02When governments or public policy makers, what misconceptions do they have, or they tend to make
03:11about demographic change? Excellent question, Anne. It is the core. I love it, this question,
03:18because it is at the core. The three misconceptions of demographics are, first, demographics is only age,
03:25which have already changed. Second, demographics, people say is long term. Why is it long term? Because 20 years
03:32later, they think Melissa will be exactly the same as somebody who's 20 years older. Amlan will be exactly
03:39the same as somebody 15 years older, if I live 15 years more. However, demographics has immediate, short term,
03:46medium term, and long term effects. Why? Because consumers are consuming today. Workers are working today.
03:53That affects inflation today, GDP today, asset prices today, and lots of other things. So taking
04:00demographics just as a constant of age, moving age along, does not keep things constant. Because
04:06consumers respond to new products, the environment, the policy, and other things. Variables change.
04:12Yeah. And we really need to look at it in a much more intuitive, interpretive, and holistic fashion,
04:21rather than saying age determines everything. Is there anything else other than looking at,
04:26not just looking at age, and not just looking, thinking of it as just long term? Is there any other
04:32misconceptions about demographics that we need to address? Yes, good. I was forgetting this.
04:35If you look at demographics as consumers and workers, then the income statement and profit of a household,
04:42of a company, or a nation, all depend on demographics. Let's look at Shangri-La. Today,
04:48EPF is renting Shangri-La, so they are giving revenues to Shangri-La. The people, the workers,
04:53in Shangri-La, they are the costs. So consumers equal revenues, workers equal costs. If you look at it
04:59that way, income statement and balance sheet of every company in the world, and every country,
05:05is affected by demographics. Right. Can you give me an example of how demographic change
05:10has, or the lack of paying attention to demographic change, has resulted in, to the detriment of a
05:18country or a government population? Oh, brilliant question again. The core of any country's growth
05:24is considered GDP, and GDP growth. GDP growth comes from three fundamental demographic components.
05:32One is the number of workers. Let's take Malaysia. The number of workers,
05:36growth rate of workers in 2025 relative to 2024 is component number one. Component number two is
05:44labor productivity growth of the workers. Have they produced more widgets, more factories,
05:50more papers, et cetera? That becomes component number two. And component number three is,
05:55hours worked. Are we working more hours? If you add component one, component two, component three,
06:01you get GDP growth rate. But if you ignore how productive people are, how many hours they are
06:07working, how they are working in terms of quality of hours, you might be very fast on the computer.
06:13I might be very slow on the computer. You may be very fast in writing an article. I may be very slow,
06:19but what matters is the change in growth rate. You're very high, but I've improved. I want to be like
06:25Melissa. So if people don't consider how others are improving, they will get growth rates wrong.
06:30Demographics is core to each of these components of growth rate and the demand and supply components
06:37of inflation. Amlan, there seems to be so many different variables when looking at
06:43how demographics change and what makes up the composition of any demographic. How do you pay
06:49attention to, how do you know what to consider as a variable, what to look at? There are so many
06:56moving parts in trying to determine this. Yes. So there are lots of things which affect our psychology
07:01and which affect our behavior. As a consumer. Yeah, as a consumer. We can't measure all of them,
07:06but what we can measure is, are consumers buying more cars? Are they buying more cereals? Are they
07:11buying more IT products, toys, etc.? In the aggregate, all those things add up to GDP. Now, at the micro level,
07:19the consumer companies, whether it's Procter and Gamble, it's Unilever, it's Danone and all of them,
07:24Pepsi, Coke, they are looking at the consumption changes for Gen X, Gen Y, older people, etc. Okay. So
07:32they tend to focus a lot more on the demographics at the micro level. I'm looking a lot more at the
07:38macro level. Okay. So the consumer companies, when they are doing these ad profiles, what are they
07:42trying to do? They are trying to get a hook into Melissa's mind and Amlan's mind to change our consumer
07:48behavior. Right. The companies which are creating, consider WeWork or other places which are helping
07:55in terms of people not working in one office, they are trying to change our work culture. So what's
08:02happened? Earlier when we used to have a desktop, it was fixed. Yes. Today you don't need a fix. Look at this.
08:08What have people managed to do? iPads, iPhones, etc. So initially, people only had one type of iPad or
08:15iPhone. Now people have different kinds because there are different attributes that attract different
08:20people. Somebody needs a docking station on the iPad. Somebody wants to type on the iPad. So products
08:26innovate in response to our needs. Our needs change in response to the products. So it's an interaction of
08:32endogenous consumer change and consumer behavior changing and worker behavior. And we can't map
08:38everything, but we can say, I don't know what's going on in Melissa's mind or in Joanne's mind,
08:44but I can see when they're buying a car or they're buying a meal or they go for a fashion show or they
08:49go for makeup or theater, etc., that, oh yeah, these are things which are getting influenced. And then try to
08:55understand, oh, Melissa did this, but Melissa's friend didn't do this. What was different? So consumer
09:01psychologists and marketing consultants, they look a lot more at it. But at a macro level, I look less
09:07at it, but I know that they are at the ground level, the micro farm. Amazing. So when you are looking at
09:13it, so let's take to this conference's theme for an example. So living to 100. When we think about
09:19longer life, longevity and living well, that would affect almost every aspect, healthcare, welfare,
09:27how we work, all these systems that are already built for a different type of time. Is it a relic
09:34of when people lived shorter lives? And when you think about longevity from a demographics point of
09:40view, how is it that you are rethinking systems and institutions? Well, the biggest thing is that people
09:47are changing all the time. Earlier, we didn't have data on it. If you went into Nordstrom's, which is
09:53one of the biggest department stores in Chicago and New York, etc., in the 70s, I argue, there were
09:58three kinds of white shirts. Today, there are 31 different types. Okay, you could also consider
10:05either kind of like my daughters nowadays use nail polish or compact and things like that. They've also
10:12evolved. Look at the changes. What's available also then makes a change as to what you demand.
10:19So when we look at things and people are aging, people are gaining by their experiences. Today's
10:2680-year-old has experienced a lot more than the 80-year-old 20 years ago. Because in the last 20 years,
10:32things have totally changed. While the 80-year-old has changed, the 20-year-old also has changed.
10:38My 26-year-old daughter is very different than my 18-year-old daughter. Not because of their behavior.
10:43They're born in the same month. Genes are quite similar. But within one generation, what has changed
10:49in terms of IT, consumerism, as well as Spotify, they're both fans. I'll just give you an example.
10:57They're both fans of Taylor Swift. But Taylor Swift concerts and music used to come differently to my
11:04older daughter than to my younger daughter because many more different types of media is coming.
11:09So that's changing the consumer. My wife is also changing because after COVID, she's never worked
11:16in an office. She works on health care and health policy just from my office. And I always work at
11:23home. We are very different. We need to understand changing behavior because she's changed to the
11:29changing office behavior. But I have not changed because my habits require me a lot to print and
11:35to go and see clients. So I go much more to the office. Well, people are dynamic. They change so
11:40much the way you're explaining it to us. But institutions and systems and ecosystems don't change as fluidly.
11:47Absolutely. They take a very long time. And let me put it in context. Two of the most important
11:53prime ministers just three weeks ago in London, they were talking of a certain US president in a
11:59PIMCO conference. And they made the comment that for the first time, geopolitics dominates everything
12:05so much. However, the disembowelment of global institutions, which is occurring currently,
12:16will take a long time to kind of reverse. And that really is very, very concerning.
12:25WHO, WTO, UN, IMF, education. So we really need to understand that behavior changes relative to
12:33environment. Yesterday in the first slide I showed was about macroeconomics. We don't live in an isolation.
12:39If somebody came from planet Mars, Earth is defined by GDP growth, unemployment and
12:45inflation. Very concise way of looking at three things. There are probably 100 things which
12:50matter. But they all change according to the environment. If tomorrow there were meteors,
12:55which were going to send down things, that would change our behavior. It's very important to note,
13:00there's a terrific book I need to recommend, which tells you about how consumers are changing. Because
13:05you've asked me a hard question. This guy was considered the king of consumer surveys
13:10and psychology in the world. He also was the only reason Bill Clinton, many people believe,
13:17became president. He was Bill Clinton's political advisor, as well as Hillary Clinton's. The name of
13:23the book is Micro Trends. And the name of the person is Mark Penn. And he coined the term
13:29soccer moms, Amazons, older dads, etc. So these trends you need to understand. Because if you don't understand
13:36these trends, and you're a consumer company, or you're a policy maker, you'll be left very far
13:41behind. So to understand the very fact that Gen X, Gen Y, and Gen Z are also very different one to the
13:48other. Forget about being different. We need to follow those trends to understand their working
13:52habits. I'll give you an example. I sit next to very young 20-year-olds, and first question many of
13:59them want to ask is, how many days can we work from home? Because that allows them the flexibility to
14:05roam at home and do whatever. The change in nature of work. Exactly. And I will always want to work
14:11from office. My wife works all the way from home, even across age and across generations. And governments
14:17need to understand it. Because if you don't understand it, then you don't understand. Like if I go to office,
14:23I'm having my lunch in office, my breakfast in office some days. Whereas my wife is having both of
14:29them at home. So the demand for delivery for her or the demand for croissant and coffee and tea for me
14:37is very different. So understanding how things change according to an environment is very interesting.
14:44But the dynamism requires you to understand psychology, economics, marketing, and the environment.
14:52Because we respond to others. So how would you, Amlan, understand retirement or rethink retirement in
14:59the age of longevity? How should we be rethinking, for instance, the retirement age? In Malaysia,
15:07we're having this discourse about whether or not to raise the retirement age. What are your thoughts on that?
15:12So in 2000, I challenged the whole world on it. And I'm happy to say that in the demographic manifesto,
15:17the first policy that I recommended, 73 governments use it to change the retirement age. It's called
15:24the demographic manifesto because it was radical. It says there's a demographic time bomb, growing mass
15:32of old people to be supported by a shrinking mass of young people because fertility rates and birth rates
15:37are going down. How do we solve the problem? The first one was abolish fixed retirement age,
15:44no fixed retirement age. That's why it was radical. Have flexible, enabled retirement where retirement
15:51age is linked to life expectancy, but is also linked to, am I a manual worker or am I a white-collared
15:59worker? Do I have the skills to adapt or am I able, am I disabled? So there are a lot of my professors who
16:06are still working at 91, teaching at universities, one day a week or one and a half days a week. They can,
16:13because they're white-collared. Flexible. Yeah, exactly. So flexible, enabled retirement was the first
16:18thing I recommended. The second solution is... Sorry, before you get to the second, may I just very quickly
16:23jump in. When you recommended this radical idea of not having a fixed retirement age, what was the
16:28response like? What was the pushback like and what drove that pushback? Is it ideology? Is it just the
16:34way we've been doing things? So I recommended it in 2000. In 2010, I was sitting in Hong Kong with the
16:41former Prime Minister of Malaysia and the Prime Minister of Japan. And Japan had made very teeny
16:47weeny progress. And that Prime Minister since then, called Prime Minister Abe, he made a lot of changes
16:54and called it Abe's third arrow, which is structural reform. Structural reform means for a world of
17:01retirement, you just can't change retirement age. You also need to train people. You also need to give
17:06them better health. You also need to ensure they have better housing. And if somebody's a single
17:11grandparent living in a village, that's very different than if you're living with lots of
17:16people. So holistic change is something then in 2011, I recommended in Japan, saying you cannot just
17:24change retirement age, you need to change things around it. Labour market, gender equality, consumer,
17:31as well as training. All these things should be part of lifelong learning. In 2006, the OECD published
17:38a whole series of booklets for 15 countries saying live longer, work longer. So I challenged the French
17:46that you're lazy, you're retiring very early and working less. So now whenever there are strikes,
17:54I'm blamed for the fact that the French retirement age was recommended to be increased on my list. But
18:01people cannot afford to retire at 65 because the age of 65 was appropriate in 1892. When life
18:07expectancy was 46, most people didn't claim retirement. Today, so many more people are claiming
18:13retirement and governments are going bankrupt because 23% of European GDP is going on pensions, health care,
18:20long term care, and those governments can't afford it. So my question is, who will pay for the benefits
18:26of the old people? You can't get young generations to pay 60, 70, 80%. Therefore, these solutions are very
18:34important. When older people are retiring, try to get the best out of them. In Japan, when older people
18:40are going and working one or two days per week from office, they are engaging and passing on skills to the
18:46younger generation. It's win-win. The young people are saying, oh, we did not know these crises things.
18:52Let's learn from it. Younger Japanese women are learning from older Japanese women who are looking
18:57after their children and empowering them. So society needs to change overall, and we need to be open to
19:04get... I love this conference because it's international social well-being. We need to get the best out of each
19:10individual, out of each family, each generation. Only then society will be healthy, economically productive, happy, as well as willing to give in a sense of philanthropy to the generations who are yet to come.
19:28So I want to give a quotation which we wrote in an article or a book I'll send to you called Age of Responsibility, written along with about 30 other authors, 19 institutions.
19:40At the back, there was a Greek saying. This is a company called Reddington, which commissioned the report. There's a saying called a society grows wise.
19:49This is a Greek saying of 3000 years. A society grows wise when old people plant trees, knowing that they will not benefit from the shade of the trees.
19:59Oh, I love that. So we need to create institutions that you rightly pointed out, and we need to create a society which is fit for a baby born today,
20:08as well as accepting of a 95 year old or a 55 year old, along with their full presence.
20:14I think you're right. We're not thinking along the life cycle completely. So I think we get, we're very focused in often on the working age, the productive age,
20:23and we forget the rest of the other life cycles.
20:25You're so right, because the life cycle hypothesis developed by people who win the Nobel Prize was restricted to three generations.
20:33One retiree generation, one working generation, and one not working. Today, even in Malaysia, as I talked in the conference, there are five generations,
20:42two generations of retirees, one in the 90s, one in the late 60s, early 70s, only one generation working, and two, again, yet to enter the workforce properly.
20:52So we need to think about all these changes holistically, comprehensively, and understand the heterogeneity.
20:59So the point is that five old countries, they're very different in the way they behave, and the way they consume, and the way they retire.
21:07So, Amla, you talked about the radical suggestion in your Demographic Manifesto. Are there other radical proposals in there?
21:16Yes. Yes. So, the Nordic countries changed their retirement age with life expectancy based on what we recommended.
21:24There's another thing that we recommended, that no government, no country should make unconditional promises.
21:30The only person who makes unconditional promises is a mother to her child. Promises should be flexible to the extent that the Malaysian government or the Singaporean government,
21:42I've said it to the Singaporean and Norwegian governments, you make a promise, but no one can give a promise for 20 years.
21:49Let me ask you a question, which I've stopped asking after about a thousand conferences, and the question is the following.
21:55Melissa says, Amla, retire at 65. Joanne says, Amla, you'll die at 85. How much money do I need for 20 years?
22:03No Nobel laureate out of 37 has answered it to me. I've asked 500 CEOs. Why? Because you can't predict inflation for 20 years, equity returns, bond returns, you don't know what my health will retire.
22:16Therefore, you need to follow it through very consequentially. And my argument is promises should be made conditional on GDP, inflation and how well the country does.
22:28Just like, let me just continue. So American Airlines, United Airlines and a lot of airlines went bankrupt because they made promises long term.
22:39If you don't know how much your profitability will be or how well you will do in 20 years, how can you make a fixed promise to all your workers that you don't know relative to your profitability?
22:51So long term promises should be within a sense of a little bit of renegotiation.
22:57When you say long term promises, are you referring to pensions?
22:59Yes.
23:00I see.
23:01Or healthcare too.
23:02Or healthcare.
23:03So I'll give you an example.
23:04Earlier, a company I worked for used to give me healthcare which gave unlimited amount of call outs.
23:11Then they said no, £10,000. Then they said £5,000. Why is that happening?
23:17If the company's profitability is not very good, companies should have the flexibility somewhat to renegotiate the benefits.
23:26If you don't, then the company will go bankrupt like United Airlines and American Airlines. Revenue is growing only this much but costs going.
23:33So workers did not understand it of the unions etc. And I did predict that this would happen if the unions can't be convinced by the employers.
23:43Right.
23:44The fault was on both ends. The unions were very rigid and the employers were sitting on their high perch, not communicating well.
23:51Not meeting halfway.
23:52Not meeting halfway.
23:53And this is what Peter Drucker had predicted that GM Chrysler 4 will have big big problems because they have made pension promises they can't keep.
24:02Defined benefit pension promises are fixed. Defined contribution are not. So defined benefit is, I would say, very liberal, very generous and over promises.
24:16But defined contribution under delivers. So the real best thing is a hybrid combination of the two.
24:24And this is what another Nobel laureate, Franco Modigliani, wrote in his book, Rethinking Pension Reform.
24:30And he was one of the architects of BC. Defined contribution in America. Yet on his deathbed he came and said that's not a good solution because it's giving so little and people aren't educated.
24:42Right.
24:43So when you interview people regarding their retirement investments and go to DC, about 80 to 90 percent of people are lethargic, inertial or not in the know.
24:52So they can't professionally. Even people who are well trained like me in the financial services don't have time to look after their own pensions that well.
25:00And therefore, there is a need for hybrid pension plans, which bring about, I would say, a good compromise of not over promising and not under delivering a bit more of a realistic promise.
25:15Things need to be flexible as the economy moves out. Fixed promises for long term will not work.
25:21I agree. Dr. Amlan Roy, it's been such a pleasure to talk to you. You've really piqued my curiosity and interest into understanding demographics better.
25:30Thank you so much for bringing your knowledge to us today. I appreciate your time.
25:33Thanks a lot. And I will end by referring to a huge bestseller book written nearly a hundred and let's say 30, 40, 50 years ago called A Brave New World by Aldous Huxley.
25:47Where he talked about genomics, living longer, etc. And all these same kind of problems he'd reflected as current to his time.
25:57Thank you so much, Melissa. So many book recommendations you've given me. Thank you.
26:00Because I'm not an expert. I want the world to really recognise the old experts and not forget about them.
26:06Thank you so much for your time. That's all the time we have for you on this episode of Consider This.
26:10I'm Melissa Idris signing off for the evening. Thank you so much for watching. Good night.
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