The aging of the European population, recently confirmed by Eurostat, doesn’t just mean that it will be necessary to finance more retirements; it also implies a shortage of competent, motivated young people, so necessary for a smoothly running economy. This is why Europe must create an environment capable of attracting young talent to the continent, concludes Italian economist Irene Tinagli.
What effect will these diminishing demographics have on Europe’s future? Many research centres have been exploring this question for quite some time. The birth rate has continued to slow in a number of countries, and the economic crisis has diminished the influx of migrating job-seekers, now unable to fill the widening gap. The main fear, especially for political leaders, is that an entity like Europe, with a population of barely a half-billion inhabitants, will lose its global influence in the face of countries like China and India, whose populations both top one billion.
Population is evidently the strongest argument: a president who represents a billion citizens carries much more weight than one who speaks for a lesser number, and larger populations spend and consume more, attracting more investment. But it is also evident that numbers alone do not confer power, neither in political nor economic terms. A country’s demographic structure, much like its economic and social structures, is not only determined by statistics, but is the result of a number of qualitative factors. Seen from this angle, diminishing numbers are less of a problem than the progressive aging of the population. The great power of India is not only in their 1.1 billion inhabitants, but in the fact that 50% of this population is under 25 years of age, and 65% have not yet turned 35. In China, the mean age is 34 years. For comparison, the average age in Italy is 43 years, 44 years for Germany and 40 years in France, one of Europe’s “youngest” countries.
Europe’s aging population doesn’t only negatively impact social security and retirement funds. It also greatly affects productivity, the capacity for innovation and a country’s overall production, and these considerations have not been sufficiently addressed. Many have studied the effects of aging on demographics, but much less has been done with respect to younger populations. Having a young population is first and foremost the sign of an active work force, fresh to the market and conversant in the latest techniques. A 25-year-old, armed with a diploma will know how to make use of new technologies, while someone who is already 45 or 50 will have, in the best of cases, a diploma that is already two decades old, most likely earned with the help of a manual typewriter.
A young person of less than 30 years of age generally works longer hours for a salary that has yet to be inflated by years of seniority. In other terms, he or she produces more for a lesser cost, with the desire to learn and generally help the system to move more rapidly, to produce and innovate at higher rates, while reducing costs. This is even more evident in the most dynamic economies, where “investments” in terms of training and work pay the highest dividends. In a Europe where the middle remove was already bursting at the seams decades ago, and where families now tend to have a single child, this new generation is much more sheltered than those in China and India, and much less competitively motivated. What’s more, young Europeans have become accustomed to slow-growth economies whose perspectives for recovery and growth, both in economic and social terms, are rather modest. Europe also needs to take these considerations into account.
Making Europe more favorable to young
Commitment, energy and the possibilities for growth in new generations are what will make the difference for a country’s future and global influence. Young people are not only contributing significantly to technological innovations, but to an important cultural dynamism that has become the tendency on a global scale. New frontiers in art, science and even mass culture most often come from the efforts of young graduates and rebel artists, new generations ready to measure their talents against the long experience of their 50 and 60-year-old counterparts.
The demographic question in Europe is clearly a problem that must be examined without further delay. But before figuring out how to augment the number of European citizens in the naive hope that greater demographic weight will maintain global stature, Europe should concentrate on creating more fluid social and economic conditions that will be more dynamic, and thus more attractive to young people throughout the world. In essence, it should turn the Old Continent into a world that welcomes the young, with less bureaucracy, fewer nationalistic interests, able to allow for productive activity, innovation and creative opportunities in business. Only then will Europe have the necessary social and cultural conditions for real global influence.
Irene Tinagli is an Italian economist born in 1974. Specialised in innovation and development, she has worked as a consultant for the UN and the UE, and teaches at the University Carlos III in Madrid. A member of the Italian think tank Futura, she has published Talento da svendere (“Talent on sale”, ed. Einaudi, 2008), an essay on the lack of professional opportunities for young Italians.