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Waking Up to UK Futures
– closed POST breakfast event
Tuesday 23rd June 2015, 0830-1000, Attlee room, House of Lords
This breakfast briefing was held as an initial step in meeting the recommendation made by the HoC
Science and Technology Committee that POST acts as conduit for the flow of horizon scanning
information and that the Government engages parliamentarians on its horizon scanning programme.
The event was held for parliamentarians to discuss five areas of futures analysis that are the current
focus of the UK Government: Robotics and Autonomous Systems, Internet of Things, Financial
Technologies, Cities and the Future of Ageing followed by more general discussion of the challenges
of using futures work to inform policy and decision making. Specific focus was given to the main
challenges arising from the futures projects undertaken by the Government, potential areas of focus
for activities in coming years and how well reflected the findings of previous projects have been in
departmental policy. This event was funded by the Science and Technology Facilities Council.
The event was chaired by Lord Hennessy, and attendees, including peers and parliamentary staff,
heard briefly from seven speakers during general discussion of the issues:
Professor Sir Alan Wilson, Professor of Urban and Regional Systems in the Centre for
Advanced Spatial Analysis at University College London and Chair of the Lead Expert Group
for the Foresight Project on the Future of Cities.
Professor Sarah Harper, University of Oxford, Professor of Gerontology at the University of
Oxford, Director of the Oxford Institute of Population Ageing and Senior Research Fellow at
Nuffield College and Chair of the Foresight Review on Ageing Societies. (Professor Harper
was unable to attend due to illness but a summary of points that would have presented
are in Annex A).
Professor David Lane, Professor of Autonomous Systems Engineering at the Ocean Systems
Laboratory in Heriot-Watt University and Chair of the BIS/TSB Robotics and Autonomous
Systems Special Interest Group, which developed the UK Robotics and Autonomous Systems
Mr Stephen Pattison, responsible for government relations within ARM Holdings and
member of the Stakeholder Group for the Future of Manufacturing Foresight Project.
Dr Louise Beaumont, Head of Public Affairs and Marketing for GLI Finance and a member of
the expert panel for the Fin Tech Futures Report for the UK Government Chief Scientific
Jessica Bland, principal researcher in the Policy and Research team NESTA
Josef Hargrave, an Associate in ARUP’s global Foresight + Research + Innovation team.
Breakfast Briefing Summary
 Lord Hennessy opened the meeting, noting he was a historian and it was a rare treat to talk
about the future. He reminded attendees the purpose of the event was to brief
parliamentarians on ongoing futures initiatives, discuss the Government’s programme of
futures analysis and areas of policy on which the Government might need to concentrate in
the years ahead.
Professor Alan Wilson stated that the Future of Cities project was looking 50 years ahead to
what the UK’s urban infrastructure needs will be, but that it was sometimes necessary to fall
back to the more tangible 25 year time horizon. The lead expert group has visited 21 cities in
the UK to understand urban systems and is working with a range of Whitehall Departments.
The project is considering six major themes:
o How people will live in cities, part of which is considering the effects of demographic
change. There will be an additional 10 million people in the UK within in 25 years,
where will they live and to what extent this will affect different cities is being
assessed. This includes effects on levels of social disparity, which is already causing
widespread concern in many of the cities visited.
o Urban economies, which are inherently unpredictable with technological change,
are being addressed by looking at a wide range of scenarios. In terms of
interdependencies, the training and skills of the workforce will be an important
factor for the future resilience of city economies.
o Urban environmental sustainability, climate change, low carbon targets etc., the
trends are all heading in the wrong direction for urban areas at present and radical
thinking will be needed to get them heading in the right direction.
o Urban form, there are current arguments around whether all new development
should be on brownfield areas or if new towns should be built in the green belt.
Insufficient levels of housing supply will be a problem going into the future with the
suggested levels of demographic growth
o Infrastructure, utilities and who pays for them, connects to the future of work, with
automation possibly hollowing out the jobs in the middle employment bracket,
possibly by 50%. Transport needs to be thought through as well, such as HS3, 4 and
5 and then levels of transport below this including local rail connections and other
local public transport modes to reduce car use.
o Governance and leadership, thinking on this has been overtaken by events with
devolution to some cities but it is still a big challenge in terms of defining the
principles of subsidiarity.
The project will look at possible changes in these areas across a range of different future
scenarios including a business as usual market forces scenario, doing something serious
about social disparities scenario and a climate change/sustainability scenario. These
scenarios will be published towards the end of this year.
Professor Sarah Harper was unable to attend the event, but the speaking notes for the
presentation are in Annex A.
Professor David Lane heads up the £35 million Edinburgh Centre for robotics, a joint venture
between Heriott-Watt and Edinburgh Universities, which aims to produce in excess of 100
PhD students over the next five years who should be ‘innovation ready’ by the time they
complete their studies. The centre has a definition of research which includes turning
innovation into money and these funds back into research again. Robotics used to mean a
big robotic arm in a manufacturing plant repeating a single task, but we have now reached
the tipping point of producing a new generation of smart tools enabled by computational
algorithims, which are the arms and legs of big data. Studies produced by consultants such
as McKinsey suggest that the market for robotics will be worth between $2 and 6 trillon per
annum by 2025 and £70 billon of non-military technologies per annum by 2025. This market
opportunity is already being realised; for instance, large corporations such as Amazon and
Uber have widely recruited US postdoctoral robotics researchers, and a noticeable
phenomenon at the major US robotics conferences this year was the recruitment of second
year PhD students. Robotics and Autonomous systems (RAS) are one of the ‘eight great
technologies’ identified as strategic priorities by the last government, and Professor Lane is
involved with the BIS initiative to produce a strategy for RAS and a number of other
exercises including moves to create a leadership council for RAS. The manifesto for the
recently elected Government included a commitment to continue funding initiatives on RAS
as one of the eight great technologies. There are a number of examples of where things are
moving forward, including work on future prospects for drones, autonomous cars, and in
progressing marine robotics there are significant opportunities for naval subsea surveys and
mapping of prospective subsea oil and gas fields for the industry. However, there is a major
constraint to realising the significant economic benefits of manufacturing RAS; the UK is very
good at producing innovative SMEs but who are going to be their customers? Larger
companies are risk averse to investing in R&D, preferring to buy back their own shares.
However, government departments, such as Health, Transport and the MoD, could play the
role of prospective customer, while improving their own productivity as well as helping to
create a UK RAS industry.
Mr Stephen Pattison highlighted the internet of things (IOT) is essentially the embedding of
sensors in objects to collect information about themselves or their environment and that
information being sent somewhere else, which in theory will be information of use in
improving a process. Rather than discussing in terms of smart consumer objects, it would be
more useful to consider how this approach might radically transform service delivery and
efficiency of resource use, particularly in key sectors such as health, transport,
manufacturing and energy sectors, as well as in the consumer products sector. For the
health sector, it will allow remote healthcare for looking after an increasingly elderly
population in their own homes to reduce pressures on primary care systems. While
autonomous cars are some way off, connected cars are near to market and will stop drivers
driving too close to the vehicle in front or going round corners too fast, holding out the
prospect of zero road deaths. The IOT is also applicable to the smart cities agenda and
incentivising drivers out of their cars to reduce congestion and the flow of cars can be
calibrated to increase energy efficiency. The automation of manufacturing, industry 4.0,
could facilitate the repatriation of manufacturing through greatly reduced labour costs, but
may have a knock on effect on energy prices. A couple of key generic issues will need to be
addressed to provide the confidence for these radical transformations to occur:
o Increasing public confidence in data handling, both in terms of the permitted uses of
that data (data protection) and the security of that data.
o The business model needs to be right - the technology alone never drives the
business; for instance, mobile phones became a successful technology when they
could be rented by the public from shops on the high street, whereas before they
had been limited to the few businesses that could afford them.
A consumer example of where these two issues will come together, in about ten years, nonEU companies will offer to furnish your house with smart appliances to increase energy
efficiency at an affordable rental price, so long as they can freely use your data. Data can
drive the adoption of the technology but it is also necessary to realise its benefits.
Dr Louise Beaumont described how GLI finance invests in the companies that provide
finance to SMEs, with 19 investee companies that provide 8 different types of SME finance
on 3 continents. Alternative finance is a subset of financial technology (fintech), which
broadly consists of three things:
o Alternative or non-bank financing companies
o The types of technology used by these companies
o Blockchain technology (a sequential transaction database used as an asset registry).
The UK is a hotspot for fin tech, with estimates of start-ups ranging from one to two
thousand created over the last three to five years, which are seeking to disrupt existing
models of financing and create new business models. It has enormous transformative power
for the UK economy and the global economy. London is currently the centre for financial
technology, being both a centre for finance and technology, but competing centres are
emerging in New York, Singapore and Hong Kong and there are more places looking to
commercialise this technology. The success of fintech can be seen in the adoption of the
jargon by larger older existing financial organisations, although you have to wonder whether
this is just marketing. The actual fintech sector is estimated to be worth about £20 billon but
growing fast. At the launch of Innovate finance, an umbrella trade body for the sector, last
year, the Chancellor announced that Sir Mark Walport would carry out a review into the
sector. The review panel looked at a range of issues including vision, technology, the impact
on people, work and policy, business models, globalisation and regulatory technology
(regtech). Three areas are being taken forward as part of this review:
o The extent to which fintech can be regionalised, looking at areas beyond London
where the relevant financial services capability and technical skills might exist, such
as Leeds, Manchester and Edinburgh, and a number of projects are being rolled out
with Innovate UK.
o Project Innovate have established a regulatory sand box to test out ideas and to
launch new business models without having negative impacts and to develop
understanding of how these models provide benefits to SMEs.
o Looking at new regulatory technology that will allow regulators such as the Financial
Conduct Authority and the Prudential Regulation Authority to keep pace with
technological change. As part of this, work is ongoing to develop common standards
that can be applied across established and new financial companies to avoid existing
companies excluding new entrants from the sector.
Research is ongoing into looking at business models using distributed ledger or block chain
technology. Sequential transaction databases that can be used as an asset registry are
widely applicable and are not solely applicable to alternative currencies such as bitcoin. With
regard to fintech, there is a role for government to direct funds to relevant research and to
ensure regulators keep pace with changes, but more importantly there is also a
communication role. This is not only to communicate the implications of fintech to the
public, but more importantly to raise awareness amongst SMEs of these alternative sources
of finance. This is critical for the sector being able to address the 85% monopoly the existing
banks currently have in SME finance.
Jessica Bland suggested that the range of impressive foresight projects discussed
demonstrated how it can operate as a bridge between policy development, which can get
stuck in the here and now, and political debates, which by their nature are about building a
better future. However, it was not easy to define what constitutes successful futures
analysis that can act as this bridge, but it was possible to satirise what it needs not to
o The Institute for Buzzword Realisation (IBR). This would be a new mini-institute,
populated by self-identified systems-change experts and former disruptive
innovation evangelists. It would use advanced web scraping techniques to rank the
evolution of the latest buzzwords in a select group of monthly magazines, blogs and
international conferences. It would then decide which of these to investigate further
depending on potential partnerships with multinationals that use the same key
phrases. The outputs are mainly videos about key trends that the Government
should address, with proclamations that it will make £X billion for UK PLC by 2020.
The team would not look to the wider public or to the civil service and their
networks, as their Key Performance Indicators are media impact, mentions in
speeches and initiating public-private R&D partnerships between government and
o The Scientistic Technology Foresight service Centre (STFsC). A network of small
teams of civil servants and foresight academics would deliver on-demand foresight
services to Government. They are organised into a hub and spoke model, anchored
in a university campus somewhere in the South West. The reports they provide are
often in collaboration with the European Commission Joint Research Centre. They
have to be approved by directorates in Brussels as well as all relevant UK
departments and agencies. Although projects vary slightly, they usually require
interpreting expert testimony into lists of opportunities and challenges. Using
national statistics and market projections, these are translated into complex system
diagrams detailing potential shape of a sector or policy area. Dedication to this
science of foresight means that the centre has strict rules against intervening in
emerging policy debates or experimenting with new forms of foresight.
These two ends of a continuum reflect some of the inherent communication challenges in
complex futures work, which include:
o having a large group of people driving the direction of the study and who have to
approve its outputs and recommendations, which ends up diluting the pointedness
of future scenarios produced
o having to keep to a rigid timetable, which may mean missing the window in political
cycles when the studies may have most influence on relevant decisions.
Nesta has learned a number of lessons from the futures programme it has undertaken,
including the importance of telling stories about the future and talking about the users of
services and how their lives will change. While this doesn’t have the depth of ONS
projections, it is a means of challenging experts who may not be comfortable making
forward projections; for instance, talking to over 200 experts to create the six futures for
the longitude challenge prize. DIY futures are better than glossy perfect futures to use as
essentially straw men to intervene in a debate and create a ruckus. For example, the ten
future Londoners created with Arup and other partners as part of a project last year. Events
can also work better than research papers to bring the public into discussions about what
future they want, such as NESTA’s future fest.
Josef Hargrave is part of the global foresight team in Arup, a global engineering and
design company with about 13,000 employees globally, which is involved in a number of
large infrastructure projects in the UK, including the Olympic Park development, Crossrail
and some work on HS2. It is an employee owned company, along the lines of John Lewis,
allowing freedom and independence with regard to what is invested in, such as research and
development, which led to the establishment of the foresight team that has been running
for ten years. The Arup foresight team specialises in the future of the built environment in
projects that range from cities to individual buildings and have included the future of the
workplace and how this will affect the future building design, working with the Singapore
Ministry of Transport on how to design cities around autonomous vehicles and with Arup’s
lighting business to explore the future of cities at night how urban lighting should be
designed to facilitate new forms of economic and social interaction. Arup have four strategic
priorities: cities as these are the places where positive change to solve problems is likely to
take place; transport and the integration of modes and new forms of transport; low carbon
energy and new forms of energy supplies across economies; and, water. There is a particular
need for governments to look at water in more detail, just from agriculture water demand
will increase by 20% globally. There are huge challenges in terms of securing future water
supplies and giving equal access to all parts of the global population. Existing infrastructure
is also in a poor state with about 30% of water supply lost in US cities through leaking pipes
and probably a similar level in London. Water is relevant to the UK economy across a range
of sectors from agriculture and food production to manufacturing to private households to
energy supplies. If the challenges are considered in the context of a number of the areas
already discussed there are opportunities for interesting technological solutions, such as
using the internet of things to improve efficiency of water use. Arup has recently produced a
report on the 25 drivers of change in trends relating to water and are thinking about the
future of water utilities. This includes how they should link up with energy and telecoms and
utilities in areas such as protocols for the maintenance of utilities and how they can
collaborate better. A key thing for Government foresight functions is to focus on the end
goal of impacting policy and informing strategic decisions. There is a tendency for foresight
to throw up lots of interesting findings, but with very little focus on how this will impact on
policy decisions. There needs to be a means of ensuring the right information reaches the
right people at the right time to influence strategic decisions.
 The Lords have just started scrutiny of the Cities Bill, but while it may establish the principles
of devolution, it is less clear what kinds of devolution are suited to different types of cities
and the role of leadership at the local level is key to its success. The Centre for Cities recent
report, A Century of Cities, defined two types of cities:
o those that replicated existing economies, resulting in mainly low paid jobs
o those that reinvented their economies, creating higher paid knowledge economy
 Devolution is important for dealing with different types of cities in terms of size and income,
but the local leadership has to recognise where they are. Social disparity appears to be a
national problem, but its nature varies widely between cities. The economic differences
between cities mean they will contribute to the overall economy in different ways, with
scenarios suggesting certain cities will grow faster than others. The project is working with a
range of cities to develop a portfolio of relevant mini-foresight projects.
 Past projections that new ways of working would greatly reduce the need to live or
commute into urban areas has not been borne out by current trends, with an enduring need
to maintain face to face meetings. However, what is seen is more flexibility in working
patterns with only 2 or 3 days spent in the workplace rather than five.
 The project will leave a whole range of papers, but there is also the intention to leave a
legacy of foresight activity across Whitehall. This includes connecting to activities such as the
ONS measurements of natural capital and ecosystem services has to be an important aspect
of this. Another area of similar activity will be on big data; in the near future cities will be
generating too much data for conventional approaches and new approaches to analytics will
be needed, along with clarity about what needs to be monitored and having the inventive
capability and attitude to solving problems.
 At one level, the UK can be seen as a distributed city entity in itself. City regions can be
defined broadly within the UK, such that the administrative boundaries of counties can be
defined as distributed city systems. While everything is interconnected, how useful such
definitions are depends on the nature of the city; for instance, Cambridge provides
employment for many individuals residing in other towns in Cambridgeshire.
The sharing economy is presently quite small, it has to be monitored but it is not likely to get
much bigger as the interdependency with growing social disparity will kick in, limiting the
assets available to the majority for sharing.
It should be possible to retain PhD students in robotics from the UK’s four robotics doctoral
training centres (Edinburgh, Bristol, Oxford and Loughborough) in the UK if the right
innovation ecosystem is in place that gives people equity in start-up companies, which will
be more valuable than golden hellos from US corporates. Our ambition should be to recruit
the best from the US.
The UK Government would be more effective in driving innovation through procurement if it
adopted the procurement model used by the US defence bodies. For example, the US Navy
Procurement worked with Professor Lane to set the requirements of the problem the
technology needed to solve, a couple of years prior to the competitive stage of
procurement, helping him to set up his marine robotics company. In the UK, the Home
Office and Police could work with drone manufacturers to develop the specifications for
drones prior to procurement or the Department of Health with medical supply companies
for assisted living technologies. However, this requires enthusiasts in government
departments to drive this culture change forward, which are lacking at present, although
there is growing interest from some departments, with DfT asked to look at making progress
on it.
This should be a standard part of intelligent procurement. This requires the client to be well
enough informed to involve the suppliers in developing requirements, rather than
Government refining specifications on its own prior to procurement as happens now.
However, this is more about better procurement than supporting research per se, although
Government needs to have researchers in-house to be an intelligent customer. A more
important factor in strengthening innovation is building better links between industry and
doctoral training centres to ensure faster exploitation of knowledge and reduce costs to the
public purse.
There is a cohesive approach across Innovate UK, academia and industry to Fin Tech, with
the Digital Catapult, the Turing Institute and Research Councils represented on the panel of
the Blackett review and the research going forward, such as on common standards, is also
being widely consulted on, to ensure the right knowledge is available to business.
There is a role to develop public benefits, such as delivering health services and designing
modular cities, which the Government can provide leadership on. The Government has
started to do this with £40 million allotted to large scale demonstration projects in the last
budget. There are a number of other things government can do, including helping build
partnerships through its convening power, for instance, to get people out of cars by working
with the companies that provide transport and ICT infrastructure and the bus companies to
run extra buses at times when traffic is bad. It can also incentivise other agents, such as the
health service or local authorities; for instance, you can run street lights more effectively
using a gadget to save 30% and use those savings to turn street lights into an internet of
things, from which a range of innovations would flow. However, local authorities are unlikely
to do this without being incentivised.
One example where the Government has done really well is with the Financial Conduct
Authority and Project Innovate. The challenge you have if you are doing something new is
there aren’t a lot of established rules to go by and a lot of the established rules for the
traditional banking sector would kill any new industry. The FCA took a pragmatic approach
to this setting up project innovate to allow regulation to be appropriately tailored for startup companies. This included realising the companies would need help to adjust to the
regulations and communicating the rules to the SMEs that they needed to follow rather than
just producing a handbook and expecting the companies to engage a lawyer. Lessons can be
learned by other regulators from how the FCA have behaved.
The robotics and autonomous systems strategy included demonstration projects such as the
autonomous car system in Milton Keynes. Systems can demonstrate what they can do and
regulators can be involved to give them the opportunity to adapt their regulations and
standards alongside. Regulators are usually up for the challenge but may need help.
Regulation is usually behind the curve of innovation, but regulation is needed to improve the
confidence of consumers in data protection. However, the current approach being set out in
Europe is heavy handed and will only be understood by a small number of lawyers. What is
needed is transparent regulation that can be clearly communicated to consumers to build
confidence. The one exception to this should be an offence of re-identifying anonymised
data, which should carry a serious penalty given that many of the benefits of big data will
arise from analysis of anonymised datasets.
There is a dichotomy between devolution and people taking decisions at the right level and
central government needing to manage finance and regulation in a global economy. The
principles of subsidiarity need to be articulated to make this work across the different levels,
already many policies that are badged as national decisions are implemented differently at
the city and local level according to need, such as health and education, but current financial
systems do not take account this.
Foresight needs to be focussed where it is going to have impact, which relates to how
decisions get made and how the decision process can be informed by the sort of insights
futures generate. This is around the implications of the issues coming forward and looking at
the risks and opportunities in a fair and even handed way and enabling people to think
about their relative risk appetite. It’s all well and good to compare scenarios with a long list
of policies, but it is the thinking and the dependencies behind these that help people care
about them. If you care about a risk or opportunities you will allocate resources to chase
these down and allocating resources is the role of government. Parliament can help
Government do that in a challenging way by exploring risks and opportunities to debate
what society’s risk appetite is and to determine if a risk is worth chasing down or if an
opportunity is worth chasing toward. Subsequently foresight can inform decision-making
and facilitate adoption of more strategic approaches towards desired futures.
The issue of natural capital requires a radical shift in national accounting, the way natural
capital is taken into account in decision making and how renewable resources are invested
in. To ensure renewable resources retain the capacity to renew themselves, the income
generated from renewable resource use should be re-invested into the renewable resource
and arrangements should be in place for the compensation for the loss of renewable
One of the roles of parliament should be conscience prodding and awareness raising. For
example, water infrastructure in the UK is ageing and many pipes will burst over the next
few years, but if you installed sensors to measure the pressure of water you can predict
which will burst when and pro-actively fix them. Why don’t select committees as part of an
inquiry on smart cities call in water companies and ask them why they aren’t doing this and
what it would take them to incentivise them. Similarly, bus companies could be called in and
asked why they aren’t using real time traffic prediction for flexible demand driven bus
services; and national health executives could be asked why they don’t just put a toe in the
pond of remote monitoring and how can things be driven forward in these areas.
Many issues are cross-departmental challenges in Whitehall and one of the great services
that select committees can offer is to tackle cross-departmental topics and suggest who in
Whitehall should be doing what to co-ordinate, as this becomes very challenging once
something falls beyond the remit of one department. Housing is an interesting example,
where issues around housing, industry, technology, health, economic issues etc. will have to
be tackled to address future challenges.
Industrial strategy was a big success that worked very well and leadership strategies created
alignment between industrial and academic communities and helped to create innovation
ecosystems. Select Committees need to ensure these sorts of initiatives continue.
Select committees can play an important advocacy role for science and technology across
both houses; for example, there are major issues in ensuring the education system is
supplying people with the right skills for future jobs and a range of parliamentarians are
seeking to raise this issue.
The public’s consumption of the media is quite sophisticated; the media raises questions
about science and technology for the public to think about but does not supply answers they
find credible and people will then go on to look at different sources. The media needs to do
a better job celebrating the achievements of British science.
There was a discussion amongst attendees about what areas they felt identified by futures
work could be the focus of Government efforts given limited resources:
o Improving the liveability and wellbeing in the UK, particularly in cities, addressing
issues such as air quality, housing and urban green infrastructure.
o Unless the UK invests in the next generation of fin tech and has better
understanding of how to link people who want the money with the money, it will
lose its primacy as a centre for finance. There also needs to be effort on the demand
side of the equation to raise awareness of the availability of non-bank finance
solutions to drive growth in SMEs, which makes up 50% of our economy.
o The new revenue earners for the nation, which includes quality of life as it generates
activity, industry and wealth, but also advanced materials, synthetic biology, the
NHS dataset and huge array of other areas glimmering on the horizon from science.
It’s not what we know, it’s putting it in to practice that is the issue.
o Industry 4.0 involves an array of technologies including robotic manufacturing, 3D
printing and remote control plants. This provides incredible flexibility allowing
manufacturing plants to change between products being produced quickly and has
very low labour costs. One of the issues that is often raised is whether there are
sufficient engineers and programmers to implement industry 4.0. It doesn’t help
that 5% of people with relevant skills are taken each year by the financial sector, but
only a limited number of really good people with relevant skills are required, rather
than a high proportion of the working population. This isn’t to say the sector will
only provide jobs for a limited number of highly skilled individuals, there will be a
whole ecosystem of linked SMEs that will grow up around them. ARUP have recently
published a re-thinking the factory report that reflects some of these debates.
Annex A: Professor Sarah Harper’s Speaking Notes on an Ageing Population
 The rhetoric and reality of the age structural change facing advanced economies is often
confused….. “Ageing: Europe’s growing problem.” BBC Business News, September 2002
 “Ageing in Europe…has been one of the most remarkable success stories of our time…”
United Nations Economic Commission for Europe, April 2002
 Advanced economies such as the UK are well along the way of the age structural shift, which
has been in progression for a couple of hundred years since the start of the demographic
transition in Europe in the mid-18th century. Alongside the general mass ageing of their
populations, with a steady increase in both the mean and median ages and in average life
expectancy, they are also facing the challenge of extreme low fertility, and low mortality
rates amongst the oldest old. While the first is changing their worker to dependent ratio, the
second is questioning the ability to care for the large numbers in and approaching extreme
 Put simply we can say that the ageing of the UK population has two broad components:
o longevity which is increasing the number of old people in the population, and has
particular implications for health care provision
o the age structural shift or increase in the median age of the of a population, caused
primarily by falling childbearing rates, and has particular implications for the
 Most advanced economies, have aged continuously over the past century. By 2030 nearly
half the population of Western Europe (44.5%) will be over 50, one quarter over 65 and
12.5% over 75. Longevity has increased and it is now forecast that the real life expectancy of
today’s European babies will be well over 100 years with over 3 million centenarians alive in
Europe by the end of the 21st century.
 The next decades will also see a rapid shift towards increased elderly dependency ratios in
most industrialised countries. Europe as a region will be most affected: the average EDR for
the EU25 as a whole is expected to double as the working-age population (15-64 years)
decreases by 48 million between now and 2050. The EU25 will thus change from having four
to only two persons of working age for each citizen aged 65 and above or a EDR of 50:100.
However those countries which are already demographically old – Belgium, France, the
Netherlands, Norway, Denmark, Sweden and the United Kingdom – are projected to see
relatively small increases in dependency ratios over the next 40 years; those where
childbearing rates are very low - Italy, Spain, Greece and Germany _ will have high elderly
dependency ratios.
 This will clearly have significant implications for labour supply, family and household
structure, health and welfare service demand, patterns of saving and consumption,
provision of housing and transport, leisure and community behaviour, networks and social
o Yet, the major concerns - public spending on pensions, high dependency ratios
between workers and non-workers, increases in health care costs, declining
availability of family based care, and a slowdown in consumption due to an increase
in older people and a decrease in younger people, are based on assumptions
developed from the characteristics and behaviours of current older populations.
Behind the rhetoric defining dependency and productivity lie the complexity of
social and economic behaviour and the ability of societies and individuals to adapt to
changing circumstances.
o It is highly likely that future generations of older adults will have higher levels of
human capital – in terms of education, skills and abilities – and that old age, as
defined by retirement and dependency will occur at far older ages than currently.
o In additional, they are all issues which can be addressed by policy, given the political
and economic will.
Young nations have high proportions of economically active individuals with the potential to
produce the wealth needed to support dependents, both old and young. However, old
populations have a lower proportion of workers and thus the responsibility of providing for
old age dependency may increasingly fall to the older person themselves. In addition,
societies with a large proportion of their populations in old age have to consider how to
redistribute resources away from a focus on younger people towards older people in an
equitable manner, both inter-generationally (between the generations) and intragenerationally (within each generation). Increasing decline and dependency within the
population, inequalities and equitable redistribution of resources frame the major
challenges for advanced economies.
Clearly the above concerns are based on a series of assumption – which should be
o Firstly, the population context of the current demographic drivers is affected by
policies and institutions – and it is these and not the demographics themselves
which frame the outcomes. We need to recognise the impact of current institutions
– and in particular to recognise that 21st century living is structured by 20th century
institutions which may not be effective for 21st century dynamics.
o Secondly, there are preconceptions around the economic contribution of older
adults and their productivity which are not supported by robust evidence, and these
need to be revisited. It is these institutions and public perceptions which influence
the behaviour of individuals in these societies.
o Thirdly, in advanced economies, such as the UK, not only are individuals living
longer, they are doing so within a population which is in itself growing older. To
grow old in a society where most people are young is fundamentally different from
doing so in a society where most people are old. A key question for these societies
is not only maintaining wellbeing across the life course of these longer lived
individuals, but also how we redistribute resources within this new demographic.