In March 2024, conglomerate Oji Holdings announced that it would cease manufacturing baby diapers in its Japanese factories. It now prefers to concentrate on the much more lucrative adult diaper market. Still in Japan, "All my foreign friends find escalators incredibly slow," said Jesper Kroll, a German economist who has lived in the country since 1985. "That's because a decade ago, new rules called for their speed to be reduced by 15%, to make life easier for the elderly."
Welcome to our future. Japan is the oldest country in the world, with almost 30% of its population over 65. Italy – second on the podium – will reach the same level by the mid-2030s, followed by Germany in the next decade. According to UN projections, all developed countries will be there by 2060.
In France, where a slightly higher birth rate has somewhat delayed the impact, this demographic shift is expected to occur around the 2070s, although estimates are uncertain. Across the wealthiest nations, the population has peaked at 1.3 billion and has begun a gradual decline, with a projected loss of around 100 million inhabitants by the end of the century, according to the United Nations. In Japan, the total population has been falling for 15 years, now at a rate of 2,300 people a day.
'Good news'
In economic terms, this slow but inevitable demographic phenomenon represents a major upheaval. "First and foremost, it's good news," said Vincent Touzé, an economist at the French Observatory of Economic Cycles (OFCE). "It means we're living longer, including in good health. But we still have to deal with the consequences."
Kroll also stressed one positive aspect: "In Japan, the balance of power between employees, who are fewer in number than before, and companies has shifted. In a company like Mitsubishi, young people used to beg for a job just a few years ago; today, they ask what the company can offer them." Salaries, once based purely on seniority, are more regularly linked to performance, and the Japanese now change companies more often during the course of their careers. Women's participation in the workforce has also risen sharply. "But the huge downside," said Kroll, "comes from public finances."
Japan, with a debt level of 260% of gross domestic product (GDP), foreshadows the future for most European countries. According to estimates by the British bank HSBC, the UK's debt is set to rise by 35 percentage points of GDP by mid-century due to demographic effects alone, increasing from nearly 100% of GDP today to 135%. For Eurozone countries, the increase would be 25 points on average by 2045, with France seeing a 30-point rise, according to the European Commission. At a time when debt is already a major issue and spending on defense and climate transition is urgently needed, budgetary trade-offs are likely to become increasingly difficult.
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