How Ageing Society Affects Business in Australia - Case Study Example

HOW AGEING SOCIETY AFFECTS BUSINESS IN AUSTRALIA STUDENT’S NAME: INSTITUTION: INSTRUCTOR’S NAME: DATE: Table of contents 1.0. Executive summary………………………………………………………………….3 2.0. Introduction………………………………………………………………………….4 3.0. Economic and social impacts of aging population in Australia…………………..5 4.0. Conclusion…………………………………………………………………………….8 5.0. Recommendations……………………………………………………………………9 1.0. Executive summary Business in Australia has been subjected to challenges due to the rising population of old people. Ageing society has an impact on the government that is an issue to be considered. When people grow old, they will tend to be slow in performing their duties unlike young people who are active. In Australia, you find that people continue to work even after their retirement period. Most organizations are populated by old people who discourage the young to apply or look for jobs. When there is such situation, the future should be considered because there will be a need of people to work when the old are no longer able. There will be the need of younger people to generate innovative ideas to enable the government comes up with projects that will boost economic development. The topic discusses on the impacts of ageing the population on business in Australia, it focuses on how this business will be affected in the future as well. Sources form the internet, and books have been used in this topic whereby statistics on the current population of workforce in Australia has been analyzed, and facts depicted from these sources. How ageing society affects business in Australia 2.0. Introduction Business is defined as an activity that aims at generating money. The process of exchanging goods and services to make money is a business; the main motive of business is to make profits. There are several categories of business depending on social, political and economic stipulations. The major characters that form a business is the existence of the buyer and the seller. They are the main components that accomplish business activities. There cannot be a buyer, and the seller is not available because the seller has what the buyer needs. There are factors that determine the success of a business, and they include demand and supply forces, availability of raw materials and enabling environment. From the insight of business; it is crystal clear that it requires young and energetic people to conduct business. Therefore, we will focus on the effects of ageing the society on business in Australia. While there is a rising population growth in Australia, it is not able to meet the ageing population as well. There is a challenge on increasing expenditure on health and welfare costs because of the need to cater for the old while ensuring that the younger generation is also healthy. The government of Australia is working on facilitating free maternity so as to prevent an escalating challenge of the future workforce. This is evident that the ageing population is higher than the children born. Australia cannot dream of having strong community that lacks a strong economy to sustain it and also they cannot have a strong economy when there are no profitable enterprises to enhance economic growth. Businesses and private enterprises have contributed to economic development in many countries. They are the basis for employment and also for generating money. They also influence other activities which generate money as well, therefore without a profitable enterprise; there will be a slow rate in economic development. For the case of Australia, ageing the population is a challenge because there will be slow performance in business which will result to low wages, lack of jobs and slow rate of prosperity. 3.0. Economic and social impacts of aging population in Australia The existing workforce in Australia has been studied, and statistics concludes that the workforce is rapidly ageing, and more employees remain in their jobs for longer periods. This is because the ageing population is exceeding the younger and therefore forcing the old to work past their retirement period. When this occurs, the young will end up looking for jobs because the ageing workforces have dominated most companies. From a report on male workforce, it was discovered that the highest population of workforce consisted of men above the forty-five years of age. When there is insufficient labour as a result of an expected decrease in the workforce due to age factor, it raises the issue. Clearly, business requires people who are energetic and can participate in daily activities without being subjected to fatigue or illness. It is obvious that old people tend to be lazy in carrying out their duties and therefore lowering the rate of organization or any business performance. Also, young people are more active than old people, take a look at a situation that requires quick decision making among the employees, you find that the young can engage their minds into making appropriate decisions in a short time compared to the old who will need time to think so as to fix the situation. There will be a rise in dependency ratio when the ageing population stagnates; this occurs as a result of the increase in life expectancy such that the old will expect from the young. If the population of young people is low, therefore, there will be a rise in dependency ratio. Take the example of more people who are claiming pension and there are fewer people who pay taxes due to lack of workforce. This will result to a demand of high tax for the current workforce and therefore discouraging people to engage in business. This affects the economy of Australia because the more tax demanded, the more money needed to be generated and therefore with the aging population that increases; it fosters a challenge to the balance of economy. When people grow old, they tend to be vulnerable to diseases; this will result to more of them resigning from their jobs. When this occurs, the government is responsible for healthcare facilities for the old. This will force the government to concentrate on giving pensions and healthcare facilities for the old and therefore allocating money on these programs. On the other hand, business will, therefore, stagnate because there are no people to run them. These government commitments, result to a challenge in running the government expenditure and therefore affects the overall performance of businesses in Australia. Sectoral changes as a result of the increased number of people who are old and retiring. Business will shift their attention towards meeting the demand for the ageing population. For example; construction of homes for the retired and provision of goods and services that target the old. In this case business will be affected because other sectors will fail to grow because they have been ignored. When concentration focuses on enabling accessibility for the old people, the younger generation will be disillusioned because they will lack the motivators for innovation, and since many businesses depend on innovative ideas, it becomes a challenge to the young generation. Capital investment is affected because the ageing population requires higher savings to be used in providing pensions. Take, for example, a society that puts a higher percentage of saving on pension plan. This will result to a reduction in the available savings for investment in production. When this occurs, the rate of economic growth will slow and thus resulting to an impact on businesses since they are used to measure the rate of economic growth. Ageing population also affects business in the sense that there will be a slow rate of expanding businesses. When the old are responsible for managing the business, they will not engage in ideas that could result to business expansion. This affects the growth of many businesses in Australia, which results to challenge in the future aspects of businesses. The chart above shows the impact of aging population on the workforce in Australia. The chart is from a statistics on the ages of the male workforce whereby it analyses the growing rate of male workers who are old. Forecast for Dependency Ratios in Different Countries The chart shows a forecast on the dependency ratios of different countries; we can conclude that Australia will experience a dependency ratio of approximately 40% in the future, and this is a challenge because we can observe that the ratio has been growing since the year 2005. 4.0. Conclusion From the above factors that slowdown the rate of business due to ageing the population, we can conclude that there is a great impact on the businesses in Australia. The ageing society is an alarming issue that should be considered because it fosters a challenge on economic growth that will result to a government stumbling block. The more the population of old people, the fewer innovations and the low rate of business developments. This will result to high costs of living, low rates of employment, low development in communities and therefore a downfall in economic activities. 5.0. Recommendations The government of Australia should come up with ways of ensuring that the number of old people who retire is equal to the number of the new employees in the industry. This will be achieved when the government provides training programs for the young so as to prepare them to venture into developing the economy through engaging in businesses. The ageing population should also consider taking their retirement periods so as to give way for the young to venture into the business industry. The government should also open up more industries so as to create more employment to the young and also facilitate accessibility for healthcare services especially maternities in order to prevent infant mortality that contributes to slow the increase of the young population. Reference Farabi, Y. (2012). Analysis of Marketing Environment of Virgin Australia. Grin Verlag. Holzman, R. (1999). Aging Populations, Pension funds and Financial markets: regional perspectives and global challenges for central, Eastern and Southern Europe. World bank publications. Magnus, G. (2012). The age of the aging: How Demographics is changing the Global economy and our world. John Wiley & Sons. Mary Robinson, W. N. (2007). Global health and Global Aging. John Wiley & sons. Pettinger, T. (2013, September 20). The impact of an aging population on the economy. labour markets,society. Tay, L. (2014, January 13). CHART: Here's How The Ageing Population Is Affecting Australia's Labour Force. Business insider,Australia. Appendix One Appendix two Appendix three Read More