As we analyse global demographic trends, we see that the ageing of the world's population has accelerated in recent years. According to United Nations (UN) statistics, the global ageing population was 962 million in 2017 and the total number of elderly people is expected to double by 2050 and is expected to grow close to 2.1 billion.
According to the statistics of the Asian Development Bank, the Sri Lankan population is ageing more rapidly than most other developing countries. The inability to add the output of the ageing population to the national economy negatively affects the national economy. Welfare costs such as Government expenditure on the public health of the ageing population increases rapidly and these types of costs of the ageing population negatively impacts the economic development of the country.
When the population is ageing, there are a number of economic consequences, such as the need for transportation, etc., and on health, especially the State health expenditures of the ageing population. According to the UN International Children's Emergency Fund – European Union – Sri Lanka Partnership’s “Budget brief: Health sector Sri Lanka 2021”, Sri Lanka's public health spending accounts for 1.5% of the gross domestic product (GDP), which is similar to the average public health expenditures in lower middle income countries (1.5%) and well above those in South Asia (1% of the GDP). From 2000 to 2018, Sri Lanka's domestic public health spending increased from 1.5% of the GDP to 2.3% of the GDP. When we analyse recent years, central Government spending on health care has increased significantly.
Another negative effect of the rapid ageing of the population is the rising cost of pensions. According to the World Bank, 12.3% of the population is 60 years or older in Sri Lanka, making it the country with the highest proportion of seniors in South Asia. The Western Province has the highest proportion of seniors in the country at 31.7%, while the Northern Province has at least 4.8%.
More than one in four or 25% of Sri Lankans will be over 60 years in just 15 years, which further explains that the number of workers retiring will increase, while the number of people entering the workforce will decrease, resulting in lower productivity, taxes, national income, growth and savings. The rapid growth of the retired labour force will translate into a higher public sector pension scheme, which currently accounts for almost 2% of the country's GDP.
To avoid the negative effects of the rapidly-growing ageing population on the national economy, such as the increased cost of pensions and state social assistance for health care, the best strategies are to promote self-employment and to outsource some of the work to the ageing population without affecting the employment opportunities for young people.
Outsourcing
Taking into account these factors, Sri Lanka is one of the strategic locations in the region for the development of the outsourcing industry.
Highest level of literacy and an educated workforce
Sri Lanka has the highest literacy rate in the region, representing 92.38%, while Sri Lanka's literacy rate in 2020 was 92.38%, an increase of 0.13% over 2019. Sri Lanka has implemented the free education system in the country and has extended it to university education as well. Every Sri Lankan has the opportunity for free education that would strengthen and develop an educated workforce, which would be ideal for an industry like outsourcing. The best educated workforce will provide the highest quality of work and would be a competitive advantage for the work performed by outsourcing.
Digital literacy in the country
According to the “Computer Literacy Statistics 2021” of the Department of Census and Statistics of the Ministry of Finance, Economic Stabilisation and National Policies, the following facts and figures could be taken into account when analysing Sri Lanka's digital literacy: One out of three persons (aged five-69 years) are computer literate (computer literacy rate 34.3%), one out of two persons (aged five-69 years) are digitally literate (digital literacy rate 57.2%), 22.9% of households own a desktop or laptop computer, and the urban sector shows more literacy on both computer and digital literacy.
Low costs of internet and data in Sri Lanka
It is noted that Sri Lanka is considered the country with the lowest prices among South Asian Association for Regional Cooperation (SAARC) countries in relation to absolute prices as well as a percentage of the gross national income (GNI) per capita, despite the third highest tax rate.
The International Telecommunication Union, the UN information and communication technologies body, sets yearly reference prices for voice, short message/messaging service and fixed and mobile broadband for its Member Countries. Sri Lanka is considered the country which has the lowest prices in the world, ranked at number 21 in terms of mobile broadband services (plans with a minimum of one gigabyte of data per month) across 181 countries, based on the United States (US) Dollar price (taxes included) as a percentage of the per capita GNI.
The outsourcing industry uses the internet and the relatively high data and internet costs play a vital role in the investment decisions in the outsourcing industry in Sri Lanka. The lowest data and internet costs among other countries in the region motivates investors to invest money in the outsourcing industry in the country.
Since the elderly are growing rapidly in the country and people tending to retire in the coming years have elevated, the wise move is to increase the productivity of older people in the country by providing them with opportunities in the outsourcing industry without disrupting employment opportunities for youth in the country.
The particular process will strengthen the economic development of the country and will have an impact on reducing the cost of welfare for older people by increasing their incomes.
Self-employment
The ageing of the non-working population can weigh on the development of the country, while increasing the cost of welfare for the elderly. By promoting self-employment amongst senior citizens, the country will be able to accelerate economic development and may reduce the social cost for the country's elderly population. The Government can ensure the sustainability of the self-employment of seniors by motivating them to produce eco-friendly products, since environmentally-friendly products have steadily increased domestic and foreign markets.
The country's green goods industry has been growing rapidly over the past few years. According to R.M.U.M.K. Rathnayaka and W.M.N.M. Wijethunga’s “Consumer’s green product buying decision: Impact of selected factors”, Sri Lankan consumers are highly concerned about environmental awareness and actively support the environment by purchasing and consuming products that are known to be environmentally responsible.
Constructive consumers around the world are concerned about the consumption of eco-friendly products as well as the activities of organisations that protect the environment from which they buy goods and services. The following facts and figures indicate that consumers worldwide are very concerned about environmentally-friendly products.
Europe
According to a study conducted by YouGov on behalf of Carbon Trust, "green consumers" express their concern about the business practices of organisations. “This is confirmed by a group of what the Trust calls 'green consumers', where one in five respondents stated, they take climate change into consideration when purchasing products while 37% say that it's important for them to know that the businesses they buy from are taking action against climate change."
Australia
Nine out of 10 Australian consumers are most likely to buy ethical and sustainable products. According to new research, a survey also reveals that 85% of consumers want retailers and brands to be more transparent about the sustainability of their products.
New Zealand
Across the eight industries, at least 47% of New Zealanders report that they care about sustainability when choosing a brand or a product to buy. One in five say that choosing a brand that works in a sustainable way or helps them live a low impact life are the most important factors in their purchasing decision. Sustainability is the third most important equal factor when choosing what to buy based on the quality and the price.
United States of America
"Almost 70% of consumers in the US and Canada think that it's important for a brand to be sustainable or green, based on new research from the International Business Machines Corporation and the National Retail Federation."
By fostering self-employment for seniors in the green products industry, the Government can be in a position to ensure the sustainability of self-employment for elders and the Government can also promote these green products to growing international markets.
Where the Government can ensure the sustainability of self-employment for the elderly population, it can motivate the elderly population to invest in self-employment, while respecting the Government's decision to promote and support self-employment among seniors.
(The writer is a marketing consultant.)
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The views and opinions expressed in this article are those of the author, and do not necessarily reflect those of this publication.