Taking Risks In A World Of Pensioners

As the world gets ever older, so does everyone in it. But advanced economies such as France are ageing even faster than other countries, with a larger and growing share of its population nearing or in retirement. This is also the case for China, and will soon be the case for the most advanced emerging economies. What is unique about ageing societies is that they are more rigid, less open to innovation and change, and prefer guaranteed incomes over-risk taking.

We can see the effects of this ageing and the spread of an economy of pensioners all around us. Investment is declining: in France, the net investment rate of businesses is just over 1.5%, which will not allow economic growth to exceed 1%. More and more savers are turning to risk-free investments, even if yields are below inflation. Owning real estate is a popular choice. Financial regulations, dictated more by the fear of a new crisis than by the intention of avoiding the same mistakes in the future, have halted economic risk-taking. Climate change is viewed less as a challenge to be ambitiously tackled than an additional reason to be doubtful, stuck in a mindset of defending the status quo. Are we condemned to become fossilised societies that refuse to invest in order to protect their pensions?

And yet, alongside this underwhelming option, current conditions for innovating are unprecedented in the history of the human race. The only limits to our capacity for innovation are our own choices. We can either deal with current challenges by withdrawing, or address them head on. To do this, we know we must invest. But investment requires work, saving and risk taking. While these actions seem disparate, economically they are inseparable. However, the key is risk-taking. Whether work, saving or investing, these actions all imply reasoned but fully-embraced economic and social risk.

This session will examine ways to encourage ageing societies to avoid the fatful temptation of sclerosis, and to continue thinking about the future and innovating by taking appropriate risks. Taking risks does not mean taking just any risk. This session will also look at how to profit from past errors, so as to be better prepared and take the right sort of risks in the future. We will offer an exhaustive critical analysis of the contributions to expect from the market, regulations, alternative financing, self-employment, employee motivation, social welfare and public policy decisions.