McGRAW HILL Global

FINANCIAL Institute

Aging and
Urbanization
Principles for Creating Sustainable,
Growth-Oriented and Age-Friendly Cities

January 2016
 To Thrive In The 21st Century,
Cities Must Embrace An Influx Of
(Mostly Older) Residents

T
wo inexorable and intersecting demographic trends are already defining the 21st century: rapid urbanization
and an aging population. The world’s cities must meet the challenges posed by these changes to compete on a
global scale.

Widely accepted statistics bring these challenges into clear focus. By 2030, more than 1 billion people — one in every
eight — will be aged 65 or older.1 And just two decades later, nearly two-thirds of the world’s population will live in urban
areas, up from just over half today1a, with nearly 1 billion older people living in cities in the developing world alone.

These demographic realities mandate that urban centers adapt an intergenerational view of growth and development.
In European cities such as Madrid, Lisbon and Warsaw, elderly residents represent a greater proportion of inhabitants
than the national average. Meanwhile, Italy and Germany are home to the majority of the world’s cities with old-age
dependency rates — defined as the ratio of those over age 64 to the working population — of 35% or more.2 Clearly,
for the European Union to meet its goal of “smart, sustainable, and inclusive growth” by 2020, cities — as well as
national economies — need to adapt in ways that allow countries to tap the economic potential of older residents
while also cultivating younger generations.

This need extends far beyond Europe. It will take significant action
by governments around the world to enable cities and economies
The 21st-century social
to thrive in an era that will soon see more old than young for the contract for urban life
first time in human history. Toward this end, the World Health
Organization (WHO) has identified 24 principles that promote must be rooted in an
active participation, health and security and independence for
people of all ages. These guidelines have been used by the WHO to
age-friendly philosophy.
develop, implement and evaluate local action plans that create age-friendly urban environments.

Despite the challenging nature of these looming trends, changing demographics also present opportunities, with
broad public support for government investment in age-friendly resources. This is especially important given
that financial and economic issues of a graying population have so far dominated the conversation about this
demographic trend.

2 1
 ational Institute on Aging (U.S. Department of Health and Human Services), Why Population Aging Matters: A Global Perspective (2007); 1a United Nations Department of Economic and Social
N
Affairs, 2014 Revision of World Urbanization Prospects (2014); 2 Eurostat, Statistics on European Cities (data from March 2015)
 Aging and Urbanization:
Principles for Creating Sustainable, Growth-Oriented and Age-Friendly Cities

In Europe, for example, pension shortfalls and alarming

levels of youth unemployment have highlighted the
Executive Summary financial challenges of caring for an elderly population.
Across Latin America, age-related expenditures are
growing faster than GDP. Brazil’s pension and health
• By 2030, more than one in eight people in the world
care costs are expected to climb to 26% of GDP in
will be 65 or older. This demographic shift has huge
2050 from 14% today.3 Meanwhile, in the U.S., health
implications for urban development as cities strive
care costs that already absorb 17.9% of GDP4 will
to include people of all ages in economic and social
almost certainly climb. And in Japan, where more than
communities.
a quarter of people are 50 or older, record low birth
• As illustrated by a new survey commissioned by rates have led to a steadily shrinking population that
MHFI, people around the world believe governments threatens the economic health of the country.5
are underinvesting in the infrastructure needed for
cities to adapt and incorporate age-friendly design. With this understanding of global priorities and the
existing WHO goals, the McGraw Hill Financial Global
• 
Building on work from the World Health Organization, Institute — in partnership with the Global Coalition on
World Economic Forum and others, MHFI has developed Aging — is proposing four principles of an age-friendly
four principles to guide how cities can channel their city (discussed in greater detail on page 7):
infrastructure investments to ensure economic
vibrancy of their urban communities:
- I nfrastructure and transportation that accommodates citizens 1 Infrastructure and transportation build out
of all generations; that will address the needs of citizens of all
- Housing that allows residents to age in place; generations;
- Robust community health programs; and

- O
 pportunities for continuing work, education, and recreation for
2. Housing to enable aging in place that pro-
all ages. motes independence, choice and freedom;
•  uilding age-friendly cities that can accommodate
B
the next generation will require the public and private 3. Access to community health programs
sector to come together. MHFI calls for three immediate with innovative technology and excellent
actions to move the conversation toward action: medical interventions; and
- Develop an economic case for aging in place.

- Provide opportunities for innovation.

4. Opportunities for continuing work,
- C
 reate incentives for intergenerational policies and
education, arts and recreation across the
investment. life cycle.

A recent public opinion survey commissioned by the McGraw Hill Financial Global Institute underscored the attention
that the world’s city dwellers are paying to the importance of a multi-generational approach, and gauged their opinions
of the importance of these principles (see page 4 for detailed findings). Their interest in matters related to aging was
overwhelming: more than nine out of ten respondents believed that governments should invest more resources to
ensure the health, security and well-being of their aging populations.
Unfortunately, with the exception of China, a majority of respondents said they do not trust government leaders to solve
these challenges, with access to health care and infrastructure investment the most widely recognized areas of need.

Living And Contributing Longer

Increasing longevity is changing how people spend their lives, and those cities that best support healthy and active aging
have a greater potential to harness the human capital of older adults, a previously untapped driver of economic expansion

3
Standard & Poor’s Ratings Services, Global Aging 2010: An Irreversible Truth (2010); 4 American Society on Aging, Can Japan Serve as a Model for U.S. Health and Long-Term Care Systems? 3
(2013) 5 PassBlue (CUNY Graduate Center), The World’s 10 Oldest Nations by Population and the Implications (2015)
 Aging and Urbanization:
Principles for Creating Sustainable, Growth-Oriented and Age-Friendly Cities

which can also enable further age-friendly development. Just as city leaders of the past fostered innovation aligned to the
trends of those times — such as industrialization and manufacturing, technological revolutions and baby booms — they
must now plan for the sea change accompanying increased urbanization and longevity.

Standard & Poor’s Ratings Services has examined the economic effects of increased longevity for more than a
decade, writing in a 2010 report that “[n]o other force is likely to change the future of national economic health,
public finances, and policymaking as the irreversible rate at which the world’s population is aging.”6 Yet the dominant
sources of global investment and development continue to fall short as a needed mechanism of change that would
allow cities to turn demographic burdens into opportunities.

Attitudes Around The World

While aging and demographic shifts have been a part of the - D
 evelopment of infrastructure and transportation tops concerns
global agenda for more than a decade, these issues have in Japan while coming in second in Germany, China and Brazil.
only recently begun to penetrate the concerns of the general
population. The McGraw Hill Financial Global Institute recently • 
A majority of people in each country agree that the current
commissioned a survey of 6,000 respondents living in cities conditions of their cities are contributing to a generational divide.
within the following countries: United States, Brazil, United
Percentage of people by country that agree or strongly
Kingdom, Germany, China and Japan. Their responses indicate
agree that cities are contributing to generational divide
broad public support for investment that will better integrate
young and old populations and a strong call for public and
private leaders to come together with solutions. 89% 71%
• Awareness of the pending demographic shift is highest in
the developing nations surveyed.
81% 66%
ABOUT 49% 54% 72% 64%
HALF
of people in the US and UK are aware of the demographic shift • 
[Source: Edelman Berland survey on Aging and Urbanization,
commissioned by McGraw Hill Financial Global Institute]

Governments are falling short on actions needed to

address the most important issues that will promote

NEARLY 94% 89%

intergenerational communities.
- B
 y a ratio of 3 to 1, people assume they will need to take care of

EVERYONE themselves in older age instead of relying on pensions programs

or government support. The only exception is China where 45%
of people think the government will support them as they age.
in China and Brazil are aware of the demographic shift
- T he biggest areas where government intervention is falling
short of people’s expectations are 1) ensuring the availability of
A GREATER jobs, 2) ensuring options for caregivers and 3) creating mixed

NUMBER 65% 56% generational housing.

- E
 nsuring access to transportation and healthcare facilities are
the areas where people think government is doing its best.
of people in Germany and Japan are aware of the demographic shift
[Source: Edelman Berland survey on Aging and Urbanization,
commissioned by McGraw Hill Financial Global Institute]
• O
 nly 2 in 5 people trust government leaders to solve these
challenges—except in China where more than 80% of
• Top priorities vary around the world, based on existing people trust government.
programs and local trends:
Survey Methodology
- Access to community health programs with innovative technology
and excellent medical interventions are most important in China, Results based on a global survey of 6,077 people ages 18-65 living
Brazil, the United Kingdom and the United States in medium, large or very large cities in the United States, the United
- Promotion and accessibility for all people to “age in place” (in their Kingdom, Germany, China, Japan or Brazil. Survey conducted by
current home) rather than being institutionalized is most important Edelman Berland, with data collection between November 30 and
in Germany—and ranks highly in both the U.S. and the U.K. December 14, 2015. Margin of error +/-3.07 percent.

4 6
Standard & Poor’s Ratings Services, Global Aging 2010: An Irreversible Truth (2010)
 Aging and Urbanization:
Principles for Creating Sustainable, Growth-Oriented and Age-Friendly Cities

To be sure, an aging population creates some tension between the desire to contain government budgets and
the need to sustain public spending on pensions and health care7 — as well as the need to increase spending on
infrastructure. Evidence of the benefits of increased spending can be seen in the potential economic returns of
targeted infrastructure investment. In fact, according to economic research by Standard & Poor’s, this “multiplier
effect” can run as high as 2.5 times8 over a three year period. In other words, for each additional dollar allocated for
public-sector investment in a given year, about $2.50 would be added to real GDP in the next three years. The effect
is generally greater in developing economies such as China, India and Brazil, where immediate effects can be seen
than for more developed countries, where a main benefit is the boost to employment. Not that this longer-term effect
should be underestimated, especially since it is a key mechanism for tackling the pension challenge that resonates
throughout Europe.

Infrastructure Investment and The Pension Predicament

According to Standard & Poor’s projections, unchecked pension costs (including early retirement, surviving relative
and disability pensions) would rise on average by slightly more than 2% of GDP by 2050, to exceed 11% of GDP.9 Given
that pension costs already trump spending on health care and long-term care, this is cause for concern. But while the
economic realities of pension expenditures weigh on government budgets — especially in countries such as Brazil, Russia
and Turkey10 — these same programs put money directly in the hands of older consumers. Elsewhere, countries such
as Argentina and Mexico — where the population is relatively youthful and governments have pushed through several
rounds of pension reform — are generally meeting the fiscal challenges of aging populations. As people worldwide
consider the impact of demographic shifts over the long term, the McGraw Hill Financial Global Institute’s survey found
that their resounding concern is lack of government support for public pension and health care programs.

Percentage of people who agree or At the same time, the challenges of infrastructure
investment are at the forefront throughout Latin
strongly agree that governments do not America where average infrastructure expenditures
allocate sufficient resources to public hover around 3% of GDP, below the global average
pension and health care programs of 3.8%. This low level of investment is especially
unfortunate, given that Standard & Poor’s projects
91% 85% 83% 80% 76% 70% the potential payoffs as relatively large throughout
the region, ranging from a multiple of 1.3 in Mexico
to 2.5 in Brazil.11
[Source: Edelman Berland survey on Aging and Urbanization,
In many ways, developing economies are well-
commissioned by McGraw Hill Financial Global Institute]

positioned to be at the vanguard of the movement to build and adapt infrastructure systems for a demographically
diverse populace. In these nations, crumbling legacy systems and structures are not the burden they sometimes are in
more developed areas, allowing these countries to capitalize on technological advancements and start from square one.

Beyond providing foundational needs, such as roads and transport systems, these countries can focus on tailoring
their infrastructure to shifting populations, such as power grids designed to handle the peak demands of high
concentrations of people, robust sanitation systems that account for whole life needs and public-transit networks
that rely on sustainable sources while allowing easy access to economic opportunities and health care for older
populations. These countries can orient their infrastructure to meet mobility issues, vision challenges and other
concerns that disproportionately affect the elderly.

Most marquee infrastructure projects involve improvements to, or the construction of, transportation networks —
a priority that 80 to 99 percent of survey respondents support. But as the rate of urbanization accelerates, other
projects hold the promise of positive investment returns. For example, water and waste management facilities,
power grids, telecommunication networks and social infrastructure will need to reflect the changing demographics of
cities. Meeting this challenge will require a combination of public and private investment to fill a funding gap between

7
Standard & Poor’s Ratings Services, Global Aging 2013: Rising To The Challenge (2013); 8 Standard & Poor’s Ratings Services, Global Infrastructure: Timing Is Everything (2015); 9 Standard & 5
Poor’s Ratings Services, Global Aging 2013: Rising To The Challenge (2013); 10 Ibid.; 11 Standard & Poor’s Ratings Services, Global Infrastructure: Timing Is Everything (2015)
 Aging and Urbanization:
Principles for Creating Sustainable, Growth-Oriented and Age-Friendly Cities

investment needs and available public funds that

Standard & Poor’s has estimated to be $500 billion
Developing countries can
annually, including investment in infrastructure orient their infrastructure to
that will accommodate older citizens.12 While
accessible transportation infrastructure and meet mobility issues, vision
housing options are the most obvious areas where
older demographics may have specific needs, there
challenges and other concerns
are also benefits to consider from establishing that affect the elderly.
technology systems that older generations can
better understand and use.

All told, the confluence of rapid urbanization and increased longevity represents an opportunity for policy makers,
corporations and investors to take the lead in creating the cities that will prosper most in the coming decades.

Advancing An Age-Agreeable Agenda

Despite the importance of the intersection of aging and urbanization, these trends have received little attention in
the public discourse, and they are rarely discussed as an opportunity for economic growth. One of the few high-profile
initiatives to do so is the WHO’s effort to promote an “age-friendly world.”13 In 2007, the Geneva-based organization
published its “Global Age-Friendly Cities: A Guide,” which looked at 33 urban centers in the context of eight relevant
issues, from community support and health services to social inclusion, in an effort to set a research protocol on
healthy aging in cities and develop recommendations that would appeal to and reflect the interests of people of all
generations, particularly the elderly.

A variety of governments and global institutions have begun responding to the call to create age-friendly cities. In
2015 the World Economic Forum established its “Age-Friendly Business Principles” to help demonstrate how this
demographic shift can drive economic growth at the national, regional and global levels — as well as to highlight
companies that have positioned themselves for this opportunity.

Meanwhile, Europe — perhaps unsurprisingly — is the region that has most readily prepared to develop such age-
friendly cities. In fact, the European Commission has identified healthy aging as one of three platforms to achieve as
part of its Europe 2020 economic growth strategy.14

6 12
Standard & Poor’s Ratings Services, Global Infrastructure: How to Fill a $500 Billion Hole (2014); 13 World Health Organization, Ageing and Life Course;
 European Commission, Europe 2020: A strategy for smart, sustainable growth (2015)
14
 Promoting The Principles

T
hese initiatives suggest that managing such shifting demographics requires solutions that break deep-seated
paradigms and are technologically disruptive and innovative. Working closely with the Global Coalition on Aging and
drawing heavily from the existing guidelines set forward by the WHO and the World Economic Forum, the McGraw
Hill Financial Global Institute has developed a set of focused principles to help cities and governments decide how best to
allocate limited resources. As this conversation continues on a global scale, these principles aim to define this disruption and
innovation and map a path toward developing the successful, self-sustaining, self-perpetuating cities of the 21st century.

Principle 1:
Infrastructure and Transportation
Providing the services, tools and programs that keep older citizens mobile, connected and included in the activities that drive societal
growth will enable them to engage in commerce and, thus, contribute to economic expansion. From workplaces to public spaces, and
transit systems to ride services, the structures that connect people — and the technologies that facilitate them — will be essential for
cities to foster future growth.

When social participation decreases with age, the likelihood of health problems increases — often in conjunction with one’s loss of the
ability to drive safely. Creating ways to keep older people — especially those who live alone — connected with their environments can help
prevent loneliness and social isolation. This, in turn, can lead to improved physical and emotional health. As populations age, infrastructure
and transportation systems that can handle varying levels of mobility will bolster growth and help reduce health care costs and other costs
associated with dependence.

At the same time, increased investment geared toward older people

Infrastructure in Action: today will remain relevant for citizens of all ages at every stage of life
In Akita City, Japan, the installation of snow- for decades to come. Public transit, public spaces and buildings and
Internet access improvements can help older citizens engage with
melting sidewalks and multiple all-weather society longer, which promotes sustained economic growth.
walkways in 2012 has helped address
A robust transit system, in particular, helps ensure that the loss
weather-related falls and injuries. of driving privileges for older adults does not mean a loss of
And in New York City, street intersections in independence. One U.S. study found that seniors 65 and older who
no longer drive make 15% fewer trips to the doctor, 59% fewer trips
high-traffic pedestrian locations across the to shop or eat out and 65% fewer trips to visit friends and family,
city have been redesigned to improve the compared to their counterparts who continue to drive.15 As an added
benefit, investment in transportation systems creates jobs for younger
safety of older adults. residents to build and maintain these systems and fosters growth.

15
Transportation For America, Fixing the Mobility Crisis Threatening the Baby Boom Generation (2011) 7
 Aging and Urbanization:
Principles for Creating Sustainable, Growth-Oriented and Age-Friendly Cities

Principle 2:
Housing that Enables Aging In Place

Creating housing that enables and promotes older adults to remain at home will help delay — and, in many cases, altogether
avoid — institutional care for the oldest individuals, which can incur devastating costs for individuals, families and entire
societies. As the number of people 80 and older grows faster than any other demographic, the aggregate costs of long-term
institutional care could hold back economic growth. In Japan, the dependency ratio (the ratio of children and elderly to working-
age adults) will be virtually 1-to-1 by 2050, and other countries are mirroring this trend.16 Meanwhile, the annual cost for
nursing home care in the U.S. has risen to $77,380-$87,600 per person.17

Though aging in place will not entirely remove the costs of care, it can reduce them substantially, especially as new technologies
and other innovations make it more efficient. The opportunities to make the “smart home” safe and hospitable for older adults are
seemingly limitless. Already, transformative technologies such as “telehealth,” which delivers health-related services and information
and enables remote patient monitoring via telecommunications networks, have made it to market. Additionally, new demand for in-
home caregivers will be created, with the potential to at least partially offset the loss of jobs in institutional settings.

In cities with a pronounced proportion of aging residents, the ability of landlords to adjust rents for existing tenants tends
to be highly regulated. This leads to elderly residents staying in their apartments longer because rents are low (sometimes
considerably below market rates), as compared to moving elsewhere. This encourages intergenerational cities — but only if the
housing market is flexible enough to induce younger generations to live alongside older residents.

In Germany, the United States and the United Kingdom,

Where Aging in Place Works:
survey respondents identified accessibility for all people
to age in place as the first or second most important In Ireland, the OPRAH (Supporting Older People to
step for cities to take to ensure safety, security and
Remain at Home) initiative promotes community
well being for all generations. Despite this ranking,
respondents also noted that initiatives designed to help coordination to determine and deliver required care.
people age in place are where the government is most
In Italy, the city of Bolzano collaborated with IBM on
falling short of people’s expectations. In Brazil alone,
there was a more than 50 percentage point gap between a “Living Safe” program, which collects data that will
the importance of initiatives to help people age-in-place
contribute to the development of strategies to keep
and how well the government was addressing this need.
seniors safer and more independent.
Enabling aging in place is a positive not only for those
who avoid being placed in an assisted living or similar facility but also for their families. Aging in place replaces the “visits to nursing
a home” with in-home interactions. The benefits of multigenerational familial interaction are well understood, and for younger
generations that must build careers in multigenerational workplaces, this interaction can have economic benefits as well.

Principle 3:
Community Health Programs

Highlighting information and services that promote health, prevention and wellness to older citizens as well as those across the
age spectrum will raise awareness of the chronic conditions that increase with age and promote behaviors earlier in life that
improve health outcomes and lower the costs of care. Greater access to information that promotes healthier living, similar to
measures that curbed tobacco consumption and encouraged the use of seat belts, can encourage healthier behaviors. Investing
in health throughout the life cycle and applying these examples to prevent non-communicable diseases and maintaining
functional ability (as reflected in the WHO’s October 2015 World Report on Ageing and Health18] will lead to more active lives and
reduced costs as residents age. In 2013, Standard & Poor’s highlighted health care spending as a high-impact cost that policy
makers had neglected to address, and recommended that “the focus should now [shift] toward improving the design of health
care systems and containing health care spending.”19

Community health services offer solutions while simultaneously creating opportunities on these issues. Viewing health spending as
an investment in future growth and economic security is contrary to conventional thinking, but it is essential in this era of longevity.

8 16
United Nations, 2015 Revision of World Population Prospects, Medium Variant (2015); 17 Genworth Financial, 2014 Cost of Care Survey (2014); 18
World Health Organization, 2015 World Report
on Ageing and Health (2015); 19 Standard & Poor’s Ratings Services, Global Aging 2013: Rising To The Challenge (2013)
 Aging and Urbanization:
Principles for Creating Sustainable, Growth-Oriented and Age-Friendly Cities

Community Health In Action: Such investment must start early — for instance,
with programs geared toward the first 1,000 days of
In 2012, U.K. Prime Minister David Cameron launched life — to help truly achieve wellness and prevention.
the Dementia Friends initiative, which aims to improve While access to information and tools that educate
citizens about prevention, nutrition and active aging
the lives of those living with dementia in part by encourage healthy lifestyles and behaviors, it can
changing the way people think, talk, and act about it. also help remove the stigma of aging and associated
age-related conditions and challenges such as
In Singapore, the city-state launched a Falls Alzheimer’s disease.
Prevention Programme in 2012 including health
The McGraw Hill Financial Global Institute survey found
screening for the elderly who are highest risk of falls, that community health is the area where people think
government is focusing the most attention, with more
access to a public education programme and a free
than 58 percent of people in the six countries surveyed
pair of non-slip shoes. reporting that government is taking the necessary steps
to ensure access to community health care facilities.

Principle 4:
Continuing Work, Education, Arts and Recreation

Opportunities for engagement in society through work, education, arts and recreation lead to social inclusion, individual well-be-
ing, and ongoing economic contributions throughout one’s life. At a time when 20th-century conventions shape our thinking
— giving rise to fears that the workforce is dwindling, public pensions are waning, and generations are competing for jobs — we
must adopt new social norms in light of longevity.
In fact, older people can be drivers of growth — in the workplace, through education and training in new fields, via volunteer
work, and by contributing their wisdom and experience to the community. As the WHO outlines in its principles for age-friend-
ly cities, “The whole community benefits from the participation of older persons in volunteer or paid work and civic activities.
Finally, the local economy benefits from the patronage of older adult consumers.”20
Programs that improve access to work, education, arts and recreation for all citizens encourage entrepreneurship and the
search for second (or third) careers, leading to longer lives in which residents are active, engaged contributors to society.
Such programs also promote mental health and minimize social isolation. A Mayo Clinic study showed that Americans over age
85 who said they engaged in things like painting, quilting or book clubs during middle age were less likely to develop memory
impairments that may precede dementia.21 In this light, cities need the infrastructure to foster a 21st-century view of personal
and professional development and social interaction, which must extend well beyond traditional retirement age.

Leading Efforts to Promote Demographically Diverse Cities

A number of institutions, cities and governments have stepped to the forefront of the movement to promote healthy aging
and demographically diverse cities, some with clearly outlined initiatives and some in subtler ways.
In 2016, the WHO will continue work on its “Decade of Healthy Ageing, 2020-2030,” in which the centerpiece is the
achievement of functional ability. The strategy is expected to gain adoption at the World Health Assembly in May 2016. Aging
will take a prominent place on the agendas for the E.U. and World Economic Forum’s 2016 Annual Meeting, with an emphasis
on how healthy aging can promote economic growth across developed and emerging economies.
At the same time, the Organisation for Economic Co-operation and Development (OECD) is set to launch its Digital
Economy Program, with aging as a principle component. In less direct — but, potentially, just as effective — efforts,
Japan will serve as chair of the G-7 and China of the G-20. Both countries are widely known for their traditional
cultural respect and appreciation for older citizens, and each is now facing urgent demographic challenges.
While developed and developing economies alike will be advancing initiatives for healthy aging, the latter will be the
focal point of the intersection between aging and urbanization. With nearly 1 billion older people in the developing

20
World Health Organization, Global Age-Friendly Cities: A Guide (2007); 21 Roberts, Dr. Rosebud, et. al, The Mayo Clinic, Risk and protective factors for cognitive impairment in persons aged 85 years 9
and older (2015)
 Aging and Urbanization:
Principles for Creating Sustainable, Growth-Oriented and Age-Friendly Cities

world expected to live in cities by 2050, nations with traditions of close family bonding — including families living close
by or under the same roofs — must learn to accommodate such conditions in an urban setting.
At stake is not just the health and productiveness of older adults, but sustainable economic growth for all. The
21st-century social contract for urban life must be rooted in an age-friendly philosophy. This will prepare younger
generations — and their children, and so on — for a profound shift that will reshape and redefine societal institutions.
As we live longer, capturing the benefits where aging meets urbanization will require public policy changes aligned to
the institutional reforms required for economic growth and social inclusion across all aspects of life.

Ahead of the Curve: Cities Preparing for a Changing Future

Age-friendly action is already taking beds for the elderly and encourages all Sausalito, California, USA - Call A Ride
place around the world. Many cities have grassroots medical institutions to provide Sausalito Seniors (CARSS) of Sausalito,
operated as part of the WHO’s framework health services and monitor conditions of California provides free rides for people
and within its network. Others have people aged 65 and older. aged 60 or older. CARSS is a volunteer
launched their own initiatives, often in drive program providing up to two free
Hong Kong – The Hong
partnership with business, academia and one-way, door-to-door rides per day for
Kong Housing Society set
non-profits. The following examples are older adults and persons with disabilities
up the Elderly Resource
models that can be adopted. in driver-owned passenger cars. In
Center to promote the
2015 the program expanded to include
concept of aging in place within the
ASIA-PACIFIC transportation to city wide events.
community. The website offers education,
training and assessments, as well as Hamilton, Ontario,
Seoul, South Korea advice on age-friendly housing design. Canada – The City of
– To make the Hamilton, in partnership
subway system more with the Hamilton
EUROPE
accessible to seniors, Council on Aging, Ontario Sport and
the city introduced several age-friendly Newcastle, England – Newcastle’s Older Recreation Communities Fund, McMaster
adaptations, including elevators at each People’s Delivery Plan develops service University and senior volunteers,
station, platforms with automatic gates, models, good practices, and a pipeline assessed walking trails across Hamilton
LCD screens displaying real-time train of schemes to ensure older people are to create “Let’s Take a Walk: An Age-
arrival times and comprehensive voice safely housed and can remain in their friendly Guide to 18 of Hamilton’s
announcements on trains. homes as long as they wish. The plan Outdoor Recreational Trails.” The guide
Canberra, Australia – Canberra’s Life’s includes technological care elements. assessed features including design,
Reflections Photographic Competition amenities, maintenance and esthetics in
Basque Country, Spain – Four towns
aims to celebrate the contributions of an effort to promote the health benefits
have launched the “Age-friendly Business
older people within the community. It of walking and outdoor activities.
Initiative,” an educational campaign to
encourages people of all ages and walks help businesses attract older customers
of life to use photography to promote affected by loss of mobility, vision and SOUTH AMERICA
“positive, diverse and thought-provoking hearing impairments and dementia. They
images” of older people. La Plata, Argentina –
have also partnered with the Alzheimer’s
La Plata was one of
Wellawaya, Sri Lanka Association to help businesses
the original 15 pilot
- HelpAge Sri Lanka understand the impact of dementia.
age-friendly cities in
launched a mobile eye
the WHO network. Since then, the city
camp for older persons in NORTH AMERICA has developed initiatives such as the
Wellawaya. The camp provided eye exams,
arrangement of sidewalks, public toilets
free reading and prescription glasses New York, New York, USA
and improved driver training in public
where needed, guidance on proper eye - The New York Academy
and private transport. As early as 2002,
care and recommendations to their eye of Medicine partnered
La Plata formed La Red Mayor (“The
hospital in Colombo for those who required with the Mayor’s Office
Senior Network”], a local network of clubs,
cataract surgeries. and the city council to launch “Age-
journalists and scientific organizations
China – China’s 12th “Five Year friendly NYC College Link,” America’s first
dedicated to making the city more livable
Development Plan on Ageing” includes searchable online database connecting
for older people.
developing a nationwide system of older older adults with mostly free educational
persons’ homes with 3.42 million more opportunities at local universities.

10
 Aging and Urbanization:
Principles for Creating Sustainable, Growth-Oriented and Age-Friendly Cities

An Agenda For Action

Against this backdrop, infrastructure investment that accounts for changing demographics provides an opportunity for
individual countries to extend their economic prosperity. When older adults have access and resources to participate as
full contributors and consumers, they remain an active part of the economy rather than a drain on resources.
The call for more demographically integrated cities begins with research and programs to spark partnerships. Around the
world, people are split about whether the responsibility for addressing these demographic shifts should fall to the private
or the public sector.
City governments are in a position to
begin investing in age-friendly programs, Which Of The Following Statements
but corporations and non-governmental
organizations (NGOs) have an equal role
Do You Agree With More?
to play. The McGraw Hill Financial Global I believe the private I believe it is purely
sector should take the responsibility of
Institute envisions three short-term
a bigger role in the public sector to
actions that can reorient investment to addressing challenges address the challenges
best promote growth: that face aging that face aging
populations populations

1.  evelop an economic case for

D
aging in place. While numerous
36% 64%
studies suggest economic benefits
from helping older adults remain in 39% 61%
their homes, there is still a need for
definitive research demonstrating 41% 59%
that aging in place aids economic
expansion. In an environment of 49% 51%
limited resources, discussion about
53% 47%
aging too often slips into a debate
about costs. This is particularly
89% 11%
true across Europe, where pension
reform remains a key element of any [Source: Edelman Berland survey on Aging and Urbanization,
commissioned by McGraw Hill Financial Global Institute]
dialogue about aging. The value of
vibrant, cross-generational communities — with broad populations that remain engaged in the daily life of cities
— represents an opportunity to find new markets and new growth. A comprehensive study of how aging in place
affects local businesses, real estate values, health care costs and local economic activity would complement the
recent work from the G20 and OECD to reframe the conversation about aging in a way that undeniably quantifies
the benefits.

2.  rovide opportunities for innovation. Unfortunately, the word “old” is now used to describe large numbers of
P
experienced, educated professionals with unparalleled perspective on how to improve the world. In the United
States, 23% of new entrepreneurs in 2011-2012 were 55-64 years old.22 IBM and Intel have each created
programs that allow younger employees to leverage senior expertise through technology, but innovation both for
and from older demographic groups remains insufficient. Some simple ways to promote innovation that attracts
seniors include loan programs dedicated to providing start-up funds for entrepreneurs over the age of 55;
corporate educational forums that provide examples of how to tap into senior expertise; and awards programs
to highlight corporate practices that foster cross-generational knowledge-sharing, a tactic with particular
impact in manufacturing and industrial professions.

22
Fairley, Robert W., Ewing Marion Kauffman Foundation, 1996-2013 Kauffman Index of Entrepreneurial Activity (2014) 11
 Aging and Urbanization:
Principles for Creating Sustainable, Growth-Oriented and Age-Friendly Cities

3. 
Create incentives for intergenerational policies and investment. Public-private partnerships draw private
investment, but government support (through tax breaks, fund-matching programs, and other specific
initiatives) often serves as the trigger. To reorient investment toward cross-generational priorities, governments
need to take the first step. This can include bringing together partners with an interest in serving an older
cohort of consumers, creating specific tax structures that reward demographically diverse initiatives, building
educational systems that account for lifelong learning, or focusing health care efforts on community-based
wellness. With community engagement that links the interests of both younger and older consumers in place,
cities and partners then will have the option to reinforce successful initiatives with targeted support.

Building the Ideal Intergenerational City

The ideal intergenerational city brings together human and financial capital to create and sustain wealth and social
value. Cultural, social and economic factors will feed different models of what this city looks like. A city with walkable
streets and a large, easily accessible medical infrastructure may find the transition quicker and easier than a sprawling
city with an economic base of manufacturing. Some cities may have a head start if they have capital readily available.
Either way, the confluence of urbanization and aging represents a great opportunity for all cities, where aging
populations are at once a source of economic value and a chief beneficiary. In the United States, for example, citizens
50 and older will soon hold more than 70% of all disposable income, with other developed and emerging economies
set to follow suit.23 Though logic dictates that capital is deployed in the places where more and more of us live, today’s
public policies, institutions, and lifestyles remain rooted in 20th century sensibilities.
Numerous questions have yet to be answered. What can
The confluence of cities do to ensure that all citizens have the opportunity to be
productive — and healthy — members of society and contribute
urbanization and aging to economic growth? How can they finance the changes they
represents a great need to make to reach this ideal? How can social institutions be
aligned to meet these goals? And, perhaps most importantly,
opportunity for all cities. what can be done to turn the current paradigm on its head, to
move from societies dominated by fear for public finances – and,
too often, the elderly themselves — into a world of opportunities for sustainable economic growth, longer-lasting
health for citizens and overall better lives?
The very breadth of these issues offers as many opportunities as hurdles. While so few cities have been able to
tackle the incumbent challenges wholesale, changing just one aspect of a city may make it more attractive for, and
responsive to, the needs of older people.

McGRAW HILL Global

FINANCIAL Institute
www.mhfi.com/mhfi-global-institute

Paper is authored by the Global Coalition on Aging and the McGraw Hill Financial Global Institute

12 23
Nielsen, Introducing Boomers: Marketing’s Most Valuable Generation (2012)