Digital Transformation in the Western Hemisphere

Aging in the Western Hemisphere

The Western Hemisphere is a rapidly aging region because of an increase in life expectancy coupled with a decline in birth rates. Aging is the sign of a healthy society, but countries must support healthy and dignified lives for older people, strengthen care infrastructure, and prepare the workforce for this demographic shift.

Fifty years ago, just 4 percent of the region’s population was over the age of 65, and that proportion has more than doubled, growing more rapidly than Africa, the Middle East, and South Asia, its age demographic peers in 1970. In the next decade, almost 12 percent of the population will be over the age of 65, and one in five people in the Western Hemisphere will be over 65 by 2050. 

People in the region are also living longer. Fifty years ago, the life expectancy in the region was about 60, with Haiti and Bolivia in just the mid-forties. The current life expectancy is now close to 75 years and is projected to hit 80 in the next 20 years.

Of course, some countries in the region are already experiencing this demographic shift, while others are much further behind.

Cuba is the oldest country in the region, with a life expectancy slightly higher than that of the United States. By 2040, Cuba is projected to have a proportion of the population over 65 surpassing the current proportion in Japan, and almost one in three Cubans will be over 65. 

Haiti is by far the youngest country in the region. Unlike other countries in the Western Hemisphere, the proportion of the population over the age of 65 has fluctuated in the last 50 years and is not consistently increasing. Only 1 in 10 Haitians are projected to be over the age of 65 by 2050. 

Although Costa Rica’s aging is trending close to the region, it is significantly older than its neighbors in Central America, which are some of the youngest countries in the world.

As the population in the region gets older and people live longer, the fertility rate is simultaneously going down. Globally, people are having fewer children, and the Western Hemisphere matches this trend.
 

While the fertility rate in the region was higher than the global average 50 years ago, the rate is now lower. A fertility rate of around 2.1 children per woman of childbearing age is considered the “replacement level,” meaning that a population replaces itself each generation (not including other factors such as migration). Since 2015, the region has been below replacement levels. Combined with a growing older population, a decline in the number of young people means that there are fewer people who will participate in the workforce, deposit into pension and other social insurance systems, and care for those older people.

The fertility rate is going down in every country in the region, but not every country is experiencing this decline at the same rate. 

In 1970, Honduras had the highest fertility rate in the region, but it will be below replacement levels in the next 10 years. 

Unlike most other countries in the region, Barbados has already had a fertility rate below replacement levels for the past several decades (since 1980).

In contrast to the regional trend, Bolivia’s birthrate is the second highest in the region and will not be below replacement levels until 2050. 

Disasters in the Western Hemisphere

The Western Hemisphere also faces many types of disasters, including hurricanes and tropical storms, earthquakes, volcanic eruptions, drought, pandemics, and landslides. Challenges from disasters are often made worse by a lack of technological capabilities, weak infrastructure, and bureaucratic mismanagement. Improved digital disaster warning and management systems could provide critical support to the region as it prepares for future disasters. 

Since 1970, disasters have cost the region almost half a trillion dollars, killed more than half a million people, and impacted almost 300 million. 
 

Many countries in the region are already committed to disaster risk reduction (DRR) policies and have signed onto international frameworks and agreements such as the Sendai Framework. The Sendai Framework is an agreement under the United Nations’ Sustainable Development Goals and provides a roadmap for countries to better prepare for and recover after disasters. The framework highlights four priority areas for disaster preparedness: understanding disaster risk, strengthening disaster risk governance, investing in DRR measures, and developing a “build back better” approach to post-disaster recovery. 

Covid-19

The Covid-19 pandemic revealed weaknesses in many countries’ healthcare, social insurance, and DRR infrastructure. Older adults were disproportionately impacted by Covid-19: aside from facing significant risks of developing severe or even fatal symptoms from the Covid-19 virus, older adults also experienced a drop in economic stability and a rise in physical and financial abuse during the pandemic. Poorer health outcomes and higher mortality among older adults in the region are proven to be associated with feelings of greater perceived loneliness, lower life purpose, higher memory concerns, and greater discrimination, all characteristics heightened by the pandemic. 

The pandemic has also compounded the impact of other disasters in the region. Many hospitals and healthcare systems have been overloaded caring for Covid-19 patients and struggle to absorb other patients who might be impacted by other disasters. For example, in Central America, Hurricanes Eta and Iota destroyed critical infrastructure and agriculture systems throughout the region in November 2020. 

Preparing for an Aging and More Disaster-Prone Region

It is inevitable that the population of the region will age and that the countries in the Western Hemisphere will continue to face various disasters.

Countries should begin preparing now for an aging population. Some countries will be “building the car while driving it,” but enacting policies now and in the near future can still help them support a healthy older population, strengthen their social insurance infrastructure, and prepare their workforce for the coming demographic shift.

Countries will need to prioritize strengthening healthcare and aging care infrastructure to better support an older population. As countries age, the region’s older population will also require increased care for chronic illnesses, including specialized doctors and treatments, along with long-term care either from family members or professionals. The region will need to increase its spending on healthcare, now only at 4.1 percent of gross domestic product (GDP), lower than in other aging regions such as Europe and Africa, and significantly lower than Japan, which has the world’s oldest population and spends 11 percent of its GDP on healthcare. 

The region should also prioritize providing a high quality of life for older adults, which will mean creating a society that older adults can easily navigate. This includes increasing livability and accessibility in both urban and rural contexts, providing safe and convenient transportation, and prioritizing social and civic engagement.

Countries will also need to modernize and reform their pension systems to be prepared for a greater demand for government support for the older population, particularly regarding insurance coverage and pension payouts. As the dependent population (individuals over 65 and minors under 15) grows larger and the working-age population (individuals between the ages of 15 and 64) shrinks in the coming decades, there will be an imbalance between pension payouts and those who contribute to those funds. If governments do not have the resources to support the elderly, an even greater portion of the population could become vulnerable to poverty. 

As older employees leave the workplace, they take with them institutional knowledge and best practices that the younger generation may not yet know. Older and younger generations will need to work together to find innovative solutions to fill the gaps in personnel through technology and employee trainings, among other solutions. 

In order to better prepare for and recover after disasters, countries in the region need to implement comprehensive DRR infrastructure through three priority actions:

1. Invest in pre-disaster infrastructure.

Countries need to invest in disaster warning systems and structural measures to better prepare for disaster events. Early-warning disaster mitigation systems can provide critical warnings in advance of a disaster and save hundreds of lives. Structural measures are the most important part of DRR efforts.

2. Establish DRR institutions.

Countries need to develop and implement legal frameworks and institutions related to DRR to create a systemic response to disasters. These institutions and frameworks also need to be well funded and thoughtfully integrated into country budgets. Countries should also have a committee in their legislatures that is responsible for disaster relief, potentially overseeing or consulting with their executive branches on actions related to disasters, managing the financial resources for DRR initiatives, and taking responsibility for informing the public of DRR initiatives.

3. Implement build back better initiatives.

During disaster recovery efforts, countries should focus on strengthening infrastructure and disaster warning systems and mitigating the impact of future disasters. For example, homes destroyed during an earthquake should be rebuilt using earthquake-resistant technology.
 

How Digital Transformation Can Help Countries Prepare

Digital transformation policies can help countries in the Western Hemisphere prepare for the inevitabilities of a demographic shift due to an aging population as well as for a variety of disasters.

To prepare for an aging population:

• Design a strategy to support a healthy aging population. This includes creating smart cities, expanding accessible public transportation, and facilitating continuing education for older adults.
• Strengthen the healthcare sector. Digital initiatives such as telemedicine and data-driven healthcare can help healthcare workers better care for patients with chronic illness, which is more common in old age.
• Support caregivers. Caregivers in the Western Hemisphere include both professionals and family members. Digital solutions such as wearable robotic devices and apps that track symptoms and doctor’s appointments can help caregivers better support older adults.
• Modernize insurance and pension systems. Countries should design pension schemes and insurance systems that offer coverage to both formal and informal workers to increase accessibility to government resources for all employees and help employees plan for their retirement. The digitization of these systems can offer greater knowledge regarding financial planning, increase trust in government, and allow companies greater data-sharing capabilities, among other benefits.
• Prepare the workforce. Along with a shrinking working-age population, countries are facing an increasing push toward workforce automation to replace older employees who are leaving the workforce. Many sectors, particularly in the formal economy, can benefit from automated procedures rather than rely on human capital, which further reduces the need for in-person jobs. The automation of jobs in the informal sector is nearly impossible, meaning that countries will continue to rely on informal workers even as the working-age population decreases. The digitalization of immigration systems can also help facilitate legal migration to fill gaps in the workforce and ensure both faster processing systems and more dependable information.
• Encourage the silver economy. An older population will also bring many opportunities for economies in the region. As the population ages, more people will begin to participate in the “silver economy.” Older people are major contributors to the economy: they often have significant spending power, they travel, and they consume services such as healthcare more than younger populations. Countries should prepare their workforces now for jobs in industries that older populations use.
• Strengthen the community of practice. Several multilateral organizations have already identified aging as a policy priority and are working with countries in the Western Hemisphere to prepare for an aging population. Countries in the Western Hemisphere can also benefit from the experiences of other countries with aging populations, such as Japan, Greece, and Italy, to design and implement aging strategies.
   

To prepare for and build back better after disaster:

• Build a systemic response to disasters. The goal is to have disaster mitigation policies that remain in place regardless of changes in government and include a whole-of-government approach. This also includes ensuring that disaster responses are adequately funded and that country budgets plan appropriately for disaster infrastructure, immediate relief, and rebuilding. This would streamline the DRR processes, increase DRR know-how, and prevent incomplete responses to individual disasters.
• Plan ahead. Advanced planning for disasters is almost always better than trying to mitigate a disaster after it has occurred. Make certain that policies, procedures, and expected roles are identified in advance of a disaster and that community networks are in place prior to a disaster to adequately deploy disaster infrastructure. 
• Protect traditional infrastructure. Traditional infrastructure such as electricity or the internet are the basis for newer technologies. For innovative digital solutions to work, they will need to rely on traditional infrastructure. Donors, especially development agencies, should keep this in mind when promoting technological solutions.
• Develop and put in place inclusive legal frameworks. Legal frameworks, informed through public consultation of key stakeholders that require governments to plan will encourage and maintain advanced planning for disaster mitigation policies but will also help build a systemic response to disasters. 
• Prioritize addressing gaps in technological access when directing donor support.  Different populations will have varying levels of access to technological tools such as reliable internet or smartphones. Donors should recognize this gap and tailor their support to ensure maximum efficiency of implemented policies.
• Learn lessons from other regions and strengthen a community of practice. Asia-Pacific countries, in particular, have vast experience in disaster mitigation efforts. Latin American and Caribbean countries could benefit from other countries’ experiences and expertise as they prepare future DRR policies. 
• Involve the target population when testing mitigation technologies. Donors, including the private sector, governments, and development partners, should address the following questions: Can the community effectively use the technology we are designing and implementing? Is the technology accurately addressing the needs of the target population?
• Balance private sector interests with the interests of the public. In the event of a disaster, the private sector will be focused on economic losses, whereas the public may be focused on the loss of housing or a public health emergency. Disaster mitigation policies should seek to balance these interests and maintain equitable procedures. 
• Build upon Indigenous knowledge. Many Indigenous and traditional communities have unique knowledge about land management and earth cycles. Their deeper expertise is especially useful in instances of fire and floods.

Key to all digital transformation efforts is ensuring that digital solutions are designed for and tested on the target population. For example, a digital solution that works only with internet may not be usable after a complex emergency or may not be usable for an older adult with little technology training. Digital solutions must be tested on the target population, and users should also be offered training so that they can effectively use these solutions.

Donors and development agencies play a key role in designing and implementing digital transformation efforts. Donors can help countries in the region develop both short- and long-term DRR and aging strategies. Donors can provide technical assistance to countries to help implement digital technologies and train users. Donors can also help design legislative frameworks to help governments prepare a systemic response for both aging populations and disasters.

Investment in digital solutions will be key for counties in the Western Hemisphere to better support an aging population and prepare for and recover from disaster. These investments will be critical to ensuring that countries are prepared for decades to come and can promote a healthy and safe population.

About the Authors

Daniel F. Runde

Senior Vice President; William A. Schreyer Chair and Director, Project on Prosperity and Development

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Daniel F. Runde is senior vice president, director of the Project on Prosperity and Development, and holds the William A. Schreyer Chair in Global Analysis at CSIS. A global thought leader and change agent, his work centers on leveraging U.S. soft power and the central roles of the private sector and good governance in creating a more free and prosperous world. Mr. Runde has been recognized for influencing the debate on USAID-State Department relations, as an architect of the BUILD Act, and led the debate surrounding the role and future of the World Bank Group. Mr. Runde has also influenced thinking about U.S. economic engagement with Africa (of which he is in favor of much more) and domestic resource mobilization. Mr. Runde holds the Officer’s Cross in the Order of Isabel la Católica, a Spanish Civil Order.

Linnea Sandin

Consultant, Americas Program

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Linnea Sandin is a consultant and the former associate director and associate fellow with the Americas Program at the Center for Strategic and International Studies, where her research focuses on security, migration, and gender equity in Latin America and the Caribbean, specifically in Mexico and Central America. Before joining CSIS, she worked as a paralegal at the Boston law firm Chin & Curtis, LLP, specializing in business immigration matters, and as a field organizer for Organizing for America (President Barack Obama’s reelection campaign) in southern Colorado. Ms. Sandin holds a B.A. in Latin American studies from Mount Holyoke College and an M.A. in law and diplomacy from the Fletcher School of Law and Diplomacy at Tufts University. She is fluent in Spanish and has a working knowledge of French.

Arianna Kohan

Program Coordinator, Americas Program

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Arianna Kohan is program coordinator with the Americas Program at the Center for Strategic and International Studies (CSIS), where she facilitates event planning and outreach efforts while also supporting the project's research agenda. She previously served as an intern for the Americas Program. Her research interests include the changing political landscape in Argentina, terrorism in Latin America, and women's representation in government. Ms. Kohan holds a B.A. in international affairs with concentrations in security policy and conflict resolution from the George Washington University.

Special Thanks to:

• Henry Shuldiner, Intern with the Americas Program
   

This project was made possible with support from the Japan International Cooperation Agency.

A product of the Andreas C. Dracopoulos iDeas Lab, the in-house digital, multimedia, and design agency at the Center for Strategic and International Studies.