And it is expected to exceed 30 per cent by 2050. Other advanced economies, most notably Japan, face even greater challenges from an aging population. This demographic transition has important implications for economic growth. Our estimates suggest that workforce ageing can reduce GDP per capita growth in Europe by 0.5 percentage points each year over the period 2020-2050.
The demographic headwind can to some extent be mitigated by working longer. The spotlight should be turned to policies that foster productivity gains. **** [Slide 6: Europe faces an R&D gap] Advanced economies have turned towards sectors where productivity gains are harder to achieve. The development of new ideas is therefore essential for unlocking future growth.