Workforce aging, labour productivity, and digital empowerment in Europe

Purpose - The relationship between workforce aging and labour productivity has not been sufficiently explored, despite that both are crucial for socioeconomic welfare. This paper examines existing research on the impact of an aging workforce on labour productivity in Europe. Design/methodology/approach - The methodology includes a comprehensive literature review on the relationship between an aging workforce and productivity, an analysis of international productivity trends, and the examination of demographic databases from major international institutions to understand global and European population trends. Findings - While there appears to be a notable and negative association between the aging of the labour force and productivity, this relationship is not fixed; it seems to be contingent upon the evolution of the economy’s industrial structure. The paper concludes with reflections on potential levers and policies in the areas of industrial structure and digital empowerment. These measures will ensure that, both in Europe and globally, the population aging phenomenon becomes a smooth social transformation that contributes to the socio-economic well-being of future generations. Originality/value - The paper enhances the understanding of the relationship between workforce aging, labour productivity, and industrial structure in Europe. It suggests that the negative impact of aging on productivity is dynamic rather than static. As economies shift from labour-intensive to capital- and/or knowledge-intensive industries, the adverse effects of aging may be mitigated or even reversed. This insight encourages changes in the European industrial structure to better adapt to the ongoing trend of workforce aging.