Taiwan Faces Societal Aging Crisis, Must Leverage AI to Maintain Economic Growth: NDC
Taiwan is on the verge of becoming a “super-aged society” by 2025, with 20% of its population set to be 65 years or older. This demographic shift presents significant challenges to the nation’s economy, particularly in maintaining a robust labor force and supporting industrial development. However, experts from Taiwan’s National Development Council (NDC) suggest that leveraging advanced technologies like Artificial Intelligence (AI) could provide vital solutions.
At a conference hosted by Academia Sinica, NDC Deputy Minister Kao Shien-quey highlighted Taiwan’s looming demographic crisis and its potential impact on the nation’s economy. With nearly half of Taiwan’s population expected to be over 65 years old by 2070, the country is facing unprecedented challenges. To address this, Kao stressed the need for AI and other technologies to play a crucial role in mitigating the negative effects of an aging society.
Taiwan’s Aging Population: A Major Challenge for the Economy
Taiwan’s demographic trends reflect a rapid transformation driven by a low birth rate and longer life expectancy. By 2070, an estimated 46.5% of Taiwan’s population will be over the age of 65, making it one of the oldest populations in the world. This dramatic shift will place immense pressure on the country’s working-age population, which will fall below 50% by that time.
Kao warned that this sharp decline in the working-age population poses a “major warning sign” for Taiwan’s economy, as the country could face challenges in maintaining its labor force and sustaining industrial development. With fewer young workers entering the workforce, Taiwan will need to rely on innovation and automation to sustain economic growth.
AI as a Solution: Leveraging Technology to Combat Population Decline
Despite these challenges, Kao emphasized that countries with a high level of AI-readiness experience stronger GDP growth. As AI technology, particularly generative AI, continues to develop, Kao predicts that the number of people and companies utilizing AI will exceed those who do not, providing a significant competitive advantage.
She noted that AI technologies could serve as an alternative to mass immigration, which has been considered by some nations as a solution to population decline. AI systems, including large language models, would allow Taiwan to maintain its cultural identity while simultaneously addressing the challenges posed by a shrinking workforce.
“By developing AI and large language models, Taiwan can preserve its own language and culture, while also ensuring that its economy remains competitive,” Kao said.
Taiwan’s Role in the Global AI Landscape
As a leader in AI development, Taiwan is well-positioned to capitalize on these technological advancements. Kao highlighted that AI could help break through the limits imposed by an aging society and population decline. By integrating AI into various industries, Taiwan can enhance productivity, reduce the need for manual labor, and foster new opportunities for economic development.
In the coming years, Taiwan is expected to intensify its efforts to strengthen its AI capabilities, build “sovereign data centers,” and train its population in new technologies. As AI becomes a core component of industrial innovation, Taiwan can maintain its competitiveness on the global stage.
Table 1: Projected Demographic Trends and Impact on Taiwan’s Economy
| Year | % Population Aged 65 or Above | Impact on Working-Age Population |
|---|---|---|
| 2025 | 20% | Rising pressure on the labor force |
| 2030 | 23% | Increased demand for automation |
| 2040 | 30% | Potential shortage of workers |
| 2070 | 46.5% | Over 50% of the population will be 65+ |
NDC’s Plan for Addressing Aging Population
The NDC has released a biennial report outlining Taiwan’s population trends and the potential consequences of its aging society. In response, the council plans to propose a series of measures in February 2025 aimed at addressing these challenges. One of the main strategies will focus on utilizing AI to promote economic resilience and ensure that Taiwan remains a competitive player in the global market despite its demographic challenges.
Frequently Asked Questions (FAQ)
- What is the projected impact of Taiwan’s aging population on its economy?
Taiwan’s aging population will lead to a shrinking workforce, which could pose challenges for maintaining industrial development and economic growth. The working-age population will fall below 50% by 2070, which could strain the labor market. - How can AI help Taiwan overcome these challenges?
AI can provide solutions for automation, productivity enhancement, and labor shortages, allowing Taiwan to maintain economic growth without relying on mass immigration. AI technologies also enable the country to preserve its language and culture while boosting global competitiveness. - What is Taiwan’s AI readiness?
Taiwan is one of the leading nations in AI development, with strong infrastructure and research capabilities. The NDC aims to further strengthen Taiwan’s AI landscape by building sovereign data centers and training its workforce for AI integration in various industries. - What actions is the NDC planning to take?
The NDC plans to propose a series of measures in February 2025 to address Taiwan’s aging society, including increasing the development and application of AI to ensure economic stability and growth in the coming decades. - How will AI influence Taiwan’s future economic prospects?
AI is expected to play a significant role in driving Taiwan’s future economic growth by enhancing productivity, reducing the dependence on human labor, and fostering new industries and sectors that can thrive despite demographic shifts.
