The Importance of Aging in the Innovation Process of Organizations

The Importance of Aging in the Innovation Process of Organizations

DOI: 10.4018/978-1-6684-6351-2.ch005
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Abstract

The authors of this chapter aim to present the links between an aging workforce, innovation, and creativity. They address each of these themes individually, and then analyze the interconnection between the central theme (i.e., the aging workforce with creativity and innovation), and in the last point, analyze the innovative work behavior as a conclusive way of using the knowledge and skills of the aging workforce as a competitive advantage for an organization. Thus, this chapter demonstrates that the aging workforce, contrary to popular belief, is one of the age segments of organizations that contributes most to the innovation process since there is a symbiotic process between older and younger workers, and this is also evident in the creative process since innovation and creativity are intrinsic processes.
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Background

Aging

Aging is characterized by the natural biological process innate to any human being that occurs throughout their lifetime. At the same time, the phenomenon of demographic aging directly impacts the amount of labor available in each organization and country (Cepellos, 2018).

Derived from reduced fertility and mortality rates and increased life expectancy, and improved health and hygiene systems, concerns about economic expansion, growth, and workforce shortages have arisen as a result of population aging, as it is projected that unless there is a change in work patterns and retirement age the vast majority of individuals will be of retirement age (Settels, 2022). Thus, the Organisation for Economic Cooperation and Development projections indicated that between 2000 and 2020, there would be an increase of 63% of the labor force aged 50 to 64 (The Organization for Economic Cooperation and Development, 2020).

This is already verified in developed countries such as those belonging to the European Union, Sweden, Canada, Australia, Israel, China, and Mexico, among others, thus showing that this is a worldwide phenomenon (Rinsky-Halivni et al., 2022; Rodriguez & Saenz, 2022; Stengård et al., 2022; Stone & Harkiolakis, 2022; Zhang & Wood, 2022). To combat labor shortages in developed countries due to an aging population and a low birth rate, most countries have adopted policies such as postponing the retirement age to extend working life in order to mitigate a possible shortage of workers in the current labor market, and as aging has become a global phenomenon, this practice has also become prevalent worldwide (Rinsky-Halivni et al., 2022; Rodriguez & Saenz, 2022; Stengård et al., 2022; Stone & Harkiolakis, 2022; Zhang & Wood, 2022). On the other hand, this issue is only being discovered in underdeveloped countries such as Bangladesh. However, experts are already saying that the retirement age will have to be raised for retirees to be economically self-sufficient and independent (Islam et al., 2022).

Times have changed, and currently, many individuals intend to work beyond retirement age, either because they wish to remain active, either physically or intellectually, or to make up for some insufficiencies in the pension they will receive, or even due to the difficulties of social security systems. Simultaneously, new knowledge about physiology and human anatomy and cumulatively about human aging was developed and acquired (Pinto et al., 2015). Individuals must realize that aging does not translate into something negative but may very well be the opposite to be something positive for the individual, such as improved health, financial security, and social and family participation (Pinto et al., 2015). Due to an increasingly aging population, but also more active, it was considered necessary to define the concept of Active Aging based on three pillars: health, participation, and security, with the perspective that people can maintain productive lives in society (World Health Organization, 2012).

Key Terms in this Chapter

Knowledge Transfer: Refers to the exchange of life experiences, technical knowledge, and practical knowledge among the various employees of the organization, either between age segments or within the same age segment.

Innovative Work Behavior: This translates as the innovative behavior of an individual, applying his or her creativity, skills, and knowledge in a process capable of generating innovative ideas and elaborate projects that allow putting those ideas into practice regarding new products, new ways of producing, or reinventing a product.

Aging: Is based on the demographic aging of the population inherent to the increase in average life expectancy and improvements in health and hygiene conditions, together with the decrease in birth and mortality rates.

Economic Growth: It consists of the increase in the production of one or several economic units over one or several periods. Such an increase presupposes the nation's enrichment and improving the standard of living.

Skills: Consists of the knowledge, skills, and attitudes inherent to an individual user in performing an individual's function.

Innovation: Its goal is to create something new or introduce novelties through the renewal or re-creation of a given product or way of producing. Such a process necessarily means changing or improving a given product or way of producing and is one of the engines of economic growth.

Creativity: This is a competency described as the ability to imagine, produce, create, or invent new ideas or concepts; such thinking is the predecessor of the innovation process through the creation of a new idea or way of looking at a problem or a new process.

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