Shin Hyun-song, Governor of the Bank of Korea, described demographic changes as a "formidable challenge" but emphasized that it is possible to foresee these changes and prepare accordingly. He noted that advancements in artificial intelligence (AI) and productivity could present new opportunities in an era of declining population.
Shin made these remarks on September 2 during the opening of the conference titled "The Economics of Aging and Longevity: From Challenges to Opportunities," co-hosted by the Bank of Korea, the Centre for Economic Policy Research (CEPR), and the Organisation for Economic Co-operation and Development (OECD).
The governor identified demographic changes as one of the most critical long-term issues facing central banks, as they will influence productivity, potential growth rates, and long-term equilibrium interest rates.
He stated, "What is happening in Korea may serve as a preview of what many other countries will soon face," adding, "Demographics are a powerful force, but as the saying goes, 'demography is not destiny.'"
Shin highlighted the creation and dissemination of knowledge as key factors influencing productivity and long-term growth. He stressed the need to reassess the relationship between productivity improvements and population decline in light of the emergence of AI.
He also pointed out that unlike short-term shocks, demographic changes can be anticipated decades in advance. "While we often focus on responding to short-term shocks, demographic changes can be predicted well in advance," he said. "Now is not the time to delay but to prepare."
Shin assessed Korea's competitive edge in the AI ecosystem and semiconductor industry as opportunities in the face of a declining population. He remarked, "Today, Korea stands at the center of the AI ecosystem, benefiting from unprecedented semiconductor production and investments driven by AI. I believe this discussion will lay a valuable foundation for our preparations."
* This article has been translated by AI.
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