With aging, where should innovation go? -- Interpretation based on the perspective of human capital

Abstract Background With population aging, this demographic dividend diminishes, which may have implications for innovation in a region. Understanding the relationship between population aging and innovation is crucial for addressing economic challenges associated with an aging population. Methods This study utilized panel data on population aging and innovation from 252 cities between 2005 and 2014. Various estimation methods, including the fixed effects model, the generalized method of moments (GMM), and the mediation model, were used to analyze the data. These methods allowed for a comprehensive examination of the impact of population aging on innovation and the role of human capital in mediating this relationship. Results The findings of the study indicate that both the 60-year-old and 65-year-old population significantly hinder innovation. The GMM suggests that innovation is "path dependent," meaning that past levels of innovation do not alleviate the negative effects of population aging on future innovation. Additionally, the mediation model analysis demonstrates that human capital plays a crucial role in mediating the relationship between population aging and innovation, highlighting the importance of investing in human capital development. Conclusions The findings of this research highlight the obstacles that population aging presents to fostering innovation. Overcoming these obstacles necessitates strategic investments in human capital and policies that support innovation. It is imperative for policymakers to implement recommendations that address population aging and encourage innovation in order to navigate the challenges posed by an aging population and promote a vibrant and dynamic economy.