Monetary Matters with Jack Farley Investing in Gray | Pictet’s Maria Vassalou on Aging Demographics and Technological Innovations
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Dec 29, 2025 
Maria Vassalou, Head of the Pictet Research Institute, dives into the urgent challenges of aging demographics and the role of technology in economic growth. She explains how countries like Japan and Italy face daunting dependency ratios, which could threaten their economies. Vassalou argues that robotics and AI can substitute declining labor, boosting productivity. The conversation also highlights which sectors, like housing and healthcare, stand to gain, while cautioning against long-term stagnation if investment in tech doesn't happen now.
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Demographics Are A High-Confidence Macro Trend
- Demographic projections are unusually robust because they rest on births and deaths that change slowly over decades.
- Pictet forecasts dependency ratios above 50% in many developed countries within 20–30 years, sharply raising retiree burden.
Technology Is The Natural Substitute For Shrinking Labor
- Declining labor supply will reduce output unless substituted by something else in the production function.
- Robotics and AI can substitute scarce labor and boost productivity, altering gloomy demographic-only forecasts.
Invest Only Where Automation Meets Demand And Institutions
- Invest where automation can scale, where demographic demand persists, and where institutions support diffusion.
- Prioritize sectors with cheap, diffusable tech, skilled workers, and supportive infrastructure or regulation.