Most of what we read about economic and the aging population focuses on the economic imbalance of the smaller younger work-force supporting an aging demographic. While this trend is real, it focuses solely on the effects of the demographic on public entitlement programs such as Social Security. However, there are important positive economic factors as well.
According to the AARP, the 50 plus generation in the United State (mainly considered to be Boomers) represent the 3rd largest economy in the world, generating over $7 trillion dollars a year. Boomers account for 80% of US disposable income.
Many corporations are recognizing that catering to the aging population is at least as important as marketing to the younger demographics. This awareness will generate acceleration in innovation for improving the quality of aging in place.
Boomers Key to Economic Growth
A question for every startup: ‘What’s your 50-plus strategy?’
by John Burgess, AARP Bulletin, November 2013
Imagine an economy that ranks No. 3 in the world, after the United States and China. It’s got more than 100 million consumers generating $7 trillion a year in goods and services. They’re generally better off financially, with special interests in health, exercise, leisure travel, Internet shopping and digital gadgets. Every year, their numbers and buying power expand.
This is the 50-plus population in the United States — call them the “longevity economy.” Whether working or spending retirement dollars, older Americans are one of the country’s prime engines of commerce and jobs. In entertainment, apparel and other important sectors, they account for close to half of all spending. They hold 80 percent of the country’s personal net worth; they pay $420 billion a year in federal taxes and $250 billion at the state and local levels.
Yet they don’t get the respect these numbers should command, from either Washington or corporate America, says Jody Holtzman, senior vice president of thought leadership with AARP. Holtzman is a key member of an AARP campaign trying to change those perceptions by showing that older Americans are a huge, unified market that more than pays its way in society and can handsomely reward companies that grasp its importance. To truly tap the longevity economy, Holtzman says, companies need to provide product lines specifically tailored to the tastes and needs of older Americans, helping them lead active, satisfying lives for as long as they can.
Not surprisingly, many of the emerging products and services are health-related, but with a goal of keeping people at the top of their game, not treating ailments. Wende Hutton, general partner at venture capital firm Canaan Partners, says she sees new investor interest in health-related products that the consumer, not insurance, pays for. ReVision Optics has developed an “inlay” that is surgically inserted over the pupil to eliminate the need for reading glasses. It’s available now in Japan and Europe and undergoing regulatory evaluation in the United States.
The Longevity Economy
Boomers have 80 percent of the U.S. net worth
Boomers pay $420 billion in federal taxes
Boomers drive 25 percent of e-reader sales
For people who have reached their slow-down years, other firms are deploying advanced technology to help them age in place. For instance, Lively Inc. of San Francisco is beta-testing sensing technology to foster safety and connectivity for older people living alone. Low-cost motion detectors are placed around a home — on, say, the refrigerator, the medicine cabinet and the front door. The devices report wirelessly to a small central unit, which remembers the resident’s daily routine. If the pattern is broken, the unit sends out word — a text message to Dad reminding him to take his pills, perhaps, or to a boomer son or daughter saying that Dad hasn’t been out of his apartment for a while.
Still, too many business leaders “can’t get away from cultural biases about aging that really go back to the early 20th century,” says Holtzman. He’s determined to keep up the forces of change. A key objective: Build interest among the country’s venture capital firms, which have hatched many breakthrough technologies. He’s pushing investors to pose a particular question to every start-up that comes calling: “What’s your 50-plus strategy?”