When a reporter asked famous bank robber Willie Sutton why he did it, he supposedly said "Because that's where the money is." Joseph Coughlin of the MIT AgeLab (and author of "The Longevity Economy" reviewed in MNN here) writes behind a paywall in Barrons about where the money is now, and how people are continuing to miss this opportunity.
The longevity economy is the emerging market to rule them all: the size of a new continent rising from the sea, populated with eager consumers but seemingly without the usual emerging market uncertainties. After all, the demographic seeds of our older future were sown long ago in the form of rising life expectancies, falling fertility rates, and (in many countries) a postwar baby boom now striding toward its later years.
Coughlin discusses an issue we wrote about recently, about why boomers are not moving into all the retirement housing developers have been building. He notes that the vast bulk of boomers are still too young for it, but that also, technology makes things a lot easier to stay home. With Amazon, Task Rabbit and Uber, you can order in just about anything now.
Many boomers are technically adept and don't want phones marketed to seniors because they already know how to use iPhones. They have Apple watches instead of those "I fell down and I can't get up" pendants. If they're like me, they have hearables, not hearing aids, and they use them to connect to their podcasts. We want stuff that anyone would want to use, not just older people. Coughlin writes:
Older consumers will no longer put up with companies that address only basic physiological or safety needs. New demands in the older market are arising from higher-level drives, such as goals, aspirations, aesthetic preferences, social needs, and talents. From the consumer's perspective, products that seem to deny the importance of such considerations (for instance, by implying that the consumer is infirm) may soon find themselves foundering, not propelled by the prevailing demographic tailwinds so much as capsized.
Coincidentally, Lindsay Cook writes in the Financial Times that longevity is "the biggest business opportunity of the 21st Century." She quotes Professor Andrew Scott, who describes The 100-year life. "Professor Scott reminded the audience that today’s 75-year-olds were no older in health terms than 65-year-olds were in the 1970s." Another speaker noted that "50 per cent of people aged 85 or older claim to be healthy enough to work."
Vicky Redwood, chief UK economist at Capital Economics, says the ageing UK population will transform the jobs market, as more people work into their late sixties or even early seventies. And they will have a growing influence on consumer spending as pension reforms allow them to cash in their lifetime savings and spend the money as they wish. Industry needs to recognise that ageing is not a problem, but is an opportunity.
Of course, this isn't describing everyone in North America or Britain. There are many who don't have savings, and many who don't have their health. But there are many millions who do. As Coughlin notes:
There may be other major changes coming to the world’s economies — the rise of artificial intelligence, for instance, or the effects of climate change — but in terms of sheer, mind-numbing predictability, the longevity economy beats them all.
Once again, demographics rule, and we might consider what these aging boomers are going to want in five, 10 or 15 years, and start planning for it now.