Written by Chris Farrell
When older people gather together, it has a major impact on economic activity.
“Many forces will shape our economy and society in the coming decades, but no single factor will likely have as far-reaching an impact as the aging of our population.” Ben Bernanke, Economic Club of Washington , Washington, DC, 2006.
The aging of the global population is hardly a secret.
America’s population is aging rapidly, with nearly 1 in 6 people over 65, compared to less than 1 in 20 a century ago. Demographers predict that in 10 years, for the first time in U.S. history, there will be more people over 65 than under 18. Many countries in Asia and Europe, such as Japan and Italy, have far more elderly people than the United States.
There are many nuances behind the trend toward longer lifespans in the United States and other countries. Key factors include a sharp decline in birth rates, as well as medical advances, improved public health, higher standards of living, and higher levels of education. (Life expectancy in the U.S. declined for the second year in a row in 2021, but continues to see strong growth for decades.) Modern older adults in many parts of the world are taking advantage of longer lifespans. , spend more years earning and living, and rethink what your portfolio of activities will look like in the next chapter.
When older people gather together, it has a major impact on economic activity. For example, according to an AARP analysis by The Economist Impact, people aged 50 and over accounted for half of global consumer spending ($35 trillion) in 2020 and about one-third of global gross domestic product (GDP). contributed $45 trillion, or $45 trillion.
By 2030, the equivalent figures are projected to be $52 trillion and $65 trillion, respectively, adjusted for inflation. The report highlights that “the over-50s generate economic value, supporting employment and labor incomes and benefiting wider society and all other generations.”
The senior market goes far beyond AgeTech, a term that refers to products and services that utilize artificial intelligence, information technology, and other digital advances to improve the daily lives of older adults.
Across industries, there is still a long way to go in innovating for aging customers. That said, the culture is changing in a positive direction.
The Rolling Stones have released their first album of new music in nearly 20 years, with Mick Jagger, 80, and Keith Richards, 79, calling the record “a record that shows fresh life in the Jagger-Richards songwriting partnership.” The magazine’s reviewer reports that it was created. Financial Times.
ABC (DIS)’s new program “The Golden Bachelor” features a 72-year-old man who seeks love with a woman in her 60s or 70s. The show not only attracts large audiences, but is also “making a huge impression on social media and the broader culture,” said Ken Stern, chair of the Longevity Project, a collaboration with the Stanford Longevity Center. he writes.
Opportunities for an aging society
But business leaders and financiers don’t seem to care about the aging of the population for years (decades). Companies largely ignore older consumers and rarely involve them in marketing campaigns or product design. Older workers are often treated with contempt and are thought to be stuck in the past, unable to master modern technology, and lacking energy and creativity. Products made for seniors were bland with an unmistakable nursing home feel.
Testifying before the U.S. Senate Select Committee on Aging in 2019, Joseph Coughlin, director of the MIT Age Lab, said, “Instead of celebrating longevity, stories of old age present people with problems to solve rather than societal triumphs and opportunities.” It’s gone,” he said.
Four years after Mr. Coughlin’s testimony, there appears to be growing recognition that aging provides significant opportunities for innovation and profit. At least that’s my impression after attending a recent conference at the University of Southern California. The one-day conference — USC Age is Now/Aging is the Future Entrepreneurship Symposium — brought together venture capitalists, entrepreneurs, researchers, and industry leaders looking for opportunities in the aging market.
Efforts among entrepreneurs and financiers who specialize in disrupting established markets and ways of doing business are encouraging the broader business community to become more open to business, driven by older but healthier and more educated customers. We hope that this will encourage you to quickly embrace the innovation opportunities presented to you.
“This is not a sad story. This is a positive story,” Jeff Garrett, dean of the University of Southern California’s Marshall School of Business, said in his opening remarks. “What we need to think about is taking advantage of the opportunities created by an aging society.”
Much of the discussion at the conference focused on the rapidly growing AgeTech market, currently estimated at $1 trillion and on track to reach $2 trillion. Examples include smart appliances and connected devices in the home, wearable robots, e-learning platforms, and social companion robots.
“Things are getting heated,” David Krane, head of GV (previously known as Google Ventures), said during a panel session. “More and more people are waking up and recognizing the possibility of change.”
Asia leads the way
Why now? A big factor is Asia and its dynamic economy. Asia’s population is aging faster than other regions of the world. Asia’s population aged 65 and over was estimated at 414 million in 2020, and by 2060 the number is projected to reach 1.2 billion. Just imagine that by then, according to the U.S. Census Bureau, “one in 10 people in the world will likely be an older Asian.”
Additionally, entrepreneurs and financiers are beginning to see opportunities to create products and services that improve the overall quality of life for older adults in the United States and elsewhere. Innovations in technology will allow people to work longer (think remote work) and live at home longer (think technology-enabled appliances).
Take panelist and longtime investor Paul Scibetta. He co-founded his 22Health Ventures in Singapore. The company plans to be an early-stage specialty health tech company with rapid access to the US. With active programs in education, promoting intergenerational integration, and several other key age group initiatives, it is a smart home for finding innovations to fund. Other veteran venture capitalists and entrepreneurs who highlighted global opportunities include Ori Birnbaum, co-founder of Global Impact Ventures; Julie Wroblewski, co-founder and managing partner of Magnify Ventures; They include Katy Fike, partner at Generator Ventures and co-founder of Aging 2.0; and David Crane of GV.
The final factor is more sociological than economic. Almost every panelist had a story to tell about the challenges they faced caring for an aging parent. The pandemic has also shown venture capitalists and entrepreneurs with aging parents and relatives the potential for technology to limit the risks of social isolation and loneliness among today’s older adults. Aging may finally be getting personal in the tech community.
Tectonic movements take time to develop, especially initially. But the good news is that the venture capital community and entrepreneurs are increasingly recognizing that aging represents an economic opportunity for innovation, creativity, and profit.
-Chris Farrell
This content was generated by MarketWatch, a Dow Jones Company. MarketWatch is published independently of the Dow Jones Newswires and the Wall Street Journal.
(Ended) Dow Jones News
11-01-23 0922ET
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