By Paul Irving & Anusuya Chatterjee
Apple Computer once famously advised us to “think different.” It’s time to think different about America’s ongoing demographic shift -- and to think seriously about the opportunities it holds.
For decades, we’ve been conditioned to believe that growth is driven by the entrepreneurship, consumerism and aspirations of the young. We’ve learned about new technologies, products and services from our children, often the early adopters, who lead us to new ways of communicating, working and playing. Advertisers and marketers see the young as most open to new fashion and change, and as prime consumer targets. Products and services aimed at the young abound.
Conversely, there is a widely held view that aging hangs like a dark cloud over individuals, families, communities and many countries in the developed world. In the U.S., we hear daily that the aging of more than 78 million baby boomers brings with it the burden of entitlements, the inadequacy of pensions, and the rising costs of healthcare.
However, there’s a silver lining in the cloud of aging – and it’s big. Aging boomers represent a powerful wave of potential and opportunity. Longevity is not diminishing their influence; it’s changing their focus as consumers, leaders, learners and workers. Demography is destiny, and the size of a generation counts. Now is the time for businesses, investors, educators, public policy makers and others to share in the fruits of longevity, or miss the chance to benefit from a massive emerging market. Are the boomers capable of driving the economy forward?
Just look at the numbers. In 2010, according to the Bureau of Labor Statistics, disposable income for Americans 50+ was over $3 trillion. That age group also accounted for almost one half of all expenditures: spending over $250 billion on apparel, personal-care products, education and entertainment alone. Leading market analyst Nielsen, together with BoomAgers, says that boomers are “as likely as younger cohorts to experiment with new products.” There is very clearly is a growing hunger for products and services tailored to satisfy the needs, interests and aspirations of the rapidly growing mature consumer market.
Another enduring misperception is that the 50+ are technologically challenged and unplugged. In fact, aging consumers are tech savvy and eager for more. The same Nielsen report states that boomers spend $7 billion on online shopping, are quite active in social media, and represent one of the highest TV viewership groups -- a wake-up call for those in entertainment, marketing and brand integration. Savvy companies are already serving up content for this target group: from NBC, Proctor & Gamble, and Verizon to Nintendo. These and other forward-thinking companies are both expanding existing businesses, and creating whole new ones focused on an aging demographic in areas such as financial services, lifestyle, dating, fashion, travel and education.
Today’s difficult job prospects for both young and mature workers is too often misconstrued as the older generation cheating the young out of employment opportunities. Is that perception reality? The Marigold effect survey conducted by Encore.org and Participant Media (inspired by the movie “The Best Exotic Marigold Hotel”) affirms that 8 out 10 mature workers want to help the younger generation succeed through mentoring. According to the survey, more than 80 percent of those currently working say they would be willing to mentor younger people entering their fields, even if they had to sacrifice their own free time. Nearly 70 percent are either very or somewhat willing to take other actions that involve a financial sacrifice, such as cutting work hours or pay.
Boomers’ intergenerational contributions are not limited to imparting wisdom, but also include acting as a catalyst in job creation. A large number of boomers aspire to an entrepreneurial path, and their new businesses bring job opportunities, growth and prosperity for all age groups. According to the Kauffman Foundation, 1 in 5 new entrepreneurs in 2011 were aged 55-64; almost half of all new entrepreneurs were between the ages of 45 and 64.
Entrepreneurship doesn’t stop at an age traditionally thought of as the beginning of retirement. Penny Johnston of Waldoboro, Maine started her business of making doormats from recycled lobster trap float-rope at age 69. To help mature workers fulfill their dream of running their own businesses, Randal Charlton’s Detroit-based Boom! The New Economy charts pathways for the 50+ to pursue career changes, entrepreneurship, and meaningful volunteer services. As many as 9 million boomers have already launched their “encore career” with another 31 million waiting their turn, according to a recent survey. Fanning these entrepreneurial urges among the boomers is a key to economic vitality.
The longevity economy - understanding and capitalizing on it – and thinking different - can be an important part of the solution to America’s economic challenges and the challenges of many aging societies. It’s a powerful opportunity driven by dramatic demographic shifts and a hunger for products, services, innovation, and ideas focused on a huge, rapidly evolving and lucrative market – our aging population.
Paul H. Irving is the President of the Milken Institute and Anusuya Chatterjee is a senior economist at the Milken Institute.
