Forget Bitcoin and real estate speculation. The longevity economy is rife for more upward potential – a realization that is taking hold for private and corporate investors. The numbers can’t – and shouldn’t be – ignored. There are 1.6 billion adults age 50+ globally with that number poised to double in the next 30 years.
A recent Barrons’ story, Aging Could be the Next Booming Business, caught our attention and fortifies what YouAreUNLTD has been saying since the publishing brand started. It notes that citizens over the age of 50 account for half of all consumer spending and 83 per cent of household wealth. The economic clout of this group is staggering. The story goes on to put this into perspective: “That should make catering to the aging population a lucrative opportunity for entrepreneurs and investors—one that could be akin to investing in the software boom in the 1980s or internet in the 1990s.”
That wasn’t just the opinion of the author of the story. It was the conclusion of aging experts and investors who attended a virtual 2020 Century Summit held by the Longevity Project and the Stanford Center on Longevity in December. Susan Golden, a former venture capitalist, pegged the value of the 50+ market at $8.3 trillion US and $22 trillion globally. (By comparison, Canada’s entire GDP for 2020 was estimated at $1.8 trillion.)
Summit panelist Paul Irving, chairman of the Milken Institute Center for the Future of Aging, called out the gap between the reality of changing demographics versus what businesses were offering. He said that companies are catering to a population that doesn’t exist and they must shift to design, build, and manufacturer for an older demographic. Some of the key areas of growth identified included: health care, real estate, and services, especially those allowing older adults to age at home, and financial services.
Companies have a unique opportunity to lead and to disrupt. Robert Chess, chairman of biotech Nektar Therapeutics, also a teacher at the Stanford Graduate School of Business, said: “For entrepreneurs that get in now, it’s the best you can want for an opportunity. You know the market is there and there is very little competition.” Businesses should engage and participate in the longevity economy now.
Those that successfully pivot and embracing a graying population include BMW, which has redesigned its dashboard for older adults and Nike, now offering shoes easier to put on and constructed with additional padding.
The aforementioned Milken Institute, a highly regarded non-profit think tank, has been keeping pace with the changes prompted by a shift in aging demographics. Its report, Silver to Gold: The Business of Aging, from its chairman, Paul Irving. “As aging continues to shape population ratios, investment in relevant products and services will prove lucrative for companies that reach out to older consumers,” it stated.
The report also emphasizes the enormity of the opportunity for businesses that invest in the longevity economy as the growth of an older demographic picks up pace. It points out that the United States, with adults over 60 controlling 70 percent of disposable income, and with those over 50 projected to increase their spending at more than twice the rate of younger adults in the next two decades.
A few interesting statistics to highlight: Older adults dominate 119 of 123 consumer packaged-goods categories, according to Nielsen, and adults over 50 spend almost half of all vacation dollars and account for 80 per cent of the luxury travel market. As well, they purchase more new cars than other age groups. And bucking perceptions, older adults account for four in 10 wireless service customers and 99 per cent report owning a tablet, laptop, or desktop device.
Bay Street is catching on, too. Last June CI Investments introduced the CI Longevity Economy Fund, the first of its kind. It’s focused on companies benefiting from changes in consumer behaviour, technology and health care resulting from the trend towards longer, healthier lifespans. Its holdings will be influenced by Dr. Joseph Coughlin, a global expert on demographic change, Founder and Director of the Massachusetts Institute of Technology AgeLab, and author of The Longevity Economy: Unlocking the World’s Fastest-Growing, Most Misunderstood Market.
Prevent FOMO (fear of missing out). Tap into the longevity economy. Interested in learning more? Talk to the experts at YouAreUNLTD.