If it's true that all roads of life lead to the future and increases in life expectancy are pushing that future ever further toward the horizon, then we should all buckle up and get ready for a much longer road trip than any of us may have anticipated. Welcome to the Longevity Economy, the remarkable financial consequence of more people living longer than ever before.
We live in The Age of Aging and it's reshaping our economic context in staggering ways. Oxford Economics coined the phrase Longevity Economy, defined as the total annual economic activity associated with people over the age of fifty. In the U.S. alone, it consists of 106 million people 50+ generating over seven trillion dollars of economic value per year. Seen as GDP, the U.S. Longevity Economy is larger than the economies of Brazil, Russia and India combined ($6.3 trillion) and larger than any other country's total economy with the exception of China.
Aging is an economic stimulus package. As people live longer and continue to contribute to the economy as wage earners, taxpayers and spenders, they are extending and expanding their national economies in proportion to their incremental years lived. When the Baby Boomers were born, we were a one-economy world. The economic value of being 50 and older was negligible at the time but now it is an entirely new and incremental economy.
Two fundamental things are driving this value creation: changing demographics and changing behavior within the new demographics. Since our goal is to understand the implications of these behavioral changes, here are a few to consider:
Sustained Employment. Whether out of financial necessity or personal preference, more aging Americans are choosing to work longer than ever before. According to a survey conducted by Merrill Lynch, 71% of pre-retirees are planning to continue some type of work as they pass retirement age (65); over half of the respondents indicated that they plan to start a new career in a paying position.
With more aging people working longer, they are behaving like younger people longer; i.e. they have a reliable source of income that fuels spending and the continuation of middle age consumption patterns. The economic implications are massive. These aging workers represent almost two-thirds of all employment and wages paid in the U.S. and nearly fifty percent of federal tax revenue. There's a reason we call them Marketing's Most Valuable Generation.
If you're marketing to people 18-49, remember that more 50+ people are acting like they are 18-49. Age can be a misleading guide for target marketing; if you market only by the numbers of age, you will be missing out on a number of dollars.
Simplification and Streamlining. These are the next major implications of the 50+ economy. People are aging at the same time that the world's getting more complex. They're compensating by over-simplifying, so they can focus more of their energy on what really matters -- quality time and quality of life. This is triggering a shift from the ownership of material things to the enjoyment of experiences. Things that seemed important to own along the way are getting the heave-ho, as owning less is starting to become the new more. The new joy in life is to lighten your load -- to eschew quantity of material things in favor of more quality experiences. Why tow the boat all the way to the lake again when I can fly to Paris and float the Seine? Unlike material things, experiences bring joy without maintenance.
Aging in Place. If you're in the business of aging, Aging in Place is the place to be. This is the term used to describe this generation's desire to spend their final years in the comfort of their own home, enabled by advances in housing amenities and the on-premise administration of health services. The burgeoning field of telemedicine has enabled people who are aging in place to transmit essential medical data to healthcare professionals who can remotely monitor their condition. It is also being used to track movement and other behavior within the home to assure family members that all is well and, if not, to provide the opportunity for timely intervention.
At the same time, progressive care providers and retailers are taking their products and services directly to the home, rather than waiting for the customer to come to them. This type of innovation is helping aging consumers enjoy uncompromised quality of life while alleviating the burden on local care facilities.
While we've learned about the Longevity Economy, marketers' focus needs to be on the Longevity Effect -- understanding the consequencesof more wealthy people living longer, more active lives. The numbers don't lie. Most of the world of modern marketing lives in the broader ecosystem of the Age of Aging. Growth can be hard to find these days, but this is one big opportunity hiding right in plain sight.
Photo credit: BoomAgers
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