We need to talk about one of the biggest factors shaping America and the world over the next 25 years. Although it rarely figures in our headlines, posts and debates, global aging will have an impact on everything from individuals and families to governments and the global economy.
Global aging is the result of two trends occurring simultaneously in countries around the world: a steady decline in birth rates and an increase in average life expectancy. Therefore, by 2050, one-third of the world’s population will be 50 or older, and one-fifth will be 60 or older. This population group is estimated to total 2.1 billion people.
Although the phenomenon is global, the aging transition is occurring at different rates in different countries, including the United States, which leads the global average. The United States has reached a point where one in three people is age 50 and older. By the end of this decade, the first Millennials will turn 50, and by mid-century, seniors will make up the largest share of the U.S. population, surpassing children under 18 and adults ages 18 to 49. As time goes by, the elderly group will continue to grow, as shown in the figure below.
Aging transformation brings economic possibilities
The changing face of our population will have a direct impact on the way we all live and work, with consequent changes in consumer needs and desires. The wider economic impact will be huge – and is already happening. As AARP’s “Longevity Economic Outlook” report states, consumers over the age of 50 in the United States today already account for 59 cents of every dollar spent. Given its growth in both absolute and relative size, the impact on economic activity is only expected to increase.
Some industries are already ahead of the aging curve and starting to make business decisions based on the coming changes.
One of the most important and innovative industries – technology – is a prime example. At the recent CES (Consumer Electronics Show), one panel moderator noted, “AgeTech is a term we’ll be hearing a lot more over the next decade…it will have the power to transform millions, if not millions, of billion people’s lives to achieve sustainability. There’s no doubt that interest in AgeTech innovation is growing at CES, driven in part by data showing an increase in technology spending by more than 50 companies as the world’s aging transformation continues. , technology leaders will be able to find new growth opportunities through age-inclusive innovation and timeless design.
While the tech industry is defined by embracing change, the growing senior consumer base will touch upon everything from travel and hospitality to healthcare, financial services and housing. These other sectors of the economy will also need to adapt if they hope to benefit from the growing size and spending power of America’s older population.
Workforce can improve with age
In addition to preparing for shifts in customer bases and providing innovative services to older adults, global aging data also shows that businesses need to think differently about their workforces.
Traditionally, prime working age has been classified as between the ages of 25 and 54. Today, the United States is already facing a severe labor shortage, with the number of job openings exceeding the number of people seeking employment. Even if companies aren’t feeling the pinch now, data shows they will be in the coming years.
The growing 50+ population is a resource that businesses in need of a talented and experienced workforce can tap into. But proactive steps are needed to ensure this resource doesn’t go unnoticed.
As the shift toward an older workforce continues, companies should consider how to retain and reskill older workers and build teams and operating structures that take advantage of the wealth of experience and institutional knowledge older adults bring.
Research also shows that multigenerational teams—which include individuals with decades of experience working with early-career workers—are more productive, better able to serve a range of markets, and even tend to innovate more frequently.
As shown in the Growing with Age platform, a collaboration between the World Economic Forum, the Organization for Economic Co-operation and Development, and the American Association of Retired Persons, companies that support older workers and rely on them as assets and resources can generate a range of competitive advantages.
The growing number of adults over 50 is different from other groups in terms of spending power and valuable work experience. As their share of the population grows, it will be a huge, missed opportunity if we fail to tap the potential for stronger economic growth, increased labor productivity and millions of people living longer and healthier lives.
