May the Fourth be with you
At this point, we’ve all seen the data and heard the alarms. The world is aging! The silver tsunami is cresting! Pension schemes and health systems will collapse!
But why not take a breath? Look around. It’s time to celebrate the incredible achievement of human longevity and the amazing potential to be realized when we break free our unrecognized, yet institutionalized ageism.
We might just realize that we’ve ignored the single greatest economic opportunity since the last industrial revolution. And, we’re doing so at the expense of business and national economics around the globe.
In this age of hyperbole that statement could seem more of the same. How could longevity offer so much promise and so much peril at the same time? To us at EconomyFour, it’s about a shift in perceptions and policy – it’s about recognizing what’s changed and moving our collective frame of reference from numeric age to life stage.
The mess we made
To give context on the state of aging and the origin of our ageist beliefs, we need to look back nearly 140 years to Germany in 1889 and the creation of the first old-age social safety net program. Although this history is widely understood within the “aging community,” it may be new to many in business. Here’s the primer.
That first Germany pension was for citizens who were older than 70. The architect of the system, Otto von Bismark, was 74 at the time. It wasn’t until 20 years after his death that eligibly eventually shifted downward to 65. To get the context, it’s essential to note that life expectancy in Germany was about 38 for males and 41 females.
As we marched through the 20th Century, similar social welfare systems popped up across Europe, the Americas, and East Asia, and 65 – even younger in some countries – became the standard pensionable age. In the United States, it also became the age when the state took responsibility for healthcare. In essence, 65 became the official age when individuals stopped being considered economically productive. 15, on the other hand, was considered the age when youth became economically productive. The ages of productivity and dependency were established and haven’t changed much since.
Governments further codified the age of dependency through laws that forced people into retirement. Mind you, this was done with the best intentions in mind and with an eye to decreasing youth unemployment. But those policy decisions institutionalized the idea that a person’s life stage was tied to their chronological age.
While many mandatory retirement systems have been abolished, it is still legal in some countries like Japan. Some governments, like the United States, have attempted to curb age discrimination through legislation. However, in their attempts, they further reinforced and institutionalized old age – in the US it is illegal to discriminate against anyone over 40 based on their age. Ageist beliefs and bias, once again, inadvertently fixed into our social conscious for over 100 years.
The irony, and what’s either unrecognized or willfully ignored, is that from 1889 to today, everything has changed. Life expectancy has more than doubled. In Germany today, a newborn male can expect to live to 79 and a newborn girl to 83. The average life expectancy in Monaco is 90, and more than half of all children born today in developed nations are expected to live past 100.
Yes, there are still the old and the infirmed. Yes, there are older adults living economically challenged or depressed lives, Yes, there are more chronic conditions and higher numbers of debilitating, age-related disease like Alzheimer’s. Yes, this is causing incredible strain on social welfare systems. And yes, that’s been further exacerbated by declines in overall birthrates.
But somehow, our societies refuse to see the realities right that are right in front of us. We keep pushing older people out of the economy at rates that no longer make sense. Our societies buttress and pay for outdated social welfare systems that they can no longer afford. It’s a vicious cycle that has made a bad situation worse. Our societies cannot seem to help themselves.
Change is afoot
Visionary leaders began reframing aging as an opportunity just over a decade ago by building awareness. This was led in large part by notable academics, leading non-profit institutions, forward thinking businesses, and innovative government agencies.
A select group of organizations began attacking the gloom and doom naysayers around the turn of this century. They worked with organizations like the Organization for Economic Cooperation and Development (OECD), the United Nations (UN) World Economic Forum (WEF), and engaged influential media organizations like the Financial Times and The Economist to shift the attitudes around aging and spark innovation for longer lives. Interestingly, most of the awareness is happening in Europe and the United States.
We’ve identified ten milestone publications over the last decade that have really moved this conversation forward:
- The UK Department for Work and Pensions noted in the 2011 report The Macroeconomic Impact from Extending Working Lives that “a one-year extension in working life increases real GDP by about one percent about six years after its implementation.”
- Euromonitor – one of the leading providers of strategic market research – estimated in 2015 that the global spending power of consumers aged 60+ will double over ten years to reach $15 trillion USD by 2020.
- Atul Gawande releases his book, Being Mortal, in 2014, where he addressed the realities of living longer and our health system limitations to extend quality life.
- Jo Ann Jenkins, AARP’s CEO, released Disrupt Aging, where she challenged outdated beliefs on aging
- Oxford Economics found in 2016 that the annual value of all US economic activity for the 50+ was $7.6 trillion – making the longevity economy the third largest economy in the world after the US and China
- Lynda Gratton and Andrew Scott published The 100-Year Life – Living and Working in the Age of Longevity in 2016 that outlined the challenges and choices that individuals need to make in order to turn longer lives into a gift, not a curse.
- IBM released the Periodic Table for Aging Technologies in 2017 developed to focus governments and businesses on how to think about tackling technology innovation for older adults, rather than simply about them.
- AARP and FP Analytics released the Aging Readiness and Competitiveness Report in 2017 that looked at 12 large economies and their innovative approaches to the longevity economy
- PricewaterhouseCoopers finds in its 2018 update to its Golden Age Index that OECD countries can boost their economies by $3.5 trillion by increasing their older worker participation rates
- Joseph Coughlin, founder and director of the Massachusetts Institute of Technology (MIT) AgeLab, published The Longevity Economy: Unlocking the World’s Fastest-Growing, Most Misunderstood Market in 2018.
In recent years, we’ve also begun to see major organizations take note and embrace the opportunity of a longevity economy by making significant investments in research, product and service development, and engagement. Interestingly enough, most of the action is happening in Asia. Notable organizations include AEGON and its subsidiaries, The Asian Development Bank, China Jianyin Investment Ltd. (JIC), Cigna Korea, JapanPost, MetLife’s Lumen Lab, and Shin Kong Group.
But it’s just too big
Although it’s hard to believe, the population of people over 50 in China alone is greater than the total population of the United States. And, based on the aforementioned research from Oxford Economics, the economic activity of this group in the United States alone is greater than most G7 economies. We believe that this group is simply too large to address as a single group.
We’ve also identified a shift from a three-stage life – youth, adulthood, and old age – to a four- stage life. This new, fourth stage, falls after 50 and in-between traditional adulthood and old age. Individuals living in the fourth stage are challenging societal norms and its rules.
You know these people. You identify them on the street or in your life. There’s a high likelihood that you’re one of them, like us. They are revolutionary. They are “Foursters.”
EconomyFour was founded to help businesses and governments understand and design for Foursters. We’re about social innovation. We are calling out stereotypes and tackling ageism. We are focused where reinvention matters most: work, well-being (both financial and physical), innovation, and investment.
Even in the very earliest stage of our business, we have been humbled by the attention that our message, and offerings have gained. Just last week, EconomyFour and Dow Jones Media Group agreed to collaborate on a session during the 2019 World Economic Forum Annual Meeting in Davos, Switzerland.
Over the course of the next two weeks EconomyFour’s expertise will inform conversations in Singapore and Tokyo by presenting and participating at The Longevity Summit, hosted by The Economist, and the 1st Aging Well Society Event, hosted by the Japan Ministry of Economy Trade, and Industry and C-suite leaders from across Asia who are ready to meet the wants and the needs of Foursters.
Are you ready?