Social Machinery

Aging is one of the most striking mega trends changing our society in the next decade. Over the next ten years, aging and how we respond to it will increasingly affect society. The number of 65+ year olds will increase greatly between now and the year 2020.

An aging population will have several implications to the society, workforce market and new technologies that will emerge.

But is also interesting to notice that elderly of tomorrow will behave different as elderly of today. Fresher, more technologically savvy,  better educated seniors  and a big need for elderly involvement in employment and society in general, could change the way will look aging.

Some of the key trends that will impact aging by 2020

1. Changing demographics

According to the UN, between now and 2025, the world population will increase by 20% to reach 8 billion inhabitants. 97 % of this growth will come from Asian and African developing countries.

Also by 2025, 61 % of the world population will be in Asia and aging European countries will count for 30% of all people above 65 years old. A high economic impact of ageing is expected especially for pension, healthcare and long-term care spending

An aging world is driven by two factors: lower birth rates and longer life expectancy. We can expect both factors to be present in the next decade. Average annual growth worldwide peaked at 2.19% in 1963 and has fallen steadily since then. Annual growth is project to fall below 1% in 2015 and below 0.5% by 2050. Many devloped countries will see birth rates below the replacement level creating significant declines in populations. The population of the developed countries will fall from 14% of the total world population in 2000 to only 10% in 2050. 

2. Seniors extend their retirement age

A big number of baby boomers will reach the age of traditional retirement by 2020. This sharpens the demands for the recruiting and retention of seniors and the many other groups who can replace them, such as the disabled and immigrants. By 2015, the workforce in Japan and most of Europe will be shrinking by 1% per year. By the 2030s, it will contract by 1.5% annually.

Unless birth in the developed nations increase dramatically, either would-be retirees will have to remain on the job, or developed countries will have to encourage more immigration from the developing world. 

Also by 2020 radical life extension and aging improvement will be possible due to a number of new healthcare technologies available such as vaccines for cancer, treatments to prevent and repair Alzheimer’s disease and genetic therapies that will directly slow the aging process, therefore people will feel capable of working at a older age and they will need to do it as well fare structure was not designed for such long life time.

Some economists predict that a big number of Seniors still hanging to their jobs could create an increase in the unemployment rate in the short term, but in the long run usually new segments joining workforce market brings several offset like new parallel industries. It happened in the 60s when women joined massively the workforce market creating new markets for child care or fast food. 

3. Well fare system under pressure

Over the next ten years, the pressure on the welfare system will come from two sources: the need of more services and treatment for seniors and labor shortage. The increase in the proportion of retired in society can lead to a less dynamic economy or what some experts called “Japanization”. Slower growth also makes it harder to raise taxes and finance an increasing welfare system. In the other hand by 2020, our society will demand and embrace a much more involved elderly segment in order to keep the equilibrium in several aspects of the economy.

Aging can bring several disruptions in countries economy and well fare system.  For instance in Japan, population is aging, its working-age population is shrinking, and its birth rate is the lowest in the developed world and still declining. By 2030, the number of workers in Japan will shrink from its current 66 million to about 56 million. Japan’s total population is expected to decline by 50% by 2075 and by two-thirds through 2100. At the same time, government debt equals 176% of GDP. This will make it extremely difficult for Japan to provide the necessary services for tomorrow’s elderly.

 4. 2020 will bring self-sufficiency elderly

In total, the number of young seniors aged 55-75 will especially increase. While many, from around 80 years of age, will suffer many different disabilities that, in various ways, limit their lives, most 80 year-olds will be able to care for themselves.  Radical life extension developments in the next decade will Increase life expectancy adding “good” years to life. The rising life expectancy and more good years of satisfactory health have direct impact on the retirement age. While the retiree of 1960 could expect 11.5 years of retirement, the retiree of 2020 looks forward to 22 years.

5. The traditional stages of life are breaking down

Many young people have their first child ten years later than their parents or grandparents did. To some extend youth last longer. For instance, many have children at age 40 or more. 2020 elderly will have dependent children when they become seniors. So they might need to stay active to satisfy their family needs until a much older age.

6. Elderly workers

By 2020, demographic changes will require a greater focus on recruiting and retaining older employees. Companies will need to redesign their diversity and senior policies by adapting their workplace to accommodate elderly workers. Also flexible hours and innovative training methods will be needed.

Historically, elderly workers have been met with skepticism. Many companies do not hire employees who are close to retirement age, perhaps because they assume the older workers will be less motivated and productive than younger candidates. But new findings show that elderly segments can be highly engaged and most loyal than younger candidates. Nevertheless, changing public conditions for retirement and creating special programs for the elderly is critical to change the current cultural misapprehension about senior workers.

7. Seniors consumers increase their importance

With elderly segments extending their participation in society, working life and having a relatively high disposable income,  brands will increase their interest on them.

Also industries like genetics, education, and technology could benefit from an active senior segment that will need to keep an active participation in our society. I forsee new industries bringing many kinds of products and services for the working elderly from 2020.

For the last century advertisers have been more focused on young people. The main reason is that a young people lifetime value is higher than older segments. Companies like McDonalds, Coca-cola invest heavily on kids and youth to create consumers for life. But with 2020 demographic changes, elderly cannot be longer ignored and marketers will need to reexamine their strategies.  Seniors consumption is less driven by recognition or fashion offered by status goods. They are less sensitive to “stereotyped” marketing messages. Brands will need to prepare for this new consumer and their special needs.

8. Bridging the digital divide

Worldwide, only 14% of the 60+ segment have access to broadband. This is quite low compared to the 30-39 segments which are around 24%. The Elderly segment of 2020, which comprises the group between 50-59, is more tech savvy with 18% of them using broadband at least once a week.

While it is self-evident that the average 20-year-old is more tech-savvy than the average 70-year-old, making too many generalisations of this type can be misleading. Is too simplistic to classify young people as ‘tech savvy’ and those over 45 as “analogs”. Even do is true that over-65s are generally much less savvy with new technology than younger age groups, those between the ages of 45 and 54 generally had a high level of comfort and use it everyday.

A good example is social networking; Facebook’s fastest growing segment is the +55 years old group. Browsing internet, sharing photos online is becoming a way to keep in touch with their family. Also this segment is taking internet and mobile phone as a basic need item. 2020 elderly is already sending SMS, email, using their camera phone, browsing the internet and exploring the social media world. Probably the main difference is that they do it less often than digital natives.

While many older users have never switched on a PC or surfed the web, there are plenty of 50+ who are entering the technology world, well able to handle it. As these users get older, the generation coming behind will be even more familiar to technology than they were, therefore digital divide we see today between the generations will further diminish.