The world is experiencing a significant demographic shift, with the number of older adults rising steadily. By 2050, it is projected that one in six people globally will be over 65 years old, marking an 85 per cent increase from 2020 (UN, 2019).
In Australia, nearly one-quarter of the population will be over 65, according to the Australian Human Rights Commission. These statistics present a tremendous opportunity for businesses to tap into the longevity economy, which encompasses the economic potential of an ageing population across various sectors such as finance, health, construction, transport, leisure and more.
So, how can Australian businesses support and benefit from the longevity economy?
Recognising the Market Potential
First and foremost, businesses need to recognise the growing market potential of the ageing population. According to Joseph Coughlin, Director of the MIT Age Lab, longevity will be a driving force behind innovation in the coming years.
To harness this potential and cater to the preference of “living better for longer”, strong leadership is essential. Australians aged 55 years and above have the highest levels of household wealth, and their consumption increased by more than 21% in the five years leading up to 2015/16. This indicates a ready market segment eager to consume products and services that support ageing in place for an extended period.
Notably, the longevity economy in the United States is already valued at an astonishing US$8 trillion.
Investing in Research and Development for Older Adults
Investing in research and development is crucial for creating innovative products and services that cater to the needs and preferences of older people. There is a demand for innovative solutions that address the specific needs and preferences of older consumers, such as age-appropriate housing, mobility aids, and social engagement platforms.
The Global Centre for Modern Ageing’s Living Lab, or LifeLab®, is an excellent example of a research and innovation ecosystem that involves older end-users in the co-creation process. By engaging older individuals, businesses not only increase the chances of product and service success but also contribute to the overall well-being of older adults.
Addressing Ageism and Fostering Age-Inclusive Workplaces
Ageism continues to be a significant challenge in both society and the workplace. Therefore, it is essential to address ageism and foster age-inclusive workplaces. This includes promoting intergenerational collaboration, encouraging age diversity in the workforce, empowering older adults to acquire new skills, pursue entrepreneurships, and remain active in their careers. Additionally, by leveraging the skills and experiences of older employees, businesses have the opportunity to unlock substantial economic benefits.
Dr. Kay Patterson, the Age Discrimination Commissioner, highlights that a mere 3% increase in participation by individuals over 55 could generate a remarkable $33 billion annual boost to the national economy.
The Creation of Age-Specific Financial Services
Tailored financial services addressing the diverse needs and circumstances of older people are paramount. Financial education, mortgage assistance products, and retirement income planning to help manage longevity risk are some of the areas that businesses can focus on to meet the financial needs of older people.
By addressing the financial concerns of older adults, businesses can contribute to their financial well-being and empower them to make informed decisions.
Establishing Comprehensive Solutions through Partnerships
To better serve the longevity economy, businesses should establish partnerships with healthcare providers, retirement communities, and other relevant stakeholders. Collaborative efforts can lead to the development of comprehensive solutions that promote healthy ageing. By working together, businesses can create integrated systems that address various aspects of older adults’ lives, including healthcare, housing, and social engagement.
Embracing Technology and Digital Advancements for Older Adults
Investing in technology and digital solutions is crucial. Businesses should embrace technological advancements to enhance accessibility, convenience, and connectivity for older adults. This includes developing user-friendly apps and software at various price points to support independent living, creating wearable devices and smart home solutions for safety and health monitoring, and implementing cybersecurity measures to protect older adults’ information and ensure their digital safety. Imagine the possibilities of a rating tool co-created with older end-users that rates the user-friendliness of technology products, providing valuable assistance to older consumers in making informed choices.
Challenging Ageist Stereotypes through Targeted Marketing
Businesses must challenge ageist stereotypes and highlight the valuable contributions of older people through targeted marketing and advertising campaigns. By adopting a “stage not age” approach, businesses can recognise the diverse capabilities and experiences of older adults. Such campaigns will help shift societal perceptions and foster a greater acceptance of ageing as a positive and dynamic stage of life.
The Growing Ageing Well Market in Australia
The ageing well market in Australia is experiencing rapid growth due to an ageing population, increased life expectancy, and shifting social attitudes towards ageing. Older people actively seek products and services that promote their health, well-being, and quality of life, creating diverse opportunities for businesses. By developing age-friendly and inclusive products, businesses can tap into this market and contribute to the overall economic growth of Australia.
Investment Opportunities for Australian Businesses in the Longevity Economy
By catering to the ageing well market, businesses can access a large and growing customer base, enhance their brand reputation, and contribute to the overall economic development of Australia.
Australian businesses can equally benefit by investing in various areas. Some key opportunities include:
- Age-friendly Housing and Real Estate: Designing and constructing accessible and adaptable housing options, developing retirement communities, and retrofitting existing housing stock to be age-friendly.
- Health and Wellness: Offering specialised healthcare services, fitness programs, and nutritional products that promote healthy ageing.
- Education and Employment: Establishing lifelong learning programs, creating age-inclusive workplaces, and providing career transition support for older people . Consider career transition programs and mentorship opportunities for older workers seeking new employment or starting their own business.
- Leisure and Recreation: Tailoring travel and tourism packages, developing recreational activities, and investing in age-appropriate entertainment options.
- Financial Services: Providing comprehensive financial planning and investment advice (including retirement planning, estate management, and strategies to manage longevity risk), innovative products and services (such as reverse mortgages, and long-term care insurance), and user-friendly digital banking platforms to ensure their financial security.
By investing in these areas and considering the diverse needs and aspirations of older people , businesses can thrive in the longevity economy while positively impacting the lives of older people, communities and the economy.
The longevity economy presents vast opportunities in Australia and beyond. By recognising the market potential, and investing in research and development, and fostering solutions, businesses can position themselves for success.
It is imperative for business leaders to embrace the potential of the longevity economy, drive innovation, and support older people in living better and longer lives, or risk losing a critical sector of the market. By embracing inclusivity and meeting the needs of older people , businesses will not only secure their own future but also contribute to the overall well-being and prosperity of society.
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