Study the Boomers!
The Who once sang, “I hope I die before I get old.” Despite their best efforts to exit the planet early, most of them didn’t. They and their fellow Baby Boomers represent the greatest technology and business opportunity of the 21st Century.
It is typical for each of us to be drawn to areas for which we feel the most affinity. For that reason, most students looking forward see themselves surrounded by people of a similar age while they conjure up products and services attractive to their peers. I teach an MBA class at the Haas School at U.C. Berkeley and so many of the students have great ideas on how to innovate in areas deeply relevant to their day-to-day worlds. The problem is: that is not where the action is. If you are a student today preparing to be the Steve Jobs or Oprah of the next generation, you should be thinking a lot more about what your parents and grandparents need than what would interest your friends.
There are approximately 76 million baby boomers (people born during the years 1945 and 1964). The first of the boomers turns 65 years old in 2011 at a rate of approximately 10,000 people per day, and that trend will continue for the next 20 years. According to the Census Bureau, an estimated 72 million people, or 19.3 percent of the population, will be 65 and older by 2030, compared with 40 million, or 13 percent last year. By 2030, people aged 18 to 24 will represent 9.1 percent of the population, down from 9.9 percent in 2010, according to the Census Bureau. The share of people aged 25 to 44 will drop to 25.5 percent from 26.8 percent. Young people: it is time to start thinking old-you are outnumbered. The best thing you could possibly study is how to conceive of technologies, products, and services that would appeal to the aging demographic—that is where the spending and trending power will reside. “No other force is likely to shape the future of national economic health, public finances and policy making,” analysts at Standard & Poor’s wrote in a recent report, “as the irreversible rate at which the world’s population is aging.”
According to various reports, Boomers already control over 80 percent of personal financial assets and more than 50 percent of U.S. discretionary spending power. A MetLife study shows Boomers stand to inherit over $11.6 trillion in their lifetime in addition to the incomes they make, and the vast majority of Boomers expect to work through their retirement. Boomers already comprise over half of all consumer spending and yes, while they account for over 75 percent of all purchases of prescription drugs and a whole lot of chronic illness (itself a stunningly large business opportunity), they also account for about 80 percent of all travel purchases.
For those of you who think of the Boomers as old and out of touch, note that retirees age 65 and older are the fastest-growing group of social networking site users, according to the Pew Research Center, which adds that over half of baby boomers use social networking sites. If you think that the latest and greatest technology doesn’t apply to the older crowd, you are wrong. New technology is essential to finding ways for Boomers to maintain their vibrancy and independence, as well as ways for us to reduce the skyrocketing costs in our current healthcare system, something that all economists agree is essential to maintaining our national economic viability.
Accordingly, students today would be best served by studying the fields that swirl around and intersect with the fields of gerontology and geriatrics. This means everything from the study of aging in medicine to the study of architecture, engineering and finance as it applies to the Boomer opportunity.
The future of caring for older Americans lays in technology, with vast green field opportunities available in the design of technologies and services that enable extending health and psychiatric well-being. Just one area, Alzheimers’, today costs the U.S. $172 billion annually; by 2020 this cost will be $2 trillion and by 2050, $20 trillion according to recent reports, and that is just one disease that needs innovation, both in treatment and in patient management.
Beyond healthcare, there is a screaming demand for technologies that ensure mobility, enable physical and financial autonomy, provide for social connectivity, and deliver education and work-place skills to those who are looking to their second or third career. People of a certain age don’t want and often can’t use the same products and services that appeal to the young, but also don’t want to buy things that make them feel old. Striking that balance is the innovation opportunity of the next several decades.