Conference Presentation, Panel
Growing the European Longevity Economy
Milken InstituteSarbjit Nahal, Jonathan Collie, Lynda Gratton, Baroness Sally Greengross, Jody Holtzman
- The 60-plus population is projected to grow from approximately 901 million today to 2.1 billion, with the proportion of people aged over 65 expected to exceed children under five before 2020 and 80% of older individuals located in emerging markets by 2050.
- Global annuity and pension-related longevity risk exposure currently stands at $25 trillion, while age-related costs are projected to push up to 60% of sovereigns into speculative grade by 2050.
- Spending by the 60-plus cohort in developed markets is projected to grow by $1.5 trillion over the next 10 to 15 years, with the demographic's total consumer spending expected to reach $15 trillion by the end of this decade, accounting for 50% to 60% of consumer spending in those regions.
- Approximately $3 trillion is currently wasted annually in the sector, prompting a strategic shift toward managed care, cognitive computing, artificial intelligence, and gene editing to address inefficiencies.
- Up to 87% of baby boomers expect to age in place, creating a significant tailwind for the $500 billion senior living market, while 80% of older people are expected to be located in emerging markets by 2050.
- Work patterns are expected to restructure with individuals working until between ages 70 and 80, necessitating the development of intangible assets and the ability to reinvent careers multiple times.
- Companies employing individuals over 60 report consumer satisfaction more than 20% higher than those without older staff, and retraining older employees can yield retention benefits compared to the typical one-to-two-year tenure of younger workers.
- In the United Kingdom, consumers aged over 50 spend £314 billion annually, representing 43% of household spending, though inequality persists with life expectancy dropping by one year for every station change from northwest to southeast London.
- The gap between people in need of care and available caregivers in the United States is projected to reach a two-to-one ratio by 2020, involving roughly 117 million individuals in need and 50 million caregivers, 45 million of whom are unpaid family members.
- Technology such as voice command and recognition is expected to bridge care gaps and reduce isolation, though 20 to 25 percent of the elderly are expected to continue living in poverty while the current healthcare system fails to cover low-income middle-class individuals.
- The current pension model is characterized as a "ponzi scheme" that will become unattainable, requiring individuals to save more, work longer, or accept a lower percentage of final income upon retirement.
- Venture capital focus is increasing on the caregiving sector, where three startup companies raised over $130 million in two years, a figure previously considered unrealistic.
- Individuals aged 50 and 60 are expected to start companies at twice the rate of those in their 20s, challenging the myth that youth are the primary drivers of new business formation.
- Consumer spending by the 30% of the U.S. population over 50 is projected to generate 42% of total U.S. GDP and support 90 million jobs.
- Schools are expected to need to instill fundamental building blocks of a dynamic working life in young people to prepare them for multiple career reinventions over longer lifespans.