Conference Presentation, Panel
Investment Strategies That Leverage the Longevity Economy
Milken InstitutePatricia Milligan, Ben Franklin, Jim Mellon, Andrew Scott, Marc van Weede, Pat Milligan
- Definitional Shift: Participants advocate replacing the term "aging" with "longevity" to emphasize that people are living longer and healthier, rather than simply approaching the end of life.
- Professor Andrew Scott notes that while chronological aging affects everyone equally, biological aging rates vary significantly, and the net trend over the last century is "younger for longer."
- Jim Mellon argues that "aging" is a misnomer for the current trend, where the average life expectancy in the developed world could reach 110–120 years within 30 years due to existing molecular manipulation technologies, not future gene editing.
- Workforce Demographics and Representation:
- Older workers are identified as the only major demographic currently underrepresented in corporate diversity and inclusion frameworks.
- In the UK, a woman is now more likely to have a child in her 40s than under 20, illustrating the deep restructuring of life stages.
- In the US, 30% of individuals re-entering the workforce are retirees, a demographic not yet fully managed or segmented by employers.
- Productivity and Biases:
- Three pervasive myths regarding older workers are debunked by the panel:
- The belief that older workers cannot learn new skills.
- The belief that older workers cannot master technology.
- The belief that older workers lack tolerance for ambiguity.
- Mercer data indicates that while individual older workers may have slower speed-to-market, teams with age diversity demonstrate improved safety records and overall performance.
- The perceived "inverse U-shaped" productivity pattern is attributed to a lack of lifelong learning investment rather than inherent age-related decline.
- Three pervasive myths regarding older workers are debunked by the panel:
- Investment and Market Opportunities:
- Longevity Science: Jim Mellon predicts the biggest investment returns will come from biotech and pharmacology (e.g., senolytics, CRISPR) that extend healthy life spans, comparing the current market to the internet sector in 1995.
- Healthcare Integration: A convergence of retail, pharmacy, insurance, and fitness is emerging, exemplified by CVS acquiring Aetna to create holistic care hubs offering everything from screenings to workouts.
- Social Care: The sector for human empathy-based care is expected to explode as automation replaces data-centric roles, turning current minimum-wage social jobs into high-demand "professor of social care" fields.
- Recreation and Leisure: The industry is shifting from leisure as consumption to leisure as reinvestment, with demand for health and fitness facilities growing exponentially (e.g., a specific gym seen by an audience member grew 15x in two years).
- Pension and Financial Security:
- Defined benefit pension plans are disappearing; the panel warns that relying on them is "doomed" given projected life expectancies.
- The "pension gap" rises by $1 trillion for every one-year increase in life expectancy.
- Zero-return environments and auto-de-risking investment strategies driven by outdated retirement age assumptions are suppressing returns.
- Public policy interventions like auto-enrollment (UK) and mandatory savings (Singapore, Hong Kong) are deemed essential to trigger individual saving behavior.
- Corporate Strategy and Human Capital:
- Companies are failing to grasp the nettle regarding aging, leading to productivity stagnation in developed economies.
- Flexible Work Models: New structures are required, including demotion options, sabbaticals, and "sideways moves" to accommodate physical changes while retaining wisdom.
- Cost of Inaction: Many firms fail to measure the cost of lost human capital when older workers leave, focusing only on agency replacement costs.
- Retention: Quality of work, enjoyment, and flexibility are cited as primary drivers for older workers choosing to continue employment.
- Inequality and Social Risks:
- A "best practice" life expectancy gap exists between wealthy and poor populations, with a 10–15 year disparity in the UK and US.
- If inequality is not addressed, it risks triggering "The Great Leveler" events (pandemics, war, revolution) as described by historian Walter Scheidel.
- Japan's mandatory filial piety laws (requiring children to visit parents) are noted as a potential, though difficult-to-enforce, solution to isolation and social fragmentation.
- Behavioral Psychology:
- "Ageism" is described as a unique prejudice where individuals discriminate against their future selves.
- Traditional age markers are becoming obsolete; the mortality risk equivalent of a 65-year-old in 1922 is now a 78-year-old.
- Psychological barriers prevent executives from engaging in longevity planning, often viewing the topic as depressing compared to other diversity initiatives.
- Forward-Looking Statements and Predictions:
- Life Expectancy: By 2054 (30 years from now), average life expectancy in the developed world could reach 110–120 years.
- Retirement Age: Working until 85 or 90 will become a minimum necessity for financial sustainability.
- Education: A shift toward "re-education leave" and credits for adult learning, moving beyond the traditional 25-year education/40-year work/30-year retirement model.
- Market Convergence: The healthcare and leisure industries will merge, creating a new dominant service sector similar to the "Amazonization" of daily needs.
- Personal Health Practices:
- Jim Mellon notes that practitioners in the longevity field commonly take Metformin (a diabetic drug) for its pro-longevity qualities, paired with Vitamin B12.
- The panel emphasizes that health interventions must be "smart" to avoid the cost spiral where medical innovation drives up spending without necessarily extending healthy life.