Conference Presentation, Panel
Investment Strategies That Leverage the Longevity Economy
Milken InstitutePatricia Milligan, Ben Franklin, Jim Mellon, Andrew Scott, Marc van Weede, Pat Milligan
- Life expectancy in the developed world is projected to reach 110 to 120 years within 30 years, barring major global disasters, fundamentally altering the traditional lifecycle of birth, learning, earning, retiring, and expiring.
- Investment opportunities are anticipated in longevity science, pharmacology, and biotech, with predictions that these sectors will produce dominant market leaders despite facing multiple failures and disappointments in the near term.
- The labor market will shift toward longer working lives, with individuals potentially working until ages 85 or 90, necessitating flexible models such as demotions, sabbaticals, and the reintroduction of retirees to the workforce.
- New products and services will emerge to support extended lifespans, including significant expansions in adult education, social care, and leisure sectors, alongside advancements in senolytic drugs to prevent frailty.
- A "lump of labor" fallacy is identified as a barrier to productivity, where failure to adapt to longevity trends contributes to economic stagnation, though older workers can match younger productivity levels with appropriate training.
- The pension landscape faces a potential global insolvency crisis, with the worldwide pension gap rising by $1 trillion for every one-year increase in life expectancy, rendering defined benefit plans unsustainable.
- Current financial education and wellness initiatives are criticized for low engagement, with a significant cohort of individuals being unprepared to manage their own wealth, retirement, and health risks over extended periods.
- Health and insurance industries face disruption as life expectancy rises, creating risks for those ill at age 50 who may live to 100, while corporations are urged to apportion profits for older workers and offer broader asset portfolios including health and education.
- Job markets are predicted to see a rise in roles relying on human empathy, such as social care and home health, while automated roles like data analysts face obsolescence, creating a challenge for retraining workers with mismatched skills.
- Inequality in life expectancy between the rich and poor in the UK remains between 10 and 15 years, a discrepancy expected to trigger political reactions if not addressed through public policy and "nudge" mechanisms.
- Older workers represent a neglected diversity constituency despite being a vital investment opportunity, yet they face biases regarding their ability to learn technology, tolerate change, or remain physically strong.
- Psychological challenges regarding reinvention and career stages will intensify, particularly for those with fewer resources, while the "hard stop" of retirement is increasingly viewed as obsolete by both individuals and progressive corporations.
- Governments are attempting to utilize auto-enrollment and nudge thinking to close savings gaps, though experts argue these measures are insufficient without mandatory savings or significant changes to how life expectancy is calculated for policy purposes.
- Corporate strategies must evolve to capture the value of experienced older workers by measuring the cost of lost human capital and offering retraining, as the current model of replacing staff with agency labor fails to account for invested experience.