By the year 2047, the global population will have more people in retirement age than young people

The global population is aging, and no country, company or government is fully prepared to handle, and potentially benefit from, that demographic shift.

The economic power wielded by older adults, already considerable in terms of their spending patterns, will only increase in the coming years, and the companies and regions that adapt to this growing market will be best positioned to succeed – and will also have the greatest chance to improve the lives of older people. That’s the premise of a forthcoming book edited by Joseph Coughlin, founder and director of the Massachusetts Institute of Technology AgeLab and a MarketWatch contributor, and Luke Yoquinto, a research associate at the MIT AgeLab.

“Longevity Hubs: Regional Innovation for Global Aging,” which began as a series of articles that ran in the Boston Globe in 2021 and 2022, evaluates the power and influence that may be wielded by the older segment of the population. It also looks at places – among them Louisville, Ky.; Newcastle, England; Dubai; Milan, Italy; São Paulo, Brazil; Tel Aviv, Israel; and regions of Japan and Thailand – that are doing a good job of handling the challenges to governments, economies and societies posed by an aging population.

MarketWatch spoke with Coughlin and Yoquinto, who say that as the world’s population ages, cities and regions need to come up with new ways to effectively serve, learn from and care for older adults.

‘Retirement is probably the largest single thing you will buy. Putting that money aside and investing is not simply about planning and portfolios. You’re literally buying a lifestyle.’ Joseph Coughlin

MarketWatch: What are longevity hubs, and how can we learn from them?

Luke Yoquinto: This started out as, “What can Boston do to become a regional powerhouse for innovation for older adults?” And it expanded to cities around the world and what they are doing. Population aging is a global megatrend. There is a lot of opportunity for regions to become the suppliers of and for the older population – for the services they need, the places they want to live. The primary takeaway is for people to wake up and smell the Ensure and say, this is a huge opportunity. Policy makers are worried about population aging and their economies. This is an opportunity to reverse that spirit.

Joseph Coughlin: This should be great for a population that is aging – which is all of us – because the alternative is bleak. There have been companies that were always aware of aging as core to their business, such as [those focused on] health and wealth. “Longevity Hubs” shows that finally, regions and other industries are becoming aware and are beginning to take action. This is a market that is not your father’s or grandfather’s old age, but a real one that needs to be served and a real one that is, frankly, lucrative.

Yoquinto: It’s a misapprehension that longevity is about senior housing and healthcare. It’s about more than that – it’s about Amazon (AMZN) subscriptions, dog food, rubber plants for people who live in [the central Florida retirement community] The Villages six months out of the year who don’t want their plants to die. It spans all these different industries. Older adults have not been in the design process or the marketing process, because the assumption has always been that the marketing needs to be for the 18-to-49 demographic. But looping in older adults and testing the products with them, and having them assess products and marketing, will be really important.

MarketWatch: What part of the aging population are we the most ill-prepared for in America?

Coughlin: “Older adult” is an entire lifestyle stage that has yet to be invented. We have to imagine how effectively we are to spend one-third of our adult life. Right now we have at one end pickleball and at the other end wheelchairs. But there are many chapters, events, experiences and memories that businesses, governments and families need to invent. It’s not a problem. It’s an opportunity.

Yoquinto: We talk about the older population as if it’s not massively diverse. But it is diverse in terms of background, beliefs, ideology – and diverse in terms of age within that group. There’s been a whole population [viewed] as the sum of its problems. Of course there are very real problems to solve. But if you view a person as the sum of their health problems, you miss a lot. It would be like if you were marketing to teenagers and only saw them as a buyer of acne cream – you’d be missing a lot of things and how nuanced they are and how they think about themselves. Medical care may be a part of life, but for older adults, being a patient may be part of their lives, but it’s not their entire life.

‘There is a lot of opportunity for regions to become the suppliers of and for the older population – for the services they need, the places they want to live.’Luke Yoquinto

Coughlin: Retirement, which can go 15 to 20-plus years, may have three or four different retirements within that span. There will be different needs, different expectations and different lifestyles.

MarketWatch: There’s a line in the book about how continuing to disregard and misunderstand older adults will haunt regions and countries for years to come. What will happen if people don’t start paying attention to this age group?

Coughlin: Technology is about hope, and economics is about math and witchcraft. Demography is destiny. If you look at the year 2047, we will have, worldwide, more people in retirement age than we will have young people. It’s going to happen in the United States in 2034. If we don’t respond, not only are we missing a market, but we’re missing an opportunity to help people live longer and better.

MarketWatch: What about the need to attract and retain older workers?

Yoquinto: Companies should do more to retain and hire older workers. An age-diverse workforce is the most productive workforce configuration, studies show. As populations age, from a macroeconomic perspective, you potentially have a lot of people who are not working and relatively few people who are. From a policy maker’s perspective, the temptation may be to say, “Why don’t we raise the retirement age?” There already are a lot of older workers who would be happy to stay in the workforce if their role was available. The first order of business is to see if there is ageism happening in the hiring and promotion in our companies. There’s a lot of institutional knowledge that older people bring that just goes out the window with retirement.

Coughlin: Older workers are now the leading edge and may be the way to push companies to be more creative to govern a multigenerational workforce. It’s common to talk about the differences between the generations, and there are many, but many things are similar. Older workers are saying they want more flexibility. Can we talk about job-sharing and thinking about work as a gig? Those are very similar issues for younger workers who say, “I want to have a life in my work as much as I want work in my life. I want to have flexibility. I want to be able to transition between roles.” The demands of an aging society and a shortage of younger workers is actually going to make the older worker the leading edge of innovation in tomorrow’s workplace.

MarketWatch: There’s a crisis in caregiving and eldercare. Is any region doing it well? What could we model ourselves after?

Coughlin: No one anywhere is doing it well, I would argue. Frankly, the current problem of caregiving is different from decades and centuries past. It’s common to say, well, look at these countries over here, they respect their elders and take care of them. But the fact is, globalization is not just about our markets and money, but also about lifestyle. Younger people are often moving away from where their families are, so parents and grandparents they may have cared for in the past now live in primarily rural areas or at a distance. Or they pursue a lifestyle that is so busy that they can’t provide the care people once did. China has a 4-2-1 problem, in that the average woman in China has four grandparents, two parents and one child to care for. That’s not a sandwich generation – that’s a full-out panini. In the U.S., there has been [Family and Medical Leave Act] leave or time off, but the state of the practice is giving out a 1-800-number to where you can get services. That’s not necessarily a solution.

Read: ‘It’s just almost impossible to do it all’: Here’s how much time and money the sandwich generation is spending on eldercare

MarketWatch: What can the financial industry do better to help younger people prepare for retirement?

Yoquinto: As a first order of business, people simply need more money. That said, when younger people think of old age, it’s like they think of a different person than themselves. Part of that is that old age seems very alien, because we’ve made it very alien. It’s hard to imagine what you’re even aiming for when the message you’ve gotten about oldness is this image of going to the doctor’s office, and back home to a microwave dinner and going to bed. It’s not that. We need more integration of older people and younger people together – living and working together and interacting. This image is going to change. And it will make the image of aiming for older age more compelling.

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