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We need to talk about one of the biggest factors that will shape America and the world over the next 25 years. Even though it rarely comes up in our headlines, posts, and debates, global aging will have an impact on everything from individuals and families to governments and the global economy.
Global aging is the result of two trends taking place simultaneously in countries around the world: steady declines in birth rates combined with an increase in the average lifespan. As a result, one in three people worldwide will be 50 years or older by 2050, and one in five will be 60 or older. That demographic group is projected to total 2.1 billion people.
And while the phenomenon is worldwide, the aging transition is moving at different paces in different nations, including the United States, which is ahead of the global average. The U.S. has already reached the point where one in three people are 50 and over. By the end of this decade, the first of the millennials will turn 50, and by mid-century, older adults will make up the largest share of the U.S. population—larger than children under 18 and adults ages 18 to 49. And that 50-and-older group will continue to grow over time, as illustrated below.
Aging transition brings economic possibilities
The changing face of our population will directly impact how we all live and work, and with it, lead to shifts in consumers’ needs and wants. The broader economic implications will be significant—and are already materializing. As AARP’s Longevity Economy Outlook reports, age 50–plus consumers in the U.S. today already account for 59 cents of every dollar spent. Given the growth in size, both absolute and relative, the impact of their economic activity is only expected to increase.
Some sectors are getting ahead of the aging curve and beginning to make business decisions based on the coming shifts.
One of the most important and innovative—the tech sector—is a leading example. At the recent CES (Consumer Electronics Show), a panel moderator noted that “AgeTech is a term we will hear a lot more of in the coming decade … It will have the power to transform millions and millions, perhaps billions, of lives for the better.” The growing interest in AgeTech innovations at CES, is, no doubt, also spurred in part by data showing growth in 50-plus spending on technology. As the global aging transition continues, technology leaders will be able to find new growth opportunities with age-inclusive innovations and ageless designs.
While the tech sector is defined by embracing change, the growing consumer base of older adults will touch everything from travel and hospitality to health care, financial services, and housing. These other areas of the economy will also need to adapt if they hope to benefit from the growing size—and spending power—of the older-adult population in America.
The workforce can improve with age
In addition to preparing for shifts in their customer base and innovating to serve older adults, the data on global aging also suggests that companies will need to think differently about their workforce.
Traditionally, prime working age is categorized as the years between 25 and 54. But with steady growth in the number of workers over 50, the population who fits neatly into the “prime” age band is growing smaller and smaller. The U.S. is already facing significant workforce shortages today, with a greater number of job openings than people seeking employment. Even if businesses are not feeling the pinch now, the data shows that they will in the years ahead.
The growing 50-plus population is a resource that can be tapped by businesses in need of a talented, experienced workforce. But it will require proactive steps to make sure that this resource isn’t passed over.
As the shift to an older workforce continues, business should think about how they can retain and retrain older workers and develop teams and operational structures that make the most of the extensive experience and institutional knowledge that older adults bring.
Research also shows that multigenerational teams—which include individuals with decades of experience collaborating with early-career workers—are more productive, better able to serve a range of markets, and even tend to innovate more often.
As shown in the Growing With Age platform, a collaboration by the World Economic Forum, the Organization for Economic Cooperation and Development, and AARP, companies that support older workers and rely on them as assets and resources can generate a range of competitive advantages.
The growing number of adults over 50 is unlike any other demographic when it comes to spending power and valuable work experience. As their share of the population grows, it would be a massive, missed opportunity if we fail to tap the potential for stronger economic growth, improved workforce productivity, and healthy longevity for millions of people.
