The Longevity Economy: When older consumers become a bonus

The good news is we are all living longer. In Oman, the average life expectancy is now 76.9 years compared to 49.3 in 1970 and the youngest members of Omani society can look forward to living even longer. We are gaining roughly 2.5 years of life expectancy per decade. Predictions suggest that, of the babies that are currently being born, the real life expectancy will be 104. In Japan it is 107.

SIDEBAR

To discuss the opportunities and challenges of an ageing population, Ithraa is hosting a “Silver Economy” Inside Stories session 7:30pm, Tuesday, June 26, at the Public Authority for Civil Aviation Training Centre in Al Hail North.
Moderated by Sayyid Dr Adham al Said, Assistant Professor of Economics at Sultan Qaboos University (SQU), the evening’s discussion will be led by smart ageing economy specialist, Anne Connolly (pictured), CEO of Ireland’s Smart Ageing Exchange (ISAX), an independent network of Irish businesses, academic institutions and government agencies fast tracking the R&D and commercialisation of solutions for the global ageing economy.
“Today, the world is in the early stages of a silver tsunami,” suggests Taleb al Makhmari, Ithraa’s Marketing & Media Director-General and organiser of the popular Inside Stories series.
As the proportion of over-55s rises steadily across the planet, we are seeing the expansion of a generation with more energy, desire for life and spending power than ever.
“Think ‘silver’ rather than ‘grey’ and the increasing proportion of older consumers globally becomes a potential bonus, not a burden,” points out Al Makhmari.
In fact, the over-55s, or the silver surfers as they are often called, constitute the fastest-growing group in the populations of high income countries, with their number set to increase by more than a third by 2030, from 164 million to 222 million.

Older consumers are also the richest thanks to the rise in house prices and pensions. It is estimated that the grey market currently spends in the region of $4 trillion a year and that number is only expected to rise.
From an international perspective, the over-55s hold around 80 per cent of the wealth in the UK and 70 per cent in the US. Their spend has grown by an average of 4.5 per cent annually for the last 10 years, compared with only 1.2 per cent for their younger compatriots. The management consulting firm, AT Kearney, projects that globally, the spending power of the over-60s will reach $15 trillion by 2020. Presenting opportunities for Omani businesses at home, around the region and even internationally.
With the rise in the over-55s more rapid than any other segment, they are expected to generate over half of all urban consumption growth in developed markets as their numbers swell. “In other words, the world’s biggest spenders will be the elderly, a trend that both our public and private sectors should be closely monitoring,” remarked Al Makhmari.
“Looking to the future, it is impractical for our cities and communities to count on young people alone to act as economic drivers,” explained Ithraa’s Marketing & Media Director-General.
By 2022, US estimates suggest that around 31.9 per cent of people between the ages of 65 and 74 will remain in the workplace — as opposed to 20.4 per cent in 2002. Despite the “lump-of-labour” fallacy — the faulty idea that the amount of labour available to all demographics is fixed — retaining more older people in Oman’s workforce will not detract from the number of jobs available to younger workers. Rather, a recent Stanford study has shown that the employment of older people has no impact on labour market outcomes for other age groups.
Diversity in the workplace is crucial, argues Al Makhmari, it creates a more inclusive environment for a wide variety of talent, and it has positive ramifications for the success of Omani businesses.
“If I were asked to advise an Omani tech start-up about how to build their team, rather than telling them to hire two twenty-something SQU engineering graduates or two 55 year-olds with 30 years telecommunications experience, I’d tell them to hire one of each — one would bring the creativity and risk-taking, while the other the experience and ability to see across sectors.”
Age-diversity in the workforce is also a plus for an economy driven by innovation. Research has shown that while age-similar groups performed better on jobs that required primarily repetitive tasks, age-diverse teams performed much better when it came to problem-solving, idea generation, or productivity.
Yet it is not just their spending power and its impact on the economy that should be a motive for keeping elderly Omanis active.
For ageing Omanis, the benefits of staying active and engaged with the whole spectrum of their communities are enormous. Social isolation is a growing problem and one that has an immediate effect on health. Adults who say they are lonely have a 30 per cent higher chance of dying in the next seven years than those who are surrounded by strong connections. The risk of diseases like Alzheimer’s is also exacerbated by isolation, but researchers have found that participating in purposeful activity in the ageing process can slow cognitive decline by 30 per cent.
“The truth is a new stage of life has been opened up but we have yet to get to grips with all its promise, potential and possibilities — not to mention its challenges. Hopefully, the June 26, Silver Economy, Inside Stories session will go a long way in addressing and exploring these,” concluded Al Makhmari.
In a 2017 Havas Meaningful Brands study that analysed the relationship between 79,000 silver surfers and 1,500 brands, across 33 countries and 15 industries for a period of eight years:
n 76 per cent of respondents said companies and brands should play a more important role in improving their quality of life and well-being, while 60 per cent think brands should play the role of life coach, by offering better solutions to everyday problems with key emotional benefits. Currently, neither is happening. More than half (57 per cent) of all content provided by brands is not meaningful to the over-55s.
n When they have a positive experience with a product or service, 68 per cent say they share it with their social networks, while 90 per cent look to brands to provide relevant content in the form of experiences, solutions, entertainment and advice. In these respects, silver surfers are not so different from the youth audiences that dominate today’s marketing thinking.