As Procter & Gamble Co. takes new aim at aging Americans by making and marketing products for adults suffering from incontinence, the move confirms one thing: While good public policy can help transform the billion of us over age 60 by 2020 into a source of economic growth – it is markets that will do the trick.
It makes perfect sense that P&G engages in this arena as we observe the huge explosion of market opportunities in Japan, which is both the canary in the mineshaft and the model for change worldwide. Japan has the oldest population on the planet as measured by the percentage of old to young. By 2020, the country will sell more adult diaper products than baby diapers. Among other business moves in Japan, the giant Aeon Retail Chain is focusing on aging as a core strategy, while Fujitsu focuses on its senior-friendly Raku-Raku mobile phone.
By 2017, Americans over the age of 65 will control 70 percent of the disposable income in this country. These millions of people are today responsible for at least $7.1 trillion in annual economic activity – which is expected to grow to over $13.5 trillion in real terms by 2032. Across such sectors as travel and technology, health care and consumer goods, and telecom and housing, the smart money’s on strategic investments in a boomer market. If Google is trying to figure it out – others will follow.
Yet many people continue to miss the notion of global population aging as the seminal issue of our era, as already predicted by S&P in its 2010 Global Aging Report: “No other force is likely to shape the future of national public health, public finances and policymaking as the irreversible rate at which the world’s population is aging.”
Many elites are still stuck in 20th century conditions. Much of the philanthropic world, for example – the likes of US AID, the Bill and Melinda Gates Foundation, the Norwegian Investment Fund for Developing Countries – is still dispensing funding as if we were back in the ‘70s. Nearly 99 percent of funding is given to eradicating communicable diseases and only 1.2 percent is left for dealing with non-communicable diseases (NCDs) such as diabetes and Alzheimer’s that cause two thirds of the mortalities today around the globe as a consequence of population aging.
There was also barely a nod to the trend of population aging from the emerging markets meeting this past week in Brazil, where at least three of the countries – Brazil, China, India - will get it right or fall into the same fiscal unsustainable malaise that has dogged Japan. In paragraph 57 of their Fortelaza Declaration is this short reference: “The demographic transition and post-transition challenges, including population ageing and mortality reduction, are amongst the most important challenges facing the world today.”
Yet as these BRICS establish their bank in Shanghai – the only noticeable outcome of the summit – they’d be wise to heed the market needs and opportunities of a silver economy.
The new bank might create a window for silver entrepreneur loans, which, by the way, will be (as P&G is finding out) a great business. Some of the most successful ventures in America and Europe today are the new small businesses started by people over 55. That’s where the money is, too, in China, Brazil, and India, which have the most rapidly aging populations on the planet.
Even India, considered “young,” is aging rapidly, as the country also benefits from the 20th century longevity revolution and its people start having fewer babies, now just at replacement level – down from 6 or 7 children per woman just two decades ago.
Top Reads from The Fiscal Times: