It’s the mother of all untapped markets: the world’s 65-plus population. Already at a historical high of over 600 million people, it’s projected to hit a full billion by 2030, and 1.6 billion by 2050.
And unlike many other fast-growing markets, this expansion will take place primarily in wealthy countries. As a result, the sheer amount of money involved nearly defies comprehension. In the U.S. alone, the spending of Americans ages 50 and up in 2015 accounted for nearly $8 trillion worth of economic activity. The Boston Consulting Group projects that by 2030, the U.S. 55-plus population will have accounted for half of all domestic consumer spending growth since the Great Recession, a number that rises to 67% in Japan and 86% in Germany.
The longevity economy, then, is the emerging market to rule them all: the size of a new continent rising from the sea, populated with eager consumers but seemingly without the usual emerging market uncertainties. After all, the demographic seeds of our older future were sown long ago in the form of rising life expectancies, falling fertility rates, and (in many countries) a postwar baby boom now striding toward its later years. There may be other major changes coming to the world’s economies—the rise of artificial intelligence, for instance, or the effects of climate change—but in terms of sheer, mind-numbing predictability, the longevity economy beats them all.
The obvious response to a predictably growing market is to produce more of what that market is already buying. But sometimes, the appearance of certainty breeds complacency.
Take the senior housing market. To talk to anyone in the real estate investment community just a few years ago, money could find no safer resting place than senior housing. But despite the burgeoning older population, senior-housing occupancy is currently at its lowest since 2011.
It’s possible that the bulk of the demand is still incoming—baby boomers have yet to replace the Silent Generation class of residents—but there’s more to it than that. Many older adults, increasingly aided and connected by such tech services as Uber, Amazon.com , TaskRabbit, and social media, are finding it easier to remain in their homes instead of moving to a specialized setting. And for those who would prefer to move, the staid offerings of traditional elder communities pale in comparison to special-interest communities aimed at their wants. Jimmy Buffett’s Latitude Margaritaville retirement community in Daytona Beach, Fla., which opened in 2017, with an ethos built on booze, guitars, and boats, is reportedly selling units far fasterthan its developer originally anticipated.