An article posted by CNBC.com—Bust of the Baby Boomer Economy: ‘Generation Spend’ Tightens Belt—proposes a gloomy economic future due to Boomer aging.
Jessica Rao, the article’s author, argues “because of severe recession and stock market losses, Boomers have less to spend, and further they’re entering a post-career life stage when they will reduce spending anyway.”
While this story may be accurate in aggregate—overall national economic growth may decline from loftier times 15 years ago, due to many factors including global competition—it misses myriad nuances of the Boomer future.
In lockstep with Boomer aging, established industries are about to grow exponentially, and enterprises yet to be conceived will create new wealth. Some interviewed for the article acknowledge that “experience industries” such as travel will see a boost, but this cannot be diminished as an aside. When Boomers focus their wealth on shared goals, such as the need to see the world before they die, billions of dollars will follow. Generation Reinvention will answer unrequited dreams notated on countless bucket lists. Travel and tourism-related expenditures will grow dramatically. Thousands of entrepreneurial businesses will emerge.
For example, the National Geographic Society has developed a series of catered tours called Expeditions. These precisely engineered adventures emphasize learning, and many of the Society’s preeminent experts escort guests on their journeys.
Recreational Equipment Incorporated also showcases appealing travel experiences across the nation and throughout the world. So does Road Scholar, an innovative brand reformulation introduced last year by the former Elder Hostel, primarily to accommodate peripatetic Boomers.
Beyond travel we can expect expansion in other industries aligned with an aging population. The CNBC.com article identifies healthcare for obvious reasons: an aging generation needs more medical care for diseases and disabilities related to aging. But the article doesn’t address explosive developments in “age management” industries.
Age management, more commonly referred to as anti-aging, involves novel technologies such as hormone replacement to fortify aging bodies and slow the effects of aging. This rapidly evolving industry includes modern fitness facilities, personal trainers, nutritional supplements, nutricosmetics, preventative genomics, cable TV programming about wellness, medical spas, alternative medicine practitioners, natural foods merchandisers, and functional foods.
Most in this generation share a wish technically known as “compression of morbidity.” They want more than just life expansion; they hope to stay healthy and active until the end and then quickly pass away. A keystone Boomer value, left over from the seventies’ human potential movement, is self-empowerment, and a burgeoning age-management industry squarely addresses this value.
Just as the Salk vaccine diminished and then all-but eradicated polio when Boomers were children, emerging genetic and nanorobotics technologies promise extraordinary new methods to compress morbidity in aging. Most pharmaceutical companies already embrace this opportunity. That’s why they have more than 400 drugs under development to tackle aging, with Viagra being a noteworthy and welcome early innovation.
Intel, the legendary computer chip manufacturer, is among a growing list of companies developing products to help people stay in their homes and avoid assisted care facilities or nursing homes. Intel has recently formed a strategic alliance with GE; these two technology and innovation giants are now also focusing on age adapative technologies through an initiative called Care Innovations.
Not only do aging-in-place technologies have important implications for quality-of-life, they can reduce national healthcare costs. Forrester Research has projected that in-home medical monitoring, just one facet of this burgeoning industry, could reach $34 billion by 2015 as the leading edge of the generation approaches age 70.
I argue that Boomers will spend their wealth in every industry the CNBC article gives a cloudy forecast.
Boomers might not buy as many second homes as once thought, but they’ll downsize and right size. Many will buy cutting-edge retirement homes in active-aging neighborhoods yet to be conceived. They’ll embrace new urban lifestyles in big cities. They’ll be early adopters of communities wired for the future and nostalgically reminiscent of the past. They’ll refurnish their lives while reducing clutter—another emerging industry.
They might reduce spending on luxury products, but Boomers have always found ways to justify luxuries that match their stage-of-life passions. A luxury necklace is more than a fashion statement when a grandmother buys it as a future heirloom for her granddaughter.
They might stop buying Mercedes automobiles, as speculated in the article, but an enterprising car manufacturer will develop the ideal vehicle to fulfill Boomer driving aspirations in later life. The Volkswagen Beetle became a metaphor for their road-tripping youth, and the Chrysler minivan became the soccer-mom brand when they were raising families. An imaginative “third-age” vehicle, designed to compensate for sensory deficits with cool technologies and universal design, will punctuate their automotive driving future.
Those who warn of Boomer economic catastrophes often look at the future through the rearview mirror. I propose that the Boomer future is robust with opportunities.
Not only is Generation Reinvention changing aging, reshaping their post-career years to be expansive, engaged, and vital, this generation is setting the stage for younger generations to one day receive greater economic and social opportunities in their aging.
Will some businesses lose money because Boomers are aging? Yes. Will some businesses make fortunes because Boomers are aging? Count on it.
The future is always fraught with uncertainties, but it’s not reaching too far to conclude that trillions of dollars will be made and spent in the next few decades by a generation that has shaped the consumer economy for the last 40 years. Boomers are going to transform traditional industries focused on mature consumers. They will influence innovation of entirely new industries, whether bricks and mortar or online.
Their imprint on commercial enterprises and nonprofit organizations will endure beyond them. Younger generations will come to accept as normative many new, robust, and egalitarian conceptions of aging as Boomers transform everything in their paths, from housing, health care, and home-based services, to tourism, transportation, and traditions associated with aging. The significant uncertainties in this economic forecast reside in three questions:
• What are you going to do about it?
• How will you be part of this transformation?
• Will you profit from the forthcoming revolutions in consumerism and the sociology of aging?
The above essay is an edited excerpt from Generation Reinvention: How Boomers Today Are Changing Business, Marketing, Aging and the Future. This 279-page book explores a growing body of research, arguments, insights, and speculation over how Boomers are impacting aging and commerce. Implications from my book are monetary and personal, local and international, intergenerational and multicultural. To learn why these conclusions are significant for your work and future, you can get a copy from online book retailers, including Amazon. Thank you for following my blog and, of course, your interest in Generation Reinvention.