Impact of the Longevity Economy on Older Americans

Bob Edwards: Hello. I'm Bob Edwards with an AARP Take On Today. Here's something to consider. If all Americans age 50 and over formed their own separate nation, that economy's gross domestic product would rank third, behind only the United States and China. The sum of all of our combined economic activity would amount to $7.6 trillion, and we would surpass the GDP of some of the wealthiest nations on Earth.

Americans over 50 are a powerful force in commerce, and our contributions are known as the longevity economy. Here to talk about the longevity economy and everything else related to aging and technology is Joe Coughlin. He teaches in MIT's Sloan School of Management, and his research explores how demographic change, technology, and social trends converge to drive future innovations in business and government. Welcome, Joe.

Joe Coughlin: It's great to be here.

Bob Edwards: Not only do you serve on the AARP Board of Directors, but you're also the founder and director of the MIT Age Lab. How did that program come about, and what is its goal?

Joe Coughlin: Well, we have a lot of fun, first. We're based in the School of Engineering, and my staff and students basically have one very simple goal, to live longer better by technology, and services, and the like, to improve transportation, home services, how we provide care, and frankly how we plan for longevity. How do we plan living longer? So, it's a little bit of engineering, a lot of psychology, and a lot of other things, like gerontology, medicine, even political science and economics.

Bob Edwards: How did this come about?

Joe Coughlin: Well, my original area of research that I did with AARP and the US Department of Transportation was on older drivers. While that's a perennial issue in the media and somewhere between humor and horror quite often, it really struck me that given the demographic changes, which were easy to see, you could see them coming, the Baby Boomers have been aging for a long time, we had not planned for the infrastructure of what it was like to have an aging society. Not just how to get around, which was the transportation part that I was first interested in, but where we're going to live. What are we going to do? How are we going to provide care? Old age is quite new. So, I started a lab that said how do we start new technologies, new products, new services to invent life tomorrow?

Bob Edwards: You're the author of The Longevity Economy. What is the longevity economy?

Joe Coughlin: My book, The Longevity Economy, is about, as I like to put it, an emerging market hiding in plain sight. I want you to imagine that the 50 plus are the fastest growing part of the population not just in the United States, but around the world, just in pure economic matter. Not just about numbers, not just a story about more, but we're looking in the United States nearly 70% of the spending power is held by the 50 plus. In the world they would be the third largest economy, after the GDP of the United States and China. The Longevity Economy is about more older adults with greater demands and frankly the need for new products and services that not just fit your needs, but excite and delight.

Bob Edwards: What's the impact of that, other than creating needs?

Joe Coughlin: Well, if you think about it, while we've always had older people, we've never really had this many older people with a very different background of education, and income, and tech savviness, and the like. It's really pushing businesses to have to come up with new ideas that go beyond the basics of healthcare and housing that we need, but to come up with products that really get people excited enough about living longer is also about living better.

Bob Edwards: Your book crisply and clearly lays out to wide gulf between myths and realities of older populations today. What are the origins of the myths?

Joe Coughlin: Well, the fun part about the book is it's not a quantitative analyses, but in many ways I believe that narrative is far more powerful. Old age is actually made up. The story around old age comes from something called vital energy that came largely out of the medical research in the UK in the 1800s. Vital energy said that basically you were born or imbued with a certain amount of energy, and if you used it badly, which basically means anything fun, you would eventually get tired. In fact, you would get so tired that you would have to retire. So, many of the poor houses, and retirement, and Oms houses became retirement homes. The problem was we now had a story that was going on for over 100, 200 years that old age was about this half-full glass that basically over time ran empty.

Bob Edwards: So, I'm not in the home. I guess I had enough fun?

Joe Coughlin: No. You got more fun to go.

Bob Edwards: Why are these myths so dangerous?

Joe Coughlin: I think that a lot of people look to technology as being the great driver of innovation. In part, it is, but our stories are the things that power our creativity, but also limit it. If we have a story that basically says that old age is about being tired and retiring, start thinking about the following stories that are out there that have kept us from developing great technologies for older adults. Myth number one, older adults don't like technology. Interesting. The high tech, high style cars out there are bought by the 50 plus. Tablets, whether they're the Apple iPad or others, are bought in good number by the people over age 60.

How about this? The other story is that because they're tired and because they have disease and health issues, we only create products that take their blood pressure and remind them to take their meds. Honda Element designed this big, boxy car/truck combination for young kids, mostly guys, to go to the beach with a surfboard and a dog. They made it so you could hose it out, and the doors were easy to open and the like. Guess what, the kids liked it, but so did the older adults, because basically we have lives, surfboards, dogs, gardening equipment, and golf clubs as well.

Bob Edwards: How will societies function differently because of a growing older population?

Joe Coughlin: Well, they're going to start functioning differently, because the next generation of old and frankly I think, if I may use the royal we, many of us are already here. We're expecting to have greater engagement to where health is a priority, not just to manage disease, but to manage engagement and to be out there. We're going to be changing work. Work is going to be not just for a longer period, but demand flexibility. We may want to work more years. That didn't mean I want work 40 hours in the same job for the next 40 years. So, we're going to be changing what we think about health, wellbeing, and the workplace.

Bob Edwards: In your book you suggest that Boomers will serve as a sorting mechanism in the longevity economy. What are we sorting and how?

Joe Coughlin: Well, the Baby Boomers have changed almost everything, many of them for good, some of them, who knows. But I want you to imagine, this generation has more education. I'm not here to tell you that years of schooling make you smart, but we do have more years of school than any other generation before us. We are more tech savvy. We have more buying power. As a result, the new generation gap is not about Baby Boomers and their parents, but expectations. We expect there's a pill, a policy, a product somewhere out there that's going to enable us to live marginally better in old age than our parents did.

So, that gap is that gap that parents went quietly into the good night, and what we expect as Baby Boomers or older generation is going to teach not just the Boomers, but future generations, that there is a way to live better, that we expect to live long and better. The switch, the catalyst that's going to make this happen is perhaps the most ignored consumer on the planet, older women. The future is female. She's the one who's not just living longer, but she's providing the majority of care. She does all the work in the house. She knows what products and services are needed, and yet she's the most ignored by business.

Bob Edwards: Joe, I like this.

Joe Coughlin: Yeah. It's going to make up for a very bad high school experience for me when there's all those women.

Bob Edwards: Why is it so important for business, industries, governments, et cetera to understand this reality?

Joe Coughlin: Well, there's the economic, crass reason, which is frankly they're leaving an entire opportunity, an entire market force that, as I said, is the equivalent of the third largest economy in the world on the table, but there's something else. Business frankly, government and society is about stories. If we don't start creating new products, and services, and experiences, and [inaudible] public policies, we are not fully cashing in the longevity dividend of living longer.

Let me just do some very quick math for you. From zero to 21 years old is about 8,000 days. From 21 to roughly what we might call midlife crisis in our 40s is 8,000 days, and from about the late 40s to 65 is 8,000 days, but the fastest growing part of the population is 85 plus. That's another 8,000 days. It's one-third of an adult life where government, business, nonprofits, and the like have yet to invent a story, or the products, or the services to excite and delight for one-third of life. So, it's not just about the economic value. It's about giving me a reason to cash in those 8,000 days with a smile.

Bob Edwards: The tech industry seems to really stand out. How is the older population influencing technology?

Joe Coughlin: Well, as far as pure numbers and pure economics, older adults pose an amazing market for the tech industry. While we tend to look at younger people, Gen Z, and Millennials, as being the digital natives, that digital lifestyle or that digital divide is starting to close. Older adults are now online. They're on social media, and they're doing more than just sharing pictures. They're actually doing research. The other thing is that the tech industry is starting to take note that they may not necessarily been innovating correctly for an aging populations. Not everything an older adult needs has to do with measuring my blood pressure and reminding me to take my medication. By the way, technology should come in colors other than beige and clinical blue. So, the tech industry is starting to take note, but they've got a long way to go.

Bob Edwards: What should we expect from technological advancements?

Joe Coughlin: Well, that's what's fun, because the tech advancements combined with the attitude, if you will, of the new older generation in the longevity economy is actually introducing values that are truly ageless. We're looking at wellness and performance as being universal. It's not how many diseases I have, but how much can I do with the conditions that I may be managing. It's about making things easy, not just usable, but everybody at every age likes things that are particularly usable.

Technology also makes things more ability to personalize them. If I want the font larger because I'm wearing glasses, I can do that, not because I'm using a device that says old man that can't see. But frankly it's translating into new, cool things. Your house will start to predict services that you need and order them before you need them. The autonomous vehicle has great promise. There's still work to go, but the idea of seamless, safe mobility across the lifespan. So, technology combined with consumer demand from an aging population is going to make life better for everyone of every age.

Bob Edwards: Well, that's what technology's supposed to do. Right?

Joe Coughlin: Yeah. We hope.

Bob Edwards: Are there advancements we should see in the near future, let's say in the next year?

Joe Coughlin: Smart environments, homes that are able to detect how you're feeling and literally change everything from color, to temperature, and the like to make you feel better, nanobots, the science of the really small that maybe clean out those decades of cheesesteaks I ate when I grew up on Philadelphia, and frankly starting to look at genetics in terms of we might get pre-treatment, in terms of diet and exercise based upon how well we chose our parents.

Bob Edwards: I like that, the house sensing my mood. House, I got the blues. What do you got for me? How are some businesses adapting?

Joe Coughlin: Well, they're starting to look more and more at usability and being able to do things better. The original piece of equipment I always like to say is perfect for all ages is the microwave. It's the difference between sometimes eating and not eating if you're a household of one and eating well. I'll pick one brand that is particularly interesting. Dyson makes very high end, very expensive products, but they're very light. They're easy to use, and by the way, they come in bright colors, so they're not necessarily seeing an old man walking kind of thing. Yeah. Those products that allow you to personalize, that are easy to use, that's how business is starting to respond, ever so slowly.

Bob Edwards: How are workforces impacted? I assume new products means new jobs.

Joe Coughlin: Yeah. Well, also the fact that many of us who can may end up working longer. In fact, some of the data of the research we've done shows that people are working longer, yes, for money, but the other reason is for meaning. In many cases most of the people you know are at the office or at the plant, but now think about this. Now that we're living so much longer, we're looking at four or five generations in the workplace. The World War II generation and the Korean War generation, 3% of them are still in the workplace, and the average age of a small business owner is well into their 50s. So, suddenly now we've got a whole workforce that's had multiple generations, where not only are we gonna be having to learn across the lifespan to be able to stay in the workplace, but you're not gonna have four, or five, or six jobs in a lifetime. You're likely, due to change of technology and the amount of time you're in the workplace, to have four or five careers in a lifetime.

Bob Edwards: What happened to don't teach an old dog new tricks?

Joe Coughlin: Exactly.

Bob Edwards: We can be retrained?

Joe Coughlin: Yeah. We can be retrained, and it's something that frankly very few of us want to do the same thing for decades. We want a little bit of a mix or a little bit of flexibility to spice it up.

Bob Edwards: Do you expect the longevity economy to remain powerful for future generations?

Joe Coughlin: Yeah. I think that perhaps the legacy that the Baby Boomers will leave, among other things, is the expectation to live longer better. The demography is showing us that we are going to have an increasing number of older adults, but it's going to be an increasing number of older adults with attitude.

Bob Edwards: How is this going to change society long-term?

Joe Coughlin: I think we're about to see ever so slowly, but it's coming, a change in genuine social contract. What I mean by that is that life right now is designed around basically zero to about 75, when in fact we have more and more people living to 85, and we have to start thinking more and more about a 100-year life. So, education, we have to rethink that. We can't think that going to school from zero to 18 or 21 is going to last you a lifetime. We're going to be living a life where school is never out, a multi-work career, working longer in general. By the way, how many houses will you live in? We may move many more times.

As my wife likes to remind me to read my own research, with a highest divorce rate among people over age 50, maybe dating is going to be a bigger thing. Who knows? But the fact of the matter is that we're now looking at where health, and personal performance, and the like is something where we have to start teaching people the day they're born in school that that original equipment that you were given at birth has got to last 100 years.

Bob Edwards: Thank you so much.

Joe Coughlin: Thank you, Bob.

Bob Edwards: Joe Coughlin serves on AARP's Board of Directors, is director and founder of MIT's Age Lab, and author of The Longevity Economy, Unlocking the World's Fastest Growing, Most Misunderstood Market, which is available online and in stores. You can find more from Joe Coughlin on how older Americans are fueling the economy in our show notes or at AARP.org.

A lot of us cheat. That is we rely on one of the 53.6 million pairs of readers or cheaters that were sold in the US last year to help us read the fine print. At an average price of only $17, many of us buy multiple pairs to have at the ready around our homes and workplaces. As the population gets older, over the counter vision correction is getting bold. For starters, new versions can do more than just magnify words on a page. There are now computer glasses with filter to shield your eyes from the harmful blue light emitted by digital screens. There are sunglasses too for enjoying a paperback at the beach or pool while blocking out UV rays. There are even nonprescription bifocal sunglasses with reading magnification notched into the bottom, so you need only one pair of sunglasses for all your outdoor activities. For those who hope to buy drugstore glasses for distance vision someday, that prospect is still in the distant future. For our nearsighted friends it's still best to see your eye doctor for an eye exam and prescriptions.

For more visit AARP.org/podcast. Become a subscriber, and be sure to rate our podcast on Apple Podcast, Google Play, Stitcher, and other podcast apps. Thanks for listening. I'm Bob Edwards.