The financial services industry has seen no shortage of enthusiasm for the millennial generation, with banks and start-ups all clamoring to be the first to understand and serve the needs of the young digital natives and the mobile first generation. But what about the rest of Americans?
Meet the most financially challenged generation in American history. There are over 111 million Americans age 50 and older, confronting a financial future with high anxiety, great struggle and kitchen-table economics that are more complex than any other generation has ever faced. Financial decisions are numerous and amplified in importance with longevity. Much is at stake.
Although the 50-plus segment represents only 35 percent of the U.S. population, its members account for $116.8 billion in revenue in 2017 for the traditional banking industry. They are avid users of digital tools, services and products, and they are increasingly finding that their needs are not met by bank offerings alone. As a result, they are forecasted to spend $15.3 billion in the fast-emerging alternative financial services section by the end of 2017.
By 2020, the number of Americans who are expected to need assistance is projected to be 117 million, yet the number of unpaid family caregivers is expected to reach only 45 million. We need technology more than ever to bridge the gap. Project Catalyst, in collaboration with HITLAB, conducted a survey with over 1,000 caregivers, aimed at identifying their technology interest and usage. The research found that caregivers have a high interest in using technology to care for their loved ones – 71 percent of survey participants expressed interest in using technology to support caregiving activities while less than 10 percent have currently or previously used caregiving technology. Adoption rates are low due to a range of factors including lack of awareness, high cost, perception that technology may not be a benefit, and lack of time to learn and adapt new technologies. This presents an opportunity for the technology industry to leapfrog existing offerings and provide viable alternatives to the 40 million caregivers actively seeking ways to lessen their workload.
Roughly 1 in 10 Americans own an activity or sleep tracker. But do older consumers see these devices as valuable in their quest to improve their health and manage chronic conditions? AARP’s Project Catalyst and the Georgia Technology Research Institute’s HomeLab examined this question – and the market opportunity – by conducting a real-world study. Participants 50-plus used these devices in their daily activities for six weeks and shared their experiences, observations, frustrations and recommendations for product improvements. Trackers showed promise for improving overall health with older consumers. Seventy-seven percent of participants reported trackers to be useful, and 45 percent reported increased motivation for healthier living; but usability issues presented major barriers to adoption by older consumers.
The number of people in need of care in the United States is expected to reach 117 million by 2020, according to AARP. Also growing are the responsibilities of their caregivers: managing daily tasks for a population that’s living longer, monitoring health amid a boom of chronic conditions, planning for transitions while long-term care insurance rates continue to skyrocket, and helping care recipients stay connected to family, friends, neighbors, and health care professionals.
By 2015, more than 1.6 billion people in the world were part of the 50-plus cohort. By 2050, this number is projected to nearly double to about 3.2 billion people. Throughout the world, the growth of this age group is having a transformative impact, economically and socially. The U.S. alone is home to 111 million in the 50-plus cohort; they represent a powerful force that is driving economic growth and value. This is the Longevity Economy, representing the sum of all economic activity driven by the needs of Americans age 50 and older, and includes both products and services they purchase directly and the further economic activity this spending generates. The difference it makes is substantial. In our first report released in 2013, the Longevity Economy fostered $7.1 trillion in annual economic activity. This figure has now been revised up to $7.6 trillion in our 2016 report. The outsized contribution reflects the changing demographics, wealth and spending patterns of the 50-plus population as the life span increases and the Longevity Economy becomes more pervasive and central to economic and social policies.
In 2013, AARP and Parks associates identified a rare, untapped opportunity to generate revenues for entrepreneurs, investors and others in the private sector to generate revenues while meeting the greatest wants and needs of a substantial, influential and important population: people 50 and over. Updated in 2014 with new revenue and market forecasts as well as groundbreaking market landscapes, this research finds that it is an opportunity that could, within five years, generate $30 billion in additional revenues for entrepreneurs and investors while having a significant impact on the lives of 100 million people.
2016 is the year the Longevity Economy spreads its wings. Market disruptions are happening at an astonishing pace. Revenues are steadily shifting away from traditional players. So what’s in store for 2016? Expect an increase in innovation-fueled solutions and an ongoing transformation of care through 2020. And the revenue potential is bigger than previously imagined — cumulative revenues are forecasted at $34 billion, $4 billion more than the previous estimate.
Health innovation frontiers represent a vast and under-addressed market opportunity. Breakthrough technologies, innovative services and disruptive business models will benefit more than 100 million people 50-plus and represent $20 billion in revenue by 2018.
In recent years, many of the most influential investors in venture capital have placed significant bets on digital health and in the 50-plus market specifically. This report highlights the 12 most active investors in the digital health 50-plus market over the last year (through April 2014) and looks at investment trends in the nine categories of health that make up the 50-plus market.
This report, published by StartUp Health and AARP, tracks and reports on early stage investment in digital health solutions for the 50-plus market. It highlights the encouraging rise in health innovation targeted at addressing a growing population with increased medical needs. The total digital health and wellness industry has rapidly expanded from $999 million in 2010 to $2.82 billion by the end of 2013 with a 4-times increase in deal count. The report found that the annual total funding in the 50-plus digital health and wellness space has kept pace with growth in the overall market accounting consistently for greater than 40 percent of funding and deals between 2010 and 2013. Funding in the 50-plus digital health and wellness market rose from $425 million in 2010 to $1.15 billion in 2013.
AARP has sponsored research with the Consumer Electronics Association (CEA)* to spotlight the technology needs and wants of people age 50 and over.
* Through a relationship with the Consumer Electronics Association (CEA), AARP has sponsored custom analysis focusing on the needs and wants of the 50-plus community. This research and analysis has been conducted wholly by CEA. AARP was not involved in the gathering of data, analysis or production of the research or publication of the results. The results are presented here with permission of CEA.