How “age tech” is creating opportunities for older adults
How “age tech” is creating opportunities for older adults
America is growing older at quite a clip. Nearly one in six people in the United States is now 65 or older. That figure was less than one in 20 a century ago.
Many countries in Asia and Europe are home to far larger, older populations as a share of society, including Japan, South Korea, Italy and Finland. While aging is often treated as an ominous economic problem, growing numbers of entrepreneurs and their financial backers are starting to see aging as an opportunity for innovation and profit.
Marketplace’s senior economics contributor Chris Farrell spoke with “Marketplace Morning Report” host David Brancaccio. Below is an edited transcript of their conversation.
David Brancaccio: So, what the VC crowd, the venture capital community is seeing good investment projects in companies that serve an aging population.
Chris Farrell: Yes, and David, it’s about time. You know, like climate change, the demographics of population aging, you know, it ranks among those significant forces shaping the global economy. And you would think venture capitalists — I mean, these are financiers that focus on profiting from major global trends — would have raced into this market. Yet, for a long time, a majority of venture capitalists, you know, seem blind to the opportunities. Now, I think ageism probably played a role in that neglect. And so did the attitude of, “Why risk money in a market where the customer dies soon?”
Brancaccio: But of course, ageism still runs rampant. What finally woke up these venture capitalists to this market?
Farrell: So, I think there are a number of factors that came together, and the pandemic might mark a turning point. So, at a recent conference at the University of Southern California, it brought together entrepreneurs, researchers, industry leaders in the market for older adults. And David, it was really striking how everyone seemed to have a story about taking care of someone older. Perhaps aging has become personal in the venture capital community.
Brancaccio: Personal. All right. And the demographics of, for instance, Asia is particularly getting investors excited.
Farrell: Absolutely. I mean, the number of older Asian people is predicted to nearly triple over the next four decades, and no country is experiencing aging on the scale of China. The other thing, David, is people are living longer, they’re working longer, and they’re living in their homes longer. They want products and services that improve the quality of life and engagement.
Brancaccio: All right, one way to process this is we get more high-maintenance as we get older. High-maintenance is more costly. Firms want to cash in, right? But I suppose if our quality of life is actually improved, the money older adults spend might be seen as worth it.
Farrell: Oh, absolutely. And a lot of the products and services that were discussed at the conference come under this rubric of age tech. So, these are products and services that use artificial intelligence, information technologies, digital advances to improve the quality of life of older adults. And at the conference, the age tech market was estimated to be around $1 trillion, and it’s on its way to $2 trillion. So, examples would include smart appliances, connected devices in the home, wearable robotics, e-learning platforms. And of course, these are opportunities, David, that really extend way beyond age tech. Every industry will see the benefits of investing more to meet the needs and the wants of an increasingly diverse and engaged older population, or they’re going to get left behind.
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