Grey matters

Ageing societies must harness the skills and experience of the “silver tsunami” to ease the strain on public resources – and keep the sustainability agenda on track, writes John Elkington.

Over the years, I have met a surprising number of robots in Japan, including Aibo, Sony’s robotic dog. And one thing I have been told repeatedly is that the Japanese obsession with robots is partly fuelled by a concern that the ageing of the country’s population will trigger huge demand for elderly care, which people would very much prefer was met by machines than by immigrant workers. 

True or not, a recent robotics fair in Japan featured humanoid waiters, mechanical arms and robotic wheelchairs, many of these products reflecting the needs and wants of a country where life expectancy is now 86 years for women and 79 years for men. You might wonder whether we will see a future where robots tend the elderly, doing everything from lifting them in and out of bed through to reading their faces to know what they are likely to want next.

As a “baby boomer”, one of the post-war generation that has had such an impact on the world, for better and worse, I am now a reasonably fit 61-year-old. Like many boomers, I have no thoughts of retirement, imagining at least another 15 to 20 years of useful work. But I am increasingly concerned about the impact of the ageing trend on politics – and on the appetite in greying societies for the sort of transformational economic, technological and social changes that will be required to shift the global economy onto a more sustainable footing.

A world of 9 billion people by mid-century will be unsustainable in multiple dimensions without profound technological, economic, social and political transformations. And our chances of success will be massively compromised if we fail to work out how to tackle the most critical demographic challenge in the developed world, the ageing trend that some now call the “silver tsunami”. That’s why we have created a consortium of Volans, Cranfield University and Accenture to explore some of the implications of related demographic trends for entrepreneurship and the sustainability agenda.

The ageing of the baby boom generation could not only herald growing strains on health care, housing and pension systems, but also – even more alarming – a fading of the appetite for transformational social and economic change that will be necessary to adapt our technologies, business models, lifestyles and economies to the environmental realities of the twenty-first century. 

There is an upside, however. There will be exciting opportunities both to use new business models to meet the needs of the over-50s and to mobilise the knowledge, skills, experience, contacts and financial resources of retirees and those moving towards retirement.

The implications of an ageing society should be particularly important for businesses committed to corporate responsibility (CR), yet in practice they do not yet appear to be integrated into the wider CR agenda. This is pretty much analogous to the disability issue some 15 to 20 years ago. A quick review of the websites of major CR organisations shows little material – and few initiatives – on ageing. There has been very little attention paid, so far, to what would be the responsible business approach to an ageing society.

The ideal outcome, of course, would be one where the issue of age became less significant, in effect an “ageless society”. On current trends, however, we are as likely to see societies splintering into age-denominated (and increasingly gated) communities. Market research is beginning to explore “grey” markets, and the degree to which they are served by current generations of products and services. One conclusion: older people seem to be moving into a “buy now, worry later” mindset, though it will be interesting to see to what extent that has survived the global downturn.

A central dynamic is that an ageing society means a larger number of older consumers – and a larger percentage of spending power controlled by older people. There is going to be greater demand for certain types of products and services. Will financial institutions offer more tailored equity-release schemes for older people to finance long-term care? Will pharmaceutical companies, for example, invest more in research and development to create new products offering not just enhanced longevity but greater functional, physical and mental longevity? Will retailers customise services for older people?

Business will need to work out how to use older workers to the best effect. A recent article in the Harvard Business Review by Christoph Loch, professor of technology management at business school INSEAD, and two colleagues looks at what happened when car company BMW decided to staff one of its production lines with workers of an age likely to be typical at the firm in 2017. At first “the pensioners’ line” was less productive. But the firm brought it up to the level of the rest of the factory by introducing 70 relatively small changes, such as new chairs, comfier shoes, magnifying lenses and adjustable tables.

Whether we like it or not, defusing this demographic time bomb will claim a growing share of the attention of political and business leaders. We must urgently develop business models that help harness the skills, experience, connections and financial resources of those in – or just entering – the second half of their lives in order to tackle social, environmental and governance challenges. 

Whether or not I end up being cared for by a robot, an outcome I would hate, we must now work out ways to re-ignite, ignite or channel the entrepreneurial abilities of some of our best-trained people, who are either retired or approaching that point. We must create the pre-conditions of an ageless society. In the ideal win-win outcome, we would help counter the natural tendency of older people to resist change, boost the resources available to leading change-makers and help emerging sustainability solutions to evolve and scale.

John Elkington is executive chairman of Volans and non-executive director at SustainAbility.

Homepage image by dshack