There are nearly 70 million baby boomers in the U.S. The generational cohort above the baby boomers in age - the Silent Generation - comprises only 20 million people altogether. In 2030, all baby boomers will be above the age of 65, according to Linda A. Jacobsen in her PRB article “Debunking Baby Boomer Myths”.
It is worth highlighting that the disconnect between 70m and 20m is nothing short of what can only be deemed a “Silver Tsunami”.
On the one hand, this represents a huge business opportunity. Given its size and importance, far too few entrepreneurs are focused on it, as I wrote in a previous post.
On the other hand, this Silver Tsunami will create huge tensions. Many elders will face serious challenges, including economic insecurity and loneliness. More than 40% of elderly households currently lack sufficient resources to maintain their living standard in retirement, according to the Wall Street Journal. What is paradoxical is that baby boomers are not necessarily healthier than their predecessors, despite having higher levels of education. Although they smoke less, many are suffering from obesity, notes Jacobsen.
And this is not all. Younger generations will be impacted strongly by the coming Silver Tsunami, creating intergenerational friction. Meanwhile, a high proportion of the working population’s taxes goes towards supporting the elderly. Younger generations are not seeing the benefits of their tax payments, housing is unaffordable, and more students are relying on loans. In an op-ed in the New York Times last year, two experts, C. Eugene Steuerle and Glenn Kramon, both in their seventies, pointed out how unfair the U.S. Medicare and Social Security system is towards young people.
The situation is similar in many countries. In Canada, the Conservative opposition leader Pierre Poilievre calls younger Canadians “generation screwed.” The situation in Italy, Japan and South Korea is even worse than in the U.S. or Canada, but it’s only a matter of time.
The Times’ piece proposes some solutions but they are painful: a) raise the retirement age, and b) cut costs in health care and the pension system.
However, the authors are missing something important. The power of innovation and entrepreneurship. It is not a zero-sum game. Here are just three examples of innovation areas, which lead to lower health care costs, lower care and living costs and better-suited job opportunities for the elderly.
Health innovation is shifting from treatment to prognosis and prevention. This will ultimately lower the costs for the system substantially. Traditionally, the system is geared towards trying to fix problems at a huge price tag.
One of the most well-known startups in this area is Neko Health, the body scan clinic focused on mole mapping, diabetes and cardiovascular disease. Behind it: Spotify founder Daniel Ek. The Stockholm-based company received $260 million in funding earlier this year, and Neko Health is not the only player focused on holistic health scans. Its competitors include Function, Prenuvo, and Fountain Life, which have all raised significant capital. According to CB Insights, $643m of VC funding went into these four companies alone. Alas, many of these services are still out of reach for all but the richest seniors. However, costs will fall.
Care tasks and living spaces can be shared amongst the generations, providing a win-win for everyone so that nobody has to be “screwed.” Several initiatives have developed around this concept, for example, the Brooklyn-based social enterprise Nesterly.
This company operates in a couple of US cities and is explicitly focused on intergenerational living. Through “task sharing,” younger tenants and lodgers can reduce their rent substantially. Another player, a little different, is HomeShareOnline. These are all wonderful concepts pushed by entrepreneurs. Not every startup requires $260m to jump-start its vision.
Our elders are yearning to contribute to society, and many actually want to work longer but find the job market skewed against them. Thus, part of the solution is also about how to make work better suited and more welcoming for seniors, not just by extending the pension age.
In my previous post, we already mentioned the Australian jobs site Maturious.com. In German-speaking countries, there is Seniors at Work, and in the US, the AARP Jobs Board is huge.
Innovation in each of these areas will reduce pressure on the system and lower friction between the generations. But there are not nearly enough agetech moonshots out there, and as the silver tsunami approaches, we are certainly going to need more.