The Economist issued a special report, "A Slow-Burning Fuse," on the colossal impact an aging population will have on economies across the globe in the future. Download it and make it required reading for anyone involved in long-term planning for your organization.

Since humans walked upright the population "pyramid" has had more young people at the bottom and few old people at the top. Two seemingly permanent changes and one "blip" have caused the pyramid to become more cylindrical.

First, people are living longer - much longer. Not just in developed countries, but worldwide. According to the latest UN data, the average life expectancy is 67 for the world and 78 for so-called rich countries. In 1900, it was around 30 and 50, respectively. Today the UN estimates that just under 11% of the world's 6.9 billion are age 60 and older. By 2050 they project that figure to double, to 22%, or 2.2 billion out of a global population of over 9 billion. In developed countries, one out of three will be over 60.

Here's where certainty comes into play: Every single one of those 2.2 billion people who will be over 60 in 2050 has already been born. Makes us recall Poltergeist, as in "They're here."

The second slap-me-and-call-me-Sally reason for the aging of societies is that people everywhere are having far fewer children. This is a recent emerging trend around the globe which has tremendous impact on the population composition locally and globally.

In the 1970s, women globally were having, on average, 4.3 children. Today the global average is 2.6, and only 1.6 in developed countries. It takes 2.1 children to replicate a population. By 2050, the UN predicts the world population will begin to level out.

Creating fewer young at the same time we have more old is changing, perhaps forever, well, everything. Put another way, this is all new territory for humans on this planet. So much for studying history, we're going to make a new history.

The "blip" magnifying the effects of lower fertility and greater longevity is the "baby boom" that arrived in most developed countries after World War II. In those countries, the "age boom" is already sounding and will grow in volume over the next 20 years as Boomers reach age 60 and beyond. But developing countries will experience the same aging shift in the following decades.

The Boomer Line: The report by The Economist provides a good starting point for companies and organizations to get smarter about the impact of global aging. The last sentence in the 14-page report puts it best, quoting demographer Ronald Lee from the University of California, Berkeley: "We don't really know what population aging will be like because no one has done it yet."

Sounds like opportunity to us.

 

The downside of a longer life is what happens at the end. In every study we see that asks about late life living, respondents of all generations want to grow old at home -- "Age in Place."

After reading psychologist Ira Rosofsky's book, Nasty, Brustish and Long: Adventures in Old Age and the World of Eldercare, that's probably a good strategy.

It be also be a necessary strategy if Boomers can't sell their homes. A new study from Harvard says there will be more 5.9 million more home buyers ages 25-44 in the coming years than when Boomers were that age. But there is also more housing inventory available now, and those younger buyers will likely have less money.

So aging in place may make more fiscal sense than other options. Especially once Boomers figure out how to tap into their remaining home equity to fund their fourth quarter of life.

MetLife recently published a report for financial advisors telling them how to use reverse mortgages and other equity-unlocking techniques to help older clients manage their money.

The Boomer Line: The home will be where the action is -- for living, for growing older, for home-based health care, and for income using the equity (if any remains). Knowing this, what business opportunities open up? Plenty.