Saturday, 16 February 2008

The Olderpreneurs

Is an ageing society a problem? When we see this issue discussed, it is normally in terms of dependency ratios (the number of people of working age supporting the number of people not of working age), potential burdens on healthcare systems, and, of course, the looming pensions crisis. It would seem that the future for us all could be quite bleak.

We cannot deny that possibility of this scenario as a future, but the case against it is starting to mount up. The BBC Money Programme carried a feature last week on ‘Olderpreneurs’ (see feature). This was a very interesting programme for a number of reasons. In the UK, if we can believe the official statistics, there are now more people aged over 60 than there are aged under 16. The section of society with the fastest growing amount of business formation is the over 50s. It is unclear why the statistics cut off at 50. There is potentially a lot of interesting facts that are buried in this aggregation.

This rather struck a chord personally. I turned 50 this year, which meant that I went from the relatively unemployable to the completely unemployable. I know a number of very competent people who are practising well into their 60s and beyond. This signifies an important change in society that we ought to note. As more and more Boomers enter into their 60s, the definition of what it means to age is likely to change quite significantly.

To start with, people in their advancing years are unlikely to want to give up work. They need it for the income. From the perspective of the economist, people are likely to draw down their human capital for a monetary income. The tale of the looming pensions crisis relies entirely on the accumulation of monetary capital as its basis. The use of human capital as a pension fund rather cuts through the argument. It also rather undermines the argument about dependency ratios. If the nature of work is changing so that people are working for longer in their lives, then, by definition, the dependency ratio is not likely to change in quite an adverse way as previously feared.

People also like to continue to work for the social contact that it brings. Once again, economists are now starting to highlight the monetary value of social networks. The argument of those who fear a looming pensions crisis completely discount the value of social capital as a generator of monetary income. The Olderpreneurs are likely to become an important B2B segment as well as being a B2C segment of increasing importance. The Olderpreneurs are more likely to respect experience over youth, creating a ‘Grey Economy’ of friends doing business with friends. It may be that the looming pensions crisis is not as bad as it has been made out to be.

If so, then one might wonder about the prospect of the burdens upon healthcare systems. What does this mean in practice? It means that we – as a society – do not have sufficient monetary resources to pay for the eldercare demanded within the system. However, over the past twenty years, there has been a trend towards shifting the financial cost of aftercare from the Health Service to the patient. In fact, UK hospitals contain so much latent infection that it is safer not to have aftercare in hospital but to have it at home. The social networks of patients – family and friends – have been picking up the cost of this healthcare, and there is no reason to suggest that they will not continue to do so in the future.

When we look at it like this, perhaps an ageing population will not be so problematical?

The Future of Work and Management is a topic that is being covered at the London Futures Symposium on April 18th 2008. Click here for more details of the event.

No comments: