Turning old into gold: Why an older worker may be your next innovation champion
We wish to positively start 2025 by exploring how older workers can assist companies enhance their innovative capability. As the world drifts towards nations inhabited by increasingly older demographics, economists are waking up to its possible ramifications and becoming more nervous about this trend’s potential impacts on productivity and GDP movement if nothing changes. Improving firm innovation capacity is recognised as one micro-economic reform that can contribute to tackling anticipated productivity and economic growth challenges. By outlining the benefits and opportunities of actively embracing older workers within the corporate innovation space, we also wish to provide another plank to the business case for creating age inclusive workforces.
The product & services innovation gap
According to the peak national employer organisation, the Australian Industry Group, Australia performs well on innovation compared to our peers, ranking seventh out of 36 countries in the OECD innovation ranking. Australian innovation rates are around 12 percentage points higher than the OECD average, where only 55% of firms are innovation active and 49% are innovative.
Process innovation is what Australian business does best and where the focus of local innovation is placed. The emphasis is on efficiency improvement and cost reduction. By contrast, inventing new goods and services is less common. Only 15% of innovation active businesses are targeting ‘new to the world’ product innovation, while 25% pursue ‘new to Australia’ products. The business mentality is about ‘doing something new’ rather than ‘inventing something new’.
Whilst there are a range of factors contributing to this situation, two causes are generally advanced to help explain the inability or reluctance of Australian organisations to play in the product innovation space. Local business decries the existence of skill shortages which they maintain inhibits their ability to innovate, whilst the Institute of Company Directors (AICD) observes Australian business has a thinking problem. The AICD noted in 2021 Australian business was 78th in the world for knowledge diffusion and 52nd for knowledge absorption at the organisation level.
Perhaps, in part, these observations might help understand the slow response of local industry to the business opportunities an ageing global demographic increasingly offers. The accumulating knowledge of demographic change and its possible social and economic impacts is still not permeating local business thinking and practice. This is where there is an opportunity for the older worker to play a role in increasing business innovation capability.
The emerging ‘silver economy’ and its product innovation opportunity
In our earlier newsletters we have referred to the advent of an emerging ‘silver economy’ represented by people 50 years of age and over. All indications indicate this is the world’s largest and fastest growing ‘emerging market’. Currently, this economy is estimated to contribute $45 trillion to global GDP with projections by 2050 of this number more than doubling. We are also seeing a rapid expansion of the global consumer class. The World Data Lab, predicts this class (defined as anyone who spends at least $11 per day) will grow from 3.9 billion people as of 2020 to 5.6 billion by 2030. Driving this expansion will be consumers aged 65-plus, a group that will grow by 66% during this time period, a rate faster than younger ranges.
Joe Coughlin, the founder and director of the MITAgeLab has also identified another trend with the older US consumer which is a lack of interest in leaving behind an inheritance. They have a desire to keep on spending until they die. He notes that although they have begun to transfer some of their wealth down this maybe because they see nothing better to spend their money on. He suggests this hints at a mismatch between, on one hand, the actual universe of products and services the economy is presently churning out, and, on the other, the hypothetical universe of things that would compel older consumers to whip out their debit cards.
Anecdotally, Coughlin may be on to something. A recent local media report highlights a similar Australian trend. Travel companies and retirement experts are noticing increasing numbers of older Australians choosing frequent and sometimes extravagant holidays as retirees forsake traditional saving habits and adopt a new ‘spending the kids’ inheritance travel mantra.
Against this background, marketers still tend to focus on the younger generations. While the younger generation accounts for less than 3% of all consumer spending, companies still allocate most of their marketing resources towards them. Age 49 appears the do not cross line for many in marketing with the Economic Intelligence Unit determining in 2011 that a mere 31% of companies factored ageing into their marketing and sales plans. A 2019 AARP study of marketing imagery revealed just 15% of brands’ images depicted adults over age 50 – despite their accounting for 46% of the adult population.
The bottom line is for Australian business, there is a great deal of value to be created, and money to be earned, by serving older people, both their existing wants and needs, as well as sources of demand yet to be created or discovered. A company embrace of an age inclusive workforce would seem a great investment in enhancing their innovative capability to take advantage of the emerging older adult market.
The older worker innovation ‘value add’
Coughlin argues representation in workplaces can affect which products and services get developed – and how, and for whom. And right now, the lack of older worker representation in the workforce is contributing to stereotypes of ageing resulting in a focus on products and services addressing presumed frailty needs, a missed opportunity for the development of new products and services or the design of products and services that do not work properly as older consumers do not operate them as was intended.
Coughlin maintains in the absence of actual older people in the room to set the record straight, younger designers, marketers and advertisers attempting to serve older markets must necessarily turn to what they think they know about old age. This hodgepodge of second-hand knowledge and stereotypes can have a destructive effect. Innovator views of the older market and the advertising industry’s support of this perception is blinkered. Two tropes about older adults have come to dominate, although for many in this cohort neither is representative of their real life.
There is the trope of the older adult as ‘the 'loved one,' who may be frail or declining, offering an overgeneralised view that older adults need care and protection through for example pharmaceutical, care work, reverse mortgages and home security systems products and services. The other is the ‘super-ager’ who is not letting the grass grow under their feet with their want of adventure, good health, personal growth and community contribution. Think here cruise ships, golf or pickleball pursuits, a crisp white wine with friends under palm trees at sunset, learning new skills or volunteering as a grandparent or charity support.
Whilst these tropes represent extremes of older age life, this does not make them wrong, per se, but the view they offer of the world is incomplete. With both wants and needs apparently accounted for, there is no need to think harder about what else might make older people’s lives better, producing a false sense of comprehensiveness. This perhaps could be expected from an advertising industry perspective where the majority of employees are aged between 25 and 44.
The absence of the older adult perspective from workplace innovation discussions about their perceived needs or wants, means the notion that older people, in all their variety and complexity, who might have something to produce or create, not just consume – to say nothing of the products or services that could support those ambitions, is entirely missing from the innovation conversation.
Harnessing older workers to fill the business innovation skills gap
The Productivity Commission identifies the diffusion of ideas, their adoption and adaptation by the broad mass of Australian businesses as the “main game” in productivity policy. Deloitte understands staying competitive in a world of unprecedented longevity demands that organisations adopt new strategies to engage with older talent. The traditional assumptions of learning ending in one’s 20s, career progression ending in the 40s, and work ending in the 60s (if you’re lucky) are no longer accurate or sustainable. Rethinking workforce strategies across multiple generations to account for longer lives will require open minds and fresh approaches. Evidence also points to older workers being able to make invaluable contributions to older adult product and service innovation because of their actual lived experience.
Business continues to tell us there is a skills shortage impeding their innovative capability, singularly ignoring the possibility older workers offer in helping fill this gap. The value of older workers in the innovative space is not just through their ability to convert life experience into product or service innovation. They are also well educated. ChatGPT indicates about 23% of Australians aged 50 and over hold a university degree with this figure gradually increasing as more older Australians pursue higher education later in life or continue their studies. There exists a lot of intellectual horsepower to drive innovation capability within older workers.
What a great example of the Productivity Commission’s desire for more idea diffusion to be adopted and adapted than to integrate older workers into an age inclusive workforce that drives productivity growth through increased business innovation capability. So where are the 50 years and over marketers, advertisers, salespeople, business developers, product and service designers or researchers in today’s workforce? Where are the 65 year and over CEOs ready to challenge prevailing business orthodoxy?
In a world where older peoples’ needs and wants are defined by a younger generation, there seems a generic understanding that the ‘silver economy’ is the best way to define the potential older age consumer market and this perceived market is a homogenous one. Older worker input into older adult business product and service design strategies might help firms understand there exist a variety of over 50 years of age markets each with their own demand peculiarities.
They may also help decision-makers understand that characterising the over 50 years market as ‘the silver economy’ might be a self-limiting way to frame the potential opportunities in this emerging market. As Andrew Scott, a Professor of Economics at London Business School observes, the concept of a silver economy represents a positive version of an ageing society rather than reflecting the importance of creating a longevity economy which recognises a bigger change-that of older and younger people becoming more similar. The wisdom of older workers might help those younger in the workforce to consider there is a bigger business upside to promoting a longevity economy than continuing to reinforce the less positive notion of an ageing society.
Not sure how to get started? We can help you understand the business opportunities the emerging 50 years and over age group could represent and the questions your senior managers should be asking to take advantage of this change.
We’re happy to speak to your organisation on the business case for older workers and how to make age-inclusive teams’ work. It's a winning proposition for your organisation.
References
Coughlin, J.F. & Yoquinto, L. (2024) Longevity Hubs: Regional Innovation for Global Ageing. The MIT Press. Cambridge. Massachusetts
Deloitte. (2018). The rise of the social enterprise. Deloitte Global Human Capital Trends Report.
Foster, E. (2024) Productivity growth is at a 60-year low. AICD Note (1 March)
Hall, J. (2024) Boomers make up 30% of consumer spending — so why do advertisers ignore them? Market Watch (Feb. 7)
Scott, J, A. (2024). The Longevity Imperative: Building a better Society for Healthier, Longer Lives. Basic Books. UK.
Sydney Morning Herald. (2025) ‘Well-travelled Wilma joins the SKI club, and her daughter couldn’t be happier’. (January 25).
Wilson, G. (2024) Inside the engine-room of Australia’s innovative businesses. AIG Research Note.
