[Senior Trend] Fierce Competition in the US Senior Industry① Longevity Economy

Iboram, CEO of Third Age

Peter Drucker, the global guru of management, once described demography as the future that has already happened, predicting ‘The Future of Global Aging.’ In response, the United States has long conducted extensive research and commercial projects in various fields. The three countries of Korea, China, and Japan differ from the U.S., where the government focuses on welfare aspects of aging, while the private sector has developed in a commercial direction. Therefore, cases from Japan and China, which are geographically close and share similarities with Korea, have been carefully examined, whereas the U.S. has received relatively less attention due to its distance and significant cultural and background differences. In Korea, whether in senior education or health sectors, even if initiatives start privately, the common perception is, ‘Isn’t that the government’s job?’ Government agencies such as the Ministry of Health and Welfare and the Ministry of Employment and Labor cover almost every senior service area. This makes it difficult to approach aging as a business, as it operates mainly within policies and systems. The situation is different in the U.S., where companies enter the market and expand services based on how much seniors are willing and able to pay for actual services.

Interest in the U.S. senior business sector has been rising this year. There is a growing consensus, especially among seniors around their 40s, that viewing aging solely from a welfare perspective will only lead to financial depletion. Currently, the U.S. forms the world’s largest single market for the age-friendly industry, already exceeding about $3 trillion, with an estimated 80 million people aged 65 or older by 2030. Most notably, this sector is supported by a self-sustaining organization created for the economic benefit of American seniors. The American Association of Retired Persons (AARP) has 40 million members. Any American aged 50 or older can join, with an annual fee of $16. Partnered insurance companies, banks, travel agencies, shopping malls, and restaurants offer discounts and benefits far exceeding the membership fee. AARP also actively lobbies in politics. With its large membership, it wields significant voting power and works to secure and expand seniors’ rights. It participates in activities such as corporate R&D and new service development targeting seniors. Its annual membership fee revenue alone reaches 1 trillion won, and it conducts joint research projects with the government, global companies, and universities. Samsung Electronics even collaborated with AARP to organize the ‘Age Tech Summit’ at CES, the largest U.S. consumer electronics show, demonstrating its influence.

At the beginning of the year, at the ‘Global Senior Trend Forum’ hosted by Third Age, Professor Park Young-ran of Gangnam University’s Silver Industry Department received follow-up requests for a deeper understanding of her presentation on ‘U.S. Senior Trends.’ As the vice president of the International Gerontechnology Society, she shared examples from ‘Leading Age,’ held in Chicago last November. While Japan leads in aging rate, China ranks first in the population aged 65 and older, followed by India, the U.S., and then Japan. She noted that the U.S. senior business focuses on the combination of longevity economy and technology, is highly segmented and age-friendly from a consumer perspective. Because the private market is active, efforts focus on quality control tailored to income levels rather than universal welfare benefits, resulting in high creativity and expertise. In March, at the ‘Evolution of a Super-Aged Society and Digital Care Society’ event hosted by the pharmaceutical company Eisai, which developed an Alzheimer’s drug, Professor Kim Young-joo of Gachon University’s Biomedical Device Department shared impressions from a visit to the Jordan River Health Campus in the U.S. The campus features a large town combining independent living, assisted living, and medical support housing, creating a systematic and reassuring environment.

Earlier this month, at the ‘Global Senior Business Expert’ seminar held at the Gangseo 50 Plus Center, it was introduced that the U.S. has over 20,000 retirement communities and 2,400 Continuing Care Retirement Communities (CCRCs). The defining feature of U.S. retirement communities is their large scale. Additionally, the U.S. baby boomer generation tends to have substantial pension income, and as of 2020, those aged 55 and older account for 42% of the total U.S. consumer market, with expectations of maintaining high consumption power even after retirement. In other words, it is economically viable. Consequently, health management industries and medical products or services applying biotechnology tailored to the needs of the elderly are emerging as new growth engines. Furthermore, residential cultural environments reflecting contemporary changes and trends are possible. Near Phoenix, Arizona, ‘Sun City’ houses nearly 40,000 residents. It is called a paradise for retirees, designed with mild climate, golf courses, an amphitheater, and community spaces to provide fun and enjoyment for retirees during their golden years.

Thus, the U.S. has long analyzed and researched seniors from a commercial perspective under the concept of the ‘Longevity Economy’ and put these insights into practice. Recently, Disney announced plans to enter the senior town market from a storytelling perspective, signaling exciting developments. This approach is quite different from viewing seniors merely as welfare recipients. Some aspects may not align with Korean sensibilities. However, benchmarking the successes and failures of the U.S. could help explore new paths.

Lee Boram, CEO of Third Age