Longevity Economy: What’s in it for Start-ups?

Scott Frisch

EVP & Chief Operating Officer, AARP

AARP, a non-profit dedicated to empowering Americans 50 and older, spent a lot of effort building awareness around the “longevity economy”. What does the “longevity economy” mean and why is AARP so active in sharing its value with the business community?

AARP’s purpose is to empower people to choose how they live as they age. Our Longevity Economy research highlights the economic contributions of the 50-plus age group and demonstrates how this demographic is a powerful force driving economic growth and value.

The numbers tell a compelling story. Our research found that in 2015 there were more than 1.6 billion people in the world who were part of the 50-plus cohort. By 2050, this number is projected to double to nearly 3.2 billion people. Throughout the world the growth of this age group is having a major impact, economically and socially.

In the U.S. there are 111 million people age 50-plus. The Longevity Economy is the sum of all economic activity created by the needs of Americans 50-plus, including the products and services they purchase and the economic activity this spending generates. In 2015, the Longevity Economy fostered $7.6 trillion in economic activity, a $500 billion increase from 2013.

If the Longevity Economy were a country it would be the third largest economy behind the U.S. and China.

Why have seniors, as customers, been of low or no interest to so many companies? Do you see corporate attitudes changing?

Yes, the description and discussion of the Longevity Economy is helping to raise awareness of the economic activity of people 50-plus and to counter existing bias and stereotypes. Older people are extending their work lives and contributing to society in a variety of ways. Smart companies who are paying attention and analyzing the data are recognizing the purchasing power and  importance of this age group and working to address their needs.

AARP has a long history of working with companies to deliver products and services to its members. However, AARP is relatively new to the start-up scene. What made AARP shift some of its focus to these new companies?

AARP is known for developing innovative solutions that create opportunity and solve problems for people 50 plus. It’s in our DNA. Several of our recent initiatives involving startups include:

• The Hatchery, an AARP innovation lab, that works with startups and investors to discover big ideas and bring them to scale to change how people live as they age.

• Tech Nest, our collaboration with the University of Illinois at Urbana-Champaign, now heading into its second year. Our goal is to develop solutions to make life better for people of every age, particularly those who are 50-plus. We build prototypes to answer one question:“Will it work?“ With the help of student contractors, AARP’s work in the lab focuses on leading-edge technology in the fields of artificial intelligence, mobile apps, information security, biometrics (techniques to recognize and verify an individual’s identity), and software engineering.

• In addition, for the past six years, we have produced LivePitch events, where we bring startups together with industry and consumer judges to evaluate the best solutions. In 2017, ten finalist companies in the categories of financial tech and caregiving tech presented their businesses on stage in three-minute pitches to venture capitalists, angel investors and 50-plus consumers. The winning solutions ranged from a sock with temperature sensors for health monitoring to a ride hailing transportation solution to fintech companies offering financial protection.

Can you tell us about your innovation@50plus activities?

AARP is working to encourage companies to design innovative solutions for people of all ages. We want them to create compelling products that work for multiple generations, including for our members. We do this in a variety of ways, including meeting with and speaking to influencers at events and conferences, producing research on topics as diverse as growth opportunities for financial technology companies and key trends in caregiving technologies, sponsoring startup events and mentoring the startups that participate, and working with companies of all sizes to provide the 50-plus perspective. Through these efforts, we are having an impact on the range of innovative products offered to all, including those who are 50-plus.

AARP and J.P. Morgan Asset Management created the AARP Innovation Fund. What is the fund focused on? Which funded companies are showing the greatest promise?

The AARP Innovation Fund is a first-of-its-kind investment fund that provides capital to innovative companies focused on improving the lives of people 50-plus and their families.

The goal is to spur investment in early stage companies  developing innovative products and services in three areas: aging at home/independent living, convenience and access to healthcare, and preventative health.

AARP Innovation Fund has invested in One Medical, FreshDirect and Anki.

There are so many venture capital firms investing in start-ups. Does AARP’s investment signal that few are focused on the longevity economy?

Each year we are seeing increased venture capital investment in companies addressing the needs of people 50-plus. If you look at the 50 finalists from Live Pitch over the past five years, you’ll see that 27 companies have raised over $175 million in venture investment and another four companies exited through acquisition.

Our ongoing focus is promoting the impact, size and importance of the Longevity Economy to many audiences, including venture capitalists, and encouraging them to take an ageless design approach to their technology by developing solutions that work for all.