Over the past three generations, the US age distribution has been shifting inexorably. In 1950 one of twelve Americans were aged sixty-five or over; today, one of seven Americans are in that age bracket; by 2050 most forecasts indicate the ratio will be one in four.
Not only is the age distribution is shifting (that is, relatively higher percentages of retirees and lower percentages of kids) but, as life expectancies increase, the number of older Americans is increasing even more dramatically. In 1950, 11 million Americans were over the age of sixtyfive; by 2060, that number will approach 100 million.
Spending patterns change as people age and retire; with less income, they spend less and their total consumption declines. Although per capita spending falls for older Americans, their sheer number (driven by the aging Baby Boomers and increasing life expectancies) is growing, and the net effect on spending is smaller than it was a generation ago.
In addition, the product mix of their consumption undergoes changes. Older Americans spend more on all varieties of medical care (pharmaceutics, medical devices, physician services, home care), but other spending changes occur as well. Now working longer and with more active lifestyles than previous generations, their relative consumption of transportation, entertainment, communication, and computer services increases.
In those sectors of the economy there is much technological change and innovation. Moreover, industries that complement and support those sectors—those involved in miniaturization, product portability, and battery size and useful life—depend even more on technological change and innovation. Those sectors of the economy are heavily invested in and depend crucially on intellectual capital: patents and copyrights, research and development, and creative business methods.
Using four metrics, the importance to older Americans of the fourteen major expenditure categories in the US Consumer Expenditure survey is ranked. Those ranked as most important to older Americans are among the most patent-intensive segments of the economy.
Data show that the most innovative industries are those with secure property rights. As those economic sectors become more important, intellectual property rights protection becomes imperative. Securing intellectual property rights will lead to securing the well-being of an aging population.
Read the paper: The Demographics of Intellectual Property