CHAPTER 6: INDUSTRY AND COMMERCE: THE
6.1. The Prime Minister has said that "the
demographic revolution offers challenges and opportunities for
all of us", and that "for business, a changing customer
base offers new markets".
In this chapter we examine the failure of business to confront
this challenge and take advantage of these opportunities.
6.2. In Chapter 5 we noted the reluctance
of car manufacturers to look at the buying power of older people
who want to go on buying new cars; at how little attention is
paid by industry to the needs of older people for electronic communication;
and at the failure of industry to commit itself to the design
and marketing of assistive technology. Each of these seems to
us to be only one symptom of a generalised failure by industry
and commerce to take advantage of the lucrative market represented
by the ever-growing group of older people who have at their disposal
what is sometimes called the Grey Pound.
6.3. Older people are often regarded as being
the generation with the assets, and the leisure to spend those
assets. This is an over-simplification. Mr Mervyn Kohler, the
Head of Public Affairs at Help the Aged, made it plain that half
of pensioners do not have a large enough income to pay tax, and
that many are eligible for means-tested benefits (Q 457).
Despite this, it is true that the UK's wealth, savings and spending
power are now heavily concentrated within the over-50s. They hold
80% of all assets and 60% of savings, while over 75% of UK residents
with assets of £50,000 or more are over 50. Some of the savings
are tied up in the equities of their homes. Nevertheless, this
group controls 40% of UK disposable income, making them a key
group for buying in high-profile sectors such as cars, holidays
and IT. They purchase 25% of all children's toys, and are the
single biggest buyers of gifts at Christmas.
6.4. The Committee heard oral evidence from Robert
Diamond, the founder and chief executive of Diametric, a marketing
agency. He told us that his company provided services to large
national brand owners to help them in the effectiveness of their
marketing, and three years ago had launched a unit to help mainstream
brands understand and respond to the challenges of an ageing population.
The unit had struggled to engage the large advertisers in the
UK in a meaningful dialogue about the impact of an ageing population.
One possible reason was that large advertisers and the marketers
in the UK typically aimed at large families with children, and
were genuinely concerned that marketing their products (whether
cars, computers or food) overtly to an older audience might have
the potential to alienate the mainstream; there was indeed some
evidence that this was taking place. But perhaps more important
was the fact that marketing was a youth sport: evidence from the
Institute of Practitioners of Advertising suggested that 39% of
UK marketing directors were aged under 35 and only 10% were over
50 (QQ 458-459).
6.5. Dr Nowell, from Age Concern England, did
not think there was an awareness of the opportunities of engaging
with the 50-plus population (Q 495). Professor O'Neill felt
that companies had not woken up to the fact that there had been
a change in the profile of their consumers, and gave us this example:
"I remember running my first international conference on
older drivers, and one of the automobile manufacturers gave me
a grant towards it but said, "Don't mention we are supporting
an older drivers' conference" (Q 378).
6.6. We do not single out industry for its apparently
ageist attitudes, which sadly are common across all sectors of
society. They are particularly evident in much of the output of
major broadcasting organisations and of the print media. Although
our inquiry has focused on scientific aspects of ageing, we have
often been made aware of deeply entrenched negative attitudes
to ageing and, by association, to older people themselves.
6.7. This prevailing attitude helps explain why,
with a few notable exceptions, marketing directors start with
the preconception that advertising and marketing should be targeted
at the young. It does not explain why they should continue in
this view when there is so much evidence of the potential market
offered by older people. Mr Diamond added: "When we go round
speaking to brand ownersand we work across almost all consumer
sectors that you can imagine, from technology to automotive, to
consumer goods to travel retaileverybody nods and looks
at the numbers and is academically interested about the ageing
population, but they then go back and do what they have been doing
before." He thought the best solution might be more direct
research and subsequent education among marketing practitioners,
and he told us that the annual Older Richer Wiser conference of
Haymarket Conferences, one of the largest organisers of conferences
for the marketing community, was consistently sold out. It seemed
to him that people were clearly looking for further information
6.8. We are by no means the first to have noted
this problem. In their December 2000 Report,
the Foresight Ageing Population Panel considered the opportunities
and challenges for business and finance. They said:
"Businesses need to ditch outdated stereotypes
about older consumers and focus on the grey pound, both in the
UK and overseas. If they fail to grasp these new markets, overseas
competitors will take advantage ... Businesses that plan on the
assumption that tomorrow's older consumers and workers will simply
be like today's will be wrongfooted by the effects of generational
change ... As a matter of urgency, business organisations, trade
associations and trades unions should raise the profile of ageing
as a business issue and fill the information gap with industry-specific
guidance. Assistance should be made available to firms to help
them seize the new opportunities presented by an ageing customer
The Panel's recommendation was addressed to the Confederation
of British Industry, Institute of Directors, Federation of Small
Businesses, British Chambers of Commerce, trade associations,
Trades Unions, and the DTI Small Business Service. Yet the evidence
we have received shows that little has changed over the last five
6.9. We cannot understand why, with few exceptions,
marketing directors of companies of every size seem unable to
recognise the commercial opportunities which are there for the
taking. Some of these are obvious, like remote controls for televisions
and video recorders which can be used by those with poor manual
dexterity or impaired vision. Manufacturers of mobile phones seem
to concentrate on providing ever more complex functions for the
young, rather than allowing older people to make use of their
6.10. For older people, packaging raises special
problems, not just of usability, but of safety. No less than 40,000
people are admitted to hospital every year for injuries sustained
by trying to open packages using inappropriate instruments (Q 469).
Plastic packaging, especially of electrical goods, seems to be
designed for the protection of the product and the manufacturer,
without thought being given to the end user. A country which can
build Concorde should surely be able to design jam jars and packets
of peanuts which can be opened without a titanic struggle, or
supposedly child-proof medicine packets which older people so
often have to ask their grandchildren to open for them.
6.11. Perhaps there is a role here for the Design
Council. We note that its website states that packaging can be
viewed in four different ways: as a means of protecting the contents,
as a contributor to the cost of the end product, as a sales canvas
on which to promote the product's attributes and benefits, and
as "a part of the product experience itself". An even
more important function would be to enable the end user to derive
maximum benefit from the product in return for minimum inconvenience.
6.12. Mr Kohler suggested that in a very competitive
market the marginal cost of better packaging might deter manufacturers.
A reason suggested by Mr Diamond was that manufacturers perhaps
feared that appealing to older customers might alienate younger
ones (Q 476). If these are the true reasons, it seems
to us that not just manufacturing industry, but also the large
suppliers who are in a position to dictate what they will buy
and sell, are being remarkably short-sighted. We believe older
people, and those shopping on their behalf, would readily pay
a penny or two more for a product designed for easier use; and
so might many younger shoppers.
6.13. Mr Diamond told us that in the United States
there was a consumer body, the American Association of Retired
Persons (AARP), which operated as a commercial and almost quasi-political
body in influencing manufacturers to listen to and be responsive
to the needs of an ageing population. Such a body was lacking
in this country (Q 480). This is a matter which organisations
representing consumers might consider. The University of the Third
Age is building elements of what the AARP have achieved in the
United States in terms of skills transfer and members (Q 486).
We encourage them to continue to do so and in particular to be
open to links with commercial organisations.
6.14. Our witnesses were unanimous in believing
that the solution was not legislation or regulation, and we agree.
We believe nevertheless that the DTI could use its influence to
educate and train designers and marketers, and to bring to the
attention of industry and commerce the opportunities open to them.
6.15. Dr Roger Orpwood, Deputy Director of the
Bath Institute of Medical Engineering, suggested that if there
were evidence of a burgeoning market, industry "would all
be jumping on the bandwagon without any doubt whatsoever"
(Q 238). We believe that the evidence is already there; the
bandwagon is there; all that remains is for industry to jump on
it. And if they do not, the view of the Royal Academy of Engineering
is that "If we do not take action soon to co-ordinate our
research, we could find ourselves missing out on a lucrative share
in the fast growing market of the provision of the medical care
solutions for the ageing population".
6.16. We agree with Professor Tinker: "How
come they do not see that older people want good design?
Somebody is going to make a fortune when they do realise that
there is this big market for good design." (Q 255)
6.17. The Government's policy of encouraging
older people to remain in their homes as long as possible will
be thwarted if industry does not respond to this challenge.
6.18. The Government should consult with the
Design Council, the Confederation of British Industry, the Institute
of Directors, the Federation of Small Businesses, the British
Chambers of Commerce, trade associations and trades unions on
how they can best play an active part in developing these markets.
6.19. Like the Foresight Ageing Population
Panel, we encourage manufacturers and the finance and services
sectors to seize this opportunity simultaneously to benefit their
older customers and their shareholders.
114 Foreword to Opportunity Age, Cm 6466, March
From the evidence of Mr Robert Diamond, p 268. Back
From the evidence of Mr Robert Diamond, p 269. Back
The Age Shift - Priorities for Action, pages 13-14. Back
See the evidence of Professor Newell quoted in paragraph 5.36. Back
From the evidence of Mr Mervyn Kohler, Head of Public Affairs,
Help the Aged, p 259. Back
p 125. Back