Select Committee on Science and Technology First Report


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".[114] 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.[115]

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).[116]

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 owners—and we work across almost all consumer sectors that you can imagine, from technology to automotive, to consumer goods to travel retail—everybody 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 (QQ 463-466).

6.8.  We are by no means the first to have noted this problem. In their December 2000 Report,[117] 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 base."

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 years.

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 primary function.[118]

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).[119] 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".[120]

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 2005. Back

115   From the evidence of Mr Robert Diamond, p 268. Back

116   From the evidence of Mr Robert Diamond, p 269. Back

117   The Age Shift - Priorities for Action, pages 13-14. Back

118   See the evidence of Professor Newell quoted in paragraph 5.36. Back

119   From the evidence of Mr Mervyn Kohler, Head of Public Affairs, Help the Aged, p 259. Back

120   p 125. Back

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