Investment Strategies That Leverage the Longevity Economy

Hello so the video is over and we are here so so welcome, and thank you guys for joining us So at the title of our session today is investment strategies that leverage the longevity Society and we’ve consciously chosen longevity not Older and aging because we actually like the word longevity better, but we can debate that And part of the conversation we’re gonna have today is that there are really multiple perspectives on longevity and aging on the one hand there’s a voice of investors that feel deeply that we are all going to Thrive and do well because we are going to make a lot of money off this population of older workers and and older people And that these older people Actually represent a cohort and a constituency. That’s quite important to us, but on the flip side These older people and older workers actually represent a part of human capital that Heretofore has actually not been well represented If you really look at it through any lens a data point that’s interesting to me, and I’m sorry I apologize I’m Pat Milligan from Mercer But older workers are the single group left in Business the business environment that has no representation in the corporate world from a diversity and inclusion perspective. It is the only Unrepresented and underrepresented part of the workforce. I’m not going to cite the numbers because the panelists here are all experts about how many How many people will there be with what kind of life expectancies and skills? And I’m actually going to spend a little bit more time with them Looking at what are these opportunities and also? What are the mixed messages that? Corporations and society send around aging in longevity, so let’s let’s dive in and I’m gonna actually I’m gonna start up with a broad question about defining the difference between Longevity and aging because we are all excited about the word longevity But we’re actually not very excited about the word agent so mom I’m gonna mix it up And I just learned a good definition in our little pre panel Professor Scott I’m gonna let you introduce yourself. I think many people have hopefully seen your book and read your book But I wanted you to at least start the conversation with why should I be excited about the longevity? Path I have in front of me, but not as excited about eaching So thank you for the interactions I’m Andrew Scott economics professor at London Business School and with Lynda Gratton the co-author of 100 year life. I As the macro economists are interesting big trends that shape the world around us and that often creates investment opportunities And I’ve long been interested in longevity so to answer the homework question I think ageing and connect came to almost drop it because it’s kind of not a very informative word First of all everyone is aging and then chronologically whether you’re 1 or 99 Everyone’s aging and everyone’s aging at the same rate, so chronologically the concept of aging is not terribly interesting Secondly you know if you look at people as they get older They actually are aging biologically at very different rates So it’s not a very Homogeneous phrase to use and then I think if you look at really what’s happening at an individual level over the last a hundred years Is kind of almost the opposite of aging we’re sort of younger for longer? If you look at mortality risks and health people are healthier on average are healthier for longer And they’re living for longer so the call that aging seems to be a fundamental Misrepresentation there’s kind of two things that are happening. There’s a big baby boomer cohort particularly in the States They’re moving through society and that is leading to an increase in the average age of society But the other thing is that? Everyone not just the baby boomers is happening this advantage of longer lifespans and as Jim will point out later perhaps Even further is yet to come So longevity is about all of life Aging tends to be seen as about end of life What is really happening with longevity is we have a lot more time and with that extra time we will restructure what we do We’re already seeing that restructuring happening you look at people with being employed in their 70s is that? Proportion is rising in the UK now you’re more likely to have a child in your forties as a woman than under 20 We’re seeing all sorts of deep-seated changes right the way through life And that is kind of a bit like technology because what’s gonna happen with longevity is on average We’re living longer, and we’re more productive for longer that actually has to be good news for the economy Which brings investment opportunities and of course if we’re gonna see new ages and new stages We’re going to see new products and new providers take my profession education we have to see a lot more Provision of education in later years and that’s a market. That is not well served right now, so just like technology It’s got big aggregate implications big distributional implications boss the other raft of new products and new services around arrive So longevity all of life aging tends to be about end of life So Jim Jim melon chairman of burn Brae and the Builder of lots of different kinds of businesses with lots of success and you shared some perspectives on the phone the other day about mah about least open my mind that the definition of longevity that we’re all planning for You think will be obsolete before we even understand it because of the progress in science so one of you share with us You know some of the views that you see because it actually does make it very difficult to coach I’ve got a 30 year old who’s asking me what horizon should I be planning for as I start saving for? My future and I’m actually not quite sure what to tell him so I’m gonna have them connect with Jim so Well, I’ve written a sort of companion manual to Andrews excellent book 100 year life Which is heavy on the science of longevity and it took me a year to research it and especially as a non-scientist That’s quite difficult but I did have the Opportunity, and if you’re an author it’s much easier to get access to key opinion leaders to meet almost all of them in the longevity Science area and my firm conviction is that barring plague? Wars you know famine etc the usual so human panoply of disasters that within 30 years average life expectancy? On this planet in the developed world will be 110 to 120 and very few people are taking that into account and that’s based on science that exists today It’s not based on the science that we all read about its future signs like gene-editing based on Christopher Cass 9 Or stem cells or organs from animals into humans or whole tissue regeneration? It’s based on stuff that we have today That’s either commercially available or shortly become commercially available as well as some other trends like a trend towards Believe It or Not Healthier living in the developed world which is happening at the moment less sugar consumption and most importantly less tobacco consumption, so I’m absolutely Convinced that this is going to happen and it’s not such a big ask because after all life expectancy has doubled Since 1900 so gained 110 120 is not such a big ask except that it’s going to occur as a result of the molecular manipulation as opposed to Environmental manipulation so with that in mind the trajectory of our lives which is to be born to learn to sometimes burn out to retirement to expire is going to change and That’s why I said that we make good companions in terms of our books because Andrew explains the societal impact Very very well of what this means for Humanity So So it with that perspective then there’s the practical reality of how do we as business leaders? Prepare our organizations to manage these cohorts through their life cycle And you know how do we ensure that people know? How we really feel about their work and their participation in the workforce? So I was I’m gonna ask Ben for you to start because you you know have a very strong view about Longevity given your role at the ILC But love you to share kind of some of the biases and things I think you and I very similarly see You set up a framework that guess it should give us a lot of optimism But the real reality of how organizations are managing the challenges is to that population. We are so far from that That it’s almost a great divide right now absolutely say the longevity sort of revolution is obviously with us And we’ve heard some sort of positive messages so so far But I think we are kind of failing to to grasp the nettle on this issue in a big way if we look at work the world of work for example a lot of It it’s still 9:00 to 5:00 Inbuilt flexibility is okay in some companies and quite poor in others There’s a long-standing belief in The fact that there’s a fixed number of jobs in the economy and there and there aren’t that’s the lump of labour Fallacy, and that is a debate that we see both in in terms of older workers But also in terms of migration on the health front We’ve seen big cuts to prevention spending especially during the austerity period but clearly it’s health prevention That’s going to be the key thing to it Not just extend lives, but extend the healthy period of life so people can work for longer And we’ve had issues about long term care specifically in the in the UK, but right across the world This is a increasingly big big problem There’s not been great innovations in housing there are in some very specific areas But they’re not being diffused across the entire economy as well so absolutely there’s loads of opportunities in here But we’re still not grasping the nettle in terms of really getting and adapting our society ready for this big transition and I think maybe that’s one of the key sort of Reasons why over the last 10 years or so we’ve actually seen a kind of productivity stagnation across developed countries not just in the UK not just Europe but worldwide and Really for for me as a kind of economist and expert in terms of aging I do think that that Failing to get to grips with this is one of the key reasons why we are seeing this stagnation so if we want to really improve investment prospects going forward We have to think holistically about how to how to adapt the world for this huge revolution That’s ongoing at the moment, and so what are you? What just what are you advising organisations? How do they start because I do think that and we’ll talk about you know the study of what are the biases about? Older workers, what is the real ambivalence if you look at organizations? And then what certainly mark will have you sure your perspective you know it’s actually a topic I can’t get any energy on and so I’ll share let me you know a very personal You know when you talk about diversity and inclusion you talk about women you talk about I can get any sport of directors to actually Have a very complex conversation about diversity about women certainly now in the global environment about sexual harassment I can’t get a single board to have a conversation with me about longevity When I say do you have a strategy for older workers, what’s your point of view do you want them? Do you not want them literally people look at me like I could be talking them about something completely irrelevant to their business So how do you start? I think I think I think absolutely is about having the conversation? I think I think we’ve we’ve done a number of kind of qualitative bits of work with with industries that are aging fast so actually It’s in their personal interest to get the debate going But they are scared about having this conversation because they don’t know how line managers aren’t necessarily trained appropriately on this on this front and that’s a real concern because these companies are going to lose invested skills and energies of these older workers who have Experience which is ultimately going to hit their bottom line and many companies don’t Understand to what extent it’s going to hit the bottom line. We know that a number of companies don’t even Measure the cost of that lost capital They might they might you know they might count the cost of I do go into an agency to replace that worker But actually in terms of that invested human experience of that worker They’re not actually costing that at all so as a starting point firms need to realize that it’s going to cost their bottom line ultimately And given that there’s increasingly less slack in the labor market at home and abroad It’s going to be increasingly important for for firms to hold on to those older workers So mark you’ve heard both parts of this conversation and given You know your role in Aegon you where you know you’re like me you wear multiple hats yes And and so I think hearing you talk about how are you from a strategy and development perspective think about the products the solutions But then we had the really candy conversation about then How do you look your older workers in the eye and say what are you doing? well
Maybe looking at the market side first we we do annual research among workers and retired people and we do that in 15 Markets, and we also ask Retired people if they retired when they wanted to retire and what we found is that? 40% of them actually retired earlier than they had planned to and the two main reasons were one was unemployment And the second one was ill health so the health theme. I think is a very important one On the other side. It’s clear that the old model of 25 years of education 40 years of work and then 30 or 40 or 50 years of retirement is not going to be sustainable for our societies I actually had a great-grandfather who was a cavalry officer and the Dutch army retired him in his 40s in the 1930s and he was actually in retirement for more than 50 years Which which was an expensive customer for the for the Dutch government, but that’s that’s not sustainable on a way So we will need to move to a society where people will have you know longer periods of work Maybe taking breaks from work as well I think as in your book to take care of children or parents or but be able to to re-enter so that’s So much for the theory Behind it, and and I think we are starting to see some Signs of more flexibility, and if I look at my own company the most recent collective labor agreement which we have in the Netherlands, which we Renegotiate with unions it actually opened the option of demotion Which was not a an option that was on the table that people could continue work, but with less responsibilities than they had Before so that that’s one a second one is my own industry We are going to suffer net losses of employment anyway Automation robotize ation is still in full force and The reality is we have restructuring round after restructuring round and we are going to be a net Smaller employer in the future than we are today so when we think about our employees and what their future is For many of them that future will not be in our company so the question is how do we prepare people for a world? Outside our company, and that’s where some of the efforts are having said all of that I recognise what you say that in practice There are still quite a lot of barriers about talking about the fate of all the workers so we enjoyed you what how about if you if you build on that I mean one of the things I think you and I shared was that one of the fastest growing cohorts to come back to work are retirees that if you look at Entrance to the labor market in the UK you look at in the u.s.. In the u.s. Thirty percent of the people re-entering the workforce are actually retirees So that’s a fascinating Statistic to me is do we treat them? Do we stay in touch with them do we know what they’re interested in do we manage them as a cohort? I’d love to hear your perspective and then we’ll open it up and and Just talk through what what else could we be doing and then what are the investment opportunities? Yeah? I think one of the readings things about longevity is the trend is just how long it takes to respond? So this is a big social experiment We don’t yet know how to live the length of life that on average people are currently facing So we don’t know the right way to do things We haven’t got the previous generation to follow those people who have lived to 100 before it’s kind of been a pleasant surprise Hopefully rather than something they planned for so we don’t know what to do so we don’t know the right things to do and guess What we respond slowly to it, and if you think out the different groups in society corporates do tend to be the slowest to respond Individuals the quickest government’s a mixture of farsighted and short-sighted and corporate slow to respond But I would say we’ve seen actually quite a lot of change already, and yeah You mentioned the case of people working after? 65 I Think the concept of retirement is already Disappeared the idea of a hard stop that everyone comes to an end at work at the same time at the same place has changed So some corporates are already responding not enough more will have to change we’re seeing a rise in people being self-employed after 65 if there’s a way out of that I Think also crucially or seeing a reversal in Europe of people retire There used to be a very big drop-off for people aged 55 to 65 Withdrawing from the labor force and that’s a real challenge because we’ve been living for longer and retiring earlier That’s starting to change It still it’s probably much lower than it needs to be but I think we’re already beginning to see some of this process occurring A bit like technology it always happens much more so than everyone would like it to although it should because organisations take To change, but we are beginning to see some of it already happening So Jim. You know you you listen, you know you listen to both sides and certainly you’ve got a perspective on What are the real growth and investment opportunities let’s let’s spend a little while and talk about you know as organizations What should we be thinking about and what should we be investing in so? Okay, I thought I’d start with a picture of two mice The old mice, they’re both old The one on the left has not been treated with what’s called a cèlle lytic drug so oolitic drug removes senescence cells from the body senescence cells are almost entirely responsible for the burden of information information and frailty in old people And it’s now going to be possible within a very few years for us to take semaa lytic drugs and to look like Healthy mass on the right who is exactly the same age as the decrepid blind Can hardly move Further eroded mass on the left All right so most companies and most people have the view of old age as necessarily being a condition of frailty a condition of disability characterized by one of the five key diseases of aging And that is not going to be the case in the next 20 or 30 years Old people will be much more robust they won’t be frail and as a result that be much more important to the workforce not only as Consumers because there won’t be enough money to sustain them in retirement But also as contributors because of their wealth wisdom and acquired skills, and I was very interested what Mark said about demotion because Devotional sidewise sideways moves and companies is going to be necessary because older people are not necessarily As physically strong as younger people and may different things in companies, but older people will not just be hired They will be required in companies in terms of investment to sustain ourselves There are two areas one is what a old people are older people keen on consuming and I flippantly Sade Cruise Lines because I think they’re one-way ticket upwards basically and short for instance nightclubs and bars flippantly on on the other side But most importantly the technologies and the pharmacology that will keep people alive a very long time Which are the molecular manipulation of our bodies? I talked about earlier are going to be the best investments is like we’re like in the Internet in 1995 There’ll be multiple failures multiple charlatans Lots of disappointments, but out of that will come the Google’s the Facebook’s of the new age And they will be the biggest companies on the planet because there is no one Who confronted by the opportunity of spending five or ten percent of their income for another thirty years of healthy life? Almost no one will not take that offer and that’s why it’s going to be such a huge industry And why we’re so excited about it So we do you think if we’d offered like free trials of these drugs in the room. We would have filled the house or so Probably I’ve got some of my bags Back, but so so a couple of so in so if you think about that data point and about the fact that we are Changing the definition of longevity it links to a broader conversation about what are the myths of aging and longevity? Because you’ve talked about this been you know you’ve talked that there certainly at Mercer We study this so one of the things we really study is the actual productivity of older workers where we look at When you’ve got an older worker And you evaluate their performance on individual performance standards depending on whatever their role is speed to market business product innovation development on an individual level factually older workers perform at less Less productive rates than younger workers, but what we don’t actually study is What is the impact of an older worker and we say older anyone over 50 when you put an older worker on a team on? A team when you add that level of diversity what happens to safety records performance records different kinds of metrics and we find Uniformly that the role of an older worker And some of the work that we’re doing with milking is looking at the performance standards of these diverse teams But we have to start with the biases so there are three very Significant biases that we hit when we talk about older workers first and foremost They don’t learn as quickly so an older workers capacity to learn is very limited You know my hypothesis is that’s well you don’t actually invest it in older work But when you do focus groups and ask how many workers over 50 of bending which? Development session or a training program very few so first myth older workers can’t learn Second deepen they can’t learn technology, so they’re you know major issues about whether older workers can learn technology? And then the third they have no tolerance for changing ambiguity, so what’s what’s what’s our panelists view on those three Issues and are they myths or what level of reality? Happy to sort of take up the point about productivity of older workers I don’t think there’s any sort of a priori reason why an older worker should be less productive than a younger worker there may be an issue about leading skills and Retraining And I think one of the sort of public policy adaptations and company adaptations that is necessary is to ensure that we have lifelong learning And over here in the UK recently we had the industrial strategy Which is about raising the productivity of the UK economy in the long run And it’s quite pleasing that the government put adult skills and training as part of this whole process I think if we have the training system ready there for these individuals because actually a dolt education in the UK has fallen and training in the UK for adults has fallen over time if we reverse that trend then actually we don’t have to see this this kind of what’s often recognized in the literature is a kind of use inverse u-shaped consumption a Productivity pattern where the the younger and the old are less productive than those in the middle age So I think there’s no a priori reason for that if we get the training and skills in place and we can actually sort that Out I think you know one of the challenges. I mean stereotypes are really hard to get rid of And you know one of the problems. We’ve got with structured life in a certain way where certain ages and certain numbers Have a meaning and that’s no longer relevant so for instance in a three stage life. Where you have a linear career Then you learn at the beginning You don’t have to learn later, so one of the questions is are order people incapable of learning Or is it just I haven’t been using that for a long while and it’s plenty of evidence suggests that older people can learn Then after learn differently, but they certainly can learn, but if you haven’t had to change in 5060 years Then it’s gonna be very hard to suddenly change so people don’t have to invest more in being able to or we can recreate themselves And whether that be through health whether it be through exercise we’re either the true education But we haven’t kind of encouraged that before I think you know one of the deepest challenges We’ve got is that somewhere around 150 200 years ago Society suddenly got interested in numbers as a way of determining people’s age And that’s when government started to properly record birth and death dates And then suddenly society became very very age stratified, and you know what is so interesting about ageism I think is twofold first of all all the isms ageism is one way you’re going to be prejudiced against your future self Which is kind of strange so they know that that’s a complicated one to try and overcome But this sort of second thing is how a number as you get older? isn’t a very good predictor of behavior the whole thing about aging is actually productivity starts to really vary and Most of the studies on productivity and age suggest that actually age is a very weak predictor of someone’s productivity Education other things are much more important, then the other problem I think we’ve got is why I call kind of the equivalent of age inflation so as a macro economist you know you can’t compare the price of a bottle of beer in the 1950s with a price of a bottle of beer today the numbers just aren’t comparable And I think we have the same problem when we use the word old because you know 65 was deemed to be old in 1922 in the early days of UK pensions a 65 year old male in Britain had a 4.3 percent mortality risk it’s now 1.3 And if you’re looking for the equivalent of someone today with a 4.3 percent Mortality risk it’s a 78 year old so now we keep clinging on to these numbers despite the fact that so many things are changing The average age of marriage in society now is more like 31 not 21 I’m told the fastest growing age rate for divorce in the UK is over 80 So you know what was the thing is that numbers? No longer have the same meaning as they used to but we cling on to them, and I think that’s the biggest challenge We’ve got because going back to the challenge that corporates face If you look at what is actually happening what you in a kind of the message to get across is People of a certain age on average a fitter and more productive than they used to be you should be more Interested in them than you used to be and that that’s kind of the fraks of the challenge This is the opportunity, but somehow we don’t see it because we resort to these numbers that I think aren’t meaningful anymore Yeah Having said that that from the perspective from from of employers I do see some some issues, and it’s not so it was part picked up on a discussion last night We say you know It’s going to be pretty hard to retrain a 50 year old truck driver to become a data analyst and and I think it’s the skill mismatch of both younger and older workers with the type of skills that We need you know today. We need data analysts. We need you know a web interface designers We need you know these and that’s the big challenge and actually having people Reese killed in a way that their capabilities actually make sense of the businesses of today and tomorrow is is more the challenge than aging Per per se that’s one I think on the second on the health what you do see that I Think and again, I don’t have all the stats to back it up But typically I think older workers typically are conscientious responsible turn up for work But the risk that they get sort of long-term illnesses is As a percentage higher than with younger workers and and the burden of that on employers particularly SME employers is can be crippling and and that’s where you see very risk-averse they’ve seen a shift that when that happens Yeah, so that you know that’s true, but being old now is 78 not 65 So there is a shift and just on the on the the retraining point I mean Jim is doing about the investment opportunities in the health sector. You know I do think about that whole Recreation sector you know you saw the recreation sector developed in the 19th century the leisure industry The leisure is a consumption active is now very standard leisure is a reinvestment opportunity is going to be huge And I think the hardest thing about a longer life Is going to be the need to reinvent and go through new stages, and that’s a psychological challenge And that’s hard and of course the fewer resources you’ve got the fewer education less education you got and the less your network is supportive The harder it is to go through change and that to me. I think is the the most challenging thing We face at an individual level so can you get in comment because one of the things that I think? Concerns you know a human resource consultancy like Mercer is we see very little and I’ll be very Transparent about it of all of the groups within an organization We see virtually no reinvention of the classic training and development organization when you look at who’s really reinventing themselves to think differently about Bringing new ways to learn to different cohorts five generations in the workforce I’d love to get me because and I obviously we have not read the book yet But if you think about so much of the Economic Opportunity is actually on the science side reinventing education And not just education in the world that you live, but education and and lifelong development for older workers Give us your perspective on what you might see as the opportunities and I think you know Ben you’ve got a perspective there also because that Feel if we can’t break that not I don’t see how we can take advantage of this Population see I slightly disagree with mark because I would say that yes maybe older people are not suited to be retrained as data analysts or Something to do with computers and web design and so forth but no one is because frankly speaking all those jobs data Analysts web designers and so for they’re going to be automated out of existence And the jobs that will be important will be the artisanal jobs the jobs in leisure and travel that andrey talked about but most Importantly the jobs that rely on human empathy And who is better to convey human empathy than the people who have got decades of Experience about dealing with people, and I think those will be the prize jobs at the moment They’re a bottom of the heap you know. They’re the minimum wage. Type java spoke there were sooo many professors of social care Degrees and social care because we will need much more of that and people will have much more time to do that and it would be a much bigger industry, so I Disagree in the sense that you know the truck drivers will not have a future of course I have a future and that future will probably be in care Which we will need a lot more often From my perspective quality of work is an absolutely critical issue I mean we’ve done some research to try and identify Why? People work beyond pensionable age in the UK and a high proportion of that is Actually, whether they enjoy they still enjoy their their job you know And I think that’s something that’s often overlooked in the debates about you know the financial incentives etc Etc but actually if you enjoy your work quality work Where people have some flexibility then we will see more older people wanting to continue working? even after they’ve reached a kind of pensionable age point where State might provide something and where their private pension might kick in as well so quality is key. There is a virtuous Cycle of success because because being employed, but you typically your health condition improves you stay better you have purpose Etc so these these things are we as well see as being very very important also to Ensure that financial security and health status later, so let’s let’s try to drill down on Financial security man. We’ve been at this conversation for thirty minutes We’ve talked about we’ve talked about a lot of the elements of longevity But given that I am in the largest actuarial firm in the world I’ve actually not talked about the pensions gap, but we find again very little energy around What are you going to do to prepare people to pick up the financial responsibilities? That would used to be filled by great organisations If you look at the pension schemes and systems around the world we are really Creating a cohort of people who actually will manage their own life their own wealth and their own retirement And they’re willfully unprepared and we don’t actually see we’ve not seen that changing on a global level So I think it’s worth having a conversation about what is our response if our Responsibility is to ensure that workers actually are prepared for these long or more productive lives They have the skills they have the health that means that they’re going to have to figure out their own Life and wealth accumulation in a way that many of us had the benefit of great organizations Helping us and of all the products and solutions a firm like Mercer looks at one of the least Products that employees are interested in is anything around financial education and financial wellness now there if you give them Opportunities to double click and you know it get involved in anything related to physical and mental well-being Absolutely engaged Anything around financial and educate finiancial well-being very little take up So I can’t decide if that’s an avoidance process. They just say look. I’m 30 or 40 I don’t have to think of that But if we look at this room when we ask the question how many people in this room are going to have a defined benefit pension plan and in the future and what percentage of your retirement planning is it that’s one of the single biggest life changes We’re gonna see so well first of all if you rely on the defined benefit pension plan and Jim’s predictions come out. You’re So I mean the find benefit is Disappearing quickly, and and I think and we’re not the only company But you know many companies that still have exposure in that area Are you know trying to sell out of it because it’s you know things things could turn Turn for the worse So it is more and more individual responsibility people that need to take care in Europe. We often look at the u.s. Because the u.s.. Is about 30 years ahead maybe in this Yes people are you know Willie? Under-under saved four for a time and so I think and I do think governments in Europe And I think the UK is somewhat leading in this in in trying to get sort of nudge Thinking having auto enrolment auto escalation auto everything and make it as easy as possible for people Not to make the wrong choices At plus education, but education is slow going so it’s a massive challenge I think I I think na G’s help But I don’t think is a naja big enough to fill the silence gap right for the Solidarity We’ve got and and you know people can be just working later I think that’s unavoidable so in terms of how we provide pensions and financial security You know there can be three different ways of doing it one will be through the government and again I think we shouldn’t just focus on finance because if people are working for longer. They will need reeducation as you were referring to London Business School provides that You know the high ticket item in a quality product That’s not going to be available to masses of people and I can see the government offering just we have maternity and paternity leave Paid retraining leave where you have a credit And you may even see the resumption about our education rather than just the provision of primary and secondary education. I think there’ll be massive financial opportunities in the financial sector I mean how the insurance industry deals with longevity risk There’s a lot of money to be made there, but also there’s whole new risks around and one of the biggest risks We’ve got is that though on average people are living for longer and a healthier for longer We have a new risk in town, which is I live at 50? And I live to a hundred and actually how I deal with that risk is going to become incredibly important as well as dealing with the increases in longevity that might come that Jim’s been talking about I think the company one is interesting because You know I think there is a limit to what government corporates can do and certain what they want to do I’ve got a sort of vision of just reinventing the concept of the company pension If you think about why companies introduced to find benefits, it was twofold it was one Hey, I can recruit you now at a lower salary And I would do otherwise because I promise to pay the money later and secondly that’s gonna be a great retention tool But if you think about a longer life, you’ve got to invest not just in your financial assets but also in your health and fitness in your education and This sort of recreation ability and so I love my life I’m gonna want different Stages to defend us so a corporation can offer a sort of a more broad ranging portfolio of assets and say to people hey after five years you take a six-month sabbatical You come back your job is still open after ten years. I’ll offer you – you’re retraining and you can come back so I think You know extending the relationship between company And the employee in some long-term sense and moving away from just financial assets But also to cover intangible assets is a rather natural thing to They’ll have the same benefits or help recruitment because I can pay less for you now They would do otherwise and it can also offer as a retention tool So how do we change the conversation about longevity? I mean, I just happened we happen to run a longevity conference actually it was called aging in Japan two weeks ago and about two-thirds of the way through the day three or four CEOs said I’m just this topic is just too depressing like do we have to stay and talk about this for the rest of the day No, we can talk about whatever you want to talk about, but um, but there is a psychology There is some psychological aspect of this conversation that people you’re yawning, but we don’t want you to yawn. You know But there is some psychological aspect that it’s one of the topics that either doesn’t invoke evoke from management or Executives the level of passion that diversity does or women does so I mean I’m really interested in just a more transparent Conversation about you know it’s almost like we need a marketing and communication and engagement plan Around the whole topic because even though you write books and you write books It’s just not a topic that people really want to spend time in when I sit down and assess I’m gonna do in order to your workforce plan, and I say you are woefully underprepared for your more older workers strategy They’re like just don’t tell me what I need to do like they don’t really want to engage So let’s let’s have that frank conversation about is that because we all have You know kind of mental biases about their mi, and I’m aging or what what can we do to make this a very positive conversation and maybe Jim we start with some of your data because it we need to get energy around this and I’m Willfully not creating the level of energy at least with My cohorts that I’d like to be creating well everyone suffers from the trap of Tiffany’s which is basically that This Greek gob was conferred in mortality, but unfortunately the mortality didn’t come along with Eternal youth and so the older and older older, but he lived forever, and that’s what we think of as being aging Or you know longevity today? It’s a fact that every time life expectancy rises by one year the worldwide pension gap Rises by 1 trillion u.s. dollars And I notice that British companies because we’ve had a little plateau and it’s a very temporary plateau by the way and life expectancy gains Are all rushing to reduce their contributions to pension plans on the basis that we’re not going to live this long But they can put that in their pipe and smoke it because we argued in a very long life I think that companies should be actually forced not to judge how much they put in to pension schemes on an annual basis But have to apportion a certain percentage of their profits For the provision of their older workers who will be retiring 85 or 90 years as Andrew said And that should be and in fact in many ways companies are making too much money at the expense of the labor force anyway I’m not a socialist by the way But I do think there’s too much share of GDP and corporate profits And not enough in the provision For the labor force at the moment and something needs to be done about that in one of the ways that that could happen Is by forcing companies to make a constant provision for pensions? We also happen to live in a zero return world You know especially in Japan for instance you can save as much as you want But you’re going to get a zero return on your assets, so it can be depressing, but it can also be an opportunity But I would say that the insurance industry Which Marc is involved in is going to be upended it has to change and even if they do longevity hedges? That’s just transferring the risk of someone else. It’s a zero-sum game. There’s no positive benefit by doing longevity hedges I Would say that the banking system is going to be changed dramatically? And I would say that almost every pension scheme in the world is effectively bankrupt Because I have a very high conviction that our life expense is going to rise very dramatically and there is no pension scheme that is sustainable so we all have to save much more and Save aggressively from an early age There is no way around that and we all have to work to 85 or 90 at the minimum it’s interesting in how far there is a link between longevity and that zero return world because most of our also are algorithms for how our You know pension plan participants should be invested. They automatically de-risk as people get closer to To that retirement age so with the whole baby boomer cohort going through we’re we’re de-risking investment portfolios like Like crazy and that that’s one of the things that’s driving down these returns And it’s all based on this idea that people need certainty when they reset You know mythical you know that 65, but I think there’s a deeper link as well Actually, I have this idea that you know we define the discount rate annually I suspect people discount over the course of their life I think the longer you live the more patient people get So I think that’s why ever centuries you see the ruiers return coming because life expectancy Expanding we’re going back to your point about how we make the debate more positive You’ve got a tough sell to corporates And I think individuals is where you begin here and with governments because part of this will be as with any big social change Government, led legislation and regulation and subsidies whatever to bring about change like I I do that I mean I saw danger of an author pushing their own book, but you know at the book minute I wrote the hundred life has been pleasingly very successful. I think we wrapped about 300,000 copies sold and I think that’s because we talked about longevity Not aging and aging is very important we have very serious problems around social care and moral people and they actually like the first pioneers coming through and Testing the new longevity that the second half the 20th century produced, but actually we’ve got people coming through a teen ages They live even longer so we have to think about what is happening across all of life one of the challenges We’ve got is the baby boomers particularly the states are so vocal and so big that they’re capturing a lot of the attention but actually we’ve got to think about how to adjust all of Society of this and this is an opportunity if the punchline is on average people are living longer and healthier for longer That surely can’t be bad news for society, but somehow we turned it back to an aging society And I say that’s so captures. I mean first. I’m not quite sure what it means for society to age I think there’s some whiff of society dying because getting older, but you know people age, and then eventually die but societies don’t So there’s a lot of negativity around it. We’re actually the very opposite is happening. We are healthier for longer This is almost the inverse of an aging Society Way of one way of kind of framing Aging in a really positive way is a long time ago john maynard keynes said we’d only be working fifteen hour working weeks That days for example right and and you know as a result of this everyone said well. We’ve never reached that kind of Utopia, but actually if you think about all of our don’t life, so you include working life, and you include retirement And you average out the period of time that you’re working and the number of hours, you’re working You’ve actually got quite close to that to that level but people not necessarily maximizing that period of time in retirement to do the things that they might want to So we’ve done research that and others have done research about and they called the retirement consumption puzzle Where in the last 5-10 years people aren’t you know consuming as they would have done in their fifties or sixties it? Falls off a cliff and that’s for all kind of income Quintiles so real opportunity and all of this is to support better kind of consumption smoothing Reducing those health constraints finding products and services that actually support those individuals consumption needs so they can live a long and happy err Later life in retirement as well, and that’s not just good for the individual, but that’s good for for GDP as a whole as well So one of the things that milk in so polar ring at the at the Longevity center at milk in you know one of the things that he really works on is actually how do you really get? People to see themselves in these different lights So don’t think don’t don’t pet take a 30 or 40 year old and have them think about aging have them think about longevity by using technologies to show them the rat on the left is the rat you don’t want to be in the rat on the right is the Rat you want to be but let’s talk a little bit about you know in in one since um What are the technologies because I do our? Experience is that if people can visualize the positive and the negative if they can see if I do these things at 30 and 40 I will live a Healthy I will actually have the right level of wealth and i’ll be able to work the way. I want to work We don’t manage that in any way is an integrated conversation if you really think about it We go after people on their health we market to them separately on wealth And then we leave it really up to them to continue to reinvest themselves so One of the things that I think Milken is trying to do through Paul’s leadership is really think about how do you think differently about? What will a 60 year old in sixty years be doing? What will it look like so using? artificial intelligence some of the technology to get people to step in to what their new life could be and I just like to because I do think getting people to think differently about Aging Is going to be a big part of what we’ve got to do? And that’s that’s just not happening right now the gap is just too large So the world’s longest lived Country is Hong Kong has overtaken Korea and Japan And it spends five percent of its GDP on health care in the United States Which is at the bottom of the g20 in terms of longevity six years adrift on average to Hongkong? 20 percent nearly 20 percent of GDP is spent so this is not an issue necessarily of money This is an issue of marshaling resources And also encouraging communities to integrate the young and the old and the middle-aged so in hong kong you have the bonds of Filial piety which still exists and in the united states you have anything but basically so old people are isolated quite often And a very high percentage of health care is devoted to people who are over 75 unnecessarily There’s over intervention as we know so I think we need to address the issue of healthcare Fundamentally to get to a point where we can say You know older people will be more robust? Because we’re spending healthcare monies more effectively And you don’t need to have 25 pills a day to be a successful ager You don’t need to have surgical interventions that are necessary you need to have family and community support And I think that’s gonna be something that’s gonna be very important I think picking up on that point actually having smart health intervention it’s gonna be absolutely critical for not just for individuals health and well-being but for the fiscal sustainability of Governments as a whole the strange thing to see about a health market is if you create a new drug you have new demand for It and actually costs rise as a result so there can be innovation that actually Could be an efficient and therefore lead to cost growth rather than anything else and actually if you look at health service spending not just In the UK but abroad as well over the last 30 or 40 years It’s that technological change that has driven up costs to such an extent so getting really smart about what? Interventions both increase efficiency while also improving quality of life is the holy grail in this area. I think but the type of interventions that Recreate that social structure are the hardest ones, I know China I think has introduced a new rule that obliges children to visit their parents at least twice a year Because I think that’s actually it’s it’s probably the key to the solution, but it’s also the hardest thing to do engineer or So I’m conscious that we’ve covered a broad gamut and a broad set and we’re supposed to positively open this up and get Observations and questions from all of you, so we would love to I think there’s somebody with a microphone But certainly love to hear the perspectives of people in this room so great – so thank you Hey, I hate to end on the gloominator, I just wanted to challenge the very concept of the Walken a live longer and And I’m not gonna talk about diseases of despair like suicide and opioid addiction and drug addiction and now collision where I think that is they are important issues in the West which she didn’t address I Actually wanted to pick up on something that Jim Mellon mentioned in terms of the share of GDP going to corporations, and you know the massive inequality we see in Western society and I don’t know if you’ve read it But there was a book published earlier in the year by a historian called wall – idle called the great leveler And he looked at inequality down the ages from sort of prehistory to the present and The greatest amount of inequality we’ve had prior to the current era for the just price of a black death and just prior to World War one and His Four Horsemen of the Apocalypse were pandemic disease societal breakdown violent revolution and global war kind of Hopsin war of all against all and I’m saying you know I’m probably sounding like chappathis an Sandwich ball standing on that Westminster bridge, then he ended well It’s nine books and how important do you think that issue of inequality in what sort of derails this kind of Pangloss ian vision of a wonderful society of the best of all possible worlds in a kind of graying way I Mean I think we’re a crucial juncture right now so in the last few years We’ve kind of seen a continued improvement in life expectancy and mortality rates in many developed countries We’ve actually seen a slowdown of those Improvements as a whole now obviously there are lots of new technologies out there that may well extend life far beyond what we already think is going to happen and what un population projections etc show But the real issue is are we going to get the resources into diffusing those at a level that is Mass-market that helps everyone rather than those who are just the elite and the wealthy and this is a crucial Moment in time where you know issues like prevention spending and getting that working appropriately are going to be apps critical Not just the success of individuals, but as we mentioned already overall public spending etc going over the next 40 to 50 years so the moment is right now to Be getting smart health Intervention working for everyone and not just a few I think if I couldn’t just also just pick up on that and I think you Know there is massive inequality And I think what Jim’s been talking about and the stats I’ve been referring to what’s called best practice life Expectancy which is the country with the highest average life expectancy and that shows a continual trend And I think will continue to show that upward trend there are several countries the UK and us I think being most prominent Amongst the rich countries who aren’t following best practice because of inequality and the gap between the rich and the poor is not Somewhere between 10 and 15 years in the UK and that is completely Inexcusable and has to be challenged if it doesn’t we’ll get the physical Reactions that the great leveller talks about the interesting about the great level book though of course You look at the 20th century was in a doubling a life expectancy In hundred years this included two world wars the Russian Revolution the Chinese Revolution rising cancer and HIV So even with that political turmoil. We’ve seen that rise in life expectancy in best-practice life expectancy other please jump in Right I’d like to see the rerun of this next year because when I saw longevity on the description That’s what made me attend not the word aging and the reason why I’d like to see the rerun of this because I do actually Think but I’m government need to introduce policy That’s the only way I think that companies will do something about it, but while companies are pondering whether they’re going to implement initiatives or programs to encourage their people to save more for a longer life some things that I’m seeing already taking place I With my daughter’s go to a gym very regularly I try and one of the things that I’ve noticed that the demand is so high At this gym that I go to When you look at the age spectrum even I’m myself and staggered By how much the demand is and because of that But that particular area in term of help and leisure facilities Has grown more than 15 times over the last two years And what that has done it has created more employment to serve that community So what I’d like to see next year if that’s okay. If you or if you want to share it with me today That’d be great Where do you think are going to be the group the best areas to kind of invest or growth areas in terms of? opportunities going forward Thank you I think that the best opportunities to invest in the technologies Which are pro longevity? because this is a branch of biotech, which is one of the world’s biggest industries, and it’s a branch that’s extremely promising and Although we talk about the plateauing of life Expectancy in the UK and the u.s. At the moment that’s because we haven’t yet seen these drugs. Which are in development coming onto the market but if I refer back to the mouse if you look at My mouse models for instance you can increase the life of a massive the middling mice are not human beings, but they do share 99.9 percent of our genes You can increase the life expectancy of a mouse so more importantly its robustness by 60 to 65% And of course that’s only going to increase so we don’t know what’s going to happen in the next five years But in the last five years. We’ve cured hepatitis A weed science has cured hepatitis C artificial intelligence has come to the fore in terms of developing new compounds and Used in diagnosis as extremely effective as well And of course we’ve had cancer immunotherapy, which shouldn’t exist five years ago Resulting in biblical are cures almost for cancer And so you’ve got you know remarkable scientific advance just in the last five years imagine What’s going to happen the next five or ten years and that’s not taken into account? In the projection that we’re going to live to 110 or 120 which I think is a relatively conservative projection albeit I Agree with the gentleman at the back there who knows we might have the five horsemen other or the ten when the apocalypse come along? So very pragmatically though I think one of the things I would suggest is that if you look at any of the future of jobs or the workforce of? The future research whether it’s the World Economic Forum Mercer McKinsey It’s got a very clear trajectory of look health care home health care any kind of retail and social Jobs are growing very dramatically and so I think there’s a question of what’s the future in the world that Jim sees? But if you’re saying where would I invest I absolutely would invest at the intersection the biggest merger in the u.s.. Right now That’s going to transform the way health care and fitness gets delivered is is actually CVS the drug company buying Aetna the insurance company that will be one of the largest transformation, and we will see CBS will have a fitness center, they’ll have a health care center They’ll now have pharmacies So I’ll actually go to CVS to do everything So it’ll be the you know if you kind of think I go to Walmart for this I go on Amazon for this if I want a physical experience, and I want to workout. I will bet you in a year I’ll tell you I’ve gone to CVS because they will build fitness center so I can go buy my drugs take care of myself get my Screenings and do everything in one environment, and that’s going to challenge the role of Aetna You know and other large healthcare providers, so I think there are two scenarios There’s the gym your scenario But if you say where would I invest I know in a fitness center that actually does? Flu and wellness shots has Doc’s there and I can actually do everything I need and it’s what I can’t do on Amazon so you Divide your life, and what can I do on Amazon and what can I do on Amazon? Really when you talk to you know focus groups literally people will say to me now in work This is how I think about this. What can I do on Amazon? What can I do on Amazon? I think it’s two issues that I agree that I think I mean you know that the recreation industry susannah grow and grow and grow Right I think there’s two things one is well the jobs be and the second is well I’m a very large rates of return is exactly exciting jobs will be there But you know getting us unique competitive advantage is gonna be hard But I think the really big investor returns are being a longevity It’s questioned right behind shirt Please so it said another question Jim so given the knowledge is power Now that you know you’ve got another 50 60 years ahead of you what life changes you now make that’s you found not That’s a very good question machine so far not many, but I can tell you that everyone. This is a free tip everyone who’s in this longevity science area takes metformin on a daily basis metformin being a diabetic drug that goes back to 1957 it seems to be very remarkable and it’s prolonged evety qualities for you have to take vitamin b12 along with it I’m not a doctor, so I’m not prescribing it it might be something you might want to think about and I definitely take that You know no noticeable side effects so far Well so any any final questions or queries sure please absolutely Thank you, I just want to extend the the question from the previous questioner about but you What are the areas to invest in let’s turn it round and then the point you you raised earlier on about? Invest or behavior or US citizens you said start investing aggressively from youth and work until you’re 80 That’s not happening so what needs to happen to make that happen My views that public policy has a crucial role to play in this earlier We heard about the issue of auto enrolment in the in the UK that has got people saving and we’ve done comparative analysis of saving systems around the world it really is public policy intervention that a Is through nudges or B is through mandatory and compulsory savings such as Hong Kong or Singapore? It’s those two elements that have to get the the thing started It’s then down to the conversations with employers and other important stakeholders to get that level of savings Ticking up and as we heard earlier given that we are kind of in a low returns world is absolutely about putting as much aside for the future as possible I Mean, I think you know this is the crux of the challenge about longevity How do we draw a connection to myself now and myself in the future and that gaps got even bigger and that’s a really hard task to resolve I Think you know making people aware of lifespan is one thing and you know it really annoys me that governments continue to use period life Expectancy measures which seriously underestimate life expectancy based on current trends, so we don’t do ourselves any favor That’s actually one is just providing the information There’s some evidence that the 20 year olds currently are actually saving more than past cohorts, but in the end It’s not gonna be saving I think because I think don’t think we’re gonna Radically get people to have a different attitude towards money today, or money in the future. It’s gonna be investing in health investing education To support a productive and a happy longer career. That’ll be I think relatively easier task than saying Don’t spend money in yourself now shift it to later So on that positive note we see you in the back, so we are all wishing you a productive and healthy Kind of life long life cycle. How’s that so we’re not going to play, so thank you

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