Search

Thursday, March 5th, 2009

Boomers, Innovation, and the New Economy

So much talk about the educated and creative classes focuses on the youth market. The implicit concern over “brain drain” is almost entirely based on the post-collegiate market. But what about older Americans, particularly the Boomers? Boomers are turning 60 and as with every stage of life before it are redefining what that period of life looks like. The previous generations moved to the Sun Belt to retire. But are Boomers likely ever to retire in a traditional sense? Will they have the same preferences in living environments? I think not. Commenter Ironwood suggested I devote a post to this, but since he counts himself among that cohort and did such and excellent job of stating the case himself, I figured I’d just promote his comment to a post and let his words speak for themselves. Now, over to Ironwood:

I agree that innovation is one of the keys to an exciting future for the Midwest. And in that respect – and others — I’d like to discuss the impact of Boomers.

Full disclosure: I turned 60 last month, and having a certain personal interest in the subject, I’ve been doing some reading on where the Boomers are heading. What I’ve found has gotten my juices flowing, both in terms of my own personal future, but much more in terms of how me and 76 million other Boomers are going to change things in the next couple decades.

This has HUGE implications for our cities and the Midwest, and the Midwestern cities that grasp these implications and act on them are going to have some pretty exciting days ahead.

This is not a billboard for Boomers. I raise the issue of Boomers specifically in the context of creativity, innovation and the future of the Midwest.

Ten years ago, it was predicted that Boomers would be bankrupting social security and Medicare, and there would be a huge hole in our workforce. It was assumed that Boomers would continue to migrate south into age-segregated communities, and indulge in leisure, golf-cart-type pursuits. This was based on extrapolating then-existing trends. Those trends and assumptions have been built into demographic and hundreds of other unspoken projections about how northern and southern cities would look in another ten-twenty years.

But these trends have already proved to be obsolete. “Bleeding Edge” Boomers and those right behind them are taking a very different direction from their parents. And it’s going to take awhile for everyone to take this into account. (This is built into the Baby Boom. Society has consistently been unprepared for Boomers.)

With apologies to all who are bored stiff with Boomers, consider the following: 8,000-10,000 people are turning 60 every day. By 2020, one out of four Americans will be over 65. The vast majority of Boomers have no intention of retiring – ever; and even if they wanted to retire, most Boomers can’t, since their now-depleted retirement funds were never designed to cover their increased longevity. The fastest growing segment of the workforce – by far – is the over-50 segment, and it will constitute an even bigger slice of the pie in the decade ahead.

We are now looking at the prospect of a relatively healthy, productive, experienced, educated workforce of 76-plus million Americans who control more than half the nation’s wealth and who will end up counting for a huge percentage of the workforce. Boomers will be at a new point in their life cycles, with as much as 25 productive years ahead of them, without the responsibilities of raising a family.

Implications for innovation and creativity? Not only are Boomers going to stay in the workforce, they will be an enormous catalyst for and source of innovation. Boomers (at least in their own minds) feel like they’re just getting started. The majority of Boomers view “old” as 89 – which is currently older than the most optimistic of average life expectancies of Boomers [!] They feel ready for new challenges, want to stay involved and relevant and are hardly invested in the old ways of doing things. Arguably, the Boomers have lived through and embraced far more technological change than younger people have. This is an age group that started with three black-and-white TV networks, no cell phones and no computers, and they’ve spent they’re entire life adapting. You might buy a Jitterbug phone for your grand parents, but you’d better figure on a Boomer buying his own iPhone. Further, most Boomers welcome the chance to work with younger professionals (there’s certainly not the generation gap between Boomers and their kids that existed between Boomers and their own parents). The presence of Boomers and younger people on the same entrepreneurial team is apt to be a positive when it comes to innovation, whether the innovation comes from Boomers or younger people. At the very least, Boomers can provide mentoring, business experience, contacts, etc.

When you think Boomers, think Creative Class. Whatever effect the Creative Class might have on urban areas, magnify it by about as many powers as you want, because Boomers will swell the ranks of the creative class by millions as they move into the new pursuits that, if the polls are correct, should be more focused on personal passions than earning a secure buck.

Now go back to something in the Urbanophile’s article – that some portion of innovation is going to come from smaller, entrepreneurial outfits of four-ten people. These may, in fact, not even be particularly stable, but rather ad hoc teams that come together to tackle specific projects. This is right up the alley of Boomers in the next two decades. Boomers, when polled, say that what they do next will be less structured and more flexible than what they’ve been doing all their lives. They want to pursue multiple opportunities. They intend to devote some time to the not-for-profit sector, some time earning money; some time relaxing, but whatever they do, they intend for it to be more on their terms – working less than a 50-60-hour week; flexible arrangements; being their own bosses; working with people they enjoy; trying out new things.

The Brain Drain has been discussed at length in this Blog. But it’s generally been in the context of younger people. Consider the impending brain drain of Boomers from Midwestern cities. Midwestern cities need to figure out how to retain their Boomers and attract new ones. On that score, see below.

Implications for Midwestern Cities? Most Boomers want to live in age-integrated communities and have generally rejected the “golden years” Sun-City type fates of their parents. So, where will they end up? Well, many want to stay right where they are — if they can afford it. Let’s not forget that, in the past, many retirees moved to the Sunbelt not for the weather, but because it was affordable on a retirement income. In doing so, they left behind, in many cases, life-long friends and social networks. They often became isolated from their families and grand-kids in the process. Boomers are going to be a lot less likely to make these sacrifices, if recent polls are accurate. They want to stay involved and active in communities they’ve helped build. They want to stay integrated in urban settings with people of all ages. But cost-of-living will be a factor. Sure, many Boomers have, and will continue to, move back to the urban cores. But, in the case of Chicago, that’s not going to be an option for many of them. And when it comes to Boomers, “many” means “many.”

Now think back to the recent articles in this Blog discussing a hierarchy of labor that would permit people to achieve a higher standard of living at a lower cost in places like Indy or Columbus, while still being able to access the culture and nightlife of Chicago through light rail. This arrangement should, it seems to me, be as attractive to many Boomers as it would be to younger workers with children. Maybe even moreso, because, in addition to access to culture, Chicago ex-pat Boomers would have access to their Chicago-based, friends, families, churches, etc.

A city like Milwaukee, for example, that could offer a “micropolitan” weekday experience for Boomers at a reasonable cost-of-living that is a short train ride from Chicago could offer a much better alternative to a Chicagoan Boomer than moving to Phoenix. Imagine a city like Milwaukee or Indy specifically marketing itself to Boomers. Imagine Boomer-friendly college campuses; programs that create opportunities for Boomers and younger entrepreneurs to link up; live-work developments; real estate subleasing markets that accommodate seasonal Boomer housing. Imagine more in-city “intentional communities” (example: Lincoln Park Village in Chicago) that can take the edge off of winter-living for some aging Boomers by providing services that are now generally only available in assisted living environments.

Forgive the length of this comment. But the implications of what the Boomers do next amount to a heretofore – in the history of the world – unknown demographic phenomenon. It’s staggering. The advent of the post-60 Boomer is as much of a game-changer as anything discussed to date in this Blog. I’ve just scratched the surface of this topic, and I strongly encourage the Urbanophile to devote another article to this phenomenon.

7 Comments
Topics: Demographic Analysis, Economic Development, Public Policy

7 Responses to “Boomers, Innovation, and the New Economy”

  1. thundermutt says:

    The peak of the boomer generation is closer to 50, and we sure aren’t retiring in any great numbers (other than cashed-out Lehman and Goldman partners and UAW members and government workers on 30-and-out programs).

    In fact, it is for us that the Social Security “full retirement” age rises in steps from 65, part of the last “fix” of the system.

    Many of us have 20-25 working years ahead of us, almost as many as are behind us. Who will YOU hire: the young pup with a degree and no real experience (but mad texting and iPhone app skills), or someone who’s been an active participant in a quarter-century of innovation in public management, business systems, or economic restructuring? Not everything old is useless or bad; most experience is good and useful if it is not the only consideration in decision-making.

    Go gray!

  2. Alon Levy says:

    Usually, employers will hire the young pup. The young pup has fewer qualms about learning to adjust to the company’s way of doing things, and will accept (much) lower pay.

  3. The Urbanophile says:

    Alon, clearly money has to factor in. In year’s past, we escalated salaries in line with seniority and experience. Today, it is about market relevant compensation for skills. Unless Boomers bring premium skills in the market, they are not going to command a premium salary. That is an adjustment that needs to take place. However, with ironwood’s approach to party time work with ad hoc teams and low overhead, I can see the same effect achieved on a win-win basis.

  4. Anonymous says:

    “Billboard for Boomers”…nah…more like continued ‘billboard for rail”….”Now think back to the recent articles in this Blog discussing a hierarchy of labor that would permit people to achieve a higher standard of living at a lower cost in places like Indy or Columbus, while still being able to access the culture and nightlife of Chicago through light rail.”

    1) Light rail between Indy and Chicago…hmm….that would be like ‘subway or streetcar’ with like 100 stops. A boondoggle and gigantic waste of taxpayer money; even bigger waste of money that HSR which is itself a gigantic pork train.

    Other: Depending on the industry/position, employers that hire the ‘young pup’ at lower pay vs the ‘older dog’ at higher pay will likely end up paying lots more than if they just hired the ‘older dog’. The reasons:
    * young pup will wander off to a new ‘dog pound’as they have zero loyalty which increases turnover and the costs associated
    * young pup’s work ethic is suspect
    * young pup’s lack of experience will cause for poor decisions that could be very costly

  5. Eric Orozco says:

    This post is why I read blogs…Thanks for this!

  6. The Urbanophile says:

    Eric – thank you for saying so!

  7. Anonymous says:

    http://finance.yahoo.com/family-home/article/106732/Suburbia-R-I-P

    this article provides an interesting view of the future of suburbia.

    Am not sure it is quite as dire as proposed but do think it could mean the end is near for additional greenfield type sprawl.

The Urban State of Mind: Meditations on the City is the first Urbanophile e-book, featuring provocative essays on the key issues facing our cities, including innovation, talent attraction and brain drain, global soft power, sustainability, economic development, and localism. Included are 28 carefully curated essays out of nearly 1,200 posts in the first seven years of the Urbanophile, plus 9 original pieces. It's great for anyone who cares about our cities.

Telestrian Data Terminal

about

A production of the Urbanophile, Telestrian is the fastest, easiest, and best way to access public data about cities and regions, with totally unique features like the ability to create thematic maps with no technical knowledge and easy to use place to place migration data. It's a great way to support the Urbanophile, but more importantly it can save you tons of time and deliver huge value and capabilities to you and your organization.

Try It For 30 Days Free!

About the Urbanophile

about

Aaron M. Renn is an opinion-leading urban analyst, consultant, speaker, and writer on a mission to help America’s cities thrive and find sustainable success in the 21st century.

Full Bio

Contact

Please email before connecting with me on LinkedIn if we don't already know each other.

 

Copyright © 2006-2014 Urbanophile, LLC, All Rights Reserved - Copyright Information