Economist Andrew Scott: Economic and Corporate Implications of the 100-Year Life

economist Andrew Scott impact of a 100 year life

Andrew Scott is Professor of Economics at London Business School having previously held positions at Harvard, London School of Economics, and Oxford. He has published widely in leading international academic journals and his book, The 100-Year Life: Living and Working in an Age of Longevity, is an international bestseller having been published in 14 languages and received several awards.

Andrew has advised a range of governments including serving as Non Executive Director for the UK’s Financial Services Authority. He is currently on the advisory board of the UK’s Office for Budget Responsibility, a member of the Cabinet Office Honours Committee (Science and Technology), and co-founder of The Longevity Forum.

As an economist whose research has covered everything from fiscal policy to debt management, to trade, to UK labour markets, and so on, how did you come to make longevity your area of focus?

Andrew Scott: As an economist at a business school I tend to focus on two sets of trends—short run ones that will affect the economy the next few years, such as the state of the business cycle, and long trends that will drive the corporate environment for decades to come, such as technology and globalisation. I have long had an interest in demographics and longevity but the more I talked to students about what was happening the more I felt that the debate was missing something. It wasn’t just that there were more old people but how we are ageing is changing. That’s a huge and important effect that tends to be forgotten. On average we are living longer and longer in better health. That seemed good news not bad news so that prompted me to investigate more and write The 100-Year Life.

At an individual level there was also something else. The 100-Year Life talks about a multi-stage life and I was looking for something intellectually new and invigorating having spent around 30 years studying business cycles.

In your book The 100-Year Life you warn, “Without positive planning and action-taking, longevity has the potential to be a curse.” That curse would be felt, certainly, on an individual level, but what are some of the broader economic implications if we collectively ignore this shift?

Andrew Scott: As a society we have got rather trapped in thinking about age purely chronologically. That’s the basis of the ageing society story that says there are more old people, more people aged over 65.

This however totally misses the fact that we are ageing differently. The other fact it misses is that we have more time. The average US or UK citizen has never been older but has never had so long left to live. It’s not obvious that’s an ageing society. We all need to be more forward-looking than past generations whatever our age. With more time we will also restructure our lives differently. This means new career paths, more life time learning and more social pioneering.

'The average US or UK citizen has never been older but has never had so long left to live. We all need to be more forward-looking than past generations whatever our age.'Click To Tweet

At a social level, if all we do is think of 65 as old we fail miserably to captialise on the benefits of healthy ageing. However, equally, just raising the retirement age also fails to recognise that longer careers will require a different pace and more frequent upskilling.

''If all we do is think of 65 as old we fail miserably to captialise on the benefits of healthy ageing. However, equally, ....longer careers will require a different pace.'Click To Tweet

At a society level we need to move away from the simple idea that age in years is informative, move away from out of date stereotypes, and move towards a more flexible structure that helps people create new life paths for this new longer life.

Your Beckhard Prize-winning MIT Sloan Management Review article “The Corporate Implications of Longer Lives” makes it clear that the majority of corporations are unprepared for both the challenges and opportunities of the new longevity. With that in mind, which part of our employer-focused Longevity Agenda most resonates with you, and why?

Andrew Scott: So all of those are what corporates will need to start to do if they want to make the most of older workers. The training one is too often forgotten and so it’s good to see it included. In addition corporates need to structure things so that different people can make different choices. They also need ahead of time to instigate a process of conversations with workers to get them thinking about the options and planning accordingly.

Not only are corporations unprepared, in many cases they are actively working against longevity in the form of age discrimination. How could a better understanding of increased life expectancy help combat those biases?  

Andrew Scott: For me there are four steps to getting corporates to understand better what is happening.

The first is what I call age inflation. If people are ageing differently then 70 is the new 65 etc., although of course really 70 is just the new 70—with all the experience but on average being healthier.

This leads to the second channel: on average older people are healthier than they used to be and are more productive. This means firms should be more interested in older workers.

Thirdly firms need to recognise diversity. People age at different rates and have different needs. As more and more people reach older ages this will become apparent and firms need to think about how to deal with this diversity and also recognise that not all workers are the same.

The fourth item is immigration and demographics. With immigration likely to slow and smaller cohorts entering the workforce, firms need to think much more about the large cohort that are approaching retirement and how to keep them in the workforce and make use of their experience and skills.

How could our tool ThePhazer, which gives aging workers step-by-step guidance to request and obtain extended work and flexible and phased retirement options, help nudge corporations in the right direction?

Andrew Scott: One of the problems we face is that everyone is having to act as a social pioneer. we are looking to do things differently. That’s tricky as social norms help guide us in easy ways. Tools such as ThePhazer help structure thoughts and make people aware of options that they may not have been aware of.

Photo credit: Andrew Scott

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