Hi ho silver lining? What firms need to think about as New Zealand ages
March 26, 2013
As the population ages, a number of economic trends will emerge that put pressure on profits. On the cost side, an increase in competition for skilled workers will push wages up. Revenue will also be affected as demand shifts in favour of products that older people use and consume. These trends are opportunities as well as threats. Some sectors of the economy will flourish. Firms which invest in staff and devote time to understanding the changing needs of their customer base will have a strategic edge. The trick is to expect change, to be aware of the trends that will dominate the commercial landscape in the years ahead and to be prepared to adapt. This working paper evidences the key trends that should be expected to result from an ageing population. It looks at which kinds of industries will fall and which will flourish. It discusses the kinds of trends we might expect in terms of consumer demand and it touches on what firms should be thinking about if they want to manage commercial risks from an ageing population. The paper draws on empirical analysis that NZIER has undertaken to examine the effects of population ageing on the economy in our earlier working paper "Golden years? The impacts of New Zealand ageing on wages, wealth and the macroeconomy." Both papers are funded from NZIER's Public Good programme.