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Monday, August 15, 2016

There's something about students and we should all be worried.

This is not directly about older consumers but it does impact their lives and those of their children.

I spend more time than I should wondering what will be the next sub-prime financial disaster that will throw the world's finances into convulsions. Unfortunately, there there is no shortage of candidates for that 'honour'.

The thing they all have in common is the are global issues that revolve around a large pile of debt that financiers and government think will be repaid, but will not. That was the problem with loans on homes that could not be paid and bank loans to companies and government that cannot be serviced. Another instance is the promise to pay unsustainable levels of retirement pensions. All potential financial bombs that might explode.

This blog is about students and their precarious financial position. In 1999  the policy of the UK changed and a target was set that 50% of all young people should attend university. Why 50%? There is no rhyme or reason why this figure was selected other than it sounded like a great policy statement.

The US has always had large numbers of students that were funded by loans. In the UK it is a relatively new development for students, not the state, to pay for their education.

There has recently been some highly disturbing research the puts into doubt the viability of much student debt ever being repaid.

In the US it has been shown that the value of a degree, as far as increasing life-time salary levels, is not as great as once thought and highly skewed to the very best degrees (not surprisingly)

In the UK, a quarter of university students are in low paid employment 10 years after graduating.

Not surprisingly, this low pay results in student debts not being paid. Again, there is recent evident showing this to be the case in the UK and the US.

If anything, the numbers of graduates in low pay work will increase. The continuing affect of off-shoring and substituting technology for people means that what we require are a few, very well qualified graduates in specific subjects, rather than hoards of young people with degrees that are seen of little value.

At some stage, this reality must be faced and at that point a large amount of debt will have to be written off. Dick Stroud

Tuesday, August 09, 2016

Sometimes the biggest firms lose interest in older adults almost immediately. Why

Laurie Orlov raises the issue of the way some large companies have a surge of interest in the older consumer that then ebbs away as fast as arrived. She gives some good examples about Amazon (with Amazon 50+), Microsoft (with Kinect) and Verizon (lots of micro-attempts to enter the market).

It is not just digital related companies that go through this hot and cold relationship with the ageing business.

Unfortunately, I have seen it happen all too often. Here are the reasons that I think it occurs:

Reason 1. A senior manager 'gets ageing' and kicks off lots of activity that ends as soon as they move job or lose interest.

Reason 2. Something more important turns up. It is always possible to put of doing anything about ageing until tomorrow. Of course tomorrow never comes and what was a short delay becomes permanent.

Reason 3. It is more complicated than they thought. What could be simpler than having a large group of older consumers with lots of money that are bound to purchase whatever we produce. Of course it is never as simple as that and soon as the difficulties start then management focus move onto the next 'big thing'.

Reason 4. Middle management have too much to do. A senior manager sees the light and fires off a string of activities for their middle management to achieve. These people already are working at the limit and the new ageing activity is slowly (sometimes quickly) buried.

Reason 5. Conflict between senior and middle management. The engine room of the marketing group are instructed to get into the ageing business. This takes them well outside their comfort zone so one way or another they make the venture fail.

There are another 5 subsidiary reasons for failure in making ventures into the ageing business work, but these five account for 80%+ of the failures. Dick Stroud

Well Mr Trump and Mrs Clinton, what are you going to do about these ageing issues?

Ken Dychtwald, the guy who has been talking about ageing for what seems like an eternity, has posed four questions for the US Presidential candidates. I doubt it he expects to get an answer, well I sincerely hope not since I think there are 0% odds are that he will.

It is worth looking at his questions because they are just as relevant to the UK, if not more so.

I will paraphrase his points - maybe he would object to me being so blunt. so apologies in advance.

Point 1. The healthcare system is not fit for purpose and is collapsing, it has the wrong structure, wrong skills and commits a derisory amount of funds researching the main age related illnesses - especially Dementia.

Point 2. Most older people are going to have a tough to dreadful financial existence since they don't have sufficient financial assets (other than their property)

Point 3. Society is institutionally ageist.

Point 4. There are hoards of older people who will not have any rationale or structure to how they spend their post work lives.

I am going to whisper this, since it is a tad scary. There is nothing that government can do to make any difference to these issues, at least for the next couple of decades. Still it is worth asking the question. Dick Stroud