Today Florida is our grayest state -- close to 18 percent of the population is aged 65 and over. In less than two decades, a bunch of states will resemble the Sunshine State, demographically speaking, that is.
The number of Americans 65 and older will more than double in at least 20 states. Even more remarkably, in absolute terms 19 states will likely see a decline in the number of those less than 18 years old.
So fewer Mustangs and more big Lexus sedans. It's the sort of thing demographers and statisticians are always chatting about at cocktail parties. (At least that's what I've heard.)
In fact, to anyone working in the public policy arena, or even regularly reading the newspaper, the coming great gray wave isn't breaking news. Many of the key issues associated with population aging -- including extending retirement ages and reducing benefits -- have been probed and debated ad nauseum, though hardly solved.
Far less understood or even much explored, however, is the profound impact the growing ranks of the elderly will have on the business of government. The aging trend will affect the way government agencies are organized and the services they deliver -- both the design and mix -- and the delivery channels they use. Moreover, there will be changes in the funding sources they rely upon. This is not a ripple. This is an enormous swell that could knock an unprepared government off its foundation.
Consider service delivery, an area in which the private sector has begun to remake itself.
With the aging of the Baby Boomers and the rise of the elderly population, companies are racing to make big changes in the way they deliver services and bring products to the market. Recognizing that not everyone wants to wear a tool belt when they're pushing 70, Home Depot, the home improvement retail chain, has shifted from the "do-it-yourself" to the "do-it-for-you" approach by offering home improvement installation services. Fidelity Investments has redesigned its Web site to make it easier for aging customers -- increasing in number, affluence and Web savvy -- to navigate.
Customer-centered private companies are focused on understanding their aging customers and learning how their needs change as they get older. That knowledge helps them redesign their products and services to meet the needs of this increasingly crucial customer segment.
All of which brings us to government. How will the aging citizen affect government delivery of services and programs? How can governments simultaneously meet the very different service channel preferences of older citizens and the younger digital generation -- without heaping huge new costs on a shrinking number of taxpayers?
These questions face virtually any government agency you can name.
Agriculture departments wrestle with how to shift farmers to low-cost, online channels for reporting information without alienating older farmers. Social Security agencies ponder whether, in an era in which forms and payments are increasingly virtual, they will need extensive networks of physical offices a decade from now -- and whether they can even afford them.
In tackling these issues, public managers are pressed to meet two often-conflicting objectives -- provide value to taxpayers by reducing cost, and provide value to customers by addressing individual preferences. Striking that balance will be a central challenge for many government agencies over the next few decades.
This will be difficult, but to start these managers will need to ask hard questions, such as:
Who are the agency's customers now, and how might they change in the future? Motor vehicle agencies will likely struggle with how to advance both safety and mobility in the face of rapidly increasing numbers of much older drivers.
What do different customer segments need and want? The Department of Veterans Affairs, for example, must try to figure out how to deal with the different preferences younger and older veterans have for interacting with the department.
What is the full range of service delivery channels -- both high- and low-cost -- available to customers? Can older customers' preferences for certain delivery channels be changed over time, and how can they be influenced?
These questions, in turn, can't be addressed in isolation -- they are closely intertwined. Together, the answers form the core of a holistic customer strategy for the aging citizen.
As a first step toward gaining a better understanding of the myriad ways the graying of America will affect their city, county or state, policymakers can follow the lead of New York State, which in 2002 required every state agency to produce a plan detailing how they were preparing to cope with the impact of the aging and increasingly diverse state's population. Such planning will be crucial to avoid being swamped by the coming demographic tidal wave.
