Young at Heart.(what the world will look like in 2012)(marketing to an aging population)

Kihabara shopping district, Tokyo, 2012: in a street once dominated by electronics dealers and toy stores, a new business is opening its doors. Signs in extra-bold lettering are advertising "authentic" whalebone walking canes, along with the newest high-tech wheelchairs. Three doors down, at one of the few surviving electronic-gadget stores, Sony's new snap-on cholesterol sensors are all the rage. But few of the stores are doing well. Instead, the once lively neighborhood is being taken over by undertakers, doctors' practices and "silver age" hotels whose bright neon signs advertise tiny cubicles and nursing robots. Last year, the average Japanese turned 46 years old. The over-80s have reached 9 million. With fewer children born every year, Tokyo will soon start thinning out as Japan's population continues its long decline.

This is how most people view the silvering of our planet: it's a future in which the aging population of rich nations produces a bleak panorama of crises, from collapsing pension plans to recessions, poverty and upheaval. Two thirds of all the senior citizens who have ever lived are alive today, according to the Center for Strategic and International Studies in Washington, and the world's population grows older every day. In Germany, the number of people born between 1990 and 1995 was only about half as large as the number born between 1970 and 1975. That means more old people, and many fewer youths to support them. A recent U.N. report calls this "the greatest societal challenge of the 21st century."

But there's another way to look at the coming Silver World: as one of history's greatest opportunities for innovation and invention. And nowhere are those opportunities greater than in the world's most rapidly aging societies, in Europe and Asia. Industries that traditionally cater to youth--toy companies in Japan, amusement parks in Europe--are reinventing themselves for senior citizens. From housing to autos, robotics to consumer electronics and cosmetics, the global market is increasingly driven by aging baby boomers. In the cosmetics industry, products advertised for "mature skin" such as Shiseido's Benefiance or Lancome's Absolue already account for about half of those companies' skin-care sales, and are rising fast. Is it so inconceivable that come 2012, we'll look back and marvel at all the economic potential unleashed by the aging of the planet?

Consider: not only is the 50-plus crowd the fastest-growing market, on average they're also the richest seniors the world has ever seen, thanks to much-improved public and private pension savings schemes. The over-50 crowd controls half of all discretionary spending in rich countries. Luxury cars and expensive SUVs are doing well because the average car buyer is older than 10 or 20 years ago, and the vast majority are richer. Companies that don't get with it are getting creamed. Levi Strauss, for example, complains that the youth market is shrinking faster than the company's jeans: shifting demographics caused it to shut down three European factories in 1999. Why not market jeans for seniors?

As both the oldest and fastest-aging industrial society in the world, Japan may be a good harbinger of what's to come. In 2012, three of 10 Japanese will be over 60, a shade of gray that nations like the United States won't reach until 2070. Many new innovations are already inspired by fear that the nation will run out of young people to care for the elderly. Companies like Honda and toy maker Bandai are developing service robots that carry bags and serve drinks. In late 1999 Bandai came out with Primopuel--a high-tech doll that nods, talks and sings--figuring it would appeal to lonely young women. Instead the doll took off among lonely seniors. In December, a new hotel will open in the northern city of Yamagata with no steps or stairs, for seniors who want to give their families a month's break from care giving. Building contractors are developing prototype stair-free housing with built-in health monitors for the senior market.

The unwritten taboo against aligning one's corporate image with old people is breaking down. In Italy (the world's second most rapidly aging society), upscale designers like Prada, Gucci and Armani began about five years ago to offer special lines for ...