In the literary arena, all, which could have been said about our life’s social journey, has been said. However, in the business arena, there is a new discussion in the air that focuses on the impact of the lives and social activities of the ageing population on a country’s economy. The senior citizens or the people aged fifty and above are the focal point of this newly recognized economic sector, which is called the Silver Economy. It is the part of the general economy that are relevant to the needs and demands of older adults. It stands as the third largest economy in the world being little shy of the national economies of the USA & China. This blogpost is particularly about the European Silver Economy, which includes all the economic activities catering for the needs and active life styles of working and retired ageing citizens of the European Union (EU).
Description, Scope & Economic Impact
A study published by the European Commission in 2018 defines ‘Silver Economy’ as the sum of all economic activity that serve the needs of people aged 50 and over, including the products and services they purchase directly and the further economic activity this spending generates. The scope of the silver economy covers a unique cross-section of economic activities related to production, consumption and trade of goods and services relevant for older people, both public and private, and including direct and indirect effects.
In the EU, some 199 million individuals are aged 50 and above, which represents 39% of the entire population among all 28 EU member countries. This ageing population spends around €3.7 trillion on their needs for various goods and services, thus created 78 million jobs in various industries in the EU. Besides, due to global supply chain structures, the silver economy has created revenue of €780 billion for non-EU business entities. Since it plays a vital role in supporting activities in a diverse range of sectors across the EU, therefore it has caught the attention of the economists, policy makers and politicians alike.
It is not so distant future, when the ageing citizens would count for 43% of the EU population. The European Commission’s report estimates the potential size of the European silver economy by 2025 to reach €5.7 – 6.4 trillion across the EU, creating 88 million jobs. The study further projects that with an estimated 5% steady annual increase, the European silver economy will drive a substantial uplift in the level of economic activity sustained by the spending of the 222 million senior European citizens.
Opportunities within the European Silver Economy
The prevailing distribution of private consumption expenditure in the European silver economy expands over twelve industrial sectors including housing, food and transportation, which accounts for over 53% of total consumption by senior citizens. However, the potential economic growth opportunities are spread over a broad range of novel areas, from well-established economic sectors to those which are in their infancy or yet to born. A few of such cases with vast array of potential market growth are highlighted in this blogpost.
- Connected health encompasses such smart-phone based mHealth devices and mHealth services, which could be used for online prescriptions and health related software applications in the Europe’s national health service sector. Let us not neglect the possible competition arising from the USA and Japan.
- Robotics to assist ageing individuals, helping them to be independent in their day-to-day lives. In the EU, the artificial intelligence driven markets may seem slow now, nevertheless new doors will be opened for us in the future. The development of smart phone applications and games are yet potential avenues to improve the social lives of older Europeans.
- Integrated care encapsulates the ICT solutions for healthcare monitoring of the older people in private homes. Europe has strong industrial base to support the growth in this sector.
- Smart home technology offers convenience and pleasure to older people. Home automation including domestic robotics (domotics) and connected health via integrated care model could help ageing population live longer and independently.
- Wearable technology covers the smart watches, fitness trackers, smart clothes and eyewear, medical devices and infotainment gadgets that could be used for active and health lifestyle.
- Silver tourism concentrates on senior European tourists and produces 100,000 + jobs. This sector has significant potential for economic growth in the EU.
- Driverless cars are not a dream anymore. Especially with European car manufacturers, the autonomous vehicle technology and assistive technologies are high on their development agenda. Such advancement – fully or partial autonomous vehicles – would make driving easier for the older people.
- Interactive platform to support and fast-track the production and development of ideas and services by the younger population with common interests in the growth of the European silver economy.
Among several other mainstream economic sectors, which could grow due to the changing demographics of the European ageing population, age-friendly educational institutes and older-preneurship are the ones under lime light in the business arena.
The way forward
In order to materialize the potential economic benefits arising from the European silver economy, the policy makers across the EU are emphasizing the readiness of our industry landscape and to act in support of healthy ageing via digital revolution in health and care of the elderly. Along with provision of employability in an age friendly built-environment, create a connection between recreation and physical and cognitive activities. With technological and social means, support the innovation of products and services targeted towards independent and meaningful living of ageing individuals.
Are we ready to reap the fruits of such potential economic uplift? The answer may come from the ‘Novel Opportunities for new Company Creation and Accelerated Growth’ (NOCCA) project, which is part of the Central Baltic Programme 2014-2020 for result oriented cross-border cooperation. The NOCCA project involves multi-disciplinary students from educational institutes in Finland, Estonia and Latvia, where students are exposed to entrepreneurship in general and are made aware of some of the pressing challenges within new and emerging fields related to silver, blue and green economies. The objective of this initiative is to encourage the participating students to create new knowledge intensive business ideas as well as to run their own companies in the future.