Tina Riis | November 23, 2016
We are living longer and Europe is aging rapidly: in 2003 18% of the EU population were 65 year old or older (compared to 21% of the Italian one). In 2050 the percentage will reach 28% at EU level and 30% in Italy (2015 EU Ageing Report).
The Challenges of the Silver Economy
The demographic change impacts - for better or for worse - all economic sectors: transportation, food, insurance, housing, health, safety, communications, internet, leisure. As the Silver Economy is becoming a more and more central theme, definitions emerge to distinguish the various categories of elderly: In the first phase (over 50) they are active with very high expectations to their quality of life. The second phase is characterized by an increasing need for assistance in order to support and extend the period of independent living in their own homes and avoid costly hospitalizations.
The Opportunities of Digital Transformation
The (public and private) industry related to prevention, care, and assistance in Italy is estimated to have a value of €290B or 9,4% of the GDP making it the second industry after trade, having already exceeded the value of traditionally strong industries like transportation and construction. This is the result of a 2015 Censis-Unipol study.
From an employment point of view this industry is important as well, representing about 16,5% of the Italian work force, or a total of 3.8 million people.
According to some estimates Europe is operating at only 12% of its digital potential, Italy at an even lower level: 10% (McKinsey Global Institute).
Considering the importance of welfare in the current economy and the additional growth caused by the demographic transformation, it seems crucial to find ways to innovate and digitize the industry in order to reduce public spending and make living environments (homes and neighborhoods) more comfortable, connected and safe.
For example solutions for remote health monitoring (vital signs and early warning, medication compliance, medical consultations), management of home risks (fire, gas, flooding), physical safety (intrusion, access control), social relations and communication (family, friends, caregivers), home comfort (air conditioning, lighting), etc.
Who will benefit?
Technology and solutions that can support independent living of the elderly already exist, but they are not yet mass-market, and consequently not very simple to identify, decide to buy and implement, although it could create benefits for everyone:
- For the Elderly - Being able to live independently as long as possible in their own homes is the wish shared by most elderly and their families. Solutions that support everyday life and allow them to be connected to family members (or other caregivers) would provide the necessary safety and peace of mind.
- For Companies - According to Merrill Lynch the Silver Economy is already the third industry worldwide when considering both private consumption and public spending. With the demographic development this market will continue to grow guided by new needs, and therefore new products and innovative services.
- For Public Administrations - The Silver economy represents 25% of the European GDP and 50% of public spending and the trend is increasing like the average age of the population (Growing the EU Silver Economy).
- For the Young - One of the current political priorities in Italy is to increase the employment opportunities for the younger generations, possibly at regional and city level. The digital transformation represents a big opportunity as this generation already have some of the necessary digital skills to design, integrate and support the new digital solutions.
- For Investors - In the current financial markets, banks and investors are focusing on concrete investment opportunities (real economy) characterized by low risks and high growth margins. The Silver Economy represents such an opportunity: it is based on very personal needs and people are more likely to spend part of their savings on projects and solutions that make a real difference in their lives and improve their living environment.
How do we make it happen?
The potential benefits of digitizing the Silver Economy are evident and many different stakeholders (in addition to the elderly) would benefit from this transformation. But to implement the vision and guarantee that the new solutions and services arrive at the final user - and are able to gradually adapt to his/her changing needs - it is necessary to identify new business models and funding opportunities and new partnerships (Internet-of-Things value chains).
The new technological solutions and the new services will not necessarily be mono-vendor or proprietary, but will have to integrate different products and services - also multi-vendor. Also, they will have to take into consideration how to manage the data generated by users, devices and processes and how to develop professional skills and support structures locally.
Last, but not least, the solutions must also be attractive for the user from an economic point of view, maybe through new buying modes: as-a-service, insurance, sharing, etc.
We are creating a community to speed up this implementation process with a series of initiatives and partnerships. Contacts us if you are interested in learning more: email@example.com.