The demographic transition is one of the most relevant global phenomena of our time. The elderly population will continue to grow: by 2050, the number of people over the age of 50 will increase by 44% globally; it will be one in three people (equivalent to 3.2 billion individuals). Not only that, the over-65s will outnumber children under 15 by 2075. Holding two-thirds of them as middle-income earners, the business opportunities are enormous. AgeTech and AI will be able to give great impetus to the development of assistive technology to meet the needs and interests of the ever-increasing new silver: the longevity economy will represent a huge business that will improve the physical and mental well-being of those over 50, as well as generate technological innovations and new jobs.
These are among the observations in the Rome Business School‘s research, “From Silver Economy to Longevity Economy: Health, Technology, and Business Opportunities”, by Sabina Eminente, Program Director of the Rome Business School’s International Master in Digital Marketing and Business Transformation, and Partner at YourCMO, and Valerio Mancini, Director of the Rome Business School Research Center. The study highlights global aging as a significant trend of our times, emphasizing how a longevity-centered approach can generate greater well-being and social, economic, and cultural opportunities.
Italy ranks first in Europe in terms of median age, with an average age of 46.5 in 2023. Meanwhile, the population aged 80 and above is projected to increase from 5.9% in 2020 to 14.6% by 2100. This demographic trend extends to Europe as a whole: the percentage of the population aged 65 or older, which was 21% in 2022, is expected to reach 31.3% by 2100. Additionally, the median age is projected to increase by 4.9 years, reaching 48.8 years.
“To date, we are ill-prepared for this demographic evolution, which requires new models of social contracts and welfare to manage the costs and challenges associated with an aging population. It is essential to take into account the global aspect and the impacts on the growth of the world economy. Although the exact value is not certain at the moment, systemic and complex impacts are expected in various sectors”, says Valerio Mancini, one of the authors. Indeed, population aging has a significant impact on GDP and greatly influences consumption patterns and economic production.
Globally, the over-50s contribute $45 trillion to GDP, but their contribution will continue to grow: it is expected to reach $96 trillion in 2050. Specifically, Italy’s silver economy ranks first globally in terms of the percentage of spending by the over-50s, at 67.7%, followed by Hong Kong (60.8%), Greece (60.4%), and Denmark (60.2%).
Over the past 60 years, globally, we have gained 19 years of life expectancy, but according to the McKinsey Health Institute, the proportion of years spent in full health compared to years spent in moderate or poor health has remained essentially unchanged.
The authors propose a paradigm shift aimed at improving the well-being of our elderly: “We need to move from the term ‘silver economy,’ with its more negative connotation associated with aging, to the concept of ‘longevity economy’—a concept that reflects a broader and more positive perspective, aiming to encourage not only living longer but also living in better health and staying active“, says Sabina Eminente, one of the authors of the Rome Business School report.
Several studies have highlighted the top 8 challenges and areas for improving longevity: promoting daily well-being through healthy lifestyles and maintaining as much independence as possible; enhancing mobility and movement, including redesigning living spaces; nurturing mental health through exercises that stimulate cognitive skills and outline a life purpose; managing health care through pathways for chronic conditions; supporting caregivers in caring for the elderly; promoting active living by combating isolation and marginalization; ensuring financial well-being through the adoption of new models of work and retirement; and addressing end-of-life care by considering how to cope with death and preparing for it appropriately.
Certainly, wellness, even in longevity, is fostered by paying attention to maintaining a healthy lifestyle over the years. Researchers from Harvard University identified five low-risk lifestyle factors: a healthy diet, regular exercise (at least 30 minutes a day of moderate to vigorous activity), a healthy weight (defined by a body mass index of 18.5-24.9), absence of smoking, and moderate alcohol intake (up to 1 drink per day for women and up to 2 per day for men). Compared with those who incorporated none of these lifestyle factors, those with all five factors lived up to 14 years longer.
The main consumer categories in which older Italians contribute billions are the areas of preventive care, healthcare, and advanced home care. However, a significant overhaul of offerings to consumers over 50, resulting from their new consumer needs, behaviors, and desires, is underway. Recent research by Health & Science identifies six “Personas” among the over-50s:
The over-50 population is increasingly interested in the opportunities offered by technology. Research by Health & Science Italy (2023) shows that smartphones are used by 93% of the over-50s, 90%use WhatsApp, and 80% use social networks. Moreover, they record daily interactions on par with younger generations, utilizing digital devices and apps for various kinds of purchases, as well as subscriptions to online magazines and newspapers.
“AgeTech is among the businesses of the future“, explains Eminente, who continues, “In fact, the term AgeTech is not limited to the medical sector or assistive technologies but embraces all technologies useful to promote what, in the Anglo-Saxon world, is called ‘aging in place’—that is, aging while remaining in one’s home, community, and, we would add, one’s conception of life”. These are technologies that help individuals live fully, continue to learn, contribute, and thrive in different ways as their personal circumstances evolve. They will increasingly need to be co-designed for and with end users.
It is estimated that a better user experience and greater familiarity with digital technologies among the over-50s will cause their technology-enabled spending (another way of defining AgeTech) to grow from about $1 trillion in 2022 to more than $2 trillion by 2025 (National Innovation Centre Ageing, 2023). Tech giants such as Amazon and Apple have tapped into a large share of the demand, but startups backed by venture capital are also growing, already generating revenues of about $10 billion (UK National Innovation Centre for Ageing).
Moreover, the shift toward promoting independent and self-directed living is demonstrated by the increase in applications for new patents related to technologies aimed at reducing the impact of functional limitations of older people and the cost of care. This is a business of enormous size. Currently, more than 1 billion users are in need of assistive technology aimed at promoting self-sufficiency, independence, and health monitoring. This figure is expected to reach 2 billion by 2050 as the population ages and consumer electronics and assistive products converge (WIPO Assistive Technology Trends, 2021). Finally, the pandemic has emphasized the importance of telemedicine as a crucial tool to address the health emergency, and today the global telemedicine market is steadily growing. It is expected to reach a value of more than $175 billion by 2026.
A key technology in healthcare today and in the future is, and will be, AI. It is primarily used for diagnostics, drug development, and continuous health monitoring of patients, even from home, enabling the detection of abnormalities and facilitating timely medical intervention. By 2026, it is expected that two-thirds of medical imaging will use AI to detect diseases and propose possible treatments. Currently, 19% of healthcare investors favor AI investments, and 37% are expected to do so in the next three years. “The combination of AI with immersive technologies is changing and improving the landscape of the global healthcare system but requires attention to accessibility and equality in adoption. The March 2023 enabling law ‘on policies in favor of the elderly’ is a first step in using resources from the National Recovery and Resilience Plan (NRP) to support
Italy is now among the countries with the largest number of elderly people. According to Eminente, “Longevity should be incorporated into individual and social culture by requiring life planning in the three dimensions of physical, mental, and financial health. The public sector should promote prevention, redefine continuing education and training, as well as reform labor and pension systems to support longer, more diverse, and flexible working lives“. The Longevity Economy is set to continue expanding as awareness of its potential increases, and technological innovation remains a key focus of its development.