Rome, Nov. 29, 2022. Rome Business School, part of Planeta Formación y Universidades, an international network created in 2003 by De Agostini and the Planeta Group, has published the study “Silver economy and demographic aging in Italy. Critical issues and business opportunities.” The research, edited by Valerio Mancini, Director of the Rome Business School Research Center, and Katerina Serada, Founder of the SDG Hub (Center for Sustainable Economies and Innovation), brings to light the most recent trends on demographic trends in Italy and around the world and analyzes the impact of global aging on current economic and political arrangements, institutions, markets and businesses.
Although different countries and regions are experiencing the demographic transition at different rates (for example, the population in Asia is aging faster than in Europe), it is projected that, worldwide, the over-50s will increase by about 70 percent during the period 2020-2050, so that one in three people (equivalent to 3.2 billion individuals) will be 50 years of age or older by 2050, and, by 2075, the over-65s will outnumber the under-15s.
Italy is projected to have the highest median age in the European Union in 2100, peaking at 53.6 years, preceded by East Asian countries, with South Korea peaking at 56.5 years and Japan at 54.7 years, the highest median ages in the world. In Italy today, the Silver represent 23 percent of the total population, or about 14 million people, more than half of whom are women, which will become more than 16 million in 2030.
At the regional level, the highest incidence of over-65s is in the Northwest and the Center, with one in four individuals, followed closely by the Northeast with 24.2 percent; more detached are the Islands with 23.2 percent and the South with 22.2 percent. In 2030, the authors estimate, the area with the highest incidence of over-65s is expected to remain the Center with 28.1 percent (+3.6 p.p.); in second place should rise the Islands (27.7 percent), with a growth of +4.5 p.p.; followed by the Northeast with 27.5 percent and the Northwest with 27.2 percent (+3.3 p.p. and +2.7 p.p., respectively), and finally, the South with 26.6 percent (+4.4 p.p.). While, in 2040 in both the Islands and the Center, more than one in three individuals will be over the age of 65, the South will become the third area in terms of incidence of those over 65 with a percentage close to 33 percent, followed by the Northeast with 32.8 percent and the Northwest with 32 percent.
As a consequence of this aging process, a Silver Economy is on the rise, which, according to research author Katerina Serada, “is not one of ‘markets,’ but rather a cross-cutting ‘economy’ that is shaping all markets and sectors, particularly housing, transportation, food, insurance, technology, health (e-health), communications, sports, leisure and travel.”
Adults over the age of 50 contribute $45 billion to global GDP, and by 2050 this figure will reach $96 billion. Due to their ability to spend on goods and services, in 2020, the population over 50 supported one-third of the world’s jobs, or just over 1 billion jobs, generating $23 billion in labor income. By 2050, those over 50 are expected to support 1.5 billion occupations (equivalent to 38 percent of the world’s jobs) and their impact on labor income is expected to more than double to $53 billion.
The impact is also strong, therefore, in terms of spending: as early as 2020, Italy ranked first with a percentage of spending by the over-50s of 67.7 percent, followed by Hong Kong (60.8 percent), Greece (60.4 percent) and Denmark (60.2 percent). In monetary terms, in Italy, the added value attributable to the economic sectors in which the Silver Economy has a direct impact is at least €43.4 billion: compared to an average monthly expenditure of Italian households of approx. €2,571, the couple aged 65 and over without children spends approx. €2,674 monthly. In this context, “our country is well positioned in pivotal sectors of the silver economy such as prevention, health, and advanced home care, thanks to industrial primates in mobility and nutraceuticals,” says Valerio Mancini, author of the study.
In our country, housing ranks first in Silver’s spending with 48.7 percent of total average monthly spending; the second sector is food consumption, which for couples over 65 is about 12 percent higher than the corresponding younger family types; the third sector in importance is transportation to which couples aged 65 and older devote about 9 percent of their monthly spending and health services accounting for 6-7 percent of monthly spending.
“Spending in these areas can be expected to increase further due to technological developments and the availability of innovative consumer-friendly products on the market. Growing awareness of the opportunities of the Silver Economy is leading to the proliferation of initiatives by private companies and public and private research centers on older age,” Mancini explains. The impact of this phenomenon, as revealed by the research, thus affects not only the health sectors involving financial services, consumer goods, real estate, tourism, and, by 2025, it is estimated that the Silver Economy will contribute 5.7 trillion euros to the European economy.
Since 2016, elder care startups have raised $1.2 billion globally, and they are increasingly active as the sector matures. Daily care services and products are, in fact, benefiting the most from the Silver Economy, receiving nearly $500 million since 2016. Also significant is the impact on technological development and not only related to healthcare. In fact, there is a substantial increase among silver people in both Internet adoption and smartphone use, as well as in the adoption of “broadband” and tablets. In this regard, it should also be noted that Internet use among the elderly has increased over the past decade, especially in the countries of the EU, the United States, China, and India. However, many have difficulty interacting with digital products, the design of which often does not take into account the needs of this particular type of user.
This trend leads to the increasing integration of complex assistive technologies into consumer goods and will thus have an increasingly strong direct impact on the competitiveness of SMEs that produce and export goods to “aging markets” around the world. Among the most imperative needs recorded: staying in their homes as long as possible (94 percent of the over-65s in Italy say they are very or fairly attached to their homes), new independent mobility solutions, and more efficient health monitoring. “This is an enormously large business. In fact, more than 1 billion users currently need assistive technology and this figure is expected to reach 2 billion by 2050.” On the other hand, the increase in the development of innovative solutions for older people is demonstrated by recent global trends in patent applications and patent registration in all categories related to assistive technologies.
Thus, the social, economic and fiscal implications appear to be manifold, and the growing needs will inevitably lead to cooperation in cross-sector innovation while “mergers and acquisitions will provide further opportunities to accelerate the advent of technology and digitization in the Silver Economy, thus developing a market for new goods and services on a large scale.”
The analyses proposed by the authors show, therefore, that contrary to popular belief, the aging process should not be understood as a threat to fiscal sustainability but, on the contrary, represents a huge resource with benefits for all generations, bringing the economy onto more sustainable and humane tracks. This, however, is by no means a given. The study stresses the need for fundamental reforms in work patterns, innovation, business forms, institutions and health systems. Thus, there is a need to develop new approaches to disease prevention and care delivery; to define new models of social contracts and welfare that are capable of being able to handle the costs and challenges of aging; to develop (technological) products and services and business innovation models that need to transform into resilient and more collaborative systems; and, for educational institutions of so-called higher education, to strengthen a lifelong learning-oriented approach capable of coping with a lengthening of the working age to over 70 years and a number of occupations, over the course of a lifetime, that will surely be higher in the years to come.
The creation of an economic fabric that can therefore seize the opportunities of this market is a great opportunity that Italy must take advantage of, thus transforming the presence of one of the world’s longest-living populations into a factor of development and well-being.