Rome Business School study: Silver Economy: 16 million over 65s in Italy in 2030, a huge business
- Worldwide, over 65s will overtake children under 15 by 2075.
- People aged 65 and over will represent 31.3% of the EU population by 2100, up from 20.6% in 2020, and the share of those aged 80 or over will rise from 5.9% to 14 , 6%.
- In 2100, Italy is expected to be the third “oldest” country in the world with an average age of 53.6 years, after Japan and South Korea.
- Silver represent 23% of the Italian population, and will be over 16 million in 2030.
- The over 65s are the “family pin”: over 9 million grandparents look after their grandchildren and over 7 million contribute monetary resources to the family of children and grandchildren.
- The share of wealth of the oldest part of the population on the total of Italian families has gone from 20.2% to almost 40% of the total in 20 years (from 1995 to 2016).
- Demand for silver consumer products in the world is growing: today more than 1 billion users need assistive technology, 2 billion by 2050.
- The PNRR faces aging as a challenge and not as an opportunity to revive the country’s economy starting from the age group with the greatest spending power.
- Robots, IoT, AI, voice assistants: technological innovation will be the key to offering products that are more suitable for the silver market.
Rome, 21 December 2021 Rome Business School published the study: “Silver economy: analysis of a constantly growing sector capable of contributing to the development of a vibrant, innovative and sustainable Italian economy”. The research, curated by Valerio Mancini, Director of the Research Center of the Rome Business School and Katerina Serada, Founder of the SDG Hub (Center for Sustainable Economies and Innovation), analyzes the impact of the increase in the over 65 population in Italy and in the world, and studies how this represents an important business and technological development opportunity. We are living in an era of unprecedented demographic change. Rising life expectancy and falling fertility rates, combined with improving living standards and health care, have triggered an entirely new process in human history: the aging of the global population.
According to the United Nations, the threshold of 727 million people over 65 was reached globally in 2020 and this figure is expected to double, reaching 1.5 billion people over 65 as early as 2050. All regions of the world will experience a historical inversion: the over 65s will overtake children under the age of 15 by 2075. In 1995 Italy was the first nation to experience it, now 34 developed countries present this trend, which will continue to increase and it will cover 90 countries by the middle of the century. The whole world will witness this epochal transition starting in 2075.
By 2030, citizens over 50 will make up 32% of the entire population of the Asia-Pacific geographic zone. In the EU, on the other hand, people aged 65 or over will represent 31.3% of the population by 2100, up from 20.6% in 2020, and the median age is expected to rise by 4.9 years from 43.9 years recorded in 2020 to 48.8 years predicted for 2100. The highest median age in the EU is predicted for Italy, with a peak of 53.6 years, after South Korea (56.5 years) and Japan (54.7), the highest median ages in the world. The share of those aged 80 or over in the EU population will increase between 2020 and 2100, from 5.9% to 14.6%.
The numbers of the silver economy
The silver economy refers to the set of economic activities aimed specifically at the population aged 65 or over who cease, partially or totally, working, moving from an active lifestyle to a “differently active” lifestyle. Silver people represent 23% of the Italian population, equal to about 14 million people, of which over half are women, and will become over 16 million in 2030.
Part of the silver also belong to the “baby boomers” category (those born between 1946 and 1964), and currently control three quarters of the world’s net worth, thanks also to the fact that they have enjoyed an era of rapid economic growth with stable wages. As their global average gross income will be the highest of all age groups by 2030, their spending will set the stage for the era of the Silver Economy.
Looking at the numbers, worldwide, in 2020, the spending power of the elderly in Asia Pacific was estimated at around 3.3 trillion dollars. China is the country with the largest number of silver spenders, with nearly $ 1 trillion in spending power in 2020, which makes up ⅓ of global consumer spending annually. In Germany, a third of total spending is attributed to people over the age of 60, a figure expected to rise to 41% by 2050.
The silver in Italy
Compared to the past, according to the Senior Observatory of the Italian Post Office, the new silver have changed their lifestyle and habits. Only 13-14% of respondents say that at 65 they feel elderly, do not feel the need for help and continue to carry out their daily activities independently. Not only that, silver is the “family pivot”: over 9 million grandparents look after their grandchildren and over 7 million contribute monetary resources to the family of children and grandchildren. It should be considered that they are a more affluent generation than previous and subsequent generations: with over 20.3 thousand euros, the real equivalent income of families headed by an over 65 is 11% higher than the total and 25% higher than families headed by an under 34. This is also a constantly growing trend: the share of wealth of the oldest part of the population out of the total of Italian families has gone from 20.2% to almost 20 years (from 1995 to 2016) 40% of the total.
Furthermore, in Italy, there are 5.9 million seniors and 6.8 million women. Men have a total annual pension income of 135.8 billion euros, about 25 billion more than women (the average per capita income is 23,156 euros for men and 16,254 for women). In addition, the largest portion of the retired population is between 70 and 74 years old – almost 3 million people – and it is also the richest, having a total income of just under 59 billion euros, about 700 million more. of the 65-69-year-old group, which however receives the highest average per capita income: 21,342 euros.
The economic impact of the Silver Economy in Italy
In Italy there is a Silver Society, as currently there are no factors that could suggest a reversal of the aging of the population. Currently, the over 65 population represents 23.2% of the total, those up to 14 years of age 13%, those in the 15-64 age group 63.8%, while the average age has approached the milestone of 46 years old. By 2050, people aged 65 and over could represent 35% of the total under the current scenario.
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 euros. The sector that benefits most from Silver spending is housing (48.7% of the total average monthly spending of singles over 65), followed by food shopping: the consumption of food and non-alcoholic drinks by couples over 65 is approximately 12% higher than that of the corresponding younger family types. The third most important sector is that of transport (9% of monthly expenditure) and, of course, the expenditure on health services and the health of silver is also significant: 167 billion euros in Europe, about 53% of all health expenditure which in Italy represents 6-7% of the monthly expenditure of over 65s.
The importance of technological innovation
Therefore, the demand for products intended for silver consumers also continues to grow. This will have a significant impact on product development and lead to the convergence of assistive means and technologies with consumer goods, with a direct impact on the competitiveness of SMEs that produce and export goods in “aging markets” around the world. . To remain competitive in the context of globalization, SMEs will have to invest in research and development of their offer and also pay close attention to the digital world.
In fact, a study by the Pew Research Center found that there is significant growth in the use of new technologies by the over 65s: there is a substantial increase in the adoption and use of the Internet, smartphones, “broadband” and tablets. In particular, the future of the Silver Economy will be linked to the use of new services enabled by voice assistants, IoT sensors, wearables and Augmented Intelligence and Machine Learning systems.
The new technologies have various uses: they can be applied to homes (smart homes, cleaning robots, anti-intrusion systems), in mobility (self-driving vehicles and wearable navigation and geolocation systems), for well-being and health (integrated technological services to monitor health and offer remote assistance). It is worth remembering that aging is often accompanied by an increased likelihood of disability and functional limitations. In fact, global interest in “assistive technology” and all those innovative solutions that contribute to self-sufficiency is also growing. The registration of patents is also increasing in all categories related to this type of technology, such as robots, IoT, AI, advanced sensors, voice interface systems and so on. It is therefore a huge business: more than 1 billion users are currently in need of assistive technology, a figure that is expected to reach 2 billion by 2050.
The data show that the future of seniors will undoubtedly be indissolubly linked to technological evolution, thus determining a double opportunity: both for the seniors themselves to lengthen and improve their active life in terms of quality, and a market opportunity for those who will be able to offer useful services, simple to use, safe and at the right cost.
The PNRR and the opportunities to be seized
To date, we are poorly prepared to face the persistent aging of the population, an inevitable and long-lasting change that will characterize our economic systems and our societies. We must therefore adapt to the new demographic, social and economic reality and develop new models of social and welfare contracts that are able to manage the costs and challenges of aging. In Italy, none of the major policy programs currently contain adequate measures or financial resources to cope with this type of demographic change. The PNRR has faced aging as a challenge and not as an opportunity, it has not seen in the Silver Economy one of the ways for the economic revival of the country system, it does not focus on the opportunities to have digital and technological leadership in the development of solutions in support of active aging and long and healthy life, or in prevention and effective monitoring (smart nursing, smart cities, smart homes, etc).
For Valerio Mancini, “winning this demographic challenge means understanding the change in lifestyles, investing in integrated welfare, in the new needs of silver and transforming them into a targeted offer, also through an increasingly fundamental synergy between public and private sectors, thus favoring active aging and maximum social participation of this large and increasingly predominant segment of the population “. Economic recovery in Italy will therefore depend on the ability of the economy and institutions to adapt through innovative and holistic approaches to policy making and strategic partnerships with a wide range of stakeholders, in order to transform challenges into opportunities.