Opportunities to leverage the Silver Economy

Healthy life and the right to health do not start or end at a specific age. They are applicable to all ages, including the later years of life. All of us need to take account of the rapid population ageing that is occurring in almost every country. By 2050, one in five people will be 60 years or older, totaling 2 billion people worldwide. This is the “Silver Economy”.

Populations are ageing rapidly across advanced economies and many emerging market economies because of rising life expectancy and declining fertility, although at different speeds. The number of people over 65 for each working-age person will at least double in most G20 countries by 2060, and the share of people over 80 in the world’s population will triple. The slowing growth of the working-age population will weigh on GDP per capita growth in the coming decades in most economies, especially if shrinking and ageing populations result in slower investment and productivity growth.

Advantages of the matured ageing society

Human lives are an incredibly valuable resource.

Older people participate in, and contribute to, society in many ways, including as mentors, caregivers, artists, consumers, innovators, entrepreneurs and members of the workforce. This social engagement may in turn reinforce the health and well-being of older people themselves. One key factor – the health of the older population is critical for the success of the above, any decline in physical and mental capacity of older people could lead to negative implications for society.

So Priority 1: is ensuring the best possible health in older age.

Older age also involves significant changes like shifts in roles and social positions. Countries will need to invest and develop a public health response system and strategy that reinforces resilience and psychosocial growth. Ageing will also create new opportunities for technology companies to provide for Old age related needs and improved health care. Countries where policy conditions enable innovation and entrepreneurship to thrive will be best placed to benefit from the “silver economy”

Some areas of concern

Rising old-age dependency ratios will put unprecedented stress on the financing of public pensions, health and long-term care, especially in a slow growth environment.

Pension reforms would be needed to address some of the challenges faced in improving financial sustainability and reducing old-age poverty risk. Advanced economies, where ageing is already well under way, typically face more pressing challenges to finance rising pension costs. Depending on each country’s pension policy objectives, options include linking the retirement age to life expectancy, allowing for flexible retirement with adequate financial incentives, expanding pension coverage of non-standard workers and improving the adequacy of safety net pension will all work towards providing the social security framework to the “ Silver Economy “.

Rising health and long-term medical care costs increase the pressure on public finances already strained by rising pension costs. Promoting healthy ageing, containing costs and realising efficiency gains in the health and long-term care sector is critical for each country to plan and strategize today.

Increasing employment in ageing societies and having policies that tackle any barriers to the employment of older workers, such as mandatory retirement, lack of flexible work arrangements and seniority wage-setting should be tackled by the countries to prepare for the challenges ahead.

Opportunities to Leverage the “Silver economy”:

The “silver economy” can be a powerful source of new products, services and jobs where policies encourage entrepreneurship and innovation. Population ageing has the potential to create a new market and opportunity for innovators to respond to the unmet needs of the ageing population, this includes the rising demand for leisure and services by retirees in good health.

People over 60 are on track to generate more than half of urban consumption growth in developed economies, fuelled by spending on healthcare but also transport housing and entertainment.

Start-up companies and their innovations can help the elderly remain healthier, more autonomous. Some examples are: telemedicine and mobile clinics to help improve health care in underserved areas. Home-based health monitoring through smart devices and wearable technologies and communicating with health professionals can enable more personalised care

Artificial Intelligence (AI) and Data-driven innovation will provide practical solutions to enhance elderly people’s quality of life and facilitate independent living, while reducing financial costs and freeing up time for family. Advances in robotics (e.g. development of “carebots” in Japan), intelligent sensors (e.g. fall detection) and neuroscience are some examples. Similarly voice-activated technologies and autonomous vehicles will find customers in the Silver economy. Regulation will need to be implemented by countries to ensure appropriate data privacy and security, as well as greater interoperability across devices, services and systems in order to foster the emergence of connected healthcare systems.

Senior level Entrepreneurship could be an integral part of the society. Entrepreneurs will ensure a longer productive participation of older workers in the labour market. Senior entrepreneurs start businesses not only for lack of alternative employment, but in most cases as perceived opportunities or as a path to keeping an active and socially engaged life. Older people can leverage their experience and knowledge into successful ventures, and use their developed networks, financial resources and management experience

They may face significant barriers in the form of lack of IT skills, access to early stage finance, insufficient information on starting and running a business, as well as potential age discrimination.

Countries need to tackle these through continuous learning and development. Training in IT skills to start new ventures and acquire knowledge and Policies to that effect includes tackling regulatory and administrative barriers to starting businesses, maintaining adequate regimes for the protection of intellectual property, and ensuring that competition regulation is conducive to innovation and business dynamism.

As seen above the future is greying, but the silver economy is throwing up its own challenges and opportunities. Countries and economies who are preparing themselves for this shift will be able to leverage the change and come out stronger.

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