Italy, amongst other European countries, is currently encountering an ageing population, with an ever-increasing number of citizens over the age of 50. In fact, if everyone over 50 were put into one country, this would be the third largest country in the world, according to a recently published EU Commission report. This higher life expectancy is supported by modern advances, including access to water, better healthcare, and better working conditions, to name a few. It is only further fueling the Silver Economy. Evidence of this is that the average life expectancy in the EU has risen to 80; in the US, it is 77, a far cry from the global expectancy of 63 in the early 90's.
A pivotal discussion involving Lucia Albano, the Italian Minister of Economy and Finance, and Mario Ottiglio, President of the Global Coalition on Aging (GCOA), occurred on 13th February 2024. During this roundtable event, the topic "Silver Economy Meets Innovation", speakers delved into the challenges and opportunities that are presented by the Silver Economy.
The event was organized by AC75 Startup Accelerator and Next Age. This is the first acceleration program in Europe created on the initiative of CDP Venture Capital and AC75 Startup Accelerator, which specifically invests in Silver Economy startups.
In this article, we will discuss the world of the Silver Economy, the main implications, and how the government and businesses need to adapt to overcome challenges while capitalising on the unique opportunities presented.
When discussing this topic, it is important to understand what the Silver Economy means and what the term encompasses. Originating in Japan, the concept has gained global significance; it includes economic activities, products, and services specifically tailored to the over-50 population. With a calculated value of a staggering $17 trillion, the Silver Economy is rapidly expanding, emphasised by an ageing global population.
But this poses the question of why. Why is the Silver Economy such a giant in the business world? When we consider that those over the age of 50 have fewer economic burdens, such as raising children, and have stronger financial health, including savings, we begin to understand the picture being painted that shows us the incredible purchasing power held and represented by this group. Let's also consider that along with financial stability comes an increase in free time to spend on luxuries, technology and travel. Combining these creates a powerhouse amongst economic groups that businesses and governments must capitalise on.
With a calculated value of a staggering $17 trillion, the Silver Economy is rapidly expanding, emphasised by an ageing global population.
The ageing demographic in Italy is a pressing concern. With approximately 14 million elderly citizens, including a significant number of centenarians, the nation is witnessing a demographic shift. The Silver Economy in Italy is notable for the substantial influence of individuals over 65. They hold 30% of the wealth and drive 30% of consumption. However, surveys reveal concerns among this demographic, with 85% worried about diseases, 42% facing loneliness, and 34% fearing financial instability.
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Italy's unique position as the second-longest living country globally and the oldest in Europe necessitates strategic planning. The impending "silver tsunami" is both an opportunity and a challenge, requiring a reevaluation of the country's organisational structure.
The Italian government clearly understands the importance of addressing the ageing population's needs. This can be seen from the actions taken in January 2023, where a draft law was proposed and later approved in July 2023. This law has a comprehensive focus on protecting the dignity and life quality of senior citizens. The new legislation aims to promote a multitude of various aspects, including human, psychological, social, cultural, and economic values across different life phases. The implementation includes measures to combat social isolation, support physical activity, and enhance semi-residential services.
In addition, a strong emphasis on residential living has led to the creation of a control booth within the Ministry of Economy and Finance. This demonstrates the government's commitment to addressing housing interventions. The long-term program, as outlined by Lucia Albano, not only improves living conditions for the elderly but also has the potential to decrease national debt.
Other implications of an ageing population include the need for new training strategies to help keep up with the constantly evolving technological advances that are being made. This includes online banking and VR/AR, as well as unique job opportunities in the workplace, helping to capitalise on the experience while keeping employees skilled and motivated.
Mario Ottiglio of the GCOA highlighted the inseparable connection between senior housing and innovation. The GCOA has been a leading advocate for ageing-related issues for the past decade. As a coalition of industries and multinationals, it strives to be a leading business voice on age-related issues.
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Working with various institutions by promoting awareness on ageing-related topics, Ottiglio's assertion that "No other force is likely to shape the future of national economic health, public finances, and policymaking as the irreversible rate at which the world's population is ageing" underlines the urgency of addressing ageing-related challenges. Ottiglio emphasised that the growing population of individuals aged 50 and above, coupled with a decrease in birth rates, presents a pressing need for innovative solutions to cater for evolving needs.
The private sector is urged to actively engage in addressing demographic trends. With the Silver Economy poised as a driver of growth, the private sector must adapt its workforce and consumer strategies. The GCOA stresses the importance of adapting to the changing consumer landscape, as older individuals are no longer a rigid demographic. Companies are encouraged to develop business strategies focused on older demographic groups, promoting social responsibility and combating ageism.
Demographic trends are becoming increasingly clear, with the Silver Economy presenting significant growth potential. There are several compelling reasons for the private sector to actively engage in addressing these trends. These are the current political landscape aligning towards action, the relevance of adapting both internal workforces and external consumer strategies, and contributing to sustainable social development in line with stakeholders' expectations.
The global workforce is ageing rapidly, and according to Bain & Co., "In the Group of Seven countries – which are Canada, Germany, UK, Japan, US, France, Italy – workers age 55 and older will exceed 25% of the workforce by 2031, nearly 10 percentage points higher than 2011." This shift means that employers will need to recruit and retain older workers, recognising the potential and experience they bring to the workforce.
Beyond this, businesses must also consider accessibility, diversity and inclusion initiatives to ensure that these older workers have the same opportunities in their working environment as their younger counterparts. Businesses must assume a position against ageism if they want to be able to continue growing and recruiting suitable candidates. This, in turn, leads to the need for initiatives to educate against discrimination, evolve recruitment strategies, and develop training plans. Businesses and organisations must invest in The Silver Economy now to be prepared for the future.
Demographic changes bring challenges and opportunities for G20 members, requiring comprehensive policy actions. One significant issue is that of caregiving. With an anticipated need for 13.5 million new care workers by 2040 in OECD countries, the heavy burden of caregiving currently falls on unpaid family members, and this particularly affects women and impacts both psychological and financial well-being.
... need for 13.5 million new care workers by 2040 in OECD countries
This caregiver issue is relevant not only for family relationships but also for many workplaces. As the average population age increases, there will be more and more situations where employees face difficulties due to being informal caregivers for their families. Without proactive measures, this caregiving burden will continue to fall on unpaid, untrained family caregivers, resulting in substantial psychological, emotional, and financial strain on families.
It is becoming increasingly crucial that generations become connected and mixed. We are in a society where generational labels like Boomers and Gen Z have created an unnecessary barrier and created a stigma against any generation outside of their own. As such, social evolution remains a core topic, and building a sustainable future for new generations is essential. Guidelines for corporations are necessary, urging companies to stop relying on stereotypes and instead focus on objective and merit-based criteria.
Companies are encouraged to adopt age-sensitive cultures to break free from stereotypes and embrace merit-based criteria. GCOA collaborates with major companies like Biogen, Bayer, Philips, and Uber, envisioning a future where innovation and technology play a crucial role in overcoming barriers related to ageism.
In conclusion, as Italy grapples with the challenges and opportunities its ageing population presents, innovative solutions, government initiatives and private sector engagement are vital in being able to venture through the complexities of the Silver Economy.
The way public and private efforts work together will be vital in making sure of a sustainable and inclusive future for the elderly population both in Italy and beyond. The Silver Economy is not just much needed but a huge opportunity for economic growth, social development and innovation.
As the world ages, countries, companies and people must embrace this demographic shift. We should also recognise the potential for a more inclusive, prosperous and sustainable future.
