Silver economy: a neglected possibility

Jaana Leikas

Gerontechnology aims to provide solutions to the everyday problems brought about by ageing, thereby enabling the elderly to participate fully in the information society. This technology will open up huge business development opportunities for developers and manufacturers, as they direct products at the constantly growing consumer group represented by ageing people.

Where are you, gerontechnology?

Most technology developers and manufacturers have yet to venture into the market segment made up by the elderly, let alone understand its significance. The current scarcity of high-quality gerontechnology products is indicative of an inability to design, develop and market products and services aimed at meeting the special needs of the elderly.

Aged consumers are not interested only in services related to care and medical treatment. Looking ahead, active senior citizens can be expected to increasingly use a wide range of information and communication technology products and services.

The design of ICT products and services in particular is currently focused on the interests of healthy and active young consumers, known as ‘digital natives.’ This is hardly surprising, since many of the developers of such products belong to the same generation. However, technology will take a wrong turn if it focuses solely on young consumers to the exclusion of the older generation. Demographically speaking, the older generation represents the most promising market segment ever, and is increasingly wealthy and technologically aware. Technology developers and manufactures should give serious thought to re-evaluating their product target groups.

Growing senior markets

In both the domestic and international markets, the proportion of senior citizens is rapidly growing. In Finland, 18,8 % of the population consists of people over 65 years of age. In 2013, more than 18 per cent of all the consumers in the European Union (approximately 92 million) were over 65 years of age. In the United States, this age group is expected to grow beyond 72 million by 2030, amounting to 20 per cent of the entire population. In many Asian countries, people older than 50 years already make up 37 per cent of the population.

Today’s aged people are more healthy and more active than ever before. This is why, for many, active decades spent in retirement will mean new opportunities for consumption. In retirement, technology will be viewed as a factor which improves people’s quality of life and as a tool for enhancing the social life and personal well-being of retirees. Due to longer careers during working life and other similar factors, older people also have more money to spend — often more than the younger generations. In Europe, for example, people older than 50 years of age purchase more than 45 per cent of all new cars, more than 80 per cent of all luxury items and 35 per cent of all travel packages.

Seniors want value for money

This growth in what is known as the silver market (or silver economy) will set new requirements for the development of products and services. Success in the silver market requires sensitivity and openness to the needs of the elderly. In this connection, two aspects are emphasised. Firstly, consumption is unfortunately often hampered by poorly designed product interfaces, which ignore user requirements based on ageing. Secondly, the market needs products and services that are aimed at improving elderly people’s quality of life.

With the retirement of the baby boomer generation, being able to meet the needs of the ageing population will increasingly provide a competitive edge on the international market. Baby boomers will grow the size of the market, demanding products and services which contribute to an active and healthy ageing process, in addition to care and medical treatment. This generation expects such services to provide them with quality, individuality, communality and ease of use. In other words, such services should provide real value for money.

With regard to the functionality of the silver market, it is essential that due attention is paid to the wishes of ageing consumers and that their suggestions are put to good use at the planning stage of new business concepts and revenue models. Furthermore, efforts should be made to improve product visibility and product compatibility. Engaging users in product design and taking account of product appearance and value-related issues will enhance product acceptability.

Jaana Leikas

Principal Scientist

2 thoughts on “Silver economy: a neglected possibility

  1. What’s up i am kavin, its my first time to commenting anywhere,
    when i read this piece of writing i thought i could also create comment due to this
    sensible paragraph.

    Like

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