The population aging – though accelerating, but still a gradual process – has not yet generated appropriate responses, at least not in overwhelming majority of countries around the globe. Consequently, this is creating serious social, economic and even political problems, and is probably the most demanding challenge of modern societies, for which satisfactory solutions have not been found even in the most advanced countries.

Due to dramatically improved life conditions, healthier nutrition, and better than ever healthcare and medical services, life expectancy has extended over two generations for about 30%. First time in history the demographic pyramid has turned around: there are more people above 65 than those under 20 years. So far, it seems we are unable to recognise and fully understand the complete implications of these changes.

The concept of elderly has changed: it is not any more referring to the people above 60-65, but rather above 70-75 years.

The delay in adjusting public perception of the elderly is very important, but still only part of the problem, but it leads to the lack of needed policy adjustments. Governments are faced with steeply rising expenditures on elderly care and health services – both being subject of increasing public pressure, and giving a negative connotation to the challenges of the aging process. The relationship between economically active and retired people has changed drastically: within 2 generations from 4:1 to 2:1, and by 2050 it will go towards 1:1. Obviously, lots of things will have to change in order to prevent a complete economic breakdown!

In public opinion, seniors are still predominantly perceived as the people needed to be cared about and imposing growing public expenditures. However, the statistics for France give a very different picture: only 6% of people above 50 years are actually in a dependant state. During the decade 2015-2025 the seniors are expected contributing even 50% to the global Gross Value Added growth, about 30% to growth of productivity, and 13% to overall employment. Actually, seniors are the most intensely growing segment of society - with highest potential for spending and contributing to the budget by paying taxes.

All projections indicate further extension of life expectancy (around 85 years by 2050). The IBRD and WHO statistics indicate that we lived in 2020 an average of 72.5 years, which is even 20 years more than in 1960, and that the total population over 60 will have doubled by 2050 compared to 2000.

According to the latest demographic forecasts, in Europe by 2060 the elderly will represent 1/3 of the total population, and that implies that the age structure of the labour market will undergo major changes. Mandatory working age will have be extended for at least 5 years, and a much higher share of seniors above 70 years will continue working in various modalities for another 5 years or even more. Many of the seniors will decide to open their own company, and will be receiving free advice, training and consultancy.

Let us list some of the key problems and concerns of seniors:

  • Forcing people to retire at age of 65 is now in complete contradiction to actual life expectancy, unfair to people interested to continue working, plus economically irrational and unsustainable;
  • Governments should establish ministries responsible for issues of senior citizens;
  • Public pensions being paid to seniors are usually out of proportion to the money paid into pension funds, governments should control these funds more closely – preventing them to make excessively risky investments;
  • Only very few service providers take particular care of the specific needs of their senior customers (whom they take for granted), instead of making a small effort – surely to be rewarded by the market;
  • Banks and insurance companies should adjust their credit policies to the new demographics;
  • Governments should support associations and networks of seniors, helping them to be as efficient, productive, and impactful as possible.

In other words, the whole range of regulations, standards and habits are strongly in conflict with the new demographic reality. The challenges in the domains of paying pensions and securing the growing needs of health services and elderly care are pressing hard on many governments – frequently causing crises which are difficult to address satisfactorily.

There is only one way to face the aging society challenges efficiently: by developing the Silver Economy and supporting it by an advanced Innovation Ecosystem.

What is actually the Silver Economy? There are minor differences among various definitions of the phenomenon, and they all refer to all those economic activities, products and services which are designed to meet the needs of people over 60 – offered at the market and partly also supplied by senior economic actors themselves.

When defining the dimensions of European Silver Economy the following figures say it all: we are referring to about 100 million people, and turnover of about 6 trillion € (in 2015 it was only 3.7 trillion €).

Here are some interesting characteristics of Silver Economy in some selected countries:

In France the seniors hold over 45% of the purchasing power, with a calculated total of 132 Billion € – and creating 300,000 jobs by 2020. The over 60‘s are calculated to hold about 60% of the private wealth. When projected to 2050, the seniors will increase by 75%, whereas the share of youngsters under 20’s are expected to rise by only 1%.

Already in 2013 the Minister for Industrial Recovery, along with the Minister for Ageing and Autonomy, launched the Silver Economy Industrial Network, which proposed a series of actions to tackle the issue of the ageing population and reducing the risk of a stagnating economy. It has proposed the development of a national strategy, supported and diversified by regional activities and strategies. Three regions were to be proposed as pilot regions, quickly to be followed by the launching of the first service labelled as ‘silver economy’. They created a Silver Economy Sector in the Ministry for Solidarity and Health – which coordinates several clusters, including the Silver Valley Cluster (located in Paris – with over 300 members).

In Portugal people over 50 years are now over 4 million, more than 39% of the national population. The total number of people over 60 years would have increased 40% over 2050; and the population over 75 years would have increased by 80% - compared to 2020. Complicating this is the geographical distribution characterized by an ageing population predominantly in coastal departments, which highlights that the issue is not homogenous across Portugal. Projections from the European Commission estimate that the total public expenditure related to ageing in Portugal will increased drastically in the period 2007-2060, a change in the order of 3.4 % of GDP. Portugal is predicted to record a variation in public pension expenditure between 2007 and 2060 at the level of 2.1 % of GDP.

The elderly population is the most affected by poverty. The phenomenon of poverty among the elderly is distributed throughout the country, particularly in rural areas. Not exclusively, it still remains an issue also for territories in the main urban areas of the country.

In Singapore seniors are the fastest ageing population in the world, with one in four Singaporeans expected to be aged 65 and above by 2030. While this “demographic curve” can pose a “significant strain on the society”, such as increased healthcare needs, it can also be a window of opportunity. This “silver lining” is set to be a US$ 72.4 billion market in Singapore by 2025. The country has been named the top market in terms of silver economy potential. Digital services and infrastructure are also areas that local businesses are keen to capture the “silver dollar”. These include developing assisted living solutions, wellness and fitness technologies targeted at seniors.

In Japan active aging measures have been developed as a national government initiative already since the 1960s. During the past half-century, the Japanese government initiated various active aging efforts that have greatly contributed to healthy ageing, and possibly extending the nation’s life expectancy. Since the 1960s, urbanization trends, economic growth, high literacy rates, and changes in the living arrangement from living with adult children’s family in old age to living only with one’s spouse or alone have buttressed the support of national active aging initiatives.

While there has been evidence of a decline for senior clubs and their level of participation, senior colleges, which have also received some policy and financial support, may be seen as another avenue for active aging program development. Municipalities and universities have initiated them jointly, which is particularly important.

With population decline, population aging, and declining fertility rates, Japan’s financial challenge to maintain its level of support for past older adult programs may face future challenges. Tax increases are already occurring and retirement age for pensions are changing. In concert with the government, some gerontological professional consortiums are creating a new push to encourage older adults to remain employed. In keeping with this government effort to encourage the continued employment of older adults, the mandatory retirement age in Japan has been extended in the beginning of 2023. Active aging in Japan is shifting to expand the productive role of retiring seniors beyond senior employment centers, not surprisingly as people are approaching 100-year life.

As illustrated by the examples in these countries, the Silver Economy is a major opportunity, however there are two major reasons for its slow conscious development:

(a) Only partial awareness of the implications of changed demography (intensive aging of society accompanied by enhanced intellectual and economic potential of seniors);

(b) Regulatory environment and policies still not fully adjusted to the new demographic reality, and to the specific needs of seniors. For example, only a few countries have government departments dedicated exclusively to issues of seniors.

Besides delays in government actions and adjustments of legislation to respond to the challenges of quickly aging societies, one has to notice, that many political parties actually pay insufficient interest to issues of this large part of their electorate. As a response, in some countries new parties have been established – bringing together seniors and focusing primarily on issues of their concern. For various reasons, at least so far, these initiatives have not been particularly successful. So, obviously the seniors need to become politically much more active in order to protect their interests, and present to others in the political process what is the right response to the challenges of the aging societies.

Undoubtedly, the academic community, as well as the media should do much more to alert the general public and politicians how much is at stake. Particularly the influential economists should be more active in debating these issues, presenting the damage of wasted creative potential of seniors, who could make an important contribution in supporting their economies’ transformation into sustainable knowledge economies, dynamic and internationally competitive. The role of the innovation ecosystem in this framework is of course of immense importance, and here again the seniors – with their knowledge, skills and experience can play a very important role.

These are the seniors' primary, legitimate expectations in a society having fully understood the new demografic reality, and having decided to build an innovation-based Silver Economy:

  • Descent level of pensions – proportionate to corporate and private payments;
  • Reduced agism – stereotyping seniors as old people to be supported by society;
  • Government departments to be responsible for seniors only – separately from social care departments;
  • Age balance among employees – in line with »seniority friendly approach« - similar to gender balance principle.

What should the Seniors be doing to support and accelerate the process of building Silver Economy?

  • Being much more politically active in helping their societies and auhorities to recognise the new demographic reality and appreciate the potential of Silver Economy – also by introducing proper regulative and support measures;
  • Joining seniors' associations and networks, and connecting them at various levels, in order to be able to generate bigger social and political impact;
  • Demonstrate in prolonged employment and in other societal roles the value of their knowledge and experience – helping constructively in multigenerational context (also by mentoring and guiding their young colleagues);
  • Communicate with the media in helping the public to fully understand and appreciate the socio-economic impact of aging, and the potential of Silver Economy.