'Silver economy': when maturity and innovation go hand in hand

In most developed societies, a phenomenon of population aging is taking place that will have notable consequences on the functioning of society and the economy.. Undoubtedly, this evolution entails obvious risks in terms of the sustainability of the pension system, the stress of the health systems or the general functioning of the welfare state.. However, it also offers new opportunities for economic activity and the growth of the territories around the development of the silver economy, that is, the set of opportunities in terms of the appearance of new markets and the transformation or expansion of others to satisfy the needs of a larger population that progressively increases its relative weight in the total.. The report of the Mesval Chair, The silver economy in the city of Valencia: current situation and future prospects, analyzes the situation in the Valencian case.

The data allows us to appreciate the magnitude of the demographic challenge we face. In the Valencian Community, life expectancy at birth has gone from 72.9 years in 1975 to 82.2 years in 2021. For its part, the crude birth rate has plummeted from values of 19.5 born per thousand inhabitants in 1975 to only 7.1 in 2021 and the global fertility rate (births per thousand women of childbearing age, between 15 and 49 years old) from 83 to 32.5.

The result is that in the Valencian Community the population aged 55 and over accounted for 33.3% of the total in 2021, 6.4 percentage points more than in 2003. In addition, the available population projections indicate that this weight will grow to 42.8% of the total population in 2035, with an increase concentrated especially in the most advanced ages, over 75 years of age..

All this is going to have a substantial impact on the economy given the greater and growing global spending capacity of silver households.. In the case of total family income (annual income), the concentration in the elderly is not as intense, but it is also substantial.. In short, most of the potential capacity to decide spending corresponds to people aged 55 and over.

The simulations carried out based on the current pattern of per capita consumption according to age and the population projections draw a 2035 horizon with a silver consumption that would represent 57.7% of the total private consumption of the residents of Valencia, an additional increase of 8.4 percentage points with respect to the current situation.. In this context, adapting to the specific needs of the elderly will be increasingly vital for the economic and social development of any territory..

Apart from the greater frequency of home ownership and the weight of imputed rents, food (and alcoholic beverages to a much lesser extent) and expenses associated with housing (maintenance and repair of the home, water supply and other services, electricity, gas and other services, goods and services for current household maintenance) have a greater weight in the consumption of this population group, along with medical products, devices and equipment, insurance and social protection.. On the contrary, the relative importance of housing rental payments, consumption of clothing and footwear, non-alcoholic beverages, the acquisition of vehicles and the expenses linked to the use of personal vehicles, education and restaurants and canteens decreased..

The consumption of Valencian silver households will mean a market increase in the vast majority of types of goods and services, with contributions in the 2035 horizon of between 9% and 10% of the current total market in groups of expenditure such as housing, health, furniture and household items, food and non-alcoholic beverages or goods and services not contemplated elsewhere.. But the contribution will also be positive in the rest of the goods and services, although in these it is not enough to offset the negative contribution of the youngest households. In short, in all areas of consumption the greatest boost to market growth would come from the silver economy.

All this allows us to anticipate a future scenario characterized by the relative expansion of the services sector.. It is foreseeable that this will happen in activities related to healthcare and health, physical care or emotional needs, aspects that are increasingly relevant as people age, but also in others linked to active leisure, such as culture, hotels or restaurants.. In these cases, success will come hand in hand with an adequate adjustment of the supply of these sectors to the particular needs and characteristics of this type of population..

Job opportunities will tend to be concentrated to a greater extent in the occupations associated with these activities, although the process will be conditioned by technological advances and the deployment of the digital economy and robotization. The opportunities will be of different types, since in some cases the associated qualification is relatively low (a large part of the hospitality industry, commerce or personal care) and in others, on the contrary, high (such as the health area)..

The available foresight exercises specify potential areas of opportunity linked to the silver economy: telemedicine, taking advantage of the use of communication technologies for remote medical care; robotics for the home; silver tourism; adult education; assistance at home or adapted transportation, among others.

In short, the development of the silver economy implies a notable transformation of social and economic conditions that poses problems and, at the same time, new opportunities..

*Lorenzo Serrano, Ivie researcher and professor at the University of Valencia