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Tribune | Are we ready for the ‘silver economy’?

A few days ago we asked one of Ana’s 12-year-old nieces to draw her grandmother. To our surprise, instead of drawing the typical storybook granny with white hair and glasses, the girl drew her in front of her electronic tablet. If not for the detail of her drawing there were some wrinkles, it could hardly have been said that she was a grandmother. But, reasoning better, her 72-year-old grandmother runs a civil society organization, exercises several times a week and, except for the current limitations due to covid-19, has a socially active life.

This grandmother is one more example of many of our elders today, who enjoy a more productive longevity. Unlike what happened a few decades ago, older adults are now more likely to continue working, studying and consuming; they are in better physical condition and have more energy, both to enjoy life and to continue contributing to society with their work activities.

Latin America is still a relatively young region where people over 60 are, on average, 13% of the population, compared to Europe (26%) or North America (23%). However, it is worth mentioning that, in some countries, such as Uruguay, the percentage of the population over 60 is already 19%.

What implications does this have?

The demographic changes produced by the aging of the population have led to the silent emergence of a new economy: the silvery. The Organization for Economic Cooperation and Development (OECD) defines it as the set of opportunities derived from the economic and social impact of the activities carried out and demanded by the population over 55 years of age.

Your needs and preferences influence the supply of almost all sectors including, for example, health, finance, housing, transport, the labor market, education, entertainment, tourism and care. We are talking about a wide range of products and services intended for the consumption of older adults that can play an economic driving role.

It is estimated that between 2015 and 2030, 60% of the increase in consumption in the cities of Northeast Asia and Western Europe will come from adults over 60 years of age. In Latin America and the Caribbean, this percentage will be 30%, and some estimates say it will increase. It is worth noting that demographic projections are among the most accurate in the world and that this change will have very little room for error.

This new reality will imply a radical transformation because it will allow millions of people of that age to continue working, saving, creating and consuming; it will allow some industries to be born to serve them, and new entrepreneurs will emerge, who will find opportunities where no one thought there could be. The relative youth from Latin America gives us the advantage of being able to analyze what has already been done in other regions of the world that are in more advanced stages of aging and learn from their actions. These cases will serve as a guide both to establish and adjust public policies, and to introduce the best solutions from the private sector.

Is aging a burden or an opportunity?

Aging is often understood as an additional burden for society and especially for the public sector: it involves the triple challenge of responding to the growing demand for pension benefits, health services and long-term care services. Even covid-19 has demonstrated, once again, the physical and social vulnerability of older adults.

However, in Latin America and the Caribbean (LAC) it brings with it infinite opportunities by promoting an entrepreneurial ecosystem around the silver economy. It is something that will increase the offer of services and products aimed at this population, contributing to their greater well-being, and favoring the emergence of enterprises with potential for scaling up at the local and regional level.

Ageism prevents the development of adequate responses to the aging of the population, since it skews our vision of aging and adulthood

In IDB Lab, the innovation laboratory of the Inter-American Development Bank (IDB)We believe that involving the entrepreneurial sector with adequate innovation, technology and scale allows generating a virtuous circle of economic value creation for older adults that, in turn, has a social impact. To do this, it is necessary for LAC to generate specific knowledge about the silver economy among innovators, and improve their connection. Despite its large number and economic weight, this market is still a little-known niche in our region.

In this process, it is essential to work trying to overcome the barrier of ageism or age discrimination, which presents older people as devoid of value for society as “unproductive, fragile and incapable”. Although it is true that older people are losing abilities and, as consumers, reduce their purchases, at 65 years of age the majority today have a good state of health, which together with the fact that they are free of economic burdens, makes them into attractive clients. It should not be lost on anyone that, according to sociodemographic trends, they represent a very large market.

Ageism prevents the development of adequate responses to the aging of the population, since it skews our vision of aging and adulthood, and limits the type of responses that we can offer to respond to their needs. The proper approach would instead be to harness the wisdom, experience, and better physical and financial conditions of today’s older adults.

We know that the future is human, digital and silver, and the silver economy It will be key to innovation, the creation of new jobs and economic growth. So we shouldn’t wait much longer to create proper ecosystems and promote a positive way of looking at older people in our societies.

From her drawing, Ana’s niece already knows that this is the way. Instead, are we ready for this silver future?

Ana Castillo Leska Y Masato okumura They are specialists from IDB Lab, the innovation laboratory of the Inter-American Development Bank (IDB)