EUROPEAN PAPERS ON THE NEW WELFARE

Mobilising the Potential of Active Ageing and Silver Economy in European Countries

2.3 European countries approaches in promoting social participation of older persons

In many countries, it was believed to be the case that it is best to encourage people to take part in the voluntary activity while they were still in work, as this habit continues into retirement. So, in some countries employers and trade unions are organising joint initiatives to get workers involved in volunteering. Other salient programmes can be identified as:

  • In Croatia, the Ministry of Social Policy and Youth has established a programme to encourage volunteers aged 50 to 70 to work in Day Centres for the elderly.
  • In the Czech Republic’s Strategy on Ageing, 2013-2017, there is a new emphasis on encouraging older people to volunteer as a way of helping them to participate in society and encourage intergenerational solidarity.
  • In Italy, some municipalities have introduced programmes to involve older people in local activities, for which those on low incomes can receive up to €400 a month.
  • In Slovenia, Estonia and Croatia the number of older people who volunteer is officially very low, but this is because they are often providing informal care services.

In some countries public care is a precondition for family care. For example in Sweden, care for the elderly provided by the municipality helps ‘filling the gaps’ in the care that families can provide. Municipal support is also important in Bulgaria, which adopted a new approach to social services in 2010 and where services to elderly people have nearly doubled since 2008. This has also been backed up by a national programme for people with disabilities, funded by the state and the European Social Fund, which helps to create a more dignified life for elderly people. It was emphasised that the European Social Fund is intended to support care in the community and to encourage people to move out of institutions where possible, rather than to duplicate state services.

  • In Estonia informal child care is usually provided by women over 60 and this could be a concern for its effect on the children and the well-being of older people.
  • In Italy, the welfare system is heavily family based and it is taken for granted that women will care for both children and elderly relatives. However, there are plans in some regions, like Liguria and Lombardy, to encourage better care of the elderly in the community, with funds for families to care for disabled relatives at home. In addition, many Italian families hire someone to care for family members. This person is often a migrant worker, employed informally without any employment protection.
  • In Denmark, the local authorities are fully responsible for all care services: child care, care for the disabled and for the elderly, dispensing with the need for (informal and unpaid) family care.
  • In Poland, where the government is concerned about the number of women leaving the labour market early, a new law, introduced in 2009, provides for the state to fund childcare, including nursery and non-institutional care up to three years of age, (based on the French model of childcare.).

3. Silver economy as an opportunity for growth and development
This part of the paper discusses how adaptation of the economy to the ageing society can influence positively the opportunities for greater economic growth. What specific sectors should be targeted and what conditions and actions are necessary to unlock the growth potential of demographic shifts in demand arising from the rising share of older consumers in the economy (the so-called silver economy phenomenon). The premise of the discussion is that the development of the silver economy has the potential to generate new, decent jobs for all working age groups as well as to improve the competitiveness and growth potential of the whole European economy.

Policymakers at EU and national level as well as the business sector are realising that the older people will be generating demand for specialised new products and services, ranging from personalised care to age-friendly technologies that enable them to maintain healthy and autonomous living in their old age. As demographic change is not exclusively a European phenomenon, European economies will also have an opportunity to become a world leader in introducing innovative products and services to the global market and sharing knowledge on how to create age-friendly environments (in the communities and in the markets).

As yet, measures to promote silver economy have been rather limited, at both EU and national level. As yet it is not realised as an endeavour that brings together key actors from all areas of society and across policy sectors. Accenture (2011) provides the most commanding word in this respect, drawing conclusions from their own research and analysis as well as from inputs of various distinctive experts. It identifies the silver economy as one of the foremost sources of the ‘new waves of growth for economies’, and point to six specific sectors that stand to benefit from a rising share of older population as consumers.

  1. Third-age learning: The sector offering specialised education and training services to older persons is expected to grow; mainly for the fact older workers will pursue education to remain competitive in the marketplace during a longer working career. These education pursuits will also be not limited to developing work skills only, as older persons will also become a great resource engaged in new hobbies, undertaking volunteer work, seeking mental stimulation and valuing the benefits of longevity gains by pursuing lifelong learning.
    Example: The University of the Third Age (U3A) in the UK has attracted nearly 250,000 members since its inception, and it offers a good example for entrepreneurs in other EU countries of the potential growth in the provision of tailor-made education service for older persons.
  1. Experiential goods and services: The leisure and entertainment goods is also expected to be in greater demand, especially for the fact that the new cohorts of older people are healthier, financially better off, better educated, more technology aware and have greater aspiration levels for a decent standard of living in retirement. For example, people aged 50-64 spend nearly twice as much on recreation and culture as the under-30s in the UK, and such diversification of consumer demand across age groups is also found in other EU countries, especially in those countries where a large majority of older people are entitled to a decent retirement income. Given greater heterogeneity in the circumstances of older people, new services and products must be able to cater for differences in choices.
  2. Health services and wellness products: Older people are the main users of health and social care and major drug companies are already making a move to capitalize on this specific demographically driven demand. Also, products and services need to be developed to deal with the challenges of a rise in chronic diseases, an increasing focus on cost cutting and the use of preventive medicine. The same can be said about the greater demands for residential and nursing home care.
    Example: Novartis and GSK (two major multinational pharmaceutical companies) have been acquiring greater stakes in the production and sale of eye-care and dental-care products, respectively, in a bid to gain greater access to the fast-growing demands of these products by older consumers. Pfizer is the first pharmaceutical company to have a dedicated programme to develop stem-cell products targeted at treating age-related illness.
  1. Connected health: The rising demand for healthcare (within the context of efforts to control cost and improve the quality of and access to healthcare), future organizations will need to make significant investments in IT and e-health, so as to e.g. connect health records for better prevention and treatment of diseases (especially non-communicable diseases).
    Example: Leading firms such as Google, Microsoft and Intel have been expanding into the connected health market.
  1. Lifelong finance: The development and easy access to suitable financial services will become increasingly important for people’s planning for longer lives. For instance, there is a significant opportunity for insurance companies to develop new retirement products, particularly as the public sector pension schemes are fast disappearing in many EU countries. The age barriers to certain financial products, such as taking out a mortgage, can be targeted in the design of such new financial products. Likewise, the products designed to cater for a longer lifespan will need to be developed, such as equity release schemes to convert the value of a home to a stream of retirement income.
    Example: Aviva, the global financial services company, is focusing on the growth of equity release products and expects its sales to pick up (increase by 38% within five years). Certain banks are looking into developing biometric ATMs, which enable users to access their bank accounts with a thumb impression instead of a personal identification number (PIN), to enable older people to feel secure without the need to remember too many PIN codes.
  1. Age-inclusive consumer goods: Entrepreneurs will have to opportunity to design new products which will reflect the changing functional conditions of the older generation. The retailers also have the opportunity to adapt their store formats for older shoppers, by (say) offering devices that facilitate better scrutiny of the products on offer (such as to see or hear price and other information about the product), especially in view of the fact that many older consumers are becoming more familiar with technology and are embracing it for personal use.
    Example: Nissan and Ford already make regular use of specially developed clothing that fits well old age. Nissan has a waist belt that simulates “middle-age spread,” while the Ford adds bulk in the knees, elbows, stomach and back to reduce flexibility. According to Ford, its Third Age design in Ford Focus played a major role in attracting older drivers to this model, although the car has wide appeal and is marketed to both younger and older age groups. This example indicates the potential of innovations that spring from age-related issues to spread into the larger, mainstream market. The Raku-Raku phone sets, made by Japan’s company Docomo, offer voice-to-text conversion, clear voice technology and a large screen, and all these features have proved to be very popular among older consumers. Another example is IPhone: although marketing is still targeted towards younger people, the product in question has been more often used by older people due to its user friendly design (and also for its user friendly retailing shops). It is therefore not surprising that companies with the age friendly products and services bring the highest yields in the stock market.

In measures promoting the potential of the silver economy and thus new forms of economic growth, it is essential that the new products follow the ‘design for all’ approach. This way, they will not only have a greater market, but also they minimise the risk of intergenerational conflict, showing that not all the attention and resource go to the older segments of society. It is also important to seek older people’s opinions when designing employment programmes or producing goods and services to cater for their needs.

Oxford Economics modelling finds that ageing populations will have significant additional growth potential over the next decade. Their simulation of the current trajectory incorporates a number of positive and negative effects of trends in population ageing, including impacts on consumption and on labour markets. They show that, if appropriate interventions are put in place, economies could boost from the demographic shifts, producing the following results by 2020:

  • Raise Germany’s GDP by €61 billion, 2.1% above the current trajectory in 2020. This translates to lifting employment levels by 1.5 million by 2020.
  • Boost UK GDP by £46 billion, an increase of 2.5% above the current trajectory in 2020. This translates to lifting employment levels by 1.3 million by 2020.

 

3.3 Experiences of European countries in goods and services targeted towards older persons
Sweden has a special project in the community centres which offer education to older workers about new products and services and allow them to test out new products. The municipality also buys products for use by older people, which it sells at a considerably reduced rate. The Slovenian government is investigating how to reactivate elderly people as a group of consumers for products and services which increase their independence and decrease their dependence on institutional care.

The sale of financial products is certainly a potential growth area in many EU countries, as most people are living longer and they need to reinvest their pensions and savings in order to have an adequate income to support them in later stages of their life. There is a risk that older people become a target for mis-selling of these goods. In Poland, Ireland and Italy there have been numerous cases where elderly people have unwisely invested their money, leading to financial losses.

Another relevant financial product is ‘reverse mortgages’, which are a popular option for many older people in Italy, France and Poland. There is concern that people are selling their family homes and deferring problems to future generations or being sold worthless packages by unscrupulous institutions or sales personnel. To prevent further cases of this happening several countries are introducing legislation to ensure that only accredited banks or insurance companies can enter into this business. For instance, Poland now has a special body that supervises banking and insurance companies.

One booming area of services for older people is care centres and homes. In Bulgaria, health and social care is being transferred from institutions into the home and new standards are being established, together with measures for sustainable care and staff training for care services in the community. This is also the case in Poland, where daily home care centres are popular and the government is considering training home-based nurses, especially those who are specialised in dementia.

ICT and new technical innovations can also support the silver economy. For example in Estonia elderly people living in remote areas are encouraged to learn computer skills to communicate with their relatives across the generations. The ICT is also facilitating use of interdisciplinary teams to improve services in nursing homes. Denmark is another country where the government is focusing on the potential in improving labour-saving technology and more efficient working processes to deliver goods and services to the elderly people.

Conclusions
In promoting older people’s social activity and participation, the single most important measure identified is to promote the self-motivation and self-worth of older people through well-defined measures; in particular, through their engagement in local community activities. The education and training services should go beyond what is required for employability alone, as these services enhance their well-being in general but particularly their health and dignity. Moreover, the welfare provision from the state seems to enhance private contributions for social care, thus public services can be used to kick-start or support different aspects of private care provision. Furthermore, evaluating the value of the older people’s activities and contributions to society will produce further evidence to change public awareness and attitudes and contribute to getting rid of negative stereotypes about older people.

In promoting the potential of the silver economy and thus new forms of economic growth, the new products should follow ‘design for all’ approach which will minimise the risk of intergenerational conflict. It is important to seek older people’s opinions when designing job entry and training programmes or producing goods and services to cater for their needs. There is also considerable scope for specially-targeted financial services for older people and these must be carefully regulated by the state to avoid miss-selling frauds.

In promoting incentives for employment and labour productivity growth, the use of financial incentives is shown to be very important, such as rewarding delays in going on pensions, or restricting early retirement schemes to extend older workers length of time in work. The individually designed active labour market measures for older workers, especially for less educated and low-skilled workers, have also identified to be an effective policy tool. Skills, training and education are considered the milestones for employment and active ageing and the longer people participate in the labour market, the better their chances of remaining socially active in their life post-retirement.

References

Accenture (2011) ‘New Waves of Growth Unlocking opportunity in the multi-polar world’, Research conducted by the Accenture Institute for High Performance and the Accenture Institute for Health & Public Service Value, with economic modelling contributions from Oxford Economics, UK.

European Commission (2012) “EEO Review: Employment Policies to Promote ACTIVE AGEING 2012”. Directorate-General for Employment, Social Affairs and Inclusion, Unit C1, Brussels.

Giarini, O., (2009) The Four Pillars, the Financial Crisis and Demographics – Challenges and Opportunities, The Geneva Papers 34: 507–511, Available on: www.palgravejournals.com/gpp/journal/v34/n4/full/gpp200926a.html

Zaidi, A., Zólyomi, E., 2012. Active Ageing: What Differential Experiences across EU Countries?. European Papers on the New Welfare, Paper No. 17: Counter-ageing Policies.

Zaidi, A (2012) “Population ageing and financial and social sustainability challenges of pension systems in Europe: A cross-national perspective”, Chapter 2 in: L. Bovenberg, C. van Ewijk, and E. Westerhout (eds.) The Future of Multi-pillar Pensions, Cambridge University Press.

Zaidi, A., K. Gasior, M. M. Hofmarcher, O. Lelkes, B. Marin, R. Rodrigues, A. Schmidt, P. Vanhuysse and E. Zolyomi (2013). ‘Active Ageing Index 2012. Concept, Methodology, and Final Results.’ Research Memorandum/Methodology Report, European Centre Vienna, March 2013. Available at: (www.euro.centre.org/data/aai/1253897823_70974.pdf).


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