The "Silver Market in Europe": Myth or. Reality? .... Challenges developing the Silver Market. Given the demographic ..... Answering machine 20.7. 3.8. 5.9. 10.1.
The "Silver Market in Europe": Myth or Reality? Oliver Gassmann and Marcus M. Keupp University of St. Gallen, Switzerland
Abstract: All in all, the demographic changes in Europe imply an enormous economic potential. While these changes are still considered a nightmare by much of today's media (as characterised by notions such as 'clash of generations', 'war on pensions', 'methusalem complot'), the economic power of the generation 50+ makes one thing very clear: In the long run, only those firms that will understand to address the demands of this age group by designing products and services according to their needs will survive in most markets of the future. Although older customers in principle have basic demands similar to that of younger customers, there are a number of important differences in preference and consumption patterns, as well as a greater importance of aspects related to health, safety, independence, mobility, and social participation. Even if older customers do not explicitly articulate these needs, those products and services that implicitly recognise them and offer ways to fulfill the demands that stem from them will have a great market potential. Furthermore, older customers do not fit the cliché of conservative, technology-averse customers. Market research shows that the new generation of 50+ consumers likes to experiment and to try something new quite often. Traditional values do no longer strongly dominate the decision to buy. Consumption is increasingly characterised by hedonism and self-realisation motives. Neither are older customers technology-averse. However, they only buy technology-related products if these, in their eyes, represent meaningful solutions to existing problems. Keywords:
1. Introduction The European Union is currently facing many challenges related to the future demographic developments of its societies which imply both an increasing life expectancy as well as low birth rates. These demographic changes will confront most European economies with an ageing society. They imply serious consequences for Europe's competitive position in the world economy, its economic growth, and the social security systems of its member states. Recent statistics show that Europe's societies are on an irreversible track towards ageing societies. In 2002, the average birth rate in European industrialised societies was about 1.5 children per woman, a rate 30% below the rate needed for a stabilisation of the population. This low birth rate ranges from 1.2 in Spain and 1.3 in Germany and Switzerland to about 1.9 in Ireland. Due to the thus implied steadily decreasing generativity, Germany's population will decrease by 12 to 17 million individuals by 2050, with the remaining population
growing older and older. Similar effects can be expected for all other European societies (DB Research 2002; Gassmann and Reepmeyer, 2006). However, while these demographic challenges are often discussed as a serious problem for society, and as a catastrophic scenario for social security systems, we argue that the benefits Europe can derive from these demographic developments are frequently ignored. Specifically, the immense potential for European firms' economic growth has been addressed little. Today, firms can no longer ignore the demands of the generation 50+. In 2003, in Germany alone, this generation has inherited more than € 200 billions of assets from their parents. Today, people over 45 are responsible for 63.3% of revenues from consumer goods, although they make up 'just' 43% of all customers. In absolute numbers, they spent € 72.6 billions (ACNielsen 2004). Over the last 20 years, the over-50-year-olds have increased their consumption stronger than any other customer segment (The Economist 2002). Finally, the over-60-year-olds' expenditure on private consumption is already at 74% of that of consumers aged 45 to 59 (Eurostat 2002). Moreover, this age group is characterised by a changing preference of saving as opposed to consumption. In Germany, the consumption ratio of people over the age of 55 ranges between 77% and 82%, whereas the savings ratio is less than 10% (Destatis, 2003). Consumer research shows that compared to the last decade, today more than twice as many seniors are willing to actually spend their money: Of 1800 seniors aged between 50 and 79, almost 50% agreed to the statement 'I rather prefer to live a good life than saving money all of the time'. Ten years ago, only 25% could identify with this phrase (GfK, 2002). Thus, today's seniors have an enormous market power and have become as attractive a target group as the conventionally addressed 14 to 49-yearolds. If firms can address this new customer segment appropriately by developing the 'right' products and services, many economic benefits are to be earned. In this contribution we argue that information and communication technology (ICT) can play a very prominent role for firm's product development efforts aimed at reaping such economic benefits. This is because ICT is an enabling technology that can be found in almost all products available today. The demographic changes will imply considerable changes in product markets, product design, production technology, marketing, and consumer preferences. Many new products will have to be developed and existing products adapted to meet the demands of the strongly increasing and wealthy customer segment of the 'best agers', i.e., people over the age of 50. ICT will play a key role in this process of product innovation and modification for an ageing society. Thus, firms in all EU member states have a very promising prospect for growth if the 'right' way to use ICT-based product innovations and modifications can be identified. Similarly, the European Union as a whole can benefit from a greater competitiveness of European firms, because the competitive advantage they develop by addressing Europe's demographic change makes them eligible to compete with other firms in markets that are or will be strongly affected by ageing societies (e.g., the USA, Japan, and very soon China).
2. Challenges developing the Silver Market Given the demographic developments leading to the emergence of a completely new customer segment on the one hand, and given the purchasing power of that customer
segment on the other hand, it is surprising that there are still very few product innovations that would specifically recognise the demands of best-aged consumers. One reason for this phenomenon could be the 'merit good' nature of products for successful ageing which could lead to market failure. A merit good is characterised by the fact that the benefit for society from this good exceeds the individual consumer's willingness to pay for the good. Thus, while the state may desire the development of merit goods, firms could be reluctant to invest in R&D to develop such goods, because their optimisation criteria do not include maximisation of public welfare. Therefore, an initial subsidising by the state that incentivises firms to engage in the development of merit goods is considered advantageous. Consequently, what would be needed most to foster the development of successful ageing product innovations would be an initial state promotion programme or agency. In Switzerland, such an agency exists already (KTI/CTI - the Commission for Technology and Innovation), and it explicitly promotes innovation for the generation 50+ since 2004 by its programme 'Innovation for Successful Ageing'. Still, we suggest that a more important reason is responsible for the few successful ageing product innovations: The missing awareness and inertia of firms that so far has impeded a large-scale involvement in the development of such products. Many firms still cling to a youth-oriented image, aiming eagerly to address a young, trend-oriented target group typically 14 to 49 years old. We suggest that this unwillingness to invest in product developments for the newly emerging customer group of 50+ consumers is due to a considerable information asymmetry and risk aversion on the side of firms. Despite much gerontological research, little is known as regards the preferences and predilections of this mature customer group, let alone the right product design and communication strategy to make the firm's products fit with the preferences of that customer segment. Given this uncertainty, we can expect many firms to decide to refrain from investments, rather than risking the loss of such investments from poorly designed products which do not meet the demands of the target group. However, this decision to not invest is likely to deprive firms of the economic benefits they can achieve from the demographic development. Both the increasing share of older people as a total of Europe's population, as well as the availability and cost digression of many technologies point to the fact that those technological innovations which will explicitly recognise the demands of the consumers 50+ will be those with the greatest economic potential: On the one hand, the inversion of the population pyramid leads to a 'market pull' of older consumers demanding products and services which meet their specific demands. On the other hand, the mass availability of many technologies will enable a 'technology' push implying many new possibilities for product creation which are based on innovative uses of these technologies. Thus, for firms, the relevant question for investment allocation in new product development is to identify those areas where 'market pull' and 'technology push' are most likely to meet, in order to develop the 'right' innovations. The key to developing such 'right' innovations is based in identifying promising market segments that result from the combination of newly emerging technologies on the one hand and market demands on the other hand. Thus, developments are not 'blind', but technology is utilised to solve an existing problem and the thus resulting market demand. Thus, the intersection between technologies and market demands is what contains the possibilities for innovation.
A promising methodology to bring together these market- and technology-based potentials is the expanded concept of 'universal design'. This concept describes how firms can develop products which are applicable irrespective of the consumer's age, yet fulfil the demands of all customers groups (specifically, not only those of consumers of the typical target group of '14 to 49 years old'). Its basic idea is that both young as well as older consumers should be able to use universally designed products equally, eradicating any potential problem with the use of the product which are due to the consumer's age. While in the past the concept of universal design was dominated by providing compensatory functionality for handicapped people, today, it has been expanded to include both aesthetic and user interaction considerations. Therefore, universal design stipulates that older consumers should be able to use the products exactly like any other consumers, despite potential problems with their physical health. On the other hand, this fact should not deter younger customers from buying the product. Thus, the seven principles of universal design (equitable use, flexibility in use, simple and intuitive use, perceptible information, tolerance for error, low physical effort, size and space for approach and use) allow us to define a guideline of how to design age-based products while still addressing younger customers. A successful implementation of this design principle requires several spheres of the firm to work together. First, the concept of universal design needs to be integrated in the firm's product strategy. This integration can apply to the whole firm, certain business units, or specific product segments. Once the role of universal design has thus been strategically defined, the design and development of products and services should follow the principles of the universal design approach. The results of this step are innovations which are ready to be introduced in the market. However, the final acceptance of these innovations by the 50+ consumers also requires an adequate product communication and marketing strategy.
3. Market Potential in Selected Specific Areas
3.1. Medical Technology We will discuss the many application potentials of ICT in the successful ageing market by a specific product, namely, hearing aids. By focussing on such a typical example, the basic method of how to apply ICT to successful ageing applications becomes easily understandable. Hardness of hearing is a common problem in the ageing population, leading to the impairment of the comprehension of spoken language, especially in situations with background noise. Many affected persons feel the thus imposed limitations of their possibilities to communicate and withdraw from their networks of social relationships (Höpflinger and Stuckelberger 1999). Generally the number of operating elements should be kept limited. Today, the maintenance of technological systems is often too complicated for older people who experience difficulties with the small-scale build of technological components. Potentials for innovations are maintenance-free hearing aids, a fact especially important with respect to batteries. These expire quite rapidly and they are also expensive and tricky to replace. Another source for innovation comes from the fact that inarticulate or murmurous language is hard to understand with today's
hearing technologies. Intelligent speech-interpreting systems in hearing aids have thus a great market potential. Another chance for ICT-related product innovations comes from the interaction with other information-processing and communication systems. Hearing aids could be connected to communication technologies such as TV, telephone, mobile phone, or headset technology. As the mobility of older consumers in the future will be considerably greater than that of today's older persons, the connection between mobility and communication will be of greater importance for consumers in the future. Thus, to connect heading aids with communication technology bears a great market potential. This especially applies to the 'intelligent' connection of technologies. For example, hearing aids will no longer have to be manipulated manually, but the hearing aids could directly pick up the call from the mobile phone if it rings. Thus, the hearing aid would allow us to use the mobile phone. Today, hearing aids can already manage such interaction with TV technology, however, as yet this technology is reactive, but not intelligent. Another potential for intelligent functionality would be a self-adjusting device or software that automatically turns up the volume in loud surroundings. 3.2. Telemedicine Many new developments in the field of ICT technology could considerably enhance and enlarge the range of applicability of medical technology products. The market potential for merging these two technologies is so capacious that a separate product segment has emerged, which has become known as 'telemedicine'. The European Commission defines this notion as follows: 'Telemedicine describes the use of remote medical expertise at the point of need. It includes two major areas: Home care, as the care at the point of need through connected sensors, hubs, middleware and reference centers; and co-operative working, as a network of medical expertise linked together' (Beolchi 2002). Therefore, applications of telemedicine include, but are not limited to, the following: • Examination, surveillance, and management of patients and medical staff by systems which allow direct access to professional information and expertise, irrespective of where patients and information are physically located, • The use of ICT to support health care if spatial distance should impede interaction between health care staff and patients, • Consumption of health-related services of all kinds (including remote diagnosis, surveillance, consulting, and treatment) if spatial distance between doctors or medical experts and patients is a critical factor. As it can be assumed that future people aged 60 to 70 will be well skilled in the use of ICT technologies, the deployment of such technologies in medicine is considered to represent a great market potential. The Battelle Memorial Institute estimates that so-called ‚home-based healthcare technologies’ will count among the top 10 business ideas by the end of this decade. Today, telemedicine encompasses four areas of application: • Teleconsultation. This includes the remote diagnosis of diseases, consulting and discussion among doctors, e.g. by teleconferences, and the request for additional medical opinions.
•
Teleteaching. Teleteaching enables the remote education and further training of medical staff. • Telementoring. Telementoring allows an expert to track a surgery in real time. In addition, the expert can advise or consult the surgeon during the operation. • Telesurgery. Telesurgery includes remote operations and medical robotics. Besides these core areas, many other applications of ICT technology for telemedicine operations are possible. For example, the remote surveillance of bio data, such as ECGs or blood sugar levels, also counts as telemedicine, as does the configuration of medical databases in hospitals and doctors' surgeries, or the maintenance of internet sites with medical information. Patient monitoring allows us to continually watch over patients remotely, and it also allows us to execute supportive actions such as calling an ambulance if the patient monitoring system reports a downfall. A study by Deloitte & Touche (2000) on the use of telemedicine applications revealed that video conferences and image transfer account for 86% of all telemedicine applications. In Europe, such applications use ISDN as their primary technological platform, whereas the WWW as a platform technology was used by only 7% of all cases. In Europe, the Scandinavian states are the lead users of telemedicine applications. For example, in Sweden 50 of the 85 hospitals were already using telemedicine applications in 2000, and another 12 hospitals had tangible plans to introduce them. In Finland, a number of telemedicine projects are being implemented to increase the longterm effectiveness of the primary care sector. As telemedicine is still a young discipline, not much data is available that would allow to forecast future developments. However, it can be assumed that some trends present in the USA today will be followed in Europe in a foreseeable time. According to Deloitte & Touche, these trends include: • a growing number of desktop videoconference workstations, • the growth of telemedicine applications for private home use, • use of the internet to exchange health-related information between doctors and specialists, • realisation of the electronic patient file by ‚live’ and ‚store-and-forward’ telemedicine applications, • changes in national legislation that makes health insurance companies cover the cost of telemedical consulting and products. Telemedicine also promotes communication between patients. Thus, personal acquaintances can be made, and patients can socialise. Thus, the danger of social isolation which arises as the human interaction between doctors and patients is being replaced by ICT can be reduced. Experts even estimate that such use of ICT will result in the contrary: If telemedicine applications are used to support human interaction of patients and doctors, they can considerably enhance the quality of life of older persons. Today we already have reports of seniors approaching their doctors with a file of medical publications they retrieved from the internet, inquiring their doctors why they are not treated by the published procedures.
3.3. Housing Technology The familiar surroundings of one's home are of great importance for the elderly. A number of studies show that their home is by far the most important environment for them (Baltes et al. 1999, Baltes, Wahl & Schmid-Furstoss 1990, Moss & Lawton 1982). The greatest part of pensioners either lives alone or with a partner. Over the last three decade, the four following important trends regarding the lifestyle of the elderly have been observed (Höpflinger 2002): • The share of older women and men living in single households has grown. This is due to a better economic position and social independence, as well as a greater individualisation of older persons. The trend towards single households therefore is not as negative as it may seem, because 'living solitary' does not automatically imply 'living lonely' in social isolation. On the contrary, an own household offers the advantage of combining private independence and social relationships. In fact, the majority of older people in single households have good contacts to relatives, friends, and neighbours. • The share of pensioners living in a household with a partner has increased. On the one hand, this mirrors the preference for the traditional form of marriage and living together of this age group, on the other hand, the increased life expectancy leads to a longer period of living together. • The share of older men and women living together with or in the house of one of their children has decreased. Even in the countryside it has become rare that older persons live together with their children. This development is less due to children being unwilling to take their parents in their homes, but rather with an increased valuation of independence by today's older people. Today, 'distant intimacy' seems to be the social norm between the elderly and their relatives. • The share of 'complex' households is strongly decreasing. Living together with other relatives than children (e.g., siblings) and non-relatives has become rare. The same applies to cross-generation households. This trend also mirrors the processes of increased individualisation and autonomy of older persons. As a result of the strong preference for privacy, flat-sharing communities of older persons are a rare exception. All in all, the analysis of older persons' households clearly shows seniors' preference for a highly individualised way of living. In addition, the more active lifestyle of today's and tomorrow's seniors as compared to earlier generations is due to the fact that today many pensioners can benefit from a high standard of living. This is underlined by the fact that almost 50% of today's pensioners are not tenants, but owners of their homes. Thus, they can independently decide about changes, modernisations, and architectural changes in their homes. However, landlords can also benefit from an ageing society by offering age-based flats and houses: Over the next decades, pensioners will constitute one of the most important demand groups in the market for homes and flats. Therefore, age-based, barrier-free designs not only enhance independence and autonomy and thus the quality of life for the elderly, but also meet well tomorrow's demands for architectural design. Thus, the main question for housing technology is: Which IC technologies can contribute to adapt household environments to the demands of the elderly? (Bohn 2002, Glatthard and Bohn 2002). A first relevant sector for the use of such technologies is safety. The physical restraints of older people (e.g., regarding eyesight and mobility) increase the safety hazards in their own homes, which implies the removal of barriers in existing flats, and
the advance recognition of potential problems from such barriers when planning new flats. Several technologies can help to remove safety hazards. A great market potential for the future is being attributed to social alarms, i.e. user interfaces manipulated by real-language interaction which considerably facilitate the practical use. The design of doors is another promising field. Today, many doors are rather hard to open and require physical power. Sensor-controlled sliding doors which automatically react to the user's movements can considerably help to overcome this problem. Such doors can be used without physical force, a fact appreciated not only by the elderly, but also by younger persons (i.e., sliding door are a textbook example for universal design). Besides such architectural modifications, the household appliances used by the elderly also bear considerable potential for improvement by ICT. An especially promising field in the long term is the interconnection of appliances, commonly termed 'intelligent living'. In the short run, most existing standard appliances also leave considerable room for improvement. Many older persons have problems with the use of household appliances, and even fear to use certain functionalities at all. This study finds that greatest potentials for technological improvement are to be obtained from the development of age-based washing machines, dishwashers, radiators, ovens (especially microwave ovens), hotplates, pressure cookers, freezers, mixers, food processors, coffee makers, dryers, vacuum cleaners, and electric irons (Wahl and Mollenkopf 2003). 3.4. Workaday ICT Technology Besides medical applications, the development of other ICT technology-based applications that enable to re-establish social communication is a strongly growing market potential. Such technology includes special appliances for telephones and door bells, amplifier systems for radio and TV, and new media technology, such as interactive television and video systems (Kruse 2002). Due to the greater prevalence of physical restraints in old age, many older people have great difficulties with everyday interactions and activities which impose no problems at all for younger people. Such activities include simple tasks and procedures such as going up stairs, shopping, opening boxes and packages, and reading small-font prints and texts. Older people noticing these restraints often suffer from a lower selfesteem and self-confidence. An often-quoted comment in this context is: 'I have no disabilities, I just need a little more time'. However, small-scale technological devices could easily help to reduce or even exterminate such problems and thus could re-establish older people's mobility, comfort, independence, and autonomy. Yet most young people (including product designers!) do not consider such possible solutions because the problems are outside their personal sphere of recognition. Thus, if the designers of products for an ageing society are much younger than their customers and thus cannot relate to their target group's problems, the products' performance itself is at peril because the generation 50+ will not buy such products. Several technological products allow us to reduce the above-mentioned problems. These have basically supportive functionality, but this does not imply they are always 'high tech' products. Often relatively simple ICT devices are enough to increase the quality of life for older people.
A pilot study that has tested the useability of such devices with a focus group of older customers has demonstrated very articularly that even latest technology can be made useable for older customers, given that this technological innovation is accompanied by social interaction (Höpflinger and Stuckelberger 1999). Such auxiliary devices are categorised in the two groups 'active' and 'passive'. Active devices, such as remote controls, demand a user intervention, however the freedom to use the device is controlled by the user. Thus, these devices do not obtrude anything, yet they demand that the user take the initiative. Passive devices are engaged automatically and independent of user interaction. Examples would be automatic sliding doors, or the automatic generation of an emergency signal after a downfall. The empirical findings as regards the usage of such devices are encouraging. On average, after six to nine months, the devices become part of older people's everyday life. Furthermore, it is noteworthy that people's lifestyles have not changed, rather, they could continue with their way of living while the devices help to ease the previously existing restraints (Höpflinger and Stuckelberger 1999). 3.5. ICT Technology and Entertainment Older people do not only wish to participate in social life, they also actually do so. As the new generation of older people is characterised by a cultural rejuvenation as opposed to the current population of older people, their demands also become 'younger'. This is especially visible in older people's recreational activities, which are characterised by an increasing presence of entertainment electronics. An empirical study has looked at how older people use technological applications in entertainment electronics, analysing the extent to which older people used these products, and the personal experiences they had with them. The results are featured in table 1 (cf. Wahl and Mollenkopf 2003).
Table 1. Availability and perception of ICT among older people Demands for simplification
Availability
Bad experience
Fears
(% of households)
(% of households)
(% of households)
(% of households)
TV
99.3
12.0
6.9
10.6
Cable TV
90.4
6.1
4.3
4.6
Video recorder
57.7
15.8
17.5
35.8
Teletext
63.7
6.2
5.7
11.4
Video camera
14.2
3.3
10.1
16.6
Radio
99.4
1.7
0.5
0.8
Stereo system
65.8
5.6
5.7
9.8
CD player
50.0
3.8
3.6
6.3
PC
12.6
3.4
17.6
26.6
Internet access
5.6
1.4
17.9
20.3
Conventional telephone
77.9
3.9
1.5
1.1
Wireless telephone
34.4
4.5
5.6
6.9
Mobile phone
9.1
2.2
10.1
21.1
Answering machine 20.7
3.8
5.9
10.1
Fax
1.3
7.9
10.4
Device/ Appliance
7.5
Source: Wahl and Mollenkopf (2003). Figures for 'bad experience', 'fears', and 'demand for simplification' based only on the answers of those actually possessing the device or appliance.
The results demonstrate that most older people have a considerable demand for improvements which would allow them to use these technologies without bad experiences or fear of 'breaking something'. This implies a great potential for product innovation, especially in the area of user-friendly PCs and internet access. This applies all the more as older people have become increasingly interested in PCs - according to Bonstein et al. (2004), the demand has increased by 250% over the last 10 years. Today, the PC industry has good opportunities to recover the lost revenues from the decreasing generativity (and thus from the smaller number of young customers) by PC sales to persons aged 65 and over (Haimann 2005). However, to make a larger number of them buy a PC, both hardware and software need to be simplified and enhanced with user-friendly functionality.
Internet usage of older people is also on the rise, both for private as well as for professional purposes. In the first quarter of 2004, 22% of all over-54-olds were online, compared to 16% for the whole year 2002. Moreover, the increase of older internet users (38%) significantly exceeds the increase for the whole population (26%). There are two subgroups of older internet users. Of the 'young seniors', i.e. users aged 55 to 64, 36% were online in the first quarter of 2004. However, only 11% of those users over 64 who did not have contact with the internet during their professional life actually used the internet. Men are generally more open towards the internet than women: in the first quarter of 2004, only 29% of women from 55 to 64 had internet access. In the age group of over-64-olds, this share decreases to 6%. The frequency of internet use decreases with age. Whereas almost all users between 15 and 34 are online on a daily or almost-daily basis, only 43% of users over 54 are. 28% of users aged 15 to 34, but only 12% of users over 54 use the internet for more than five hours per week. The primary areas of interest for older users are information, communication, ecommerce, and e-government. Online chatting, is attractive for only 12% of online users older than 64, however, online travel arrangement and booking services are used by 59% of users older than 64, but only by 36% of users aged 15 to 34 (Destatis 2005). Another promising area is mobile phone technology. Less than 10% of older people own a mobile phone, yet more than 20% would buy one if their demands for more user-friendly modifications would be recognised (Wahl and Mollenkopf 2003). Generally, the market for mobile phones is characterised by a high pressure to innovate. Model specifications change frequently, and in each generation additional functionality is added. While many of these functionalities may be useful, most older users feel they are superfluous. While for younger users a mobile phone is a lifestyle product involving 'fancy' technology such as a camera, internet access, mp3 players, coloured display, organisers, and games, older users simply want a mobile phone to make and receive calls. However, despite this rather simple-to-fulfil demand, for years the market failed to generate an appropriate product. The Japanese company Kyocera was among the first to introduce to the market a relatively simple mobile phone without any display at all that simply served as a telephone. This device, which does not even allow us to write an SMS, is favoured much by Japanese customers. Within the first four months after introduction, several 10,000 units have been sold.
4. Research Challenges and Advancing Research While the discussion of industries and product segments seems encouraging for firms, there is still no clear picture of the future as to how firms should employ ICT to develop and modify products for the new customer generation of 'best agers'. For example, should products become more 'technical' or more 'simple to use'? Should ICT take on 'intelligent' or 'age-modified' functionality that interacts with the user, but increases the product price? Can ICT-intensive products like game consoles that have been sold to 14-49-year-olds also be sold to 'best agers' in the future? How to design user interfaces in order to accelerate technology acceptance and innovation diffusion in the generation 50+? What role can user communities play to facilitate technology adoption by older individuals? Our own studies show that there is considerable information asymmetry among firms regarding such questions. While they unanimously recognise the potentials for growth, they do not yet know how to use ICT to take advantage of these growth
opportunities. Similarly, by the 'right' economic, science, and technology policies, the European Commission could do much to favour and enable the 'right' product developments and modifications, but the Commission faces the same information asymmetry. This problem leads to the following research questions and needs for information for future studies: 1. How can the European Union benefit from the demographic changes of its population by ICT-related innovation? 2. How will the European Commission need to adapt its Science & Technology policy and its general economic policy (e.g., regarding subsidies, technology promotion, sponsoring of research, etc) to ensure that such ICT-related applications can produce benefit for EU firms from the demographic developments? 3. What implications need to be drawn for the Commission's DirectoratsGeneraux when discussing policy implications, product design, norms & standardisations, etc.? To address these research questions allows us to identify the growth potentials for Europe's economies that are induced by the demographic developments. Thus, in contrast to most authors who emphasise the potentially disastrous implications for national social security and pension systems, future research should specifically address the question of how the EU can, by appropriate policy-making, help firms in realising these growth potentials and thus contribute to Europe's economic growth as a whole.
5. Conclusions and Steps Ahead All in all, the demographic changes in Europe imply an enormous economic potential. While these changes are still considered a nightmare by much of today's media (as characterised by notions such as 'clash of generations', 'war on pensions', 'methusalem complot'), the economic power of the generation 50+ makes one thing very clear: In the long run, only those firms that will understand to address the demands of this age group by designing products and services according to their needs will survive in most markets of the future. Although older customers in principle have basic demands similar to that of younger customers, there are a number of important differences in preference and consumption patterns, as well as a greater importance of aspects related to health, safety, independence, mobility, and social participation. Even if older customers do not explicitly articulate these needs, those products and services that implicitly recognise them and offer ways to fulfil the demands that stem from them will have a great market potential. Furthermore, older customers do not fit the cliché of conservative, technologyaverse customers. Market research shows that the new generation of 50+ consumers likes to experiment and to try something new quite often. Traditional values do no longer strongly dominate the decision to buy. Consumption is increasingly characterised by hedonism and self-realisation motives. Neither are older customers technology-averse. However, they only buy technology-related products if these, in their eyes, represent meaningful solutions to existing problems. Thus, the acceptance of technology-related products could be increased much if the subjectively felt technological gap from existing to new applications is low. Therefore, the product's
functionalities must not be increase to the point where this functionality surpasses the user's abilities. A design concept to achieve this is Universal Design the central idea of which we have briefly outlined here. It makes possible to dissolve the difference between 'old' and 'young' products and thus help products to avoid the stigmatisation of 'products for seniors', while making the product attractive for all markets irrespective of customer segments. A core element of age-based product design is the integration of focus groups right from the first stages of product development. Today, too often products are planned and designed by young engineers, designers and marketing experts who do not or cannot perceive the specific abilities and demands of older consumers. One of the most important tasks for the future will be the analysis of how the applicability of new technologies and the views, opinions and perceptions of older consumers can be matched. The most important point here is a different perception of what technology is and how it should be used. Not functionality, but user-friendliness is key, and technological innovations need to be accompanied by social integration and human interaction to make them succeed in the market. Given the consequences of the demographic developments in Europe, one thing should be considered above all: Both the national and European policy makers need to find out more about the firm-level impact of the demographic developments in Europe to be able to formulate the 'right' responses in term of economic and science & technology policy. Only by this information, the necessary reforms in legislation as well as incentives for firms can be allocated in an efficient way.
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