Conventional wisdom suggests many older adults don't get on with technology. But a new Citi Global Insights report delves into AgeTech, an important and burgeoning market.
AgeTech is a new generation of products and services for older adults. They help with loneliness and the activities of daily living, and help caregivers intervene before things go wrong.
A large and growing percentage of the world’s population is over 80. And changes in populations mean fewer working-age people to look after them. Currently, about 9% of the Japanese population is 80 or older and this is expected to grow to 14% in 20 years. In the U.S., in 2010 everyone over 80 who needed care had seven potential family carers. By 2030 there will be three.
In the new AgeTech report:
- The Silver Economy – products and services aimed at the over 50s – is one of the largest business areas – and showing some of the best growth in absolute dollar terms. AgeTech is important in another way: When you reach old age, it’s what’s going to be making your life better.
- AgeTech illustrates what the report calls the Great Convergence – the coming together of the health, consumer and tech sectors. AgeTech will increasingly focus on ensuring older adults can stay at home – which is almost always what they want, and is usually cheaper and healthier too.
- Older adults are an underserved market – Despite its theoretical potential, AgeTech remains too small to count even as an “emerging space” in PitchBook’s taxonomy, unlike (say) FemTech. There are few VC funds focused on AgeTech, and even these broaden the definition to include old-age-related FinTech and marketplaces. While there are interesting products to talk about, in truth there aren’t that as many as might be expected, unlike in, say, mobility or NFTs.
- Covid has triggered a wave of start-ups –The pandemic caused telehealth services to develop rapidly, helping the entire sector. More importantly, many younger people found themselves worrying about their parents and grandparents more than ever before and getting personally frustrated about the many unresolved issues they faced. The result has been a wave of startups, addressing a series of really important issues.
- Are older adults “bad at tech”? – Humans’ ability to learn new skills does decline with age, deteriorating faster after 60. People aged 85+ may never have learned to use touchscreens and icons, and now it is difficult for them. But most still know how to drive because they learned when they were younger. Older adults use less tech than younger people, and feel less confident with it, but they are using more over time, and becoming more confident. Therefore, people who are currently in their 60s and 70s almost certainly will be better at tech in their later years, unless the way we interact with tech changes radically once again.
- Companion robots – The report digs into many areas but focuses on companion robots for a deep dive because they illustrate so many AgeTech themes: Loneliness is a big issue for older adults. It’s not a medically defined illness but research shows loneliness is as bad for your health as smoking 15 cigarettes per day. The products themselves are also intriguing, eliciting intense emotional bonds and helping to satisfy a profound human need. Robotic pets, for example, can comfort dementia patients while simultaneously keeping their caregivers and doctors informed about how they’re doing.
- Big (and growing) opportunities in AgeTech — Older adults represent a really important market, both in social and economic terms, and one that’s going to grow rapidly. There are some headwinds, but there are relatively few start-ups in the area, so competition is limited, and the margin opportunity looks significant.
The full report covers much more ground, asking and attempting to answer some of the most pressing and interesting questions around AgeTech. Are older adults just bad at tech? Is hardware a problem? What about attitudes towards data privacy? What’s the right funding model? Can virtual reality help older adults? How has the pandemic accelerated AgeTech’s progress?
Read Citi Global Wealth Investments’ insights into the unstoppable trend of increasing human longevity.