[pic] | COMMISSION OF THE EUROPEAN COMMUNITIES |

Brussels, 14.6.2007

SEC(2007) 811

COMMISSION STAFF WORKING DOCUMENT Accompanying document to the

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Ageing well in the Information Society An i2010 Initiative Action Plan on Information and Communication Technologies and Ageing {COM(2007) 332 final}

Table of Contents

1. Executive Summary 5

2. Ageing well in the information society: a social necessity and an economic opportunity 9

2.1. A social necessity to mobilise ICT to help answering the demographic challenges 9

2.2. The economic opportunities in ICT for elderly people 11

2.3. The European policy context for ICT and ageing 13

2.3.1. Demographic change 13

2.3.2. Growth and Competitiveness 14

2.3.3. Social and employment policies 14

2.3.4. EU policies for health services 15

2.3.5. Information Society policies and the i2010 initiative 15

2.4. Three areas of challenges and opportunities - three life situations 18

3. Assessing ICT and ageing: a life situation perspective on users, products/services, providers 20

3.1. Life situation perspective 20

3.2. Key features of product and service provision 23

3.2.1. Information asymmetries 23

3.2.2. Intrinsic and persistent diversities 24

3.2.3. Strong influence of political and legal frameworks 24

3.2.4. Disconnection of investments and benefits 24

3.2.5. Technology: access, e-Accessibility, technological change 25

3.2.6. Interoperability 26

3.2.7. Ethical conditioning 26

3.2.8. Value chain coordination 26

3.3. Demand side: portraying elderly people as users of ICT 27

3.3.1. Opportunities from ICT for independent living for the users 29

3.3.2. Opportunities from ICT for active ageing 31

3.3.3. Opportunities from ICT for social participation 33

3.4. Suppliers and providers 34

3.4.1. Changing patterns of fragmentation 34

3.4.2. Mainstreaming the age factor 35

4. Barriers to ICT for ageing 38

4.1. Barriers related to lack of awareness and common strategies 40

4.1.1. Lack of awareness 40

4.1.2. Lack of stakeholders involvement, cooperation and common strategies development 41

4.2. Barriers related to enabling conditions 42

4.2.1. Regulatory barriers towards a single European market of ICT for ageing 42

4.2.2. Market fragmentation and lack of interoperability 44

4.2.3. Lack of basic access to the information society – digital divide 45

4.2.4. Lack of consideration of ethical issues 45

4.3. Barriers related to take-up 46

4.3.1. Lack of exchange of experiences and reference implementations 46

4.3.2. Insufficient validation of solutions, lack of critical mass 47

4.3.3. Lack of common approaches and coordination of take-up of innovation 47

4.4. Barriers related to developing future solutions 47

4.4.1. Lack of risk sharing in exploring the future, lack of synergies in research agendas 47

4.4.2. Future eAccessibility and interoperability 48

5. Policy actions 50

5.1. Introduction 50

5.1.1. Policy responses to barriers 50

5.1.2. The stages of market maturity and the required policy actions 52

5.2. Raising awareness and building consensus 54

5.2.1. Awareness raising and dissemination 54

5.2.2. Building consensus 55

5.3. Putting the enabling conditions in place 56

5.3.1. Regulation 56

5.3.2. Standardisation and Interoperability 58

5.3.3. Basic access 60

5.3.4. Dealing with ethical issues 61

5.4. Promoting take-up 61

5.4.1. Deployment and uptake of innovative ICT solutions 61

5.4.2. Exchange of good practices 63

5.4.3. Raising professional skills 64

5.4.4. Use of structural and social funds 65

5.4.5. Creation of a lead market 65

5.5. Preparing for the future 68

5.5.1. ICT Research and Development 68

5.6. Summarizing the actions: the i2010 flagship on ICT for Ageing 75

6. Conclusions 77

1. EXECUTIVE SUMMARY

This paper supports the Communication on ICT and ageing (“Ageing Well in the Information Society in Europe”), which presents a response to the Riga e-Inclusion Ministerial Declaration and the Communication on the Demographic Future of Europe.

It is a huge success of science, health and social care that Europeans are getting older. At the same time, the ageing society poses significant challenges to Europe’s economy and society.

Firstly , at the individual level these challenges include to enable older people to continue participating in and contributing to economic and social life – where they wish to do so – and to reduce social isolation and exclusion. Europe can much benefit from the knowledge and experience of elderly people, even more so in a knowledge society.

Secondly , for economy and society at large the challenges include containing the rising cost of care, while safeguarding the quality of social and health care and respect for human dignity, improving services by better integration and innovation. The economic challenges also includes keeping people productive in work when getting older, in view of the rising dependency ratio.

Thirdly , for businesses the challenges include better understanding user needs and adapting design and marketing to the requirements of elderly people, in order to unlock the market potentials, not only in Europe but increasingly globally.

The information society policy can contribute to dealing with ageing as a social necessity and as an economic opportunity . Elderly people have a large buying power with persons over 65 representing some 20% of GDP. However, they also still have a low participation in the information society with only 10% of persons over 65 having Internet access. Age also often comes with some form of impairment where technology either can be a help or a barrier.

The information society should enable older people – where they wish to do so - to fully participate in the society and the economy and to be active and empowered citizens and consumers, thereby contributing to a positive perception of ageing in Europe.

Three life situations – possibly present at the same time - are addressed in this paper:

- active ageing at work : staying longer active and productive in high-quality work

- daily life at home : living longer an independent and healthy daily life

- being a member of the community : continuing to participate actively in society.

The paper analyses the individual, larger-scale economic and social aspects, and the business dimensions of ICT and ageing and suggests a range of policy responses in the form of an action plan to overcome regulatory, technical, skills and other barriers and to fully exploit the opportunities in ICT and ageing in Europe. These actions are suggestions for the i2010 flagship initiative "on caring for people in an ageing society addressing technologies for wellbeing, independent living and health", announced in i2010, or for short "the i2010 initiative for ageing well in the information society", and as the first major contribution to the 2008 EU e-Inclusion Initiative. Actions are suggested in 4 inter-related areas:

1. Raising awareness and building common strategies , including cooperation in a partnership for innovation with stakeholders, awareness raising events, benchmarking exercises and Ministerial level exchanges under forthcoming Presidencies.

2. Putting enabling conditions in place including the assessment of regulatory options to overcome fragmentation in reimbursement of ICT solutions for ageing; interoperability in eHealth; and raising skills in age-friendly design and accessibility of ICT;

3. Promoting widespread take-up by good practice exchange and demonstration trials of independent living in smart homes, telecare for chronic diseases through the Competitiveness and Innovation programme, pilot projects by regions a.o. using Structural Funds for, and innovative public procurement contributing to user acceptance, interoperability, viable business models and sustainable large-scale implementation;

4. Preparing for the future by significantly stepping up joint research and widely disseminating research results, including the launch of the new 7th Framework Programme Article 169 Assisted Living Initiative and strengthened involvement of European Technology Platforms.

ICT and Ageing at a Glance

Demographics and macro-economic change

- Europe’s society is ageing. By 1995 70 million people over the age of 60 were living in the EU, almost 20 % of total population. By 2020, this figure will rise to 25 %. The number of people over 80 years of age will more than double.

- 55 of 211 regions of the EU-15 already saw a fall in population during the second half of the 1990s. This is also the case in most of the regions of the new Member States (35 out of 55 regions), because of natural decrease and net emigration.2

- Age related spending will rapidly rise. Spending on pensions, health and long-term care will increase by between 4 and 8 % of GDP in coming decades.

- In many cases, disability affects large parts of society and the elderly cohorts. 21% of persons over 50 experience severe vision, hearing or dexterity problems.

Market opportunities of ICT for ageing – considerable and growing

- Persons over 65 possess wealth and revenues of over 3000 B€. In Germany, the 50+ generation (30 million people) have an income of 643 B€ p.a., 30 B€ more than those 30-50 years old.

- A tripling of the market for smart homes applications between 2005 and 2020, from 13 million people up to 37 million (applications to cope with reduced mobility or age-related impairments to assist in shopping, dressing, moving independently)[1].

- 68,5 million people in 2005 with several forms of age-related impairment, growing to 84,3 million in 2020;

- In the Netherlands alone, seniors would spend €500 million per year above what they are currently spending if targeted by appropriate products and services.

- One of the largest UK retail companies, Tesco, spent €50,000 on creating a more accessible website. That small investment has opened up an untapped new market of 1.9 million customers with a return on investment in excess of €2 million.

ICT can help to contains the costs of care

- Early patient discharge from hospital due to the introduction of mobile health monitoring would save €1,5 billion for Germany on a yearly basis[2].

- In the UK tele-care technology has been shown to significantly reduce the gross annual cost of care: institutional care costs £ 21.840 per place, while tele-care supported living costs £7.121 including 24 hours response and ten hours of care[3].

ICT for social inclusion of elderly persons

- ICT for social contacts and community participation becomes increasingly common (email, phone or video calls, online communities) but elderly people still tend to lag behind. By doubling their Internet use from the current 10% for persons over 65 and by easy and accessible technology and services (e.g. PC, interactive digital television, mobile phone) much can be contributed to overcoming social isolation, increasing inclusion in daily activities such as shopping, transport, leisure and for democratic and community participation. Once connected these groups tend to become even more intense users than others a.o. of online health and communications.

2. AGEING WELL IN THE INFORMATION SOCIETY: A SOCIAL NECESSITY AND AN ECONOMIC OPPORTUNITY

Addressing the needs of elderly people in the information society is a social necessity. The question is not whether we have to pay for this – that is a given – It’s whether we can also profit from it, making it into an economic opportunity. |

2.1. A social necessity to mobilise ICT to help answering the demographic challenges

The European society is ageing [4]. By 1995 70 million people over the age of 60 were living in the Union, almost 20% of total population. By 2020, this figure will rise to 25%. The number of people of 80 years and older will more than double. These trends have several implications: there will be more older people in absolute as well as relative terms, there will be considerably more older "old" people, there will be fewer family carers (i.e. informal carers), and there will be a smaller productive workforce to contribute to the financing of health and social services.

The Union’s population is set to grow just slightly up until 2025, largely due to immigration, before starting to drop: 458 million in 2005, 470 million in 2025 (+ 2%), then 469 million in 2030. Yet 55 of the 211 regions of the EU-15 have already seen a fall in population during the second half of the 1990s. This is also the case in most of the regions of the new Member States (35 out of 55 regions), due to natural decrease and net emigration[5](Annex I).

This trend is even stronger when just the total working age population (15-64 years) is considered: between 2005 and 2030, it is due to fall by 21 million. The demographic dependency ratio[6] will rise from 49% in 2005 to 66% in 2030 .

Ageing societies are not only a problem in Europe but in other industrial countries as well. 1 shows the development of the average age in the word till 2050.

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Figure 1: Average age world wide from 1950 till 2050[7]

These trends pose significant challenges to the financing and organisation of health and social care services. There will be an increased demand for social, home and long-term care services and increase in costs. It is estimated for the EU-25 that age-related public spending will rise by 3-4 GDP points between 2004 and 2050, representing an increase of 10% in public spending. In some countries 20% of the workforce would have to be in health and social care, with unaltered policies. This will be increasingly less affordable as with an overall shrinking workforce the average annual growth rate in GDP for EU-25 will fall systematically from 2.4% over the period 2004-2010 to only 1.2% between 2030 and 2050[8]. Such challenges have already been acknowledged in demographics policy and in health policy, as has the supporting role that ICT policy and initiatives can play to ease this situation[9],[10].

ICT can help to contain the cost of care and improve quality of life at the same time. The examples in the previous chapter illustrate this point. A specific case in point is the potential value of ICT to realise interoperable exchange of health related data between healthcare institutions. Studies[11] in the US estimated that net savings from the national implementation of fully standardised interoperability between health care providers and five other types of organisations (such as specialists, laboratories, insurance funds) may yield up to around $75 billion annually of savings, or about 5 percent of the projected $1.7 trillion spent on United States’ health care in 2003. Interoperability of eHealth systems is also expected to have an impact on eradicating treatments that do not improve health status, are redundant, or are not appropriate for patients’ conditions which are estimated, by other studies, at costing between 20-30% of American health care spending, or up to $US300 billion each year.[12]

2.2. The economic opportunities in ICT for elderly people

Older and disabled citizens already make up around 20% of Europe's population and represent a significant market segment. Other major countries are facing the same trends, some at the same speed, such as the USA, others even faster, such as Japan. Terms such as "silver market" or "golden market segment" have been adopted, primarily in consumer industries.

The 50+ age group has an income and wealth equal to about 1/3 or Europe’s GDP, representing some €3000 billion[13]. In Germany, the 30 million members of the 50+ generation have a net annual income of €643 billion, that is, €30 billion more than the 30- to 50-year-olds[14]. According to another study[15] the current 45-60 cohorts in Germany inherited endowments in 2004 of about €200B with a significant consumer power prospected for the future. Older people therefore represent, collectively, a very important market potential. Moreover, half of older people would be quite willing to spend their wealth, provided they are properly informed about products and services that meet their needs.

The potential gains are significant. By fostering inclusion of older adults through better ICT services for independent living and active ageing at work, it has been estimated that in the USA cumulative economic benefits would amount to $620 billion during the next 25 years - comparable to the federal government's expected spend on homeland security measures[16],[17] (Annex II). This would materialise through savings in delivering medical services, lower costs of institutionalized living, and additional output generated by more seniors and individuals with disabilities in the labour force. If accompanied by proactive investment in broadband infrastructure and by measures aimed at bridging digital divides, these three benefits could reach $927 billion in cost savings and output gains in 2005 dollars[18], equivalent to half of what the US currently spends annually for medical care for all its citizens ($1.8 trillion).

As regards the economic opportunity, there is also the wider recognition of the importance to mobilise ICT for healthy ageing at work. Indeed, modern economic progress has been built on good health – longer, healthier, and more productive lives[19].

In principle, Europe is in an excellent position to become a lead market in age-related products and services (as already identified as an opportunity in the Aho Group report[20], see below). Industrial and technological capabilities can be combined with a large European domestic market of the older population, possessing collectively significant financial means. European industry could see huge business opportunities if the older population are appropriately targeted, e.g. by fostering easy-to-access technologies and services designed around the needs of the ageing end user. In particular, the challenges faced by healthcare systems, like ageing population and patient safety, are likely to be important triggers to stimulate the growth of the health sector.

For example, it is widely recognised that ICTs contribute to enhancing patient safety[21], and can be instrumental in facilitating remote patient monitoring, which is important given the growing need of continuous care. Significant cost savings in patient management can be achieved with such remote monitoring solutions that also allow patients to receive care in the comfort of their own home environments. Moreover, ICT can improve access to patient files, speed up patient-processing times, and facilitate safer care. These tools can also respond to citizens’ demands, - in fact, whatever their age, whether young or old, - for better information on health matters and more participation in the healthcare process. Innovative eHealth solutions can empower citizens to become actively involved in managing their lifestyle and health status, and encourage a shift towards proactive, predictive and preventive healthcare.

However, the European mainstream industry has so far not exploited the full potential for products and services targeted at the mass-market of older people. While ageing is becoming a mainstream phenomenon, industry and providers do not yet sufficiently capture the needs of the ageing society in mainstream products and services . Nor has the specialised assistive technologies industry managed to enter the mass-market of older people. A good number of European SMEs are well profiled in specific niche markets for assistive technologies and possess detailed information about user needs. Fostering their cooperation with larger European companies and research centres, might guarantee a strategic encounter between assistive technologies and mass-market products and services. The market for assistive technologies currently presents a high degree of fragmentation, compounded by transparency, regulatory and technical barriers. Half of older consumer state that they cannot find the ICT products and services that meet their needs[22]. These barriers are further analysed in chapter 4.

Currently, it is probably the USA that is leading in exploiting and creating market opportunities offered by the ageing society. These are stimulated, amongst others, by the Older Americans Act, the Americans with Disabilities Act of 1990 and the Rehabilitation Act of 1996. Opportunities in the USA are also mobilised through other initiatives, such as the support to tele-health services in rural areas by the Universal Services Administrative Corporation. Congress is discussing a Bill to put in place a taskforce that will recommend how the USA can fully exploit new technologies for ageing and secure global leadership in this market and another bill is under discussion to reimburse tele-health under Medicare. In the USA social service delivery is more often dealt with by the private sector than in Europe, which may also influence the speed of development.

2.3. The European policy context for ICT and ageing

The concerns about ageing – and increasingly also the identification of the opportunities of this demographic change - is reflected in several policy initiatives, that provide the broader framework for the specific ICT and ageing policy proposed in this paper.

2.3.1. Demographic change

The October 2006 Communication on " The demographic future of Europe – from challenge to opportunity" [23], identified five ways to address the 'demographic timebomb': helping to balance work-family-private life; improving work opportunities for older people; increasing productivity and competitiveness by valuing the contributions of older employees; harnessing the positive impact of migration for the job market; and ensuring sustainable public finances for social protection in the long-term.

The review of the Sustainable Development Strategy[24] also stresses significant economic and social exclusion challenges as a result of its ageing society. It urges governments to prepare Europe’s economy and society for the demographic shift by boosting productivity and employment participation – in particular that of ageing workers and women – and the implementation of effective lifelong learning strategies. It also asks for the modernisation of Europe's social protection systems, notably in the areas of pensions and long-term care as key to the promotion of active and healthy ageing.

The 2006 Spring European Council [25] stressed that “in view of the demographic change in the European Union employment rates have to be increased and the reconciliation of work and family life has to be promoted. To tackle these demographic challenges, it will be necessary to support family-friendly policies and equal opportunities, to enhance the solidarity between the generations, improve affordable care for people in need of care, life-long learning and an increased activity rate of young people, older workers and disadvantaged groups”.

2.3.2. Growth and Competitiveness

The Report on the Lisbon Strategy [26] , the contribution of the Commission for the Hampton Court Meeting [27] and the Aho Report stress the need for European people to work longer, and encourage Member States to adopt strategies for active ageing in order to make the labour market more attractive for older workers. They also urge Member States to adapt pension, health and long-term care to meet changing needs and offer adequate protection and universal access to quality care. They have clearly identified the lead market opportunity in health, driven by ageing. Subsequently the Commission Communication on Innovation has reinforced this analysis and amongst others raised attention for the potential of innovative public procurement in the field of health and ageing – precisely because of the strong interplay between public and private sector.

2.3.3. Social and employment policies

The Council Directive on equal treatment in employment and occupation[28] is based on the anti-discrimination Article 13 of the EU Treaty, and thereby forbidding discrimination on age (inter-alia) in employment. It also provides the obligation of reasonable accommodation in the workplace for persons with disabilities, which is relevant for ICT solutions for active ageing at work.

2.3.4. EU policies for health services

High-quality health services are a priority issue for European citizens, with rights to healthcare are recognised in the Charter of Fundamental Rights of the EU. Following the European Court of Justice, Treaty provisions on free movement also apply to health services. In order to increase clarity over what Community law means in general terms for health services the Commission has launched a consultation[29] towards a Community framework for safe, high quality and efficient health services. The framework would reinforce cooperation between Member States and provide certainty over the application of Community law to health services and healthcare. This also addresses cross-border care and related to interoperability in eHealth. The consultation also addresses health innovation.

2.3.5. Information Society policies and the i2010 initiative

The 2006 Spring European Council [30] stated that “focused, effective and integrated ICT policies at both European and national levels are essential to achieving the Lisbon goals of economic growth and productivity. As such, the European Council calls on the Commission and the Member States to implement the new i2010 Strategy vigorously”.

ICT and ageing is firmly embedded in i2010: the 2005 Communication from the Commission “i2010, a European Information Society for growth and employment” defines as one of its three objectives “an Information Society that is inclusive, provides high quality public services and promotes quality of life”. In this framework, the Commission announced i2010 flagship ICT initiatives on key social challenges. One of these flagships focuses on the needs of the ageing society , more specifically on caring for people in an ageing society and addressing technologies for wellbeing, independent living and health . The general aim of this flagship is to harness the potential that ICT has to improve the autonomy and quality of life of older people while promoting containment of future costs of social and health care in addition to creation of new opportunities for European industry. This paper provides the analysis underpinning this i2010 flagship on ICT and ageing .

In i2010 and previously in eEurope the EU has already been carrying out actions in recent years, which are relevant to ageing. In particular, research, standardisation and to some extent regulatory actions have been carried out in the areas of eInclusion (eAccessibility and ICT for ageing), eHealth and eGovernment addressing issues around home as well as institutional care and assistance, assistive technologies, ICT enhanced work environments, ICT products and services that are easy to access for older people. Efforts are currently ongoing with the aim to enhance the diffusion of research results in this area for a coherent and sustainable uptake of these technologies at the EU level.[31] Research will be extended in the 7th Framework Programme.

The 2004 eHealth Action Plan[32] outlines actions in interoperability of eHealth systems. Interoperability offers the prospect of important gains in terms of:

- Access : facilitating information for both patients and health professionals, improving contacts with the range of health occupations, and avoiding useless transportation,

- Quality: making both pertinent health and clinical information available for prevention and diagnostics, avoiding treatment error due to lack of information, and

- Cost: avoiding duplication of examinations, e.g., laboratory and radiology, ensuring good supporting administration, and ensuring efficiency and effectiveness of provision of services.

The 2005 Manchester Ministerial Declaration on Transforming Public Services and the 2006 eGovernment Action Plan[33] stress the importance of inclusive public services – of which elderly people are important users – and set objectives for inclusive eGovernment for 2010. Subsequently the Riga Declaration (see below) provided the specific target of 100% accessible public websites by 2010.

The 2005 Communication on Electronic Accessibility (eAccessibility) aimed at raising the profile of eAccessibility and leveraging a range of activities and cooperation with stakeholders to enhance the accessibility of ICTs. Its goal is to foster industry self regulation and encourage coordination among the Mmeber Sates, to evaluate the evolution of accessibility based on the measures proposed and come up with additional measures in 2 years time including new legislation if deemed necessary. One set of activities is geared towards securing a prominent place and concrete commitments for eAccessibility as a policy objective in high-level policy frameworks and strategy documents such as the i2010 initiative, the eEurope 2005 Action Plan or the eEurope 2002 eAccessibility targets.

Other efforts focus on the technology research and development process and have included successful cooperation with web standardization bodies, industries and user associations in developing accessibility standards and accessibility marks. A third set of initiatives focuses on eAccessibility implementation, measurement and benchmarking issues, in order to monitor and further incentivise progress for realizing policy goals.[34]

Accessibility of electronic communications in the review of the eCommunications Framework, and audio-visual services in the revision of the Television Without Frontiers Directive are two key ongoing ICT-specific policy developments of high relevance for elderly people

The 2006 Riga e-Inclusion Ministerial Declaration [35] has set the scene for a comprehensive policy on e-Inclusion, addressing the six areas of ICT and ageing, geographic digital divide, eAccessibility, digital literacy and competences, cultural diversity and e-Inclusion, and inclusive public services. This paper provides support for a response to ‘Riga’ as regards ageing.

Policy for ICT and ageing addressing key elements of the Riga Declaration :

Riga §8: […] differences in Internet usage between current average use by the EU population and use by older people [..] should be reduced to a half, from 2005 to 2010: EU-level benchmarking and Member States awareness raising and training actions.

Riga §9: Exploiting the full potential of the internal market of ICT services and products for elderly people, amongst others by addressing demand fragmentation by promoting interoperability through standards and common specifications where appropriate. Barriers to innovative ICT solutions for social security and health reimbursement schemes need to be addressed, particularly at the national level: eHealth interoperability, stock taking of differences of reimbursement schemes and defining a target date for their removal, awareness raising and good practice, interoperable pilots.

Riga §10: Improving the employability, working conditions and work-life balance of older workers to improve productivity by supporting innovative ICT solutions which can be easily used everywhere including at home, and encouraging the provision of training from the public, private sectors and from civil society, making special efforts on ICT skills for older people: active ageing at work in R&D, ICT training at national level, a high-level debate on ICT and active ageing at work, stakeholder cooperation (supported by a thematic network in the CIP programme).

Riga §11: Enhancing active participation in the society and economy and self-expression, through innovative ICT-enabled access to goods and services, and relevant content, to facilitate interactions with public and private entities, entertainment, and social contacts: innovative ageing related projects in FP6 and FP7.

Riga §12: Realising increased quality of life, autonomy and safety, while respecting privacy and ethical requirements. This can be done through independent living initiatives, the promotion of assistive technologies, and ICT-enabled services for integrated social and healthcare, including personal emergency and location-based services. The ambient assisted living initiative of the 7th Framework Programme is an important initiative in this respect: launch of large-scale new Article 169 Ambient Assisted Living initiative, FP6/7 advanced independent living R&D, CIP pilots on smart home for independent living and telecare for chronic diseases.

2.4. Three areas of challenges and opportunities - three life situations

Three areas of key challenges and opportunities need to be addressed, corresponding to life situations or activities (all three can be present at the same time for a single person):

5. Independent living: in social and health care – how to enhance the quality of life and the quality of health and social care provision for older people, while keeping these services financially sustainable or even reducing their costs? The increasing demand for social and health care services will generate additional costs that a lower growth cannot sustain. Projections suggest that age-related spending on pensions, health and long-term care will increase by between 4 and 8 % of GDP in coming decades. Longer life expectancy poses challenges for health treatment, the effectiveness and financial viability of pension schemes, and the opportunity (sometimes formulated as a right[36]) to pursue enhanced forms of healthy and independent living. The challenge is to enable the delivery of health care and independent living services more efficiently – thus raising productivity - as well as more effectively e.g. by integrating formal and informal care, and health and social care. Investment inputs in ICT can deliver the necessary improvement in efficiency and productivity of these services and help to assure their provision to future generations. ICT can ensure sound, reliable health information for older adults and effective provision of continuity of care via telemedicine and social care in the home [37],[38],[39].

6. Active ageing at work[40]: in the labour market – how to p rovide the opportunities for older people to use their skills and be retained at work? With the "baby boomers" heading for retirement, there will be the need to retain older people in the labour market, more productively and flexibly. We already need to exceed the employment rate target of 70% in the Lisbon Strategy to compensate for the expected reduction in the working age population. Employment participation will have to increase, and the retirement age will have to continue to rise. Yet the low levels of employment and/or reduced productivity of 55 to 64 year old people creates substantial pressure on the long term sustainability of public finance. Some employers are unwilling to keep older people at work. This is reinforced by structural incentives to take early retirement, as well as barriers to returning to work or continuing to work while affording a better work-life balance. Unemployment often affects older workers more than others. Jobs in traditional industries are made precarious by increasing competition. Adapting to new knowledge-intensive jobs may be difficult, and coping with new generations of innovative technologies becomes harder and harder. ICT solutions could help to keep older workers in the labour market productively, thus retaining their knowledge and skills. This requires new work patterns with better work-life balance and life long learning, and a positive impact on motivation and quality of work .

7. Social participation: how to increase the level of social participation by older members of our society? Increasingly, in the population in general individuals access services, arrange product delivery directly through the internet, and produce their own content. While this provides extensive evidence of the potential of ICT for social interaction and economic participation, older people tend to lag behind in their adoption of new technologies, including access to the Internet. Innovations are more easily and quickly adopted by urban, skilled and financially well off communities and then spread to more peripheral, lower-skilled or lower-income social categories – and in this context, also tend to be taken up only later by the ageing population. Moreover, experience shows that age-related (and social-related) digital divides tend to cumulate over time rather than automatically disappear. Given the pace of development and the different technological waves in the ICTs, there are strong reasons to believe that cumulative digital divides will persist and risk to become a permanent phenomenon if no counter-measures are taken, thus translating into social stratification . ICT-enabled services need to meet access, accessibility, affordability, and usability requirements, If they do so, they can much facilitate active engagement in social interaction for the ageing population .

3. ASSESSING ICT AND AGEING: A LIFE SITUATION PERSPECTIVE ON USERS, PRODUCTS/SERVICES, PROVIDERS

3.1. Life situation perspective

Keeping in mind that older people are not a homogeneous group (due to different degrees of disabilities, frailness, education, income, interests), it is helpful to group challenges and opportunities around three life situations[41]:

- ‘home’: living independently and in healthy conditions at home or on the move;

- ‘work’: engaging into work activities;

- ‘community’: actively participating in society.

All three life situations obviously can be present and relevant for a person at the same time.

The related product / service delivery chains can be characterised as follows (see diagrams below):

ICT for prolonged independent and healthy living involves mainly professionals (doctors, nurses, social workers), assessing health and social conditions and – in cooperation with other technical specialists - advising on services and equipment for prolonged independent or assisted living. Products and services for healthy independent living are likely to be provided via formal service providers, although informal networks, e.g. the family, can also play a key role in daily assistance and monitoring of health and care condition. The ICT industry is therefore often not in direct contact with the elderly user. However, this may change in the future (e.g. by providing consumer-oriented home well-being solutions that fall outside medical certification.

There are three types of products/services involved in ICT for independent living: health products/services, social services, and personal daily living assistance. Health and social services (e.g. tele-monitoring, assistance for housing or finance) involve professional staff. Assisted daily living (ADL) is provided with the help of assistive devices under user control (e.g. intelligent wheelchair), or with the help of the immediate social networks such as family or neighbours. Purchase/maintenance of assistive devices often involves professionals.

In terms of financial coverage insurers will eventually be involved, receiving their revenues partially directly from users or through general taxation, depending on national insurance schemes and laws. Considered as a market, independent living as of today has several similarities to the healthcare market (a quasi-market) with potentially a large public sector involvement[42].

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Figure 2 Simplified delivery chain for products/services for independent living

8. ICT for active ageing at work involves employers as a main actor. Assessment of needs and solutions may involve a professional service that is either part of the company or contracted by the employer (e.g. in-house Human Resource Management or medical assessment centres). Solutions are purchased by the employer rather than the end-user, the employee. Insurance schemes and possibly public schemes for workplace adaptation may play a role in reimbursement and in promoting innovation and adaptation of work-spaces. From the employer perspective there is a certain degree of public policy conditioning (e.g. by imposing anti-age-discrimination workplace conditions). However, provision should be expected to function largely as in a regular business-to-business or professional market, where employers seek improved productivity, efficiency, and effectiveness when purchasing ICT-enabled adapted work-environments.

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Figure 3 Simplified delivery chain for product/services for active ageing at work

9. ICT products and services for social participation can in principle be directly purchases by the user as a ‘normal’ consumer. Still, it is likely that in many instances the user needs assistance from his/her social network (family, community) to get adequate solutions installed and maintained. Personal motivation, skills and income levels – which are often age-related - play a key role. Local initiatives can come into play to stimulate ICT-enabled community initiatives e.g. through digital literacy programs and reimbursement schemes for low-income communities.

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Figure 4 Simplified delivery chain for products/services for social participation

3.2. Key features of product and service provision

Despite the fact that these are three life situations, they have a number of common characteristics from a market perspective as analyzed below. Some of these characteristics currently represent market barriers or market failures (see chapter 4). They are the focal points for public policy , where leverage is expected to be highest (see chapter 5).

3.2.1. Information asymmetries

Users are often in a relatively disadvantaged position in terms of access to information, knowledge and power to choose, for reasons such as:

- Disability, chronic disease, or lacking education or skills. As a result, they may need assistance to make their choices;

- Solutions having potentially a degree of intrusion e.g. health monitoring by the family;

- Lack of sufficient financial means and thus dependent on the good will of others or society at large.

In all these cases autonomy and human dignity can be affected, raising ethical questions (see also section 3.2.7). Even when such ethical questions are resolved, there remain information asymmetries due to the complexity of products and services, or monopolistic provision (e.g. of social housing). Users are also unavoidably in a relatively weak position because solutions for serious handicaps or chronic diseases can bear a very high cost (too much for an individual person to carry), even though the risk of them occurring is relatively low. Consequently the user is ‘at the mercy’ of a collective arrangement (e.g. insurance) to deal with the financial burden.

A consequence is that often the user/consumer is not in direct contact with the supplier, i.e. transactions are mediated and assisted by professionals or others such as family members, and there is a certain degree of involvement of government authorities.

Some services such as health are by their very nature complex and put consumers (in general) in a position of weakness. Health services are delivered by health professionals and carers who are mediating health knowledge to the final users. The user is confronted with a problem of choice (e.g. for treatment) and with a problem of asymmetric information.

The fact that there are information asymmetries is not necessarily an irresolvable problem, since intermediaries can bridge towards users, public policy can put in place safeguards, contracts can be arranged for that guarantee fairness and minimal quality of service, etc. In indirect markets public authorities can step in to to avoid the risk that asymmetric information damages the ageing consumer.

However, such measures illustrate that the product / service provision of ICT for seniors is complicated and involves many actors (that are not always coordinated) beyond users and suppliers. Public policy has to take this complexity into account. Moreover, traditional measures to compensate for the ‘weakness’ of the user have to be and are being re-assessed in many countries. The reasons are threefold:

User empowerment is a reality more than ever before with the help of new technologies, notably the Internet, and increasingly it is recognised that the ageing group represents significant buying power (over 3000 B€ in wealth and revenues for the over 65) and voting power[43];

Increasing competition in service provision increases due to regulatory changes and globalisation – witness the large changes in the health insurance industry- , and

Changing political views (in some countries) about the relation between citizen and state, away from supposedly passive citizens towards the view that citizens should be in the driver seat, and away from the state as an altruistic service provider towards more competitive service provision[44].

3.2.2. Intrinsic and persistent diversities

Another common characteristic is intrinsic and persistent diversity. There is therefore an unavoidable degree of fragmentation , which can be expected to be a characteristic of (and barrier for) product and service delivery for a long time. Diversity stems from the variety of users, national reimbursement schemes and political preferences to deal with health or social care and inclusion in general.

A specific manifestation of this is the highly diverse assistive technology industry, which deals with a very wide range of disabilities and reimbursement schemes.

3.2.3. Strong influence of political and legal frameworks

Service provision especially in independent living is strongly conditioned by political and legal frameworks at EU, national and even regional level. These tend to reflect political views on the role of the state versus the individual and community / family in the provision of services notably such as social and health care, which, moreover, used to be monopolistic.

3.2.4. Disconnection of investments and benefits

Investment-benefit disconnects are intrinsic to ICT and ageing solutions and have a variety of reasons:

- Time-lags before benefits materialise: long-term investments can be considerable and are recovered only after a long period of time. Examples are in establishing conditions for interoperability for independent living (e.g. integrated health and social care), adapted housing, broadband for social participation, ICT training for staying productive in work,.

- Indirect benefits from network effects (network externalities): provisions such as interoperability, quality labels, health information websites, etc. usually have a network externality, that is, benefits increase as the number of users and provisions increase. This leads unavoidably to uncertainty in immature markets as for these it is not yet established if and to what extent such benefits will materialise.

- Strong presence of " public goods" characteristics impacting on the organisational of value-chains: investments and benefits concern different actors (e.g. cost-savings in for a Ministry of Health resulting from investments by the Ministry of Social Affairs or vice-versa, broadband infrastructure investments by public authorities paying off through new business in the private sector, public sector investment benefiting individual user, private companies investments not entirely or directly recovered exclusively through market incentives).

As a consequence, social / health carers and mainstream consumer businesses may see benefits materialising only long after the investment has been made and often in indirect ways. At an individual level, elderly users cannot be counted on to fully pay for products and services that are shared by many users (an example is the infrastructure for a smart home).

3.2.5. Technology: access, e-Accessibility, technological change

The technology presence in the field of ICT and ageing implies that access to and accessibility / usability of the technology are preconditions for the ICT-based services, whether for the end-user who often has restricted capabilities, or for the professional or service provider. eAccessibility[45] of general purpose ICT products and services through design for all / universal design as well as the provision of dedicated assistive technology are therefore characteristics as well.

eAccessibility is the degree to which ICT is accessible in a wide sense, e.g. for people with sensory, motor, cognitive, or auditive functional restrictions. Such impairments are present amongst a wide part of the population and increasingly prevalent when ageing. For specific areas of ICT such as the World Wide Web standards have been developed or are being put in place.

Design for all aims to enable all people to have equal opportunities to participate in every aspect of society. Therefore the built environment, everyday objects, services, culture and information must be accessible, convenient for everyone to use and responsive to evolving human diversity. The practice of design for all makes conscious use of the analysis of human needs and aspirations and requires the involvement of end users at every stage of design.

ICT & ageing product/service delivery is also influenced by the general characteristics of ICTs such as rapid technology evolution, need for maintenance, upgrading, training and expert assistance.

3.2.6. Interoperability

Sensible technological solutions for end-users often require putting together and interconnecting a variety of equipment, services and providers that final users are not capable to seamlessly assemble (e.g. assistive technologies combined with mainstream technologies).

Making such interconnection possible is what interoperability is about. Interoperability manifests itself at three levels: technical, organisational, and semantic[46]. As regards technical interoperability, market research shows a marked preference for plug-and-play solutions. However, individual companies and providers may not have sufficient incentives to guarantee interoperability and modularity across different devices and services, thus increasing costs on final users and consequently missing opportunities of economies of scale on a larger consumer base. Semantic interoperability likewise often requires organised coordination amongst many actors in the value chain. Organisational interoperability (seamless compatibility of processes and procedures) is often the hardest to achieve, due to rules and regulations, vested organisational interests etc.

3.2.7. Ethical conditioning

With the emergence of ICT and ageing new ethical questions are being raised. These questions find their origin in the vulnerability of the user, the changing characteristics of the user population (e.g. more people surviving at high age but also the trend towards more-educated and empowered users), economic constraints such as public budgets that are at tension with serving all fully in health and social care and the constant renewal of science and technology.

3.2.8. Value chain coordination

A consequence of several of these characteristics (protecting the vulnerable user, bridging investment-benefits gaps, interoperability) is that a degree of initial coordination is required between value chain actors (or their representatives) so as to unlock the benefits.

3.3. Demand side: portraying elderly people as users of ICT

Two thirds of the European ageing population is generally open-minded towards ICT. But at the same time more than 70% said that in the media new technologies were always connected with young people, and almost one half considered that ICT manufacturers[47] did not properly take account of their interest. Elderly users of technologies (and specifically ICT) present a wide range of characteristics in terms of needs, physical impairments, motivation and readiness to take up new technology. As explained above, the way they interrelate to new technology is often mediated by informal and formal networks of people and depends on the broader social context they are part of.

If adequately addressed, elderly people can offer large market opportunities for providers of information society products and services.

Current evidence (see Annex III, IV) suggests that age followed by employment, education status and disability, is the most significant element determining access disparities to the online world. Within the group of older people, gender and disabilities are two other factors of exclusion from the information society together with labour market participation and educational status.

Keeping the age factor constant, ICT uptake increases with level of educational and – vice versa – keeping level of education constant ICT use decreases with age. Similar patterns can be observed with respect to other dimensions such as income and life style. Socio-economic factors appear to have a strong impact on older Europeans’ propensity to get involved in ICTs and, through ICT, in society. Those older people who utilise ICTs for their own purposes tend to be younger but also better educated; they tend to have a rather active life style and are on average better off in economic terms[48]. Besides, the use of ICT tools and services also depends upon contextual factors such as geographical area of origin, type of household, socio-economic and attitudinal factors, encouraging social networks of families[49].

Despite the fact that older adults comprise a large potential market, the influence of personal interest and cost sensitivity is likely to be high:

- Personal motivation in accessing Internet is an issue for the 50+ (and 65+) groups. This is partly the consequence of a lack of awareness/information on the benefits of Internet.

- Cost is an important issue for a considerable proportion of older people. The biggest initial barrier may be the cost of equipment purchase, especially for many in the new Member States as well as for low-income groups in the old Member States. In addition, Internet connection and ongoing usage costs can be a significant barrier for those with low incomes.

Gerontological research has shown that sensory capabilities (e.g. visual, audio, tactile) as well as cognitive ones – particularly in relation to apperception speed – tend to decline with growing age[50], thus portraying a strong link between age and disability . A large proportion of older adults faces functional restriction when using ICTs, and the severity of the reported restrictions tends to increase with age (see Annex V). For instance, in the EU15 Member States 26 million people aged 50 and above (21% of this age group) are severely functionally restricted in manipulating a keyboard, reading small print on a screen - even when using glasses - or in relation to their hearing capabilities[51]. Users therefore need solutions adapted to these changing capabilities.

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By extrapolating from demographic trends, a considerable and growing potential market size emerges with figures ranging from 68,5 million people in 2005 to 84,3 million already in 2020 combining several forms of age-related impairments.

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3.3.1. Opportunities from ICT for independent living for the users

Independent living is the ability for older people to manage their life styles in their preferred environment, maintaining a high degree of independence and autonomy, enhancing their mobility and quality of life, improving their access to age-friendly ICTs and personalised integrated social and health care services.

Many of the challenges of old age require support from the health and social care services as well as assistive technologies. Telemedicine opens up new opportunities for providing medical care to the home and there are many new developments in ICT-based home care, including ways of monitoring wellbeing and providing a secure home environment.

Independent living solutions often address daily living support for safety (making sure entrance doors and windows are locked/closed when leaving the house or sleeping; checking for water or gas leaks; and turning all but one light off when going to bed, etc), reminders (memory problems tend to be associated to ageing and thus support may be needed in taking medication and fulfilling household tasks), and user-friendly interfaces (for all sorts of equipment in the home and outside, taking into account that many elderly people have impairments in vision, hearing, mobility or dexterity).

Future developments in many of these areas are underpinned by some key emerging technologies. These include robotics, new materials and biosensors. In addition, the emerging concept of Ambient Intelligence offers great potential, with the possibility for the whole environment (at home, on the move, in the street, whilst driving or during transportation, in public buildings and so on) to have embedded intelligence that helps with everyday life.

Recent advances in miniaturisation technologies in combination with ICT enable a large variety of new systems and devices, especially in the context of support to daily living, fitness, and health systems for elderly[52].

As regards the latter, personal health systems include implantable, wearable and portables systems for monitoring and diagnosis, therapy and repairing/substitution of functionality. Individuals with a chronic disease – major examples include heart disease and diabetes – may experience trouble with treatment plans. Older adults and elderly persons, who face greater physical and mental challenges in maintaining their own health, need more extensive access to care and supervision at home. Telemonitoring and telecare are of primary importance; and so are the newly-emerging personalised healthcare services. Provision and support of care at home to people suffering chronic diseases can avoid hospitalisation[53].

ICT-enhanced equipment, processes and delivery mechanisms can help to increase the quantity, value and quality of services provided to older persons and persons with disabilities (at equal or lower costs), especially in terms of short and medium-term health and social care, informal carers and personal assistance services (Annex VI).

By implementing technology packages into existing houses and the newly built housing with smart technology the West Lothian authorities have achieved a mean duration of stay in hospital by a patient assessed as being ready to move of 9 days, as opposed to the Scottish average of 57 days. An approach directed towards quantifying care recipient benefits commonly applied in the health care sector relies on the concept of so called Quality Adjusted Life Years (QUALYs). A case study based assessment in relation to the utilisation of assistive technologies suggests that through such technology up to 8.859 QUALYs could be added for the cases investigated. Furthermore, an evaluation of the West Lothian Home Safety Service which was undertaken by the University of Stirling highlights strong economic benefits of telecare technology: the gross annual cost for providing one care home place stands at £ 21.840, compared with £7.121 for the support in the community package including telecare technology, 24 hours response and ten hours of care[54]. |

The estimated market figures indicate a potential demand for ICT products and services for independent living lie in the two digit million range for every age-related need. They suggest a significant demand potential today among the 50+ population that may slightly increase over a decade and is expected to considerably increase over the longer run[55]:

- The market potential for smart homes applications complementing needs related to reduced mobility or age-impairments threatening the individual's independence (such as difficulty to shop, to dress, to move independently) will almost double between 2005 and 2020 from a base line ranging from 13 million people up to 37 million depending on the type of impairment.

- The number of people using community alarms in Europe will further increase from 21 million in 2005 to 26 million in 2020

3.3.2. Opportunities from ICT for active ageing

The development of age-friendly ICTs has a central economic significance for Europe[56], both for the productivity of the sectors of the economy where older workers use ICTs in their daily work and for the competitiveness of the European ICT industry itself. Accessibility and age-friendliness of ICT products and services has the potential to become a competitive factor, driven also by public procurement developments[57].

As Europe continues to move towards a “knowledge-based society”, the role of knowledge workers and information workers becomes increasingly crucial (OECD, 2001 a ). Overall, workers aged 50 years and older now comprise just a little under one-quarter of the EU workforce and projections based on population trends for the EU 15 suggest that the share of older workers may increase to almost one-third by 2021 (see Annex VII).

A growing mismatch in the labour market for ICT workers (and ICT literates) is being reported by major companies. But it also concerns smaller companies and the entrepreneurial layer in Europe. Particularly the gap between the skills of current and future IT workers and those sought by firms seems to be one of the main elements of concern in view of shrinking a labour market due to demographic effects. Immigration is one means of increasing the short-term supply of IT workers. But immigration alone cannot address the need for cyclical adjustments to the labour market.

Employers are increasingly forced to adopt internal strategies to address tightness in the labour market using the existing workforce in more effective and productive ways[58]. Within medium-/long-term solutions, firms can also focus on two complementary aspects: retaining (and training) their current workforce or attracting new skilled workers.

ICT can provide the necessary tools and levers to retain and re-train older workers providing them with better quality work and allowing them to offer their skills and expertise while respecting their life and geographical preferences (see Annex VIII).

Under the growing imperative to retain older workers and increase occupation rates and employability for older workers, opportunities for ICT in the field of active ageing emerge in:

eSkills and innovative ICT training : A range of different stakeholders are involved in building IT skills, with different incentive structures (costs and benefits) resulting in different human capital investment strategies. On the job training and life long learning has increased private returns which provides the necessary incentives for companies to invest in training and re-training older workers[59]. This is particularly relevant when confronted with ICT skills, since best use of ICT –as shown by a considerable amount of literature - also enhances productivity.

ICT training and eLearning are also key elements to enhance productivity of IT workers and the skill upgrading of all workers. They become even more crucial when linked to older age workers. However, testing of innovative training and eLearning schemes for older age employees and job seekers is important given the reduced attitude to use training in this age range (see Annex IX).

Innovative ICT-enabled working methods for active ageing : despite evidence showing possible decreases in productivity in the old age, mainly due to relative decline in physical and mental abilities[60], or mere obsolescence of competences assigned to older workers[61], there is a growing corpus of literature confirming that workers in older age can rely on their professional experience to adapt and compensate for declines in mental and physical abilities if assisted by suitable workplace and work method adjustments[62]. Innovative working methods also entail various aspects of work organisation (including labour laws)[63].

ICT-enabled working environments : ICT’s functionality and flexibility makes it possible to design work in ways that adapts to the physical and cognitive changes that occur with increasing age. Some ICT features may also pose new risks, however. For example, the heavy reliance on visual displays, keyboards and mouse-type input devices might be at variance with some of the age-related changes in physical and cognitive functioning. Standard personal computers and operating systems typically now have a number of built-in accessibility features [64] .

3.3.3. Opportunities from ICT for social participation

As Europe’s population ages it is essential that elderly people remain active members of society so that society can benefit from their experience and wisdom. Moreover, a major issue confronting many elderly people is the loss of social contacts over the years, in particular for people with limited mobility and in rural or scarcely populated areas.

ICT can contribute to helping elderly persons to maintain their mobility and to stay involved in their communities and the worlds of work and employment, maintaining the links to social networks and places that elderly people have built up over the years as well as contact with relatives through tools such as email, bulletin boards and remote presence and multi-media conferencing facilities. Promoting inclusion and participation of older people in society at large, will improve their quality of life[65], generate new opportunities for involvement in leisure, sports, travel & tourism, and civic participation as well as help avoid social isolation.

It is clear that technology on its own cannot tackle this isolation, but it can, in the form of accessible and user-friendly networking and communication tools, provide a substantial contribution to address it.

New opportunities in information, training, travel, leisure, community and public services are expected to emerge notably on the basis of television once this is going to become a digital and interactive platform, provided digital interactive TV is made easy to use and accessible for all, in particular for the growing group of elderly people with some visual, hearing or dexterity problems.

Accessibility Planning at Your Fingertips

Many elderly users, especially those with disabilities, are prevented from going out shopping, visiting public parks, theatres, etc. because they are unsure about the accessibility of their trip. Currently, the simplest of excursions can involve military-scale planning to ensure that the proposed journey is feasible. Will the next bus be wheelchair friendly? Is there anyone available in the supermarket to help with the shopping?

MAPPED , an FP6 project, is developing an intelligent system that will empower the impaired elderly to increase their autonomy and to play a full role in society. The idea of MAPPED is to allow the user to plan and re-plan excursions while they are on the move. Therefore the user interface has to be mobile.

The system is based around a web browser running on PDAs or smart phones, initially incorporating audio output to facilitate the visually-impaired, and voice command recognition for ease of use. To extend the range of users, later in the project other assistive technologies will be added that can control the interface (e.g. Headmouse). Localisation features are also included. For instance, if the user indicates that they are at the door of a certain establishment (pub, coffee shop, etc.), MAPPED will provide all the accessibility information they need to go inside.

Mobile Personal Assistant for Travel Information

Also concerned with mobility, ASK-IT is developing working personalised route guidance services for elderly persons and people with impaired mobility. These services will provide relevant and real-time information, primarily for travelling, but also for use at home and at work. The services are being demonstrated in eight major European cities, using a platform developed under a previous research project IM@GINE IT. For example, ASK-IT could assist an elderly traveller to find the right bus stop at an airport and then tell them when to get off to find a hotel or restaurant with accessible facilities. While visiting a town, the user will be able to use their mobile phone to request information about local facilities, including whether or not they are accessible to him/her. The profile stored on the mobile device could include parameters such as the turning radius of their electric wheelchair, for instance, so that restaurants meeting these specific needs are selected.

3.4. Suppliers and providers

Suppliers, service providers and professionals are of many different types as indicated in Figure above.

They comprise ICT industry (for mainstream products and services; electronic communication services and infrastructure providers; ICT assistive technology industry) the eHealth industry; health care institutions such as hospitals; social care institutions and social care providers; insurers and financial institutions; entertainment industry, etc.

The involvement of suppliers and providers in ICT solutions for ageing is showing two trends: changes in supply-side fragmentation and mainstreaming.

3.4.1. Changing patterns of fragmentation

The advent of new ICTs (the Internet, large scale management software and solutions to interoperability) is becoming one factor for service providers to restructure their back-office functions (e.g. integrated health and social care) with larger productivity gains; to allow senior users to be better and more directly connected to the services; and to move into the provision of new products and services for enhanced social integration.

ICT solutions are expected to shift health and social care provision towards more cost-effective preventive models. Much of today’s evidence for this comes principally from the US. Most strategists, policy-makers and experts, however, agree that the findings developed there in the early part of this decade can be readily extrapolated to the European context. An estimated 30 to 40% of every US dollar spent on health care, or more than half-trillion dollars per year, is spent on costs associated with “overuse, underuse, misuse, duplication, system failures, unnecessary repetition, poor communication, and inefficiency”[66].

Most health services will go through some form of a gate keeper system, where primary care providers, following guidelines, refer to secondary or tertiary care. This will also amplify opportunities for new market creation in the care domain[67] specifically addressing integrated care solutions in support of ageing.

Another factor influencing fragmentation in the sector is deregulation or changing regulations that aim to stimulate competition amongst care providers and the rising interest of private equity capital, which is already leading to consolidation in some countries.

As regards the ICT suppliers a distinction is made between mainstream ICT companies (providing general purpose consumer and workplace technology such as PCs, intelligent environments, broadband), dedicated assistive technology companies ( providing assistive devices such as screen-readers or ICT-enabled wheelchairs) and health IT companies (dedicated health IT solutions and devices). On the one hand, the presence of the mainstream ICT companies is fairly recent and still emerging. On the other hand, the assistive technology and dedicated health IT industry are present since long but represents a fragmented sector with many small enterprises. It is not clear yet whether this fragmentation is starting to change[68].

A specific challenge of the ICT assistive technology sector is to enhance synergies with mainstream solutions including standardised interfacing with mainstream technologies. By incorporating accessibility requirements into mainstream ICT products and services better interfacing with more specialised assistive technologies is expected to become possible. Assistive technology manufacturers and distributors rarely address the European market as a whole but predominantly address local, regional or national markets and tend to be specialised in a particular niche or sub-sector.

The ICT market addressing the needs of senior users is still in its nascent phase and does not yet realise its full potential. Traditional suppliers and providers have conceived the needs of the ageing society but are not using a systemic approach, and still largely still developing tailor-made solutions (whether addressing assistive technologies or specific health care services).

3.4.2. Mainstreaming the age factor

The mainstream ICT industry is increasingly interested in the ageing market because of its growing size and buying power as illustrated before. ICT enables new services which are more customer-centred and more responsive to social needs, as well as opportunities for products to be designed around the needs of the growing ageing population. This offers the perspective of mainstreaming the ageing factor into its general purpose products and services . This new perspective entails a change in roles and responsibilities of all the actors involved in the design and provision of ICT products and services for older people.

Mainstreaming the aging and disability factors has important implications for eAccessibility: responding to the needs of the ageing society entails a shift in the design philosophy of ICT industry for mainstream products , insofar as the needs of older persons and persons with disabilities will need to be incorporated upfront into the design of products and services due to a growing market share of ageing customers. This also implies costs reductions in the delivery of eAccessibility, thriving on larger economies of scale for accessible products due to increased demand from the ageing population.

Moreover, it has often been shown that products and services that have been designed to be eAccessible, become easier to use for customers in general, not only for people with special needs and can thus significantly the mainstream market.

Related to this, when the design of a product or service takes account of all users' needs, the potential of advantages for providers is high[69]: increasing the number of potential users and thus of sales, improving customers satisfaction, improving competitiveness, anticipating changes, improving public image.

While the eHealth technology supply side is also still dominated by small and medium size enterprises, the current trend shows an increased interest from larger companies. Amongst larger companies there are a small number of European companies which enjoy a strong global position in the ICT health market and new entrants such as telecom service providers which are increasingly interested in this field.

An example is the recent creation of the Continua health alliance , initiated by Intel, which has been established to help address future health and social care challenges. The collaborative industry organization is dedicated to bringing together standards and diverse technology to create new health care solutions. The Continua Health Alliance envisions personal tele-health systems that combine diverse products and technologies to enable better personal health care for people worldwide. Founding members include Avita, Body Media, Cisco, GE, IBM, Intel, Kaiser Permanente, Medtronic, Motorola, Nonin, Omron, Panasonic, Partners Healthcare, Philips, Polar Electro, RMD Networks, Samsung, Sharp, Tunstall, Welch-Allyn, and Zensys (http://www.continuaalliance.org/home)

Another example, from the USA, the Center for Aging Services Technologies (CAST) is leading the national charge to develop and deploy technologies that can improve the aging experience in America. CAST has four focus areas:

- Driving a national vision of how technologies can improve the quality of life for seniors while reducing healthcare costs

- Accelerating technology R&D pilots with seniors to fulfill this vision

- Advocating to remove barriers to the rapid commercialization of proven solutions

- Promoting national dialogue about standards to ensure interoperability and widespread access to aging services technologies.

Established in 2003, CAST has become a national coalition of more than 400 technology companies, aging services organizations, research universities, and government representatives. (http://agingtech.org/about.aspx)

In summary, the newly emerging value chains are expected to be characterised by:

- seamless integration of: a) user; b) formal and informal intermediaries; c) health and social care providers; d) technology, and service providers (e.g. telecom operators); e) local/regional authorities;

- redesigned roles and responsibilities between insurers and health service providers in the emerging service market for front-desk assistance;

- exploiting the EU internal market in the cross-border provision of services while safeguarding patient data security across national and organisational boundaries;

- incorporating the perspective of ageing users into the design, production and delivery of mainstream products and services (‘embedding inclusion’).

4. BARRIERS TO ICT FOR AGEING

Currently, the ageing market fails in unchaining its full potential for the several reasons that are mostly related to the common characteristics of product/service delivery analysed previously. The relationship between these characteristics and market barriers / failures is summarized in the table below.

Characteristic of product/service provision | Market Barriers / Failures |

Information asymmetries, relatively weak user | Information failures leading to slow adoption of solutions and combined to to lack of skills to choose and use solutions, e.g. where users have reduced cognitive capabilities, limited user financial means, limited user voice, and lack of motivation. Older people lag behind in basic access (only 10% of persons over 65 used the Internet). A resulting barrier can be fragmentation of the internal market, where there is policy intervention to protect the user which is not coordinated between Member States. Due to the degree of sophistication of tools and services for the ageing users there is a risk of information failures between actual users needs and the providers (as there is intermediation), resulting in unsuitable products, high prices, and lack of competition. |

Intrinsic or persistent diversity | Fragmentation of industry and often tailor-made solutions at local and regional level, lead to lack of economies of scale; Fragmentation of user organisations; lack of insight into progress e.g. relative to other countries, lack of provision of more advanced health services or social services or assistive devices. |

Political and legal frameworks | Regulatory barriers fragmenting the internal market for accessible information society services for the ageing population: fragmentation of reimbursement and certification schemes, lack of interoperability, and high costs of development and validation Regulatory barriers national or sub-national level: limited reimbursement of innovation; slow certification. |

Technology: access, accessibility, change | Access barriers tend to be related to the characteristics of the user (e.g. is lacking finance, skills or has an impairment). Accessibility barriers can be seen mainly as a technology issue, either inadequacies of the state-of-the-art of technology itself, or in the technology design: inaccessible devices from PCs and television sets to micro-waves, inaccessible websites, insufficient application of design for all. Speed of technology development can be much greater than speed of adoption or adaptation of service delivery leading to a supply-demand mismatch. |

Disconnection of investments and benefits | Time-lag between investments and benefits leads to risk-averse behaviour; organisational / value-chain gaps lead to self-centred or non-inclusive behaviour and sub-optimisation of solutions; lack of critical mass to achieve network effects lead to proprietary solutions, and – notably – the lack of provision of sufficiently rich content and services. |

Interoperability | Lack of interoperability between services (e.g. health – social), between devices and systems (e.g. need to re-enter data with resulting errors), and across borders (barriers to internal market, freedom of movement). The reasons are various, including historic choices, (maintaining) dominance in national markets, speed of technology development, localised and tailor-made solutions. |

Value chain coordination | Coordination failures such as between users and industry or between users and authorities. |

Ethically conditioned | Uncertainty in the market as regards ethical acceptability leading to under-investment and lack of take-up. |

These market barriers / failures can be grouped into broad categories, as illustrated in Figure and detailed in the sections below:

Barriers related to lack of awareness and common strategies

10. Barriers related to enabling conditions

11. Barriers related to take-up

12. Barriers related to the development of future solutions.

Barriers in these categories can be inter-related. For example, lack of awareness amongst authorities can lead to lack of formulation of a common vision and thereby lack of willingness to invest in pilots that would promote take-up and resolve interoperability barriers. Consequently a key enabling condition, interoperability, is not put in place and as a result there is stagnation in the maturation of the market.

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Figure 5 Barriers to ICT for ageing

4.1. Barriers related to lack of awareness and common strategies

4.1.1. Lack of awareness

Lack of awareness by the European ICT industry, intermediate and final users of assistive technologies for elderly people has been a key factor why the senior market for ICT has not been so far adequately addressed.

Despite the proven potential of telemedicine and home care support systems, adoption still suffers from lack of sufficient awareness among potential providers and authorities. Despite growing demand for ICT for ageing, there is still no widespread realisation of potential profits amongst industry.

The lack of awareness among the European ICT industry players, the adopters of ICT inclusive technologies (e.g. employers in ICT-using sectors) and the final users has also led to the fact that the market of seniors has not been so far adequately addressed by manufacturers and service providers (e.g. the design for all approach has not gained enough recognition).

More than 60% of persons over 50 in Europe feel that their needs are not adequately addressed by current ICT equipment and services. Over 10 million of them are potential customers of new mobile phones, computer and Internet services[70]. More specifically, the provision of ICT for older people is hampered by lack of awareness of[71]:

- Socio-economic circumstances of their lives and their income levels that may impede access to ICT equipment and services;

- Knowledge, education level, learning capabilities and personal attitudes and sensitiveness towards ICT;

- Physical and/or cognitive functional limitations coming with age.

In labour markers, while age management is becoming an increasingly visible theme in human resource circles, so far neither employers, employer organisations nor the other social partners in the EU have given much direct attention to the specific theme of ICTs and work-related active ageing. Part of the explanation for this is a lack of awareness amongst employers of the issues for older workers around ICTs and how these can be addressed.

Finally, as regards users themselves, US data suggests that levels of awareness and usage of the built-in accessibility features of mainstream technology vary considerably amongst those who could benefit from them (study regarding the workplace, see Annex XII).

4.1.2. Lack of stakeholders involvement, cooperation and common strategies development

In addition there are market barriers / failures due to lack of coordination and involvement of stakeholders, lack of leadership and lack of common vision and strategies.

Such involvement and cooperation or the lack thereof relates to most of the barriers addressed here: users are not provided with solutions and the development of the market is hampered due to a lack of shared awareness raising, agreed approaches to regulation and interoperability, deadlocks in resolving reimbursement questions, common understanding of user requirements, transfer of design for all expertise across the value chain, synergies in research agendas. This is only a partial list of key agenda points that should be addressed by strengthened cooperation and coordination amongst actors.

Cooperation and coordination failures not only occur across the value chains, but also within each group of actors – industry internal, users amongst them, and authorities.

Users – providers cooperation is in particular an issue in technology development. Unless technology is developed in close collaboration with users and other stakeholders, it will not likely answer to the specific users' needs and receive market acceptance. This is even more true knowing the diversity of the older age group, from "young" older in good health till "old" older with some degree of disability or illness. Furthermore, the involvement of the carers, both formal and informal, is necessary to ensure the acceptance of the technology by the close circle of persons having an active role in the day to day life of the older person. A better, more systematic involvement of relevant stakeholders will also help in a better acceptance and take up of technologies for elderly people.

Industry internal cooperation is amongst others an issue in the adoption of design for all. This concept means that a chain of professionals (i.e. architect, software programmer, engineer) need to work together, adapt and develop expertise. Failure to achieve this collaboration is one reason why the take-up has so far been limited.

4.2. Barriers related to enabling conditions

4.2.1. Regulatory barriers towards a single European market of ICT for ageing

Regulatory barriers towards ICT for ageing exist in several areas: the fragmentation of reimbursement and financial support schemes for users; the uncertainty about certification of solutions notably whether they are medical or not; minimal technology requirements, notably as regards interoperability and accessibility.

Different reimbursement and certification schemes: the provision of services is subject to different national and even local regulations, i.e. different reimbursement, service delivery and certification schemes. This constitutes a key impediment for critical mass, since most products and services are developed to match only national or local needs, where the market is very limited, thus leading to higher costs and low levels of investments. Moreover, without proper regulatory approaches and replication of initiatives at EU level, potential tailor-made solutions from local authorities combined with differing national certification and reimbursement schemes for ICT solutions might only add up to the technical and regulatory burden of the sector with no benefits for the final users.

A particular consequence is the fragmentation of the assistive technologies industry, largely confined to national borders due to the lack of harmonisation of reimbursement schemes, causing lack of economies of scale and resulting in unnecessary high costs for users and insurers. As of today this industry largely does not benefit from the internal market.

Uncertainties exacerbate this, e.g. about what should be financed collectively rather than by the individual as well as about certification (e.g. medical certification of independent living and fitness / health monitoring devices). Uncertainty also exists as regards whether a service is accepted as a medical service. More specifically, tele-health is even considered legally as a medical service in some countries.

Current evidence shows diverging national legislative interventions and standards on e-Health interoperability, on e-Accessibility, which constitute a potential barrier to the uptake of ICT products and services for the ageing society.

Legislation that is not ICT specific can nevertheless have important consequences for older people and ICT, but interpretation is still emerging. An example is anti-discrimination legislation, e.g about reasonable accommodation at the workplace where often ICT plays an important role. In this respect technical barriers in accessibility of technologies can have regulatory implications. The lack of accessibility of services and ICT tools might give rise to regulatory intervention if the market is not able to cope with this need. This is reinforced by the fact that, through ICT, a number of public services are delivered. In this regard, a case of discriminatory treatment might emerge insofar as equivalent services are not provided to the excluded users.

ICT specific legislation for electronic communications and for ICT equipment, specifically addressing people with disabilities regardless their age, is highly relevant given the strong linkage between age and prevalence of impairments. However, barriers are signalled due to perceived lack of effectiveness, slow progress in implementation or lack of agreement between users and providers about the implementation of such eAccessibility-related legislation (i.c. regulatory provisions for disabled people in the electronic communications package[72] and in the radio equipment and telecommunications terminal equipment RTTE directive[73] ).

INCOM, the Inclusive Communications subgroup of the eCommunications Framework Committee (COCOM)[74] has issued two reports on the access and use of electronic communications by users with disabilities. These reports, in 2004 and 2006, identified the major problems that people with disabilities face when using electronic communications as well as the relevant applicable legal provisions from the electronic communications package ensuring protection of the interests of end-users. The reports found as main outcome that users with disabilities – and thus, often elderly users - are placed in an overall disadvantaged situation in Europe, in relation to availability, choice, quality, price and in particular access to electronic communications.

The existence of regulatory barriers heavily limits the profitability of value chains for ICT products and services for ageing

4.2.2. Market fragmentation and lack of interoperability

The market environment for ICT products and services relevant for older people is highly diverse, and this diversity has led to complex and fragmented demand and supply, lacking the adequate scale for a profitable uptake and a niche approach by companies. Different actors are involved in the development and provision of ICT inclusive products and services, and a variety of social and local factors of technological, psychological, sociological, political, economic nature influence uptake. This creates market barriers in terms of commercialisation and in terms of overcoming technical barriers notably interoperability.

Interoperability problems concern both the general field of interoperation between assistive technologies and mainstream technologies as well as the specific area of eHealth products and services. Lack of interoperability of existing assistive and health-related ICT with mainstream technologies gives rise to sub-optimal dimensions of the market which results higher prices for users and lower profits for suppliers and service providers. Without proper market incentives, companies do not tend to tackle the issue of interoperability by themselves.

Interoperability failures also manifest themselves also in lack of seamless interaction of technologies to deliver services to the user independently from the technological platform of access. These barriers concern both the "front-desk" service delivery (the "how" to access the service) and the "back-office" organisation of services and workflows (e.g. health services supported by ICT need to comply with interoperable protocols as well as need to rely on interoperable technologies for "back-office" and patient access to the service, independently from location).

It has been estimated that there are currently more than 20,000 assistive technology products available in Europe. Although there is no reliable estimate of the numbers of people actually using assistive technologies, it is widely accepted that there are significant market and supply failures in Europe, which are partially due to lack of interoperability between such products and mainstream ICT environments.

Interoperability has to address many levels: political, organisational, legal and regulatory, semantic, and technical. Interoperability should be ensured in key areas such as smart homes (incl. sensor networks), integrated social and health care, eHealth-related care for chronic diseases – which particularly affect elderly persons, and between assistive technologies and mainstream technologies. Interoperability would require de facto or de jure standardisation on a wide range of technical, service delivery and process issues (e.g. quality control) – see also below.

Interoperability problems hinder the development of services and products for ICT and ageing, thus reducing the benefits to users and the profitability to providers.

4.2.3. Lack of basic access to the information society – digital divide

Older people in particular can miss out on the benefits of the information society because they are lacking basic access to communication networks, e.g. broadband, and information technology, e.g. PCs. Solutions can only bring benefits if users have access to basic ICT facilities. Only 10% of people over 65 use the Internet against 68% of those aged 16-24[75].

Reasons most often are lack of motivation, lack of financial means, and lack of skills. This in particular hampers the social participation in the information society. However, findings from the USA have also shown that once this digital divide has been bridged, these users that were once lagging behind become at least as intense users as the earlier adopters of online public services, communications, and online health.

4.2.4. Lack of consideration of ethical issues

Ethical issues encompass dealing with sensitive problems such as informed consent, protection of personal data, non invasion of the private sphere, respect for dignity and integrity of the persons.

The European Group on Ethics in its opinion of March 2005 on "Ethical aspects of ICT implants in the human body" has listed fundamental ethical principles. Though applicable to ICT implants in the human body these may also give guidance to ICT and ageing:

- non-instrumentalisation: ethical requirement not to use individuals merely as means but as an end of their own;

- privacy: ethical principle of not invading a person's right to privacy;

- informed consent: ethical principle to not expose persons to treatment or research without their free and informed consent. Therefore a strict preliminary evaluation should be performed to ensure an informed consent;

- non-discrimination: ethical principle according to which a person deserves an equal treatment unless reasons exists that justify difference in treatment;

- equity: ethical principle that everybody should have fait access to the benefits under consideration;

- precautionary principle: the basic constituents and the prerequisites of this ethical principle are the existence of a risk, the possibility of harm and a scientific uncertainty concerning the realisation of this harm. There must be a proportion between the potential harm and the "zero risk" situation: the acceptable risk should be identified with regard to the respect for the human body.

These principles are based upon more general ethical principles such as human dignity and human inviolability. Human dignity is a universal, fundamental and inescapable principle. Article 1 of the European Charter of Fundamental Rights states that "human dignity is inviolable". Dignity is used to convey the need to respect people's autonomy and rights. On its side, the principle of human inviolability limits the freedom to use one's body by prohibiting turning a body into sources of profit.

When ethical concerns are ignored or not fully taken into account by the technology developed they lead to a rejection by the older person and his informal carers and then constitute a barrier to market uptake.

4.3. Barriers related to take-up

Barriers to take-up, beyond lack of awareness, can limit investments. One set of reasons are the various forms of investment - benefit mismatches (time-lag, organisational / value chain, network effects). Another reason is lack of insight into the returns on investment, whether in terms of cost-effectiveness or quality of life. All these barriers result in uncertainty of investors to put their money to ICT and ageing, insurers to include solutions in reimbursement schemes, suppliers and providers to step into the market, and for users to adopt solutions. Consequences are lack of access to finance, fragmentation of approaches, sub-critical or too costly solutions, lack of service and content innovation, and inadequate service for users.

4.3.1. Lack of exchange of experiences and reference implementations

Generally there is a lack of reference implementations notably in independent living and long-term chronic care management and in active ageing at work. As of today there is little exchange of good or bad practices. E.g. smart home / independent living solutions are not yet recognised on objective criteria or given wide visibility such that replication is enabled.

Most of the advantages in terms of productivity and economic growth, in a period where the "baby boom" generation is heading for retirement, are coming from increasing older age participation in the labour market. However, there is a limited exchange of best practice on:

- Awareness of practices and policies at EU level for best retaining older workers (e.g. those over 55);

- Comprehensive approach towards active ageing at work including coherent frameworks for long life learning and digital literacy;

- The need to adapt labour market regulations to innovative concepts of work-organisations and work-environments;

- The design of new methods of work and innovative work-environments for elderly workers enhancing their quality of life at work by better adoption of accessible ICT.

4.3.2. Insufficient validation of solutions, lack of critical mass

Solutions often stay in laboratory stage or remain small scale as the critical mass is lacking to scale them up for large scale deployment, due to the various forms of fragmentation. This seriously hampers large-scale assessment of cost-benefits and quality of life impact and achieving economies of scale and corresponding cost reductions. The situation is somewhat improving though in the eHealth area, but socio-economic evidence of solutions in ICT for ageing in general is still very limited. Scaling up is also severely hampered by lack of critical mass to validate interoperability and arrive at common specifications.

4.3.3. Lack of common approaches and coordination of take-up of innovation

Generally, take-up is hampered by lack of definition of and agreement on common approaches, ranging from common specifications for platforms, interoperability,