The Peninsula

Reassessing the Role of the Elderly in Korea's Digital Economy

Who will shape the digital market evolution? You might assume that it is the tech-savvy youths. But Korea shows that the “yold” generation (the young-old, born between 1946 and 1964) has much more to offer to the digital transformation than people presume. Likely to retire around 2025, this cohort will have disposable income worth around USD 140 billion by 2030 – an average yearly growth of 13% from the amount spent by the “silver generation” in 2020. And unlike older generations, they are familiar with digital platforms and will actively seek out services online.

Experts suggest that Korea can leverage demand created by the “yold” generation to introduce new products that elevate industries like telecommunications. In turn, people hope that the private sector’s active role in catering to elderly consumers might reduce the anticipated caretaking burdens on the public sector.

However, a major point of concern is the persistence of elderly poverty in South Korea. Among OECD member economies, Korea suffers from the highest relative elderly poverty rate (number of people making below 50% of the median income) of 43.3%. The persistence of this trend might cast a gloom over the prospect of elderly consumers creating demand for the digital transformation.

There is some hope that the tech-savviness of the generation currently approaching retirement might create opportunities for continued employment in occupations that offer higher incomes than menial and low-paying positions that retirees currently occupy. But this also underscores that public policies to improve the livelihood of retirees might be both a moral duty and a boon to a growing economy.

This briefing comes from Korea View, a weekly newsletter published by the Korea Economic Institute. Korea View aims to cover developments that reveal trends on the Korean Peninsula but receive little attention in the United States. If you would like to sign up, please find the online form here.

Korea View was edited by Yong Kwon with the help of Janet Hong, Yubin Huh, and Mai Anna Pressley. Picture from the flickr account of Bridget Coila