It is a large urban area in a small, densely-populated country. That population is aging rapidly, as births and immigration fail to counterbalance rising life expectancy. By 2030, fewer than two people of working age will be available to generate the economic activity that supports each retired person. The cost of caring for those retirees risks throttling the economic dynamism at the heart of the region's success.
What is a community to do?
If the community is the Eindhoven region of the Netherlands – a three-time Top Seven Intelligent Community – the answer is to collaborate on creating innovative solutions using information and communications technology. But then, that is Eindhoven's answer to most challenges. When the President of the United States called in his State of the Union address for America to "win the future" and "out-innovate, out-educate and outbuild" the rest of the world, I suspect the people in Eindhoven were nodding their heads.
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Take just one example. As the population ages, healthcare costs in the region are forecast to rise from €17bn now to €25bn by 2020, in large part because of the need for 100,000 new healthcare workers to meet demand. The health sector in Eindhoven already employs about 17,000 people in 825 businesses. So while rising costs are a threat, they also present an economic opportunity.
To address both, a public-private innovation group called Brainport has created a project called Brainport Health Innovation (BHI). Its goals are to foster increased well-being for the elderly and chronically ill, to reduce healthcare costs and increase productivity, and to do so while generating economic opportunities for the region.
Specifically, BHI seeks to improve productivity by 1 percent per year, which would reduce demand for new personnel by 25,000 and save about €750 million. Meanwhile, BHI’s work expects to generate 150 new companies employing at least 10,000 people.
If you do the math, you find that BHI plans to cut 15,000 jobs out of the expected surge in healthcare employment demand. Huh? A project devoted to economic development is trying to reduce employment growth? What's that about?
It is about the quality of employment. BHI aims to create more jobs requiring high skill levels, which contribute to rising productivity and lower costs, and fewer low-skilled, low-paying jobs. The economy as a whole will benefit, and the region's position as an innovator in high-tech systems will grow stronger. An obstacle, rising healthcare costs, will become a source of new opportunity.
BHI has brought together hospitals, insurance companies, technology manufacturers, local government and individual patients to design and implement realistic technology solutions that offer a profitable operating model. In the works are the Living Lab eHealth project, in which aging people test new services and products introduced by the BHI participants, including remote monitoring and diagnosis over broadband.
Another project is called Care Circles. It aims to more efficiently share capacity among providers of home care for the elderly and disabled. The longer such patients can be cared for at home, the happier they generally are and the lower the costs of their care. The nighttime hours represent the biggest challenge. Through Care Circles, all nighttime calls go to a central dispatch, which uses data systems to match the location to the partner organization closes to the patient. The result is better quality and availability of care at a lower total cost.
Neither project sounds like something to light up the night. But that is how Eindhoven does things. Innovation is rarely about nerdy geniuses writing code in their basements, nor about government-financed, billion-Euro moon-shot projects. It takes place at the local level, through patient, collaborative effort that racks up small victories, one after the other. A one percent productivity gain per year may not sound like much. But accumulate it over a decade, and it's the next best thing to a miracle.