|A private hospital in Singapore. The healthcare industry in Asian economies will be a major beneficiary of the region’s rapidly aging population.(AFP)|
Often moneyed and with plenty of spare time, older Asian people represent a huge opportunity for businesses in sectors ranging from the obvious, such as healthcare, to the less immediately visible such as smart homes and telecommunications. In many economies in Southeast Asia, the ratio of older people to the working-age population will triple by 2050.
The ratios will vary from 16 older people to every 100 working-age population in the Philippines to as many as 70 in Japan. The population of the Chinese mainland will be, on average, older than that of the United States or Australia by the end of the decade.
By 2020, one in five people in Hong Kong, Australia, South Korea and New Zealand will be above the age of 60.
In recent years, much of the discussion surrounding the issue of a growing population of elderly citizens has been focused on how much they will affect economic growth. Older people tend to generate less economic activity and taxes while requiring greater spending on healthcare and services.
On the other hand, older populations also represent a significant business opportunity.
“By 2030, all baby boomers will be aged over 65,” says Janice Chia, founder and managing director of Ageing Asia, a Singapore-based consultancy. “As they age, their attitude, behavior, wants, likes and dislikes will determine whether businesses will be able to capture this lucrative market segment,” she notes.
“The corporate sector will start to integrate aging demographics and physiological changes associated with aging as key considerations for their business strategies, particularly in the development of new products and services across all industries.”
By some estimates, the “silver economy”, or economic opportunities arising from aging populations, could be worth $3.3 trillion per year by the end of this decade. Much of this money will be spent in Asia, both by the older populations directly and by the governments looking to take care of them.
The most obvious opportunity is for businesses that can tap into expanded healthcare spending. Just about every country across the Asia-Pacific region is raising the quality and reach of healthcare services.
For many of them, especially in the rapidly aging markets like China, the challenge is linked to the speed of the changes and the rapid increases in spending.
Developed economies like Japan and Hong Kong had the opportunity to deal first with the quality of care over the last century and then address the much higher cost of modern medicine, says Rafael Chomik, a senior research fellow at the Centre of Excellence in Population Ageing Research (CEPAR) in Australia.
Developing economies, which include most countries in the Association of Southeast Asian Nations (ASEAN) except Singapore and possibly Brunei, have to do both things at once.