The Asia-Pacific’s growing silver mine

"The number of older people in [Asia] is expected to more than quadruple to over 2.45 billion by 2050."
Zilla Efrat, Freelance journalist

According to the United Nations Economic and Social Commission for Asia and the Pacific, the region is home to over half the world’s 60+ population. It is experiencing population ageing at an unprecedented pace on the back of growing life expectancies and falling fertility rates.

The number of its older people in the region is expected to more than quadruple to over 2.45 billion by 2050. By then, almost two thirds of the world’s older population will be living in Asia-Pacific.

Of course, each country will experience different rates of aging and face different fiscal, social and political challenges in managing this. But all will have fewer younger people in their workforces to support this growth.

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Philip O'Keefe, lead economist at the World Bank, says East Asia has had the most rapid fall in fertility rates of any region in history.

“For example, in the 1960s, the Thais had six kids,” he says. “Nowadays they have 1.5 kids on average.”

“The classic family in China has four grandparents, two parents and one child. That one child can be as loving as you like but not able to support all those grandparents.”

The reasons? “China had a one-child policy,” O'Keefe says. “Vietnam had a two-child policy. And for the rest, as they get richer, more urbanised and their women become more educated, they tend to have less kids. That’s true worldwide.”

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DECLINING FAMILY CARE

In the past, older people in the region were usually looked after by their families but this is also changing.

“While still much higher than in the West, the share of multigenerational households in countries like China, Thailand, Indonesia and Korea is falling rapidly,” O'Keefe says. “In the 1980s, around 80 per cent of Chinese households were multigenerational – that is, they housed at least three generations.”

“Nowadays, it is about 40 per cent. The same is true in Thailand. Korea has fallen more dramatically to 28 per cent.”

One cause is affluence. “If they can afford to live separately, most people choose to do so,” O'Keefe says.

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“But there’s also a lot of migration. In China, for example, you’ve had about 260 million rural people move to urban areas. Most were young, working age people who didn’t take their parents with them.”

“So in many villages you have lots of elderly people, often with grandchildren to support because the parents didn’t take the kids to the city. In some countries like the Philippines, you also have an external migration.”

It’s mainly the richer Asia-Pacific countries which have aged care facilities for their greying populations.

“In places like China, they either get not much care or it is home-based care to the extent where they do get it,” O'Keefe says.

“But the Chinese government now has an explicit target: 90 per cent of elderly people should receive support in the home; 7 per cent should get community-based care (still in the home but accessing day services like a clinic). Only 3 per cent should be actually cared for in facilities.”

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OPENING GAPS

For businesses, these trends spell opportunity. Dugald Anthony, Austrade’s adviser responsible for health and aged care, says “there are lots of lifestyle opportunities in Asia-Pacific, whether it’s in travel, well-being, nutrition, complementary health services or financial services.”

“Just think what any affluent aging person who wants to remain independent, healthy and informed would want.”

O'Keefe says there’s huge potential in home-based services such as home meal delivery or nursing care as well as in the aged care and long-term care markets. Recent changes in China favour the public-private partnerships model of delivering services.

“That will open things up massively but there are many hurdles to overcome, as some companies have already discovered,” O’Keeffe says.

“The public sector providers in hospital care – and to a lesser extent in aged care – have such an advantageous position. They’re almost like public sector monopolies and are hard to compete with, except at the very high end of the market.”

Kim Walker, founder of Singapore-based Silver Group, bemoans that when people think about the older market, they immediately think about retirement homes or adult diapers.

“The more you single out older people as your end users, the narrower your focus and the less likelihood of success,” he says. “Regardless of age, people still need to clothe, look after and entertain themselves. The opportunities are much broader and bigger.”

O'Keefe also sees gaps for financial services companies in Indonesia, Thailand and Malaysia.

“Many older people in these countries have low financial literacy, which normally means they’re hugely underbanked,” he says.

Similarly, he expects demand for workplace design, ergonomics, technologies or basic structures, such as ramps and lifts, as many organisations make adjustments to accommodate older workers or customers.

GRAVITY WINS

Austrade’s Walker believes opportunities lie in adjusting everyday products so older people can still access them easily.

“We start to experience physiological decline from around the age of 50. But the average life span is around 80 or 85,” he says. “That means you are talking about a period of around 30 to 35 years.

“We need to understand the physical, sensory and cognitive changes of age, design products and services to accommodate these and present them in a way that doesn’t stigmatise people on the basis of their age.”

“While attitudes differ from country to country, the physical effects of aging will touch most people at some time. You can forestall them but gravity wins.”

But Walker warns against having preconceived assumptions.

“One of the things we know for sure about the aging population of today is that it will not be the same tomorrow,” he says. “It changes every day as new people enter that segment. They bring with them different values and observations towards age.”

Liu Chuyang, Australia’s Trade Commissioner in Beijing responsible for the “silver economy” and aged care, expects “smart health”, or e-health, to be growth areas in China, along with training and skills development.

“All sectors of China’s soft infrastructure are lagging behind its hard infrastructure,” she says, noting there are big skill gaps in new sectors like health, senior living, training managers, carers and nurses.

“Statistics show that China is lacking 90 per cent of the carers it needs.”

For those looking to enter the market, Anthony recommends doing thorough research and tainge a strategic approach.

“There’re lots of opportunities but also lots of noise,’ he says. “This requires a laser-like focus on which markets to enter and regular travel to meet prospective partners and build relationships. And always get good advice!”

Zilla Efrat is Sydney-based freelance journalist and editor