AN AGEING population may be a concern and a challenge for many nations, but global professional services firm Deloitte says ageing populations will also generate a growth cluster of new business opportunities for this region - and Singapore, in particular.
In the third edition of its "Voice of Asia" series, which looks at the challenges and opportunities facing the region, Deloitte says those aged over 65 in Asia are the largest and fastest growing market in the world. They are expected to grow from a population of 365 million this year, to more than 520 million in 2027, to over one billion just after the middle of this century.
In fact, says Deloitte, by 2042, there will be more over-65s in Asia than the total populations of the Eurozone and North America combined.
And these over-65s will provide a target-rich environment of business opportunities, notably in the healthcare and related sectors.
Chris Richardson, Deloitte Australia economist, said: "Ageing populations may well be challenging to some nations, but they will also present some incredible business opportunities within those same nations. Our analysis shows that ageing will produce some very large winners at the industry level, particularly in Asia."
Deloitte's report acknowledges that ageing will slow overall economic growth rates in a number of countries. Hong Kong is set to be hit harder than anywhere else in Asia as its workforce ages fast, but the likes of China, Vietnam, and Australia will all see their economies witness slower growth due to their ageing population.
Singapore, in particular, is already grappling with a rapidly ageing population and an extremely low birth rate; and its government has suggested the country will age more rapidly than any other society in the world, Deloitte's report notes.
But, these ageing populations will also turbocharge a range of specific markets at the same time. Deloitte posits that the money being spent by and on ageing populations will grow even faster than Asia ages, because the impact of new technologies and the ongoing management of increasing chronic conditions means healthcare costs will rise faster than most other costs.
In simpler terms: with societies getting older and richer, they are more likely to need healthcare and pay more for it, but will also be better placed to pay; the growth of technology will make possible what the ageing population wants, allowing for more and more procedures.
Certain chronic conditions - such as diabetes and some types of cancer - are likely to be future drivers of healthcare spending, says Deloitte. As Asia lives longer, it is increasingly living with ailments that may not be life-threatening, but will require more care than otherwise. And many of the new business opportunities they drive will be much more recession-proof than average.
"When times are tough, you may put off buying new clothes or eating at restaurants, but chances are you won't put off treatment for a sore back or an infected tooth ... this points to a welcome advantage for businesses selling into these markets - they know the future looks bright. That's why the coming wave of growth in healthcare and related sectors will see a major shift in the spending habits of Asia, presenting a number of business opportunities as it does so," said Deloitte's report.
And private sector opportunities will grow even faster still, because stretched government budgets mean the share of health-related costs borne by taxpayers is likely to decrease in the decades ahead.
"The last factor is little understood. In most nations, taxpayers fund a larger share of healthcare spending than they do of other types of spending. However, with public sector budgets set to come under increasing pressure over time, more healthcare and related opportunities will come to the private rather than the public sector," Deloitte's report explained.
This means, some of the best bets businesses can now make involve embracing the customer trends Asia's sleeping demographic giants will send their way, repositioning their business models to take advantage of the "growth clusters" emerging across a range of sectors.
Tsuyoshi Oyama, Deloitte Japan economist, says: "As it is already increasingly evident in Japan, the surge in ageing-related opportunities will be evident well beyond healthcare. Rapid ageing in the Japanese population has changed the needs of people and the way businesses satisfy them. There has been increasing demand in sectors such as nursing, consumer goods for the elderly, age-appropriate housing and social infrastructure, as well as asset management and insurance."
As for South-east Asia, Loke Wai Chiong, Deloitte Southeast Asia Healthcare Sector leader and executive director at Deloitte Risk Advisory, says: "Ageing populations in Southeast Asia are driving up the demand for healthcare. Everything from diagnosis, (to) drugs, to devices, will have to evolve together with the shift in demographics. There is an ever-pressing need for a robust healthcare system to cope with the changing needs of patients.
"Healthcare systems in the region should continue to innovate to deliver higher value healthcare and rein in rising healthcare costs," Dr Loke added.
Singapore, in particular, will see growth in private healthcare, pharmaceuticals, biotechnology, and nutritionals and supplements being driven by increased healthcare expenditure arising from the greater prevalence of chronic diseases due to the rising proportion of senior citizens.
There will also be opportunities in the arena of asset management: with asset ownership levels among elderly Singaporeans relatively high, demand may increase among senior citizens seeking to manage their assets, generating opportunities in the financial services, insurance, and legal industries, Deloitte's report said.
Demand may also rise for childcare services, healthcare monitoring devices, assisted living technologies, care-giving services, retirement homes and hospices, as more families face a situation where fewer working adults are supporting both younger and elderly dependants.
Source: The Business Times © Singapore Press Holdings Limited. Reproduced with permission