Asia's ageing population: A golden opportunity for business

People take a break on bench seats at Tokyo's Sugamo district. PHOTO: REUTERS

One in five people on this planet will be aged 60 and over by mid-century, rising from 900 million in 2015 to 2.1 billion in 2050. Those 60 and older will soon outnumber children younger than five; in developed markets, the 65-and-over cohort already surpasses those under 15.

No region will be more impacted by population ageing than Asia. At 83.9 years, life expectancy at birth in Japan is one of the longest in the world. A quarter of Japanese people are over 65 today; by 2060 the proportion is projected to rise to 40 per cent. China is already struggling to address the needs of its massive, and often rural, ageing population. In South Korea and Singapore, the effects of the age wave are already obvious.

This unprecedented demographic shift raises important questions about the prospects for gross domestic product growth, the risks of spiralling health costs, and the adequacy of public and private pension programmes. But population ageing presents a golden opportunity as well.

Increasing longevity has spurred economic growth and opportunities for personal fulfilment. Older individuals are generally healthier than those in generations past, and they seek to remain engaged and relevant. Advances in bioscience offer the prospect of even longer and healthier lives. With their growing numbers, older adults represent a dynamic consumer and human capital resource. As markets evolve to meet their needs and aspirations, opportunities abound.

Charles Darwin recognised that survival is about adaptation to changing environments, a quality that is as imperative for companies as it is for species. Businesses have been at the forefront of industrialisation and innovation, developing markets and opening pathways for diverse stakeholders. Ageing is their next frontier.

Bank of America Merrill Lynch projects that the global spending power of those aged 60-plus will reach US$15 trillion (S$20 trillion) annually by 2020. In the United States, adults over 50 already account for US$7.6 trillion in direct spending and related economic activity annually, according to the American Association of Retired Persons. With its size and scale, Asia is central to the future of this global longevity economy.

Companies are developing age-friendly products and services in housing, transportation, entertainment and leisure. A stream of new offerings in biotechnology, devices, pharmaceuticals and care services focus on older consumers. In Japan, robot caregivers - "carebots" - have made headlines. A golden age for financial services is ahead, driven by an enormous increase in household financial assets.

But ageing adults are not only consumers - they are our only increasing natural resource - but also a talent pool that can power the businesses of the future. More and more are ready, willing and able to be deployed.

The emerging profile of older adults defies outmoded stereotypes of geriatric citizens weighing down economies. In fact, when older people actively participate, the benefits flow in all directions. They contribute experience to their workplaces and civic endeavours; financial security helps them bolster economies as taxpayers and consumers; engagement enhances their own health and wellness.

Older workers provide stability, nuanced thinking and institutional know-how. They serve as mentors and role models to younger counterparts. Age-diverse teams are more productive and often better problem-solvers than same-age groups.

For ageing individuals, the benefits of work are well documented. Research reveals that purpose enhances well-being and helps to stave off cognitive decline. A Yale study found that people who held positive views of their own ageing, such as might be fostered if their contributions were sought and valued in the workplace, lived on average 7.5 years longer than those with less positive outlooks.

Countries such as Japan and Singapore are re-thinking retirement norms and implementing policies to enable longer work lives. The private sector can do more as well. Businesses are uniquely positioned to change practices and attitudes - to champion the needs and wants, as well as the potential, of older adults.

The ageing megatrend will test the leadership of the private sector in Asia and across the world. Every business should prioritise a "longevity strategy" to capitalise on the demographic shift. Awareness should spread to every corner of every company. The issues and the potential are too big to ignore.

Now is the time for forward-thinking businesses to act - to realise a golden opportunity with benefits both to the bottom line and the broader society.

•The writer is chairman of the Centre for the Future of Ageing at the Milken Institute and Distinguished Scholar in Residence at the University of Southern California Davis School of Gerontology. He will be in Singapore this week for the institute's Asia Summit which discusses ageing, among other issues.

A version of this article appeared in the print edition of The Straits Times on September 12, 2017, with the headline 'Asia's ageing population: A golden opportunity for business'. Subscribe