Japan firms see gold mine in elderly market

This story was first published in The Straits Times on July 1, 2013

THE longevity of the Japanese people has long been a marvel to the world. Increasingly, it is also presenting a business opportunity.

Earlier this month, the Japanese government said it would allocate 2.39 billion yen (S$30.6 million) in its fiscal 2013 budget to help companies develop more practical and affordable robots that will enable the elderly to lead more comfortable lives.

The growing ranks of the elderly represent a potential gold mine for many Japanese firms, which see a chance to put some of their cutting-edge technology to new use, both at home and abroad.

Many of the companies that built corporate Japan - Sony, Panasonic, Toshiba among others - are losing market share to newcomers from other parts of Asia. For them, this new market could be a way to regain lost ground.

"Japanese tech firms definitely see this as a growth area, and the government wants to make it part of their long-term economic growth strategy as they see huge potential," said analyst Jun Okumura at the Eurasia Group.

Twenty-four companies have been earmarked for subsidies, a big chunk of which will go towards what the Ministry of Economy, Trade and Industry calls "nursing-care robot equipment".

These devices include gadgets that mimic human hands in tasks such as washing a person's hair and beds that can be turned into wheelchairs. Other items include tracking systems that will help prevent the elderly from getting lost. Some devices are built to look like animals to soothe their elderly users.

The government is also keen to promote medical tourism, bringing in foreigners who are willing to pay for the very best medical care and facilities in Japan.

There is also huge potential beyond the domestic market.

"Companies here are very keen to go abroad because many other countries in Asia - South Korea, Singapore, China - will very soon be facing the same demographic problems that Japan has experienced," Mr Okumura said.

Government statistics released on Respect for the Aged Day last year - the national holiday is celebrated every September - showed that 51,376 people had passed the 100-year milestone, 3,620 more than in the previous year.

The world's oldest man - Mr Jiroemon Kimura - died on June 12 at the ripe old age of 116. The title of the world's oldest person now rests with another Japanese, Ms Misao Okawa of Osaka, who is a sprightly 115 years old.

Currently, the average lifespan for a Japanese woman is 85.9 years. Women also account for 87 per cent of the nation's centenarians. Japanese men can expect to live to the age of 79.

Both the government and companies are keeping this expanding demographic firmly in mind.

Tokyo's Haneda International Airport, for example, was renovated in 2011 to make it "barrier-free" for the elderly and physically handicapped people.

Wheelchair ramps and automatic doors were put in. Emergency buttons designed for people with hearing impairments were also installed; they are illuminated so they are easier to see.

In addition, the airport is the first in the world to incorporate passenger boarding bridges that do not slope up or down.

Other opportunities abound in the form of nursing homes for the elderly. Economist Jesper Koll once said luxury brands such as Louis Vuitton should get into the business of top-of-the-range retirement homes because so many wealthy Japanese are now reaching retirement age.

The domestic market is huge, with the number of Japanese aged 65 or above likely to have jumped by around 7.09 million from 2010 levels to 36.84 million by 2025, when they will account for 30 per cent of the total population.

That many elderly people will require an army of up to 2.4 million caregivers.

It has been difficult in the past to retain workers in this sector because of the relatively low pay. Robots designed to carry out some of the functions of human caregivers provide one solution. The government is also looking at bringing in qualified foreign health workers.

In the middle of last month, a group of 64 nurses and 80 caregivers arrived here from the Philippines to start a six-month intensive language programme. Later, they will receive medical training at local health institutions.

This story was first published in The Straits Times on July 1, 2013

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