Demography – the fundamental driver of all economies – is shifting the balance of power in Asia and creating growth opportunities for business, says a new report from Deloitte.
Asia’s over 65s are the largest and fastest growing market in the world, providing a target-rich environment of business opportunities, according to Deloitte, which has released the third edition of its Voice of Asia series. Those in Asia aged over 65 will grow from 365 million in 2017 to more than 520 million in 2027.
Deloitte Australia economist Chris Richardson says that while this creates emerging challenges for ageing nations, ageing populations will also generate a growth cluster of new business opportunities.
“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,” says Richardson.
Three big accelerators drive the industry opportunities in an ageing Asia, with each building on the other.
Asia is ageing fast, with a billion people in the region to be aged 65 and over – more than the total populations of the Eurozone and North America combined – by the middle of this century.
And the money being spent by and on ageing populations will grow even faster than Asia ages, because the impact of new technologies and the on-going management of increasing chronic conditions means health care costs will rise faster than most other costs.
Finally, 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.
Deloitte New Zealand partner Linda Meade says that while the demographic trends aren’t as pronounced here, the New Zealand economy will nevertheless be profoundly affected by ageing in the coming years.
“Over the next decade two-thirds of all our population growth is projected to come from those aged over 65. And over the next 40 years the number of Kiwis aged 65 and over will double from current levels,” says Meade.
“It follows that some of the fastest growing markets here, and in our largest trading partners, will involve older consumers. Yet it isn’t clear that this rich source of business potential has been realised by business. It’s high time that it was,” she adds.
Other highlights from the Voice of Asia include:
- Taking account of demographic trends, a number of areas can be addressed to fuel Asia’s economic future. Higher ages of retirement, more women in the workforce, more migration, and increased productivity can help the economic growth of those nations at the forefront of ageing impacts.
- Some nations will be well positioned to take greater advantage of these demographic opportunities. In particular, India is set to rise as an economic superpower, driven in part by demographic changes. Following the rise of Japan and then China in decades past, India will drive the third great wave of Asia’s growth. Its potential workforce is set to rise from 885 million people today to 1.08 billion people in the next twenty years, and it will remain above a billion people for half a century.
- While the coming ‘Indian summer’ will last decades and have the largest impact on the world, India isn’t the only Asian economy set to surge. Indonesia and the Philippines have relatively young populations, meaning they’ll experience similar growth.
“An ageing Asia will rewrite the playbook of businesses in Asia and around the globe – generating new opportunities by geography, such as India, Indonesia and the Philippines, and by industry, not just in health care, but also more widely,” concludes Richardson.
For more analysis and details on the Voice of Asia, see here
