The Silver Economy – Adapting to The Aging Population Trend in Asia

Europe is not the only region in the world affected by demographic shifts – Asia’s population is also aging. According to projections by the United Nations Population Fund (UNFPA), the proportion of elderly people aged 60 and over in the Asia-Pacific region is expected to increase from approximately 14% in 2022 to nearly 26% by 2050. The proportion of children under 14 will move in the opposite direction, decreasing from 23% to 17%. Faced with this aging population trend, Asian countries are seeking ways to adapt, embracing the elderly as a driving force for economic development, rather than a burden on social security systems, healthcare, and the labor market. That is why the “silver economy” is beginning to develop on this continent.

The Global Trend of Population Aging

In a report published in early 2023, the United Nations Commission for Social Development identified “population aging” as a global trend. People are living longer thanks to breakthroughs in healthcare, medical treatments, access to education, and declining birth rates. It is estimated that there are currently over 761 million people aged 65 and over worldwide, and this number is projected to increase to 1.6 billion by 2050. The number of people aged 80 and over is also rapidly increasing. As age increases, the need for physical health, daily care, and long-term care for the elderly also increases significantly.

In Asia, the group of people over 60 is currently estimated at around 642 million, 3.5 times higher than in Europe. The World Economic Forum forecasts that 16% of Asia’s population will be over 65 by 2040. The aging population trend is occurring in many Asian countries, from leading economies such as China, Japan and South Korea, to developing countries like Thailand and Malaysia. According to World Bank data, as of 2022, 30% of Japan’s population is over 65. In China, data released by the National Bureau of Statistics of China shows that the population aged 60 and over accounts for 21.1% of the country’s total population, exceeding 290 million people by the end of 2023 – a consumer market almost equal to the entire population of Brazil.

In the context of irreversible population aging, Asian countries are seeking ways to adapt and embrace these new shifts, where the elderly are seen as a driving force for economic development rather than a burden. Therefore, a development model based on the “silver economy” is considered an inevitable trend in line with the aging population context of these countries.

Opportunities from the “Silver Wave”

The “silver economy” is a term that refers to a sector providing goods and services to people over 50, including nursing homes, elderly care facilities, physical and mental health solutions,… that meet the special needs of the elderly. The concept of the “silver economy” is not new. However, as life expectancy increases and population aging accelerates, the economy for the elderly is becoming increasingly important. With the dual goals of improving the quality of life for the elderly and ensuring their autonomy for as long as possible, the “silver economy” impacts many sectors of the economy: entertainment, transportation, food, security, healthcare, housing, insurance, digital services, and more.

Thus, the scope of the silver economy encompasses all aspects of the lives of the elderly. In this context, the elderly are not only a part of the labor force but also beneficiaries, consumers, and a driving force for companies to develop specialized products and services. This creates both opportunities and challenges for each country in proactively planning and developing a silver economy that suits its specific conditions.

Population Aging and its Economic Impacts on Some Asian Countries

Many countries have begun to strategically shift their economies, seeking growth drivers in the “silver-haired” generation. According to United Nations estimates, by 2030, people aged 50 and over will account for 32% of the total population in the Asia-Pacific region. In this region, the “silver economy” market is projected to reach a value of approximately 4.6 trillion USD by 2025, serving 600 million people over the age of 60.

Moreover, today’s elderly are more educated, wealthier, and more tech-savvy than their parents’ generation. Therefore, to attract these “silver consumers,” countries and businesses need to offer innovative solutions that align with their lifestyles and healthcare goals to have a higher chance of success.

The Elderly as a Growth Driver for China’s Economy

In the context of an unavoidable aging population trend, many Asian governments have taken important steps to fully leverage the opportunities this trend presents. Leading among these is China. Data from the National Bureau of Statistics of China shows that, by the end of 2023, the number of people aged 60 and over reached 296.97 million, accounting for 21.1% of the population. This means that China has entered a moderately aging society. This not only impacts the labor market and social security but also the consumer market. Therefore, the Chinese government’s active promotion of the “silver-haired economy” is seen as a new driving force for the country’s economic development.

Accordingly, China plans to focus on developing services such as foodservice, healthcare, in-home elderly support, amenities in residential areas, cultural, sports, and entertainment services for the elderly, as well as elderly care services in rural areas. In addition, businesses are also encouraged to develop suitable smart terminal devices, as well as to transform website interfaces and mobile applications to address the difficulties in accessing digital products and services for the elderly.

China aims to establish around 10 industrial clusters for products related to the silver economy in strategic areas such as Beijing-Tianjin-Hebei, the Yangtze River Delta, and the Guangdong-Hong Kong-Macao Greater Bay Area. State-owned enterprises will be encouraged to expand their business related to the “silver-haired economy”, while unreasonable market access barriers will also be removed to gradually open up the market to private enterprises. The Chinese government is committed to providing more financial support to upgrade qualified new elderly care service facilities and promote the use of smart devices.

The advantage of the elderly population in China is that they have savings and pensions. In addition, they also have support from their children. And importantly, they are an increasingly large customer group. For example, on the Taobao and T-mall shopping platforms, there are 30 million users over 50 years old with a monthly expenditure of over 5,000 yuan, equivalent to 17 million VND. According to Equal Ocean, an investment research firm in Beijing, the purchasing power of the elderly in China could reach 20 trillion yuan – equivalent to over 3 trillion USD. One of the most promising markets is healthcare services and technology applications.

Promoting the development of the silver-haired economy is seen as a timely step for China to overcome the challenges of population aging and contribute to economic development. This is considered a highly practical policy, parallel to and complementary to social security policies for the elderly. Data estimated from China Media Group indicates that the size of China’s “silver-haired economy” is around 7 trillion yuan, accounting for about 6% of the country’s total GDP, and it is forecast that the size of this economy could reach 30 trillion yuan (equivalent to 4.18 trillion USD), accounting for about 10% of China’s total GDP by 2035.

The “Silver-Haired” Economy in Singapore

Singapore took only 19 years to transition from an “aging” to an “aged” society, officially reaching the aged milestone in 2017. By 2026, Singapore is expected to reach a “super-aged” status; by 2030, one in four Singaporeans will be 65 or older (Ministry of Health Singapore, 2023). According to Ageing Asia (2020), Singapore is ranked as the country with the greatest potential for developing the “silver” economy in terms of the spending power of its elderly population, whether from personal savings or familial support. The “silver” economy in this nation is projected to become a 72.4 billion USD market by 2025.

In fact, Singapore is also one of the leading countries in adopting policies to develop the “silver” economy, with a series of policies such as: (i) Employment policies: Singapore has implemented measures to enhance the participation of the elderly in the labor force, such as raising the official retirement age, encouraging the elderly to work beyond retirement age, and providing retraining programs for post-retirement jobs; (ii) Financial support policies: The government provides subsidies and financial assistance for the elderly to access healthcare services. Accordingly, the government is developing home care services and a remote health consultation system (telemedicine) so that the elderly can easily access services without leaving their homes; (iii) Knowledge and technology-based economic development policies: The government facilitates the participation of the elderly in research, innovation, and projects related to business or technology development, and organizes technology and personal finance skills courses to maintain the dynamism of the elderly; (iv) Tax policies: The government provides tax exemptions or reductions for the elderly in certain special cases; (v) Tourism-based economic development policies: Singapore develops tourism, cultural, and resort programs tailored to the needs of the elderly, creating new business opportunities.

It is undeniable that while population aging poses significant challenges, it also opens up new opportunities for the “silver economy” in Asia. The combination of appropriate government policies and private sector involvement will drive the rapid growth of this economy in the future. Along with advances in science and technology, the elderly can live healthy, happy, and useful lives, contributing positively to the overall development of society, especially when countries proactively adapt to the period of population aging and proactively seize the opportunities of the “silver wave”.

According to the population projections for Vietnam for the period 2019 – 2069 by the General Statistics Office, Vietnam is one of the countries with the fastest aging population rate in the world. Faced with the inevitable trend of aging, Vietnam is facing both opportunities and challenges in economic and social terms. From the experience of other countries around the world, especially in Asia, in developing the “silver economy” to adapt to the current aging population, what can Vietnam prepare for the development of this silver-haired economy when the country is projected to transition from an “aging” society to an “aged” society by 2036?