Malaysia is rapidly transitioning towards becoming an aged nation, with projections indicating that by 2030, 15.3% of its population will be 60 years and older. The increase in Malaysia’s ageing population is a result of advancements in medical technology and improved socio-economic conditions, which have extended life expectancy.
Recent estimates from the Department of Statistics Malaysia (DoSM) indicate a rise in the composition of individuals aged 65 and over, increasing from 7.2% in 2022 to 7.4% in 2023, encompassing approximately 2.5 million people.
DoSM also projects that by 2040, Malaysia’s demographic landscape will witness a nearly equal distribution between the young (18.6%) and the older population (14.5%). The elderly demographic is anticipated to surpass six million, marking a transition for Malaysia into an aged society.
This demographic shift presents both challenges and lucrative opportunities for businesses. Understanding and adapting to these changes can unlock significant potential in what is now being termed the “silver economy.”
Economic Implications of Ageing Population
An ageing population affects labor force participation, productivity, and consumption patterns. Fewer young people entering the workforce and more individuals retiring could constrain economic growth. Additionally, older populations generally have higher healthcare needs, leading to increased healthcare costs. The prevalence of chronic diseases such as diabetes, hypertension, and dementia is expected to rise, significantly burdening the healthcare system. The number of elderly with dementia, for example, is projected to increase to 353,000 by 2030 and further to 668,000 by 2050.
However, these challenges also create compelling opportunities for businesses to innovate and adapt. The ageing population presents a growing market for various products and services tailored to older adults. By addressing the needs of this demographic, businesses can tap into a lucrative market and contribute to economic growth.
Thriving in the Silver Economy
- Healthcare and Wellness Revolution: The increasing number of elderly individuals necessitates a focus on healthcare services tailored to their unique needs. This includes geriatric care, preventive health measures, and age-specific medical research. Businesses can invest in healthcare facilities, medical devices, and pharmaceuticals aimed at managing chronic diseases prevalent among the elderly. Innovations such as telemedicine, wearable health devices, and home automation can help the elderly live independently while managing their health.
- Financial Services Innovation: Financial stability in old age is a critical concern, with many elderly Malaysians relying on their children for support. According to the Employee Provident Fund (EPF), only 22% of active contributors have sufficient savings for retirement. This highlights the demand for innovative financial products designed to ensure long-term financial security. Policies to extend the retirement age and adjust pension schemes can help mitigate these challenges, while financial literacy programs can empower individuals to plan better for their future.
- Age-Friendly Housing and Infrastructure: The ageing population requires accessible public spaces, transportation systems, and housing solutions. Age-friendly homes equipped with safety features and community centers offering social and recreational activities are essential. Businesses can capitalize on this by developing real estate projects specifically for the elderly, creating environments that support independent living and active ageing.
- Technological Advancements: Technology offers myriad opportunities to enhance the quality of life for older adults. In Japan, for example, “carebots” assist in elderly care, a model Malaysian businesses can emulate. By leveraging technology, companies can provide solutions that cater to the specific needs of the ageing population, such as health monitoring systems, remote medical consultations, and automated home systems.
- Harnessing Elderly Talent: The elderly can be a valuable asset to the workforce. Older workers bring experience, stability, and mentorship to organizations. Age-diverse teams can enhance productivity and problem-solving capabilities. Businesses should consider flexible working arrangements, lifelong learning programs, and opportunities for part-time or consultancy roles to leverage the skills of older employees.
Malaysia’s demographic shift towards an ageing population presents significant challenges but also opens up a myriad of business opportunities. By focusing on healthcare, financial services, age-friendly infrastructure, technology, and inclusive employment practices, businesses can not only address the needs of the elderly but also drive economic growth.
As Malaysia navigates this demographic transition, a collaborative effort between the government, businesses, and society is essential to ensure that the ageing population is seen not as a burden but as a valuable resource. The silver economy holds immense potential, and those who adapt and innovate will lead the way in this new era.
Source: 1 | 2
Also read: 2 Key Insights from Warren Buffett at the 2024 Meeting
Discussion about this post