Discussions of China tend to focus on size – a nation of over 1.3 billion people certainly deserves attention from business and investors worldwide. But, ‘total’ numbers reveal little about underlying social and market dynamics nor the opportunities they may present.
China is undergoing a ‘gray’ revolution. While discussions of aging and innovation almost exclusively focus on the industrialized economies of Europe, North America, Japan and the tiger economies of Asia, China may be the venue to watch, and for innovators to engage in what’s new in aging. A convergence of forces -- demographic transition, family dynamics, and institutional readiness provide a promising market for innovations in health delivery, eldercare and aging services.
Disruptive Demographics in the Middle Kingdom
Gray China – Asia Studies Monitor data indicate that life expectancy in China was a young 41 years old compared to 65 and older in Europe and North America in 1950. China is closing the longevity gap. Today, life expectancy in China has jumped to nearly 79 years compared to 82+ years in western industrialized economies.
According to the United Nations, the number of people over 60 in China is approximately 167 million. Imagine – an entire nation of older adults larger than the total populations of Germany and France combined. In only 10 years, China’s older population is projected to be 248 million and by mid-century 437 million people or more than the total projected population of the United States in 2050.
Living Globally But Aging Alone – Two socio-economic factors shape China’s aging today: fewer children and economic development. The oft-cited one child one family policy, instituted in 1979, has been effective in managing population growth. It has also resulted in a fundamental change in China’s support ratio (the number of people working compared to the number of people over retirement age). According to the Center for Strategic and International Studies, China’s support ratio is more than 5 working people for every older person, by 2030 it may be only 2.5 working adults, and by mid-century ~1.6 working age people to every adult over retirement age.
Globalization brings change to even the most traditional families. Economic opportunity is growing fastest in China’s urban centers. Income for younger workers may be 3X higher in cities than in rural regions. Consequently, many adult children are leaving the family home for work in other regions. An extraordinary number and proportion of elderly Chinese are aging alone. China Daily reports that an estimated 80 million (of the nation’s 167 million 60+ population) older adults live alone. If accurate, these numbers reflect more than 47 percent of the older population aging alone compared to 30 percent of older people “home alone” in the United States – greatly challenging the commonly held belief that family tradition and culture shapes the alternative futures of aging around the world.
Care Gap – The family has traditionally provided eldercare. Consequently, China has an underdeveloped aging services system. Today there is a growing care gap to meet daily and long-term care needs. Community senior centers are slowly emerging in cities and some rural areas. The China National Committee on Ageing estimates that about 25 percent or 30 million older people need long-term care due to disability and disease. Compared to an estimated 50-70 long-term care beds per 1000 older adults in industrialized economies, there are only ~10 per 1000 older people in China. 2008 data indicates that most of these beds are already filled. Beyond facilities, the formal “careforce” in China is approximately 30,000 workers – estimates suggest that 10 million workers may be needed.
Innovating a New Industry of Old Age in China
An underdeveloped network of aging services and related institutions is a problem for China, but it may also be an opportunity. Institutions are generally biased in favor of ‘yesterday’s’ definition of a problem and yesterday’s range of available solutions. Simply applying models of aging services from other nations, many designed decades ago, will not necessarily meet China’s needs. Aging in China will require engineering new organizations that combine public and private providers, services and technologies. China’s demographic imperative to do something now, without a real legacy of service providers wedded to established practices and technology, is an opportunity to invent a new business of aging. Recognizing the clear need, China’s Ministry of Civil Affairs Wang Hui declared in a People’s Daily interview "We want to turn elderly care services into an industry in the long run."
Insight & Innovations
What are the opportunities for creative public-private partnerships, technology and services to support China’s aging population? Remote family care, health & wellness and aging services are three categories that could draw upon China’s existing capacity, a wide variety of global companies, NGOs and technologies to implement a uniquely Chinese eldercare services industry in the near-term.
Remote Family Care – China’s 4-2-1 family structure, four elderly parents, a young couple, with one child is Asia’s sandwich generation. Insurers that currently offer life products in China, e.g., Allianz, Ping An, may find that their growing market of young urban consumers are a cross-sell opportunity for a product to provide home care services to their parents living near or a region away. Other firms that may find family care services an adjacent opportunity to their core business are banks and money transfer agents that facilitate funds transfers from children working in cities to their rural parents. Insurers and banks could aggregate these demands and source homecare, maintenance and other services to public or approved private providers.
Maintaining regular social connection with family is critical to the health and wellbeing of an elderly parent – but it is also important to young parents seeking family advice and grandchildren learning about their past. An estimated 384 million Chinese are now online – not the same as human touch, but 'virtual' touch may replace no touch at all. AgeLab field research indicates that selected senior centers in urban areas have one or more Internet connections. Community centers and senior housing, such as those offered by Provincial governments, Society Care (established 1950) and Modern Care (established 1990) should make these services an investment priority and promote their use. Introduction of easy-to-use video conferencing applications and Internet social networking sites such as China’s Kaixin, Weibo, QQ and Youku are the new tools to connect the generations.
Health & Wellness – Maintaining good dietary habits becomes more important with age. But, eating, and eating well, is a social activity. Older adults that live alone become less interested and, eventually less able, to prepare a nutritious meal. Working within the context of traditional Chinese cooking, food companies (e.g., Groupe Danone, Nestle, General Mills) may find easy-to-prepare, easy to digest, high nutrition ‘functional foods’ be successful in China’s fast growing aging market.
Managing chronic disease (particularly hypertension, diabetes, heart disease) in China, as in every other country, is critical to wellbeing across the lifespan as well as managing the personal and public cost of disability. Disease management services that focus on diet, physical activity, medication compliance, and behavior modification (e.g., smoking cessation) are expanding into developing economies and reaching disadvantaged elderly. Healthways, for example, partners with Fleury S.A. to provide disease management and wellness services to 40 million Brazilians. In Singapore, the Tsao Foundation provides social care services and operates clinics that are a model of integrative medicine using the best of both traditional Chinese and western medical practice.
Telemedicine may be one of the best investments for an aging China. Telemedicine is not a second best alternative to care. The Scottish Centre for Telehealth, in partnership with Cisco, has shown that telemedicine can produce an over 90 percent patient satisfaction rating. NGOs, telecommunications companies and large health services providers (e.g., Partners HealthCare Center for Connected Health, University of Rochester) could be valuable partners to connect rural elderly and caregivers with specialists within China and around the world.
Aging Services – ‘Smart’ elderly housing will be a growing need. Public housing that provides a common smart technology infrastructure may facilitate the delivery of services that can be scaled across a province or the nation. For example, selected senior housing facilities in Singapore share a common information communications technology infrastructure, e.g., Internet access in each unit. Rethinking housing as a platform for technology-enabled services may optimize the integration of ‘intelligent’ devices and services already on the market (e.g., monitoring and health management applications offered by Philips, GE, and other firms in the global Continua Health Alliance) supporting safety, disease management, and social services.
Despite advances in technology, caregiving remains a high-touch business. The careforce shortage in China is critical. Development of professional programs and certification of formal caregivers would benefit from collaboration with long-term care companies and aging services organizations with expertise in training and the use of new technologies (e.g., HelpAge International, Home Instead, Golden Living). In addition to the training, expertise and services, investment in large-scale (provincial as well as national systems) health and homecare information management systems may help families understand the range of available services and government to ensure the highest quality of care.
Aging in China is not just about the elderly. It is about the wellbeing of all people in China as well as its performance in the world economy. Changing demographics, lifestyles, and an institutional readiness for innovation are converging to create an extraordinary opportunity for business, aging services and ultimately China’s people to build an "elder care services industry". If successful, it might just become another leading export.
MIT AgeLab Research Assistant Victoria Lee conducted field research in China and translation of references in preparation of this article.