Could there be sustainable innovation for ageing Asia?

It is widely recognised that some countries in Asia are facing an ageing population. According to the Asian Development Bank (ADB), Asia’s elderly population is projected to reach 922.7 million by the middle of this century. As a result, Asia is on track in the next few decades to become the oldest region in the world.

Japan is in the lead with 17.2% of its population aged 65 and above in 2000 and this is expected to increase to 36.5% by 2050. Hong Kong, Singapore and South Korea follow. By 2050, more than 28.9% of the population in these countries will be aged 65 and above.

Japan is not only facing an ageing population but a shrinking population. Japan’s birth rate has been declining and in 2014 fell to a new low record of 1,001,000 and mortality rate has been increasing for the fifth year to an estimated 1,269,000.

Life expectancy is also expected to increase by 2050 which likely implies additional burdens on pension systems. According to a report by ADB in 2012, the ratio of working-age persons to the elderly in Singapore in 2010, 2030 and 2050, is dropping from 8.2 to 2.7 to 1.7 respectively. The potential support ratio of the working-age population to the retired population in China from 2012 to 2040 will change from 6.0 to 2.0. The numbers are further dampened when traditional family support systems (where the elderly will live together and rely on their grown up children and spouses) are threatened when there are fewer adult children to provide support, and many of these children may have moved away from their family.

Governments in Asia are taking different approaches to assure adequate support for the expanding ageing population. For example, in Japan, the mandatory retirement age rose to 60 in 2013 and will increase incrementally at the rate of one year of age every three years until 65 by 2025. In Singapore, the statutory minimum retirement age is 62, but employers have to offer re-employment to those eligible up to age 65. The minimum retirement age may increase to 65 and 70 in future.

Salaries in many Asian countries are based on seniority. Employers may believe that older workers are receiving salaries and benefits that are too high relative to their productivity. However, having the flexibility to hire them on a part-time basis, modifying their responsibilities and paying them a salary relative to their productivity are options that could become increasingly attractive to employers. In fact, for businesses to remain competitive and be sustainable for the long term, they need to adapt to the shift in the age of the population and create age diverse workplaces. The impact of ageing population to businesses could include loss of expertise and shortage of young talent.

The starting point for any business to adapt to an ageing population is to conduct an age profile analysis to understand the makeup of the business. Measuring and monitoring the age profile of their employees is helpful in identifying problem areas and detecting where age bias may lurk. For example a review of take up of training that reveals a lack of older employees, might point to bias in an internal process that is excluding older workers from development opportunities.

Promoting an age-friendly culture could help dissolve the negative attitude that employers and employees may have towards older workers in the workplace. Training or awareness programmes could help inspire employees to have mutual respect and challenge mindsets on an age inclusive workplace environment.

Encouraging employees to take charge of health and wellbeing, particularly older employees are critical to ensure that they remain active and productive. In 2013, Toyota Japan introduced measures to improve “health mindsets” for employees, which included support for physical exercise at work sites, dietary education activities and employee cafeteria menu revisions, and granting awards to work sites that take proactive measures to support good health. As a result of its health risk reduction activities, the percentage of employees with BMI greater than 24.2 decreased to 26.7% and smoking rate decreased to 29.7%.

Providing alternate working arrangements is increasingly a common practice in Asia as it allows flexibility for employees to pursue personal interests. This is also valuable for older workers who may no longer be interested in a high pressure working environment but still creates opportunities for them to contribute to the business while pursuing personal interests. Panasonic’s New Next Stage Programme allowed employees who have retired at the mandatory age of 60 to continue working until the age of 65 if they desire. The programme also helps employees achieve their next life stage in various ways, such as by having a staff registration system at group-affiliated temporary staffing companies for senior citizens seeking to get involved elsewhere and to facilitate their transition to activities outside of Panasonic.

Continuous engagement with older workers, with their wealth of experience and knowledge, are a critical resource. . Establishing networks or alumni groups for retired employees is a useful way to ensure that they remain involved in the business. By establishing the Experienced Influencers Employee Resource Group (EI ERG), Cisco recognises the strategic importance of having a group that can help the company become a trusted business partner for older consumers. Older employees also have the opportunity to influence workplace health and safety practices and benefits, network with Cisco alumni and mentor junior employees. The EI ERG plays a key role in growing Cisco talents while leaving a legacy on the organisation in terms of knowledge transfer and multigenerational collaboration.

As advances in healthcare have increased life expectancy globally and societies, governments and businesses have to reassess their strategies to adapt to the changing demography. Speaking at the SG50 Scientific Conference on Ageing in March 2015, Singapore’s Health Minister Gan Kim Yong said, “We have a much higher chance of achieving successful ageing if individuals do not associate ageing with mere decline, loss of value, or worse, disability. Likewise, we have a better chance at productive longevity if employers do not have a negative view about seniors, and if the young and the society as a whole do not hold a pessimistic and deterministic view of ageing.” -Justin Teo justin.teo@csr-asia.com