A joint global business school venture between Europe and China will launch a research institute focused on ageing populations as business tries to tap into potentially lucrative opportunities in the “silver economy”.
International Business School Suzhou, or IBSS – a £28 million initiative between Xi’an Jiaotong and the UK’s Liverpool University – has established the Research Institute on Ageing and Society.
Ageing populations pose challenges for healthcare providers and governments but they also offer sectors the opportunity to target a fast-growing market.
By 2050, a fifth of the world’s population will be over 50, according to the latest United Nations estimates. This creates opportunity.
Kimberly MacPherson, associate director of health management at Haas School of Business, says: “As individuals are likely to be living longer, many with chronic disease, there are emerging opportunities to create and implement innovative approaches to managing their care.”
Professor Lawton Burns, director of Wharton business school’s Center for Health Management and Economics, says developments have spurred recruitment demand for the right graduates.
He says: “Health systems around the world face rising demands from the increasing cost of healthcare [and] meeting rising consumer expectations.”
In China this may be a bigger problem. The country’s vast working population, coupled with its one-child policy, presents myriad economic and social challenges.
IBSS follows in the footsteps of Boston College’s Center on Aging and Work, and MIT Sloan School of Management’s AgeLab, which focuses on the labour market.
Elsewhere, UNSW Business School in Sydney runs a Centre of Excellence in Population Ageing Research, and Singapore Management University has its Centre for Research on the Economics of Ageing.
IBSS will hope to lead research into the implications of ageing populations with several other departments, such as public health.
There is much scope for innovation. A Chinese government report published last year found that 8% of China’s consumption related to products and services for older people, a market worth Rmb4 trillion. By 2050, that proportion of GDP will surge to a third.
Older consumers are increasingly being targeted, groups poised to exploit companies’ efforts in areas such as driverless cars and medical nutrition. Euromonitor forecasts that the global spending power of those aged 60 and above will reach $15 trillion by 2020.
Pharma and biotechnology companies are increasing their investment to meet rising demand from the elderly. Research and development spending in life sciences was up 3% last year compared to 2013's figures, rising to $201 billion, according to research group Battelle.
David Ridley, faculty director for health sector management at Fuqua School of Business, says: “Innovation is a key driver of both improvements in health and increases in healthcare spending.”
Technology is now often at the heart of innovation. Mobile apps are being used to improve health monitoring and enable virtual doctors’ visits, for example, while smart sensors – the “internet of things” – are transforming care homes for the elderly.
Cisco estimates the smart sensor market will be worth $19 trillion in the next five years.
B-school entrepreneurs have emerged to drive insights. HealthTap, a Stanford start-up that connects people with doctors through smartphones, has 10 million users and has raised $38 million. Rock Health, the Harvard venture fund that supports start-ups building health-tech products, last year backed firms which had raised more than $200 million.
A UK entrepreneurship scheme – dubbed YES – between University of Nottingham and the Medical Research Council, among other industry bodies, has attracted 5,000 alumni, and is hosted by drugs giant GSK and Unilever, the consumer goods group. Teams pitch start-up ideas to an expert panel and compete for funding.
Jim Crilly, senior vice president for Unilever’s Strategic Science Group, says: “YES provides an excellent, brief but very insightful immersion in the world of the technology entrepreneur to students who will become our future technology leaders.”
Data have been among the most promising tools. Rainer Sibbel, academic director of the International Healthcare Management MBA at Frankfurt School, believes that analytics will continue to support innovation in healthcare.
He says: “[It can be used] to transform data into relevant information based on evidence; to individualize care; and to create holistic and integrated healthcare programs for prevention, treatment and homecare.”