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Bang for silver buck missing?
IT SEEMS local businesses are missing the shine of the silver market. Experts say the silver industry - businesses catering to the needs and wants of seniors - has not developed here, despite optimism that it will pick up like in Japan and South Korea. Talk of such an industry emerged as early as 2006, along with Singapore's ageing population.
Perhaps the most telling sign of the lack of activity in the silver market is the defunct Silver Industry Committee (SIC) previously headed by SPRING Singapore chairman Philip Yeo. Set up in 2006 to fund innovative ideas and promote awareness of the ageing population's business potential, SIC stopped operating in 2010 when Mr Yeo stepped down.
For the silver industry to develop, senior counsel and Wong Partnership partner Wong Meng Meng, then SIC's deputy chairman, said structural development has to be handled differently from the "retail element".
Structural development is the physical and systemic development of "big-ticket" items like transport, housing and healthcare. "It cannot be left to the private sector - partly because they lack the resources, and partly because some degree of central planning or lead is necessary," said Mr Wong.
The Housing and Development Board's studio apartments for those aged 55 and above launched in 1998 and equipped with elder-friendly features is one example. Both structural and retail development have to integrate - there must be suppliers of things like alarm systems in such flats, said Mr Wong. "Clearly the retail side must come in to help that structural side."
Janice Chia, founder and managing director of market consultancy Ageing Asia, said there will be a heavy tax burden if the industry's development is left entirely to the government; bringing in the private sector will create a sustainable and innovative market.
Even without much structural progress, this year's Pioneer Generation Package launch has pushed the elderly into the limelight, leading to some businesses marketing products with the "Pioneer Generation" tag.
Tim Ho Wan gave pioneer citizens - those aged 65 and above in 2014 - a 20 per cent discount in May while Hong Leong Finance had a 65-day fixed-deposit promotion in April with higher rates for "the country's Pioneer Generation". Science Centre Singapore currently offers free admission to pioneers until year-end.
Are businesses beginning to see opportunities in this segment? Not quite, as seniors here are still perceived as financially strapped, experts said.
Geared towards handouts, the Pioneer Generation Package gives the impression that seniors are less well-off, said Gerard Ee, former chairman of the Council for Third Age. Mr Ee is also president of the Institute of Singapore Chartered Accountants.
Kim Walker, chief executive officer of Silver Group, a business consultancy in the 50-plus market, agreed. Many companies respond to the elderly in line with government initiatives, which have focused largely on the needy. "They look at it as the glass half-empty instead of half-full," he said.
The tendency in Singapore is for companies to see this market as frail, incapacitated and needy. "But they should be going to East Coast Park to look at the 50- and 60-somethings on their roller blades and expensive bikes, zooming up and down - that's where the money is to be made," said Mr Walker.
The silver market is heterogenous. "You can't think of seniors in one cohort," said Mr Ee. Discounts and promotions to help the late-60s and older are welcome, but the mid-60s and younger - the baby boomers who are often healthier, wealthier and better educated - will have different tastes and aspirations, he said.
Data from the Department of Statistics last year shows that those aged 55-64 made up 13.1 per cent of the population. Those aged 65 and above made up 10.5 per cent, and are expected to double in number by 2030. Comparatively, those 65 and above make up a quarter of Japan's population, and 12 per cent of South Korea's population.
Ageing Asia's Asia-Pacific Silver Economy Business Opportunities Report 2013 projected that household savings of the over-60s will hit US$974 billion in Japan, US$148 billion in South Korea, and US$37 billion in Singapore by 2017
While the elderly segment offers much economic potential, experts are not optimistic that a silver industry will develop here soon, as most businesses have not caught on. Besides featuring successful seniors in the media, government support is also key.
The success of Japan's silver industry is partly due to its long-term care insurance programme, a social insurance system which has encouraged private sector participation by deregulation and subsidies to service providers.
In Singapore, incentives could be given to companies that engage in preventive health, suggested Ms Chia of Ageing Asia. This could be through tax rebates or a healthy ageing fund for businesses that can prove their products or services help people age better. Ms Chia added that the amount of support can be measured against delivered health outcomes.
If companies can deliver preventive care with tangible benefits, the population will age with fewer health needs, and rely less on government resources, she said. Besides, preventive care supports dignified ageing; in Ms Chia's words, "there is no joy in wearing adult diapers".
The development of standards in elderly nutrition, eldercare and liveability in homes and community by the Silver Industry Standards Committee (SISC) could also drive growth in these areas.
The silver industry standards address the needs of the elderly. "When the industry develops products and services that meet the standards, they are meeting elderly needs," said Robert Chew, SISC's chairman.
For that to happen, businesses must first choose to adopt the standards. Some may think it unnecessary and see it as additional overheads, said Mr Chew. Getting to an inflection point where the standards gain mass adoption requires raising awareness and education, he added.
In standards development, SISC has involved industry partners such as MKPL Architects and St Luke's Hospital who can be early adopters and help in standards promotion, said Mr Chew. The first set of standards on nutrition is almost complete and expected to be released this year.
Mr Wong of Wong Partnership said a holistic approach - one that will involve seniors themselves - is needed. Less well-off seniors holding menial jobs could be trained as independent household cleaners as most flats today lack facilities for live-in maids.
Instead of giving them handouts, make them active participants, create jobs for them and let them have dignity in their jobs, said Mr Wong. "If they don't have a role to play, it won't work."