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“Young” Businesses to Serve Silver Generation

“Young” Businesses to Serve Silver Generation

KIM Jeung-Kun, LEE Eunmi, LEE Min-Hoon, LEE Seung-Chul

Oct. 22, 2012

Transcript

Welcome to our video program. I'm Jeung-Kun kim from the Economic Policy Department.

The first and second generations of baby boomers, who account for one-fourth of the Korean population, will start turning 65 in 2020. The baby boomers have higher levels of assets and income than the preceding generations and have spearheaded the consumer society in Korea.

As the burgeoning silver generation of the next decades, they will dilute the conventional thinking that elderly people are poor and non-mainstream, and will be duly recognized as a wealthy, active consumer group that can live a healthy long life after retirement. They will bring about changes in those businesses which reach out to them as customers. This installment explores new trends among these well-off retirees, and examines new business opportunities that can address them.

The Baby boomers will determine the features of new businesses. Five potential spending trends are emerging based on the consumption patterns of prior generations of retirees, as well as on the baby boomers’ life history, experience, and interests. They include five trends, and health, family, leisure, social participation and “digital life.” These characteristics will be to success in silver businesses.

Five businesses are expected to emerge that reflect these trends.

The first is proactive care, which provides not only physical treatment but also bolsters psychological and emotional stability. Vibrant Brains, a brain health and fitness center in San Francisco, targets seniors who are at least 50 and are worried about their aging brain. The idea is to boost brain activities according to the center’s programs under the concept of “mental anti-aging” just as one can enhance physical health by training the body.

The second business is long distance filial piety. Although more Koreans are not living with their parents, Confucian filial piety and veneration of parents remains one of the highest values in Korean society. Parental support using IT services will help them live up to the value even if they live far away from their children. Japan, the world’s most aged country, has already commercialized an IT service that sends information about parents such as the volume and time of gas use to their children.

The third trend is “purposeful leisure.” Travel products will offer active experiences of history, local culture and music accompanied by experts passive relaxing. Road Scholar in the U.S. has developed programs exclusively for seniors combining travel and education, offering 6,500 educational tours in 50 states in the US and 150 countries. Also in the US, the National Senior Olympic games are held every two years and and accepts participants who are at least 50 years old. The 2009 National Senior Olympics in San Francisco created about US$40 million in value.

Fourth, knowledge sharing in communities will support the silver generation in sharing the skills, abilities and knowledge they have accumulated with local society after retirement. As the experience and knowledge of the silver generation is deeply connected with issues in local , support for knowledge sharing can contribute to the revitalization of the local economy. In Japan, high-level executives who have retired from large companies established an “NPO club” consisting of 160 people whose average age is 70.5 in 2002.

Club members convey their business know-how to local small -and medium-sized enterprises (SMEs) at the rate of 1,000 yen a day, enhancing competitiveness for the SMEs. As the programs provide know-how that former high-level executives have acquired through firsthand experience, demand for consulting is so high that their schedules are booked months in advance.

Last but not least, smart silver business will attract attention. The baby boomers are familiar with digital devices but have an analogue-oriented mindset. The demand for so- called “digilog” will grow accordingly. The need for IT products that facilitate convenience but also offer emotional familiarity will increase, while social networking services and online shopping malls customized to seniors will expand. For instance, Gold Violin is a US-based online shopping mall for seniors. The name of the mall does not include words like “senior” or “elderly” because dislike being regarded as old. The site is praised by seniors who find it to be a stylish website that provides tailored and sophisticated products for each age group.

Korea’s silver market is growing fast but the industry is still in its initial stages. Companies can take the aging population as a business opportunity, using it as a driver for new business. By 2035, about 30% of the world’s silver generation will be living in Korea, China and Japan. Korea can further its advances into the East Asian silver market by drawing on geographic and cultural commonalities. To nurture the silver industry, a solid infrastructure for R&D, manufacturing, distribution and sales need to be constructed, while developing silver products through links with government policies.

Thank you for watching. I'm Jeung-Kun kim.

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