They say that ‘every cloud has a silver lining’, and the bright horizon in the ageing of Australia’s population lies in the very real prospect of creating new jobs and businesses to meet the demands of this emerging market.
Australians, and South Australians in particular, have every reason to feel excited about the opportunities in those areas of the economy that support elderly people.
There are four key factors generating business growth in the aged care sector, two of which have long been known, while the impact of the other two are only just emerging.
As of June 2016, there was just over $2 trillion held in superannuation assets, having grown by almost 8% in the past 12 months.
Firstly, Australia’s aged population is large, and getting larger. Over the next two decades, people over the age of 65 are projected to number up to 5.8 million, or 19.4 percent of the population, while the number of those aged 85 and over is expected to double every 20 years for the next 100 years. This won’t be a short term phenomenon, because while we have long recognised that the Baby Boom Generation (born 1947 to 1961) was a population shock, Generation X (born 1961 to 1976) is even larger. For at least the next 50 years, older people will constitute a substantial share of the Australian population, and the goods and services they demand will be fundamental to the economy.
Secondly, Australia’s superannuation system is the envy of many parts of the world and, as of June 2016, there was just over $2 trillion held in superannuation assets, having grown by almost eight percent in the past 12 months. Potentially, that is an enormous demand ready to be released onto the market when older Australians enter retirement and beyond, as they look to maintain the high standard of living to which they have grown accustomed. The old days where people were frugal in their elderly years are now gone, meaning this group not only has money to spend, but is also willing to spend it.
While there has been a great deal of attention paid to the fact that many Australians have relatively little superannuation, the overwhelming majority have some. Even modest superannuation balances can make an important difference in retirement. These are funds that can be drawn upon to buy medical devices, pay for health care services, travel, maintain an existing home or buy a new home that may be more appropriate to their circumstances. This presents great opportunities for business. Within the tourism sector alone, cruise ships and cafes are expected to be one of the fastest growing areas of the industry.
Thirdly, and most importantly, governments have rethought the nation’s care system and, along the way, have created a new market with the potential to generate many more business opportunities for young and old alike.
Under the old, centralised system, governments would fund organisations to provide services that were one-size-fits-all. When the new Consumer Directed Care system came into operation in July 2015, it placed control over a government-provided budget in the hands of those in care, empowering them as consumers, free to spend it in whatever way, and with whomever they choose. So, for example, someone who wants to socialise more, may now choose to go to more events.
And this is not a small market: the Australian Government has budgeted $1.3 billion annually for Consumer Directed Care, on top of the $17.9 billion allocated to the National Disability Insurance Scheme (NDIS), creating opportunities for entrepreneurs in the process.
All of a sudden the game has changed. Think Uber, think Airbnb, think of any of those industries that have been through the sort of transformation that business theorists like to characterise as ‘disintermediation’, which means to cut out the middleman and link the consumer directly with the provider of a service. Across Australia, you will now find start-ups popping up, such as Better Caring Australia and Better Off At Home, with the sole aim of linking the consumers of care with independent providers.
While Consumer Direct Care is in its infancy, thousands of jobs will be created as care professionals—including nurses, physiotherapists, occupational therapists, as well as drivers, cleaners and gardeners—sign up and create their own small businesses.
The Government has budgeted
$1.3 BILLION ANNUALLY
for Consumer Directed Care, on top of the
allocated to the NDIS, creating opportunities for entrepreneurs in the process.
70 NOT OUT
Fourthly, and finally, older Australians aren’t just going to be passive recipients of these changes. As Raymond Spencer, the Chair of South Australia’s Economic Development Board notes, increasingly many of us will choose to work into our 70s. Older Australians will mark out ‘encore’ careers that are a significant departure from their earlier working life. Many will see the opportunity to assist older people who need care, helping to fill a chronic gap in the workforce, delivering appropriate assistance and helping to create a more age-friendly Australia.