Japan has the most aged society in the world. It is estimated that the percentage of people over the age of 65 in the total population will steadily grow to reach about 35% by 2050. Economists and politicians worldwide often try to show a dark picture of this demographic shift. Nevertheless, such a change can also be seen as a big opportunity for the implementation of new business models, and a chance for innovation.
This fact has become known as the “silver market phenomenon”. The elderly population of Japan is exceedingly rich, healthy and willing to spend on innovative products adapted to their needs. Business owners and inventors can capitalise on this opportunity.
One of the largest markets directly linked to a country’s demographic structure is that of healthcare. Every year the demand for care services is rising, but Japan is facing three main problems due to this surge in demand.
The most significant of the issues is social hospitalisation, where people with care—rather than health—needs stay in hospital for extended periods of time. This practice has its roots in the traditional Japanese family system. Care has always been administrated by family members, particularly female ones.
The result of this gives rise to the second main problem for Japan: a strain on the public healthcare system caused by the increased costs of so many people using it rather than the private or institutional care market.
In 2010, the Japanese government spent ¥37.42bn on healthcare—a rise of 3.9%, and a new record. Currently 10% of Japan’s GDP is invested in health-related services for citizens, and it is predicted this will only increase over the years to come.
A third critical problem is the state of the care industry for employers here. As the Japanese workforce ages, a continuous supply of new, qualified healthcare workers is needed.
Today, around 1.5mn people work in the care sector, but by 2025, Japan will need nearly 2.5mn to meet the rising demand for their services. However, many young Japanese are not interested in choosing jobs in this field. What is more, there is a high rate of care workers who change jobs after a few years.
It is not only the Japanese government that is trying to find solutions to these difficulties. The healthcare industry and some creative engineers see robotics as a possible solution to improve the effectiveness of human care processes.
PARO, a therapeutic robot that looks like a stuffed seal toy, is one of the most promising of these inventions. It creates positive emotions through interaction with its users by functioning like a pet, and can support people with dementia to regain social and personal skills.
Another promising invention in the area of robotic technology is the Hybrid Assistive Limb (HAL) powered exoskeleton suit, which can be worn by disabled people to help them move again. An extension of the human body, HAL reacts based on the electric signals sent from the brain to the limbs, and supports the resulting muscle contractions.
This hybrid technology was invented by Dr Yoshiyuki Sankai of the University of Tsukuba, who is also the chief executive of Cyberdyne, Inc. The firm is the central platform for HAL and all its related products and services.
Despite the differences in how they are used, both PARO and HAL can be considered part of care robotics. PARO has already been tested in care facilities and has shown remarkably positive results, and HAL could support overstrained care workers or help to support the mobility of the elderly.
Within all these robotic inventions lies huge economic potential. In fact, Japan’s Ministry of Economy, Trade and Industry predicts the value of the developing care robotics market to rise to ¥450bn by 2035.
As market development is still in an early phase, the most powerful stakeholders could lead the whole process to failure if they make the wrong decisions. The Japanese government and the care, technology and health-related ministries have to set up a better framework for the application of care robotics. For example, safety regulations and approval processes are a big hindrance in Japan.
Moreover, the current prices of care robots are too high for private consumption or institutional usage. This is because demand has not yet reached a level that would allow firms to choose cheaper mass production methods like integrating a chain of component suppliers—which could be outsourced to other countries—in the production process.
Lower production costs could result in cheaper prices and increased demand. To improve the situation, plans are in place for robotic products to be added to Japan’s national health insurance programme, which should foster the accessibility and availability of care-related robots.
Communication and networking will be one of the main functions of future care technology in an increasingly international world.
A person who spent their whole life connected to the outside world may no longer be willing to lose these connections because of the restrictions of being disabled or elderly. Care-related gadgets could be another step to preventing the exclusion of the elderly, and has high economic potential.
Businesses, in particular, have problems compensating for the loss of experience-based knowledge because of the mass retirement of their older workers. By using communications technology, this important knowledge could still be utilised if the pensioners are willing to share their expert opinions with new staff at their former employers.
Every technological development should have intergenerational benefits; otherwise its implementation will not be efficient and successful.