10 business opportunities from the Intergenerational Report

The release of yesterday’s Intergenerational Report didn’t really tell us anything we didn’t already know – Australia’s ageing population is going to become a big problem for us over the next 40 years – but it did contain some distinct trends that sharp entrepreneurs should be starting to think about.

The report emphasises the challenges facing Australia’s economy as the population increases and the baby boomer generation moves out of the workforce and into retirement.

The population is tipped to climb from 22 million to 36 million by 2050, with the ageing of the workforce expected to reduce the Government’s tax revenue and push the budget into deficit from 2030 onwards.

Yes, these are huge problems for Australia to confront in the coming years. But as every entrepreneur knows, providing a solution to a problem can be extremely profitable.

Here are 10 quick business opportunities we’ve spotted in the intergeneration report:

Healthcare

Okay, let’s get the really obvious one out of the way early. Spending on health as a proportion of GDP is tipped to climb from 4% to over 7% between now and 2050, so there’s a big pool of cash to tap into here. Of course, competition in this area will be intense and smart entrepreneurs will need differentiated, specialist services to tap into this market. Taking healthcare services into homes and workplaces is already a growing trend… could group-style treatments (using a sort of party-plan model where the healthcare provider visits a group of people in the one person’s home) be another model?

Pharmaceuticals and cosmetics

Breaking into the medicines sector isn’t exactly easy for a start up entrepreneur, but the cosmetics sector is likely to throw up some opportunities in what is an ever-changing market. Natural and organic cosmetics are becoming bigger and bigger, but innovations such as non-invasive surgery treatments and whitening, toning and firming technologies are likely to change the market. Euromonitor also points to the emerging areas of Nutraceuticals (nutritional foods with cosmetic benefits) and Nutricosmetics (beauty supplements and foods and drinks that have cosmetic benefits).

Financial services

Another biggie. The ever-increasing pools of superannuation will make this sector even more important. Innovative financial products that can help older workers make the transition from work to retirement (including products that will increasingly supporting part-time work) will be increasingly in demand.

Property

Many entrepreneurs have targeted the aged care and retirement home sector but with limited success – perhaps partly because older Australians don’t actually want to move into something called a “retirement home”. Coming up with alternative accommodation products that suit this market – perhaps based on the developing model of apartment or community living with access to amenities such as health and leisure facilities – will be crucial.

Construction and engineering

The solution to the economic threat posed by the ageing population is to boost productivity and as the Government outlines in the report, that is going to mean further investments in infrastructure. A steady flow of Government money should help entrepreneurs in this sector over the coming decades.

Education

This is a giant area of opportunity. Productivity improvements will require big investments in training and education, particularly in the area of vocational education. As workers’ careers stretch out, retraining and up-skilling will become particularly important – could new education models emerge to help keep workers productive for longer?

Human resources

Following on from this, managing these new workplace dynamics – more mature workers, more use of flexible working arrangements, increased need for knowledge management, an ever more competitive recruitment market – will see demand for human resources experts skyrocket. Recruitment firms specialising in mature workers have been popping up in recent years, but expect this part of the market to grow.

Leisure and personal services

A huge growth area for the last two decades, it’s hard to see demand for leisure and personal services (everything from gymnasiums and personal trainers through to lawn moving and cleaning services) shrinking. If employees are forced to remain working for longer, they will be desperate to use their leisure time how they want to, and will be prepared to pay to preserve it. What other household jobs could be outsourced? More cooking services? More online shopping services? More laundry and cleaning services? Looks like an area ripe for more franchising.

Green business

The increasing population and the introduction of carbon-change reduction legislation will increase the costs across the economy and force households and business to embrace greener ways of living. Simple solutions to reduce waste and energy consumption will find an ever-growing market.

Food and beverages

The food industry is already looking to the baby boomer generation as its prime target market (the kids are on the outer, it seems) and with good reason. Nutrition will only become more important as governments embrace preventative healthcare strategies and continued innovation in this area (perhaps even embracing superfoods and genetic modification) should be rewarded.