Bill Hall on Japan the Aging Society and Test Market for the Future

Please enjoy Bill Hall, President, IPSOS Healthcare Japan and Chairman, IPSOS Business Consulting Japan being interviewed by Kyle Springer of Perth USAsia Centre Perspectives podcast on: Japan the Aging Society and Test Market for the Future. The interview discusses aging demographics, progress with products for the aging market in Japan and elsewhere, and product and services opportunities for older adults. I have contributed a full edited transcript for the interview.

I first met Bill Hall when I was working for Japan Market Research Bureau in the 1980’s and Bill was also working in market research. With 40+ years of executive experience in Japan, Bill has become known as “a highly regarded expert on the Japan market, demographics, healthcare trends, and the impact of the aging society,” as described by Patrick Newell, host of TEDxTokyo, for an American Chamber of Commerce in Japan event (below).

I had the pleasure of meeting with Bill Hall most recently last year in Tokyo. The topic of aging is very much forefront for me as I follow up on my attendance as press at the American Society on Aging’s “Aging in America Conference” and Mary Furlong and Associates’ “What’s Next Boomer Business Summit” in March in San Francisco. Many of the fine professionals I met at those conferences may already be aware of Bill’s thought leadership on aging, but I wanted to make sure by sharing this most recent commentary with them. Those who work for pharmaceutical companies probably already subscribe to his IPSOS Therapy Monitor in Japan. “The portfolio, which tracks usage of drug treatments in 20+ disease areas and 31 markets worldwide, is the largest suite of disease-specific patient chart review studies in the industry.”

I would love to show you a photo of the memorable scene of Bill at his big desk covered with aging-related newspaper clippings, mostly in Japanese, but because of security issues, no cameras are allowed, so please just imagine that.

BILL HALL – JAPAN THE AGING SOCIETY AND A TEST MARKET FOR THE FUTURE TRANSCRIPT

Transcript contributed by Linda Sherman at BoomerTechTalk.com
(The original sound cloud link is currently broken. I have written to PerthUSAsia Nov 2021): https://soundcloud.com/perthusasia/japan-the-ageing-society-and-a-test-market-for-the-future-bill-hall)

00:00

Kyle: Welcome to the Perth USAsia Centre’s Perspectives podcast. I’m your host Kyle Springer. Rising life expectancy is generally seen as a good thing, modern medicine has prolonged life expectancy and previously deadly diseases can be treated and prevented. As a result, many developed countries have an unprecedented population of elderly citizens. And one problem modern medicine continues to struggle to solve, are the health problems associated with aging. An aging society also affects a country’s economy.

00:42

We can observe these effects in Japan: a highly productive and competitive economy, struggling with slower growth rates. 30% of Japan’s population is already over the age of 65 and, by some estimates, Japan’s population will actually shrink by roughly 39 million in the next 50 years. In this podcast, I’m joined by Bill Hall, who is an original founder of the Japan Studies Program here at the University of Western Australia, and is now president of IPSOS Healthcare in Japan. Bill starts off our podcast by giving an overall demographic snapshot of Japan and what the implications are for the Japanese economy.

01:26

Bill: As of last year, 27.7% of the total Japanese population now is aged 65 plus. In the rest of the world, people are talking about ‘the aging problem in 2030 when we will get to 20% of the population aged 65 plus’. We’re already at that stage and women live longer than men, so 30% of all women are now aged over 65 in Japan. To put an interesting Australian perspective on this – the number of people in Japan who are aged 70 plus is around 25 million, which is essentially equivalent to the population of Australia in ballpark number terms.

02:01

Kyle: Wow

02:02

Bill: And we have 10 million people over the age of 80; last year for the first time 2 million people turned 90; and there are currently some 65,000 people who are 100 and above. The government gives out a little silver cup when you get to 100, since it’s a big deal to get to 100. In 1963-1964, it was 175 or something like that number of people who received that little silver cup. Now it’s getting to the stage where every year you have 30,000, 40,000, 50,000 persons; and they’ve actually shrunk the size of this little silver cup by about half because it has become so expensive, and keeps getting more and more expensive. [Laughing]. Well, that gives you an idea of the numbers right there, they’re huge.

02:50

Kyle: Indeed. So what effects does an aging population have on certain subsections of an economy, in this case Japan’s?

03:01

Bill: Well let’s look at agriculture; the average age of a farmer now is 69 and so, if you’re sitting in the Japanese government, you have to ask the question, “how are we going to maintain food sustainability over the next x number of years”? The average age of a private practitioner, which is like a G.P. doctor in Australia, is 59; and if you’re a statistician, you know that to get an average of 59, you’ve got a few oldies in there who probably need gerontological help themselves [Laughing]. And, if we talk about persons in jail, this year some 10% of the new entrants into jail were over 65; that’s just a sampling of the impact.
03:50
Kyle: You said in the past that Japan could take the role of a test market for the aging world. What business opportunities does an aging population present?

04:02

Bill: Well, first of all, historically there has been a tendency to focus advertising on young people. But, if you just see these numbers, and also consider that most of the wealth in Japan is held by the 65 plus, there’s a big enough number now to make it a pretty interesting business market. So, for example in disposable diapers, there are now more adult diapers sold in Japan than there are baby diapers.

04:31

Kyle: Wow

04:32

Bill: And it’s not just diapers as an overall category; they now have segmented the market. So, you have disposable diapers for those people who’ve had a stroke and are trying to recover; disposable diapers for people who are lying down and can’t get out of bed, so you need a different type of one; for people who can still walk, they have a different one. Thus, Japan now has become an example of a test market for how do you create diapers for an aging society; and this is just one example.

05:02

In foods, there are now sub-segments of food; for people who have teeth, or who don’t have teeth, or just have a couple of teeth. The number of teeth impacts what you can chew and not chew. So, they’ve created whole sub-segments of different sorts of foods for whatever age you are. Obviously, another big opportunity is wheelchairs – in fact at this year’s CES in Las Vegas (the Consumer Electronic Show), a new Japanese wheelchair won the best of show sort of thing. It’s Bluetooth controlled and can go up and down stairs, and can do all sorts of stuff. No matter what area you look at, there’s opportunity.
05:42
Kyle: I can imagine if you’re a company that sells baby products, you could repurpose it for an elderly population.

05:51

Bill: Well, yes, that is what is happening, and diapers is one example. To give you a different example. I think it was here as well but there was a brain training game, I think it used to be Nintendo that had it – don’t know whether you played that or not. There’s a professor in northern Japan who is a brain imaging expert and he figured a way that by training the brain, you could maybe slow down the progression of Alzheimer’s, or at least reduce the dementia levels a little bit. He turned it from a book into a Nintendo game and it sold like 30-40 million copies worldwide.

06:37

To your point about re-purposing your business, there is a company in Japan called KUMON, which I think is in Australia as well.

06:45

Kyle: Yes, the math training for kids.

06:48

Bill: What’s happening is that there are not enough kids coming into their programs. So, they have taken this concept and are now doing this brain training game for the 65 plus. This is an example of how you change a business to fit into a new market. And you know the issue of lack of children is huge– for example, some 1,000 pediatric departments in hospitals have closed in the last 10 years. That gives you an idea of what’s happening.

07:25

Kyle: Fascinating. Now it’s estimated by 2025, 1 in 3 people that are aged 65 years or older will have some form of dementia in Japan. We talked about it on the business front but how does a government prepare for a public health problem like that?

07:44

Bill: Yes, this is a good example of being a test market for the world. This estimation came from the Japanese government – that one in 3 people at 65 plus will have mild cognitive impairment (called MCI), some sort of full blown Alzheimer’s, or some other form of dementia. From the drug business perspective, the problem is that every drug targeted at Alzheimer’s has failed in Phase 3 trials. It shows promise in Phase 1 and Phase 2, but when you get into large scale Phase 3 trials, every drug has failed in the last 10 years. So, there has not yet been a drug which can cure or ameliorate Alzheimer’s at this point; maybe by 2025 because a lot of people are putting a lot of money into this. But it’s costing you around about $1.5 billion U.S. to bring a new drug to market.

08:37

There is a lot of money going into this because this is a problem which is not just Japan, this is a global problem going forward. And it may happen that a cure can be found. You know that with hepatitis C, I don’t know whether you’re familiar, but it’s now curable finally. In 8 weeks or 10 weeks you’re now cured; this is an example of the drug business actually doing good.
So what do you do if you are in the government?

09:04

They have set up programs and policies to guide how we are going to handle this. There are lots of issues. One of the issues is how are you going to look after such people. In Japan maybe 10% — 12% of people are going into an institution, the rest are at home. And that creates a huge burden on the caregiver which is the wife or the husband depending on the case. And so, we are looking to figure out in Japan how can we create a sort of social community where everyone looks out for others. As an example, there are people who deliver foods like Japanese bento on a regular daily basis for people who can’t cook for themselves. If they deliver and no one answers the door, of if there’s newspapers piled up, they immediately call either the police or the local ward office to come double check. So, building community systems is one example of what we’re trying to do.

10:07

The other is going to be how do we train people to handle this? What you have with banks, for example, is a situation where oldies come into a bank and saying you stole my money, because they can’t remember their pin code. So, all banks are now having to go through a training program of how do you handle people who start screaming and shouting, and they’re not necessarily bad guys, they just don’t remember. That’s another example of the type of thing that needs to be done.


10:42

Kyle: And you mentioned this briefly in your last comment but I understand Japan has a problem with a shortage of healthcare workers and they don’t really have a lot of easy solutions for that. What are some of the things that they’re looking at?

11:00

Bill: They did an EPA [Economic Partnership Agreement] with the Philippines as an example. The Philippines’ biggest export is people, so they set up a system whereby 1,000 nurses or healthcare workers could come to Japan. These workers have to train and learn the language, and then, if they can pass the language tests, they can stay in Japan and be long time workers. The issue is the Japanese language. If you’ve ever studied Japanese, you have an idea what the problem is – and so if they don’t pass it, they tend to leave. Which means importing foreign workers is going to be quite difficult. because the problem is, and it’s a legitimate problem if you’re giving people medicines, if you say please take this and you can’t read what the medicine label says, or what are the side effects, it could be dangerous. If you’re a maid cleaning a house, it’s a different concept to someone coming in to do healthcare-related stuff.

12:00

So this is an issue which is a very difficult one to overcome, and frankly I don’t think you’re going to find that many persons coming to Japan who could go all the way through and get to that level of knowledge of medical Japanese. Which then gets you into robotics where Japan is doing a huge amount of work in exoskeletons. You may have seen these where, because you’re lifting people, you put this exoskeleton on your arm and it can help you lift so you don’t hurt your back and things like that. A lot of work is going to that field and, going back to farming for a moment, farmers who live on hillsides carrying oranges and things down now have exoskeletons to help them carry things because they’re getting older, and they’re not as strong as they used to be. So, I think there’s going to be a huge growth business in that side.

12:52

Kyle: You mentioned technology, do you have any thoughts, other thoughts on how emerging technologies especially like the internet of things, telemedicine; how do you think that will help shape the future of an aging world?

13:07

Bill: Well, with the advent of digital, we are moving into, not just Japan but the world is moving into a paradigm shift in healthcare. If you think about it, nothing has changed for several thousands of years in how we go about healthcare. 3,000 years ago, if you felt a bit sick, you walked 3 days to find a witch doctor, he gave you ‘mumbo jumbo jumbo jumbo’, and then you walked 3 days to go home again. It hasn’t changed if you think about it. You go to the hospital, maybe in a car now, but you wait an hour to see the doctor, maybe he gives you 10 or 20 minutes, and you get in a car and go home again. It hasn’t really changed.

13:49

What we’re now seeing is with wearables, or with other products with sensors attached such as shirts with sensors built-in, etcetera, we can now measure on a continuous basis. Up until now medical testing has tended to be on a one-shot basis. You get your medical test, and the doctor says okay you’ve had your tests for the year, come back next year; your blood sugar is a little bit high, be a good guy, and exercise a bit. But there’s no continuous measurement of that before the next test. However, now you’re going to have data coming through in a continuous stream.

14:23

So you’re able then to build predictive algorithms. And with genomics coming in and the cost of genetic testing coming way down, I can now know what your gene structure is. And, potentially, with a continuous stream of data coming in about how your cardiovascular scenario is, I can put all these pieces of data together and say you are likely to have a heart attack in next month or two if you don’t change behavior. That’s how this whole digital stuff is starting to come together that will radically transform healthcare. Then you mentioned what about telemedicine? Particularly in the countryside, where we don’t have as many doctors as we need. With the current good optical fiber connections, you can transfer images, really clear images, and you can be sitting there and the doctor will be sitting hundreds of miles away, look at the images and make good recommendations. So that whole area is going to change.
15:29
Then smart houses, all houses will have sensors built in. So, reverting again back to dementia. You can build in sensors so a person can go to these areas in the house, but if they go too far, the door shuts automatically, and so on.

15:42

Kyle: Now, I understand that one of the emerging problems is digital legacy issues. For example, if someone dies and they leave an online banking account where only that person has access to it; or they might have a social media profile and they’re the only ones that have the password to shut it down. Am I on the right track with this? Are we going to see more problems with those kinds of things?

16:11

Bill: Absolutely. It’s another growth business in Japan. There are people who specialize in digital legacy issues. For example, Yahoo has a program which states that if you join, we’ll make certain that we shut off your social media program. Not so many oldies have a social media program at this point, but digital legacy is certainly a key issue with banking accounts. So, there are businesses growing up around this offering to help you solve these problems. Also, how to get a more effective and cheaper funeral, etcetera. It’s a growth business.
16:50
Kyle: You showed me a graph earlier of other countries in Asia, that have the same aging problem; what are some of these other countries and are they going to learn anything from Japan?

17:04

Bill: For Japan, it’s not just aging that is the issue, it’s also the speed of aging. There is no precedent in world history for a country to be not just as aged as Japan, but also to be facing such speed of aging. So, for example, when they introduced the pension program, you retired at 60, and you were dead at 63. The system worked pretty well. Now you still retire at 60, or gradually up to 65, but you’re living until 90. So that speed of aging is the issue.
Korea is not that far behind Japan, and China is coming up, which is probably the most scary one because they’ve had 40 years of one child policy and they’re not a developed country yet. This is where China really has to move pretty quickly to get to that level, so they can actually pay for this coming aging society. And Hong Kong, Singapore, of course northern Europe. Italy is also going that direction, but there’s been a lot of immigration, people coming in from Syria and Africa into Europe, so it’s still getting many more younger ones coming through the system. But the aging issue is basically everywhere.
18:25
Kyle: Looks like Southeast Asian countries are aging, but from a lower base. What’s happening in Southeast Asia?

18:35

Bill: Well, India’s got a lot more young people, Indonesia is the same, and also Malaysia. So, those countries are still less impacted. But, there are large populations in Indonesia and India, and even if you say that the average age is young, there’s still 100 million people or more up on this high end of the aging society.
18:57
Kyle: And in your opinion, what can countries like India and Indonesia do to kind of take advantage of that demographic dividend, I understand they call it, and set themselves up for a later aging population.

19:13

Bill: In Japan they have established the PMDA (Pharmaceuticals and Medical Devices Agency) which is the group that does the approvals of new drugs and devices – does the drug get through, or the does device get through and be approved as being safe. The PMDA is looking to start working with the Southeast Asian countries in such a way that if a drug or device gets approved in Japan, it could be automatically approved in these countries; so that would enable them to tag into the developments in Japan. It is a specialized field; but it’s one area where they could certainly work together very closely with Japan.

19:56

Kyle: What can countries such as Australia do to help solve these emerging problems. When we talked earlier, you mentioned the possibility of research collaboration, can you tell me a little bit about that?

20:08

Bill: One area which is growing is what we call “regenerative medicine.” Professor Shinya Yamanaka of Kyoto University won the Nobel Prize for his work on iPS stem cells. Essentially what it enables you to do is to extract the cells from a person’s body, grow them, and then put them back into the body. This is not an evolution in medicine, this is actually a potential revolution. There are products in the market in Japan already, for example, for burns. If you’ve got a 90 percent coverage of burns, most people die. But if you could live– keep alive for 3 weeks -, they extract the cells, grow them in thin flat sheets like a tatami mat, and then slice the sheets up, wrap it around, and it’s cured.

21:02

This is the sort of stuff which is happening now. But a key issue is that, compared to the normal business of drugs, where you have a test of a new drug versus a comparative drug already in the market or against a placebo to see if it works, we don’t know whether, 20 years in the future, these methodologies are going to create some other side effect problem, cancer or whatever. Japan has created a regulatory pathway approved by the government, which is first and the only one in the world, where you can begin to do your trials, and you will be compensated, etcetera, if things happen later on. So, that makes it much easier to go forward with this whole new world of medicine.

21:49

Australia is doing a lot of work in this field but doesn’t have the regulatory pathway, at least to my understanding. There have been many interesting groups coming up to Tokyo presenting to Japanese companies, and a lot of people turn up to these presentations organized with the Australian Embassy and Austrade. Thus, I think that’s one area we could certainly be looking at.

22:13

Kyle: Good well thank you Bill, this has been great.

22:16

Bill: My pleasure. Thank you.

22:18

Kyle: You are listening to our guest, Bill Hall, talk about the effects of aging, the economic impact, and the opportunities they present for Australia. Japan is one of our focus countries here at the Perth USAsia Centre, and if you’re interested in Japan please sign up to receive our events and newsletters at www.perthusaasia.edu.au. If you like what you hear, follow us on SoundCloud or iTunes, leave us a rating and let us know what topics you want to hear about in our upcoming episodes. Thanks again for listening to the Perth USAsia Centre Perspectives podcast. I’m your host Kyle Springer signing off.

A little about interviewer Kyle Springer.

Bill Hall TED Talks

TEDxTokyo 2013

“Few Westerners have delved deeper into the Japanese consumer’s psyche than Bill Hall. Bill began researching the Japanese market in the early 1970s before moving on in the late 1980s to serve as president of two Fortune 500 companies in Japan. Also an economist of note, Bill is one of a small number of eminent Japanese and Australians selected by the governments of Australia and Japan, respectively, to attend the Australia-Japan Conference series. He has been chairman of the Australian & New Zealand Chamber of Commerce in Japan (ANZCCJ) and of the Japan Market Expansion Competition (JMEC), and still serves both organizations. Bill returned to the market research and research-based consulting field in 2001, and currently runs the healthcare and business consulting divisions of Synovate in Japan.”

TEDxTokyo 2012

American Chamber of Commerce in Japan (ACCJ) Videos with Bill Hall

If you will be in Tokyo June 5th, and you are a member of the ACCJ or can get someone to invite you as a guest, the following popular series will continue with M,N,O at the Tokyo American Club. Registration deadline May 31st at noon.

Date: Thursday, June 1, 2017
Venue: Tokyo American Club
Back by Popular Demand: Now You Know Your… J-K-Ls (?) – A Wide-Ranging Panel Commentary with Jesper Koll, Dave McCaughan, and Bill Hall. Moderated by Patrick Newell.
Announcing the fourth installment of this very popular panel event where some of Japan’s most seasoned experts comment on a wide range of topics guided by letters of the alphabet, this time J, K, and L. Economics, health, culture, & education are just a few of the areas to be covered in this crossfire short-answer format.
About the Speakers:
Jesper Koll: CEO of asset manager WisdomTree Japan, has been researching and investing in Japan since becoming a resident in 1986. Starting out as a parliamentary aide, Jesper was Head of Equity Research and Chief Japan Strategist at JP Morgan and Merrill Lynch. He is one of Japan’s top economic advisers and commentators.
Dave McCaughan: Story Teller at Bibliosexual and Chief Strategist at Ai.agency, Dave spent 30 years wandering Asia as the Strategy Planning leader for McCann Workgroup, including 10 years in Tokyo studying, planning and building brands. Since 2014 he has split his time between his home in Bangkok, his HK based brand and media consultancy, Bibliosexual, and Ai.agency, a Tokyo based research agency.
William (Bill) Hall: President IPSOS Healthcare Japan, he has 40+ years in business in Japan, primarily in market research, with an interregnum as Japan President for two Fortune 500 companies. Bill is a highly regarded expert on the Japan market, demographics, healthcare trends, and the impact of the aging society.
Patrick Newell (Moderator): Co-founder of Tokyo International School, TEDxTokyo, Living Dreams & 21 Foundation. He has been a leader and catalyst in Japan and globally for the past 25 years in shifting how to learn and align organizations with our increasingly fast-changing world. Patrick is also curating the 1st SingularityU Summit in Japan in September.

Feb 2015 ACCJ

Bill Hall Public Appearances

If you are fortunate to be an executive member of the Economist Corporate Network, you may have attended the May 8th, 2018 off the record panel with the president of Google Japan, the president of Toys R Us Japan and Bill Hall.