Elder care is becoming an international business. Between the beginning of this century and its mid-point, the population of those 60 or older will have trebled.
“Population aging is becoming a key global challenge that will have profound economic, social, and cultural implications for decades ahead,” the World Bank said at a conference on aging last summer.

Europe Ages, Struggles

Europe is already feeling squeezed, as the continent’s fertility rates have fallen well below what economists unsentimentally call “replacement rate.” By mid-century, nearly three out of every five Poles, for instance, will be 60 years or older.

“The primary macroeconomic implication of aging is a shrinking supply of labor resulting from a declining working-age population,” the World Bank said at the conference. “The structure of the working-age population will change as well, with potential implications for labor productivity due to loss of dynamism and less job reallocation across occupations, sectors, and locations. This has significant implications for economic growth—which depends on the supply and productivity of labor.

“Furthermore, aging populations tend to save less, which can have negative consequences for investment and capital accumulation and thus further slow down economic growth,” the World Bank said. Population aging will increase demand pressures on public services, most importantly the provision of health care and long term care, the bank predicted. Finally, increasing expenditure on pensions and health care will affect long-term sustainability of public finances.

“In the face of these daunting challenges, how do we move forward?” the bank asked.

From Mexico To Thailand

Increasingly, developing and underdeveloped countries say they have the answer. Germany, for instance, is already sending thousands of its aging folk to lower-cost Alzheimer’s villages in Spain, Greece, and the Ukraine.

Retirement villages and high-acuity centers are springing up from Mexico to Thailand, hoping to attract Europeans and Americans with low-cost, tropical alternatives to their homelands.

Where foreign firms can’t draw Americans abroad, though, they’re certainly willing to try to get American dollars here at home, experts say.

“There is a fair amount of money flowing into the senior housing space,” says Christian Mason, president and chief executive officer of Senior Housing Management of Lake Oswego, Ore.

“We’ve been talking to a number of groups—Pakistan, India, China—who are interested in getting in the space. They’re looking not just at the returns, but the long-term demographics. It’s a market that’s going to be here, but also going to grow over the next 50 years.”

The Danes Are Coming

That’s certainly how some European businesses read things, says Anders Jensen, a commercial adviser at the Royal Danish Consulate, who has been helping Danish companies prepare to enter the U.S. market.

“A country the size of the U.S. as a potential market—the potential upside is enormous,” Jensen says.

“Especially now, when you see some of the political conflict as you go east, especially in China or Russia.
You can see that it’s not such a stable business environment there. Here, there’s a stable rule of law.”
n countries such as Denmark, where a single payer system has reigned for decades, companies have had to focus on “functionality” rather than cost. Ironically, that gives them an advantage at the high end of the U.S. market, where American companies want to offer as much luxury as possible at the most reasonable cost possible.

“You see some of the high-end companies—like Brookdale or Sunrise—they have television commercials that make them look like the Hilton,” Jensen says.

“Because they’re balancing their own books, they have an interest in attractive settings and high-end service,” he says.

(And, as for any disdain for “European-style socialism,” Denmark’s health care costs are about half of those in the United States, government statistics show.)

U.S. Companies Look Abroad

Danish companies think they can, say, sell sink fixtures in assisted living homes because their target has long been “patient-focused,” Jensen says.

“What scares most Danish companies is, of course, the competition, because it’s fierce,” Jensen says, “and liability, because we hear all the horror stories. It’s definitely a risk.”

Meanwhile, U.S. companies aren’t sitting idly by, experts say. Some of America’s biggest providers are already investing abroad, trying to export their business models to Canada, Europe, and beyond.

“You’re starting to see things occurring in Japan, where you have one of the oldest populations on the globe. If you look at the industrialized countries where the populations are aging, there are a lot of opportunities,” says Mason, who is working toward a doctorate in finance.

As fierce as global competition may become, it can only benefit the world’s seniors, Denmark’s Jensen says.

“You can argue that Denmark has a decent health care system, but there are still a lot of inefficiencies.
Sometimes it’s a good thing to have the administrators balancing their own budgets,” he says.
“We still have a lot to learn from the U.S. model.”