Busan’s Ageing Economy Is Not One Market

More than a quarter of Busan’s residents are 65 or older. The city is investing in AgeTech, senior housing and employment programmes, but the deeper economic adjustment is unfolding across care, consumer spending, housing wealth and the labour market.

Busan is already living with a demographic structure that many other large cities are still approaching. In July 2026, 846,794 of its residents were 65 or older, accounting for 25.6 percent of the registered population. The city has responded with care programmes, employment initiatives, plans for senior housing and, most visibly, an effort to build an AgeTech industry around artificial intelligence, health, independent living and services for longer lives. Yet nearly 850,000 older residents do not constitute a single market. They include people still earning wages, homeowners with limited cash income, travellers and restaurant customers, households financing long retirements, and people whose declining health creates needs that ordinary consumer spending cannot meet.

Ageing changes an economy through several channels at once. Care demand rises as health or functional capacity declines. Consumer markets change when people remain healthy enough to travel, exercise, learn and spend into their 60s and 70s. Housing takes on a different economic role when longer retirement meets household wealth concentrated in property, while employers face their own problem as experienced workers grow older and the supply of younger labour contracts. A technology company selling an AI care service, a hotel trying to retain customers in their 70s, a household converting home equity into retirement income and a manufacturer deciding whether to retain an older skilled worker are responding to the same demographic shift. Their revenues, costs and buyers follow different rules.

Busan’s recent policies increasingly reflect that complexity. Its AgeTech strategy, announced in 2025, commits roughly 128.3 billion won over five years across four strategies, 12 priority areas and 34 tasks, ranging from industrial infrastructure and start-up support to health services, food technology and housing improvement. A separate 2026–30 programme worth 27 billion won is intended to make Busan a field-testing and commercialisation base for AI-enabled AgeTech. BIPA said in July that it had secured a pool of 32 potential demonstration demand sites, including cruise, hotel and senior-residence settings. Later that month, it selected 25 projects, with 20 demand sites and three first-year anchor labs linked to the initial rollout.

That breadth makes the simplest criticism of Busan’s ageing strategy difficult to sustain. The city is no longer treating later life solely as a welfare problem, and its industrial policy is not confined to technologies for frail patients. More difficult economic questions arise after a technology or service has been demonstrated, when a household, hospital, insurer, housing operator or public agency has to decide whether it is worth paying for again.

The Market Busan Can See

AgeTech is the easiest part of this economy to count. It produces companies, products, demonstration projects, public grants and test sites that fit the familiar machinery of industrial policy. BIPA’s 25 selected projects include new AI services, upgrades of existing products, wider deployment of technologies already tested elsewhere and the demonstration of commercialised services in public-facing anchor labs. Health and care are part of the portfolio, but so are housing, finance, safety, education and nutrition.

The programme is also beginning to move further toward market development. On September 1, BIPA opened a separate AX AgeTech Market Expansion Support Programme and, on the same day, began recruiting companies for a Busan pavilion at CES 2027. Busan can therefore no longer fairly be characterised as building a system concerned only with pilots. Its policy architecture now explicitly extends from testing toward market access and overseas expansion. Publicly available information remains much richer, however, on participating firms, supported projects and test environments than on repeat sales, procurement contracts, customers retained after a demonstration or revenue generated without public support.

A hospital, hotel or senior residence that agrees to host a trial has shown a willingness to experiment, not necessarily a willingness to buy the service at its eventual commercial price. A city can subsidise an initial deployment without establishing that another municipality will purchase it later. A product can perform well for older users and still lack a durable revenue model if households cannot afford it and insurers or public agencies have no mechanism to reimburse the cost. Field testing can establish technical performance and user acceptance before it establishes who will finance repeated use.

This problem is unusually important in ageing markets because some of their strongest demand originates in declining capacity rather than discretionary preference. An application used by healthy retirees can behave much like an ordinary consumer service. Technology that helps someone bathe safely, reach medical care or remain at home despite declining mobility enters a payment system in which the person using the product, the person benefiting from it and the organisation paying for it may all be different.

The commercial significance of Busan’s AgeTech experiment will become clearer when hospitals, housing operators, insurers, care providers, governments or households begin entering repeatable purchasing arrangements and suppliers can sell the same service beyond subsidised trials. Busan is now building more of that transition into its policy architecture. The evidence needed to judge the resulting businesses is only beginning to accumulate.

When Need Becomes a Market

Care exposes the financing problem most clearly. South Korea has ample evidence that older people need more assistance as functional limitations accumulate, but the prevalence of need does not reveal how much of that demand households can finance themselves. A study using the 2023 National Survey of Older Koreans examined 9,951 community-dwelling adults across housing support, daily living assistance, safety, medical care, transportation and counselling. It found that 22.6 percent belonged to a group with both high service needs and high willingness to pay. Almost as many, 21.4 percent, had high needs but low willingness to pay.

Those two groups pose different economic problems even though both need substantial assistance. A provider serving the first may be able to develop a direct household market. The second may depend on insurance, institutional purchasing, public procurement or subsidies. Care can generate substantial economic activity without behaving like conventional retail demand because the source of payment changes with the service and the household using it.

Recent research makes the underlying pressure difficult to dismiss. A 2026 study using repeated national surveys found that among older Koreans with functional limitations, the adjusted probability of unmet care needs rose from 20.4 percent in 2014 to 52.4 percent in 2023. Informal care from relatives and friends fell sharply during the same period, while growth in formal care did not compensate fully for the decline. A separate study published in August found unmet long-term-care needs rising from 20.1 percent to 54.7 percent between 2014 and 2023 as family-provided care fell from 72.7 percent to 36.4 percent.

Those unmet needs can enter the economy through several routes. Families may purchase assistance directly. Senior residences can include services in recurring fees. Hospitals and long-term-care providers can buy technologies that reduce labour requirements or improve monitoring. Insurance systems and governments can finance interventions when the medical or social savings exceed what an individual user could reasonably pay. A large care economy can therefore coexist with weak household purchasing power.

This is also why the eventual performance of AgeTech cannot be read from user counts alone. A fall-prevention system may have more economic value to a hospital or insurer than to the person wearing it. Remote monitoring may help a housing operator manage labour costs. Home technology may delay institutionalisation and reduce later public expenditure. Those benefits can support viable companies when an organisation that captures part of the saving also has a mechanism to purchase the service.

Care consequently crosses the conventional boundary between industrial and social policy. The same product can be a technology company’s revenue source, a provider’s labour-saving investment, a government expenditure and an essential service for a household. Busan’s AgeTech policy is being built inside that wider financing system, where useful technology and sustainable payment have to develop together.

Staying in the Mainstream Economy

Elsewhere, ageing alters demand without creating an entirely new need. People who remain healthy, mobile and connected later in life can continue to participate in markets they entered decades earlier, changing the age profile of ordinary consumption.

A 2025 Korean study using financial and media panels from 2014 through 2023 found significant changes among people aged 55 to 64 and 65 to 74. Relative to the 45-to-54 group, gaps in leisure and communications spending narrowed over the decade, as did several differences in media use. People aged 75 and older showed similar movement, but to a more limited extent. The study’s more important implication for business is the heterogeneity it reveals within the population routinely grouped together as older consumers.

National survey data point in the same direction. Respondents to the 2023 National Survey of Older Koreans placed the beginning of old age at an average of 71.6, up from 70.5 three years earlier. Smartphone ownership rose from 56.4 percent to 76.6 percent, while the share saying they would prefer to use their assets for themselves and their spouse rather than preserve them for inheritance increased from 17.4 percent to 24.2 percent. These figures do not describe Busan specifically, but they illustrate why the behaviour of people entering their late 60s today cannot simply be inferred from earlier cohorts of the same age.

For businesses, much of the adjustment may have little to do with products explicitly branded for seniors. Someone who continues taking short trips at 68, exercising at 71 or spending on restaurants and culture at 73 remains a customer of tourism, hospitality, sport and entertainment. Hotels can make rooms easier to use without becoming care facilities. Fitness providers can accommodate changing mobility without turning exercise into rehabilitation. Destinations can adjust transport, itineraries and booking systems so that customers do not leave the market as quickly when their physical needs change.

Busan already has assets that can serve this type of demand. Its 2026 Marine Healing Tourism Program runs from May through October across seven beaches and Dongbaekseom, offering beach yoga, sunset Pilates, ocean running and singing-bowl sessions, alongside one-day and overnight programmes involving local destinations, yachting, hot springs and massage. General sessions cost 10,000 won. First launched in 2021, the programme is now in its sixth year. It demonstrates that the city can combine coastal infrastructure and wellness activities into a coherent tourism product. It does not establish that older consumers constitute a large commercial customer base for that product: the programme is publicly organised, aimed at citizens and visitors broadly, and priced as a public tourism initiative.

The distinction matters because a larger older population does not automatically mean uniformly stronger purchasing power. In 2024, Busan had about 470,000 older households, representing 32.1 percent of all households. Among people aged 65 to 74, 48.9 percent described their income as insufficient; the share reached 59.2 percent among those aged 75 and older. Only 18.7 percent of the younger group and 7.2 percent of the older group described their income as comfortable.

Busan can therefore gain more customers who remain healthy and digitally connected into their 60s and 70s while simultaneously gaining more households whose current income limits discretionary spending. Health, employment, accumulated wealth, household composition and cohort shape whether another decade of life becomes another decade of consumption. Chronological age alone is a weak guide to the size of the market.

For mainstream businesses, the practical issue is whether customers who once aged out of a service still need to do so. Some markets will require new products around disability or functional decline. Others may retain older customers through relatively ordinary changes to interfaces, transport, opening hours, accommodation or service design. The commercial effect comes from extending participation in markets that already exist.

Wealth in the Home

The gap between current income and accumulated wealth moves the analysis toward a much larger household asset. In the 2023 National Survey of Older Koreans, average real-estate assets were about 318 million won, compared with financial assets of about 49 million won. Both figures are national averages and conceal large differences between households, but the imbalance captures a central feature of retirement in South Korea: substantial wealth can coexist with limited liquid income because so much of the household balance sheet is held in property.

Busan adds its own urban structure to that problem. The 2025 Population and Housing Census recorded 1.362 million homes in the city. Local tabulations of the census show that people aged 70 or older accounted for 25.2 percent of Busan’s one-person households, while one-person households aged 65 or older represented 13.5 percent of all city households. Of the housing stock, 61.2 percent was at least 20 years old and 34.8 percent at least 30 years old. About 130,000 homes were unoccupied, equivalent to 9.5 percent of the total.

Those figures acquire economic significance when considered together. More residents are entering later life alone, much of the housing in which households have stored wealth is ageing alongside them, and Busan already has a substantial stock of unused property. Longer lives therefore create decisions about which homes should be renovated, which households can remain safely in place, who might move to smaller or service-rich accommodation, what becomes of the homes they leave and how property accumulated over a lifetime can finance a retirement that may last decades.

Selling a home is only one route. Korea’s reverse-mortgage system allows older homeowners to convert residential property into regular income while remaining in place. In Busan, housing-pension subscriptions reached a record level in the first half of 2026. Monthly new subscriptions reported by Busan MBC rose from 24 in January to 73 in February, 85 in March and 172 in April. A change to the programme from March increased monthly payments for new subscribers by an average of 3.13 percent for the reference case used by the Korea Housing Finance Corporation, so the rise cannot be treated as a pure demographic effect. It nevertheless provides observable evidence that some Busan households are already turning housing wealth into retirement cash flow.

Housing differs in this respect from most markets commonly placed under a silver-economy label. Tourism and leisure involve annual spending. Technology companies seek revenue from products and services. A home sits on a household balance sheet, so changing its use can release capital, create renovation demand, alter the supply of existing housing, change neighbourhood turnover and determine where future care is delivered.

Busan’s ageing housing stock makes those decisions more difficult. A resident may want to remain in the same neighbourhood while stairs, bathrooms, building access or distance from essential services become harder to manage. Renovation can extend independent living, but the investment depends on household income, construction costs and the underlying value of the property. Moving may provide a better physical match, but downsizing works only when appropriate alternatives exist and households are willing to leave established social and neighbourhood networks.

House values, renovation spending, reverse-mortgage balances and the revenue of senior residences cannot be added together to produce a meaningful estimate of the size of this market. They represent different kinds of economic value: an asset stock, expenditure, a financial contract and service revenue. Their connection lies in the way longer lives force households to reorganise property, income and living arrangements.

Housing Beyond Real Estate

Busan’s own housing strategy shows how far that reorganisation could extend. Its 2032 Housing Comprehensive Plan calls for roughly one million pyeong of sites for active-senior towns, with an urban model around Marine City and suburban forms in Gangseo, Geumjeong, Haeundae and Gijang. The city says the model would combine housing with housekeeping, health, leisure and medical services, placing it closer to a continuing service business than a conventional housing-supply programme. The plan is led by the city’s housing-policy administration rather than by its AgeTech or welfare programmes.

The difference matters after residents move in. An ordinary residential development can realise much of its value through a sale or lease. A senior residence has to continue delivering part of the product for years. Meals, medical access, housekeeping, mobility support, leisure programmes, community management and eventually greater levels of assistance create recurring labour and operating costs. The building remains important, but so does the organisation running it.

L’Hour in Gijang illustrates the scale of that proposition. Its operator lists 574 households across four towers, while a second development, Lative, is planned for another 370 households. The complex also incorporates an integrated medical facility. The proposition offered to residents therefore extends beyond the dwelling to a continuing combination of accommodation, healthcare access and lifestyle services.

That creates commercial risks unlike those of ordinary housing. Operators have to maintain service standards over long periods, absorb higher labour and medical-service costs, decide what belongs in a basic package and what residents pay for separately, and preserve occupancy as the needs of the resident population change. A development marketed to people in their late 60s will eventually be serving many of the same residents in their 70s and 80s.

Singapore’s Community Care Apartments make this continuing obligation explicit. The public-housing model combines senior-friendly homes with a mandatory Basic Service Package. Beginning with the October 2026 sales exercise, eligibility is being lowered from 65 to 55 to give households more time to right-size and plan for later life. The government has also revised and subsidised parts of the service package. Housing choice, future care and recurring service costs are therefore designed within the same institutional model.

Busan does not need to replicate a Singaporean public-housing model for the comparison to be useful. It demonstrates that the economic design of senior housing extends beyond constructing more units. Someone has to determine how a household moves, what happens to the previous home, how recurring services are financed and how those services change as residents age.

Most older Busan residents will never live in a dedicated senior town. Accessible renovation, home-based support, smaller homes close to services and smoother movement between housing types may ultimately affect many more households. Senior residences are therefore best understood as one visible segment of a broader market in housing circulation, household capital and independent living.

Work After Retirement

Housing determines how assets accumulated during working life can support later years. Labour policy determines how long earnings and accumulated skills can continue contributing before households have to draw those assets down.

Busan already has a large older workforce. In 2024, 790,700 people aged 50 or older were employed in the city, up by 117,400 from 2015. Yet the group’s employment rate was 50.5 percent, slightly below the 50.7 percent recorded nine years earlier. Employers, meanwhile, were reporting shortages: provisional 2025 data put unmet labour demand at roughly 15,000 workers, including 3,294 in health and social work and 3,115 in mining and manufacturing.

The figures describe pressures that coexist without automatically solving each other. Older workers cannot simply be moved into unfilled positions when skills, physical requirements, pay, schedules and location do not match. Companies can also lose specialised knowledge through retirement even in a city where many older residents remain economically active. Labour shortage and an ageing workforce intersect only where an employer has work that an older employee can and wants to continue doing.

Busan is using several policy models to address that problem. Its 2026 programme for unemployed residents aged 50 to 64 has a budget of 2 billion won and a target of 600 jobs, with an expanded emphasis on social-service work related to local care and safety. That programme is administered by the city’s Older Persons Welfare Division. A separate scheme, handled through labour policy, subsidises employers that hire Busan residents aged 60 or older, offering up to 4.8 million won per worker when minimum conditions are met; the worker can also receive an employment incentive of up to 600,000 won.

Those programmes are not economically equivalent. A publicly financed social-service job can provide income, participation and useful community work. A private hiring subsidy is intended to move a worker into employer demand that may continue after public support ends. Employment matching addresses a different constraint by trying to connect workers’ capabilities with vacancies. Judging all of them mainly by the number of participants would obscure the mechanism each programme is trying to influence.

Research on Korea’s broader labour market suggests why job quality matters. A 2025 study in The Journal of the Economics of Ageing found that 88 percent of Korean occupations became more age-friendly between 2000 and 2020, but improvement was slower than in the United States and older Koreans were not the primary beneficiaries of the change. The measure incorporates physical demands, autonomy, scheduling and other job attributes whose importance can rise as workers age.

Continued economic activity can also occur through less secure routes. Data from the Busan Credit Guarantee Foundation cited in a city-council analysis show that people aged 60 or older accounted for 20.08 percent of guarantee executions in 2026, up from 15 percent in 2022. Their share of guarantee defaults rose from 11.04 percent to 14.45 percent. Those figures do not show that older self-employment is generally involuntary or unproductive, but they reveal another form of later-life economic participation in which continued work can be accompanied by greater financial risk.

A city can therefore increase older people’s economic participation without necessarily making better use of their skills. Stable employment that retains specialised knowledge has different consequences from short-hour subsidised work, while both differ from debt-dependent self-employment. For an ageing labour market, durability, working conditions, productivity and occupational fit matter alongside the number of people who remain at work.

Fukuoka provides a useful comparison because part of its senior-employment strategy is organised explicitly around matching. The city has 14 Senior Job Stations at ward offices and Fukuoka 100 Plaza locations, providing senior-targeted vacancy information, employment seminars, job searches and consultation. The arrangement does not remove the wider constraints of an ageing labour market, but it puts the connection between employer demand and older workers at the centre of the intervention.

For Busan, that interface is likely to become more important as older workers make up a larger share of the labour force. Remaining economically active can help a household, but productive longevity also requires employers to find reasons to recruit, retrain and retain older workers in jobs that remain physically and economically viable.

One Population, Several Systems

Busan’s own research shows that the city already understands much of this wider landscape. Its 2025 Active Aging study examined participation, economic activity, health, housing, mobility and leisure and proposed measures reaching from employment and education to smart ageing housing and wellness tourism. Together with the widening scope of AgeTech, the housing strategy and employment programmes, that makes it difficult to argue that Busan lacks a broad conceptual view of ageing.

The institutional structure is nevertheless more segmented than the lives of the people those policies address. AgeTech is developed through industrial and digital-policy organisations with BIPA. Private hiring support for people over 60 sits within labour policy, while the 50-to-64 job programme is administered through older-person welfare. Senior towns belong to housing policy. Marine wellness belongs to tourism. Care operates through welfare, health and long-term-care institutions. Those divisions have administrative reasons: the programmes require different expertise, laws, budgets and delivery systems.

A household experiences the same issues in sequence and often simultaneously. A resident may still be employed at 63, become a heavier user of travel and leisure after retirement, own an apartment that is increasingly difficult to navigate, begin drawing income from that home, and later require technologies or services that make independent living possible. A spouse may become a caregiver before either person uses formal care. A decision about retirement can change discretionary spending and the timing of asset drawdown; the suitability of the home can alter future demand for care.

The gap between those perspectives should not be mistaken for evidence that Busan’s administrative structure is itself failing. The public record does not yet provide enough information on cross-programme referrals, shared outcome measures or household-level results to support such a conclusion. It does identify a series of economic interfaces at which the city’s response to ageing can be judged. Useful care technology has to reach an organisation or household able to finance it. A demonstration has to reach a repeat customer. An experienced worker has to reach an employer whose demand survives a subsidy. Housing wealth has to become suitable accommodation, spendable income or a home another household can use.

The OECD’s 2025 Cities for All Ages report approaches the same problem from a broader urban perspective. It places accessible urban systems, appropriate housing and stronger local economies that include older residents as workers and consumers among the central elements of age-inclusive urban policy. The framework is useful because it does not isolate later life inside an elderly-services sector; demographic change alters housing, public space, employment and consumption at the same time.

International examples likewise point toward different mechanisms rather than a single model. Fukuoka concentrates part of its effort on matching older workers with jobs. Singapore connects right-sizing, housing design and care services. Other approaches documented by the OECD use renovation and diversified housing to help residents remain connected to neighbourhoods and services for longer. Their value for Busan lies in showing that the same demographic pressure can require different economic institutions, rather than in supplying a template to copy.

The same caution applies to market size. AgeTech investment, care expenditure, older households’ housing assets, tourism spending and the wages of older workers cannot be added together into a meaningful figure for Busan’s ageing economy. One is public investment, another is service expenditure, another is an asset stock and another is labour income. A large aggregate would obscure rather than clarify how ageing is changing the city.

Those changes are visible in the flows underneath the aggregate numbers. Care expenditure rises for residents whose health deteriorates while leisure expenditure can persist for healthier cohorts. Property may remain locked in an unsuitable home or become a stream of retirement income. A company can lose an experienced worker or change a job enough to retain one. A hotel can lose older customers as mobility changes or redesign the service so that they continue to travel. An AgeTech product can disappear when a trial ends or become something a housing operator, hospital or government buys repeatedly.

Busan now has policies touching almost every one of those outcomes. What the evidence does not reveal is a single market that could reasonably be described as the city’s ageing industry. The absence of one may reflect the economics more accurately than the label does.

People do not enter a separate economy when they turn 65. They remain inside Busan’s labour, housing, tourism, financial and consumer markets, while some gradually develop needs that those markets cannot finance without insurance, institutions or government support. The balance between those experiences changes as the population ages, and businesses and public agencies respond through different sources of revenue and different measures of value.

The economic consequences are therefore likely to appear in transactions that carry no senior label: a hotel room that remains usable at 75, a factory job adapted for an experienced employee, an ageing apartment renovated for another decade of independent living, a home converted into retirement income, or a monitoring service purchased by a care provider rather than by the person wearing the device. Busan’s ageing economy is already forming across those ordinary markets. Its scale will depend less on the creation of a separate industry than on how long the city’s existing economy can continue to work for the people growing old inside it.