1. The Big Little Economy
(24th Sept 2008)

2. THE PRECIOUS CHILD
A convergence of falling birth/fertility rates + technology
advancements + increasing global affluence could lead to
unique market and strategic opportunities arising from the
Little Economy1.
1
Children - defined as pre-0 to below 15 years of age

3. Since the 60s-70s, fertility rates have fallen worldwide
• 1970 to 2000 - “major and unprecedented fall” in global fertility rates.
• A trend in both the developed and developing world.
• No European country is maintaining its population by birth.
• Fertility < 2.1 in 23 developing countries including China (fertility = 1.7 in 2000-2005).
.
Europe Pacific
Americas Asia
U.S. Africa
Source: World Fertility Patterns 2004, UN Population Division

4. The fall is global and will persist into the future
• In 2000-2005, world fertility = 2.65
(Developed – 1.56; Developing - 2.58; Least Developed – 5)
• By 2040-50, world fertility < 2.1 (replacement rate)
Shrinking
Global
Population
Source: World Population 2004, UN Population Division

5. For the country, shrinking population poses a real threat
• “The rapid ageing of the developed world is pushing the global economy towards
the edge of a demographic abyss.” (Commission on Global Ageing)
• In the next 10 years, the population of Japan will start to shrink, followed within
the next few decades by the EU and even China.
“To Shrink a City”, The Economist
“Ogama in Ishikawa prefecture canvassed
an industrial-waste company from Tokyo
to. .replace replace its paddy fields,
cedarwood plantations..”
“… administrators are starting to think about
the implications of population decline…. set
about trying to shrink the city. …...
“Sullivan County
Australia …. population
has virtually flat-lined…”
“2/5 of all U.S. counties are shrinking….
Children are disappearing even more
quickly.”

6. Various drivers have contributed to this fall...
Drivers
• Improved status of women (higher education, career opportunities)
• Rising income and wealth
• Use of contraceptives, legalization of abortion
• Technology advancements (mechanization)
I. TRENDS - driving forces
• Government policies (e.g. state-sponsored housing, childcare)
“..beginning of the decline began in the
late 60s with the advent of the pill”

7. .. including Rising Infertility Rates..
• Global average infertility2 rate is 10-15% and rising.
• Fertility - linked to social, behavioural, biological, environmental factors and
increasingly, genetic factors.
National Infertility Rates
U.S. >10%
Europe 1 in 7 couples, could
double over next 10 yrs
Singapore 20%
China 10%
Sub-Saharan Africa 20%
“American men are becoming less fertile and more likely
to experience testicular cancer than their forefathers…”
“From 1988 to 1995 (7 yrs)…, American
women.. (with) fertility problems jumped
from 4.9 mil to 6.1 mil, a 25% increase.”
2 Infertility is defined as 12 mths of unsuccessful conception for women < 35.

8. .. that spawned the birth of the Baby Business/Market..
• ‘The field of reproductive technology has become
a fast growing and profitable economic sector’,…
human reproduction, would unleash a new cycle
of market creation, exuberance..’ (Harvard Biz School
Professor)
• … an increasing demand for
‘designer babies’, choosing
SAT scores, character, etc.
• Other related industries – fertility drugs, selling of
sperm/egg, stem cell research, cord blood
banking, cloning, cross-border adoption,
surrogacy,…
Louise Brown, now 29, is the world’s 1st test-tube Patients at Third Hospital, China's biggest authorized
baby. Her birth heralded the taking off of the IVF fertility center and its first to produce a test-tube baby.
industry in 1978.
“Demand knows no limits. Couples will
mortgage homes, sell cars, deplete savings..”

9. .. which is fast-growing, lucrative and very international.
UNITED STATES
• In 2004, > 1 mil underwent ..fertility treatment. “(Market is)… growing at dizzying rate….”
U.S. US$3bil fertility market, 2004 Average sperm: $300
IVF US$1.04 bil Average egg: $4500
Premium sperm: $2,950
Fertility Drugs US$1.33 bil Having a baby to call
Premium egg: $50,000
Diagnostic Tests US$375 mil your own: Priceless
IVF cycle: $12,400
Donor Eggs US$38 mil Surrogates: $59,000
Donor Sperm US$74 mil Adoption: up to >$40,000
Embryo storage: $250
Surrogate Carriers US$27 mil
Sources: ‘The Baby Business’, Debora Spar, Harvard Business School Press, 2006
‘How to Pay for Kids’, Businessweek, 15Nov07
The Trade in Infertility, Newsweek, 12Apr06
BRITAIN
• The Sunday Times Rich List in 2004 announced that fertility treatment had become the most lucrative
medical speciality. Top 2 richest doctors plus others were fertility experts.
• Industry worth £500 million in 2004 (£3,000 for 1 IVF cycle)
ASIA – INDIA, SOUTH KOREA, THAILAND
• “.. becoming big business in India .. Industry brings > $450 million a year into India..”
• “In India and South Korea, fertility has become a fast-growth export industry.”

10. .. which is fast-growing, lucrative and very international.
The Baby-Making Industry is a highly Exportable and Tradable sector
due to international differences in product availability, price, quality, regulations.
“Shanghai has slammed the door on IVF applicants until
2009, citing a shortage of high-quality donated sperm….”
“baby-shoppers ..assemble inputs from around the world -
sperm from Denmark, an egg from Russia, a surrogate
mother from California.. some even switch countries midway
through treatment, starting in Britain, .. travelling to Russia,
Spain or America.”
Popular fertility treatment destinations
Denmark For donor insemination (well-regulated, quality-checked and guaranteed to be anonymous).
Cyros Int’l is world’s largest supplier and exporter of sperm.
Spain For eggs (£800 payment ensures supply of eggs)
U.S. For advanced technology and selected fewer restrictions (e.g. California – signed surrogacy
agreements offer guarantees of ownership, gay/lesbian couples can hire U.S. surrogates).
Though payment is technically not allowed in U.S., compensation can be very high.
India For surrogacy (> doubled over last 3 yrs). Permitted and inexpensive. IVF costs 1/5 of that in UK.
E. Europe For eggs. Some U.S. clinics fly frozen sperm to fertilise eggs in e.g. Romania. The resulting
embryos are frozen and flown back to U.S. to be implanted in the womb.

11. .. which is fast-growing, lucrative and very international.
Other new products and services have sprung up rapidly in the
reproductive and related sectors
1 “Japanese scientists create
‘artificial womb' for IVF eggs”
Straits Times 28 Jul 2007
4
U.S. frozen sperm and related
services internet market alone
estimated at US$45 mil in 2002 (that’s
70% of the $65 mil sperm-bank
services market in the U.S.).
2 FertilitySCORE™ is the 1st “at home”
male sperm test kit (Australia)
5 Stem Cell Extraction and Storage
…. from adult blood; fat removed by
liposuction; children’s baby teeth;
leftover embryos; and most recently,
menstrual fluid. Charges range from
$600 to > $8,000.
3 6 Cord Blood Banking
Private banks charge $1000->$2000
for “statistically very low possibility of
future need ”.

12. And for the individual, each child becomes more precious.
With increasing affluence, parents/grandparents are spending a
whole lot more on children …..
Adoption: $22,500
Childcare: $47,300
Clothing: $14,683
► Education: $44,465
Fertility: $17,500
Healthcare: $20,353
Toys: $39,182
INDIA: Children’s birthday parties > US$4,000, iPod Mini as party favor.
In a country of 1.1 bil where 32% < 15 yrs old, party planners say that the
birthday industry may one day rival the wedding industry ($11bn a yr).
Families (rich/poor) spend 1/3 to ½ of incomes on their
children. 2 in 5 Koreans have no nest egg for old age, U.S. infant/toddler clothing sales outpaced
having spent it all on children. the adult-apparel market in 2006.
.. $600 billion of adult spending is now quot;influencedquot; by
children. ‘Junk Culture’, Time Magazine, 4 Oct 2004
Rich kids, poor kids
• 86 countries have not achieved
universal primary education.
Worldwide market for American teenagers spend
> $150 bil a yr or > GDP of • Under-nutrition still affects 143 mil
edutainment toys expected
to reach $7.3 billion by 2011. Finland, Ireland or Chile. kids < 5yrs old.
Enquirer (Sept 2005)

13. And for the individual, each child becomes more precious.
Education, especially, is a huge and growing expenditure
• In India (Chennai, Delhi), good preschools charge 10 times more than colleges and double
the fees of leading education institutions like the Institute of Info Tech.
• In Hong Kong – parents spend up to HK$33,000 a mth per child on education incl. school
fees, English lessons, revision courses, music, swimming and ECA. Expats are
also paying for debentures for int’l pri/secondary schools (price of which rose from
HK$600,000 in 2004 to HK$3 mil in late-2007).
• In South Korea, it costs S$370,000 to bring up a child (17% rise from 2003) in 2007. School
fees form the bulk. The private tuition market is 33.5 mil won or 4% of GDP - exceeding even
the entire state education budget of 31mn won for 2007. The private English education market
is US$15.8 billion (S$22 billion) a yr, fuelled by families who spend an average of 700,000
won a mth on their children.
Typical total spending on a child by age (S. Korea)
Age 0-2 S$36,000 “… costs of raising children
Age 3-5 S$43,000 can add up quickly. The
S$219,000 biggest and most common
Elementary School S$90,000
driver is education.” The
Middle School S$50,000
Million Dollar Kid, WSJ.
High School (Age 15) S$57,000
S$151,000
University S$94,000

14. And for the individual, each child becomes more precious.
Not only do parents spend more, they change their lifestyles to suit the
needs of their children
“AMERICAN cities seeking fast growth thought they
had the answer in the young, single professional. But …
when singles marry and raise kids, they move home,
dashing growth trajectories. The result is that big
cities like New York, Los Angeles, Boston and San
Francisco lose out.. The lesson for urban planners
seems to be that family-friendly cities win over the
cool, hip cities, said Mr Joel Kotkin, a noted expert on
urban economic trends.”
“Britons leaving this... ...for this” (ST Dec 13, 2007) Unfortunately, as many as half of them
'For young families, especially, the chance to raise a family in a (working professionals) leave for the suburbs
safe, out-of-doors, sporty country where your income allows you once their children reach school age - CEOs
a more enjoyable standard of living is very attractive.‘… for Cities’ “Kids in Cities” Report
HONG KONG - Actor Jet Li secretly moved to SGP last yr “Hedge fund bosses want to move to SGP (from HK)
for his daughters' education (Hong Kong's Next Magazine) for their children's sake”, Straits Times 27 Aug 2007
“HK and SGP find the price of success may be just too high” Newsweek Int’l, Aug. 6, 2007
Education, once an afterthought in expatriate relocations, has rapidly become a vexing issue in both cities.
Hong Kong's competitiveness is being negatively affected by the inability of incoming investors to find
places in school for the children of their expatriate staff members..

15. IDEAS AND IMPLICATIONS
II. IMPLICATIONS + IDEAS
Assisted Early Kids’ City General
Reproduction Education (Blue Sky
Industry Industry Potential)

16. II. IMPLICATION 1 (Reproductive Industry)
1. The baby-
conception market is
set to grow further.
Assisted
Reproduction
Industry

17. Why the baby-conception industry?
We have strong existing players and strengths in related
technologies and services
delivered
Asia’s 1st IVF
baby in 1983)
“New local invention extracts stem cells with placenta “World’s 1st mother-daughter
'juicer‘”, ST Jan 15, 2008 egg donation”, April 2007
The 2 NUS academics patented the device last year. 3 performed in Canada by SGP-
companies from SGP, Japan, Britain are keen to develop it.. trained doctor Dr Seang Lin Tan
“Infant medicine among 4 to get sub-specialty “Out in 450 seconds”
recognition”, ST Oct 15, 2007 ST Dec 14 07
SINGAPORE will recognise … Neonatology, the care KKH performs a 'crash
and treatment of newborn infants, in which Singapore is caesarean' under 8 mins
already the best in the world.. (int’l norm is 20-30 mins),
quot;Singapore scores medical first”, Agence France
Presse, Aug. 14, 2001 NUH and SGH.. transplanting
umbilical cord blood from a non-related donor to
successfully treat thalassaemia..

18. Why the baby-conception industry?
We can capitalize on our reputation for high-standards and
trustworthiness to gain a further premium
“The industry in China is believed to be huge.. more than 10 million Chinese families need
artificial fertilization, according to Xinhua News Agency. There is a Sino-US joint venture hospital
which treats more couples than any other in China”
Source: Fertility industry takes off in China, ChinaDaily, 30 Mar 2005
By growing the sector and raising the standards, we can help
improve the service for ourselves and perhaps boost our population.
“About 15 per cent of Singapore couples do not
get pregnant successfully within 12 mths of trying
to have a child” (SGH website)

19. Sub-sectors of the industry
Diagnostics and AR procedures
Diagnostic AR Procedure
II. IDEAS (Reproductive Industry)
(Done in SGP or by SGP-trained doctors) (Done in SGP)
1.5-2 weeks 1.5-2 weeks
(extraction)
“In a few years there may not be many countries left that perform the latest AR
techniques. The ones that remain - like Israel, perhaps - may see business boom.”

20. II. IMPLICATION 1 (Reproductive Industry)
2. Early education is
the most lucrative
and fast-growing of
Early children-related
Education industries.
Industry

21. Why the early childhood education industry?
The fundamentals have changed. It is now a highly lucrative
and growing market that is within reach of the masses.
- one of the most price inelastic, next to Health/Medicine
- service based on want, not need (> limiting)
- commands premium fees, skills-based
Schools in SGP Annual Fees “The Kindergarten Express”, ST 27Jan07
The lucrative preschool industry..draws 40,000 new pupils a yr, is riding a
NUS (Arts & Social Sci) S$6360 wave of change....the early childhood scene has never been so vibrant
NUS Masters Prog S$5450
Australian Int’l School SGP (Pri) S$21,088 There's preschool, there's play-school and
now there's Baby School ST 30Dec07
SGP American School (Pri) S$19,450 There are 111 infant schools that incorporate
learning.. up from just 19 in 2003…fees range
Pat’s Schoolhouse S$16,080
from $1,000 to $1,400 a mth… almost all 20 infant
EtonHouse S$18,000 schools are full with waiting lists…
GEP preparatory course: $1,500 for 8hrs
“Expat school offers guaranteed place for a cool $165,000” Tanglin Trust
School starts scheme... ST Dec 15, 2007
“Price of a place in United World College? $200,000” .. ST 11Jan08
“MBA for tots?”, ChinaDaily, 4Oct06
SGP education fever. catching on among Children’s EMBA, an early business
Koreans....parents’ annual family income > administration program for kids aged 3-6
S$145,000. .. mthly expenditure of a mother appeared in Shanghai (fees US$2,500),
here with a child > $5,000. The fathers
shuttle.. every weekend… ST 23Jan08

22. Why the early childhood education industry?
II. IMPLICATION 2 (Early Childhood Education)
We have very strong existing and emerging players (reputation)
- Private: EtonHouse, Julia Gabriel, Chiltern House, MMI, CherryBrooks, Mindchamps,
- Public: SOTA, Junior Sports Academies (JSAs), Future School
“Students prepare for opening of Arts School”, ST 21Dec07
(4 arts disciplines: dance, music,
theatre and visual arts)
“Junior Sports Academies to nurture champions”
..4 JSAs.. focus on 6 sports - badminton, netball, swimming,
“Bar raised for preschool centres and teachers” table tennis, track and field, and wushu, ST 28Deb07
ST5Mar08
“A peek into a School of the Future”, ST 28Dec07
“New school to nurture inventive
.. adopt technology to spearhead innovation in
Minds”, School of Science and
teaching and learning.. The 5 ‘Future Schools’ are
Technology to have practice-oriented
Beacon, Canberra Primary, Jurong Secondary,
focus, small class sizes, ST5Mar08
Crescent Girls' School, Hwa Chong Institution.

23. Why the early childhood education industry?
It is a highly tradable/exportable market
- national branding of education is catching on
- parents increasingly willing to send their children for good environment and services
- companies can easily expand overseas to capture more returns for SGP
“Indian-style education system catches on in Japan”, ST Jan 3, 2008
“Koreans sold on an education in Singapore”, ST Jan 23, 2008
Cherie Hearts is among the growing number of
SGP kindergartens exporting their own pre-
Increasingly active M&A scene
school curriculum.. It joins .. Kinderland, Modern
Montessori Int’l, Learning Vision who have set
“Temasek buys 12% (S$512mn) of
up centres in .. M’sia, Hong Kong, Australia,
ABC Learning”, becoming the 2nd
China, India, Sri Lanka, Bangladesh, Nigeria
largest single investor in the world's
largest publicly traded childcare
provider, ST Jun07.
“Hong Leong Group makes its
foray in to education”, Jun07
U.S. buys into SGP SGP buys into SGP SGP buys into Australia

24. Expanding the early education sector
A. Source for short, high quality program providers to launch
programs in SGP (e.g. MENSA for kids, John Hopkins, Warwick)
Attract related events to establish SGP as a node for premium early
II. IDEAS (Early Childhood Education)
education activities (e.g. WCGTC World Conference, World’s Children
Festival, Third Arts Olympiad Artworks)
800 attendees in 2007
B. Help develop a premium national brand for our private early
education providers and to explore grooming a through-train
institution in the long term.

25. 3. Countries are seeing
the demographic
threat. Responses
include building child-
Kids’ City
friendly infrastructure and
branding cities child-
friendly.

26. Branding cities child-friendly
Attracting children helps to attract talent (their parents) and we
have existing strengths to leverage on
Mr Joel Kotkin, author of The City: Leaving for children’s sake….
A Global History, said Singapore
'Those who reject HK are the ones with families,'
has an 'underestimated secret said Mr Quane, 31. 'Pollution used to be the main
weapon'. 'Its family-friendly image reason, now education is coming to the fore.'
is a big plus. Many expatriates
speak of this and it is a factor in quot;About 1/2 of white families leave Chicago when
attracting and retaining talent,' their children are school-age,quot; says
Commissioner of Children and Youth Services.
AmCham says the lack of int’l schools here is
becoming a ‘fairly acute’ problem. Some foreigners
turn down job offers, others put off relocating here,
Todayonline, 31Aug07.
“Asia's 1st garden
for children opens
here” ST 2Oct07

27. Child-friendly infrastructure
Countries are investing resources and efforts into child-friendly
infrastructure and environment for children
II. IMPLICATION 3 (Child-friendly City)
Germany, Stuttgart (government)
“City for Children” Committee - drive Stuttgart as the “Best place in the world for children” to
live in by 2010. “Believes.. will convince foreign talent to stay”:
• Create ‘Children Oases’ around city
• Boost toddler care places, extend after-school care
• Intergenerational centres incorporating elderly housing with kindergartens
• Assimilation programs for expat kids (45%)
• Children’s forums to canvass views on city planning
Canada (government)
“Child-Friendly Cities and Participatory Planning and Design in
Canada”
Research program funded under the “Initiative on the New Economy”
Program 2002-2005. The research recognized that kids/youths are not
future citizens—they are active citizens here and now.
“Winnipeg’s Art City: Children,
Art and Urban Revitalization”

28. Branding cities child-friendly
Developed and developing countries alike are branding themselves
“Child-friendly”
Unicef’s “Child-Friendly Cities Initiatives (CFCI)”
II. IMPLICATION 3 (Child-friendly City)
• CFC (launched in 1996). In high-, middle- and low-
income nations alike, a growing number of
municipalities have made the political decision to
become quot;child friendlyquot;.
867 Child-Friendly Cities
“Few subjects.. are of more passionate interest Austria, Belgium, Finland, France,
to our readers than how to raise their kids” Ireland, Spain, Norway, Netherlands,
Italy, Sweden, UK, New Zealand,
Australia, Japan, Philippines, Thailand
Philippines started
the ‘Most Child-
friendly City’ award
in 1999.
“The Real Brain Drain -
Why Putting Children
First is So Important for
Australia”

29. Branding cities child-friendly
A. Enrich and enhance our city branding (multi-dimensions) for children
Wannado City
run by children aged 4-11, includes
government, entertainment, schools,
retailers, bank, post office, hospital, etc
“What makes a great city tick?”, ST Jun 07, MONOCLE
Top urban elements for an ideal city:
II. IDEAS (Child-friendly City)
• Green space projects,
• Clear city signage,
• Child-friendly shops and services
B. To build more child-friendly zones/infrastructure
“Cities ramp up kid-friendly hospitality”, By USA Today Designs by
After > a decade of wooing ‘Carve’,
Dutch
young professionals with loft company
apartments, nightclubs, Internet
cafes, cities are .. new
challenge: hanging on to them
once they start having children

30. II. IMPLICATION 1 (Reproductive Industry)
4. There is no
premium cap to the
children’s market. It is
General where the blue ocean
(Blue Sky strategy works best.
Potential)

31. a) Media / TV / Online Networks
A Marketer’s Dream…
• “KGOY” - Kids Getting Older Younger
• “Trans-toying” turning everyday objects into toys
• MTV and Nickelodeon (SEA): young audiences are
the “darlings of marketeers” as they are really the
decision-makers in the family.
In 2005, The Wiggles
earned > AC/DC + Nicole
Kidman (Australia's richest
entertainers).
In 2006,
Nickelodeon’s
business surpassed
MTV’s.
Belgian Foops!, the 1st social networking
site for GEN Z (signed up > 12,000 born
and unborn babies). “Rush to create virtual
playgrounds for kids”, ST 1Jan08

32. b) Nutrition / Health / Medicine / Therapy
Health Food (organic, gourmet, halal, kosher)
“Babies driving robots at
“Use of hyperactivity drugs soars”, University of Delaware”
BBC, Mar 07 Robots that help to improve the
Global spending on ADHD drugs jumped 9-fold. mobility of infants with Down
1993-2003: use of ADHD medications 274%. Syndrome, cerebral palsy, autism
and other disorders
Special Needs Education
• Singapore - 10,000 kids with special needs with 1700 more diagnosed each year.
• Autism (6% kids), Dyslexia (4-10% pop), Intellectual Disabilities (2%), Down’s syndrome (1.2%).
• $2000-$4000/mth for therapy on autistic kids; music therapy CDs costs $400-1000
• KKH -3 mths for appt for diagnosis, 2-4 mths to see psychologist, 2-3 mths to see occupational therapist.
“You (Singapore) could lead the
world in this (handling Dyslexia)”.
F1 racing legend

33. c) Entertainment / Tourism / Events
Hotels, Theme Parks / Cruises “There's room for a children's hotel in every major city!”
Germany
U.S.
South
Africa U.K. Themepark U.S. Cruise
Events / Activities
“The kids’ market is very big – it is a multi-million-dollar business” VizPro, Entertainment Co., Singapore
A million U.S. youngsters
aged 6-17, rely on
personal trainers to shape
up, improve in sports.
5-day Animation Soccer Camp Aqua Botanist Overnight
Course:S$400 : S$200 : S$75 Museum
: S$60

34. d) Technology-related (for “Millennials”)
Communication
“American teenagers have embraced handphones so
wholeheartedly that .. have come to define their sense of self,
reported CNET.com… half of kids aged 8 to 12 own handphones.”
Security Kids Talk™ is a talking ID wristband
(ID Security, Child Tagging) that records name, address,
telephone number, allergies, etc
“latest parenting growth industry: a multimillion-dollar market in new
and ..flashy quot;child-trackingquot; devices.”, The Guardian, London i-kids Mobile
In Silicon Valley, Wherify Wireless was selling a US$200 watch that picks up Phone
GPS signals, and a child's GPS-implanted backpack for US$900. AUD$274
Others
Education (E-learning, E-books), Entertainment (Digital/Virtual Games), Kids-only Laptops
“MP3 music players are
Advent K
among the hottest gift
Children’s
items this year - for
Notebook
preschoolers,” ST Nov
₤ 649
30, 2007
Apple iPod Shuffle

35. e) Others (Blue-Sky)
Financial Services
(Banking, Philanthropy Management, Trust Fund)
POSB – has 360,000 accounts < 12 yrs
OCBC – Mighty Savers (gifts, no interest), < 15yrs
UOB – Junior Saver’s account (includes life insurance)
Citibank, Standard Chartered Bank, HSBC, Maybank
Research and Consulting
(Research on Product, Market, Child Policy, etc; Franchise Consulting for Kids Business)
Designer Chair, ₤ 295
Varied High-value Consumer Products, Specialized Services
Clothes, Milk Bottles, Strollers, Toys, Child Care, Convenience Stores, Lifestyle Club, Yoga,
Cinemas - “Stars & Strollers”, Babyplanners
Bisphenol-free, S$26.90

36. Assisted
Reproduction
Industry
Early
Education
Industry
Thank you
futuresgroup.wordpress.com
Kids’ City
General
(Blue Sky
Potential)