global perspectives

    A decade of healthy ageing

    A decade of healthy ageing
    Henk Grootveld - Head of Trends Investing

    Henk Grootveld

    Head of Trends Investing

    The World Health Organisation (WHO) has proposed a ‘Decade of Healthy Ageing’ in a bid to tackle the challenges presented by an ageing population. These challenges also presents a variety of compelling investment opportunities.

    This initiative represents a concerted global effort with regards to improving the lives of older people and their families. The United Nations General Assembly has, in turn, endorsed the idea and proclaimed 2021-2030 the ‘Decade of Healthy Ageing’. By the end of this 10 year period, the number of people aged 60 years and older is expected to have risen by as much as 34% higher. By 2050, there will be more than twice as many people above 60 as there will be children under the age of 5. This demographic transition stands to impact all aspects of society.

    The older generation already face multiple barriers that prevent their full participation in society. Building a more inclusive society which can accommodate the needs of this rapidly growing demographic segment requires investment on an enormous scale. It is the opportunities presented by this requirement which form the basis of our Golden Age strategy.

    The ageing society will have a large impact on multiple companies across multiple sectors

    The ageing society will have a large impact on multiple companies across multiple sectors. By anticipating these impacts, we can identify long-term sustainable growth opportunities. For example, this development will undoubtedly have an impact on pension providers. An increase in the number of individuals eligible for state pensions will place more pressure on government budgets. Consequently the onus will increasingly be placed on the individual to provide for their own retirement. This has implications for businesses which can help those preparing for financial stability in retirement, such as wealth managers.

    In the same vein, government healthcare budgets will become more strained. In the US, for example, healthcare spending has now reached 18% of GDP and costs are expected to grow by 5% every year this decade. Companies which can help alleviate this fiscal burden will grow in value. The European Commission has previously estimated that there is a 2:1 return on eHealth investment, referring to those companies which provide digital tools capable of increasing efficiency and efficacy, while lowering costs within the healthcare sector.

    Similarly, we anticipate a greater focus on healthy living, as a means of maximizing the potential of the retirement period. Rising healthcare costs will contribute to greater emphasis being placed on the responsibility each individual has for their own health. A more active lifestyle, complete with healthier diets and greater degrees of self-care, will become the standard for those approaching retirement.

    It is also worth noting the spending power of older individuals is also growing at a much faster pace than their contemporaries. The economy of the population over 50 in Europe alone currently represents the third largest economy on earth, for example. This has potential ramifications for the consumer spending sector and especially trusted brands which are valued by this demographic.

    The UN notes that a decade of concerted global action on healthy ageing is urgently needed, and that the COVID-19 pandemic has only served to highlight essential gaps in policies, systems and services. We fully support this initiative and recognise that companies that effectively cater to the older generations and help them lead longer, healthier, more fulfilled, and financially independent lives have an opportunity to grow faster than the broader market, and on a more sustainable basis.

     

    Read more about the Decade of Healthy Ageing

    Read more about our Golden Age strategy

     

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