THE global population has reached new milestones in human development. Not only is the Earth now home to over eight billion inhabitants, but the United Nations has also declared that India has overtaken China to become the world’s most populous country.
As the count of people is expected to increase further to reach 9.7 billion by 2050, the number of adults aged 65 and over is also expected to grow.
Tremendous progress in medical science has enhanced the quality of healthcare and disease prevention efforts. Life expectancy has improved thanks to better medical care, hygiene and diets.
The global pace of ageing is unequally distributed across countries and regions. For instance, the median age in the high-income nations of Japan and Singapore is, respectively, 48 and 42.5 years. In upper middle-income China, it is 38.
By contrast, it is 28 and 26 years, respectively, in the lower middle-income economies of India and the Philippines.
For this reason, investment opportunities relating to extended longevity mirror the unique demographic portrait of each country and region.
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Long-term care needs
Due to rising chronic diseases and changing consumer preferences for healthier lifestyles, the megatrend of ageing population presents new investment opportunities.
It is never too early nor late for anyone to begin to work towards improving their longevity, and ample studies have shown the long-term effects of good and bad lifestyle habits are cumulative.
This leads to the development of new products and services that aim to improve the quality of life for older adults, as well as younger individuals planning for life in their advanced years.
Ageing is an irrevocable biological process, characterised by the progressive decline in cognitive and physical functions across all organ systems.
Nearly 8 per cent of people aged above 65 in Singapore, or about 50,000 people, face issues relating to mobility. Some 25,000 people, or 4 per cent of the population, have difficulty caring for themselves.
Frailty in old age is often accompanied by the onset of chronic diseases and certain health conditions, such as Alzheimer’s disease, cancer, cataracts, diabetes, hearing loss, heart disorders, osteoarthritis and sarcopenia.
As the population ages, specific segments of the healthcare industry such as pharmaceuticals and medical equipment – which cater to the growing medical needs of older adults – will become ever more pertinent.
Leisure activities
Beyond the biomedical and healthcare aspects of extended longevity, travel and leisure activities are also important for the well-being of older adults.
According to a recent survey conducted by the American Association of Retired Persons, as many as 85 per cent of adults in the United States who are aged above 50 rank travel and vacation as the top priority for their discretionary spending.
The World Tourism Organization expects the improvement of the travel industry to continue throughout 2023 despite global economic and geopolitical challenges.
According to statistics from Cruise Lines International Association, the largest trade association in the cruise industry, the sector has begun to see a rebound in the number of passengers worldwide.
Although the number of travellers – at roughly 20 million in 2022 – is still low compared with pre-pandemic times, the industry should see further engagement – especially among older consumers.
After all, more than half of all cruise passengers are above the age of 45. The 65-plus age cohort represents a third of the total due to the appeal and convenience of visiting multiple countries in a single holiday, along with all-inclusive food, drinks and accommodation.
Short-term headwinds
Although the extended longevity theme remains attractive due to its underlying protracted structural forces, it is confronted with a few challenges over the short term. In particular, there are regulatory headwinds pertaining to drug pricing in the US.
Nevertheless, a world home to a larger number of older adults, as well as individuals with longer lifespans, will affect consumer patterns and lead to involuntary changes, as a result of the growing prevalence of chronic diseases and the need for care.
The megatrend of population ageing inevitably presents investment opportunities spanning healthcare, elderly care, beauty, leisure and travel, food and nutrition, and financial planning over the longer term.
The writer is thematic research analyst at Julius Baer
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