In its latest World Population Prospects report published this week, the UN has highlighted the unprecedented aging of the world’s population and confirmed the ongoing global increase in longevity. Last year, for the first time in history, the global population aged 65 years or over outnumbered children under age five. By 2050 there will be more than double the number of people aged above 65 as children under five. Life expectancy at birth for the world’s population reached 72.6 years in 2019, an improvement of more than eight years since 1990.
The economic, social, and political impact of more people living longer creates challenges for society. But it also provides investment opportunities that we address in our Longer Term Investments series including:
* “Silver spending”. As the population ages, we expect the spending power of the older cohorts to become increasingly influential. For example, in the last two decades, consumption by Europeans aged 50 and over has grown three times faster than that of the rest of the population. We identify five main categories in which "silver spenders" allocate more of their disposable income: leisure and tourism (particularly cruises), consumer personal care and beauty products (specifically anti-aging products), health care services, financial planning services and retirement housing.
* Medical devices. The growth of the over-65 age group will create more opportunities for companies selling medical products and devices. We identify five key markets for implantable or wearable devices, including consumer products such as hearing aids, dental implants and corrective lenses. We estimate their total market size at USD 114.8bn with a rate of potential growth in the mid-single digits.
* Oncology. The aging of the global population will likely lead to a rising incidence of cancer over the next 15 years, and we expect new cancer cases to outpace population growth by a factor of 3:1. Recent developments in understanding cancer biology and the immune system have led to the beginning of a new era in cancer treatment, with the first wave of immuno-oncology drugs now established in the market. The market for oncology drugs exceeds USD 100bn and should continue to faster than GDP. Secular trends such as aging, alongside population growth and increased urbanization, create a variety of longer term investment opportunities. Investors willing to invest over multiple business cycles can benefit from potential mispricings created by the typically shorter term focus of stock markets. Read more in our Longer Term Investments reports, Silver spending, Medical devices and Oncology.