Ageing Populations: Investment Opportunities in the Silver Economy

According to the World Health Organization, the global population aged 60 or older is projected to double, reaching 22% of the earth’s population by 2050. This demographic shift, driven by declining birth rates and increasing life expectancy, presents significant opportunities for investors.

As the ageing population grows, so too does the demand for specialized products and services designed to enhance quality of life and reduce healthcare costs. 

Areas of opportunities for investors include:

• Healthy ageing: Promoting wellness and preventing age-related diseases.
• Preventative medicine: Early detection and intervention to manage chronic conditions.
• Functional independence: Enabling older adults to maintain daily living activities.
• Delayed institutional care: Providing alternative care options to delay the need for nursing homes.

Challenges associated with ageing populations include:

• Labor shortages: A smaller workforce may strain healthcare systems and social services.
• Rising healthcare costs: Increasing demand for medical care can lead to higher expenses.
• Chronic diseases: Managing conditions like Alzheimer's, arthritis, and diabetes.
• Cognitive decline: Addressing memory loss and other cognitive impairments.
• Mobility issues: Supporting individuals with reduced physical capabilities.

Regional Breakdown

The world's most rapidly ageing populations are concentrated in Asia and Europe. Japan leads the way, with nearly 29% of its population aged 65 or older. Other countries with significant ageing populations include Italy (23%), Finland, Portugal, and Greece (just under 24%). South Korea and Hong Kong are also experiencing rapid demographic shifts, being on track to join the top of the list by 2050.

The pace of ageing varies across regions due to differences in preparedness. This fact dictates the speed at which growth has been occurring, with some areas playing “catch-up”. In 2022, Germany had the highest number of care homes in Europe, followed by England. Other countries with significant numbers of care homes include Belgium, France, Spain, Italy, and Netherlands. 

Key Sectors of Growth

The ageing population is driving demand for a wide range of products and services. Key areas of growth include:

• Healthcare and Pharmaceuticals:  Demand is increasing for medications, medical devices, and healthcare services for age-related diseases like Alzheimer's and arthritis.
• Senior Housing and Real Estate: The need for senior housing is growing from partial care to full care. Investment opportunities include assisted living facilities, retirement communities, and real estate investment trusts (REITs) focused on senior housing.
• Financial Services: Older adults require specialized financial services, including retirement planning, insurance, and wealth management. 
• Technology and Innovation: There is a growing market for technology designed to assist older adults, such as health monitoring devices, mobility aids, and smart home technologies. 
• Consumer Goods and Services: Health and wellness products, fitness activities, and leisure options tailored to the ageing population.

The global long-term care market is expected to double by 2032, from USD 1100.7 billion in 2022 to USD 2168.1 billion. This market encompasses every type of senior care, spanning near-independence to fully dependent, reflecting the growing need for senior care services. 

Top Ageing Population Stocks to Watch

BITA's Aging Population Universe carefully tracks companies that generate significant revenue from products and services catering to older adults. Our research identifies companies with substantial exposure to this growing market, focusing on revenue streams directly related to ageing populations.

The universe currently includes 387 publicly listed companies worldwide, with 30 specializing in long-term care. Below, we highlight large-cap companies across five key sub-themes, each with at least 50% revenue exposure to ageing populations:

BITA's proprietary data team meticulously analyzes revenue streams across all industries, identifying emerging growth opportunities. Our extensive universe of over 90 investment themes covers diverse sectors, including finance, technology, sustainability, social impact, food, health, leisure, sports, culture, and controversial business involvement.

In addition to our comprehensive thematic analysis, we also track ESG data such as emissions, waste, and net-zero commitments.

References

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