Mark your diaries: the human longevity revolution is coming

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The year 2030 will mark a pivotal point in global demographics. The last batch of baby boomers in the US will turn 65.

Economically, boomers are one of the most important demographic cohorts, underpinning the growth potential of many sectors related to human longevity. According to the World Bank, while seniors represent about 22 percent of the US population, they own 53 percent of the country’s wealth. 

Elsewhere, in regions with predominantly young populations – such as the Middle East and North Africa – there is a slow shift to an older age structure.

Globally, people aged 65 and above are projected to spend almost $15 trillion a year by 2030. This means the total spending of senior citizens will make up nearly 10 percent of global GDP (approximately $155 trillion in 2030) by the end of this decade.

By 2030, the human longevity industry is expected to be the largest and most sophisticated of all time. Not only in relation to investments and public spending, but also because of its strategic position at the intersection of several vital sub-sectors such as biotech, pharmaceuticals, fintech, insurtech (insurance tech) and many more.

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Due to the size and relative prosperity of this demographic group, the coming years will bring significant opportunities created by consumption habits. The main areas of spending among citizens aged 65 and above include wellness, treatment, senior care, and discretionary purchases.

Companies are increasingly realising the untapped potential in older, more active consumers. For instance, Nike launched a running shoe in 2019–CruzrOne–specifically designed for those who run at a slower pace. 

Seniors are also spending significant amounts of money on supplements and skin and dental care.

Many senior citizens choose a pet for companionship. According to Morgan Stanley, 55 percent of adults aged 50-80 in the US owned a pet in 2019. In total, US households spent over $100 billion on their pets in 2020 and the forecast amount continues to grow year on year. 

For some financial institutions – and even nations – ageing populations are creating challenges. According to the OECD, the total liabilities of pension funds have already exceeded $56 trillion, a rise of 11 percent since 2019. 

On the other hand, we are seeing the tremendous rise of advanced biomedicine and ageing research, including preventive medicine. This creates a multi-trillion-dollar opportunity for progressive financial institutions and investors.

The surge in demand for senior care, both at home and in dedicated care facilities, is driven by the rapid expansion in the senior population. According to Global Market Insights, the long-term care market alone is expected to grow to $1.62 trillion by 2027 – from $915 billion in 2020 – as populations age and government initiatives work to enhance awareness levels and promote the use of long-term care services.

While the longevity economy encompasses spending by individuals of any age, there is no doubt that the purchasing power of older generations is significantly higher. This is mainly because they have more wealth and time to indulge in leisure pursuits, and thanks to the growing demand for healthcare at an older age. 

Global health insurers are actively exploring commercial opportunities among the elderly population, attracting more clients through loyalty programmes. For example, VitalityHealth provides various rewards to people over 70 and Oscar Health collects movement data and incentivises clients through offering a $1 Amazon gift card every day for reaching certain step targets. 

The acceleration of commercial activity towards the elderly population by health insurers highlights the beginning of a much larger trend that will have a profound impact on the global financial services industry. 

Today, there are massive capital deployments within the human longevity space from venture capital and private equity firms, pension funds and family offices.

Much of the capital inflow is coming from alternative investment channels such crowdfunding and specialised investment platforms. According to the Longevity.Technology website, over $2 billion was raised by longevity companies across more than 40 deals in 2021. Of those, 28% were mega-rounds, raising over $100 million each. 

Despite the impressive growth rates across the longevity finance industry, the market needs more private capital investments to accelerate the technological progress created by startups and companies. For instance, longevity startups are limited to seeking funding from angel investors and venture capitalists, which represent a small fraction of the available global capital. 

To bridge the liquidity gap in longevity, we need more structured financial products, a longevity stock exchange and investment platform solutions to meet the needs of startups and investors, as well as more tradable financial instruments.

Talgat Takiyev is head of investor relations at Deep Knowledge Group