Old and Rich: How Aging Is Changing Our Planet

Investors are investing billions of dollars in the fight against old age every year. And we have already achieved the first successes. What will happen next?

By 2050, the number of people over 60 may exceed 2 billion, the Swiss bank Lombard Odier estimated. According to the UN, Hong Kong and Japan have already become leaders in longevity in 2019. In Great Britain alone, the number of people who, according to the forecasts of the authorities, will live more than 100 years, has exceeded 10 million people. Moreover, it is almost certain that by 2040 one in seven residents will be over 75 years old.

This is changing the economies of countries and companies. Oxford Economics and AARP in their report called 50-year-olds “a powerful new force changing the face of America.” A new term has even appeared to denote the economic activity of people over 50 years old – the longevity economy.

How does longevity affect the economy?

Longevity “will change everything in the way our lives are arranged, its trajectory, the way society is organized, the funding of old age and pensions, the life insurance industry, etc.,” British billionaire Jim Mellon said in an interview with the scientific publication Neo Life. In 2016, he founded the biopharmaceutical company Juvenescence (“Youth”), which deals with life extension issues and has raised $ 162 million over the years.

In 2016, Oxford Economics and AARP estimated the size of the longevity economy in the United States alone at $ 7.1 trillion and predicted its almost double growth in 2032, to $ 13.5 trillion.

The influence of older people on the economy is connected not only with the fact that there are more of them but also with the fact that in developed countries they often manage to save up considerable sums by the time of retirement. For example, more than 1 million millionaire pensioners live in the UK. As a result, the elderly continue to consume heavily. Seniors spend about $ 4.6 trillion a year on consumer goods and services, according to Oxford Economics. According to a study by Oxford Economics and AARP, people aged 46 to 64 spent an average of about $ 650 online in 3 months, compared with $ 581 in Generation X and $ 429 in even younger Generation Y.

What do the adults and the rich spend their money on? First, they can afford more expensive goods and services. So, more than half of Apple watch owners are people over 45 years old. Second, they are more likely to need services like house cleaning, personal hygiene, food preparation, transportation, and pet care. They are more likely to use pet grooming services and buy more expensive accessories for them. In addition, seniors do not give up on travel, and this leads to the growth of the tourism market. Older tourists have their own characteristics: they are more demanding on the quality of service and hotels, among them, there are many people with disabilities, and therefore they need an accessible environment (for example, ramps and elevators). Plus, retired, they can afford to travel throughout the year, not just during peak seasons.

As not only life expectancy, but also healthy, active life is increasing, older Americans are increasingly choosing retirement jobs and more active lifestyles than before. The same trend exists in the UK: the current 75-year-olds are not inferior in terms of work capacity to 65-year-olds from the 1970s. Consequently, global production will grow, analysts say. In addition, according to experts, one of the largest sectors of the longevity economy will be education, which will last a lifetime, because life from three stages (education, career and retirement) will be replaced by a new way of life, in which there will be more different stages, and they will be repeated.

Of course, there are more than just pluses. Population aging, WHO notes, will increase the incidence of age-related chronic noncommunicable diseases that cause disability. This will lead to higher health care costs and long-term patient care. There is already an increasing need for physiotherapists, nutritionists, social workers, nurses, massage therapists, etc. The medical tourism market will also grow, when people from countries with a higher standard of living go for treatment to countries with cheaper medicine (it has already passed for $ 100 million).

The aging of the population also leads to a change in the media market. TV channels, programs, magazines for the elderly appear, and older actors can increasingly be seen starring in films.

Who will make money on this?

The Financial Times calls longevity “the greatest business opportunity in the 21st century,” talking about new markets in the trillions of dollars. But business is still trying to figure out how to reap dividends from an aging population. It is already clear that technological products and services that can make life easier for older people play a huge role in the economy of longevity. Applications for dating and communication among the elderly are being created. Experts predict that there will be a separate direction in video games that will focus on interacting with the elderly.

There is great potential in IT solutions against age-related problems like memory loss. For example, when James Ashwell’s mother was diagnosed with early dementia, he founded the startup Unforgettable.org. The site contains products for such patients: clocks that indicate the day and time, music players that can be controlled using one or more buttons. The Echo app allows patients or their caregivers to request prescriptions from the NHS and deliver medications right to their door with reminders when to take medications and when they will run out. A company MySense has developed an analytics platform that collects data from fixed and wearable smart devices to determine changes in the health and well-being of the elderly.

The American company Samumed is one of the most expensive startups in the world, whose valuation in 2018 exceeded $ 10 billion. The company is developing drugs for diseases of the elderly, is researching anti-aging therapy and plans to go public. “People sometimes call us an anti-aging company, but we believe our platform slows down aging,” says Samumed founder Osman Kibar.

One of the first companies in the fight for a long and healthy life to go public is Californian Unity Biotechnology, founded by molecular biologist Nathaniel David. In 2018, it raised $ 85 million on the NASDAQ stock exchange with a market capitalization of $ 700 million. Unity is developing therapies “to slow, stop or reverse the diseases of aging,” including vision loss and cognitive impairment, according to its website. However, not everything is so smooth: in August 2020, Unity’s shares fell by more than 60% after the company published not the best test results for one of its drugs for osteoarthritis.

Not only startups but also IT giants like Alphabet, the parent company of Google, are fighting old age. Alpahbet owns the research organization Calico, which has also been fighting age-related illnesses since 2013. The initiator of the project was the founder of the company Sergey Brin. 5 years earlier, doctors predicted a high probability of developing Parkinson’s disease.

Russian investors are also interested in the topic of immortality. One of the most striking examples is Timur Artemyev, co-founder of the Euroset network of cellular salons, who created the Eternal Mind venture fund, whose goal is to create drugs that prolong life, as well as the Institute of Biology of Aging. In addition, over the years Dmitry Zimin, the founder of VimpelCom and the Dynasty charity foundation (closed in 2015), and the founder of Basic Element, the former head of Rusal and En + Group, Oleg Deripaska, have invested in research to prolong human life. … The Volnoe Delo Foundation, created under the Basic Element, allocated 120,000 dollars annually to a group of scientists headed by the famous academician Vladimir Skulachev.

Business is just learning to notice older people as a new economic force, and no one can predict global changes in the economy. But as economics professor Andrew Scott, author of books on longevity, says, “In this new era of longevity, education, financial planning, and scientific progress will be far more intertwined than ever, requiring an unprecedented period of collaboration between the public and private sectors, science, and society ”.

Timur Artemiev, founder of the Eternal Mind Venture Fund:

‘I think that there are already people among us who will be able to live 120-130 years. This is the generation of those who are now over 40 years old. And such longevity is already affecting the economy and the structure of society very strongly. The main problem here is that the amount of knowledge has reached its limit, and in order to function successfully, a person will have to learn all his life. For the rest, I see only advantages in longevity. Governments will be forced to make more reasonable laws in terms of economics and ecology. People will have less fear for their health.

One of the concerns that are cited in connection with the increase in life expectancy is the overpopulation of the planet. In my opinion, this will not happen. After all, the reproductive function fades with age, and therefore the birth rate will fall. This means that there will be enough products and other resources. As for the rest, the impact on the economy is difficult to predict now, because it depends on whether the duration of active life increases and the answer to the question: will people be able to work after 70 years? ‘