1. LONG TERM STRUCTURAL TRENDS IN SOCIETY ARE OF GREAT IMPORTANCE FOR INVESTORS
Such megatrends develop independently of economic cycles and have an impact on the business models of many companies. Global demographic change has long been one of the most predictable trends with serious consequences for the economy and society. Driven by falling birth rates and rising life expectancy, the number of older people, often no longer working, is steadily increasing in many industrialized countries, but also in Asia. The global share of people over 60 will double from 11 in 2011 to 22 in 2050. There are significant differences between regions. In In Africa, for example, the proportion of people aged 65 and over is currently 3% compared with 17% in North America and 19% in Europe (Sources WHO, United Nations Population Fund, DSW German Foundation for World Population, 2012, 2022).
2. THESE DEMOGRAPHIC TRENDS WILL HAVE SERIOUS IMPLICATIONS FOR HEALTHCARE SYSTEMS
The reason is that older people tend to be chronically ill more often (according to figures from Germany, more than 50% of people over 65 suffer from chronic diseases). Progress in the fight against diseases such as diabetes, Alzheimer's, morbid obesity, or cancer depends on innovation in the pharmaceutical and biotechnology industries. Health stocks are therefore likely to be among the big winners from this megatrend in the first place For example, the Danish pharmaceutical company Novo Nordisk r ecently became Europe's most valuable in terms of market capitalization, mainly thanks to the rapidly growing sales of the weight loss drug Wegovy. Much of the innovation these days also comes from bio pharma companies that use biological components of substances, so called biologics. Drugs produced in this way are increasingly taking market share from chemically manufactured (small molecule) drugs.
Furthermore, it is also possible to profit from the trend towards greater innovation in healthcare without investing in pharmaceutical or biotech companies For example, if you want to avoid the risks of clinical trials, investing in life science stocks that supply ingredients or equipment for pharmaceutical research and industry is a good option. Thermo Fisher and Stryker are two examples Healthcare technology is another area of interest as it helps the sector to become more productive and cost effective.
3. AUTOMATION WILL ALSO BENEFIT FROM THE AGEING OF OUR SOCIETIES
As more people retire, we will have fewer workers. Even today, many companies find it impossible to fill all their vacancies. More automation (software, robots, etc) can potentially solve the problem. As a result, we expect an increasing demand for IT solutions, software and cloud infrastructures that help companies to make their operations more efficient. These include software companies, the major cloud providers, and the semiconductor manufacturers.
The so called "silver agers" also have different consumption habits than younger cohorts companies that specialize in meeting their needs could benefit. This includes, for example, luxury companies that cater specifically to this target group, given the high disposable incomes of older, wealthy consumers.
The ageing population is expected to be one of the biggest social and economic changes of our century. According to our analysis, this will create significant long term opportunities for companies across a range of sectors and geographies that help to improve the quality of life of these older people.
