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Megatrend with investment opportunities

Bild av en man som tittar ut ur ett fönster från ett rött hus.

According to Statistics Sweden, the population of our country will exceed 11 million in 2028. The largest increase, in percentage terms, is expected among those aged 80 and older – a full 50 per cent.

As we age, our economic behaviour changes while our need for care increases. That affects a number of sectors, such as pharmaceuticals, health care, elderly care and consumer products. Meanwhile there is growing pressure on pension systems, public transport and infrastructure.

This is a summary – read a longer article on pages 25-27 of the latest Investment Outlook.

Why are more and more people living longer?

Researchers are divided as to whether we are actually living longer, in terms of maximum age, but it is clear that average age is rapidly increasing globally. This is essentially due to two factors – falling birth rates and increasing average life expectancy. Today the increase in average life expectancy is due almost exclusively to reduced mortality among people 65 and older: a result of more effective health care and medical advances, improved living conditions and better lifestyles because of public health measures.

It is good news that people are living longer, but given falling birth rates, it also means that fewer people will have to support more pensioners as the working-age share of the population decreases. In the February issue of Investment Outlook, we discussed automation using robots as a potential solution to the resource shortage. Robots, as well as other digital solutions, would probably improve the quality of care and shorten queues, thus further fuelling the demographic trend. Sustainability-related investments may also bolster the trend, for example, through the construction of hospitals and elderly care facilities, as well as through initiatives to improve air quality and increase access to clean water.

Diseases of affluence on the rise, even in low-income countries

Unfortunately, our modern lifestyle is in many ways detrimental to health. We exercise less while we stress and eat more – and then mainly processed food. The World Health Organisation (WHO) believes overweight or obesity can no longer be categorised as a developed world problem; nowadays it is also found to a growing extent in low- and middle-income countries.

The trend in mental well-being is also gloomy. Anti-depressant prescriptions are on the rise, including to a growing share of children. How will this affect them, and society in general, when they enter the workforce in a few years?

Yet there is growing awareness among consumers of the long-term effects of our modern lifestyle. Foods marketed as natural, organic or healthy are increasingly available. Studies show that more than 75 per cent of people around the world are willing to pay a higher price for healthier food; the same is also true of exercise. Nowadays physical activity may be prescribed as a complement to, or in some cases instead of, medication. This health trend is probably here to stay.

Growing potential in AI, digitisation and health care

Although China has been heavily criticised for its handling of COVID-19 at an early stage, the pandemic would probably have developed into something much worse without the country’s digital solutions. Long before other countries, China as well as South Korea tracked the spread of the virus in part through facial recognition technology and thermal cameras. Meanwhile, officials communicated with selected members of the population via apps, depending on their proximity to infected people and any points of contact in their movement patterns.

However, health technology – health tech – has even greater potential. Using artificial intelligence (AI), doctors can make faster diagnoses and customise patient treatment plans, freeing up staff and reducing the risk of misdiagnosis. AI also enables the processing of large quantities of data, which should speed up the development of new medicines. To give a few examples: Using 3D printing, medical devices can be produced more cheaply on a small scale. With the help of robots and drones, sick people can be identified and examined without the risk of infection spread.

Different generations show different consumption patterns

Older people exhibit different saving and consumption patterns than younger generations. But it is hard to determine which patterns are attributable to a given age category and which are instead due to the environment and circumstances under which a specific age group grew up.

When people buy their first home or start a family, their savings ratio is generally lower. It increases as they get older, earn higher incomes and approach retirement age. This is also true of consumption. Young people buy homes and cars, whereas middle-aged people have usually already made these purchases. From that perspective, it is reasonable to believe that demand for services − relative to goods − will increase as the population ages.

People aged 55-75 have the biggest purchasing power.

The age group between 55 and 75 is not just growing; it is often described as the group with the biggest purchasing power by far. Aside from traditional health care, there are many areas that should benefit from an ageing population. These include online shopping for food and pharmaceuticals and online medical consultations − especially now after the COVID-19 outbreak, with online shopping having become a more natural part of many people’s everyday lives. Older people who for various reasons do not dare to (or should not) drive a car should theoretically also be affluent enough to buy self-driving cars.

It is also likely that once people retire, a larger part of their spending will be on leisure-related activities such as travel, food and drink, whereas job-related expense such as office attire and transport will decrease. Meanwhile it may be a challenge for them to fund their pension, creating opportunities for insurance and wealth management companies.


The ageing global population affects many investment areas, such as pharmaceuticals, health care, elderly care and consumer products. At the same time, there is increased pressure on pension systems, public transport and infrastructure. We expect the current focus on health care to continue even after the COVID-19 crisis has eased, and we believe governments will prioritise health tech investments going forward.

Elisabet Törnered, Jonas Evaldsson
Investment Strategy

Read more

You can read more in “Theme: Ageing populations” on pp. 25-27 in the latest Investment Outlook.

Investment Outlook (PDF)
Summary (PDF)

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