We need to talk about the longevity economy

Published on: 27 January 2025

Last year, a demographic milestone was reached. For the first time in our history, older adults outnumbered children under the age of 15 on our planet. Worldwide, both groups currently consist of about 2 billion people. With the global population expected to continue to rise and the number of children in the world expected to remain constant, longer lives as a result of falling mortality will be the driving force behind population growth.

 

Longevity debate almost non-existent

As a result, by 2050, the number of people over 60 is projected to have more than doubled to over 2 billion. Imagine what implications this enormous demographic shift could have for the way we live and thrive, build communities, earn money and, of course, how we retire. However, while much attention has rightfully been given to AI developments and the climate transition, a profound public debate about the challenges and opportunities of the longevity economy is almost non-existent.

 

The question of how to make the most of our “extra time” on this planet prompted the creation of the World Economic Forum’s Longevity Economy Initiative, in which I personally take part. In early 2024, this initiative published six longevity economy principles[1], aiming to establish long-term solutions that empower individuals to thrive and lead sustainable, resilient lives. Here are four of these principles:

 

-   prioritizing healthy ageing with much more emphasis on preventive healthcare

-   the need for lifelong learning and skill building for a multigenerational workforce

-   addressing longevity inequalities, including across gender, race and class

-   ensuring financial resilience across key life events

 

Dutch pension system reform

Hopefully, these principles will help to spark much-needed, profound international debate. Meanwhile, we also really need concrete actions. The reform of the Dutch pension system is just one of a broader set of implications of the transition to the longevity economy.

 

Last year, we invested more than €600 billion in assets on behalf of our pension fund clients. At APG, we relentlessly try to invest in such a manner that our investments lead to a sustainable world where young and old can thrive. To do that, we are specifically aiming for enduring and large-scale public-private investments. But we also need governments to step up. A solid investing approach taps private capital to serve public goals and at the same time enables adequate investor returns. Accommodating, consistent and adequately resourced regulations, are an important condition for that. Legislation that is not fit for purpose, where policy is ambiguous and communication contradictory, can quickly temper one’s initial enthusiasm. APG is committed to ensuring that continental Europe allows investments to be made more on a public-private basis, as Mario Draghi also recently underlined in his report about the future of EU competitiveness.


Affordable housing
A good example of an investment that benefits from public-private collaboration is housing. Access to affordable housing is essential for all things critical to human thriving, such as education, employment, personal safety and community, long-term financial stability, and a foundation for healthy longevity. As an institutional investor, APG takes a long-term view, including by providing affordable elderly housing as part of larger investment deals in more and more countries. And for the Netherlands alone, APG will be investing an additional €5 billion in affordable rental homes on behalf of its pension fund clients in the coming years.[2]

 

Pivotal moment

We stand at a pivotal moment in our economy. One where the longevity economy offers immense potential. We just need to start rethinking how we see and want to deal with this demographic shift. A longevity economy where young and old thrive will benefit us all. As our population ages, APG wants to embrace responsible investing, which not only drives financial returns but also fosters social and environmental well-being. Besides affordable housing, there are, of course, many more investment categories that could contribute.

 

With a long-term, predictable, and equitable approach, there is every prospect that the potential for large-scale public-private investment partnerships can be fully realised. For today, tomorrow, and beyond. Let us keep investing together in a future where longevity, AI and sustainability go hand in hand.

 


[1] Longevity Economy Principles: The Foundation for a Financially Resilient Future | World Economic Forum (weforum.org)

[2] APG invests in affordable housing on behalf of ABP | APG