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The AI-health revolution – future-proofing our golden years
In 1917, King George V of the United Kingdom sent personal birthday cards to every British citizen who turned 100 years old. His work that year was light – he sent just 24 cards. Today, the royal centenarian birthday cards have become a much-loved tradition. For the British monarch, King Charles III, they have also become much more work – around 7,000 people now reach 100 in the UK each year1.
The evolution of this tradition symbolises a global phenomenon – individuals, and entire societies, are getting older. Since 1900, the life expectancy of an infant at birth has more than doubled, from 32 to 71 years of age2; and nearly 10% of the world’s population is now aged over 65, up from 5% just 60 years ago3.
Could recent advances in digital technology and artificial intelligence herald a productivity boom and a new Golden Age for over 65s?
At the same time, fertility rates in most developed nations have fallen below the 2.1 children needed to maintain population size. In the US, for example, each woman has an average of 1.7 children, in South Korea it’s just 0.9.4 In more and more countries there is a growing elderly population being supported by a dwindling number of young people.
Conventional wisdom says an ageing society will drain economies, with pensions required to pay out for longer and healthcare systems forced to dig deeper into taxpayer pockets to fund senior care. But is there an alternative perspective? Could recent advances in digital technology and artificial intelligence (AI) herald a productivity boom and a new Golden Age for over 65s?
Health – our most important asset
In many developed nations, governments are responding to increased life expectancy by raising the retirement age. Last year, France saw protests as President Emmanuel Macron signed into law a reform raising the state pension age from 62 to 64, while other countries – including the US, Germany and Spain – have plans to raise the age to 67.5
However, according to Andrew J. Scott, Professor of Economics at London Business School and author of The Longevity Imperative: Building a Better Society for Healthier, Longer Lives, “Just raising the pension age doesn’t solve the problem. We need a fundamental rethink to keep people healthy, engaged, happy and productive for longer. Health is our most important asset.”6
We believe AI is powering a second longevity revolution, one that takes the lifespan gains we have achieved in recent decades and adds a new dimension – ‘healthspan’
The first longevity revolution has been characterised by longer lives. We believe AI is powering a second longevity revolution, one that takes the lifespan gains we have achieved in recent decades and adds a new dimension – ‘healthspan’. As the international community works to build a sustainable and equitable economy, the AI-health nexus is set to play a key role in building inclusivity, ensuring that older generations do not find themselves on society’s fringes, but stay central to our communal and economic life.
When Italian polymath Leonardo da Vinci designed the first ever wearable pedometer more than 500 years ago,7 even with his famously far sight he can have had little idea of how wearable health devices (WHDs) would evolve. From counting steps to monitoring cortisol, breath CO2, and blood sugar levels, WHDs can now track a wide array of parameters, and can even detect a change in gait or spot if a user has fallen.8
Enhanced by AI’s ability to analyse large datasets and detect changes in patterns, WHDs are increasingly being integrated into health systems9, sending a constant flow of data, flagging anomalies, and enabling interventions long before serious disease has become established10.
By their very nature, WHDs rely on personal data, and their integration into centralised health systems raises concerns over data security. Here, another technological innovation – the digital blockchain – could be deployed to ensure data security and transparency over how data is used11. As users gain confidence that their data is protected, they may even begin to expand this real-time health analysis to the home, with a network of sensors including smart fridges that assess food consumption and smart lavatories that test waste for early signs of illness.12
Researchers writing in the journal Nature conclude: “Digital health is spreading rapidly, with the ageing population becoming a major target group...These sensing technologies are expected to become an important integral part of future diagnostic tools, leading to improved health outcomes for older adults.”13
Open source AI models (rather than proprietary ones) could improve access to high-quality healthcare and help keep costs down
The future of preventative medicine
AI’s early-warning potential does not end there. As the power of AI computing has advanced, the cost of genetic screening – also known as DNA testing – has plummeted. Tests that cost as little as USD 100 per person could soon be used to screen entire populations to identify genetic predisposition to cancers and other diseases.
The result could be personalised prevention plans for all, including nutrition and lifestyle modifications; protective ‘chemoprevention’ such as supplements, vitamins or other medication; vaccination; and regular scans for high-risk diseases. According to researchers from leading US cancer hospitals and research centres, genetic screening could become “the future of preventative medicine”14.
Caution is needed, however. While technological advances have reduced the cost of genetic testing, embedding AI more broadly into healthcare systems can be costly, and smaller providers, especially those in low-income regions, may lack the necessary financing15.
Open source AI models (rather than proprietary ones) could improve access to high-quality healthcare and help keep costs down; for governments and other providers, investing in AI in the short-term could reap a long-term economic gain.
Care must also be taken to ensure these new tools don’t entrench systemic bias. AI models that are trained on skewed data – for example, where datasets are taken from patient groups with minimal ethnic diversity – risk creating a two-tier system, improving health outcomes for some while leaving others behind. In the worst-case scenario, AI systems trained on poor quality data could even cause harm to patients. We believe this is one reason AI should be thought of not as ‘artificial intelligence’ but as ‘augmented intelligence’, helping doctors and researchers to work more quickly and accurately, rather than taking over from them.
As investors, we believe that AI, demographic shifts, and the transition to preventative medicine are transforming healthcare and offering a rapidly-expanding opportunity to achieve portfolio returns
From science to engineering
This role as a ‘super-assistant’ is already being seen in radiology and medical imaging. In the UK, one study tasked AI with analysing medical scans – the system correctly identified all breast cancer tumours in scans from 10,000 women, including picking up eleven positive scans in which tumours were so small they had been missed by doctors.16 In another study, researchers deployed AI to predict Parkinson’s disease up to seven years before symptoms occurred.17
AI is also set to transform drug development. In just one of many examples, in 2023, scientists used AI to narrow down their search for a new superbug-killing antibiotic from 6,680 potential options to just 240. Using computer modelling, AI returned the reduced list in less than two hours.18 Such is the speed with which AI can analyse large datasets that consultants McKinsey & Company anticipate, “life-changing, game-changing drugs, on a scale and at a pace we’ve never seen before,” predicting that AI could reduce the average ten-year drug development time by up to 90%.19
Billions of dollars are now being invested in AI drug development – in 2019, Microsoft teamed up with Novartis to establish an AI innovation lab, and numerous major pharmaceutical names have since acquired AI start-ups.20 Jensen Huang, CEO of computer chip giant Nvidia, believes AI will “bring the world of biology into the world of computer science,” and that we will soon see human health as an engineering rather than a science problem.
The longevity dividend
As investors, we believe that AI, demographic shifts, and the transition to preventative medicine are transforming healthcare and offering a rapidly-expanding opportunity to achieve portfolio returns. The wearable health device market, for instance, is forecast to grow from a total value of USD 16 billion in 2021 to more than USD 60 billion by 2032.21 In medical imaging, the use of AI is set to rise from a market value of around USD 1.9 billion in 2022 to as much as USD 30 billion by 2032.22More broadly, the market for AI in healthcare is projected to reach nearly USD 190 billion by 2030.23
For governments fearing the cost of longer lives, increased healthspans promise a new and unexpected productivity boom instead. Already, workers aged over 50 account for the majority of employment growth in the world’s most well-off nations;24 while one study found that increasing age diversity in the workforce, including by retaining and hiring older workers, could boost GDP per capita by 19% across the next three decades.25
Healthier older people are also likely to be increasingly important contributors to economic activity. In the US, the Boston Consulting Group anticipates that, by 2030, the nation’s over 55s will have accounted for half of all consumer spending growth since the 2008 financial crash.26
We are convinced that the AI-healthcare revolution, and the longevity dividend it unlocks, will play a defining role in this economic and social evolution
A Golden Age for the silver economy
Our ‘rethink investments’ framework aims to capitalise on this broad-based structural trend, dubbed a ‘Golden Age for the silver economy’. With longevity and technology as two of our six key themes, we believe firms that leverage AI to cater effectively to this generation are likely to see their customer base increase year on year.
This will be seen most notably in healthcare spending – in Switzerland, for instance, according to the Federal Financial Administration, healthcare expenditure is set to rise from 7.6% of GDP in 1990 to 15% by 2050. Pensions and private longevity planning will also see strong growth, as will a broad spectrum of retail and tourism, with wealthier, healthier seniors spending more on everything from cruise trips to luxury clothes and accessories. In Asia, advertising firm Ogilvy anticipates that the senior generation will be the most important growth market over the next 15 years; while globally, the Brookings Institution calls seniors “the wealthiest age cohort in the world” and forecasts that over-60s will represent a spending market of almost USD 15 trillion by 203027.
We believe that the global economy is on a one-way journey from today’s unequal, wasteful, environmentally harmful model, to a model that is socially just and climate- and nature-positive. This is catalysed by fundamental changes taking place across four major economic systems: Circular materials, Lean consumer, Inclusive health, and Clean energy – we call this the CLIC® economy.
We are convinced that the AI-healthcare revolution, and the longevity dividend it unlocks, will play a defining role in this economic and social evolution, creating broad, equitable access to preventative and early intervention healthcare, and ensuring that the world’s expanding older demographic can continue to play a full role in society. As we rethink ageing, we believe seniors will be seen not as a potential burden, but as a vital economic force of the future.
This is a marketing communication issued by Bank Lombard Odier & Co Ltd (hereinafter “Lombard Odier”).
It is not intended for distribution, publication, or use in any jurisdiction where such distribution, publication, or use would be unlawful, nor is it aimed at any person or entity to whom it would be unlawful to address such a marketing communication.
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