Biomedical progress rates as the new source of economic growth

The revolution in information technology has irreversibly changed our lives over the past two decades. However, advances in biomedicine stand poised to eclipse the social and economic effects of IT in the near future.

Biomedical innovations typically reach the mass market in much slower fashion than those from information technology. They follow a paradigm where neither demand, in the form of the consumer, nor supply, in the form of the innovator, can significantly accelerate the process.

However, in the near-term, unless the governments of the debt-laden developed countries make proactive policy changes, there is a possibility of lengthy economic decline and even collapse.

“John Maynard Keynes once said that in the long run we are all dead. Our model looks at the scenario, where some of us are alive in the long run. It also suggests that to grow the economy we need to make proactive policy changes and accelerate aging research as well as the propagation of biomedical advances from the laboratory into clinical practice.”, said Alex Zhavoronkov, the director of the Biogerontology Research Foundation.

“The contributions to life expectancy gains are blurred by the unhealthy behavior and environmental factors. However, in the near future we may see a revolution in longevity and we can either prepare for and accelerate the change or continue stimulating the economy using the Keynesian, monetarist or traditional neoclassical policies, run deeper into debt and face the dire consequences.”, he added.

“Governments, pension funds and individuals that have the adaptive life span and life expectancy expectations based on historic trends are likely to be unprepared for these paradigm shifts. We proposed a set of parameters that may be used in several models of economic growth to account for these scenarios both in the transitionary period and in the long run.”, said Maria Litovchenko, the research associate at the Biogerontology Research Foundation and the graduate student at the Ludwig Maximilian University of Munich.

The proposed model takes into account progress in the biomedical sciences, which in turn affects the size, growth and productivity of the population. In the model, the rate of biomedical progress is the sum of the rejuvenation rate, the rate at which the functions required to perform useful work that were lost to aging or disease are restored, and non-rejuvenating rate, which increases lifespan, but does not restore lost functions.

Joe Betts-lacroix, the executive director at Health Extension, said about the research: "A common concern about the dissemination of anticipated health-extending technologies worldwide is overpopulation.  However, only countries with low medical security have population growth.  Health-extending technologies will travel with overall medical technologies, and these will only reach countries as their incomes rise and their birth rates fall. In the western world, lower birth rates are automatically working to correct overpopulation. As reproductive lifespans increase (the maximum age at which women can give birth), women will wait longer to have their children, and population will continue to be regulated at a sustainable level."

The effects of population aging on economic growth remains a controversial topic in macroeconomics with conflicting schools of thought. While there are many models and simulations that account for population aging, new parameters introduced in this research may help enrich the models demonstrating both positive and negative effects of aging on the economy and help model scenarios that go beyond extending historic trends in longevity.

Commenting on the announcement Dr Joao Pedro de Magalhaes, researcher  at the University of Liverpool, said: “With the graying of the world's population, and the massive resulting social and economic challenges, this type of work is very timely. A very important message from this work is that economists should take into account technological progress when making forecasts. This work also further emphasizes the absolute need for research on aging and rejuvenation to develop interventions that extends healthy lifespan which would result in unprecedented medical, social and economic gains.”

“People are living longer, healthier lives, and this longevity boom is not going to stop any time soon. If we're to get to grips with the implications this will have for national economies, pension funds and society at large, we urgently need economic analysis of this trend. This paper is an insightful step in the right direction.”, - said Steven Burrill, CEO of Burrill & Co.

Notes to Editors

The authors of the study can be contacted at alex@biogerontology.org or maria.litovchenko@bg-rf.org.uk.