How sovereign and private capital can help develop healthcare infrastructure

As our planet surpasses a population of 8 billion, the need for robust healthcare systems is paramount. Both sovereign and private capital institutions have an unprecedented opportunity to play a vital role in shaping the future of healthcare infrastructure.

In this era of demographic shifts and technological advancements, the role of private investment, especially sovereign investment, in building a more resilient healthcare system is compelling. And it matters because the quality of the infrastructure affects every life on the planet.

Infrastructure is the backbone of a healthy economy and society. Yet, the gap between what's needed and current funding is growing as populations expand and age.

The UN predicts the number of people aged 65 and older will more than double by 2050, putting immense pressure on healthcare systems as they currently stand. Developing countries alone face a staggering annual need of $2.4 trillion over the next seven years to address healthcare crises, climate change, and conflict.

Healthcare infrastructure, in particular, requires significant capital allocation, having historically been underfunded. As demographics change, investing in research, innovation, and a skilled and competent healthcare workforce becomes ever more crucial.

Bridging this investment gap is essential for public health resilience and medical breakthroughs.

The UAE is experiencing a demographic transition that reflects broader global trends. The number of people aged over 60 is expected to increase more than sixfold between 2020 and 2050. As global and national life expectancies continue to rise, the implications for healthcare systems and the wider society in which they function are profound.

The UAE government is proactively addressing these demographic shifts by expanding and strengthening its national healthcare system. Their commitment is evident as national projected healthcare spending is anticipated to reach $34 billion by 2027. Investments include state-of-the-art facilities like Sheikh Shakhbout Medical City, international partnerships with Johns Hopkins, and research and development initiatives. The groundwork implemented by the UAE will help ensure a healthy future for generations to come.

Alongside government efforts, patient capital has a vital role to play in the long term. Understanding that infrastructure is more than just assets and buildings, Sovereign wealth funds can help unlock social and economic potential. They can significantly contribute by directly investing in medical facilities, technology, and research, ultimately enhancing healthcare quality and accessibility. Sovereign investment has played and will continue to play, a crucial role in transforming the UAE's medical system.

ADQ, an Abu Dhabi-based sovereign investor, has made notable investments in the healthcare sector. Its acquisition of stakes in private healthcare providers helps broaden infrastructure within the industry and improve service quality and access. During the pandemic, PureHealth, a leading healthcare investor and operator within ADQ's portfolio, played a critical role in handling a high volume of COVID-19 tests essential for controlling the spread of the virus.

The pursuit of a better quality of life is intertwined with advancements in life sciences and longevity-focused research. These fields aim to prolong healthy lifespans and reduce the burden of age-related health issues on healthcare systems. The UAE has recognized this potential and is fast emerging as a hub for medical innovation and health tourism. An example is Arcera, a pioneering global life sciences company ADQ recently established. Arcera focuses on forging strategic partnerships to address the growing demand for crucial therapies.

The UAE's approach to healthcare infrastructure, characterized by strategic partnerships, investments in research, and cutting-edge facilities, serves as a model for how both sovereign and private capital can enhance healthcare delivery and innovation. This narrative is not confined to the Middle East; it resonates globally. From Asia to the Americas, investors increasingly recognize infrastructure as an asset class with significant social and economic benefits.

The convergence of this infusion of capital with the development needs of healthcare infrastructure is not just an opportunity; it's a strategic imperative. We can pave the way for sustainable healthcare systems by meeting evolving demographic demands. The strategic integration of this form of investment into healthcare infrastructure projects is essential for our global community's continued health and prosperity. The future of healthcare hinges on decisive action today.