Investing in healthcare: The heart of sustainable development

Being healthy isn’t just a social good; it’s a powerful driver of economic growth. The healthier people are, the more they can contribute to the economy: Every extra year added to a country’s life expectancy can boost its gross domestic product (GDP) per capita by 4%. 1

Investing in the healthcare sector advances Sustainable Development Goal (SDG) 3: Good Health and Well-being. SDG 3 is foundational and catalyses so many other areas of sustainable development. Without it, other building blocks of a fair and flourishing society – education, employment, and gender equality – struggle to stand.

Financing innovations, infrastructure, and access improves health outcomes worldwide. For impact investors, the healthcare sector offers the chance to generate returns while enabling healthier, more resilient societies.

You might also like: Investing in SDGs: Guiding global impact and sustainable returns

A long-term growth story

Healthcare has long been a resilient sector. In the thirty years before 2020, healthcare delivered stronger risk-adjusted returns than technology. 2 The pandemic disrupted that trend, bringing forward demand for diagnostics and vaccines, then leaving the sector to adjust as growth normalised and capital flowed elsewhere.

While this has made recent years challenging, the long-term case remains strong. Ageing populations in developed markets are driving up care costs, making efficiency gains essential. In emerging economies, rising incomes are leading to young people demanding a higher standard of health than their parents.

For investors, this means opportunity on both fronts – helping to deliver more cost-effective care in developed markets, and supporting inclusive healthcare expansion in emerging ones. The sector remains not only vital for society, but well positioned for long-term growth.

Key areas for investment

1. Technology in healthcare

Healthcare has a cost problem. Traditional drug discovery is expensive, slow, and risky. In pharmaceuticals, the high costs of research and development and failed projects mean patients frequently face high costs as well, particularly in markets such as the US. At the same time, treatments are often developed in wealthier countries, making it difficult to provide affordable options in emerging markets. Technology, such as artificial intelligence (AI), could in time offer a solution.

AI models such as AlphaFold, which won Sir Demis Hassabis a Nobel Prize, are already helping researchers decode protein structures in record time, providing insights that can save costly trial and error in the early stages of drug development. 3

Beyond drug discovery, AI is improving diagnostic accuracy, identifying early-stage conditions like sepsis faster than humans can. 4 It’s also beginning to make clinical trials more efficient by identifying suitable candidates and reducing delays, which cuts costs and improves patient outcomes.

Outside the lab, digital health solutions such as telemedicine and remote monitoring are helping to reduce reliance on overstretched healthcare infrastructure. This shift allows for earlier interventions and round-the-clock care, often at a lower cost. 5

Specific opportunities for investors include:

• Diagnostics – an investable area at the forefront of technological advancement, where improved accuracy and early detection drive both impact and returns.
• Remote delivery of healthcare – such as telemedicine and remote monitoring, reducing pressure on overstretched hospitals and clinics.
• AI-enhanced drug discovery – still early stage, but with long-term potential; currently mainly accessible through larger companies with relevant subsidiaries.

2. Expanding access in emerging markets

While healthcare in developed markets grapples with ageing populations and rising costs, emerging economies face a different challenge: scale. Many are young, fast-growing, and urbanising, yet still underserved.

Health outcomes can differ drastically between regions. The life expectancy gap between countries now spans 33 years – a child born in one country may live three decades longer than a child born in another. 6 Infant mortality can be up to 13 times higher depending on where a child is born. 7

You might also like: Why emerging markets – and why now?

Emerging markets (EM) are typically on the more challenging end of health outcome trends, but are also the fastest-growing populations. By 2030, 40% of the growth in the healthcare industry is expected to come from Asia alone. 8 Emerging markets now spend more on pharmaceuticals than the European Union five (EU5) – Germany, France, Italy, the UK, and Spain. 9 While many developed nations are cutting back on healthcare funding, EM countries are laying stronger policy foundations: Indonesia now covers 93% of its population with health insurance, and India’s health insurance programme for the lowest-income 40% has already expanded access for millions. 10 The added infrastructure means healthcare providers can invest in EM regions knowing there’s a clear market for them to serve.

Specific opportunities for investors include:

• Health infrastructure – hospitals, clinics, and research facilities that expand capacity in underserved regions.
• Pharmaceutical companies investing in production and distribution facilities in emerging markets – delivering cost-effective solutions adapted to local needs.
• Insurance and healthcare coverage facilitators – companies and employers embedding healthcare provision as part of benefits packages.

3. Bridging the gender health gap

Women represent nearly half of the global population, yet women’s health remains significantly underfunded and underserved. For example, only 4% of all biopharma research and development goes towards female-specific conditions. 11 And female representation in clinical trials accounts for just 22%. 12

On average, women spend 25% more of their lives in poor health than men, resulting in 75 million disability-adjusted life years (DALYs) lost each year. 13 These 75 million DALYs represent the combined effect of small amounts of healthy life lost by individual women. While one woman might only experience a few weeks or months of poor health annually, when multiplied across millions of women worldwide, it adds up to 75 million years of healthy life lost each year. Closing the women’s health gap would be the equivalent of adding seven healthy days per year for each woman. 14

You might also like: Investing in SDG 5: Gender Equality

From longer diagnostic delays and under-researched conditions to the economic toll of lost productivity, underinvestment in women’s health holds back not only individuals, but entire economies. This is because, beyond health outcomes, underinvestment in women’s health has broader social consequences – from lost productivity to higher healthcare costs hindering overall gender inequality. 15

But the upside is equally large. Closing the women’s health gap could generate $1 trillion in global economic value by 2040. 16 Every £1 spent on gynaecology and obstetrics in the UK, for instance, delivers an estimated £11 in return. 17

Specific opportunities for investors include:

• Diagnostics focused on conditions disproportionately affecting women, such as breast cancer, cervical cancer, and osteoporosis.
• Biotechnology tailored to sex-specific characteristics, including hormonal and autoimmune disorders.
• Reproductive and maternal health solutions – products and services supporting women across their health journey.
• Female health education platforms addressing gaps in awareness and preventative care.
• Women’s-health-focused research – research and development initiatives dedicated to conditions that are underfunded or overlooked.

Healthcare: The foundation of resilient societies

Healthcare sits at the intersection of human dignity and economic resilience. It’s a sector that touches every life and underpins nearly every global goal we seek to achieve.

For investors looking to align their portfolios with long-term positive change, healthcare is a strategic imperative. Valuations in the sector have corrected since the pandemic, and the structural tailwinds – demographic shifts, digital transformation, and rising expectations for equitable access – remain firmly in place.

At Tribe, we see healthcare not just as a sector, but as a springboard – one that propels progress across education, gender equality, and poverty reduction. The return on investment, especially when measured in healthier lives and more resilient societies, is one of the most powerful of all.