The Viewpoint: The loneliness economy – could emotional connection become a competitive advantage?

I have always been one of those people who genuinely enjoys their own company, and until recently, I hadn’t given much thought to the idea of loneliness. It was a conversation with an older neighbour that prompted me to reflect a little.

They spoke candidly about feeling isolated, despite leading a fairly active life, and shared their concerns about being alone as they approached their later years. It made me realise that solitude and loneliness, though often linked, can be very different. And more strikingly, that a lack of meaningful social connection can exist even amid busyness and company.

Now that the thought has taken root, I notice it everywhere. When I step out for lunch, half the people I pass wear headphones, immersed in their own digital soundscapes. Others are heads-down, scrolling through their phones, barely aware of the world around them. Friends talk about their teenagers spending hours gaming online with people they’ve never met in person. These are lives quietly shaped by disconnection – not always dramatic, rarely acknowledged, but part of a growing and measurable phenomenon. In an age more connected than ever by data, we are increasingly disconnected from each other. How is this shaping the social landscape and how might it impact the investment world as we move forward?

If you believe that capital should follow structural change, this may be one of the most quietly powerful themes of the coming decade.

Loneliness, like inflation or climate risk, is both personal and collective. We feel it individually, but its causes and consequences are both social and economic. Unlike many modern problems, it doesn’t particularly care how old we are, how well-off we are, or where we live, it can impact every one of us. Long treated as a private, emotional issue, is now revealing itself as a systemic risk and, for some companies, a long-term opportunity. If you believe that capital should follow structural change, this may be one of the most quietly powerful themes of the coming decade.

In the United Kingdom, loneliness has been a policy priority since 2018, when then Prime Minister Theresa May appointed the world’s first Minister for Loneliness following a cross-party commission. At that time, a survey highlighted that over nine million people in the UK across all adult ages were either always or often lonely. Since then, initiatives have included funding for community cafes, social prescribing by GPs, and data collection on social wellbeing. Japan, a country grappling with an ageing population and a high suicide rate, created a similar post in 2021, with the government supporting shared living facilities and neighbourhood community hubs. In 2023 in the United States, the Surgeon General called loneliness a “public health epidemic” and proposed a strategy to rebuild the social fabric – from schools and workplaces to digital platforms.

Pricing power strengthens when a service offers more than utility — when it offers emotional return.

However, some of the most compelling responses to the loneliness crisis are coming not from government, but from companies that understand this simple truth: connection is valuable. It is valuable not just to individuals, but to business models. Retention improves when users feel part of something. Loyalty grows when customers feel known. Pricing power strengthens when a service offers more than utility – when it offers emotional return.

Few companies have understood this better than Nintendo. With the extremely successful launch of its Switch 2 now behind us, it is clear the company has once again leaned into its core philosophy of shared play. Unlike many gaming devices that focus on immersive, often isolating solo experiences, the Switch 2 builds on its predecessor’s success by encouraging local multiplayer, co-op challenges, and games that bring people physically together. It is a console that invites you to pass the controller, to laugh in the same room, to play not just against, but with. Nintendo’s commercial triumph is a reminder that joy shared is joy multiplied.

Or take Spotify, long known for personalised listening, but increasingly aware that music is also a social act. The company has introduced features like collaborative playlists and shared listening sessions, allowing users to experience content together, even when apart. This isn’t a gimmick. It’s a recognition that engagement deepens when we connect through culture, not just consume it alone.

Even Bumble, a platform born in the dating world, has made a strategic pivot into friendship. Its Bumble for Friends app caters to people looking for platonic connection – those who’ve moved cities, changed jobs, gone traveling or entered new life stages and want to rebuild their social circles. In many ways, it speaks directly to the needs of a generation whose social infrastructure – workplaces, community spaces, even regular commutes – has quietly eroded.

Beyond these, other large-cap companies are beginning to shape strategies around emotional connection.

Disney, remains one of the most powerful engines of intergenerational connection. Whether through theatrical releases, Disney+ watch parties, or its expanding park infrastructure, the company has built a model around shared nostalgia and ritual family time. At a moment when families are more dispersed and fragmented, Disney sells a reason, and a structure, to come together.

The lesson is simple: loyalty grows where loneliness shrinks.

These are not minor features. They are part of a growing effort by some of the world’s largest consumer-facing businesses to meet the emotional needs of an increasingly atomised customer base. The lesson is simple: loyalty grows where loneliness shrinks.

The implications for equity investors are significant. Loneliness is obviously not a sector, but it is a theme that cuts across sectors. It sits inside healthcare, technology, housing, consumer discretionary, and media. It reveals itself in subtle ways, in retention rates, in dwell time, in customer satisfaction. And it rewards companies that deliver something deeper than convenience.

Consider the growth in senior living models that prioritise experience and community, rather than care alone. In the UK, Inspired Villages, backed by Legal & General, is developing retirement communities focused on autonomy, fitness, and shared social space. Residents are encouraged to participate in clubs, events, and neighbourhood activities, creating a sense of continuity and identity in later life. These are not care homes. They are connection hubs, designed for people who are still very much alive to the idea of living.

One could argue that the rise of loneliness in modern society has spurred a wave of fitness trends that prioritise community and connection, with boutique fitness brand Barry’s and the explosive growth of pickleball leading the charge. Barry’s, with its vibrant, high-energy studios and immersive group classes, fosters a sense of camaraderie among its clientele, offering not just workouts but shared experiences that combat isolation, evidenced by its seven million studio visits in 2024 and ambitious expansion plans for 20 new locations annually. Similarly, pickleball, the fastest-growing sport in the US, thrives on its inherently social nature, drawing players of all ages to accessible courts in parks and retirement communities, where doubles play and quick games spark friendships and regular meetups.

If we are willing to look beyond the traditional categories of growth, be it software, semiconductors or sustainability, for example, and think instead in terms of human needs, we may find some of the most resilient businesses of the next cycle hiding in plain sight.

We may now be underestimating how strongly people will respond to businesses that help them feel seen, connected, part of something.

And just as we once underestimated how deeply the smartphone would reshape daily life, we may now be underestimating how strongly people will respond to businesses that help them feel seen, connected, part of something.

The loneliness economy will never appear as a line item in a national account or a Bloomberg terminal. It does not lend itself to easy metrics. But it is all around us, reshaping consumption patterns, public health priorities, and emotional energy. It is there in the person dining alone, in the friendless newcomer to a big city, in the elderly neighbour whose curtains never open until late. As investors, we are trained to find themes early, to spot what the market has yet to fully absorb. This may be one of those themes – soft on the surface, but deeply structural. It calls for a different kind of research, perhaps, and a different kind of empathy. But the rewards, I suspect, will go beyond returns.

In an economy increasingly shaped by absence, companies that build presence, genuine, joyful, shared presence, may be the ones that matter most.

For professional investors only.  This material is not suitable for a retail audience. Capital at risk. This is a financial promotion and is not investment advice. Past performance is not a guide to future performance. Reference to any security is for information purposes only and should not be considered a recommendation to buy or sell. The value of investments and any income from them may go down as well as up and is not guaranteed. Investors may not get back the amount invested. Portfolio characteristics and holdings are subject to change without notice. The views expressed are those of the author at the date of publication unless otherwise indicated, which are subject to change. Forward looking statements are subject to certain risks and uncertainties,  Actual outcomes may be materially different from those expressed or implied.