Megatrends Global Megatrends Conference 2017
Global Megatrends Conference
The Global Megatrends Conference hosted by Credit Suisse brings together experts and thought leaders in the world of business and politics to meet and share their insights, expertise and analysis of the latest developments in Megatrends that are likely to shape the future of investments. The Conference aims to provide investors with the tools necessary to make smart and successful long-term investment strategies.
What are Megatrends?
Megatrends are major economic, social and political transformations which are of long last significance. We identify Megatrends within three distinct and interrelated pillars: Demographics, Multipolar World and Sustainability. At Credit Suisse, we believe that the correct analysis of Megatrends is a prerequisite for successful investments into growing markets.
Finding suitable investments opportunities is not always straightforward. Investors may not be able to identify investments at the early stages of their life-cycle. The inverse may also be true. Investors can become over-enthusiastic, driving valuations to high levels, pushing evaluations to bubble territory. In this case, the investor can achieve higher returns than someone that entered early. Understanding these investment cycles allows for a strategic and sustainable approach to investment in global Megatrends. With this in mind, our Megatrends framework, which aims to expose long-term opportunities of a given Megatrend while also allowing for the tactical aspects of the Megatrend’s investment cycle. In addition, it emphasizes the benefits of a cross asset and portfolio approach towards Megatrends investing.
The Demographic Challenge
Rapid population growth in emerging markets and aging populations mainly in developed markets, represent the starting point of the current cycle of Megatrends.
Dynamic shift from rural areas to urban areas, has accelerated over the last 50 years and is projected to continue increasing rapidly. By 2030, cities will accommodate two-thirds of the world’s population. This shift creates extreme demand for additional infrastructure, housing, and consumer staples.
Health & Aging
According to the UN, global life expectancy could rise to more than 75 in 2050. This creates new challenges and opportunities for healthcare. Attention will turn to combating illnesses associated with old age such as Alzheimer’s and chronic diseases like cancer owing to poor diets and rising obesity.
Automation already dominates many production processes and will become the norm in several industries. Innovation, knowledge, and the need for a more skilled labor force have become the key to productivity enhancements and long-term economic growth.
Global population is set to reach 9 billion before 2050, placing great pressure on already taxed natural resources. Feeding this population will challenge the farming industry and greatly tax the water supply. Growing energy demand will also force us to look at other forms of sustainable energy.
Transition to a Multipolar World
The world is increasingly becoming multipolar; for several years, economic growth in emerging markets has been outpacing advanced economies. These developments are leading to a shift in global wealth and economic power from the developed to the developing world.
The size of the global middle class is expected to grow to almost 5 billion in 2030, driven predominantly by emerging markets. Emerging markets are benefiting from favorable demographic trends, spread of technology and higher educational attainment. Consequently, new growth will predominantly originate in emerging markets.
The past seventy years has seen pervasive globalization, the result of which has produced the rise of global cities, successes of small states and growing wealth in emerging economies. However, recent events signal a departure from globalization and is slowly replaced by an increasingly multipolar world, notably in areas of military power, political and cyber freedom and, financial sector growth. (Source: 2016, Credit Suisse Research Institute, Getting over Globalization).
The Need for Sustainability
The two pillars of Demographics and Multipolar World are placing an extraordinary burden on existing resources, with a potentially catastrophic impact on our environment. The situation requires investment in sustainable generation of resources in combination with investments in technology to improve efficiency in the use of existing resources.
Alternative forms of energy are catching up fast and investment into renewables has been on a steady rise with further scope for strong expansion. Increasing urbanization also has called for better waste management and recycling to help make human activity more sustainable.
Our ever-changing environment forces us to by finding new solutions to tackle new problems such as climate change and other emerging risks resulting from today's hyperconnected world.