Dubai/Zurich, October 21, 2009 Global megatrends, the far-reaching factors that are shaping the world and its inhabitants, will have an important and lasting global impact. In the latest issue of Global Investor, the analysts at Credit Suisse together with experts from around the world, examine the 3 key megatrends at play today; demographics, the return to a multipolar world and sustainability, and explore their future impact and how investors can best benefit from the developments and innovations in these areas.
The last two years have been tumultuous, with extreme market conditions and unprecedented government intervention. There are, however, much larger and arguably longer-lasting shifts occurring in the social, economic, environmental and technological domains. These megatrends often don't make the daily headlines, but they are surely and steadily re-shaping the world around us. Their global impact and widespread importance is magnified by the fact that they play out over decades, rather than simply over months or years. Tracking them thus requires expertise bridging many disciplines and a long-term focus.
Megatrends have been at work for centuries, for example the introduction of long-distance ocean navigation and its impact on trade, or the force of industrialisation, which resulted in migration from the countryside to urban centers. The mass urbanization seen in the West a century or more ago is now taking hold and accelerating in contemporary Asia and throughout the developing world, demonstrating that megatrends can also overlap in time and location, and reinforce or modify each other.
In addition to highlighting the views of the analysts at Credit Suisse, this issue of the Global Investor features insights from numerous internationally-renowned experts engaged in advancing, mitigating or simply understanding the primary forces impacting the world today and in years to come.
Demographics: The aging challenge
No contemporary megatrend is more visible or more intractable than the aging of the developed world and the contrasting youth of emerging market populations. Due to pension and healthcare funding challenges resulting from longer life spans, aging is often portrayed as an impending crisis, particularly for the West. However, history has repeatedly shown that the response to megatrends has been that these often breed ingenuity, change, and opportunity. Investors should therefore not only prepare for an increase in consumer demand among the aging populations, but also for some surprising solutions, as communities experiment with social and physical rejuvenation and re-defining the very meaning of aging.
Multipolar World: Emerging producers
Even before the recent global financial crisis, the forces of economic globalization and political reform were eroding the 20th Century constraints of a bi-polar / superpower world. In its place, a more balanced geopolitical order is rapidly emerging. One of the first waves of the enrichment of developing countries came in the form of low-cost manufacturing for wealthy Western consumers. Usually, such products were brought to market under the brands of their developed country designers and distributors. In a second wave, production for emerging-market "home" consumers is a natural outcome of their rising spending power. The brand- and quality-building imperatives now at work in these dynamic economies will provide investors with many interesting investment opportunities.
Sustainability: The road to a green future and innovations in food production, artificial intelligence and robotics
The widespread global recognition of resource over-use, pollution and climatic or nutritional threats to human well-being has triggered enormous efforts in finding sustainable solutions. First, the carbon-based energy economy has been challenged to transform itself – both through technological innovation and by pricing schemes that offset environmental impact, thus discouraging pollution and waste. Second, risks of food shortages have spurred innovation in crop growing and yield improvement. Thirdly, human labor productivity can be increased and magnified by developments in robotic technology and the new frontiers of artificial intelligence. By keeping up with the latest breakthroughs in the applied sciences, investors will have a first-mover advantage in accessing this growing field.
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