Megatrends

Megatrends are powerful, transformative forces that could change the global economy, business and society – and have been changing the way we live for centuries. Megatrends also influence our investment decisions – from the businesses, industries and countries we invest in, to the way we go about finding opportunities.

Identifying the potential for change is a key driver of investment decision-making. Most of these changes occur in a cyclical manner and over the short to medium term.

Occasionally, though, we're faced with structural shifts that are longer term in nature and have irreversible consequences for the world around us. These powerful, transformative forces are called megatrends.

We believe the awareness of megatrends in investment processes offers real insights; helping us to identify investment opportunities. This ultimately provides the potential for attractive risk and return profiles.

See below the five megatrends shaping our investment thinking:

1. Climate change
and resource scarcity

Crop failure, widespread flooding,
destroyed habitats and energy shortage
If predictions are correct, by 2100 the average surface temperature of the planet will have risen
5.8°C
since the late 19th century, and the planet’s resources will become increasingly scarce.
Source: ipcc.ch

2. Demographics
and social change

Labour shortage, demand on healthcare
and changing consumer demands
The global population could increase by over
> 1 BN
by 2030, and by 2050 a third of the population of 55 countries will be over 60 years old.
Source: un.org

3. Technological
Breakthrough

Machines will learn faster than humans and
personal data will be a valuable commodity
60%
Nearly two-thirds of all occupations could see a third
or more of their constituent activities automated.
Source: mckinsey.com*

4. Rapid Urbanisation

Space and accommodation will become
more of an issue in major cities
Two-thirds of the world’s population will live in urban areas by 2050.
In 1950, only 30% lived in urban areas.
66%
Source: Hing, E, Hsiao, C. US Department of Health and Human Services. State Variability in Supply of Office-based Primary Care Providers: United States 2012. NCHS Data Brief, No. 151, May 2014.

5. Shifting economic power

China will become the new superpower, Asia’s population
is growing rapidly, changing the global demographic
China could become the new world superpower by
2030
with India rivalling the US by 2050.
Source: IMF for 2016 estimates, PWC analysis for projects to 2050*
*Date accessed: May 2018

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A detailed examination of structural shifts in the global economy