Urbanisation, rising middle classes and the rise of economic strength in the East, are some of the demographic megatrends that present both challenges and opportunities for investors. Understanding the nature and impact of them is fundamental to any long-term investment strategy.
The 'famous five' megatrends
Bringing clients and opportunities together requires continuous improvement in agility and the identification of opportunities that are not short lived. We have identified the five demographic megatrends that we believe will have the greatest impact on long-term investing:
The rate of urbanisation is the fastest in history, proving that now more than ever, people are choosing to live, work and play in cities. Understanding the unique attributes that make a city desirable is key to unlocking investment opportunities.
Rising middle classes
A truly global middle class is emerging – the number of middle and high-income households globally will more than double from 554 million in 2010 to 1,121 million in 2030. This will result in a higher demand for goods and services, as well as new sources of capital for investment.
An unprecedented ageing of population is taking place, globally; the proportion of the elderly is expected to increase by 50%, from 8% of total population in 2010 to 12% in 2030. An ageing demographic will transform economies and societies, posing immense challenges to health care systems, but also opportunities for investors chasing the ‘silver dollar’.
The rise of economic strength in the East
By 2030, Asia Pacific’s contribution to global output will be larger than Europe and North America combined. Evaluating the long-term economic sustainability of markets before choosing the most appropriate sector to invest in is key for longevity of performance.
Technology has not only significantly changed the way we live, work and communicate, but has helped create an interconnected global ‘village’. With further technological development, the world will become even better connected. Investors need to identify and harness these changes in order to be successful.