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8 megatrends to follow in the coming years
As we celebrate our 190th anniversary, we look at 8 key areas that are shaping tomorrow – from the metaverse to artificial intelligence, from new energy sources to new breakthroughs in healthcare.
1. The invention of new materials will be a game-changer for the world – and for financial investments
This is one of the trends that will have the greatest impact in the coming years, in areas as diverse as technology and agriculture. The transition from natural resources to the use of laboratory-produced, biological and synthetic materials with novel physical properties is expected to accelerate worldwide. Examples include sustainable materials for consumer products, smart building materials, synthetic fuels and green batteries. This trend will be particularly relevant in another market that is strategic today but has huge growth potential in the future: semiconductors.
Source: Precedence Research
Data suggests that the global semiconductor materials market will continue to grow at a compound annual growth rate (CAGR) of 6.6%. This trend is driven by the predicted impact of the integration of artificial intelligence into a market that is already part of the daily lives of millions of users, whether in smartphones or cars. For these reasons, investing in the semiconductor materials marker could be particularly attractive. There are several financial products available to suit your trading style, preferences, objectives, risk profile nd time horizon. Those wishing to invest in this market can choose from derivatives, equities, ETFs (Exchange-Traded Funds) or investment funds specialising in semiconductors.
2. The majority of the world’s population to have data protection laws in place by 2025
It is estimated that by 2025, 75% of the world’s population will have all their personal information covered by privacy legislation. This scenario is forcing us to make fundamental changes in online marketing and commerce. It will be necessary to adapt in order to make smarter and more profitable use of the data available, as it will become increasingly complex to obtain new data sets on users.
This trend makes it more attractive to invest in companies that are developing technologies to improve consumer privacy and regain their trust. Examples include companies working in privacy and security software, blockchain, Web 3.0 and tokenisation, among others.
3. If cybercrime were a nation, it would be the most powerful nation in the world by 2027
As the digital economy grows, digital crime, which has already reached record levels, is set to increase in the coming years. More and more data and systems become open, connected, accessible, smart and web-enabled, making everything from power grids to healthcare to home appliances more vulnerable to cyberthreats. Statista’s Cybersecurity Outlook estimates that the global cost of cybercrime will rise over the next five years, from US$8.44 trillion in 2022 to US$23.84 trillion in 2027 – equivalent to US GDP.
ESTIMATED COST OF CYBERCRIME BY 2027
Source: statista
This scenario requires new and complex solutions to protect users from this type of crime. In this context, interesting investment opportunities may arise, for example through equities, ETFs and investment funds specialising in innovative cybersecurity companies.
4. New energy sources to account for 50% of consumption by 2050
Carbon-based energy will remain important, but growth will be driven almost entirely by renewables and decarbonisation technologies. The world will still be under strong pressure to achieve carbon neutrality, which will mean a shift in energy sources towards synthetic fuels and hydrogen. Statistics show that these new energy models will account for a third (32%) of the world's energy mix by 2035 and half by 2050.
ENERGY CONSUMPTION BY FUEL TYPE BY 2050 (IN MILLIONS OF TERAJOULES)
Source: McKinsey & Company
This scenario is a driver for greater investment in clean energy over the next decade and could be a major opportunity for investors. Many investors are targeting companies investing in carbon capture and storage technologies, new transport infrastructure, smart grids and sustainable hydrogen.
5. ESG investments will be part of the growth story
The importance of environmental, social and governance factors (ESG) will continue to grow. Investors, legislators and rating agencies are increasingly demanding that large companies take responsibility for their role in the sustainability of their operations. Europe has been at the forefront of this management, but the Asian and US markets are following the trend to reduce their carbon footprint.
ESG-linked bonds are also growing. ESG-linked debt issuance to finance sustainable projects more than tripled to US$190 billion in 2022, and sustainability-related equity fund flows also increased to US$ 25 billion.
‘SUSTAINABLE’ DEBT PURCHASE PER YEAR (USD bn)
Source: IMF
For these reasons, ESG investment funds are increasingly present in the portfolios of many investors, not only because of their potential and long-term risk/return balance, but also because of their concern for ecological footprint, environmental impact and social dimension.
6. In the next decade, 70% of new economy will come from online platform businesses
By 2021, the US digital economy accounted for 10.2% of global GDP and created 7.8 million jobs, outpacing average global economic growth, which shrank 3.4%. This growth, which is expected to continue in the coming years, was driven primarily by the digital sector. In fact, it is estimated that 70% of wealth creation over the next decade will come from online platform businesses.
Source: Statista
Against this backdrop of the global digitalization of economic sectors, driven by rising purchasing power, the digital economy looks promising for investors in the coming decades.
Megatrends such as the metaverse, where online games and social interactions will become more and more realistic and linked to product offerings in the virtual world, are a good example of this. A new symbiosis between the human and virtual worlds is expected, enabling people to touch, smell, feel, see and hear in places where they are not physically present. This opens the door to the replication of a variety of virtual environments, including workspaces. With the potential to generate up to US$5bn by 2030, the metaverse is too important for investors to ignore.
7. Autonomous robots working alongside humans
The number of robots in factories around the world continues to grow, making their costs more competitive and driving machine integration in all sectors. According to the International Federation of Robotics, there are already 3.5 million industrial robots in use and 517 000 new robots were installed in 2021. The fastest growth is in Asia and Australia, which now account for three-quarters of all industrial robots. The global growth rate is expected to be 7% per year.
Source: International Federation of Robotics
Some experts believe that a new ‘robot revolution’ – with more autonomous, safer and more agile robots such as those launched by Boston Dynamics – will completely transform the global economy over the next 20 years, creating significant investment opportunities.
Shares are generally the most popular option, but Exchange Traded Funds (ETFs) and investment funds can also be a good choice.
8. Investment in health set to continue in the coming years
The quest for better mental health will be an ongoing concern in the coming years. Worldwide, about US$3.7 bn a year is spent on mental health research each year, and this is expected to continue to grow over the coming decades. Access to information and education, or the use of technology (such as brain-computer interfaces), can open up new avenues for realising the potential of human beings and reshaping the meaning of being human in the future. For example, Neuralink, a company founded by Elon Musk, has just received approval for human trials of its new wireless brain implant that could restore mobility and even help in the treatment of brain diseases.
In this respect, ETFs offer investors easy exposure to advances in healthcare. They can also include stocks focused on companies that are accelerating scientific progress in this fast-growing area. New technologies also have the potential to produce food in a sustainable and regenerative way, thereby reducing environmental pressures. For example, the personalisation of nutritional, metabolic and genetic profiles can lead to significant advances in the diagnosis and treatment of a wide range of physical and mental conditions, increasing human longevity, productivity and well-being.
Figures show that global health spending has reached 10.89% of global GDP, with 80% of this coming from government budgets in more developed countries. It is therefore a promising area for investors to consider, particularly through the further systemic integration of ESG funds incorporating health and nutrition. This megatrend is expected to continue to grow among investors concerned about this type of responsibility, helping to shape the food systems of the future.
Banco Carregosa, looking to the future
The world is always changing. It is therefore essential to be aware of and keep up with these changes. However, some things never change: at Banco Carregosa, these are customer focus, transparency, and trust. Because we know that sustainable growth requires a solid foundation. This is what 190 years of history have taught us. You can count on our experienced team to help you make the right decisions.