Dr. Raul Deju's Articles
How Megatrends Will Shape the Future of Successful Investing
As we welcome a new decade, people love to make predictions. To me, there is only one theme certain to become reality – “change”. Yes, rapidly accelerating change will increasingly be the norm in every aspect of life on our Earth.
So how do you invest in a world where yesterday is rapidly forgotten and tomorrow is but one step away. Well, I think the answer is clear. You look for “megatrends” and you put your bet on their growth. Megatrends can be defined as global, sustained, and macro-economic forces of development that impact business, the economy, society, cultures, and personal lives thereby defining our future world and its increasing pace of change. As such, megatrends drive commerce and financial growth. In other words, they define the road from the present to the future and should be considered major areas for possible investment, especially when the result is accelerated growth due to a highly beneficial discovery, or the development of processes that indeed further accelerate technological change.
One of my favorite ways to describe “megatrends” is to think of them as the hurricanes of the global operating environment. In the investment world, I want to be driving these hurricanes rather than being blown by them. Over the past year, as I have lectured in various platforms, attended meetings with known “world-class” thinkers, and spent time with many of the shapers of the world’s economy, I have compiled a list of ten significant megatrends that will likely shape our road to growth in the next quarter-century. This list is not in any particular order. Every one of us is likely to see the world through a different set of glasses, but I bet my money that the ten megatrends I list will significantly drive a great deal of growth and change in the next quarter century. You may want to add your own perception of other megatrends, but as you will see we are entering a period in our planet’s history where staying still is the only certain way to be a loser in the investment world. A continued look at the direction of megatrends will likely produce the most significant growth-creating opportunities and ensuring a surprise in every corner.
Here are my ten megatrends. However, please remember there are many more and your perspective could be different than mine. In fact, I am sure you can add a few more megatrends to this list:
1. The speed of change (its acceleration) will continue to increase, disrupting life in its wake. As the speed of change increases, the emphasis will be less on owning assets and more on the use of these assets. Thus, providing and maintaining assets will likely become even more profitable than asset ownership.
2. The world will greatly value businesses that focus on ensuring adverse climate changes are minimized and resources such as clean water are available to all. This will ensure human health and welfare, industrialization, leisure, and commerce while minimizing overuse of natural resources such as water and discharges of contamination in a manner deleterious to the health of our planet. Also, assets such as water will more rapidly increase in value than many other assets not affected by climate change as many of these assets are still undervalued.
3. We will increasingly focus as a society on Artificial Intelligence (AI) and communications to ensure improved human to human, human to machine and machine to machine connectivity by having a 5G or greater network. This network will be robust, agile, and sufficiently fast to drive communications, industrialization, entertainment and all forms of AI including items such as driverless vehicles, drug discovery, machine learning and basically all aspects of communication.
4. In coming years, businesses will continue to emphasize extending the useful life of products through recycle and reuse, with a drive to eliminate waste in all production and use cycles.
5. Clean fuels and electricity availability will help improve the world’s living and working conditions. Throughout this process, we need to focus on incorporating clean fuel options into the mix to reduce carbon emissions as much as possible. The world must also focus on ensuring that the transmission lines that deliver the power will be efficient and with significant safeguards to ensure uninterrupted power deliveries to users, including safeguards to guard from those wanting to destroy existing electric grids.
6. We need to maximize healthy living through the beneficial use of healthy food, exercise and nutraceutical supplements to ensure a productive and longer human life expectancy. Healthy living will include exercise, healthier eating habits, and a choice of leisure activities focusing on wellness.
7. There will be an increased use of technologies including artificial intelligence in all aspects of medicine, from the production of new drugs to the use of technology to improve all aspects of life. Such technologies will also help us be more productive while optimizing our leisure time. We will learn to use AI to cut back dramatically the time it takes to get new drugs to market, and this will extend human life expectancy on this Earth.
8. The world will see an increased use of technology to expand our ability to connect with each other using a diversity of options. As thought is transmitted through more and less personal ways of communication, we as a society will expand our communications yet become even more polarized. Our understanding of the world will become more difficult through an overwhelming amount of information. This dichotomy will help balloon and consolidate investments in communication, although the disadvantage will be increased polarization until we as humans continue to value the input from all others and better weigh diverse perspectives.
9. Changes in the educational systems, from kindergarten through university, are needed to improve the efficiency, relevance, and flexibility of educational choices. The educational institutions need to insist on cost-effective, relevant learning through the use of live options, online learning, and machine learning. Educational institutions need to bring the cost of education to levels that do not create inter-generational debts that strangle the students, and financing costs that are not in line with the benefit the education itself brings. Opportunities for world-class lifetime learning will become very relevant and may warrant significant future investment.
10. As we become more polarized in a rapidly changing world, nations and international actors will continue to develop weapons of mass destruction. A great deal of wealth and public debt will be squandered on weapons creation, however, as a world leader, we in the US must continue to lead in national defense technology. Humanity needs to be smart so the actions of a few do not turn into the destruction of the many. This represents one of the biggest challenges to humanity.
The world will grow, hopefully, with more people able to enjoy the fruits a few of us have been able to enjoy to this point.
As investors, it is now more than ever essential to have a clear understanding of the social megatrends that will drive our world in order to make relevant and successful investments. Such investments will also continue to improve humanity not just our neighborhood or even our nation but everyone on Earth.