Megatrends that will shape investment growth
By Kirsten Hastings, 31 Jul 18
There are nine key megatrends that will have a big impact on the investment philosophy of the future, according to research by RBC Wealth Management, part of the Royal Bank of Canada.
Technological advances lead to new gaming possibilities
As the ‘Nintendo generation’ enters the market, 2.2 billion worldwide players are expected to generate $108.9bn in gaming revenues, 87% of which is accounted for by digital revenues.
With the advancement of cell phone technology and the potential of 5G networks, mobile gaming is expected to account for over half of the total games market, and the emergence of virtual and augmented reality is likely to grow the market even further.
“The Asia-Pacific region is a clear frontrunner, comprising nearly half of the global gaming market,” Storm said. “We are likely to see current gaming platforms grow and new platforms emerge, creating the perfect environment for incoming investors.”
A middle class population requires revamping of infrastructure; opportunities for public private partnership (PPP)
An estimated $5trn in infrastructure investment will be required globally before 2030, to improve or replace transportation, power, water and telecommunications many of which have existed since the World War II era.
Combined with the requirements of a growing middle class that demands convenience, better housing, commercial space and mass transit systems, this is an opportunity for investors that is likely to net long-term, positive results.
As Storm explains: “This is an opportunity for the private and public sectors to partner, as private investors can be paid for providing the capital required to fund improvements in infrastructure. From a different angle, this may also be an appealing opportunity to invest in the firms that will build the infrastructure and grow as a result.”
Renewable power technologies introduce solutions to environmental concerns
Many countries, under the COP21 Paris Agreement, have agreed to participate in efforts to combat pollution.
Alongside governmental efforts to increase green technology, global investment in energy efficiency increased to $231bn in 2016. As companies embrace the need for cleaner energy sources, investors have the opportunity to benefit from rapidly advancing technologies and evolving markets focusing on green energy.
“As the world becomes increasingly aware of green energy solutions, companies are adopting these technologies, either due to government regulations or by their own accord,” said Storm.
Citing PwC figures, he added that 69% of corporates in the US are actively now pursuing solar energy contracts as their power source.
“This is already driving substantial growth in industries, from solar power and electric vehicles to renewable power plants. Each of these industries is small compared to the incumbent traditional industry they are beginning to replace, but their growth rates are much higher. All of these areas represent meaningful ways to invest in the future economy.”
Tags: Investment Strategy | RBC
