Exploring three megatrends with Pictet
Discover the causes, current state of play and investable opportunities of three megatrends: Resource Scarcity, (De)Globalization and Service Economy.
About this report
Pictet has picked out three megatrends to explore in depth in this report. We surveyed dozens of financial professionals from within our own ranks, esteemed members of our external thematic advisory boards and leading figures from business, academia and economics. This report unpacks the causes, current state of play and investable opportunities of each of the following three megatrends.
Resource Scarcity
The world’s economy and population continue to grow, but the quantity of available raw materials does not. Supply growth is failing to keep up with rising demand, creating pockets of scarcity.
The quality and quantity of available water is decreasing. Available, usable water per capita is falling – across the globe. Fortuitously the number of patents for waste recovery and water resource management has nearly doubled since the year 2000.
(De)globalisation
There are two aspects driving (de)globalisation. The first is declining trade. The second is the fact that the interests of China and its allies are becoming less aligned with the interests of the US, Europe and their blocs.
Companies recognise that relying on countries with which their government no longer has a good relationship for supplies is risky.
But it’s not as simple as a reversal of globalisation. The plain fact is that global trade (sum of exports and imports as proportion of GDP) peaked in 2008 and has fallen since.
Service economy
The service economy – the share of world’s value generated by services as opposed to manufacturing or agriculture – is going to jump. Most notably in the developing world. This is already happening. The number of people employed in services in middle income countries grew from 35% in 1991 to 52% in 2019 – a rise of 50%. Over the same period services employment in rich countries ticked up from 64% to 74%.
If developing countries can navigate this entry into the service economy and connect to the global economy (think India as an IT outsourcing destination) those same countries could skip the stage of industrialisation with its major capital and resource demands.
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