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Where growth may come in the next decade

As investors, it is important to keep our eyes on the big picture as short-term anomalies merely accentuate longer term opportunities. 

Major shifts in consumer behaviour and other forms of disruption, including those that stem from innovation and digital transformation have opened up opportunities for investors who are looking for sectors that are primed for growth.

We have identified four Megatrends that potentially have the capability and scale to further change the world.

Megatrends and the investment opportunities

Globalization

The Evolution of Globalization

Globalization continues to evolve as it did from the exports of raw materials and basic goods in the 15th century to digital goods and services. Today, services, underpinned by technological innovation, are the anchor of global output.

Source: World Economic Forum, A brief history of globalization, 17 January 2019.

Digital Transformation

The Age of Digital Transformation

Widespread Adoption of Technology

From process automation to big data, digitalisation shapes our world today. Technology is fueling disruptive innovation, streamlining outdated processes, and creating new possibilities. Over the past few decades, the way we live had already been altered by new developments. Now, the COVID-19 crisis has significantly accelerated the process of Digital Transformation.

2020: What happens in an Internet minute1

Moving at an ever-increasing rate seems to be one of the characteristics of modern life. Multitasking is becoming the norm, as the amount of information and data shared over the internet rises substantially, and it continues to grow.

 

The race to 50 million users (in years)2

For most innovations of our history, their success can be measured by the number of users. Reaching a 50 million users mark is a sure sign of triumph, however how long does it usually take to reach this number?
In today’s tech-fuelled and tech-led world, top products are reaching high levels of consumers in incredibly short amounts of time.

  1. Source: Statista, as of August 2020. For illustrative and discussion purposes only. The information provided is not a recommendation to purchase, sell, or hold any particular security and should not be construed as an endorsement of or affiliation with Franklin Templeton.
  2. Source: Statista, as of 22 June 2018. For illustrative and discussion purposes only. The information provided is not a recommendation to purchase, sell, or hold any particular security and should not be construed as an endorsement of or affiliation with Franklin Templeton.

Age of Biotechnology

Importance of Biotechnology

The fusion of technology and biology has created breakthrough treatments for major killers such as heart diseases and cancer. These advances also complement issues stemming from a greying population that is living longer. The recent COVID-19 vaccine development is a good example of how medical science can help heal the human race.

Megacities and the Need for Infrastructure

Megacities and the Need for Infrastructure

Over half the world is living in man-made infrastructure enjoying improved safety standards, sheer physical convenience, and economic advantages over rural living. The infrastructure gap continues to grow across sectors critical to sustaining the urbanization boom.

Rapid Rising Population In Megacities And Large Cities Continues To Drive Global Growth In Urban Populations

Source: Franklin Templeton Capital Market Insights Group, United Nations, Department of Economics and Social Affairs, Population Division (2018). World Urbanization Prospects: The 2018 Revision, Online Edition.

 

While the world is moving to better living facilities and enjoying economic success, there are challenges to this proposition. Increased migration and urbanization will test the capacity and reliability of existing infrastructure.

Governments are struggling to keep up with the rapid pace of expansion and the infrastructure gap continues to grow across sectors critical to sustaining the urbanization boom.

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