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ANALYSIS

Five themes to shape the world over the next 5 years

DUBAI, October 23, 2018

The Bank of America Merrill Lynch (BofAML) has identified in its new Thematic Investing report the five most influential themes that should shape our world over the next five years.

The five themes include:

(1) Big Data and AI: vast opportunities span multiple sectors. The amount of global data stored and analysed could swell from 1 per cent today to 37 per cent by 2025, implying up to $5 trillion in annual benefits.

 (2) Electric Vehicles (EVs) & Future Mobility: 20 per cent of global cars sold will be EVs or plug-in by 2025, helping to bring forward peak oil, and influencing sectors like Energy, Utilities, Consumer, among others.

(3) Demographics: every second, five people enter the middle class and one escapes extreme poverty, meaning the Bottom Billions are becoming a force to be reckoned with.

(4) Climate Change: 12 per cent of the globe is exposed to extreme weather.

(5) Privacy and Cyber threats: the cost of cybercrime is set to double to US$6tn by 2021E.

5 years ahead: "Techceleration" - pace of change is speeding up

“The pace at which themes are transforming businesses is unprecedented today, but we believe this rate of technological change will be faster still over the next five years,” said the BofA Merrill Lynch Global Research report.

The exponential growth of data (doubling every 2-3 years), cheapening computing power and rise of a connected world (IoT, mobile devices, social media) will bring about the fastest transformation in human history. These trends, enabled by 5G as the bedrock platform, will hasten the rollout of nextgen technologies (autonomous vehicles, augmented reality etc).

5G: the launch that enables it all

If data is the fuel for these megatrends, 5G is the engine making this virtuous cycle happen. The 4th industrial revolution will be powered by the launch of 5G mobile networks. These will support a ubiquitous connected world and accelerate the digitization of businesses. With more than 30 billion connected devices by 2025, 5G will be the key enabler (big data, mobility, cyber) and influencer (demographics, climate change) in a transforming world.

5-year outlook: how and when the themes impact sectors

Technology, eCommerce and Payments (Big Data & AI, Millennials) are seen as having the strongest thematic tailwinds today, while Capital Goods (Industry 4.0) and Consumer Durables (EM Middle Class) should also benefit over the next 2-3 years.

Apparel/Retail (Automation, Millennials), Old Media (Advertising Agencies, Cord Cutting) and Health Distributors (Tech Disruptors) could face notable thematic headwinds in the next 1-2 years. Energy (EVs, Climate Change) will likely face headwinds towards 2023, the report said. – TradeArabia News Service




Tags: EV | 5G | BofAML |

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