Investment themes for the next decade
We’ve come a long way in a decade. Ten years ago, Sydney was about to play host to the Olympic Games, the GST was introduced and technology stocks and ‘dot coms’ were hot investment topics.
Ten years ago, a fledgling start-up company was just beginning to get noticed on the global stage. Who could have predicted that a company named Google would change the way we access information over the internet in such a revolutionary way?
So, where are we headed investment-wise over the next decade? While the answer remains anyone’s guess, here are some themes that you are likely to hear more of as the years progress.
Healthcare and medical technology
The aging of the population is gaining momentum, especially across Japan and key Western economies, and with this brings an urgent need for escalating investment in healthcare and medical technology.
An expected surge in demand for specialised aged care and hip, knee and corneal replacements means that the coming decade should see a dramatic increase in the fortunes of health and pharmaceutical-related businesses.
Agriculture
The global population is expected to soar over the coming decade, driven primarily by continued prosperity in China and India and the emergence of an ever-growing middle-class in those countries.
With population increases comes additional pressure on existing food supplies. This is likely to foster renewed innovation in the global agricultural industry to produce seed stock that produces a higher yielding crop, reduced water uptake and superior protection against pests and disease.
Infrastructure
The provision of infrastructure is likely to be a pressing topic over the next few years for three reasons:
- Australia, like many developed nations, has major infrastructure, including roads, railways, water supplies and telephony systems, which are decades old and in urgent need of an overhaul.
- With the emerging ‘BRIC’ economies of Brazil, Russia, India and China, there is a pronounced requirement for basic infrastructure to be built for their growing populations, especially new road systems and internet/telephone networks.
- The increasing global trend towards urban living and smaller households means greater investment in infrastructure will be needed to cater for increased pressure on city schools, hospitals and transport links.
Demand for infrastructure is also likely to create additional need for heavy machinery equipment, and engineering and infrastructure consultants. Given the large workforces required to bring such projects to fruition, extensive accommodation and support services for these workers will also be required, which is good news for companies specialising in these fields.
Sustainable green energy sources
The triple issues of population growth, increased urbanisation and major infrastructure initiatives expected over the coming decade will also have a considerable impact on the demand for energy.
In addition, with fossil fuels expected to run out sometime this century, the race is on to find a cheap, clean and green alternative that is also sustainable.
Companies that emerge as early providers of appropriate green energy solutions are likely to be very successful over the forthcoming years.