19 April 2018

Credit Suisse: three megatrends for 2018

Source: Credit Suisse. Cavalli.
Source: Credit Suisse. Cavalli.

The sixth annual Credit Suisse Global Megatrends Conference 2018 in Singapore covered three megatrends: technology at the service of humans - artificial intelligence (AI) and robotics, a future where Millennials rule, and the silver economy.

In his opening address Benjamin Cavalli, Head of Private Banking Southeast Asia, Singapore CEO, Credit Suisse, explained that megatrends are investment themes based on Credit Suisse’s House View. "They link developments such as political changes in the West, worldwide demographic shifts, and, continuous technological advances, with concrete investment opportunities geared towards the medium- to long term, and most certainly targeted to ultimately improve portfolios’ risk/return profile in the long run," he said.

He noted that with the rise of artificial intelligence, “traditional” industries ranging from healthcare and eldercare to manufacturing are being transformed. At the same time, virtual reality applications are moving beyond gaming and entertainment to education, design, architecture, marketing and even medical practice.

On the flip side Cavalli listed various pressing issues:

 The enormous capacity of artificial intelligence (called AI) to process data has heightened issues of privacy and data security, amplified by its role in the maneuvring of political campaigns.

 The viral power of social media to galvanises active citizen-centred movements on gender equality and youth safety, yet at the same time radically intensifying political and social division in many countries.

 Ongoing debates around fake news, the boundaries of social media and the challenges of regulation.

 Driverless cars causing deaths leading to the question of whether this spells the end of AI in autonomous vehicles.

"How do we, as investors, remain focused on technology being at the service of humans, at a time when technology is increasingly perceived as a threat? How do we see beyond all the short term noises and the daily ups and downs of the financial markets, to focus on the predictability and sustainability of these long-term secular trends, and seek profit from them? Today’s conference will cast the spotlight on some of these topics, and hopefully put into perspective the long term impact they will have in the world of investing," he said yesterday.

When it comes to the silver dollar, Cavalli noted that by 2050, more than 2 billion of the world’s population are expected to be aged 60 and above. This is a full 20% of the world’s total population. "Here in Singapore, the statistics are even starker – in thirty years’ time, almost 50% of Singapore’s population will be aged 65 or older – and that includes me," he said.

At the other end of the demographic spectrum, he said that those below 35, often termed Millennials,  have values around societal perspectives which drive their investments and businesses that have implications in shaping the world economy. Credit Suisse works with Millennials though its Young Investors Organization (YIO), a network representing more than 1,200 members of the next generation of the most influential families around the world that is solely sponsored by the financial institution.

The conference, attended by around 600 guests of Credit Suisse, was themed The Future. Now, and included 30 members from the YIO from around the world.

Hashtag: #CSMegatrends