Winning Investment Strategies for the Coming Decades

What will the world be like in year 2020? Or in 2030, 2040 and 2050? – Where will it be most interesting to work, build businesses or invest? – Where will the greatest growth and biggest profits occur?

During much of May, 2009 I found myself pondering these questions. The reason? – I had been invited to make a keynote speech at the Red Herring Europe 100 conference in Berlin entitled nothing less than “The Future of Technology”. Evidently, when you speak about how technology will evolve, you also have to consider where demand will come from, how demographics will change, and much more. So to prepare my presentation, I ended up thinking about not only technology, but also a whole lot of other issues.

I made the presentation on April 1st, and afterwards I had some very interesting discussions about the future with some of the delegates. As I sat in the plane flying out of Berlin that same afternoon, I decided to write a book about the future of politics, conflict, economics, demographics, environment, lifestyles, business, finance, business sectors and…yes, technology.

Here is why I made that decision: From time to time I have noticed how almost all business people – including myself – overwhelmingly seek information about the short to medium term. “What are 12 months forward consensus earnings?”, “Which mobile phone manufacturers are currently taking market share?”, and “Who will win the election in Japan?” This kind of information may be important, but I have discovered that the times in my life where I personally have made the best investments and had the greatest fun in business, was where I got the really big picture right and took long term positions against the prevailing mood or ahead of the game. I have also noticed that to have fun and to succeed, it’s not enough to play your game well – it is far more important to choose the right game to play. When things worked for me, I really was in the right place, the right time, as they say.

Supertrends is primarily a book for investors, but I also think it should be very relevant for high school students who are about to chose where to study after graduation, and for policy makers and even anyone else who is curious about what the future may bring. Writing it was tremendous fun, and I hope reading it will be a joy too.

The Issue

  • The world will experience significant, but decelerating population growth. Meanwhile, people will continue their net migration towards cities while many rural areas will get depopulated.
  • Due mainly to explosive growth in many emerging markets, the world will experience its largest economic growth ever, and global real purchasing power will have quadrupled by 2050.
  • Aging will be another major theme. The number of elderly will explode, and perhaps surprisingly, 90% of this growth will take place in emerging markets.
  • More and more industries will essentially become information technologies, and this will vastly accelerate their development pace.
  • Global knowledge and innovation will continue to evolve exponentially, and by 2050, our combined commercially/technically useful knowledge will be 40-50 times as large as in 2010.
  • We will not run out of any commodities, but we may experience temporary shortages of energy and metals due to the explosive growth in emerging markets.
  • New technologies will provide the solutions to environmental problems, and many of these will be rapidly reduced as our wealth and technical acumen grow.

Knowledge and Science

  • Useful human knowledge will double every 8-9 years and will grow approx. 4.500 % - or 45 times - from 2010 to 2050. One main contributor will be the effect of Moore’s Law, whereby computer chip performance doubles approx. every 24 months. Until approx. 2030, this will be sustained through still smaller geometries in chip architecture, culminating just after 2020. Water cooled 3D chips, and multicore chip designs will be used to further sustain the performance improvements beyond that. Before 2050 we will also see optical computing and quantum computing, with in particular the latter enabling a massive further increase in computing power. Furthermore, telecommunication bandwidth and digital storage technology will also continue to grow exponentially.
  • The best computers will already by 2020 rival the human brain in terms of data processing capacity. By 2020 computers will also be fairly good at simulating the way our brains’ neocortex works. This will enable them to be create and intuitive. Indeed, computers will begin to rival if not surpass the best scientists and artists in creativity. However, neocortex simulation will not give them emotions, although it may enable them to simulate emotions extremely well.
  • Another major driver of human knowledge will be the genetics revolution, which will sustain productivity growth equal to what we have seen in IT. This will enable us to understand all life to its core – the biggest intellectual endeavour in the history of mankind.
  • Furthermore, humans shall continue to develop “meta ideas” - ideas about how to create and spread ideas - which will accelerate knowledge generation. One of the main future meta ideas will be computers that tirelessly and at frantic speeds automatically “mine” digital data (read and comprehend it) and draw conclusion from it. Some of these conclusion and recommendations will be truly creative, and their sheer scale wil be far beyond what humans could ever have achieved.
  • The number of people with tertiary education will also double every 15 years. As this happens, women will on average become better educated than men. The global average of human IQ will increase approx. 12% from 2010 to 2050 – mainly due to cross breeding, better health and nutrition, and better upbringing. However, towards the end of the period it will start to rise much faster, as some communities will start modifying human genes to obtain even much higher intelligence. This will be the start of a process leading to the creation of “super humans” in the second half of the century, and their intelligence will be almost beyond (current) comprehension.
  • A permanent base on the moon will be established around year 2025-2030. We will identify dark matter and discover the smallest particles in the universe before year 2030 and we will have reached a consensus “theory of everything” before year 2040.

Resources and the Environment

  • Pollution will generally decline as we approach year 2050; in particular towards the end of the period. This will partly be as a function of increased wealth (as rich countries pollute the least) and decelerating population growth, but mainly because of an abundance of new technologies such as robotic recycling, metabolic engineering for higher farm yields with less or no need for tilling and pesticide spraying, 3rd and 4th generation biofuels, solar and fusion power, etc.
  • However, carbon emissions will take several decades to get under control, and the planet may heat 1-2 degrees more than natural as a consequence. Sea levels may also rise modestly, but with limited impact.
  • In terms of resources, we will not run out of any commodities. The most successful sector will in this regard be farming, which is rapidly becoming an information technology with productivity gains that will vastly exceed demand growth – even as increasing proportions of land is used for biofuel. This productivity growth will enable us to free up land to wildlife while doubling agricultural output.
  • Supply of freshwater will remain largely an economic problem, which will haunt the bottom billion countries, but will be more easily dealt with by wealthy nations.
  • There will be temporary shortages of energy and industrial metals.

Covers and other Editions

This book has been published in international markets in several other languages and editions.