Thematics

Innovation is nothing new. What has changed, however, is the speed and scale at which it is occurring.

For investors, thematic investing offers the chance to potentially benefit from the economic, political, demographic, environmental and technological forces driving global innovation.

Thematic investing harnesses two dynamic forces - acceleration and convergence.

• Acceleration manifests itself through faster innovation cycles. Faster innovation cycles are creating entirely new markets and value networks or serving overlooked customers within existing markets to eventually displace established companies.
• Convergence is a catalyst for opportunity. The most attractive opportunities are found when multiple trends converge and reinforce one another. A virtuous circle where events in one domain spur action in another. 

Advancements in AI, hyperconnectivity, digitisation, automation, and the demand for new materials are driving long-term global impact across industries. These forces enable innovation, streamline operations, promote global integration, reduce resource needs, increase efficiency, and shape the future of multiple sectors. Their influence will continue to grow and shape our world in the years to come.

The world is undergoing profound shifts in population, urbanisation, ageing, and healthcare advancements. Changing demographics have implications for growing populations, inequality, pressure on labour markets, migration, and public finances. Urbanisation is on the rise, with cities becoming the driving force of economic growth, characterised by strong infrastructure, diverse economies, advanced ESG policies, skilled labour forces, and high quality of life. An increasing ageing population poses both challenges and opportunities, impacting the workforce and healthcare systems. Meanwhile, advancements in healthcare and a growing emphasis on preventive health are shaping the future. These shifts shape the trajectory of societies and economies worldwide.

The world is amidst a transition towards greener energy sources as countries address climate change and strive for net zero emissions. Energy demand is driven by population growth, economic growth, and the increasing electricity consumption of data centres. To achieve energy security, a hybrid approach integrating conventional and renewable energy is necessary, requiring both tactical and strategic steps. Investment opportunities arise from the need to reduce the energy intensity of the global economy through efficiency improvements. These global shifts necessitate significant transformations in the energy system and present opportunities for sustainable investment across sectors.

The increasing demand for energy, water, and raw materials coupled with biodiversity loss and escalating waste generation fuel the triple planetary crisis. Solving these challenges requires systemic changes, embracing circular principles to preserve resources, protect biodiversity, and drive innovation in business models and sustainable practices. By transitioning from linear practices, investing in new technologies, and creating supportive regulatory frameworks, we can pave the way towards a more sustainable future.

Generational shifts impact consumer behaviours, driving demands for seamless omnichannel experiences in the digital age. Economic imbalances, encompassing disparities in income, wealth, and resources, intersect with social, political, and demographic factors. Achieving equitable growth and empowerment requires educational and professional inclusion, along with financial access, fostering a skilled workforce and enabling economic participation.