How governments and companies are adapting to the longevity economy Paras Anand Head of Asset Management Asia Pacific Fidelity International
Governments are in office but not in power 499,800,417 People voted this year 75 National elections held this year Source: Election Guide, 2019
The changing face of global consumption 50% $24tn of US and Japanese GDP will come from the grey economy by the 2030s. in new consumer spending by an emerging Asian $15tn middle class by 2030. Spending power of 60+ age group by 2020. Source: RHS: Brookings Institution, the Unprecedented Expansion of the Global Middle Class, February 2017. LHS: Bank of America Merrill Lynch. The Silver Dollar-Longevity Revolution Primer, June 2014, Euromonitor, Oxford Economics, NLIRI. The longevity economy encompasses both the economic activity that serves the needs of the 50+ global population, as well as directly purchased products and services and the knock-on economic activity that generates
Balance Sheet Assets $USbn Source: Bloomberg, October 2019. Central Bank Balance Sheets How are governments adapting to longevity? 1,000 2,000 3,000 4,000 5,000 6,000 0 Nov-99 Nov-00 Nov-01 Nov-02 Nov-03 Nov-04 Nov-05 Nov-06 Nov-07 ECB Nov-08 Nov-09 Fed Nov-10 BOJ Nov-11 Nov-12 Nov-13 Nov-14 Nov-15 Nov-16 Nov-17 Nov-18 Oct-19
How companies are adapting to longevity
Average company lifespan is decreasing 70 60 50 40 Projections based on 30 current data 20 10 0 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 Duration may become the single biggest factor in determining valuation Source: INNOSIGHT/Richard N. Foster/Standard & Poor’ Each data point represents a rolling seven-year average of average lifespan. Source: INNOSIGHT/Richard N. Foster/Standard & Poor’s, Fidelity International. Long-term chart constructed on the basis of Innosight Winter 2012 and Spring 2016 Executive Briefings.s.
Short-term vs long-term goals In the short-term the markets are a voting machine…but in the long-term markets are a weighing machine (thanks Ben Graham!) News Collective to Tech national interest disruption Low real Divided wage growth Societies Climate change Short Term Ageing Political population Instability Long Term
Are we really enhancing artificial intelligence?
How do we refocus priorities?
Do we need to reconsider the role of governments in society?
Does the corporate sector have a bigger role to play?
The importance of normalising monetary policy
We need a different economic strategy Tax cuts have no lasting impact Evolution of corporate & individual top bracket taxation in the US 100% 90% Top US tax bracket 80% marginal tax rate 70% 60% 50% 40% 30% US corporate income tax statutory rate 20% (including federal and local) 10% 0% 1952 1962 1972 1982 1992 2002 2012 2022 Source: Goldman Sachs 2019
We need to rethink immigration policy
We need to rethink immigration policy Net migration 3000000 2500000 2000000 1500000 1000000 500000 0 -500000 01-01-67 01-01-69 01-01-71 01-01-73 01-01-75 01-01-77 01-01-79 01-01-81 01-01-83 01-01-85 01-01-87 01-01-89 01-01-91 01-01-93 01-01-95 01-01-97 01-01-99 01-01-01 01-01-03 01-01-05 01-01-07 01-01-09 01-01-11 01-01-13 01-01-15 01-01-17 Net migration - Japan Net migration - Germany Source: World Bank Group via Bloomberg, net migration calculated as total number of immigrants less annual number of emigrants, including both citizens and noncitizens. Data as at 31st December 2017 (latest data available).
Asset managers have a big role to play
Important information This document is for intermediaries only and not for external distribution. All external distribution requires prior written approval from Fidelity. FIL Limited and its subsidiaries are commonly referred to as Fidelity or Fidelity International. Fidelity, Fidelity International, the Fidelity International logo and F symbol are trademarks of FIL Limited. The information contained in this material is only accurate on the date such information is published on this material. Opinions or forecasts contained herein are subject to change without prior notice. Reference to specific securities mentioned within this material (if any) is for illustrative purpose only and should not be construed as a recommendation to the investor to buy or sell the same. Investment involves risks. Past performance is not indicative of future performance. Please refer to the relevant offering documents for further information including the risk factors. If Investment returns are not denominated in HKD/ USD, US/HK dollar-based investors are exposed to exchange rate fluctuations. This material may contain materials from third parties which are supplied by companies that are not affiliated with any Fidelity entity ("Third Party Content"). Fidelity has not been involved in the preparation, adoption or editing of such third party materials and does not explicitly or implicitly endorse or approve such content. Any opinions or recommendations expressed on third party materials are solely those of the independent providers, not of Fidelity. Third Party Content is provided for informational purposes only. The material is issued by FIL Investment Management (Hong Kong) Limited and it has not been reviewed by the Securities and Futures Commission (“SFC”).
Recommend
More recommend
