Examples of Interacting Disruptive Macro Trends Driving Future Asset Class Valuations and Returns


Technology

  • Transition from industrial to digital/knowledge-based economy
  • Hyperconnectivity - networks of unprecedented breadth and density
  • Accelerating improvement of automation, machine learning, and artificial intelligence technologies
  • Healthcare and education systems that aren't keeping up with the pace of change around them

Energy and the Environment

  • Climate change, and its impacts
  • Transition to new transportation and power generation energy systems
  • Declining energy return on energy invested (EROEI) - e.g., for oil

The Economy

  • Persistent weakness in aggregate demand
  • Expansion of potential supply in many industries, due to globalization and/or improved technology
  • Rise of winner-take-all (or at least most of the economic profit) global markets
  • Increasing inequality
  • Record Debt/GDP

National Security

  • Rise of a more aggressive China as a peer competitor to the United States
  • Cyberspace as a new warfighting domain
  • Hypersonic and autonomous weapons systems, and war at unprecedented speed

Health and Disease

  • Increasing antibiotic resistance
  • Global rise in obesity, and impact on morbidity, mortality, and medical costs
  • Increasing water and food security risks due to climate change

Society

  • Slowing population growth and accelerating aging
  • Increasing migration, driven by climate, economic disparities, and/or deteriorating local security
  • Declining social capital and connections; increasing loneliness and alienation
  • Increasingly remote elites, with weakening social mobility
  • Middle class growing more anxious and angry

Politics

  • Increase in problem complexity and conflicting goals stymie policy development and implementation
  • Social media enabled publics who organize and react more quickly than ever before - often negatively
  • Weakening of traditional centrist parties, and increasing popularity of the extremes
  • Worsening institutional legitimacy crisis

Financial Markets

  • Increasing role of rapid algorithmic decision making
  • Growth of indexing
  • Shift of capital to private markets