Gene Salerno

AI has been a dominant theme for the past year or two. Thus far it has had limited visible impact on our daily lives. But, it will undoubtedly lead to profound changes over the next decade and beyond. In the way that networks (of any kind) often lead to natural monopolies (Facebook, LinkedIn), we may expect to see monopolies in knowledge – superior and trusted knowledge that can be applied to decision-making, problem-solving, and innovation at ever-accelerating speeds. 

This has the potential to foster a winner-takes-all all economy, at least in the realm of information. This goes some way to explain the arms race that deep-pocketed companies and other investors have entered.

Separately, the economic shift toward Asia will continue to dominate. Just as the US’s prominence developed over the entirety of the 20^th century, the development of Asia – not least of China and India – has much further to run. China has long passed the point of being a low-cost/high volume producer to become a leader in various technologies and industries. Its unparalleled industrial base combined with significant improvements in the health and education of its people should lead to sustained growth for several decades, despite its demographic challenge of a declining population. India is on a similar path.

As ever the case, long-term growth potential is not the only factor investors need to consider. These and other megatrends will experience episodes of over-exuberance and excessive valuations.