Everyone knows that data has become the new oil of the global economy and as a result we have seen the rise of the FAANGs, BATs and more.
The megatrend for the next decade is the control of the metadata and the data. Why? Control and access to knowledge are the keys to future global growth as cities and financial systems become more interconnected.
In recent years, we have seen increased nationalist tendencies and greater inward focus by governments and the resulting regulatory policy changes. The risk is that these nationalistic tendencies escalate and extend to providing significant limits on the flow of data. We see three potential scenarios:
1. Status quo. The internet remains a global asset where the access to knowledge is available cheaply to all (and increasingly so as emerging markets and frontier economies are able to leapfrog).
2. Fragmentation. The internet becomes segregated and access to knowledge is totally controlled by nationalist governments.
3. A blend of the above. A hybrid model evolves where global knowledge is less available to all and information is selectively available based on location.
Our research shows that governments, organisations and people have been much more focused in recent years on producing data as opposed to providing new goods and services. These product markets are mature and competitive advantage opportunities are minimal.
Political focus globally is on trade of goods at present. The current trade spat is small in scale and significance versus the rising risk that countries place wide-sweeping controls on metadata and data in the future world.
From a portfolio standpoint, it is too early to be positioning for this next megatrend. Investors should be closely monitoring anti-globalisation responses as they are a major threat to the technology giants, global growth, and earnings and prosperity of future generations.