We have often discussed the fourth industrial revolution started in the late 90s with the introduction of the Internet, to continue with robotics and, more recently, with artificial intelligence.
The Internet has, in fact, revolutionized our lives: in advanced economies we are almost all connected and it is estimated that over the next ten years more than two billion people in emerging economies will connect. Furthermore, more and more often, perhaps without realizing it, we purchase digital products (applications, music, films, etc.), with the effect of dramatically shortening distribution chains and reproducing large quantities of data.
But, if the Internet connection is already high for individuals, it is not yet for the objects that surround us and which, more and more, will be connected, producing data in their turn. This additional step will have countless applications from industry to city management (the so-called Smart Cities where, for example, each car park will have a sensor to indicate free spaces), home automation, etc.
Generational change will further fuel data consumption. For example, in Asia i Millennials represent 30% of the population, but they make up 60% of the online community and 75% of ecommerce users.
Even the financial industry is moving more and more to digital, to reduce the costs of activities with lower added value and offer faster, more personalized and immediate access to customers. The shift towards digital in the financial sector is visible on almost all operational channels (payments, investments, insurance, loans), but it is the payment channel that has undergone the greatest revolution. Moving towards digital payments not only leads to greater speed and security of transactions, but also to a sharp increase in the volume of data that can be analyzed and used to improve services and offers.
The consequence of all these advances will be an exponential growth in the amount of digital data, which is expected to exceed 44 zettabytes by 2020. For those less familiar with these measures, this is more than a 50-fold increase from the 2010 level ( source: IDC). In addition, the recovery of investments by companies should also boost the turnover of companies active in the management of digital data. The market is keeping an eye on the phenomenon: Listed companies active in data management have performed well in recent years and we expect strong earnings growth and potentially an acceleration of mergers and acquisitions in the coming months.
From an investment perspective, the digital data theme is therefore bound to offer long-term growth opportunities. However, in a universe that will be increasingly subject to regulation (including as regards privacy), it is essential to maintain a broad diversification and avoid excessive concentrations on individual operators who could find themselves caught off guard by a change in regulations.
