Global Hotspots 2030: Where the Smart Money is Going Next

What cities and countries around the world will be thriving in 2030? Which will grow the most, adopt the most sophisticated technologies and most successfully attract the companies with the brightest futures?

Though no one can predict with certainty where the next global hotspots will be, that doesn’t stop investors from trying. Here are some insights from thought leaders placing their bets on where the smart money will be in 2030.
AI

Canada: Heart Of The AI Revolution

John Boyd, whose Boyd Company advises businesses such as Boeing, Chevron and JPMorgan Chase about where to locate, believes that artificial intelligence will be a major driver of economies of the future. Because Montreal and Toronto are major AI hubs, with universities doing advanced research and Silicon Valley companies establishing satellite offices there, he thinks the cities are terrific places to invest business capital for the future.

“They’re growing exponentially and attracting IT and banking talent,” he said. These cities — Canada’s two largest — are experiencing a snowball effect, drawing like-minded scientists, investors and entrepreneurs in a field where talent is scarce.

Google and Microsoft have offices in Montreal, and Facebook recently announced it will open an AI lab there.

Johnson & Johnson opened a branch of its JLABS incubators in Toronto. LG is launching a Toronto AI lab, as well as a five-year research partnership with the University of Toronto.

And universities in and around these AI- and business-forward destinations are graduating a slew of engineers and data scientists engaged in developing the next AI applications and more.

In addition, both cities epitomize the collaborative atmosphere and progressive ideals that appeal to tech companies, Boyd said. As AI gains a dominant position in industries and homes, Canada, which ranks a stellar fourth on the Forbes Insights/OFX Global Exchange Index (GEI) of the world’s largest foreign direct investment (FDI) recipients, could become the next global leader.

Saudi

Saudi Arabia: Catching Up Fast

Robin Lee Allen, the managing partner and co-founder of Esperance Series, LLC, has heard the hype about China and Brazil, but he’s not buying it. He thinks the place to be in 2030 will be Saudi Arabia.

“It’s going to be huge,” he said. Under tremendous pressure to diversify its economy, the country is rapidly changing its culture to build new industries and incorporate more of its own citizens, including women, into the workforce.

The government recently announced plans for a $500 billion investment to develop a massive industrial zone that will serve as a hub for digital technologies. It’s already under construction, with the first phase due to open in 2025.

The country is also working with the World Bank to become a more competitive place to do business and has made more than 160 reforms. Crown Prince Mohammed bin Salman aims to increase foreign investment from 3.8 percent to 5.7 percent of GDP.

What convinced Allen was the country’s $3.5 billion investment in Uber in 2016. Most of the ride share’s Saudi customers are women, who were officially forbidden to drive in the country until June of this year. Uber essentially gave Saudi women the opportunity to get around without the supervision of male relatives.

Though no one can predict with certainty where the next global hotspots will be, that doesn’t stop investors from trying

 
Asia Office

South Korea: The Next Asian Tiger

Allen and Boyd agree that China’s tremendous growth engine will face challenges in years to come, ranging from a real estate bubble to widespread pollution-related health problems. There’s also the trust factor: Many of the world’s economies are unlikely to realign around China unless they have faith in its government and its willingness to play according to international standards, areas in which the country is currently perceived as lacking.

But South Korea offers intriguing possibilities. Kakao — the country’s mobile messaging service that has branched into internet banking and other online activities — recently raised a billion dollars for AI acquisitions, Boyd noted.

The country has a young, well-educated population and an advanced digital economy. Its influence is expanding throughout the Asia-Pacific region and beyond. An early adopter in mobile payments, South Korea is now moving into edgier technologies such as digital currencies. As much as a third of the country’s workforce has invested in cryptocurrencies, and some experts see the technologically advanced country as the perfect testing ground for them. Indeed, the country accounted for more than 10 percent of trades in bitcoin in the second half of 2017 and was No. 1 for trading in Ethereum, the second-largest digital token by market value.

Whether South Korea’s cryptocurrency mania turns out to be beneficial or not, it shows the country’s willingness to embrace risk. That’s the same kind of culture that has made Silicon Valley attractive to investors, said Allen.

Developers

Growth In Eastern Europe

In the post-Brexit world, according to Boyd, banking and fintech may shift to Eastern Europe, where costs are lower and growth potential is high. Estonia’s Tallinn is aggressively recruiting bankers from London. Assuming ongoing regime stability, Warsaw is another likely Eastern European hotspot.

“There’s high in-migration of corporate investment and intellectual capital to these cities. Costs are lower, and they can supply employers with the requisite skill sets,” Boyd said. “There will be a lot of growth over the next decade or so.”

San Francisco

Home Sweet USA

While overseas economies offer exciting growth opportunities, most economists believe the United States will retain its global dominance for the foreseeable future. The strong dollar and stable government that have been beacons to investors for generations are not likely to find viable competition by 2030 – even if we may have entered an era in which Washington proves less predictable a partner than it has been in the past.

Recent corporate tax cuts make the U.S. more competitive on the global stage. Recent U.S. policy changes have led some major manufacturers to return. Foreign companies such as LG and Samsung are building factories in the States, and Indian outsourcer Infosys has pledged to create 10,000 U.S. jobs. The U.S. remains the world’s largest FDI recipient, and ranks first for financial market development and second for global competitiveness in the Forbes Insights/OFX GEI.

While the U.S. looks like a pretty safe bet, many investors prefer to take more risk, with the potential for greater payoff, in other geographies. For them, Canada, Saudi Arabia, South Korea, Estonia or Poland might be the ticket to prosperity in 2030.

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