Over the last decade, a significant number of millionaires around the world accumulated their wealth in technology and the associated digital industries, a trend that will likely continue in the next 10 years, says Wealth-X, a global wealth information and insight provider.
In “A Decade of Wealth,” a report released Thursday to commemorate its 10th anniversary, Wealth-X reviewed the trends in wealth creation over the past decade and based on that, made predictions on how global wealth might change down the road.
In the last 10 years, one of the clearest trends in wealth creation is that Asia has become the fastest-growing region, led by China. Asia’s share of global millionaires increased 10% to 27% during that period of time, while North America still dominated, accounting for 39% of all wealthy individuals.
Wealth-X defines wealthy individuals as those with at least US$1 million in net asset.
Going forward, one immediate change for the wealthy—following the Covid-19 pandemic—will be a focus on rebuilding their businesses and their wealth, the report says. They will also have to reexamine their asset allocations. During the initial phase of recovery, business acquisitions are likely to take a back seat, except for some strategic ones, according to the report.
In addition, there will be more pressure on the wealthy, as the government debt will increase from the coronavirus crisis. Although it will differ from country to country, the wealthy may be asked to contribute more to the government coffers, or there may be increases in wealth taxes, Wealth-X predicts.
The pandemic will likely also result in the continued growth of wealth from the technology sector. “There remain huge gains to be made in applying digital transformation, artificial intelligence, and other technologies to a host of industries—a process that could be accelerated further by the coronavirus crisis,” the report said.
Additionally, an interest in philanthropy, as well as expectations on the part of the wealthy to “give back” to the society as they retire, have increased in the last 10 years, which will translate into a rising high-net-worth population transitioning from businesses to not-for-profit undertakings, according to Wealth-X.