Deep Water Waves in Global Emerging Markets

Beyond our immediate horizons, deep water waves are building at a scale that could significantly alter the global investment landscape. These waves are formed from powerful forces such as technology, demographics, geopolitics and climate change. When they break, they will bring disruption to global markets, washing away the previously sacrosanct assumptions of investors around the world. Yet amidst the disruption will lie opportunity for investors with a keen eye for investment prospects forming in the new landscape.

Technology has already been hugely beneficial in removing some of the artificial barriers between the developed and emerging worlds. Soon we will usher in the fourth industrial revolution, a complete digital ecosystem, which promises new developments in artificial intelligence and quantum computing, delivering unparalleled access to knowledge and increased processing power. Emerging market companies may stand to benefit from new breakthroughs and innovations, with numerous investment opportunities in technology-exporting countries such as Taiwan and South Korea. However, technology innovation is not restricted by borders, and investors should expect to see a rise of world-class companies from less obvious countries such as Belarus, Malaysia, Russia and India.

During the pandemic, companies learned to value digital solutions and high-quality management information systems, leading to a veritable investment boom in technology. Looking forward, innovative companies in emerging markets may continue to benefit from the digital revolution. Some are already well known such as Samsung Electronics and Taiwan Semiconductor Manufacturing Company. Others are not as widely known but are well positioned to benefit from fast-growing trends in the IT industry, such as the use of digital technology to address increased regulatory requirements, growing expectations from consumers and the leveraging of data.

One such company is EPAM Systems, an information technology company with its software development center located in Belarus. EPAM claims to have helped over 275 Forbes Global 2000 customers with complex engineering solutions and information technology services. In addition, its management has a history of successfully generating profitable growth, and EPAM has a strong employee culture, resulting in one of the lowest attrition rates in a high-attrition industry.

Demographics is another powerful force worthy of investor attention, as young populations, a growing middle class and urbanization will alter the investment landscape. This will come at a time when global growth is set to slow to below its long-term trend of 3.45% over the next generation, according to the International Monetary Fund. The U.S., one of the countries that has driven global economic growth over the past two decades, saw the number of working-age people decline last year – something that had never happened in the nation’s…