What is the world going to look like over the next 20 years, and what will its inhabitants need in products and services? Deloitte delved into that topic in its Access Economics report released earlier this month.
It gazed into the future until 2033, and created a list of the industries that it projects will grow faster and slower than the expected global gross domestic product. The report also predicted that the top six fastest growing industries could add as much as $250 billion to the Australian economy over the same time period.
Those top six were: gas, tourism, agribusiness, health, international education and wealth management.
On big sector choices, investors have to have a much longer-range view to see which companies can survive for a long period of time and will have the necessary scale to do the most business.
To get ready for the future, here are some suggestions to create a six-industry diversified portfolio to mirror these predictions.
Gas: The big two here are Santos (ASX: STO) and Woodside Petroleum (ASX: WPL). Already they are in the lead of off-shore oil and gas development. In addition, coal seam and shale gas industries are just starting in Australia as we speak. They can afford the multibillion-dollar projects required for this development.
Tourism: Travel and entertainment, accommodations and sightseeing — Crown Resorts (ASX: CWN) can cover at least three of these with its plans to develop an integrated resorts brand called "City of Dreams" in Australia, Macau, The Philippines, as well as plans for Sri Lanka.
It is expecting an increase in Chinese and other Asian tourists and VIP gamblers, and these customers will want to stay in six-star hotels, and play in the latest resorts.
Agribusiness: This industry has already started to move, and companies like Graincorp (ASX: GNC) and Warrnambool Cheese (ASX: WCB) are already under takeover offers by domestic as well as international companies. Should Bega Cheese (ASX: BGA) or Murray Goulburn be successful in taking over Warrnambool Cheese, the new owner will be situated to be a bigger global dairy products producer.
Health: Biopharmaceutical researcher and developer CSL (ASX: CSL) works on blood disorders, viral and bacterial diseases and other diseases. With larger populations and larger percentages of older people, this company's creations will be in demand.
International education: Navitas (ASX: NVT), an education services provider provides English training and university level education and degrees in Australia and a number of other companies. Foreign students studying here in Australia or learning overseas can fulfill their goals, and this company will be there to service them.
Wealth management: Australian-based fund manager Platinum Asset Management (ASX: PTM) specialises in investing in international equities. With a net profit margin usually around 55%-60% each year, and a return on equity of 37% in 2013, it is already making good money for its shareholders.
Foolish takeaway
Investors with long-term views stand to benefit if they concentrate on quality companies that can deliver dependable service. Companies need firm financials and the inner drive to expand their business with research and development, so look for those traits when assessing a prospective stock.
