The past year brought significant change, uncertainty and disruption to many facets of both life and business around the world – and opportunities too. Now, a recent research project implemented by UBS and PwC has shone a light on these impacts to billionaires, their wealth and businesses, and also to their philanthropy.
The research is the latest in a series of joint reports that UBS and PwC publish annually on billionaire wealth. It covers more than 2,000 billionaires from the 40 largest markets globally, and looks back over more than two decades. The most recent report includes more than 60 one-on-one conversations with billionaires.
Below, we identify five key findings and our favourite ‘sound bites’ from the research. If you’re interested in reading the full report, you can do so here.
- Billionaire wealth has never been greater, despite the turbulence of the past year. Total billionaire wealth nudged past USD $10 trillion at the end of July 2020. This represents a new high after the year’s V-shaped rebound in asset prices. This level of billionaire wealth has soared past the previous peak of USD $8.9 trillion at the end of 2017. UBS-PwC reports that there are now 2,189 billionaires globally, up slightly from 2,158 in 2017.
- Innovation is on the rise, and contributing to new wealth. The research concludes that scientists, computer programmers and engineers are revolutionizing certain industries at a pace we’ve never seen. This innovation is now spreading from the tech and healthcare sectors to disrupt many other parts of the economy. Many of these innovators are driving change by applying new and faster technologies – and some of them are becoming billionaires as a result.
- Billionaires are giving more of their wealth away, particularly in support of the pandemic. The UBS-PwC research says a small group of billionaires is pioneering “innovation in philanthropy,” while also pursuing specific goals for sustainability across their various corporate and investment platforms. In specifically tackling COVID-19, more than 200 billionaires have publicly committed a total of USD $7.2 billion, whether in financial donations, manufactured goods and equipment, or other commitments.
- Billionaires love real estate, especially as an asset to transfer to successors. The research concludes that half of all billionaires – regardless of their business sector – have between 20–40% of their wealth invested in real estate. The 64 real estate billionaires in 2009 (i.e. having real estate businesses or a major part of their assets in the sector) went on to double their wealth over the next decade. Of course, that all changed by 2020, exacerbated by the pandemic undermining demand for commercial real estate, and an increasingly digital economy undermining demand for actual physical space. So now what? Real estate billionaires have diverging views on what’s next. Some see a black hole, while others see opportunity. “Real estate got sucker punched but you have to stay on your feet and swiftly identify coming opportunities,” says one. “The future of work will look different, and offices are still a major opportunity for investors.”
- A next generation of “rebuilders” is emerging. When the pandemic storm passes, UBS and PwC conclude that a new generation of billionaire innovators appear ready to play a vital role in pitching in to repair the damage. Using their growing tool kit of emerging technologies, these innovators will continue to digitize, reinvigorate (and even revolutionize) the economy. The potential impacts are huge.
Some selected sound bites from the report:
“The function of entrepreneurs is to reform or revolutionize the pattern of production… for producing a new commodity or producing an old one in a new way…”
~ Joseph Schumpeter, Austrian economist
“This COVID-19 crisis could be the real border between the old and the new economy. It may give the opportunity to create a better economic environment focusing on sustainable growth and efficiency… with less bureaucracy and procedures…”
~ Italian billionaire
“For billionaires and the world economy as a whole, 2020 will go down as a pivotal year, a hinge point in history… In the next 10 years, society’s business innovators have a vital role to play in applying the world’s growing inventory of emerging technologies to boost productivity. They must also bridge the increasingly evident environmental and social deficits…”
~ UBS & PwC researchers
Again, if you’re after the full report, it’s available here.