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Business News/ News / World/  ‘Great Polarization’ may be next for world’s richest, UBS says
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‘Great Polarization’ may be next for world’s richest, UBS says

The huge boost to the fortunes of technology and health-care billionaires during the coronavirus pandemic may be the beginning of a more permanent trend.

The surge in net worth among tech entrepreneurs this year -- Amazon.com Inc.’s Jeff Bezos and Tesla Inc.’s Elon Musk both added more than $60 billion to their net worth in 2020 (AP Photo/Pablo Martinez Monsivais, Evan Vucci, Jeff Chiu, Jens Meyer, File) (AP)Premium
The surge in net worth among tech entrepreneurs this year -- Amazon.com Inc.’s Jeff Bezos and Tesla Inc.’s Elon Musk both added more than $60 billion to their net worth in 2020 (AP Photo/Pablo Martinez Monsivais, Evan Vucci, Jeff Chiu, Jens Meyer, File) (AP)

The huge boost to the fortunes of technology and health-care billionaires during the coronavirus pandemic may be the beginning of a more permanent trend.

The Covid-19 shock could act as a catalyst to spur increased opportunities for those who offer digital or other tech solutions, while the wealth of those in older industries may in turn suffer, UBS Group AG and PricewaterhouseCoopers said Wednesday in a report.

“Those that are the innovators and the disruptors, the architects of creative destruction in the economy, are still increasing their wealth," the 2020 Billionaires Insights report found. “The net wealth of billionaires in entertainment, financial services, materials and real estate sectors lagged the rest of the universe."

Despite the global economic shock, the world’s 500 richest people are a combined $813 billion richer now than they were at the beginning of the year, according to the Bloomberg Billionaires Index.

Total billionaire wealth surged to a fresh peak of $10.2 trillion in July, up from $8.9 trillion at the end of 2017, according to the report findings. The heavy lifting came from the tech and health-care sectors, where fortunes jumped by 43% and 50%, respectively. Net worth among those in entertainment, materials, real estate and even finance, by comparison, grew at 10% or less.

‘More Digital’

The post-Covid world will be “more indebted, more digital and less global," said Maximilian Kunkel, chief investment officer of UBS’s global family office unit. “All of those points should reinforce these trends over the past few months."

The growth in total wealth was accompanied by a rise in philanthropic efforts. The world’s richest donated $7.2 billion publicly from March to June, and potentially even more privately. The donors are increasingly focusing on tangible results such as lowering incidents of a particular disease, instead of just the amount of cash donated.

The results cover more than 2,000 billionaires in 43 markets, accounting for 98% of billionaire wealth, UBS and PwC said. The researchers also conducted about 60 interviews with the ultra-rich.

The surge in net worth among tech entrepreneurs this year -- Amazon.com Inc.’s Jeff Bezos and Tesla Inc.’s Elon Musk both added more than $60 billion to their net worth in 2020, according to the Bloomberg index --has led to increased scrutiny as millions in the U.S. lost their jobs amid a slumping economy. Meanwhile, a U.S. house panel has proposed a series of far-reaching antitrust reforms to curb the power of the technology giants after a 16-month antitrust investigation found the companies are abusing their dominance.

But these wealthy individuals may just be the ones that will help lead the recovery.

“As the storm passes, a new generation of entrepreneurs looks likely to digitize, refresh and revolutionize the economy," the report found.


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This story has been published from a wire agency feed without modifications to the text.

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Published: 07 Oct 2020, 06:38 AM IST
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