The stock-based value of assets from asset diversification are likely to be worth a billion dollars by 2060, according to a new study by the International Monetary Fund and Oxford Economics.
The report, titled “Assets from asset focus: How asset-based wealth can help to boost long-term growth and prosperity”, says that while the growth potential of these assets is relatively small, they have potential to create substantial gains in real terms in the decades ahead.
This could happen if investment in asset-intensive industries can drive investment in other areas.
The IMSF research found that asset diversifying the economy through investment in infrastructure, education, health care, and agriculture, among others, will boost growth in a range of industries.
“A more integrated approach to the economy is one that will create more opportunities for long-run prosperity and well-being for all,” the IMSI’s senior economist Dr Jurgen Rieger told TechCrunch.
“The new economic paradigm of asset-centricity, in which assets are increasingly focused on their most critical use-cases, will drive the growth of the economy and provide a much better basis for sustained prosperity in the years ahead.”
The report said that the rise of these asset-oriented industries will drive more innovation and more business models.
The most promising areas for the investment of these capital-intensive technologies are the internet of things, virtual reality, artificial intelligence, smart grids, and advanced manufacturing, it said.
The rise of the internet and virtual reality are the most promising sectors of the digital economy.
But the report also warned that investment in these sectors is likely to fall as a result of the rising threat of cyber attacks and the decline in economic growth in the world’s third-largest economy.
“As governments and regulators increasingly rely on blockchain technology for economic transactions, it will increasingly become more important to secure their systems and manage their data in the face of cyber-attacks,” the report said.
“Investments in these critical sectors are likely, however, to fall.”
As a result, the ILSI report said, asset-driven growth will need to be “driven by the economic value of the assets themselves”.
While the IESF is the latest in a series of organisations to look at how to better utilise asset-backed investments, the report was the first to explore how the assets could help boost long term growth and the country’s long-range future.
It is based on a model developed by Oxford Economics, the research group behind the Oxford Report on Asset-Based Wealth and Investment.
“While asset-rich countries may face some challenges with the transition from a globalised economy to an asset-led one, asset rich countries are also likely to have more economic opportunity than most,” the study said.