In the next ten years, the world economy is expected to grow
around 3.1% per year (source: International Monetary Fund
and UBS research, December 2007). There will be continued
productivity gains as a result of global competition and the diffusion
of new technologies. Worldwide population, and therefore
economic activity, will also grow; although employment
may increase at a slower pace, reflecting demographic shifts
towards older populations in some countries, which is expected
to reduce the growth potential of the global economy.
The real growth rate of gross domestic product (GDP) will be
highest in Asia (excluding Japan), followed by Central and Eastern
Europe, the Middle East, Africa and Latin America. As a
result of the strong growth performance of many emerging
market countries, developing markets will contribute a total of
52% to the increase in global GDP between 2007 and 2015.
Asia, excluding Japan, will represent the largest increase in GDP
in absolute terms, closely followed by North America and Western
Europe, due to the current size of these developed markets.
This is why it is important for global financial service providers,
such as UBS, to have significant positions both in growth markets
and large, mature markets.
The financial services sector has been growing faster than
the economy on average for the last three decades. Despite
the credit crisis in the US affecting the securitization and
credit market, which started in 2007 and continued into early
2008, the financial services sector continues to have attractive
long-term growth opportunities. Financial innovation,
closely linked to the evolution of securities markets, will
not disappear and will remain the driving force for further
development in the financial sector. UBS sees several specific
factors that will drive the development of its business over
the coming decades. The factors which are expected to result
in the financial services industry having continued higher
growth rates than the overall economy are:
