The investment drought: a UBS Opinion Leaders White Paper

In recent years we have witnessed an investment drought. Companies, institutional investors, individuals, and governments have all seemed reluctant to commit to long-term projects such as infrastructure. At the same time, the need for investment has seldom been more acute. Structural changes in demographics and technology represent challenges, but also opportunities, for investors. With this in mind, a group of UBS's Opinion Leaders have written a white paper addressing the scale of the problem and how to fix it.

The investment drought

Executive summary

The world is facing an investment drought. To take a few notable examples, public the United States is at its lowest level since 1947. Among US companies, the growth rate of business investment has slowed to less than one tenth its average during the 1990s. Across the Atlantic in the United Kingdom, fixed investment now accounts for its lowest share of GDP since the 1960s. Such concerning statistics are part of a global trend that threatens the outlook for growth, productivity, and innovation.

We believe that changes to tax systems and compensation structures could go a long way toward reinvigorating investment. Novel ways of rewarding innovation – including prizes rather than patents – offer promise. Impact investing also has the potential to offer attractive rates of return and promote the well-being of society. In the face of profound demographic and technological change, finding ways to boost investment should be a priority for decision-makers in government and the private sector.