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The Digitisation score of this Portfolio is 17%

Digitisation

The Globalance Megatrend-Share shows you the average share of revenues of the portfolio that is achieved in one or more megatrends. For the calculation, the Megatrend-Shares of the individual investments are capital-weighted and added up.

17%

Digitisation Exposure

2nd

Digitisation is the 2nd most represented megatrend in this portofolio

8 (of 52)

of the holdings are invested in this megatrend

What it is about

The term digitization covers all forms of technically networked digital communication such as broadband communication, the Internet of Things, artificial intelligence, Big Data, e-commerce, smart home or Industry 4.0. The term has been used less and less in the original sense (conversion of analogue to digital data formats), but almost exclusively in the sense of the comprehensive digital transformation and penetration of all areas of the economy, state, society and everyday life.

Digitisation Exposure of your Assets

17%

Portfolio Megatrend Exposure

0%100%

Data source: Globalance

 
Asset Name
Digitisation Exposure
Global Megatrends Exposure
% of portfolio
AAC Technologies Holdings Inc.100%100%0%
Sunny Optical Technology (Group) Co., Ltd.85%91%1%
Alibaba Group Holding Ltd.83%100%5%
Xiaomi Corp. Class B69%69%4%
Tencent Holdings Ltd.68%100%11%

Why does it matter

Opportunities

  • Digital technologies and platforms can reduce transaction costs for businesses and facilitate access to new customers, both in domestic and foreign markets.

  • Digitization can enhance the productivity of enterprises and offer new opportunities for entrepreneurship, innovation and job creation.

  • New cloud-based solutions can reduce the need for investing in information technology equipment and corresponding in-house expertise.

  • E-commerce can facilitate the scaling-up of enterprises by providing financing opportunities and the means to build verifiable online transaction records that may help to attract new customers and business partners.

  • Artificial intelligence, big data, cloud computing, machine learning and algorithmic decision-making are all powerful instruments of change.

Risks

  • Risk of loss of personal and informational autonomy and increased dependence on IT or IT companies.

  • Questions of business ethics arise concerning the responsibility of companies in the use of data and production processes towards users and employees.

  • Against the background that workers and employees lose their jobs because hardware and software robots perform them more cheaply and faster (sometimes better), there is a political discussion about approaches and concepts such as the robot tax and the unconditional basic income. Some see social justice and social cohesion as being at risk.

  • More and more links also mean more and more interfaces. Thus, more and more doors are open for cyber criminals.

  • Technically networked digital communication does not create long-term stable structures, but rather increases their flexibility and complexity and reduces their predictability through the processes of disruptive change it initiates.

Relevance for Investors

Each industry and target group reacts differently to the digitization of the service offering and customer interaction. Creativity, willingness to experiment and risk taking are therefore required to leave the beaten track and take completely new paths. This makes the digital transformation a great challenge for companies. Entire industries have been transformed. Specialized platforms are displacing traditional players, even though they do not own any equipment, vehicles or real estate. Social network operators create little or no content of their own. User-generated content is used for analysis, which in turn is the basis for personalization (including advertising). Investors need to understand early all interdependencies between digitization of sectors and long-term value creation.

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