David Kuo: Water, food, energy...the very basic needs of seven billion souls
Sunday 06 November 2011
The number of people on planet Earth has jumped from six billion to seven billion in 13 years.
So, in the time it took a child born in 1998 to reach adolescence today, the world's population has increased by another billion. According to the United Nations, which delivered the jaw-dropping statistic, the world's population could hit nine billion in another 30 years. When we are presented with statistics on the global population, it is important to remember that we are not dealing with numbers but instead we are referring to human beings. Consequently, as investors we should be looking at industries that can help people to lead a fulfilling life.
One of the best places to start could be with Abraham Maslow's hierarchy of needs. Maslow theory is often depicted as a pyramid with the largest and most fundamental of physiological needs forming the base. In the main, what Maslow had to say should be obvious to everyone, though we sometimes take many of the basic things in life for granted. However, we need to remember that physiological needs are the basic requirements for human survival. If these basic requirements that include water, food, heat and housing are not satisfied, then the human body cannot function and everything else is irrelevant.
Water is a basic need and it is perhaps one of the most misunderstood of commodities. Water is admittedly a commodity in the same way that gold, silver, zinc and iron are commodities. But it is largely unaffected by economic cycles. In other words, we need clean, drinkable water all the time, and demand for the wet stuff is increasing.
More importantly, though, there are no known substitutes. Hong Kong tycoon Li Ka Shing probably recognised this when he splashed out a tidy sum earlier this year for Northumbrian Water. Other water companies worth considering include United Utilities and Severn Trent. So, while water may appear plentiful right now, it is possible that demand for potable water may outstrip supply.
Food is another of Maslow's basic requirements for survival. As the number of mouths that need to be fed increases then so does the demand for food. It is easy to say we need to grow more, rear more and harvest more. But 850 million people around the world are going hungry and food shortages will only get worse unless we improve the way food is produced.
This is where science will play a vital role. Leading the way is Swiss agricultural business Syngenta, which is at the forefront of crop protection and the world's third-largest seeds producer. Many of Syngenta's discoveries should help to improve crop yields, improve pest and weather resistance and cut down the amount if water and fertilisers needed. Closer to home, Genus is a world leader in applying science to animal breeding and making advances through biotechnology. Its expertise has not been lost on Chinese farmers who want fatter cows that can produce more milk.
Energy is a basic need for survival too. As the global population grows, then so will demand for heat and light. In the UK, outages are a rare occurrence but the same cannot be said of developing countries. Consequently, demand for sources of energy sources that include oil, coal and gas will grow, which means that the days of cheap energy are unlikely to return. There are likely to be substantial investments in energy sources such as renewables, nuclear and eventually fusion to limit the impact of rising energy prices. In the meantime, the tried and tested industries should not disappoint. There is a reason why they say "Never sell Shell".
David Kuo is director of financial advice site fool.co.uk
Derek Pain: I'm cautious, but remain one of the few bulls in the market
Donald MacInnes: Who would want to be a Barbie girl in a non-Barbie world?
Mark Dampier: How to get an income now that savings are past the 'use by' date
Thousands of UK investors could lose out following collapse of Secured Energy Bonds
Bargain Hunter: Fly off for a winter break in France or Portugal for well under £100
- 1 Venezuela Expo Tattoo 2015: Extreme body art from 'Vampire Woman' to 109mm earlobes
- 2 Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
- 3 Ball pool for adults opens in London
- 4 Amal Clooney gives excellent response to fashion question at European Court of Human Rights
- 5 Canadian woman suing police who locked her in van with sex offender who then raped her
9 reasons Greece's experiment with the radical left is doomed to failure
Have we reached 'peak food'? Shortages loom as global production rates slow
Stephen Fry explains what he would say if he was 'confronted by God'
Greece elections: Syriza and EU on collision course after election win for left-wing party
British grandmother Lindsay Sandiford faces execution by firing squad in Indonesia
Liberal Democrat minister defends comments suggesting immigration causes pub closures
iJobs Money & Business
£40000 - £50000 per annum: Recruitment Genius: This is an exciting opportunity...
£30000 - £35000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...
£13000 per annum: Recruitment Genius: This Pension Specialist was established ...
£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...
Day In a Page
A minimnalist four-bedroom home designed to the highest spec, featuring glass walls and a kitchen space lit by a glass roof
Hibernate during winter and make your living during the summer at this busy guesthouse with panoramic sea views, in the village of Lynton
A four-bedroom penthouse next to the Tate with direct views of St Paul's from two floors of luxurious living space
A four-bedroom detached home surrounded by spacious gardens and woodland, close to New Pudsey
An 18th-century, three-bedroom home near Langstone Harbour built from ships beams with vaulted ceilings and wood burning stoves
A five-bedroom semi-detached home with a mix of period and modern features in a popular and convenient location
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
A three-bedroom villa with self-contained flat, minutes from Lake Windermere
A deceptively spacious, beautifully presented Georgian home with 3000sq ft of living space and five reception rooms
A five-bedroom Victorian home with four receptions, superb gardens and paddock in Pembury
An eight-bedroom house on the south side of the The Green with cinema, wine cellars and summer house
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
A three-bedroom, 15th-century cottage with original features in the picturesque village of Sissinghurst
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion