2,100 people on earth now have a wealth of more than $1 billion
With the economies of the world currently enjoying mixed results when it comes to stagnant productivity and slowing growth, one small club of super-wealthy individuals is still enjoying a bull run. The billionaires of the world now command close to $9 trillion in combined wealth, according to a new study, having seen that figure increase by more than a trillion between 2016 and 2017.
According to the latest figures available from Credit Suisse, the total wealth of the planet stands at $280 trillion, though in the ten months since this figure was last collated it is likely to have grown, especially as this came after the fastest period of wealth creation since 2012. However, while the global economy is broadly thought to have recovered since the global financial crisis of 10 years ago, the distribution of this wealth means that in many cases, the gap between rich and poor is not only wider than it was at the turn of the century, but those with the least are comparatively worse off.
Contrary to the commonly accepted platitude that ‘a rising tide lifts all boats’, a 2017 Oxfam report found that the eight richest people in the world now own as much wealth as the poorest half of the world. Almost half of the 7.6 billion people alive today, or more than 3 billion people, live on less than $2.50 a day; of those, more than 1.3 billion live in extreme poverty of less than $1.25 a day or go hungry. Now, a new report has revealed that at the same time, around 2,100 people, or around 0.00003% of the population, hold $8.9 trillion in wealth, or just under 3% of the global total.
This constitutes a sharp rise in the amount of money commanded by this select group. In 2016, the figure stood at $7.5 trillion, and while part of this rise is accounted for by a slim rise in the number of billionaires across the world, the total tally of billionaires is just 127 greater than it was 12 months ago. Figures collected by banking giant UBS and professional services juggernaut PwC suggest that 2017 saw the total wealth of the world’s billionaires enjoy a historic increase, rocketing by 19% – the largest ever such increase – to approach $9 trillion shared among just 2,158 individuals.
Regionally, it was North America which saw the slowest rise in terms of its total billionaire haul, both in terms of the number of individuals, and wealth owned. The area saw its super wealthy elite expand from 682 to 715, while the wealth they owned increased by 8%. This saw North America lose ground to both EMEA and APAC in the billionaire stakes, with EMEA gaining ground with its wealth rising by 9%, and its number of billionaires reducing the gap between it and North America to just 86. It was APAC which topped the growth, however, with its wealth increasing by 20%, and its number of billionaires pulling away from the US, having been just four greater in 2016, to see a gap of 99 now.
Crazy rich APAC
Analysts found that behind the rapid ascent of APAC as a hotspot for billionaires is a new group of self-made entrepreneurs leading the region’s super wealthy to fresh heights. As the value of billionaires’ assets grew by $1.4 trillion, just 332 new billionaires accounted for more than a third (38%) of the increase. Of these, 199 of them were self-made entrepreneurs, of which 89 were from China, or roughly three times more than in the US and EMEA.
As recently as 2006, there were only 16 Chinese billionaires. Today, just three decades after the country’s government first allowed private enterprise, they number 373 – nearly one in five of the global total. Of the Chinese cohort, UBS and PwC estimate that 97% are so-called ‘self-made’ billionaires – having become successful or rich by their own initiative, if not solely via their own labour – with many of them in sectors such as technology and retail.
Commenting on the rapidly changing Chinese economy which is driving the APAC region, Josef Stadler, Head of Ultra High Net Worth at UBS Global Wealth Management, said: “Over the last decade, Chinese billionaires have created some of the world’s largest and most successful companies, raised living standards. But this is just the beginning. China’s vast population, technology innovation and productivity growth combined with government support, are providing unprecedented opportunities for individuals not only to build businesses but also to change people’s lives for the better.”
Breaking down North America, meanwhile, the US still hosts the largest concentration of billionaire wealth, despite its slowing growth and lower number of individuals. 2017’s 12% growth, to $3.1 trillion, was far lower than the average global rate. At the same time, Western Europe saw its billionaire population increase by just 4%, or 17 people, to 414. Signaling the importance of multigenerational families, wealth transition between the generations of just five families in consumer and retail (cosmetics, retail, foods and toys), as well as technology, accounted for almost a third (30%) of Western Europe’s total wealth expansion, suggesting that European capitalism remains hardwired to family legacies over pure meritocracy.
Related: Global billionaires increase total wealth to $6 trillion, add to their rank.
