2,100 people on earth now have a wealth of more than $1 billion

19 November 2018 Consultancy.uk

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.Number of billionaires in the world

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.

Total wealth of billionaires by region

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.

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Project management industry adds £156 billion of value to UK economy

15 April 2019 Consultancy.uk

Project management has grown into one of UK’s largest areas of business over the past decade, amid the increasing ‘projectification’ of work. With the gross value added to the UK economy by project management estimated to be £156 billion, this trend is likely to continue in the coming era.

Despite the huge success of project management in recent years, until now there has been relatively little data available on the size of project activity. As a result, there has been a great deal of debate on things like the number of people involved in the sector, the number of projects, and how it contributes to economic output. Due to this need for clarity, APM, the UK’s professional body for project management (the largest organisation of its kind in Europe, with 28,000 individual members) commissioned economists from PwC to shed light on the industry's economic impact.

The research concluded that the profession makes a more significant contribution to the UK economy than the financial services sector. 2.13 million full-time equivalent workers (FTEs) were employed in the UK project management sector, generating £156.5 billion of annual gross value added (GVA). In comparison, the financial services sector contributes £115 billion, and the construction industry adds £113 billion.

Gross value added to UK economy

Commenting on the discovery, Debbie Dore, Chief Executive of APM said, “Project management runs as a ‘golden thread’ through businesses, helping to develop new services, driving strategic change and sector-wide reform.”

Who is a ‘project manager’?

To reach these estimates, PwC’s researchers used detailed models to map out the value of project management activity. They ultimately defined relevant ‘projects’ as “temporary, non-routine endeavours or rolling programmes of change designed to produce a distinct product, service or end result… [with] a defined beginning and end, a specific scope, a ring-fenced budget, [and] an identified and potentially dedicated team with a project manager in charge.”

Building on this, they then went on to define what the act of project management actually is. The job consists of applying “processes, methods, knowledge, skills and experience” so that clients can meet their objectives and bring about planned outputs or outcomes. The analysts added that this includes “initiating the project, planning, executing, controlling, quality assuring and closing the work of an identified and dedicated team according to a specified budget and timeframe.”

Importantly, it should be noted that the profession is not exclusive to only roles explicitly labelled as ‘project manager’, but to any role where specialist project management skills are used. This means that across sectors these roles can have very different titles, from the self-explanatory contract managers of procurement, or the campaign managers of advertising, to the likes of festival co-ordinators in the events sector, and many more. The roles in question also span all strategic levels of the profession, from strategic to tactical and operational positions.

Gross value added of project management profession

From a sector perspective, the financial and professional services, construction and healthcare industries make up almost two-thirds of the total project management GVA. At the same time, understandably, the UK Government has a huge project portfolio, which further drives the size of the GVA the sector contributes, thanks to megaprojects like HS2 and Crossrail.

Commenting on this to the report’s authors, Oliver Dowden, Minister for Implementation remarked, “Project delivery is at the heart of all Government activity, whether it’s building roads and rail, strengthening our armed forces, modernising IT or transforming the way government provides public services to citizens. Getting these projects right is essential if we are to ensure that we build a country that works for everyone.”

Throughout 2019, 26 major government projects were delivered, representing a fifth of the overall Government Major Projects Portfolio (GMPP) of 133 projects. According to the IPA annual report 2017-18, these represented a whole life cost of £423 billion. In addition to this were a plethora of smaller scale projects, and those in early development.

Elsewhere, with the increasing digitalisation of the economy impacting entities of all shapes and sizes, IT and digital transformations tended to dominate the projects of the UK scene alongside new product development projects, with a respective 55% and 46% of organisations in the research sample having undertaken these types of project in the past year. At the same time, this varied across sectors, and unsurprisingly, in the construction and local government sectors, fixed capital projects were the main project type undertaken.

Outlook

Looking to the future, 40% of business leaders expect project management will grow in the coming years due to the increased use of projects – or the ‘projectification’ of the UK. In a trend that has been witnessed elsewhere, organisations have to rapidly and continuously change in the digital age of business, driving the need for project management.

Outlook for project management services

An increased focus on value over cost – especially in the construction sector – and a forecast increase in the number of international projects are predicted to be key drivers of growth, according to the expert contributors. However, this will not happen in the absence of challenges; more than half of organisations expressed concern over the perceived impact of political uncertainty in the UK. Skills and capability shortages were also cited as a potential barrier by a third of organisations.

With regard to budgets, meanwhile, a third of those surveyed by PwC said they expect the size of project budgets will increase in the coming three years, while 40% anticipate a growth in project size. As the profession continues to mature, and as the recognition of the importance of good project management grows, it is expected that a greater proportion of project work will gain more distinct attribution to the profession itself, giving more recognition and appreciation to the role of the project manager.

Speaking on the findings of the study, Sandie Grimshaw, a Partner at PwC, concluded, “The project management profession is relatively new compared to some other professions, such as lawyers, teachers and doctors. However, as project management is a core competence vital to organisations in the UK, the profession is critical and will continue to grow in stature.”