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How billionaires made money during the pandemic

by LLB Editor
7th Oct 20 9:11 am

UBS and PwC have today published their annual Billionaires insights report. The new research reveals how billionaire innovators and disruptors, active in tech, healthcare and industry, are contributing to reshaping the economy at a faster pace than ever before.

UBS and PwC’s analysis includes a multi-layered approach to identify innovator and disruptor billionaire-controlled companies. The factors considered include the adoption of disruptive business models, essential technologies and proven emerging technologies. Most tech (94%) and healthcare (71%) billionaires are among these innovators and disruptors, though they can also be found in more traditional industries. Within the industrial sector, UBS and PwC identified 54% of billionaires as innovators and disruptors, while consumer & retail has 41%.

Long-established billionaire-controlled tech companies are revolutionizing their sectors from within. For instance, software giants such as Microsoft and Oracle – both effectively “billionaire factories,” having hatched several billionaires – are quickly moving into areas such as AI, cloud computing and software as a service.

Josef Stadler, Head of the Global Family Office unit at UBS Global Wealth Management, said: “This is a key moment in economic history. Scientists, computer programmers and engineers are revolutionizing industries at a pace never seen before and they are having a profound impact on the whole of the global economy.

“From AI to 3D printing, from nanotechnology to biotechnology, scientists and serial entrepreneurs are only just beginning to apply and develop radically new products and services that have the potential to reshape the global economy and create tens, or even hundreds of thousands of new jobs as the world rebuilds after COVID-19.”

Innovators and disruptors have performed strongly, as UBS and PwC Switzerland extended their usual period of analysis to take into account the transformative impact of COVID-19. In 2018, 2019 and the first seven months of 2020, the billionaires who can be identified as innovators and disruptors grew their wealth by 17% to USD 5.3trn, while traditional billionaires’ wealth increased by 6% to USD 3.7trn. Innovators in the healthcare sector have been some of the past two years’ biggest gainers, for example Zhong Huijhan, a former chemistry teacher who became the world’s most wealthy healthcare billionaire following the IPO of Hansoh Pharmaceutical on the Hong Kong Stock Exchange in 2019.

As their risk-taking and disruption has helped billionaires grow their businesses, they are creating economic growth and jobs.

UBS and PwC’s 2017 Billionaires Insights report found that the 1,542 billionaires analyzed owned or partly owned companies that employed over 27.7 million people worldwide – roughly the same as the UK’s working population. In addition to their impact through business innovation, UBS and PwC’s research shows that billionaires are giving more than at any time in history. Some 209 billionaires have publicly committed a total of USD 7.2bn between March and June 2020 to tackle the pandemic, though that is likely to be only a fraction of the overall amount, given a tendency towards discretion.

Some innovators are also extending their own values to the way their companies approach environmental and social issues. They are seeking to make a positive impact across all activities – philanthropy, corporate and investment – as opposed to looking solely to a charitable foundation. For example, of the top ten billionaire-controlled companies ranked by sustainability performance, nine are COVID-19 donors and seven also invest in clean tech.

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