• Resource scarcity is a key investment theme, with demand for solutions growing in essential sectors.
• Water technology stocks offer potential as global demand is projected to outstrip supply by 40%.
• Key growth sectors include agricultural technology and advanced materials solving supply chain constraints.
• Investing in resource solutions provides exposure to long-term trends independent of market cycles.

Investing in a World That's Running Out of Everything

Let’s be honest, we’re all a bit tired of grand predictions about the future. Flying cars, robot butlers, the usual guff. Most of it never happens. But some trends aren’t flashy predictions, they are slow, grinding certainties. And one of the biggest, most unavoidable trends is that we are, quite simply, running out of the basics. I’m not talking about the latest smartphone chip. I’m talking about clean water, usable farmland, and essential materials. To me, this isn't a cause for panic, it's a signpost for where the smart money might be heading next.

The Unsexy Gold Rush

While politicians posture and activists protest, a quiet revolution is happening in the background. It’s not glamorous, but it’s incredibly important. Think about water. We take it for granted until the tap runs dry. The reality is that global water demand is set to outstrip supply by a staggering 40% within the decade. That’s not a distant problem, it’s an impending economic reality.

Companies are already building the solutions. Forget the Silicon Valley hype cycles. I’m talking about businesses like Xylem, which develops the technology to treat and manage water. This isn't a speculative bet on a new app, it's an investment in the fundamental plumbing of civilisation. As water becomes more precious than oil, the companies that control its flow, treatment, and recycling could be in an incredibly powerful position. It’s a gold rush, but the gold is clear, liquid, and essential for life.

Beyond Just Turning on the Tap

This scarcity problem extends far beyond water. Our entire industrial and agricultural model is built on an assumption of abundance that no longer holds true. We need to produce 70% more food by 2050, yet we have less fertile land to do it on. The old ways just won’t cut it. This is where innovation becomes a necessity, not a luxury.

Consider vertical farming. It sounds like something from a science fiction film, but its economics are brutally simple. Using 95% less water and 99% less land than traditional agriculture makes it a compelling solution in a resource constrained world. Similarly, companies in the materials science space are essentially inventing our way out of a corner, creating advanced polymers and sustainable solutions to replace the resources we’re depleting. They aren’t just making things better, they are making things possible.

Why Your Old Playbook Might Be Useless

For years, investing in resources meant one thing: buying commodity stocks and hoping prices went up. That’s a cyclical game of boom and bust. I think that playbook is becoming obsolete. The real opportunity isn't in the raw materials themselves, but in the technology and services that help us use them more efficiently. It’s a fundamental shift from speculating on price to investing in solutions.

This is about backing the innovators who are turning scarcity into an asset. These are the companies building water recycling systems, pioneering precision agriculture, and designing next generation materials. A collection of these businesses, like the Resource Scarcity Portfolio, offers a different way to think about this theme. It focuses on the problem solvers, not just the stuff we’re running out of.

Of course, no investment is a sure thing. This isn't a magic bullet. Technology companies face risks, new solutions might fail to scale, and markets can be volatile. But the underlying driver, scarcity, isn't going away. Demand for water, food, and materials is not cyclical. It doesn’t vanish in a recession. If anything, the pressure only intensifies, which could provide a powerful tailwind for the companies positioned to solve these very real, very urgent problems.

Deep Dive

Market & Opportunity

• The global water technology market is expected to reach $914 billion by 2027.
• Global water demand is projected to exceed supply by 40% by 2030.
• An estimated 70% more food will be needed by 2050 due to population growth.
• Vertical farming technology uses up to 95% less water and 99% less land compared to traditional agriculture.

Key Companies

• Xylem Inc. (XYL): Provides water treatment and management systems, water recycling, and infrastructure for municipalities facing water shortages.
• DowDuPont Inc (DD): Creates advanced materials, specialty chemicals, and sustainable solutions, including biodegradable polymers, to replace scarce traditional resources and improve agricultural yields.
• Global Water Resources Inc (GWRS): Operates as a total water management service provider in water-stressed regions.

Primary Risk Factors

• Technology companies may face execution challenges.
• Solutions may prove to be less scalable than initially expected.
• Changes in regulations could impact market dynamics.
• The sector can attract speculative capital, leading to market volatility.

Growth Catalysts

• Increasing resource constraints driven by population growth, urbanization, and climate change.
• Stricter environmental standards and resource efficiency requirements being implemented by governments worldwide.
• Growing demand from corporate buyers seeking to secure supply chain stability through long-term contracts.
• Advancements in technology, such as energy recovery devices making desalination more economically viable.