Innovation and technological developments have made it difficult for many industries to survive using their traditional methods. While some industries overhaul themselves and keep apace, some are not able to cope and eventually become redundant. Despite this cycle of so-called creating destruction, there are certain industries that are unlikely to fade away as they support our lives and lifestyles.
Even today, people’s basic needs have broadly remained the same. Everyone still eats food, though it can be more processed than fresh. Likewise, children will need an education, and everyone needs a doctor at times. In this article, we'll review those key industries that have been around for a long time and will survive the ups and downs of market cycles.
- Industries that will never go away are those that cater to basic human needs and thus have continued high demand.
- Food is considered one of the safest industries for investment and is comprised of diverse sectors including agriculture, ranching, processing, preservation, preparation, and packaging.
- The pharmaceutical and healthcare industries have experienced significant growth as both developed countries and emerging nations spend more money on high-quality healthcare.
- Education is one of the fastest-growing industries globally, with the rising middle and upper classes in India and China helping support this rapid expansion.
- Three other highly resilient industries are entertainment and media, professional services, and the "sin industry" (which broadly includes alcohol, tobacco, and gambling).
Food is required for life and this means demand will always be high. For this reason, the food industry is one of the safest industries for investment. The food industry covers a variety of activities such as agriculture, ranching, processing, preservation, preparation, and packaging. This industry is diverse not only in terms of products but also in terms of the size of players, from traditional family-run, labor-intensive farms to capital-intensive, highly mechanized firms.
Some of the prominent areas are dairy product processing, grain and oilseed milling, sugar and confectionery products, animal food manufacturing, vegetable and fruit preservation, and food packaging. The industry is impacted by short-term conditions that can depress the demand of a sector at times, but the long-term demand stays intact until a substitute for "food" is found.
The pharmaceutical industry has experienced impressive growth globally. In 2019, worldwide spending on pharmaceuticals before discounts and rebates came in at $1.25 trillion, up from $1.2 trillion in 2018. The industry is dominated by companies from North America, South America, Japan, and Europe. Companies in this industry are investing a lot in research and development (R&D) to create breakthrough drugs.
The healthcare industry has grown tremendously, backed by government initiatives to provide high-quality healthcare, especially in developed countries. Further spurring growth in this industry are rising populations and incomes in emerging markets, increased access to healthcare facilities, aging populations, and an uptick in chronic diseases.
Improvements in healthcare have boosted life expectancies and quality of life. The industry is a mix of products and services such as hospitals, nursing homes, ambulance services, laboratories, doctors and healthcare professionals, medical devices, equipment, and hospital supplies. Organizations, healthcare leaders, and governments continue to look for ways to provide high-quality services that are economically viable.
The education industry is one of the fastest-developing industries globally, generating large-scale employment and revenues. Private partnerships, e-learning, higher demand for foreign education, and increased offerings for test preparation have transformed education from the traditional schoolhouse. The rising middle and upper classes in India and China have helped support this rapid growth and transformation.
Overall, the industry is comprised of products and services such as private universities, vocational training, online education, primary and secondary education, international studies, and educational materials.
5. Sin Industry
This industry will continue to survive because, as the old-time adage goes, “old habits die hard.” The industry broadly includes alcohol, tobacco, and gambling. These industries are called "sin" industries because of their undesirable social impact and costs.
These industries are heavily taxed by governments and are a source of revenue. The taxes on the "sin products" are often ineffective in curbing the consumption of these products or services, as they belong to a class that is price inelastic.
6. Entertainment and Media
This industry is a mix of businesses involved in the production and distribution of television programs, commercials, games, publishing, music and audio recordings, and motion pictures.
According to a PricewaterhouseCoopers' (PwC) report, revenues for the global entertainment and media (E&M) industry are expected to grow to $2.6 trillion by 2025.
The popularity of web-based entertainment is growing. PwC reports that Internet access accounted for 34% of E&M spending in 2020 and will increase at a 4.9% compound annual growth rate, from $694 billion in 2020 to $880 billion in 2025.
7. Professional Services
The professional services industry employs highly skilled workers in accounting, engineering, information technology, architecture, and legal matters, along with management consulting. In developed and fast-developing economies, professional services are a substantial part of the gross domestic product (GDP).
The demand for most of these services is driven by the overall economic health and corporate profits. Thus, in hard economic times, the industry can face a slowdown, but it eventually will make a comeback as spending on these services is only postponed.
The Bottom Line
Some of the industries listed above are recession proof, while others are cyclical. Overall, the big players in each of these industries adapt and upgrade to cater to our changing preferences and technologies, so that they can continue to meet our basic and lifestyle needs.