Is active investment management the solution to navigating technological disruption?

Disruptive technology, however, is when technology, or the convergence of multiple technologies, is sufficiently powerful enough to disrupt existing companies and industries, sometimes into extinction. History is littered with examples of industries being disrupted by innovative technology, such as the automobile over horses or the smartphone over traditional mobile handsets.

Though disruption has been part of life since the beginning of time, it has never moved faster than now. We are observing an innovation surge, largely enabled by technology, which is accelerating the speed of disruption.

As an investment manager, we have a fiduciary duty to our clients to research the potential impact of disruption on our investment opportunities, especially given that we predict disruptive technologies will have a larger impact on corporate earnings in the next 10 to 15 years, than that of any central bank or government.

Consequently, we believe performance gaps between the winners and losers will be untypically large and being on the right side of disruption will yield good outcomes for investors.