Meanwhile, we are closing the door on a decade long macro era. “Macro will not be massively important during the next ten years”, said Neptune’s CIO and chief economist during a presentation called “Real world risks to your portfolio” in London. Dowey also noted the environment for making money in bonds is “not great.”
In the “data generation”, the pace of technological disruption is increasing, he explained. Areas such as internet of things, genomics, 3D printing, artificial intelligence, robotics, 3D visualisation, solar energy, energy storage, mobile internet & cloud, big data, drones and driverless cars and eMoney/eFinance will all go through rapid change.
Dowey said we have been here before and compared today’s tech disruption to the industrial revolution and the rapid development on the heels of the general access to knowledge and the birth of print media that followed it.
“Many companies’ business models will be ripped apart,” said Dowey. Moreover, he explained that broad investment will not work in the coming years. “When you hit the sweet spot, exponential growth takes place, and it’s hard to predict as it’s not linear. Economists tend to think linear, but it doesn’t work in this case,” he explained.
Due to exponential growth, services firms tend to grow relatively faster than manufacturing firms. “In order to handle tech risk, we need tech aware, active fund managers,” said Dowey.
Dowey also noted that real GDP has increased in the last few years, while labour income has decreased. This perplexed economists for a while, he said, until they discovered that tech was what is eating wages. The challenge for the government during the next few years will be how to remedy this without “killing the golden goose,” concluded Dowey.
