DISRU PTIVE TECH NOLOGY
Februar y 2019
Finding potential investment opportunities in
DISRUPTIVE TECHNOLOGY How can advisers and paraplanners capitalise on the continuing developments this exciting sector has to offer for client portfolios? L&G ETF, part of Legal & General Investment Management (LGIM) highlights some of the threats and opportunities which exist as well as some effective solutions
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ur world is being transformed as a new wave of innovation, often technology-led, challenges every aspect of how we live and work. From the spinning jenny and the steam engine to the wireless and the Ford Model T, there are countless examples of small innovations that have ushered in profound social and economic change. Driving these technological advancements is the unending quest for productivity improvement. For investors, this enormous trend could be creating new investment opportunities, offering exposure to potential growth strategies rather than traditional equity investments. In some cases, technological advances are creating entirely new industries that would not have been feasible 30 years ago. “We tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run� is the observation of Roy Amara, a researcher and
I FAmagazine.com
scientist who worked at Stanford. The growing use of data for technological advances, the drive for efficiency and the quest for sustainability are together shaping our future society. To identify these investment opportunities, it is perhaps helpful to separate these major technological advances into separate groupings.
Investors can be blindsided by technology risks, from smaller disruptors or from other industries, and even well-understood technologies can have unexpected impacts
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