Disrupt or Die! – By Jon Bennion-Pedley
These are interesting times. They are fascinating and unparalleled in economic terms as we watch the world economy trashed by a relatively inefficient virus. When we look back in a few months time with enough accurate data I suspect that we will wonder how we managed to self-harm our economies so much. It will take many years for the world´s economies to recover and many years for many business balance sheets to be corrected – and some will never recover and may never re-open.
A friend and client, based in Kampala, sent me a copy of a fascinating article from London´s Financial Times this week. It is a study of the 100 listed businesses that have prospered best in the first Covid-disrupted quarter of 2020. It is a fascinating read – not least because it shows how totally the world has changed over the past twenty digital years and how much Covid19 is accelerating that change. In broad terms the 100 companies whose worth have increased the most and that have thrived through and because of Corona Virus break down into the following sectors:
- Technology – 24% – Zoom, Microsoft, Docusign and anyone else that benefits from a virtual workplace
- Health and Pharmaceutical – 23% – fairly predictably
- Datacoms and Telecoms businesses – 9% – as we spend more on data
- E-Commerce – 9% – Amazon is the business that has benefited most from Covid-19
- Consumer Goods – 6% – but only if they have a great online presence
- Drinks manufacturers –4% – mainly in China
- Financial Institutions – 4% – those that have taken advantage of massively fluctuating markets through algorithm trading
- Payment Providers – 3% – Paypal and others
- Games and e-Media – 3% – Netflix and some games I have never heard of!
- Education providers – 3% – obviously only those who provide virtually
- Electrical Car Manufacturers – 3% – Tesla of course
- Logistics – 3% – someone has to deliver everything that we buy online
- Retail – 2% – and then only the home improvement businesses
- Mining – 2% – both businesses that have had big finds
- Property – 1% – imagine a time when only one of the top 100 companies is in property!
- Conglomerate – 1% – or a time when only one multi-faceted conglomerate makes the grade
I don´t have the space to list all the companies but if you are interested just click here. But the thing to note is that nearly every one of the businesses that grew the most by market capitalisation would be described as an innovator or a disruptive business. The days of domination by banks, property portfolios, constructors or the petroleum industry appear to be over. If you have a great company that has great product, disrupts existing businesses or practices and you can react quickly then the future is yours. But if you don´t disrupt then you may well die.
Most of the businesses that we are investing in at the current time are disruptive – Medical Marijuana, Artifical Intelligence, Robotics, Indoor Farming, Virtual Giving and Medical Technology to name a few. They offer very big potential returns secured against IP assets that may well be invaluable. And they all have a tangible positive impact on our bruised world. If you want to find out more get in touch…
By Jon Bennion-Pedley