The radical transition that’s occurred over the past nine or so months is especially advantageous for asset-light business models in the tech, health care, and communications sectors, but is also likely to turbo-charge a range of industries, such as edtech, telehealth, e-commerce and e-fitness. While all companies will be acutely affected, the biggest winners are platforms, with their economies of scale and low marginal costs.
As the success of the big tech firms has demonstrated, ‘data is the new oil’, with comparative advantage increasingly defined by the ability to aggregate content and consumers. With ‘bits’ rapidly replacing ‘atoms’, we expect digital platforms to represent the vast majority of equity market capitalisation by the end of the decade.
Consequently, in coming years, technology—always the great disruptor—is likely to play an even more central role in shaping the modern economy and driving equity market returns.
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