Don’t say ‘what if’ but ‘what could be’
If you are reading this, it is probably safe to assume we have survived the millennium apocalypse and maybe now we can start to get on with our lives.
Investors can go about their business without that nagging ‘fear of Y2K’ to hold them back. Good riddance to that phrase. But there is always February 29, I hear some of you say. Maybe but, according to one futurist, the greatest challenge to management in this decade will be to change fast enough to keep pace with new technology. So do you want to move with the times or not?
That’s just as well because some people are already living in 2001. One such person is Dr Patrick Dixon, a company doctor-type, whose mission is to persuade corporations to embrace the technological revolution. He claims to have a robot for a secretary, and his house is a graphic depiction of how we may all be living in a few short years. One wall is taken up with a giant video conferencing screen.
His slogan is: “Either we take hold of the future or the future will take hold of us.” One of the many points he makes in his seminars is that the rate of change and innovation is quickening at such a pace that businesses will be forced to constantly re-evaluate their business model for fear of being marginalised. He confirms what everyone fears about the impact of the headlong rush to embrace the new technologies, particularly the Internet; that many of us could be putting ourselves out of business.
It has been suggested that if Voltaire had had access to e-mail, the French Revolution would have occurred in 1760. Today, there can be little doubt that the world is getting faster, but Dixon says this is not purely the result of technology. Social trends turn over at a faster rate than ever. Economic and political changes are subject to what he calls ‘the acceleration of history’. And he doesn’t stop there; he says a genetic revolution in this century will fundamentally change who we are.
This view is echoed by one of the US’s leading fund managers, Janus. During 1999, it overtook US index fund giant Vanguard in net subscriptions. It is the success story of the US funds industry in recent times. In the US, Janus has around $225bn under its belt, and its growth of assets in recent years has been phenomenal. Although the company was started in 1971, it has put on fully 50% of its assets in the last two years.
Scott Schoelzel, manager of the Janus Twenty Fund, has 100% of his own net worth invested in the fund. This has proved a shrewd move since, in performance terms, the fund grew by 73% in 1998 and another 60% last year.
Demand for investment in technology stocks and funds is such that fund managers have started offering segregated accounts dedicated to technology. Dresdner Bank opened a special fund for one client that began with $100m and has been so popular the client has raised this to $500m. The European universe of technology and biotechnology funds will be expanded early in 2000 with the introduction of three additions to the Dublin-domiciled Janus World Funds umbrella.
In January, Janus will introduce a US small cap fund, a mirror of the group’s ‘Venture’ US mutual fund, which had risen 117% to the end of November 1999. In March, Janus will be making available mirror funds of Global Life Sciences and Global Technology. Global Life Sciences is a biotech fund, tapping into the genetic research area that Dixon has such high hopes for. Although the biotech fund sector has produced a surprisingly negative return in recent times, the Janus fund had risen 34% to the end of November 1999, a reflection of the group’s outstanding stock picking abilities. The Global Technology fund on the other hand, was up a stunning 175% over the same 11 months.
Schoelzel suggests we are on the verge of an unprecedented explosion in technology and related industries. He agrees with Microsoft boss Bill Gates’ recent assertion that the rate of technological advance over the next 10 years will be greater than in the previous 50. Schoelzel’s advice to investors is not to look back at what they might have missed in the technology stock boom, because the revolution is just in its infancy.