A wave of extreme digitisation is disrupting companies’ business models and a battle between the disruptors and the disrupted appears to be joined.
Who will emerge victorious from this battle in five years’ time? It may not be who you think according to Jean-Louis Scandella, Equity CIO at Ostrum AM.
Every 10 to 15 years, Schumpeterian waves of disruption come along and shake up the business models of the most apparently solid companies. Since the start of the 2010s, companies have been facing an extreme form of digitisation, like a tsunami sweeping away some while propelling others to the highest ground. On the face of it, this Schumpeterian shock is pitting the disruptors against the disrupted.
However, it would be naïve to think that all the disruptors will prevail over the disrupted. The buyer of 5-year growth must flee the battlefield where the disruptors are attacking and the disrupted are resisting, and look for the players flying under the radar, who are sidestepping the blows and will ultimately take the spoils. These players, quietly going about their business and passing unnoticed, can be categorised as extreme digitisation’s suppliers, expanders and personalisers.
When we buy, as we do at Ostrum AM, a 5-year growth scenario, we know what to do: we must focus on high-visibility companies, looking closely at their franchise, management, and balance sheet