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“ Faster innovation leads to faster destruction , with existing companies fading away much faster than ever before ”
been the star : an annualised twodecade return of 6.7 per cent sits well above the rest of the world ’ s return at 3.9 per cent .” This raises two questions : how has the US been so successful and what can the UK do to follow in its footsteps ?
Tech savvy The answer to the first question is fairly obvious , with the FAAMG ( Facebook , Apple , Amazon , Microsoft and Alphabet [ Google ]) tech stocks responsible for much of the growth in world markets over the past decade . Storm Uru , manager of the Liontrust Global Dividend fund , says the success of these stocks is 1.3 %
- Scottish Mortgage Investment Trust ’ s UK exposure a symptom of the way in which the global economy is being driven by innovation and disruption . For example , he notes 300,000 US patents are now registered every year , compared with 150,000 in the 2000s . “ When PCs first started to make an appearance in the 1970s , it took 16 years for them to reach 25 per cent penetration among the US population ,” he says . “ More recently , tablet devices took only two years . “ Faster innovation leads to faster destruction , with existing companies fading away much faster than before . In the US , the average lifespan of an S & P 500 company has fallen from 60 years in 1960 to 20 years today .”
Poor relatives Uru adds : “ If you apply this thinking to the FTSE 100 and its top-five companies – Unilever , AstraZeneca , HSBC , Diageo and GlaxoSmithKline – it is hardly surprising that they have been beaten by their innovative counterparts across the pond in the form of the FAAMGs . Name one major innovation across the UK stalwarts compared with these US tech giants .”
TRUSTNET