AI is widely expected to have a transformative impact on a variety of sectors, but so far we have seen little sign of a boost to productivity growth.
Historically, the link between technological innovation and economic and productivity growth has been much weaker than perceived by consensus: the time lags between innovation and higher productivity growth can be very long.
Our research shows investing in the stocks of technology leaders does, on average, pay off in the long run – particularly when valuations are kept in mind.
With technology adoption getting ever faster, investors have less and less time to assess the impact of innovations and identify winning sectors and companies.
Our conclusion: while new technological innovations may or may not end up becoming structurally more productive for the world economy – only time will tell – they clearly matter for investors. So, be active in trying to identify the future winners, don’t overpay, and be patient.
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