Creative destruction and its impact on portfolios
World in Motion – Global equities blog

Creative destruction and its impact on portfolios

Technology trends and disruptive innovation are key factors in today’s markets. The world is changing and innovation acts as a catalyst for growth and success. Businesses that fail to innovate are more likely to lose market share and suffer reduced productivity efficiency and profits or, in the worst-case scenario, business failure.

Kodak’s rise and fall is arguably one of the most famous examples, given that at its height it had 90% of the US film market1 before its core business was disrupted by digital photography, but the corporate landscape is littered with many more. Blockbuster was killed by the growth of online movie streaming and piracy; Nokia failed to innovate into the smartphone sphere; and Tower Records was extinguished by the growth of online retailing, music streaming and piracy.

Technology is changing so rapidly that these days even a company once considered to be the most innovative in its field can suddenly find itself destroyed by a competitor that can produce something cheaper or better, or that can improve the lives of consumers in a way a traditional, incumbent company failed to understand.

As these disruptors emerge and challenge traditional industries, and the pace of technology accelerates, even the most established companies must adapt to maintain a competitive edge.

Companies that can harness technology and innovation use it to give them significant competitive advantages, may enable them to earn better returns. This is key.

As technology leaves the world of computer software and hardware and floods into all other areas of the market, businesses that use it to drive competitive advantage, and in turn high returns, maybe winners.

1 January 2020
Neil Robson
Neil Robson
Head of Global Equities
Share article
Share on twitter
Share on linkedin
Share on email
Apple web badge
Spotify web badge
Listen on Stitcher badge
January 2020
Share article
Share on twitter
Share on linkedin
Share on email

1 Kodak Failed By Asking The Wrong Marketing Question, Forbes.com, 23 January 2012.

For use by Professional and/or Qualified Investors only (not to be used with or passed on to retail clients). The value of investments and any income is not guaranteed and can go down as well as up and may be affected by exchange rate fluctuations. This means that an investor may not get back the amount invested. Your capital is at Risk. The mention of any specific shares or bonds should not be taken as a recommendation to deal.
This information is not investment, legal, tax, or accounting advice. Investors should consult with their own professional advisors for advice on any investment, legal, tax, or accounting issues relating an investment with Columbia Threadneedle Investments. The analysis included in this document have not been prepared in accordance with the legal requirements designed to promote its independence and have been produced by Columbia Threadneedle Investments for its own investment management activities, may have been acted upon prior to publication and is made available here incidentally. Any opinions expressed are made as at the date of publication but are subject to change without notice and should not be seen as investment advice. Information obtained from external sources is believed to be reliable but its accuracy or completeness cannot be guaranteed. This information includes forward looking statements, including projections of future economic and financial conditions. None of Columbia Threadneedle Investments, its directors, officers or employees make any representation, warranty, guaranty, or other assurance that any of these forward looking statements will prove to be accurate. (Include if use logos) All intellectual property rights in the brands and logos set out in this slide are reserved by respective owners.
Issued by Threadneedle Asset Management Limited. Registered in England and Wales, Registered No. 573204, Cannon Place, 78 Cannon Street, London EC4N 6AG, United Kingdom. Authorised and regulated in the UK by the Financial Conduct Authority.
Columbia Threadneedle Investments is the global brand name of the Columbia and Threadneedle group of companies. columbiathreadneedle.com

Related Blog Posts

22 March 2024

Japan: we’re more convinced than ever

Investors are increasingly turning their attention to Japan. We spent two weeks there and met dozens of companies. But which businesses look best placed?
29 February 2024

Unknown pleasures: A new era for equity investors #3

Portfolio positioning
28 February 2024

Unknown pleasures: A new era for equity investors #2

The shape of the new economy – from inflation and growth to government debt and equity valuations.

You may also like

Investment approach

Teamwork defines us and is fundamental to our investment approach, which is structured to facilitate the generation, assessment and implementation of good, strong investment ideas for our portfolios.

Our funds

Columbia Threadneedle Investments has a comprehensive range of investment funds catering for a broad range of objectives.

Our capabilities

Teamwork defines us and is fundamental to our investment approach, which is structured to facilitate the generation, assessment and implementation of good, strong investment ideas for our portfolios.