5 inevitable and investable growth drivers

Short Briefings on Long Term Thinking - Baillie Gifford

One way to find great investment opportunities is to ask yourself what must change over the years ahead. In this episode, Baillie Gifford partner Stuart Dunbar explores the increased use of robotics to fill gaps in the workforce and medical advances that help keep healthcare affordable, among other transformational themes.

Background:

Stuart Dunbar is a client relationship director and coordinates Baillie Gifford’s global marketing and product development activity, which includes responsibility for the firm’s Actual investors campaign.

For this Short Briefings… episode, he challenged himself to identify five transformational growth drivers that are both inevitable and investable. His picks cover:

• the rise of robotic systems that can make sense of their immediate environment and act autonomously
• the intelligent design of drugs and other efforts to deliver less costly, more effective healthcare
• the energy transition to renewables and electrification of transport
• greater dependence on the infrastructure underpinning digital payment systems
• the dawn of automated transport, including driverless trucks and delivery drones

Dunbar explains the factors making these forces of change necessary, including the ageing populations of many developed countries, the resulting labour shortages and rising medical budgets.

He also names some of the companies we have backed that could benefit, either by pioneering new or better ways of doing things or by playing critical roles in the involved supply chains. These range from John Deere & Co, whose self-driving tractors and precision-applied pesticide technologies help farmers increase yields and cut costs, to Nexans and Prysmian, whose extra-high-voltage cables connect offshore wind turbines to onshore energy grids.

Resources:

Actual investing: why thinking differently matters

Christiana Figueres: stubborn optimism

Eureka Alert: Cheryl Mehrkar’s robotic surgery

Michael Lewis: Going Infinite

Stuart Dunbar on growth investing (video)

Zeke Faux: Number Go Up

Past Short Briefings… episodes

Companies mentioned include:

Adyen

Amazon

Aurora Innovation

CATL

Coupang

Deere & Company

Enphase

Intuitive Surgical

Keyence

Moderna

Netflix

Nexans

Novo Nordisk

Nubank

Prysmian

Redwood Materials

Remitly

Renishaw

Wise

Zipline

Timecodes:

00:00 Introduction

1:30 Starting out in Hong Kong

2:20 Joining Baillie Gifford

3:20 The importance of optimism

4:30 Five inevitable, investable themes

5:45 Robotics and demographics

6:40 Investing in the rise of autonomous systems

8:30 Renishaw’s sensors

10:05 Intuitive Surgical and Deere & Co’s seeing robots

12:15 The intelligent design of drugs and Recursion Pharmaceuticals

15:40 Lower-cost healthcare

16:45 Selectively picking biotech winners

17:55 The energy transition and President Trump

19:40: Stubborn optimism

21:10 Undersea cables and solar installation

23:11 A new generation of payment providers

26:00 Delivery drones and self-driving vehicles

27:40 Focus on possibilities and what’s changing

28:35 Book picks – exploring cryptocurrencies