Blog Disruption as Usual

Disruption as Usual
From electricity making oil-burning lamps obsolete to virtual assistants replacing humans, disruption has been a constant feature of global development. What is new, though, is the speed at which this transformation is taking place, and its capacity to impact governments, industries and markets.

Showcasing an unrivalled line-up of over 120 influential speakers from across business, finance, politics, technology and the arts, the 21st Credit Suisse Asian Investment Conference (AIC), taking place March 19-22 in Hong Kong, will deliver unique insights into the theme of ‘Disruption as Usual’.

Finding Value in Innovation

How to compete against a backdrop of perpetual innovation and change is a topic which Imran Khan, Snap Inc.’s Chief Strategy Officer, knows a lot about. It’s been one year since the maker of the social media app Snapchat launched one of the most hotly anticipated IPOs. In the subsequent 12 months, it has faced challenges and implemented a number of changes to drive continued growth in a highly competitive industry.

Certainly, it remains a challenge for investors to place a sensible valuation on the next big innovation in the face of constantly evolving technology, consumer tastes and regulation. To give some sense of the scale of the task, 70% of startup technology companies fail — usually around 20 months after the first financing round — according to venture capital data provider CBInsights1. How to avoid the pitfalls and pick a winner will be just one of the insights from AIC speakers Yoshimitsu Goto, Senior Executive Corporate Officer at SoftBank Group, and Shailendra Singh, Managing Director at Sequoia Capital India.

Challenging the Political Status Quo

At the same time, the disruption brought about by connected technologies is revolutionising the way economies and societies operate.

Perhaps there is no greater recent example of this trend than the 2016 US presidential election that saw business mogul and reality TV star Donald Trump win the White House. Thanks in part to his prolific use of social media, Trump was able to reach a section of American society that had felt ignored by mainstream politicians.

And now in office, he continues to use social media to promote his agenda, sending 2550 tweets in his first year2 — equivalent to around seven per day. These tweets have also laid bare the unconventional inner workings of the White House, a topic on which Reince Priebus, former White House Chief of Staff under President Trump, will share his insights at the AIC.  

Tweeting Less but Saying More?

Average Trump Tweets per Day — Tweeting Less but Saying More?

It’s not just US politics that is being disrupted. A historic vote this weekend by China’s National People’s Congress to end presidential term limits opens the way for Xi Jinping to stay in power indefinitely. Meanwhile, rising populism in Southeast Asia makes the outcome of this year’s elections in Indonesia, Malaysia, Thailand and Cambodia harder to predict.

At the AIC, Weidong Ji, Presiding Chair Professor, KoGuan Law School at the Shanghai Jiaotong University, and the Rt Hon Sir John Major KG CH, former Prime Minister of the United Kingdom, are just two of the experts discussing the future of politics in the region and beyond.

Navigating Unchartered Financial Markets

Economics is also entering a new era, and not just because next week Jerome Powell oversees his first meeting of the US Federal Open Markets Committee as the Chairman of the Federal Reserve. As major economies return to growth, the decision about how much and how fast to raise interest rates is occupying the minds of policymakers and markets.

In turn, a more hawkish monetary policy has to be balanced against the effects of the unwinding of quantitative easing. The volume of central bank money that has supported asset prices since the financial crisis is at an unprecedented level and there is no blueprint for how to manage a withdrawal of this magnitude.  

Total Assets of the Federal Reserve, with Hypothetical Future Trajectory

Total Assets of the Federal Reserve, with Hypothetical Future Trajectory

And as has been made clear by the reaction of financial markets to President Trump’s introduction of tariffs on aluminium and steel, central bankers increasingly have to take political disruption into account when making their forecasts. AIC speaker Raghuram Rajan, former Governor at the Reserve Bank of India, will share his thoughts on volatile markets in a post QE world.

One company that believes it can make predictions with some certainty is Unanimous A.I. Its Chief Intelligence Officer, David Baltaxe, will explain and demonstrate how the science of swarm intelligence can contribute to improved accuracy of predictions related to financial markets.

Indeed, a new force in markets is expected to come from China’s opening up of its financial system as its growing middle class puts its savings to work. Discussing how these trends will increase the global influence of Chinese asset managers will be Shuang Chen, CEO of China Everbright Ltd, Tengying Ma, CEO of China Orient Asset Management (International) Holding Ltd and Zhenyi Tang, Chairman, CLSA Ltd., a CITIC Securities company.

Growing influence of China’s asset managers

Growing Influence of China’s Asset Managers

Creating a Sustainable Future

More fundamentally, disruption is challenging many of the basic systems and processes that societies take for granted. For example, climate change is forcing a re-evaluation of energy production and usage, while the rise of robotics and artificial intelligence is leading governments, businesses and individuals to rethink the labour market.

These changes have not been lost on David Yeung, environmental advocate and CEO of Green Monday, a social venture that addresses healthy living and food insecurity. With the global population due to reach nearly 10 billion by 2050, there will need to be a systematic rebooting of the food industry in order to sustainably feed the planet. As Mr Yeung says,

Most people remain scarily oblivious to the fact that our food system is broken and it is the industry most overdue for massive disruption in order for mankind and the planet to sustain.

‘Disruption as Usual’ is taking place faster than ever before, but for all the uncertainty it creates, it also offers boundless opportunities. 

Investors that can identify new trends as they develop and see the beneficiaries of the path forward will be able to achieve outsized returns,

says Neil Hosie, Credit Suisse’s Head of Asia Pacific Equities. “We aim to bring our clients closer to these opportunities and help showcase new technologies as they emerge.”

Chris Riddell, Global Futurist and AIC speaker, has a more poetic take:

Disruption is about fundamentally reinventing everything we have ever known, and turning our wildest dreams into a new reality.

1. CBInsights, 242 Startup Failure Post-Mortems, https://www.cbinsights.com/research/startup-failure-post-mortem/, October 2017
2. Trump Twitter Archive, http://www.trumptwitterarchive.com/archive, 20 January 2017 to 19 January 2018