In this paper, we define the Next Economy and its practical investment application, Next Economy Portfolio Theory.
Today’s economy and the market drivers of the future have little do to with those of the past. However, many investors fail to appreciate how to maximize potential today vs years ago.
The Next EconomyTM is the emerging, de-risked, solutions-driven way goods and services are produced and consumed. As systemic risks—the climate crisis, resource degradation, disease burdens, and eroding social cohesion—continue to manifest, demand for solutions is accelerating.
As a result, innovative companies addressing systemic risks are leading long-term economic growth. Investing in them is our best opportunity to preserve and create wealth.
By directing capital to the most competitive solutions creators, investors can both catalyze and benefit from the highly efficient, sustainable Next Economy.
- A New Definition of Risk. Growing systemic risks manifest as current crises are putting the business-as-usual economy in peril. Investors must rethink decision-making processes mindful of these material long-term threats.
- Solutions Are Economic Drivers. In a rapidly changing world, long-term economic growth is concentrated among firms that are the most competitive contenders in finding solutions to problems and threats. The primary centers of innovation and efficiency—in renewable energy, connectivity, AI, machine learning, robotics, genomics, advanced agriculture, and many other applications—are individually and synergistically creating the basis of the Next Economy and are the primary growth drivers of the economy overall.
- Next Economy Portfolio Theory provides the framework for a solutions-driven investment approach that reduces risk inherent in the destructive, short-term oriented legacy economy, while simultaneously driving capital toward an authentically sustainable economy.