Perspectives Blog

Labor markets in the new digital age

Columbia Management, Investment Team | April 14, 2014

…ar in our series on income inequality and secular stagnation is the impact of innovation and technology on economic growth and income. Technological progress carries long-term benefits raising standards of living and boosting productivity; however, it also causes short-term dislocations and job loss for those displaced by automation. Turnover and churn in the labor market is a normal response to the disruptive change inherent in innovation—killin…

Quality milestone in the European recovery story

March 17, 2014

…lationary spiral should German wage growth fall below 2%, but few expect this to happen. What is more, to achieve the ECB’s medium-term inflation target of 2%, aggregate euro area wage growth needs to be around 2% higher than productivity. This suggests that the ECB could embark on further unconventional monetary tools to prop up inflation and eventually drive growth in Europe. The eurozone would function more smoothly if the large gap in competi…

Finding the sweet spots in corporate spending

Robert McConnaughey, Director of Global Research | February 24, 2014

…ly in certain areas that can offer one or more of the following value propositions to the corporate spender: 1. Areas experiencing a super-normal growth surge due to disruptive innovation 2. Products/services that offer clear productivity enhancement 3. Products that significantly enhance the customer experience leading to share gains In the first category, we cite a couple of prominent examples. One would be the downstream impacts of the U.S. sh…

M&A in healthcare – Out with the old, in with the new?

Harlan Sonderling, CFA, Senior Healthcare Analyst | March 31, 2014

…uction and using its cash to invest in organic growth. Investors assumed, until proven otherwise, that acquisitions were value destructive, at best a means of manufacturing earnings to manage through a period of poor research productivity or patent expiry. Skepticism greeted Company A’s claim that its deals were a meaningful strategic and financial advance, that is, a timely purchase of undervalued innovation (the research pipeline) or an underpe…

Every day is an Amazon delivery day

Paul DiGiacomo, Senior Analyst | December 19, 2013

…S’s holiday volume is to residences, up from 30% 10 years ago. These packages are less time-sensitive, smaller, and lighter than business shipments, and consequently generate less revenue. To combat this, UPS has improved the productivity of its ground network. For example, the company enhanced its route planning through a telematics system, leading to fewer miles driven and lower fuel consumption. Also, the My Choice customer interface has resul…

Emerging Markets: Waiting on exports

Anwiti Bahuguna, Ph.D., Senior Portfolio Manager | March 31, 2014

…petitiveness. Low cost production from emerging Asia was a threat to U.S. businesses, but American businesses adapted to the environment, using outsourced labor and overseas capital deployment as an asset to improve corporate productivity and margins. This evolution has continued with the discovery of cheaper sources of U.S. domestic energy adding to the competitive advantage of U.S. manufacturing. Despite its numerous challenges, the U.S. contin…

Take an active approach to selecting your active manager

Robert McConnaughey, Director of Global Research | April 7, 2014

…ult in a cumulative residual bet on a factor the manager did not intend. We have observed many cases where managers thought they were betting on attractive sounding themes such as specific technology innovations that increase productivity, but unfortunately, a residual exposure to an unintended factor exposure such as currency fluctuation ended up being the primary driver of success or failure. A careful look at risk exposures and some basic ques…