As readers of LCF Research will know, I am an investment devotee of companies which improve the productivity of their direct and indirect customers. In this regard, my colleague Mark Wolff brought to my attention an interesting article which can be accessed by clicking here - it is a good example of the potential for stripping out cost, in this instance in relation to lawyers. When I developed the investment template used by LCF Research almost thirty years ago, I realised that technologies were emerging with the potential to revolutionise for the better the way we do things - I therefore decided that if change was going to be inevitable, it would be better to drive change than react to it. Last week it was very reassuring to be introduced to the work of the Austrian-American economist Joseph Schumpeter (who lived from 1883 to 1950). In his book “Capitalism, Socialism and Democracy” he described a process where:
The opening up of new markets, foreign or domestic, and the organisational development...
...illustrates the same process of industrial mutation, that incessantly revolutionises the economic structure from within, incessantly destroying the old one, incessantly creating a new one."
He called this process “creative destruction” and believed that entrepreneurs were the bedrock of developing a society. Against the background of LCF Research's investment template and the principles espoused by Schumpeter, it is fascinating to see some of David Cameron's and George Osborne's comments in the last week. Click here to see a report on Mr Cameron's speech to the party's spring conference. I'm looking forward to seeing whether this translates into budget proposals which really seek to leverage private investors' capital to the benefit of the latter and the country - if they do, the smallcap capital market could be transformed. However, my wife reminds me that there can be a big difference between a politician's fine words and the conversion of them into actions!
