The Bionomics Institute

1996 Conference Abstracts

Valuing information age companies will require new techniques that are still in an early age of evolution. A bionomic approach to investing in the future stresses learning as a key generator of profitability. Investors in the 21st century should focus on finding intelligent firms – companies on the far right of the corporate Bell curve. Information age valuation techniques should focus on the income statement where research and development spending is recorded. The balance sheet will become less relevant in the 21st century as it fails to capture the importance of human capital – a key asset in information age companies.

The ongoing globalization of capital markets and what Walter Wriston has called "The Twilight of Sovereignty" are underpinned by several important realities:

• The release of two thirds of the world's population from forced labor camps;
• The disappearance of foreign exchange controls throughout the globe;
• Currencies as proxies for countries as shares are proxies for companies;
• Stocks as bonds and bonds as stocks;
• Tourism as the world's largest economic activity;
• Economic evolution -- from Feudalism, or wealth based on land, to -- Industrialism, or wealth based on production of goods, to -- post-Industrialism, or wealth based on services.

These aspects of the investment landscape will be explored, with a case study on Latin America.

The investment world is, and always has been, one of information flows. From the physical proximity of early stock markets, to the point-to-point "proximity" of modern phone based trading, to the ubiquity of near-horizon communication technologies, the nature of investing has reshaped itself around information technology. Today, as the cost of copying or transmitting information collapses collapses collapses (and continues to collapse), the latest and most significant reshaping of the investing environment -- and the organizations that will flourish in that environment -- has begun. Drawing from the biological realm, what we know about learning and competition can provide insights into the direction of the investing, if not its ultimate destination.