Hugo Scott-Gall: Today, I’m delighted to have with me William Blair’s very own Simon Fennell and Olga Bitel back on the show. We are going to discuss our outlook for next year and beyond through the lens of growth. Why does growth happen? Where has it been? And where we think it’s going. Olga is our economist and strategist. She’s been with William Blair for a jolly long time, lucky us.

And Simon is a portfolio manager on a number of different portfolios. Again, he’s been at William Blair for over a decade. So, Olga and Simon, welcome back to the show.

Simon Fennell: Thank you so much.

Olga Bitel: Thank you, Hugo. It’s a pleasure to be back.

Hugo Scott-Gall: Yes. Well, you both asked to come back, so it was the least I could do to say yes. So, let’s start right now, no further mucking about. We’re going to talk about growth, but I want to know, Olga, why does growth happen?

Olga Bitel: Well, that’s probably a billion-dollar question, if not more, Hugo. So, the way we think about growth is that economic growth results, we think, when human ingenuity is combined with resources to innovate, to create new tools, new products, ways of doing things so as to be able to produce more with less, and, of course, to free up resources. So, innovations, solutions propel us forward, not us as William Blair, but us as human beings, but then create new needs, which, again, draw in innovation, and so on.

This process, we think, is perpetual because new innovations unlock new possibilities and create new needs, which then must be solved with more innovation. And we call this process the perpetual growth machine. Now, economic growth is highly diffused, organic, and continuous. So, it’s born out of each person’s sort of innate desire to better our condition in life. And at the same time, our individual and collective appetite for improvement is constantly bumping up against others’ vested interests in the status quo or misaligned incentives or just plain old unwillingness to change. And I suppose the sum total of this continuous tug of war is usually measured as economic growth. How does that strike you, Hugo?

Hugo Scott-Gall: It’s great you’ve got a machine. I think everyone should have a machine. So, that all makes sense. So, I guess my immediate reaction is now a particularly fertile time for growth from a perpetual growth machine? Why would it be so now? Is that because of tools? Is that because of an environment that allows for growth? I think this year’s Nobel Prize winner has written a book called Why Do Nations Fail that has, I think as part of its thesis, the role of institutions, the conditions that allow for progress. So, is right now a particularly good time for the perpetual growth machine to do its thing?

Olga Bitel: We think right now is an excellent time for the perpetual growth machine to do its thing. Indeed, we think innovation is accelerating, if anything. More and more of us are able to spend our productive lives not in the fields growing carrots, but doing things that further our knowledge of different aspects of humanity, are enabling us to solve different problems, whether it is electric vehicles, whether it is cheaper compute power to enable us to model human organs in real time and solve the many incurable diseases that have been plaguing humanity for millennia, whether it is to produce more with less on the infrastructure side, on the compute power side, as I’ve already mentioned.

There is no better time to be in the innovation machine. The innovation machine is revved up and going full speed.

Hugo Scott-Gall: So, it’s not that there are a lot of problems. It’s not so much that there’s just a huge availability of tools. It’s always the combination of those things. Is it or is it actually that, and this is where I’m going, I think we’re going to talk about this a lot, but is it a step change in compute power, just the capability of compute and all the cost? Is that a big shift in a tool that suddenly allows new problems to be addressed?

Olga Bitel: It’s both. And that’s a key hallmark of innovation. Whenever innovation is ripe and has been commercialized, so to speak, the costs of new products or new services or new ways of doing things with a new tool in our parlance comes down and that cost decline is exponential. And so, with costs coming down so aggressively, the availability of the tool becomes ubiquitous, if you will. More and more people, more and more labs, companies, etc., can avail themselves of the tool and do all kinds of things that we sitting here could not imagine as early as three, five, ten years ago. So, a favorite example of yours, I think, is look, 4G produced Uber.

It’s not as though the folks behind 4G sat around and thought, “Oh, where can our tool be useful?” They were solving a connectivity problem. And then others elsewhere, thousands of miles away from them, perhaps, said, “Oh, this new technology is available. What can we do with it?” And it’s that part of diffused and organic process that is so exciting to us as growth investors.

Hugo Scott-Gall: So, Simon, I’m going to bring you in because you recently organized a wonderful trip for us up to the alma mater, the University of Edinburgh. How does what we saw fit into Olga’s framework?

Simon Fennell: Well, I think the point that you made about the problems, the problems are the opportunity. And society, individuals, companies, institutions face problems every day. The ability to overcome those problems and the ability to look at them in a different way with a different solution is really the driving force of that perpetual growth machine. When we went to Edinburgh, an institution from the 16th century, you’re asking yourself, what’s the relevance now?

But the nature of the intellectual foundations there, what we saw was quite a broad approach to a number of different opportunities or problems that are really being solved in a different way. The first of which, when we saw Themis Prodromakis on the engineering side, the potential to change and to redefine the compute architecture is such a radical shift that would change the von Neumann argument very quickly. The move away from something like the CMOS element within semiconductors, again, would herald something very different to that which we’ve seen so far in the nature of compute power.

What do we want? We talked this time last year about the need for compute power. We’ve got an insatiable demand for it. Moore’s law runs out or is coming to the end as we’ve shrunk so much down on the chip itself. What’s the next move? What’s the problem? Well, the problem is I want to keep more compute power for less cost and less electrical power or less input. How could I solve that problem? Well, the University of Edinburgh and Themis and his team have got an answer for you. Will it take? Well, we don’t know, but that’s exactly the type of perpetual growth machine that Olga is referring to.

In that level of technology itself, we saw the users of technology there, Kenny Bailey, Johnny Mullen, and his team looking at a problem. How quickly can we produce new drugs, new compounds? What’s the nature of that process? Well, it’s one of a long period of time, maybe 10 years or so. How can that be speeded up? How can we get more drugs developed into the pipeline? How can we bring that down from, say, 10 to, I don’t know, 6 or 7 years? What would the impact be? Well, again, we would be solving more problems more quickly. That nature of, well, will we ever run out of problems?

No. I think the human condition would be that we’d always see something that we wanted to improve, but the tools that we’re using will get better. We’ll solve better problems. We’ll just make more problems or see further problems, and then we’ll use those again. The nature of that approach that you can see from some of the institutions, particularly in the UK, Europe, it’s global in nature. It means that I think that the Perpetual Growth Machine or PGM is very much alive and well and, in fact, is really progressing in places that you perhaps might not have thought when you look at it at first blush.

Hugo Scott-Gall: Yeah, I thought it was a very good example of you’ve got to be careful around what you see is all there is. You have to go looking. When you meet growth at the source of the river, brilliant academics doing incredibly difficult things, you realize that Olga’s growth machine is actually happening. You’ve just got to remind yourself that your daily diet and use, etc., is not the whole picture. Olga, did you take anything else away from our trip to Edinburgh? Indeed, you move in rarefied academic circles that Simon and I are not usually welcomed into. What other examples have you seen or thought of at the kind of source the river of growth?

Olga Bitel: There are no shortage of examples in terms of the source. And this was referenced in Edinburgh. Look, you’ve already talked about some of this year’s Nobel Prize winners. Another one was, of course, for allowing computers to fold and decode human proteins. So, up until just a handful of years ago, it took one PhD, so four to five years, to fold a single protein. This laborious, excruciating process has led to humanity having folded just a couple of hundred thousand proteins. And we had many more hundreds of millions to go.

And we now have a program, a computer of sorts, that can fold any protein properly within 30 seconds. We can’t even imagine. And that data set is now available for free to any proper laboratory around the world that wishes to use it. We can’t yet imagine what sorts of linkages within the human body, what sorts of diseases will be solved, what kinds of crops and agricultural advances will be possible. One of the things that we got a glimpse of in Edinburgh was something called computational and synthetic biology.

I can hardly describe what these things are, but we are basically now producing in lab organisms and reactions that would have taken us years to find in real life and would be imaginably expensive to replicate. And we’re now doing these things in minutes and hours, not weeks and years. And so, the amount of data, the amount of organisms that will be available for us to practice on, to understand, to enact in real life, anything from using bacteria to clean the oceans, to capture carbon, to improve transport, all kinds of unimaginable applications are already in the works in places like Edinburgh and hundreds of universities around the world.

Hugo Scott-Gall: So, I think, we’ve got a better understanding of why growth happens. Before we say where we think growth’s going to be, i.e., our outlook, let’s talk about where it has been. So, Simon, you’re a portfolio manager on a number of portfolios, very big companies and very small companies. When you think back at this year, 2024, and you think about 2023, where do you think growth really has been thematically and why?

Simon Fennell: Well, a couple of answers. When you formed the question, I couldn’t help but think geographically to begin with. When we’ve seen this year a sort of U.S. exceptionalism from a growth perspective, that has really been pretty extraordinary. It’s reflected in market price action, where I think that the market is giving and bestowing on the U.S. this level of exceptionalism. But if we look to the growth numbers, either at the corporate level or even sector level, perhaps even at the national level, the numbers are pretty extraordinary from a U.S. perspective.

It plays into the idea of technological leadership. And again, from the perpetual growth machine, we’ve seen an element in the U.S. able to harness a large domestic market with a very advanced venture capital market and fantastic academic institutions that have been really looking to commercialize product for a period of time. Call it the Stanford model, if you will, certainly the Silicon Valley model. That level of growth has been pretty extraordinary. And it’s in hardware and software.

But this year, I think we’ve seen clearly the emergence of companies like NVIDIA, defining whole industries with growth rates and returns on invested capital we actually haven’t really seen before. And, again, not surprising to see the market reward that. So, I think that’s the most obvious place. Again, just referencing last year, that demand for compute power has been almost turbocharged by the potential of large language models from an AI perspective, and the potential that we’re seeing a kick up in productivity, and certainly breakthroughs that we’ve already seen.

And that Nobel Prize, the Hasibis jumper protein structure prediction model is a pretty extraordinary validation, I think, of that. But, again, it’s Hinton and Hopfield that won the physics prize. So, again, I think that what we’re seeing is a pretty interesting move from academics into commercialization, from commercialization into the market. So, we’ve seen that growth primarily in the U.S., but it’s not only in the U.S. And, again, as international investors, primarily, we see that pretty well distributed across the globe. Some disappointments, of course, on that growth, most notably, from Europe and in China.

But again, we’ve seen decent growth across Southeast Asia. We couldn’t miss India in terms of both the potential and the actual growth that’s been seen. And, again, even down into Latin America. The PGM is alive and kicking, Hugo. It’s seen everywhere, perhaps not to the extent that it has been in the U.S. But going into 2025, I do think there’s the possibility for others to start at least tracking or hoping to see that level of growth. Mario Draghi’s piece that came out in September about European growth forms something of a blueprint, I think, for 2025.

And one that I think has been accepted across France and Germany in particular, but one where there’s potential, I think, for Europe to start at least trying to tape out a growth map that will help compete with the United States.

Hugo Scott-Gall: Olga, I want to ask you this question. So, Simon outlined pretty clearly that if he did a Google search for U.S. exceptionalism, it would spike roundabout now. This is a pretty strong narrative that the U.S. is exceptional and is different and is better. Do you agree with that? And why is that the case? Simon mentioned Mario Draghi’s diagnosis of the sick patient that is Europe. What is it that the U.S. does so well? And why can’t Europe do it?

Olga Bitel: Well, that’s another billion-dollar question, Hugo. So, our read on it is as follows. For many years, in a way, and this is very much a part of the U.S. exceptionalism, the U.S. really didn’t practice what it preached from the standpoint of fiscal policy. And if you plug in fiscal policy into our PGM, it’s really about resources. It’s about channeling resources into the primary research and development, into the science long before it gets commercialized. In Europe, by extension, the last several decades have seen a tremendous amount of fiscal retrenchment.

And of course, in the context of democracy, the kind of spending that gets cut is not the sort of near term spending that gets you votes, but the incremental, cumulative, long term investment spent into R&D. Europe, in terms of scientific know-how, in terms of innovation potential, in terms of educational attainment, is every bit or can be every bit as productive, and indeed, Draghi goes into that in his report in some detail as the U.S. is. But a lot of the funds have not gone where they needed to go.

Another significant reason for that is that, of course, the U.S. military-industrial complex has been the mightiest in the world and arguably still is. And that is a place that finances and that’s where a lot of primary innovation, if you will, tends to occur. There are lots of well-known and publicized examples. In the early 2000s, we had the DARPA competitions for electric vehicles. And of course, 20 years later, we have some significant wins in that area. So, the military-industrial complex in Europe has been largely absent for many decades at this point.

And I think it’s that belated recognition and some of the sort of international reorganization that is necessary to rev up the European investment machine. And, of course, some of it has been more institutional in nature, too high of a regulatory burden perhaps, too little of the venture capital culture that Simon alluded to. There are a whole host of other less significant reasons, I think. But the big ones are the fiscal retrenchment and the military-industrial complex. It doesn’t mean that U.S. exceptionalism, and this is true of any bit of growth anywhere in the world, it doesn’t last forever.

There is definitely scope for others to come in to do something different. We’re arguably seeing something like that happening in China. It remains to be seen. But growth is not static. It’s highly dynamic. Today’s winners may not be winners on a 10-year view. And that’s as true of companies as it is of countries.

Hugo Scott-Gall: I think you would struggle to argue that Europe has fewer problems to solve than the U.S. The U.S. has some natural geographic advantages that Europe doesn’t have. So, it’s kind of interesting, again, how two economic blocks have really quite different economic outcomes. So, I’m going to come back to Simon in a minute. I just want to talk to you, Olga, about China and India. Basically, a simple question. One has accelerating growth. One has decelerating growth. India, the former, China, the latter. Is something going wrong in China or is something going very right in India?

Olga Bitel: The short answer is both. The slightly longer answer is, look, in 2013-2014, so again, we have to go back a long way. And this is somewhat instructive for when we think about the perpetual growth machine and what policies are taking shape such that growth can come back. In 2013-2014, India unleashed a massive monetization and efficiency reform. The efficiency of delivering payments to those that need it. And in the context of India, that would be over 90% of the population.

And that unleashed a tremendous amount of liquidity, resources in our parlance, that could be channeled into productive endeavors, into infrastructure buildout, which is something that India desperately needed and still arguably does. And, of course, a lot of it found itself into the capital markets and oftentimes are the valve that channels capital into where it’s needed. Obviously, some of the liquidity has flown in than we’ve seen in growth, hence the very extended valuations in some of India’s companies today.

But there’s definitely been a step change in growth in India that has been enabled by freeing up resources to flow towards productive use of capital, which in India’s case is building out infrastructure, physical infrastructure, supports, roads, airports, but also digital infrastructure, connecting people to the internet, enabling price discovery in more remote areas, enabling better mobility and better connectivity. Those are all resource constrained sectors. And suddenly, they have been a little bit more free to move about and to produce the kind of growth that we’re talking about. China, on the flip side, has already gone through its period of infrastructure buildout.

Chinese infrastructure, by some accounts, is probably second to none in the world today. That is not something that we would have said 30 years ago. More recently and more painfully, China has completed building out its residential real estate sector. Now, in China, just as in everywhere else, that is not the economy’s most productive sector. There is a lot of corruption and rent associated with it. And so, scaling that down, forcing, if you will, companies to shift into other sectors of the economy is a difficult and painful and long-term problem and struggle.

And the Chinese authorities, like many others before them, have indeed been struggling with that. Under the surface, though, what’s interesting is just how innovative and how resourceful China has been. So, on the one hand, they’ve channeled resources away from real estate buildout, rightly so, and they’ve channeled it into the military-industrial complex, just of the sort of thing that produces innovation in clean energy, in batteries, in electric vehicles, in robotics, and more recently, actually, even in biotech.

So, I found it shocking that lots of large and mega-cap pharma names in the West are now busy buying Chinese biotech firms for their cancer, diabetes, and other diseases that plague humanity’s molecules, which means that Chinese companies, for the first time ever, are approaching the forefront in these niche areas of human endeavor. So, the Chinese innovation is alive and kicking. Perhaps it has not manifested itself in the stock market returns, not least due to competition in these sectors, although increasingly, you’re seeing the Chinese prowess in electric vehicle penetration.

They’ve gone from, basically, not selling any cars in 2000 to selling over $10 billion worth in a little over 3 years. And arguably, they’re the best globally competitive EVs on the market at the fraction of the cost of what we pay here. And indeed, a lot of the response that we’ve seen to China has been about limiting their capacity to innovate, slowing down their innovation machine. I think that’s the context in which we’re interpreting policy and international relations realignments that we’re seeing.

So, it doesn’t mean that India is not exciting. The efficiency gains, the early efficiency gains that India reaped are significant. The stage is set sort of for the next leg, which arguably is going to be a lot harder, but just as exciting as ever.

Hugo Scott-Gall: Well, we’ve done some geographic growth. So, I’m going to come to you again, Simon, to talk about sort of thematically where growth has been. And I think you’re going to use two letters, AI, I would guess. But let’s also sort of roll that forward because I think that the tension is palpable, almost unbearable, as we now get to where we see growth going. So, are we going to see the next two years being a repeat of the themes of the last couple of years? And what were those themes of the last couple of years?

Simon Fennell: It’s always interesting just to see which companies become the largest in respective indices around the place as an indication of growth, or at least the market’s welcoming or anticipation of growth. And look, you started with AI, and tech has been particularly dominant. The idea of a different tech cycle or tech epoch really has taken hold. So, in the U.S., even the idea of the Magnificent Seven is slightly to poo-poo what is an extraordinary amount of free cash flow generation that those companies have been able to do. And it’s not luck. It’s done through superior product services, management, innovation.

That’s what’s led to this level. So, tech, one has to have a significant eye on that. But look, it’s broader. And I think that’s the point of the perpetual growth machine. It isn’t just a technology. Although it is a machine, it’s applicable in so many different sectors, industries, areas, geographies. For the Europeans, well, luxury has been a driving sector for a long period of time. And LVMH, the largest company by market cap earlier this year, it’s fallen back from there. Again, it’s instrumental in terms of the dynamic nature of the market.

It was replaced by Novo Nordisk on GLP-1s with Lily and Novo dominating the market on the obesity side with a drug class that’s now moving exceptionally fast and is probably stopped only by the bottlenecks around the production. We’ve mentioned EVs and we’ve mentioned tech, but the nature perhaps of some of the intermingling of this in defense in particular has been a major growth area for the last couple of years within defense space, again, has seen extraordinary growth levels around the place.

And although these are all industrial elements, the financing portion of the industries has also been an exceptional area of growth, both traditional and on alternates. Again, the U.S. tends to dominate this area from an investment space or old investment space. But again, it’s a global phenomenon. And we’ve got a number of those companies based here in Europe as asset managers, alternative asset managers and brokerage houses that are brokering many things in the private market, private credit in particular.

The nature of the growth is broad. It’s multi-layered. It’s very difficult to get yourself away from tech. And so, as we think about the future, I love the line that the factory is the product. The nature of the technology that’s coming out is allowing the perpetual growth machine to be used in different places. You use the Uber example, but it will continue. We will not be able to imagine five or ten years out what the protein folding or what the nature of AI will be leading us to. It will seem completely obvious, but only from 10 years back rather than from 10 years forward.

Hugo Scott-Gall: One of our colleagues, Andrew Whitman, who is on our strategy and quantitative team reckons, again, this is somewhat subjective, that a third of the increase in the markets this year have been to do with, basically, what you would capture as AI or really the capital investment explosion of the hyper scalers. So, that’s companies like Google, Microsoft, Meta, Amazon. And so, their huge capital investment to build out the infrastructure to enable the next generation of AI has driven a lot of companies in the supply chain to that.

So, it’s interesting when he says, again, it’s imprecise, it’s a third. Makes you wonder what the other two thirds are. So, Olga, how do you think about the other two-thirds of growth areas that have propelled the market higher? Because to give you a hand here, if you think about industrials, for example, defense companies are probably seeing a higher growth rate for the next five years than they saw in the last decade. There’s things like electrification and anything to do with electrical grids. There’s even things like nuclear. So, where else do you think growth has been, Olga, thematically, that is set to continue in the next couple of years?

Olga Bitel: The industrial side of everything that you just highlighted is indeed alive and well. In fact, what we’re seeing here are moves away from large brawn, if you will, aggregated products to more distributed, more nimble, smarter products, whether that is modular nuclear reactors, drone powered warfare, although that’s somewhat more morbid, of course. But you can imagine lots of peaceful applications for drone technology as well, which we will see. Smaller planes that are arguably going to be filling our skies and we won’t be hearing supersonic noises as early as the 2030s.

So, lots of moves towards batteries, of course, more distributed, smaller, more nimble, smarter types of industrial products. And you can apply that framework to virtually any industrial technology that is exciting today. Away from that, and I will have to shamelessly borrow Simon’s favorite example from this year, is something as old as shoe wear. We all wear sneakers or trainers for some of our audience on the other side of the Atlantic. They’re probably as old as many of us, if not older. And at the same time, this is another example of where the perpetual growth machine has been alive and well.

The incumbents, the large companies that are well-known household names have struggled to innovate, have struggled to improve the quality of the trainers, the sneakers, and other more nimble, newer players have come in and seized the moment. And it’s not just the fashion bit, it’s also technology-powered. There was a need to help people solve their podiatry problems, and new crop of companies have come in and done that. These have been very exciting growth areas.

Going back to geography, Hugo, we’ve of course talked about the U.S. exceptionalism, the incredible India story. But on a multi-year view, it’s places like Eastern Europe and Greece and Italy of all places that have generated returns that were far superior from what we saw in the U.S., even on a multi-year view. Who would have thought good old Italy? More recently, we’re seeing a turnaround in a place like Costa Rica. Now, I’ve never discussed Costa Rica in an economic discussion.

It’s always been more for travel and tourism. But something is happening there to organize production such that it is beginning to unleash the power of the growth machine there and is delivering returns to match. So, the point we cannot emphasize enough is just how diffused growth is and how many exciting places it can pop up in places that we can’t even imagine. And looking forward to ’25, ’26, and this is arguably very much a right-tail risk to growth, of course, is peace dividend.

If we were to have a ceasefire in Europe between Russia and Ukraine, if we were to get some kind of lasting peace in the Middle East, imagine the resources that would be unleashed in building out these economies and the productive capacity of their people to improve their lot in life, to build a better future for themselves and their families, and the kinds of growth that can be produced as a result of that.

Hugo Scott-Gall: Simon, what else do you think is a relevant area of growth from an investing point of view in the last couple of years that is set to continue?

Simon Fennell: The surprises. When we look to see what we expect and what we don’t expect, the running shoe element we talk about, it’s amazing to see just how new companies are coming to the surface, new runners are coming to the surface, that the industry that you think you know and has so stayed is suddenly very dynamic, much broader than you think, different runners from different places. It’s the University of Edinburgh again, as Jasmine Paris is making huge strides that nobody thought that any senior woman was going to finish what she was able to do.

You can see that in the UTMB with Vincent Bouillard this year. My point is that there are different breakthroughs in places that you think you understand. It changes the nature of the industry very quickly or the competition, and suddenly you’re reformatted in an entirely different way. Tech is the most obvious, athletics, sports comes very quickly thereafter. When you see that link, it’s a very interesting element. So, I think we’re going to continue to be surprised by some of those political elements.

This year was the year of elections. And yet, we thought that we would be perhaps less surprised than we are. We’ve got martial law in South Korea that seemed to last a very short period of time, and end of the German Rainbow Coalition. We can see France’s change from a political perspective happen very quickly as well. I think that we should be prepared for quite a quick turnover of leadership in terms politically, but also to see that the dynamic nature both of growth and of industry continues to run apace.

Hugo Scott-Gall: I think I’ll finish up with one big question for you which is, here’s a statement, tell me if you agree with it, which is what I’m hearing, and also to an extent what I think as well, is that the world does not have a growth problem. There’s actually plenty of growth around that helps when the world’s biggest economy, depending on how you measure it, i.e., the U.S., has a very healthy level of normal GDP growth. Obviously, some of that is a reflection of the deficit the U.S. runs. But overall, my question to both of you, and I’ll go to Olga first, and I’ll do a follow-up, is there’s no growth problem, quite the opposite.

There’s plenty of growth around. This is in keeping with where we started the show around all those perpetual growth machines. But as growth investors, we should be very optimistic. Our opportunity set is as attractive maybe as it’s ever been. Agree or disagree with that statement, Olga?

Olga Bitel: Very much agree with that statement, subject to one important caveat. Investing and investors, and indeed productive stewards of capital in every industry, embrace uncertainty and really dislike volatility. And to the extent that we are likely to see a lot more volatility in international relations, in policies that are unveiled, in how they are discussed, a lot of that volatility can manifest itself in investments that are postponed or foregone. And it can also manifest itself in market returns and market leadership that itself is being whipsawed around the place.

And so, I fear that the next several years, a lot of the underlying growth will end up being masked by a significant increase in volatility. And so, it’s incumbent upon us as growth investors to double down and be ever more diligent and vigilant on who is solving what needs and what problems and where growth is, under the headlines and the volatility blanket, if you will.

Simon Fennell: I very much agree. The problems are the opportunity. And the entrepreneurs, businesses, industries who are solving those problems get rewarded very quickly. The volatility comes around either from the existing institutions, companies, areas, countries who are resistant to that change or for their own well-being don’t want that to occur, or companies who are incumbent. As growth investors, we’ve got to watch out for that incumbency element. The growth is coming not necessarily from brand new startups, although it often does, but we need to be vigilant around where that growth is.

The volatility comes when there’s overpayment. We’re over exuberant about the potential for those problems to be solved. But I do think that there’s a nature where new technology is really helping solve a lot of these problems. That’s the paradigm shift that everybody is beginning to talk about and the potential for that to occur. Now, it comes with downsides, both to the existing incumbents, which can be, as I mentioned, at the country level, that can be problematic and see Draghi’s piece for details. But it should make growth investors particularly optimistic.

There is huge potential for some of the greatest problems to be solved. If that’s the case, there’s an enormous amount of sustainable value creation that goes alongside that.

Hugo Scott-Gall: We could carry on. There are many questions worth asking. Not least is, what’s in the price? We could also talk about things like concentration risk in the equity markets. But I think, for now, we’ve covered quite a lot of ground. We’ve gone conceptual framework to real-life examples of growth with the conclusion that actually, Olga’s machine is very much alive and kicking, solving things. As you solve one set of problems, the next become more apparent. Then you rinse and repeat, rinse and repeat. I will stop talking now. Thank you both for coming back on the show to look backwards and look forwards. Thank you for joining me.

Simon Fennell: Thanks so much.

Olga Bitel: Thank you.