For Darwin, species evolve through natural selection: only those best able to survive in a given environment manage to reproduce and prosper. In a similar way, in economics, not only companies but also business models have to adapt to market conditions. Companies that fail to respond to changes in technology, consumer preferences or the demands of regulators end up disappearing or being absorbed by competitors who are better connected to the epigenetic heritage of modern times.
In economics, not only companies but also business models have to adapt to market conditions.
Let's not forget those companies that did not turn the corner on evolution (Kodak, Nokia, Blackberry...).
Schumpeter would no doubt be captivated by the quantum pace of innovation. Known for his concept of "creative destruction", he would stress the importance of investing in companies and sectors that disrupt traditional models, such as artificial intelligence, renewable energy and biotechnology, seeing them as an opportunity for growth, but above all as a vector for transforming the economy as a whole.
He would not hide his pleasure at seeing the 3.0 connected manager, technologically assisted by digital platforms and tools, becoming more of an expert strategic advisor than a simple transactional executor. He would be promoting a model of contact with customers who, across all generations, want to see the codes of consumerism and their reactive immediacy applied to a financial world that is increasingly regulated and limited by infobesity.
He is full of praise for algorithms, machine learning, Generative Pre-trained Transformers (GPT 4) and Natural Language Processing (NLP), which refine the relevance of recommendations by automating repetitive tasks with little added value.
The development of Artificial Intelligence has dealt an unprecedented blow to anthropocentrism as theorised in ancient Greece by Democritus and Aristotle.
For Schumpeter, venturing into the meanders of AI is to retrace the history of human genius while designing the world of tomorrow, to which Darwin would retort that we must also measure the dangers of this revolution just as he observed the adaptation of species to hostile environments; he would then see cyber risk, the other Janus face of digitalisation, as a vital challenge for the survival of financial institutions.
As a result, these innovations will increase tenfold the capacity for advice and predictive analysis, which we now know are the caryatids of customer loyalty; wealth and financial advice cannot be limited to chat bots, which certainly offer a first level of support, but above all free up the advisor's useful time to deal with complex situations, providing billable added value on a value for money basis.
These innovations will increase tenfold the capacity for advice and predictive analysis, which we know today to be the caryatids of customer loyalty.
Darwinian genetics and Schumpeterian phygital holism, embodied by a human and psychological dimension that is indispensable in family wealth analysis (for example, with the drafting of family charters to secure generational handovers), expert and highly connected, will then combine to bring about mutations, recombinations and, above all, a refusal to get bogged down in outdated models of the past.
At the dawn of a major transhumance with no return, which will see several hundred billion euros pass from the baby-boomers to generations X, Y and Z, how can we ignore the fact that adaptation and innovation will be the two breasts of the transmissive collection?
Darwin and Schumpeter saw adaptability as a key to survival and success. They will therefore inspire strategies based on species typologies that do not stand still but constantly evolve according to an agile model aimed at combining the criteria of a liquid society based on the ephemeral, so well described by Zygmunt Bauman (1) with sustainable development. Thanks to the longevity that life expectancy affords us (an increasing number of centenarians) and the responsible finance that our planet demands, impact investing will lead to a new economy in which extra-financial ethics will be essential and foresight tools paramount.
If Darwin observed that diversity is essential to the resilience of an ecosystem, Schumpeter would look at diversification and its new creations (crypto-currencies, etc.) as a way of sustaining the economic dynamic thanks to the geographical and sectoral plurality associated with the principle of constructive instability.
How could we not share these quotes dedicated to our two thinkers? Theresilience of your portfolio starts with borderless diversification" and "Where there is strength in numbers, there is security in diversity".
Both visions are part of a long-term approach that favours assets anchored in the real economy (private equity, etc.) and sustainable growth, while valuing the risk taken by entrepreneurs, who are the central figures of innovation for Schumpeter; while Darwin demonstrated that adaptation implies constant transformation and therefore also well-considered risk-taking without neglecting the overall security of portfolios.
Darwin recognised that species do not evolve in isolation but in co-evolution with other species. In economics, the same is true: companies evolve in interaction with other companies, their customers, suppliers and regulators. Economic ecosystems are built through all these interactions.
Isn't this the very definition of what makes Luxembourg so strong: this melting pot of proximity between bankers, brokers, insurers, regulators, funds and family offices?
(1) - The liquid society - Zygmunt Bauman