Defense Build-Out and Why Monopolies Hurt Growth

In this episode, William Blair Global Strategist Olga Bitel joins us to unpack her “Perpetual Growth Machine” framework and what it means for investors navigating AI, tariffs, inflation volatility, market concentration, and a shifting global order. We dig into why growth often emerges from solving problems, how monopolies can stunt future innovation, where AI’s productivity dividends could accrue, and why she sees the next decade’s best opportunities outside the United States. Olga also walks through the risks she’s watching, why facts change faster than narratives, and practical ways to connect top-down insights with bottom-up research.

Topics covered

• The Perpetual Growth Machine: why needs spark innovation and growth, and how investors can spot it early

• Why monopolies look great to investors but hurt long-term growth and innovation

• AI as a general purpose technology and the scale of potential productivity savings

• Housing affordability, incomes, and policy bottlenecks through the PGM lens

• How firms are actually adopting AI and how faster data changes research cadence

• Europe’s defense build-out and the rise of national champions and small-cap innovators

• Interpreting market concentration and what it signals about competition

• Inflation oscillation, policy mix, and why the Fed’s tools have limits

• Tariffs as a regressive tax and how costs pass through to consumers over time

• US exceptionalism narrowing and why ex-US markets may lead in the coming cycle

• The Draghi report and tearing down barriers inside the EU single market

• Comparing late-1990s tech to today’s AI build-out and who the next leaders may be

• Growth vs. value: focusing on sustained profit inflections, not cheapness alone

• Using stakeholder analysis to link macro themes to bottom-up stock work

• Biggest opportunities: Japan, Korea, Europe, select emerging markets, and parts of the Middle East

• Biggest risk: a breakdown in the global order amid US-China tensions

• Closing lessons: stay curious, stay nimble, question narratives, track the facts

Timestamps
00:00 Introduction and Olga’s role at William Blair
02:49 The Perpetual Growth Machine explained
06:24 Policy bottlenecks, incentives, and growth
09:32 AI as a general purpose technology and productivity math
11:53 Practical AI adoption inside investment firms
15:06 Where PGM points to opportunity right now
16:26 Europe’s defense spending and emerging winners
19:02 Macro setup and consumer health
20:42 Inflation today and what’s changed under the hood
22:46 The Fed’s dilemma and limits of monetary policy
25:00 Tariffs 101: who pays and how it shows up
28:55 Early evidence in goods prices
29:41 US exceptionalism vs. the rest of the world
31:00 The Draghi report and a real EU single market
33:11 Can Europe and others catch up in tech?
36:15 EU financial services barriers and capital deployment
37:07 Portfolio implications: why look ex-US
39:10 Late-1990s tech vs. today’s AI cycle
41:20 Concentration risk and competition policy
42:26 Value vs. growth through the PGM lens
44:48 Base rates, sustaining growth, and churn at the top
49:33 Marrying macro themes with bottom-up research
51:08 Firsthand observation vs. headline narratives
52:20 Biggest opportunities across regions
53:00 Middle East changes and new listings
54:48 Biggest risk: global order and US-China tensions
55:36 Parting advice for investors