Capital Ideas Podcast
Is 'The New Geography of Investing' still new?
Dec 19, 2024
Uncover the shifting world of investment as experts highlight how companies should be assessed based on their operational locations rather than their headquarters. Explore the potential resurgence of Japan amidst changing geopolitical dynamics and the charm of the U.S. market for foreign entities. Delve into the impact of digital disruption on industries, focusing on tech advancements and their implications on manufacturing. Finally, consider the importance of innovative management strategies and the role of historical economic perspectives in today's creative capitalism.
29:04
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Quick takeaways
- Evaluating companies by their revenue sources rather than headquarters reveals significant shifts in global market dynamics and risks.
- Japan’s recent economic growth and strategic geographic advantages make it an increasingly appealing destination for global investment and diversification.
Deep dives
The New Geography of Investing
Investing is evolving as companies are assessed based on where they conduct business rather than their place of incorporation. The concept, introduced nearly a decade ago, highlights the shifting revenue patterns of major markets. For instance, European firms have transitioned from deriving 60% of revenues from within Europe to 60% from outside, while Japanese companies have shifted to a near 50-50 split. These changes suggest that understanding a company’s revenue sources can provide a clearer picture of its global exposure and risks than traditional metrics based on domicile.
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