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Optimism is the Only Realism Part 1- Technology

Optimism is the Only Realism Part 1- Technology

| August 04, 2021

I know a lot of you might already disagree with the title - and I get it. Optimism being the new realism doesn’t exactly match our collective agreement that life (at least in 2020) was straight out of a bad movie. 

That’s why we will spend this month talking about all the reasons why life is better now than it used to be, minus the masks and the mandates, which will end soon. 

When it comes to the economy and capital markets, we tend to have a doomsday trend about what’s going on. Constantly, we assume the world is out of whack - even without a pandemic - and that our money and its value is a steadily sinking ship. I’m here to tell you that life is not the Titanic. In reality, life is only getting better as time goes on. If we look at information throughout the decades, we can see that we have accumulated more progress than problems. Wealth has accelerated, technology has expanded, manufacturing has increased - you get the idea. 

It’s easy to look back on the past and think that we lived in the “good old days.” I am guilty of this myself, so you’re not alone. But I’m here to tell you all the reasons why you and I might be misleading ourselves by believing that. 

Let’s start with technology. You’re reading this on a computer, right? Well, forty years ago, you know what you could do on your computer? Make a spreadsheet. And that’s if you even had one since the popularity of computers in residential homes didn’t take off until later. If you wanted to read my blogs (and I know that would be your primary concern), you’re out of luck. Today, a middle school child carries in her backpack a smartphone with more computing power than the state-of-the-art mainframe had in 1975. 

It’s time we start being grateful for the advancements that we can enjoy. When we talked about inflation, we mentioned that one key component to pulling ourselves out of economic ruts or recessions is an expansion in technology. The development of new data, tools, and ideas creates room for new jobs, new growth, and new advancements. And if we look at our lives from 1975 to now, technology has been doing all that - and it’s been doing it at a running pace.

The bright side of technology can even be found in the difficult past two years we’ve undergone. During the lockdown, companies found innovative ways for their employees to work from home, deliver products differently, and become more attractive by developing new technologies. Here are some examples of how that can benefit us long term: 

Remote work wasn’t our favorite, but it did mean that companies discovered new ways for workers to maintain jobs. With these flexible arrangements, employment is more open to those who need it but couldn’t sustain it due to life interruptions. One example is moms who have a better chance now than ever before to avoid losing income during maternity leave. Now, families can keep creating wealth, and companies could keep competent employees on board. 

Remote work also forced many companies to increase their technology infrastructure to digitize their work. This not only accelerated the use of current technology, it increased our hunger for new and more productive ways of working. That means a lot of innovation, which means a lot of growth - which we’ll talk more about later this month. 

So, companies likely won’t look back on the past two years with sunshine and rainbows - right now. But in a few years, they will certainly see benefits in the form of improved operating costs and higher productivity that came from these technological leaps. Even now, when we look back at the past forty years, we see a clear and undeniable pattern of improvement. It’s only likely that this pattern will continue. I promise, having a realistic perspective on the past will help you think a lot more positively about the future.

That's why optimism really is the only realism. 

Told you so.

Tune in next week, and we’ll talk more about the bright side - specifically, the bright side of medical advances. Stay happy, stay healthy, and I’ll see you all later.