Author: David Gibb

Technology and internet (tech) stocks now account for around 30% of US stock market value and 20% of global stock markets’ value. SA’s sole major tech firm – Prosus/Naspers – represents around 20% of our market. What is driving this? Network effects. In a 1996 Harvard Business Review article entitled ‘Increasing Returns and the New World of Business’, economist Brian Arthur wrote that knowledge-based industries (tech) work differently to traditional processing industries, “increasing returns are the tendency for that which is ahead to get further ahead, for that which loses advantage to lose further advantage.” Think of Facebook in the…