How Technology Impacts Global Economies

Estimated reading time: 1 minute

From simple machines to super computers, technology continually increases productivity. But it also has far-reaching impacts on economies around the world—impacts that are often unseen and difficult to measure.

In a new paper, “The High-Tech Lever”, Jim McCaughan, president of global asset management at Principal Financial Group, examines how technology is affecting global economies and how those effects may influence investors in coming years.

“Current economic measures may be unable to fully capture technology’s influence,” said McCaughan. “That is forcing businesses and investors to rethink their strategies.”

The paper explores the problem of measuring technology’s impact. It also looks at a variety of ways technology affects businesses, investors and economies—including its deflationary influence, which keeps interest rates low. It’s a reality McCaughan said investors need to face.

“It may be that a majority of investment professionals around the world have worked almost their entire careers under an extended, but temporary, spell of high interest rates,” said McCaughan. “Asset managers, insurers, annuity providers, investors and other long-term savers might do well to recognize and adjust to this new ‘lower-for-longer’ regime.”

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