Video transcript

Jayesh Kannan: Over the past year, we have seen structural changes in the business models of companies operating across various sectors of the economy. But the impact that technology companies have had has been amongst the most pronounced.

We believe that these shifts are not just transformative, but also persistent, that is here to stay. Going forward we see strong demand for technology-led innovation that can help more businesses digitalize their operations in order to make their products and services better, faster, cheaper, and more convenient. The roll out of 5G communications technology and the increased use of artificial intelligence, underpinned by widely available and cheap compute power are just two examples of what can sustain innovation as we look out into the future.

As long-term quality growth investors, we're particularly interested in three areas in the technology sector. The first is the digitalization of the enterprise and the consumer. This is a secular growth opportunity as more businesses rely on agile, cloud-based solutions in a hybrid work environment that increases complexity but also drives the need for increased productivity. We also see an increasing use of technology in our everyday lives, whether it be entertainment, shopping, gaming, monitoring of health and well-being, or the extension of our real selves and do online reality worlds in ways like avatars or the ownership of digital assets like art and currencies. The second is supply chain resilience. This is the localized production of, say, semi-conductor chips in more areas around the world as the result of global geopolitical trade tensions and also imbalances in supply and demand as a result of the pandemic. The third area that we are keeping an eye out on is the evolving nature of regulations and the impact that this can have on a company's operating model, especially the dynamic between large incumbents and newer disrupters. What we're seeing is increased scrutiny by regulators around the world when it comes to say the dominance of e-commerce marketplaces or protection of consumers in areas like digital advertising and privacy. We continue to evaluate investment opportunities using a quality growth framework, that includes understanding how a company can have a superior cost, capability, or convenience advantage that can allow it to generate excess returns over a long period of time. We assess a company's growth opportunity by evaluating its lifecycle, optionality, as well as fragility.

Ultimately, investing in underestimated earnings power over a 5- to 10-year time horizon is where it can help us at William Blair be goods stewards of capital and generate positive outcomes for our clients.