Innovation as a Core Holding, Not a Side Bet
Most investors treat “innovation investing” as a speculative side pocket — a small slice of the portfolio reserved for high-risk bets on the future. In this whitepaper, Bespoke Chief Investment Officer Rob Larity makes the case that this framing gets it backwards. Over a long enough time horizon, innovation isn’t a gamble — it’s the primary engine of wealth creation in the economy, and Larity argues it warrants a place at the core of a portfolio, not the fringes.
What Makes a Technology “Revolutionary”
Larity’s framework centers on General Purpose Technologies (GPTs) — rare innovations, like steel or computing, that become dramatically cheaper as they scale and, in doing so, become a ubiquitous input across nearly every part of the economy. The paper traces this pattern through the 19th-century steel revolution (which built modern Manhattan, the automobile industry, and modern surgery) to today’s computing revolution, and points to genetic sequencing, solar PV, 3D-printed metals, and orbital lift as GPTs still in their early stages.
Why Most Companies and Most Investors Get Left Behind
The paper cites research showing that from 1990 to 2020, just 2.4% of publicly traded companies accounted for all $76 trillion in net stock market wealth creation, while 58% of companies destroyed value outright. Passive index investing, by definition, puts an investor on the losing side of that math. The reason: most large, established businesses face structural barriers to adapting their existing business models to a new GPT, even when the shift is obvious well in advance.
An Approach to Investing in a Revolution Without Speculating
Rather than trying to predict which speculative startup will “win” a technology’s future (which Larity calls “gambling sanctified by an aura of techno-futurism”), the paper lays out a more disciplined approach: identify well-positioned, already-established public companies harnessing a GPT’s exponential, predictable growth pattern — using examples like Apple and John Deere — and consider them at a time when their valuations are still reasonable.
The Upshot
Because GPTs grow in a mathematically predictable way, investors don’t necessarily need to forecast the future — they need to understand the present clearly enough to spot who’s positioned to benefit from where a GPT is already heading. Applied with sufficient diversification across a handful of major innovation vectors, this can become a durable engine for long-term, generational wealth compounding.
Download the full whitepaper for the complete framework, historical case studies, and Bespoke’s approach to identifying GPT-driven investments. Explore how general purpose technologies shape revolutions, destroy old wealth, and create new investment opportunities.
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