Technology will continue to advance unabated, leading to increased productivity. History shows that as technology advances and knowledge accumulates the general standard of living will improve. This progress is due to ever increasing productivity, a trend that will relentlessly continue unabated.
Productivity in the US Farming Sector
The dramatic change in the makeup of the US farming workforce is a striking example of the impact of technology and productivity improvements.
| Year | 1900 | 2015 |
|---|---|---|
| Total US Civilian workforce | 28 million | 158 million |
| Total US workforce employed in farming | 11 million | 3 million |
| % US workforce employed on farms | 40% | 2% |
| Total Acres dedicated to farming corn | 90 million | 85 million |
| Bushels per acre | 30 | 150 |
| Total annual bushels | 2,7 billion | 13-14 billion |
The farming labour force has declined by 8 million people, but the number of bushels per acre has increased 5 fold!
Increased productivity has freed the folk previously employed in backbreaking farm labour to deliver new goods and services to society that would otherwise have been unavailable. There are many other similar examples of productivity gains in other sectors of the economy resulting in fantastic gains in the choice of new goods and services.
We very carefully consider the impact of advancing technology and the resulting productivity gains on our investments. We look closely at how our companies harness new technology to enhance their existing competitive advantage. Businesses that own strong brands and use technology to improve their competitive strengths in areas like manufacturing, customer service and distribution are likely to benefit from greater productivity. Improved cash flows are likely to result, allowing more money to be returned to shareholders.
At AXIAM, our focus is to convert our clients’ current capital into a growing income stream derived from quarterly dividends from companies that harness technology to improve productivity. Sign up to our newsletter to learn more about growing your income through investing, or contact our fund management team to invest.