Corporate balance sheets:

The divergence between the profitability of small/medium and large companies vs the global titans (companies that have reached aggregate revenues or profits! companies that in terms of revenues or profits are equivalent, or bigger in size, to a middle-high income small country, such as Hungary or Luxembourg ) is increasing in our view and the business environment pretty much everywhere is too skewed in favour of Titans.

A wide dispersion in the size of corporate balance sheets is a common feature of any economy. On the basis of Eurostat data, the average turnover of a small/micro-company employing under 10 workers was EUR230,000 a year in 2015 (the latest data available), while the average turnover for a company with over 250 workers was EUR167mn. SMEs in the aggregate contribute to 50% of total value added and as much of employment.

The small-micro companies, with less than 10 workers, on their own contribute 30% of value added and on average as much to employment. In the last ten-fifteen years, in our view three intertwined factors have contributed to the rise of titans: the advancement of AI-big data technology, low interest rates and globalisation. None of these factors will really U-turn any time soon in our view, which means titans are doomed to get bigger and more common.

In our view, the aggregate effect of these titans is beginning to have a material impact on economies, and the effect is in the aggregate negative as it depresses investment and thus in the long run it weakens the labour market for most. This problem is particularly cute at the moment in Europe and it is influencing elections results. Our latest research on this issue and suggestions for change.

Growth ideas:

As we speak with a lot of people we have collected quite a number of “wishes” on what could or should be done to improve the wellbeing of citizens and by extension would make economies “more competitive” as an economists would call it. Here are our latest thoughts and events.


Who cares about politics? Does politics matter? Will leader X actually achieve something? Whether you like politics or you feel nauseated about it, politics exists and has enormous influence on people’s lives and wealth, both short term and long term. We have developed our own way to predict and assess the effectiveness of politicians and we routinely nourish our assessment by asking those that know more about it than us: voters. We have so far engaged in a productive dialogue with over 1000 active voters across Europe for three years running, which has given us a strong ability to differentiate between policy statements and actual genuine reality, as well as being able to track what makes people vote for candidates and how quickly they can change their views.

The business cycle:

Correctly predicting the phase in which an economy is in the business cycle is critical to best time investment decisions. Unfortunately the business cycle not only differs across countries, but has also changed very much overtime. For example, up until the 1970s or so, business cycles tended to show very high real GDP growth peaks and very low troughs, and with a high frequency.

These days the cycle has become so long (the current one has been going on for 11 years and the longest one to our knowledge was 14 years!) that occasionally people question whether it exists at all and policy makers that would like (or rather hope) to make it extinct.

For the better or the worse, we think the business cycle is unavoidable as long as a sophisticated and deep credit market exists and the fact that it has got longer, does not preclude a repeat of the sharp recessions seen in 1929 or in 2008. We spend a lot of energies trying to find clues to where we are in the business cycle and at what speed is the current phase advancing (accelerating or decelerating).

Women, the labour market and risk appetite:

During the last few decades, in a closely similar fashion, the proportion of women graduates in the population has surpassed the proportion of men graduates in several countries across Europe. Women are now much more likely to complete tertiary sector education than men, and yet the length of their working life remains much shorter than that of men.

Not only that, it is incredibly difficult, if not close to impossible, to strike the “work-family” balance and this impossible equilibrium has repercussions for women and families’ happiness, it impacts children profoundly and inevitably the productivity and attractiveness of countries. We feel it is under appreciated, vital and perhaps it needs a seriously disrupted solution to turn it for the better.