Corporate investment: twofold challenge - growth and jobs
How can we get out of this situation of low investment/growth? The role of asset managers
Amundi Discussion Papers Series - February 2015
The “Great Recession” brought significant changes into stark relief: declining returns from factors in production as well as technological innovation and productive investment insufficient to drive future growth. Investing in future economic growth often means investing in moderate-sized projects and companies. What is needed first and foremost is i) for savings to be better allocated in terms of supports vehicles, in order to favour long-term investment and “risky” assets. In this sense, taxation and education are essential contributions; ii) for savings flows to circulated better at the European level in order to better direct excess savings from the North toward investment deficits in the South.
Asset managers, who manage private and institutional savings, are naturally at the hub of these financial channels and play a major role between (domestic and foreign) investors’ (domestic and foreign) yield return needs and (small and large) companies’ (small and large) investment needs. It is therefore crucial that companies developing new technologies are not held back by a lack of understanding of their activities, by inadequate regulatory frameworks or by allocating too little capital. It is in this last point where the contribution from asset managers is found.
The objective of this Discussion Paper is to identify the current 10 to 20-year period so we can gain the most from the features of the various types of investments, whereas the interpretation of short cycles aims to refine this analysis to optimally seize available opportunities.