The world is facing an investment drought. To take a few notable examples, public investment.in the United States is at its lowest level since 1947. Among US companies, the growth rate of business investment has slowed to less than one tenth its average during the 1990s. Across the Atlantic in the United Kingdom, fixed investment now accounts for its lowest share of GDP since the 1960s. Such concerning statistics are part of a global trend that threatens the outlook for growth, productivity, and innovation.
We believe that changes to tax systems and compensation structures could go a long way toward reinvigorating investment. Novel ways of rewarding innovation – including prizes rather than patents – offer promise. Impact investing also has the potential to offer attractive rates of return and promote the well-being of society. In the face of profound demographic and technological change, finding ways to boost investment should be a priority for decision-makers in government and the private sector.