This past April, our Executive Director Ashby Monk, Ph.D and Research Engineer Dane Rook, Ph.D released their book The Technologized Investor: Innovation through Reorientation. Eric Schmidt, former Google CEO provided this review:
In The Technologized Investor, Ashby Monk and Dane Rook make a compelling case that longterm investors could be making a much larger contribution to shared prosperity, 21st-century infrastructure, and a carbon-neutral economy. Their book provides a detailed, cogent road map for organizations such as pension funds to harness technology and truly invest for the long-term.
Co-Author Rook took some time to provide insight into the book.
In a nutshell, what is your book about?
Empowering institutional investors with superior technology. Institutional investors (e.g., public pension funds, endowments, and sovereign wealth funds) have a longstanding stigma of being disadvantaged and under-skilled in using technology, so our prescription of infusing their organizations with more advanced forms of tech may seem counterintuitive. But our work demonstrates that this is not far-fetched, and actually fully achievable for most funds. That is, bringing AI, Knowledge Management, Alternative Data, and other cutting-edge technologies into the organization, and using these tools to drive deeper innovation and long-termism, is fully doable; it mostly requires a shifting in priorities and resources, rather than a fundamental reformation (which, unlike many other proposals to empower institutional investors, makes it realistic).
Who and why should people read your book?
The target audience is practitioners in the investment community, as well as technologists (both researchers in the academic community who are looking to apply emerging technologies to large-scale, real-world problems, as well as those outside academic who are looking to build or deploy new tech within the financial sphere). But really anyone that wants to understand the organizations that underpin the modern economy - and how they’re broken and could be fixed - should be interested (as we elaborate in the book, institutional investors provide a bulk of the money that supports capitalism, so their wellbeing really impacts everyone in a deep way). We’ve made a serious effort to keep the book entertaining and approachable: it’s intended as a tour of what’s wrong and paths forward as much as it is a report on empirical findings and derived theory.
How can institutional investors apply the concepts in your book to today’s coronavirus crisis?
A fundamental focus of the book is using technology to more deeply understand risk and long-term behavior of assets, especially real assets (e.g., tangible things like infrastructure, not just artificial constructs like stocks and bonds). It’s enormously challenging to try and divine how the present crisis will play out in the near- or mid-terms: various scenarios can be drawn up, but their probabilities and full impacts on investment portfolios are often excruciatingly hard to nail down. For institutional investors, who are generally very risk averse, it’s more pragmatic to focus on how the crisis will reformulate the risk landscape over the long term - in terms of exploring the longer-reaching consequences of economic, political, and social decisions that have been made. New forms of data and inferential technology can be leveraged to do this, and inform choices that can help institutional investors make more savvy choices.
What research and/or projects are you currently working on?
Much of our current effort is focused on extending the work from the book in the direction of Knowledge Management. Most work on advanced technology looks at its applications from an ‘information’ angle: how can tech be used to solve contextualized, one-off questions or problems. Knowledge is a different beast from information: it involves what’s portable across contexts - i.e., important, durable relationships that hold over long time-scales. There’s much less work that’s been done on how to build and manage knowledge with advanced technology, at least in the investment space. We think this is the next logical step forward in looking at how technology can help institutional investors make better long-term decisions.