There are some data points that I came across recently, which gives important emphasis on choosing right metrics to make plans for growth or making policies.
The graph on patents is pretty interesting. IBM, Toshiba, NEC, Fujitsu are in no way flag bearers of growth in their respective industries. To be frank, there are so many has-beens here. May be, filing patents and leading growth in an industry is no more synonymous.
Also, the much vaunted reduction in corporate tax rate has not delivered anticipated benefits as yet.
This brings me to two observations: 1) any company or government needs to focus on right metrics. Stock market growth is in no way the right metric to gauge the growth of an economy or deem it as a precursor to a growth. By decreasing the corporate tax, we can decrease the PE value and hence increase the attractiveness of the stock market but cannot make companies invest if the companies see the demand slackening. 2) every company or government should look at the multiplier effect of their decisions, whether it is investing in getting patents or reducing the corporate tax rate. If the patents don’t lead to growth of the company and reducing corporate tax does not lead to more capital investments then decision making should be looked upon critically.
Disclaimer- All the views expressed are author's and not of the employer.
The graph on patents is pretty interesting. IBM, Toshiba, NEC, Fujitsu are in no way flag bearers of growth in their respective industries. To be frank, there are so many has-beens here. May be, filing patents and leading growth in an industry is no more synonymous.
Also, the much vaunted reduction in corporate tax rate has not delivered anticipated benefits as yet.
This brings me to two observations: 1) any company or government needs to focus on right metrics. Stock market growth is in no way the right metric to gauge the growth of an economy or deem it as a precursor to a growth. By decreasing the corporate tax, we can decrease the PE value and hence increase the attractiveness of the stock market but cannot make companies invest if the companies see the demand slackening. 2) every company or government should look at the multiplier effect of their decisions, whether it is investing in getting patents or reducing the corporate tax rate. If the patents don’t lead to growth of the company and reducing corporate tax does not lead to more capital investments then decision making should be looked upon critically.
Disclaimer- All the views expressed are author's and not of the employer.
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