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All posts by Howard Rubin

Technology Economics: The Real Business Impact of Technology Leaders – the “Rubin 300”

Rubin Worldwide has identified a group of 300 firms that demonstrate technology leadership across several key industries, which we refer to as the “Rubin 300.” It is our hypothesis that these firms, as a result on business-results focused technology investment, will demonstrate better performance vs. their peers.

In earlier studies, we examined the differences in performance of the Rubin 300 (in a theoretical index called the Technology Leadership Index, or TLI) vs. traditional indices such as the S&P500 and the Dow Jones Industrial average. Our findings were that from January 2006 to December 31, 2010, the TLI has consistently outperformed the S&P500 and, since the beginning of 2010, has begun to surpass the DJIA. Since the beginning of the study, the TLI has averaged a 1.2% difference in value from the DJIA, 6.7% from the S&P500, and -2.3% from the Fortune 500.

This early research has begun to support the hypothesis that organizations that leverage technology efficiently do in fact create value to the shareholders. However, the stockmarket is not based on business results alone and can be impacted by unrelated market conditions and market sentiment. For this reason we

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Technology Economics: A Market Index (Experimental, of course) of Technology Leaders – the “Rubin 300″

Traditional indices such as the Dow Jones Industrial Average (DJIA) or the Fortune 500 focus on top performers without any considerations other than their market capitalization, share price, revenue, or other 20th-century measures of business performance.

But in a “Technology Economy” technology is a strategic lever, a tool to drive new business growth, protect revenue, reduce business costs, and manage risk. So let’s do an experiment and look at a “new age” Dow Jones Industrial Average – a market index of firms that have been identified as technology leaders. Let’s call it the Technology Leaders Index (TLI). And by building and observing the behavior of the TLI we can test the hypothesis that has gone unspoken and unexplored — Information Technology is a strategic investment and firms that make the best use of it should demonstrate superior market performance.

It is definitely an interesting time to do such an experiment. Between 2008 and 2009, IT investment suffered a global slowdown. The recession led many CEOs to believe IT was one of the main cost pools that could safely be reduced without impacting a firm’s overall performance. As a result, IT

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The Drunk, the Street Light, and the President (and Jobs, Innovation, and Competitiveness)

Try a quick (perhaps not so quick) experiment.   Build a list of all the major companies that have been recognized as technology leaders in their use of “IT” over the past 5 years.  Create a “technology leaders index” like a Dow Jones or  Standard and Poor’s and look at the behavior of these technology leaders as whole.  You will find that together they outperform any of our traditional market indices and the US Fortune 500 as a group.

Perhaps your reaction will be a big “so what” – conventional wisdom says that technology and technology innovation is a major driver of productivity and business performance, so what is the “big deal”?

Now try something else.  Look at the employment figures for these same technology leaders over the same multi-year period.   On the news every day we hear the financial network commentators and their interviewees talk about the “jobless recovery” and how the key economic indices can climb along with national productivity as a consequence of automation.  But this second experiment reveals a new phenomena – these technology leaders with their superior market performance and above-the-norm investment in technology increased their

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