Politicians are much more obsessed than business firms are with short\u002Dterm results. Read more.
The economist Tyler Cowen argues in his book Big Business that such criticisms are overblown. There are plenty of examples of firms focusing on long-term results. Most examples of supposedly excessive short-termism actually reflect another firm’s superior ability to anticipate emerging new trends, like Netflix’s innovative model for delivering home entertainment .Sign up to receive the daily top stories from the Financial Post, a division of Postmedia Network Inc.
But Bezos exaggerates the uniqueness of Amazon’s emphasis on patient capital. Lots of other private sector firms play the long game. The business model of venture capital investing is predicated on absorbing numerous short-term losses in order to unearth a rare diamond that pays off handsomely.
Canada’s large resource sector gives us an innate advantage in focusing on the long term. Our largest industry is energy, which these days is dominated by oilsands extraction. The oilsands industry necessarily focuses on the long term since it requires the commitment of capital for decades, unlike the short-term outlook of the frackers who dominate U.S. oil production.
The myth persists that Asian countries have a competitive advantage in long-term planning. Akio Morita, chair of Sony Corporation in the 1980s when it had the equivalent stature of Apple today, boasted that “America looks forward ten minutes; Japan looks forward ten years.” In reality Japan failed to anticipate its decades of economic stagnation.
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