Is Patient Capital The Ultimate Competitive Advantage?

"Recently, when Page was challenged on an earnings call about the sums he was pouring into R&D, he made no effort to excuse it. "My struggle in general is to get people to spend money on long-term R&D," he said, noting that the amounts he was investing were modest in light of Google's profits. Then he chided the financial community: Shouldn't they be asking him to make more big, risky, long-term investments, not fewer?"

The struggle to build a long term capital base coupled with patience and the right incentives might be the ultimate competitive advantage.

Scaling Laws in Biology and Other Complex Systems & the Read-through for Investing

It seems the whole universe is designed based on the principle of economy of scale, from metabolic rates, to vascular systems, cancer growth, aging, mortality, etc. Those are log (x) correlated (<1.00) - metabolic rates, for instance, stand at 0.75. When it comes to cities, economies of scale still apply. Examples are less paved roads and gas stations per capita. Those are super-linear correlated (e(x) or >1.00) at 1.15 on average.

The question which pops out thus is "Is our system sustainable?!". Society and companies have to innovate in a regular, but accelerated, fashion. Clearly this isn't sustainable, at least not in the required pace for the long term. This is straightforwardly applied to the technology sector and that's why disruptive innovation exists. The curious part is that the below speech took place at Google!

But what about Coca-Cola company? What make those companies "moats", as Buffett would put it, large enough for generations to see? In hindsight it would be an easier call, but what can we look for when trying to identify ex ante such a great 100-year business? Food for thought.