June 10, 2024

Silicon Valley at the Top of the Global Startup Ecosystem in 2023

The 2024 Global Startup Ecosystem Report (GSER) by Startup Genome and the Global Entrepreneurship Network was released at London Tech Week, in collaboration with the Founders Forum, Informa Tech and London & Partners. Presented by Stephan Kuester, Managing Partner at Startup Genome, the GSER analyzes data from over 4.5 million companies across 300+ entrepreneurial innovation ecosystems and features rankings that indicate which ecosystems are currently driving innovation and deep knowledge about startup trends around the world.

Global key findings from the the 2024 GSER include:
  • Top three global ecosystems: Silicon Valley remains at the top, followed by New York City and London tied for #2.
  • The number of new unicorns in 2023 was down 58% from 2022 and 87% from the 2021 peak. With 15 unicorns, Silicon Valley again led all ecosystems for the most new unicorns in 2023, though this was down 80% from 2022. The Tashkent, Lyon, and Rhineland startup ecosystems welcomed their first unicorns in 2023.
  • Series A funding amount in 2023 was down 46% from 2022, and the value of large exits ($50M+) fell 47% over the same period.
  • In 2023, the Series A funding amount share for Top 40 ranked GSER 2024 ecosystems was 65%, down from 79% for these ecosystems in 2019. The share of Series A funding amount for the Top 100 Emerging Ecosystems reached 19% in 2023 vs. 13% in 2019.
  • Q1 2024 has projected higher Series A funding amount and deal count than Q4 2023.
  • Generative AI saw a surge in funding, with nearly 20% of all VC funding in 2023 going to GenAI-focused startups. GenAI VC funding increased 3x in 2023 compared to 2022. Deal counts nearly doubled.
  • In 2023, more than half of new unicorns were in the GenAI and Deep Tech sub-sectors, a higher rate than in 2021.
  • Late-stage Cleantech startups raised 2.5x more funding in H2 2023 than in H1 2020. Europe has outperformed the U.S. and China in terms of Cleantech Series A funding growth from 2021 to 2023.
  • Seoul moved up three spots, now ranked #9, entering the Top 10 ecosystems this year.
  • Tokyo has entered the global Top 10 for the first time, marking the most significant improvement among the Top 10 ecosystems.
  • The top two Chinese ecosystems Beijing and Shanghai, have dropped in the overall rankings to #8 and #11. Shenzhen has shown impressive growth, moving up seven spots to rank #28.
  • Europe is the most represented region in the Emerging Ecosystems Ranking, with a 42% share in the Top 100 Emerging Ecosystems, followed by North America with 27%.
  • Madrid moved up 12 ranks, claiming to #1 in the Emerging Ecosystems Ranking.
  • Barcelona moved up two positions in the Emerging Ecosystems Ranking, reaching #2.
  • Athens has entered the Top 100 Emerging Ecosystems Ranking, reaching the 51-60 range in 2024.
  • Greater Lausanne Region moved up 16 positions, reaching #11 in the Emerging Ecosystems Ranking.
  • Jakarta (#6) and Metro Rhein-Ruhr (#9) both entered the Top 10 Emerging Ecosystems Ranking.
  • Melbourne is ranking as the #32 Global Startup Ecosystem, moving up one spot from GSER 2023.
  • Mexico City has shown impressive growth, reaching the 21-30 range in the Emerging Ecosystems Ranking from the 41-50 range in 2023.
  • The top five ranking sub-Saharan African Ecosystems are Nairobi, Lagos, Cape Town, Johannesburg, Accra.
  • Tel Aviv is the only MENA ecosystem ranking in the Top 40, globally moving up one place to #4 (tied with Los Angeles).

Now in its 12th year, the GSER provides insights into the world's leading startup ecosystems, emerging trends, and key challenges facing entrepreneurs. As explained in Startup Genome's press release, "The 2024 edition ranks the top 40 global ecosystems, a ranking of emerging ecosystems, and expanded regional rankings. The report, driven by a consortium of representatives from 40+ countries, looks at the current state of startup activity and related investment. It also highlights startup communities from a regional perspective, separately ranking ecosystems in Asia, Europe, Latin America, MENA, North America, Oceania, and sub-Saharan Africa. Contributions from thought leaders further enrich the report's extensive, evidence-based findings, which are the product of over a decade of Startup Genome's independent research and policy work."

I appreciate how the GSER is designed to provide valuable perspective on the global startup landscape and actionable recommendations for entrepreneurs, investors, policymakers, and other stakeholders looking to drive innovation and economic growth even in these challenging times.

What are your thoughts about GSER's key findings?

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.

June 5, 2024

Growth Is Proving Surprisingly Resilient in the Face of High Interest Rates and Geopolitical Risks, Says EIU Report

In its latest global economic outlook report, the Economist Intelligence Unit (EIU) "forecasts more fragmentation and regionalization in the world economy in 2024-28 as alliances tighten and competing blocs form." What is more, "The return of industrial policy, including sanctions and the provision of new incentives, will push firms to adopt more inefficient supply chains, stoke trade tensions in strategic sectors and make it difficult to compete across the global marketplace. These developments will drag on growth potential." The EIU expects "global real GDP will expand by 2.8% a year on average over the next five years—below the 3% of the 2010s, which was hardly a stellar decade for the global economy."

The UK-based organization adds that "In the near term, however, the global economy is showing resilience in the face of international conflict and higher interest rates. This mainly reflects the remarkable strength of the US economy, which is driven by strong household finances, a rising trend in manufacturing investment and a booming technology sector. Elsewhere, the picture is less dynamic but short of a downturn." Moreover, "Momentum in Europe will build gradually in 2024. Modest government stimulus in China is helping the economy to in the Middle East as the conflict in Gaza continues. Russia's invasion of Ukraine, now in its third year, shows no sign of resolution. Flash points in Asia, such as in relation to the South China Sea and Taiwan, will pose a persistent threat to the fragile stability that has developed in US-China relations. The diffusion of global power and uncertainty over the direction of US foreign policy underpins this rise in geopolitical risk."

Other key findings from the report include:
  • 2.5% global real GDP growth in 2024 (compared with 2.4% previously), meaning growth will be unchanged rather than slowing from 2023. Growth is proving surprisingly resilient in the face of high interest rates and geopolitical risks.
  • The change in global growth reflects another upward revision for US growth in 2024 to 2.2% (from 2% previously), upward revisions for several European economies that have pushed euro area growth to 1% (from 0.8%) and an upward revision for Brazil to 2.1% (from 1.8%).
  • Reduction of expectations for future monetary policy loosening, removing one 25-basis-point cut from the loosening cycles of both the Federal Reserve (the US central bank) and the European Central Bank in 2024-25. In contrast, the EIU now expects the Bank of England (the UK central bank) to cut quicker than previously forecast, lowering its rate to 3.5% by end-2025 (compared with 4.25% previously).
  • The US dollar effective exchange rate is now forecast to appreciate for a third consecutive year in 2024—the EIU previously expected a mild depreciation. This reflects a stronger depreciation in the yen's value than previously forecast and the fact that the EIU is no longer forecasting euro appreciation.


On the topic of how climate change and AI may threaten global convergence prospects, the report says:
The green transition and technological change will be among the major trends shaping global economic prospects over the next five years. In both cases, they seem set to diminish convergence prospects for developing economies. Poorer countries will be disproportionately affected by climate change and will struggle to secure financing to mitigate its impact. Although we are skeptical about the scale of productivity gains from artificial intelligence (AI), those improvements that do emerge will accrue mainly to developed economies; this will create challenges for countries aiming to move up the manufacturing and services value chains. We still expect some emerging markets to stand out, however, helped by being fairly insulated from geopolitical tensions and rising trade barriers. India is forecast to expand the fastest of any major economy in 2024-28, and Mexico will benefit from nearshoring trends.
Do you agree with the report's findings? How are you preparing your business for a rise in geopolitical risk?

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.

May 8, 2024

Malaysian Electric Utilities Seek U.S. Partners to Help Decarbonize the Country's Energy Sector

As noted in previous posts in this Forum, I am optimistic about the commercial opportunities that U.S. companies that are looking to sell their services and products in Southeast Asia. Among the ten nations that comprise the Association of Southeast Asian Nations (ASEAN), I recommend that American business owners and corporate executives look closely commercial opportunities in ASEAN's six largest economies (data provided by the International Monetary Fund): Indonesia, Thailand, Singapore, Philippines, Vietnam, and Malaysia.

The Malaysia Country Commercial Guide, which is a useful resource produced by the International Trade Administration, an agency within the U.S. Department of Commerce, explains that "Malaysia is an upper middle-income economy with a population of over 34 million. The country's growing affluent middle class increasingly drives consumer and business demand for quality goods and services. U.S. products and brands are favorably viewed and enjoy a strong presence in many sectors, including technology, machinery, electronics, medical equipment, and franchising."

What is more, "U.S. exporters looking to expand their market presence in Malaysia can benefit from the country's developed infrastructure, an English-speaking business and consumer environment, a well-established legal framework, and the ability to repatriate capital and profits. Malaysia is generally considered an easy and cost-competitive market for doing business. The United States is Malaysia's third-largest trading partner, and U.S. exports of goods to Malaysia were valued at over $18 billion in 2022." The U.S. Department of State also points out that "Malaysia is the United States' 17th largest trading partner and the second-largest trading partner among the 10 ASEAN members, after Vietnam."

Considering my optimism about ASEAN's economic opportunities and interest in employing technologies to mitigate the consequences resulting from global warming, I attended the Malaysia Smart Grid Technologies Reverse Trade Mission (RTM) on May 1st, 2024 in Millbrae, Calif. The U.S. Trade and Development Agency (USTDA), which helps companies create U.S. jobs through the export of U.S. goods and services for priority infrastructure projects in emerging economies, sponsored this event. Delegates of the RTM included representatives of agencies within the Malaysian governments and executives from Malaysian energy utilities. Representatives from the USTDA and the U.S. Commercial Service were also in attendance at the event held just outside of San Francisco.

A delegate from the Tenaga Nasional Berhad (TNB) said the Malaysian multinational electricity company is the only electric utility company in Peninsular Malaysia and is the largest publicly listed power company in Southeast Asia. Serving over 10 million customers throughout Peninsular Malaysia (except Sarawak) and the East Malaysian state of Sabah, TNB's core activities are in the generation, transmission and distribution of electricity. The presentation also highlighted how renewables are expected to grow significantly, with Malaysia targeting 70 percent of its 2050 installed capacity. Advancements in storage technologies are making renewables more dispatchable.

While not part of the presentation, TNB's most recent sustainability report explains:
We have been making progress in rolling out the adoption of a Smart Grid as part of our Grid of the Future (GoTF) initiatives. GoTF aims to improve the grid flexibility with two-pronged objectives - to allow for better services to our customers and enable higher growth of Variable Renewable Energy (VRE) and Distributed Energy Resources (DER). TNB has achieved a Smart Grid Index (SGI) score of 71.4% in FY2022, which demonstrates significant improvement of 19.4% from 2019. Moving forward, under our Smart Utility 2025 Masterplan, we target to achieve a score of 85% by 2025. Through the establishment of this ambitious target, we aim to facilitate the integration of clean energy into our electricity grid and enable efficient management and utilization of resources. These endeavors will help drive the pace of our decarbonization efforts and renewable energy initiatives to achieve our net zero aspiration.

 

Source: www.tnb.com.my/sustainability

Attendees then heard a presentation by Sarawak Energy Berhad, which is state owned electric utility company of the State of Sarawak. Sarawak Energy's vision is to achieve sustainable growth and prosperity for Sarawak by meeting the region's need for reliable and renewable energy—providing electricity to 3 million Sarawakians in urban and rural areas. Furthermore, the utility aims to ensure all rural communities including the most remote and inaccessible upriver communities have access to constant electricity supply. Using micro-hydro, which is the small-scale harnessing of energy from falling water such as that from steep mountain rivers, and solar hybrids, Sarawak Energy has a goal to help more than 30,000 rural household achieve full electrification by 2025. Sarawak Energy is also making progress in becoming a regional power house as the utility exports power to the Indonesian province of West Kalimantan.

Source: www.sarawakenergy.com/about-us

According to the aforementioned country commercial guide, "The Malaysian government is seeking ways to grow its national grid to be a smart, automated, digitally-enabled grid. Malaysia is looking for solutions that ensure greater cost efficiency, reliability, and customer satisfaction than can be achieved with centralized grids. Market opportunities for U.S. companies exist for smart meters, grid technologies and systems, and transmission & distribution systems." I appreciate how this business briefing provided an opportunity for U.S. entities to meet with a delegation of decision-makers from Malaysia interested in learning more about U.S. smart grid technologies and best practices for cybersecurity, distribution networks, and storage solutions for the power sector.

What opportunities are you seeing in ASEAN's renewable energy sector?

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.

April 2, 2024

'Buy Low, Sell High'

A conversation I often have with a beginner investor about the formula of becoming successful investor in public equities often goes like this:

Beginner Investor: "How do I become a successful investor?"

Me: "Buy low, sell high."

Beginner Investor: "That's all?"

Me: "Yes, that's all."

While it is technically that simple, the reality is much different as there are various nuances to go into which stocks to buy, when to buy them, and when to execute a sell order. Jim Cramer, a financial journalist on CNBC, presents his approach on how to start picking individual stocks. "Stock picking is not simple and requires substantial research, he said, stressing that it's essential not to shoot blindly. Instead, it's wise to invest intentionally and put money into stocks and sectors you’re familiar with.

"'You want to get started? Go small, invest in what you know, research intensely,' Cramer said. 'Back then, I got old data from the public library. Now? It’s as simple as a key stroke, and the information's free — including up to the minute financials, analyst presentations, brokerage research and, of course, the conference calls that I tell you are musts if you want to actually know what you’re doing.'"

Jim Cramer's Guide to Investing contains 25 points to becoming a successful investor. There are a few worth discussing:

6. "Buy and Homework, Not Buy and Hold"

Mr. Cramer explains that within a diversified portfolio, "the facts change, the leaders become followers, the disrupters disrupt, consumer preferences change and so on. The facts change and so must our investment thesis. If you're not doing the homework then how are you going to be sure that what you bought in the past is still what you own today?"

He points out that "The two reasons people often don't do the homework is because they have either (wrongly) convinced themselves that if they hold long enough that ultimately all stocks make a comeback, or that since they don't have the time to do it, nobody does."

I strongly support his assertation that "On the first reason, that's just nonsense. Stocks represent ownership in a business. The notion that a business that is doing poorly will always improve and return
to strength is just silly. If that was the case, there would be no bankruptcies or disrupters displacing leaders. Industry landscapes are always changing, businesses are living, breathing entities and without
proper stewardship will fail. Ultimately, the stock will follow the fundamentals."

With respect to the second point, he says that "you may not have the time, but that's what professionals are paid to do. Make the time. If you can't keep up with the homework— be it because of time restrictions or a lack of understanding when it comes to financial statements—then you either need to own fewer stocks or hand it off to a professional. Tracking companies may not be your day job, but it is a pro's job."

7. No One Ever Made a Dime by Panicking

"Emotion, especially panic, has no place in investing," according to Mr. Cramer. "When we panic, we don't think clearly. And when we aren't thinking clearly, we make mistakes. If you associate the value of what you own with the price a stranger is willing to throw at it, it can be easy to panic when the bids come in low." I support his analogy that "just because someone offers you less for your house today than the price you paid yesterday doesn't mean it is any less valuable. It may simply mean that the current bidders don't see the value you see."

He adds: "When volatility strikes, you should focus more on the value of what you own than the price being put on it. By doing that and keeping level head, you can make rational decisions and perhaps realize that there will be a better time to sell— either when things calm down or your investment thesis materializes and other buyers begin to see the value that you've seen all along."

11. Don't Own too Many Stocks

Following on the importance of doing your homework, Mr. Cramer recommends "One hour of research on each stock per week. That's the rule of thumb on keeping up with the homework. If you can't manage that then you own too many stocks."

12. Cash and Sitting on the Sidelines are Fine Alternatives

Particularly when interest rates for savers were low for so long, many beginning investors thought it was erroneous to have cash in the bank. They pressured themselves into think they should put most, if not all, of their cash in the stock market. As Mr. Cramer notes, "The aversion to cash that most investors have is truly to their detriment. So many are fearful of the 'cash drag' on the way up— meaning that they fear underperforming due to part of their portfolio not being invested, that they fail to think of the positive addition that same cash drag can add to performance in a down market. Believe it or not, you can keep some of your portfolio in cash. If you don't have a feel for the market, step to the sidelines. That's the beauty of a no-called-strike game, you can sit there for as long as you like waiting for that perfect pitch."

What is more, "Some investors believe they should be fully invested, or they'll lose out to inflation. That's not a reason to invest. You only want to take a position, long or short, when you have an edge. If you have nothing compelling to buy, meaning you're only going to find it more attractive if it goes down in price, then step to the side. It's better to lose a few percentage points of buying power to inflation than it is to lose money on a low conviction, no-edge position. The idea that you should
invest so that you have 'enough exposure' is just nonsense. There is one reason and one reason only to invest— to make money."

24. "Be Able to Explain Your Stock Picks to Someone Else"

"I like to say that if you can't explain why you want to own the stock in three bullet points, you shouldn’t buy it," Mr. Cramer writes. "Not only will doing so help you better understand the story, but in doing so you will better discover if there is something you missed. Ideally you will even find someone with the opposite view of your own and have a good old fashion bull-bear debate."

His investment guide includes a list of eight questions his ex-wife would ask "over and over again whenever he wanted to put on a new position":
  1. What's going to make this stock go up?
  2. Why is it going to go up when you think it is?
  3. Is this really the best time to buy it?
  4. Haven't we already missed a lot of the move?
  5. Shouldn't we wait until it comes down a little more?
  6. What do you know about this stock that others don't?
  7. What's your edge?
  8. Do you like this stock any more than any of the others you own and why?
"That last one was especially important because she never liked to add another stock without taking one off. After all, how many good ideas can a person have at once? Moreover, sticking to that rule will help you abide by rule 11 and keep up with your homework."

Aaron's Rule: Do Your Homework

Most publicly-traded U.S. corporations are required to file a Form 10-K with the U.S. Securities and Exchange Commission (SEC). The document gives a comprehensive summary of a company's financial performance during the company's most recent fiscal year. I read the 10-K of each corporation that is in my investment portfolio. And I often read the 10-Ks of corporations that are competitors or partners of the corporation I hold stock in.

While the SEC provides a useful guide on how to read a 10-K, there are certain parts of the 10-K that I pay close attention to. Item 1 - "Business" is where the corporation provides a detailed description of its business including its main products and services, what subsidiaries it owns, and what markets it operates in. This section may also include information about recent events, competition the company faces, regulations that apply to it, labor issues, special operating costs, or seasonal factors. This is a good place to start to understand how the company operates.

I strongly recommend learning about the risks that may have a material effect on the company's operations or financial performance. Item 1A - "Risk Factors" includes information about the most significant risks that apply to the company or to its securities. Companies generally list the risk factors in order of their importance. In practice, this section focuses on the risks themselves, not how the company addresses those risks. Some risks may be true for the entire economy, some may apply only to the company's industry sector or geographic region, and some may be unique to the company.

Understanding the management's perspective on the business results of the past financial year is crucial to helping me evaluate the worthiness of owning the company's stock. Item 7 - "Management's Discussion and Analysis of Financial Condition and Results of Operations" gives the company's perspective on the business results of the past financial year. This section, known as the MD&A for short, allows company management to tell its story in its own words. The MD&A presents:
The company's operations and financial results, including information about the company's liquidity and capital resources and any known trends or uncertainties that could materially affect the company’s results. This section may also discuss management’s views of key business risks and what it is doing to address them.
Material changes in the company's results compared to the prior period, as well as off-balance sheet arrangements and the company’s contractual obligations.
Critical accounting judgments, such as estimates and assumptions. These accounting judgments – and any changes from previous years – can have a significant impact on the numbers in the financial statements, such as assets, costs, and net income. 
Source: U.S. Securities and Exchange Commission
I also read the quarterly earnings report, known as Form 10-Q, and listen to the earnings report which generally include statements by the corporation's chief executive and chief financial officers. Shareholders often have the opportunity to pose questions to the corporate executives. The SEC reports and information about the quarterly earnings calls are often found on the company's website under "Investor Relations."

Building a valuable investment portfolio is not difficult, but it does require time to learn about the company's business, financial performance, and risks that may adversely impact both. What resources do you use to evaluate the investment worthiness of a corporation?

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.

March 24, 2024

GSMA's Annual Report on the State of the Global Mobile Industry Looks at How Operators Are Exploring the Potential of genAI

According to the GSMA's most recent annual report on the state of the global mobile economy, "Mobile connectivity remains pivotal in driving digital innovation. It empowers individuals and enterprises with a wide array of transformative technologies while also aiding governments in delivering positive societal impacts."

Produced by GSMA's in-house research team, GSMA Intelligence, these reports contain a range of technology, socio-economic and financial datasets, including forecasts out to 2030. This year's report points out that "The impact of mobile connectivity is evidenced by its contribution to the economy. In 2023, mobile technologies and services generated 5.4% of global GDP, a contribution that amounted to $5.7 trillion of economic value added, and supported around 35 million jobs."

The report's key findings include:
  • 5G will account for over half (51%) of total mobile connections by 2029 and reach 56% adoption by the end of the decade.
  • 58% of the world's population were using mobile internet at the end of 2023, representing 4.7 billion users and an increase of 2.1 billion since 2015.
  • Three billion people are still not using mobile internet despite living in an area covered by mobile broadband networks (the 'Usage Gap'), underscoring the urgency of addressing barriers to adoption highlighted in the GSMA's 'Breaking Barriers' campaign, such as handset affordability and literacy/digital skills.
  • 5G is expected to benefit the global economy by more than $930 billion in 2030, of which the primary beneficiaries are expected to be manufacturing (36%), public administration (15%) and the services (10%) industries.

Infographic: GSMA Intelligence

The are two items that I found of particular interest. One is how eSIM adoption continues to gather pace. "The number of eSIM consumer devices launched has grown significantly over the last five years and the number of commercial eSIM services is also on the rise. This has set the foundation for eSIM adoption to gather pace over the course of the decade," the reports notes. What is more, "GSMA Intelligence's baseline scenario predicts around 1 billion eSIM smartphone connections globally by the end of 2025, growing to 6.9 billion by 2030. This would account for around three quarters of the total number of smartphone connections by 2030." The GSMA claims that "North America will be the region with the fastest rate of eSIM adoption due to Apple's launch of eSIM-only smartphones in the US in September 2022."

On the topic of mobile operators exploring the potential of generative AI (genAI), "the range of genAI applications is broad," the GSMA notes. "Much of the early work has focused on using the technology to improve customer services and support sales and marketing activities. However, as genAI matures, there is potential for operators to not only support internal use cases but generate new revenues from AI investments." Examples of operators generating new revenues from investments in genAI include "SK Telecom's bold AI pyramid strategy ... as do recent product announcements from the likes of KT, NTT and SoftBank."

As for maximizing the AI opportunity, the report says "The speed of AI adoption in the mobile industry may depend on several factors. First, mobile operators often face difficulties in accessing the internal data needed for training AI models, hindered by the diversity and volume of data sources. Additionally, operators must ensure the accuracy of AI-generated insights, as reliance on inaccurate data may lead to flawed decision-making."

With respect to ethical concerns around AI that still need to be addressed, the report boldly asserts that "The mobile industry is committed to the ethical use of AI in its operations and customer interactions to protect customers and employees, remove any entrenched inequality and ensure that AI operates reliably and fairly for all stakeholders. The GSMA's AI Ethics Playbook serves as a practical tool to help organizations consider how to ethically design, develop and deploy AI systems."

What trends are you seeing that are shaping the global mobile ecosystem?

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.

March 21, 2024

Singapore, Denmark and the US Are Predicted to Have the Best Business Environment From 2024–28

The Economist Intelligence Unit's (EIU) business environment index measures the attractiveness of the business environment in 82 countries and territories, examining 91 indicators spread across 11 different categories. According to the latest business environment index, "Singapore, Denmark and the US will be the three geographies with the best business environment over the next five years." What is more, as reflected in the chart below, "Several west European economies, alongside Canada, Hong Kong and New Zealand, make up the remaining top ten best places in the world to do business. These are all advanced economies and long-standing strong performers in our index, so tend to be safe bets for investments. However, both headline and per capita GDP growth rates are likely to be fairly stable and slow."


The EIU also explains, through the image below, "geographies that see the biggest improvements in score in our index in the next five years (2024-28) compared with the past five years (2019-23). These are not the same economies that will see the fastest real GDP growth in 2024-28—although Qatar and India will grow very strongly—rather, they are places where we expect the most significant policy improvements, infrastructure investment or growth in market opportunities." The UK-based organization adds that its "model suggests that their improvement in our business environment index may subsequently result in an uptick in per-head growth in real GDP, investment spending and FDI."


Regarding those countries already in the EIU's index that scored strongly, the report points out that "Qatar has implemented a US$220bn investment program over the past decade, mainly focused on infrastructure. Its business environment has benefited from the expansion of Hamad International Airport, the road network and tourism infrastructure." Furthermore, Lithuania has long been open to trade and investment, but a major tax reform will soon make it more attractive by extending corporate tax relief and shifting the tax burden away from labor. Greece sees the biggest improvement in the business environment in our index over this period. This reflects the impact of a pro-business government, led by the New Democracy party, now in its second term, that has undertaken reforms, cut taxes and boosted business confidence."

With respect to the world's most populous nation, the EIU says "India is the only single-country market that offers a potential scale comparable to that of China." The South Asia country's "youthful demographic profile promises both strong demand and good labor availability. Alongside solid economic fundamentals, digital infrastructure and favorable demographics, more policy support is being introduced to attract manufacturing investment."

Other geographies further down the EIU's ranking where they expect a strong improvement include Serbia, which "has seen a virtuous circle from its openness to FDI in the past, which has driven growth and attracted further investment, including in higher-value-added sectors. A recent strengthening of macroeconomic policy and institutions supports market stability."

Moreover, "Argentina's sharp improvement in score largely reflects the free-market reforms that we believe the administration of the president, Javier Milei, will introduce—in particular, policies to boost private enterprise and competition and attract foreign investment. In the Dominican Republic, the current Abinader administration, which we expect to be re-elected in May, will continue its business friendly policies. It is encouraging investment into the tourism sector (for example with port upgrades for cruise ships), and improving logistics infrastructure to become a regional transport and distribution hub.

Places with weak business environments but potential for improvement include Kenya, Angola, and Venezuela. As the EIU explains:
Kenya passed a Privatization Act in 2023, which will help to trim the state’s excessively large economic footprint while boosting the private sector. Angola, while close to the bottom of our rankings, is arguably a better place to do business than five years ago, with the Lourenço administration using its improved ties with the US to revamp key legislation, bringing the country's financial sector into line with international standards and reducing the tax burden on the non-oil sector. In contrast, Venezuela is the worst ranked in our index, and will remain so despite a slight improvement after its painful economic collapse.
As I have stated previously on this forum, Southeast Asia has one of the world's most attractive business environment. Among the ten members of the Association of South‑East Asian Nations (ASEAN), the EIU highlights Thailand as a market that "saw a notable improvement in our business environment index in 2021-22, followed by an acceleration in growth in real GDP per head in 2022-23." The report says Thailand was among the first movers in ASEAN "to give special incentives to invest in electric vehicles and green industries. At the same time, many infrastructure projects were being finished—notably the mass transit expansion in the capital, Bangkok—or under way, including as part of the country's Eastern Economic Corridor megadevelopment project." The report adds that "Thailand has benefited from—and encouraged, with preferential policies—the China+1 trend as investors seek to diversify away from China, often towards India and ASEAN."

Do you find this report helpful in determining which countries to invest in or avoid?

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.

March 8, 2024

Report Provides Recommendations on How to Achieve Enduring Board Effectiveness

While drafting a post on this forum about a report published by EY that provides recommendations on how boards of American companies can confront crisis and embrace opportunity, I found another report produced by the consultancy that provides "a comprehensive approach and framework for understanding and enhancing board effectiveness."

Authored by Kris Pederson, EY Americas Center for Board Matters Leader, this report presents a framework comprised of "a series of elements that must be intact for board performance to flourish. Two of these are foundational 'effectiveness' pillars that guide the work to be done by the board. These flow through five 'systemic' layering elements that embody the board's operating environment." She adds that "With a strong mission and engagement model supported by effective information practices, boards have a solid foundation for effective performance. The systemic board governance elements encompass the operating model and principles of an effective board."


According to Ms. Pederson, the first pillar of board effectiveness, board mission and engagement model, "The board's fundamental mandate is to provide insight, foresight and oversight on mission-critical issues that drive the company's governance as it advances its strategy, operations, financial performance, and stakeholder engagement to drive long-term corporate value. Guiding this mission are the board's own values.

Evidence of an effective board mission and engagement model includes:
  • The board's corporate governance guidelines articulate the board's purpose, values and core engagement strategy and practices.
  • Every board member can consistently state the board's mission and the company’s purpose, strategy and long‑term value proposition.
  • Board members and management are in clear agreement about the mission‑critical company issues that demand board oversight. Each board member individually embodies core traditional leadership values and skills, including ethics and integrity, diligence and conscientiousness, executive‑level communication skills, and a commitment to progress.
  • There is clarity as to the company's core policies, strategies and risk management approaches, and when and how the board engages to oversee them.

Regarding the second pillar of board effectiveness, information infrastructure, Ms. Pederson explains that "Effective boards are rooted in the diligent design and maintenance of reliable and efficient information practices that provide timely access to the highest-quality information and people (e.g., advisors, stakeholders, customers) needed to identify, illuminate and address evolving mission-critical issues." Moreover, "Boards should be specific with management about their information needs so that management is not overburdened with immaterial questions and potentially driven to expand board materials to include tangential information or excessive detail."

Evidence of effective board information infrastructures include:
  • Board meeting materials include a cover memorandum that succinctly describes in a clear narrative form all items on the board agenda.
  • Technical documents, such as financial reporting, equity compensation plans, merger agreements or other material contracts, are fronted with a one- or two-page (max) executive summary of material terms.
  • All board materials are presented with draft resolutions clearly specifying the matters the board or its committees are being asked to act on.
  • Boards and management are diligent about how they engage with each other to share information, respecting established communications channels and security issues.
  • Neither the board nor management feels unduly overburdened with information overload or requests for information, respectively.
  • The board regularly hears perspectives from third parties on critical issues and complex matters.

With respect to "Board composition, structure and leadership," the report notes that "Making effective determinations about the competencies, backgrounds and experiences needed on the board is key to building a strong board, keeping in mind that diversity across multiple dimensions is essential to board effectiveness."

Moreover, "Based on an understanding of the companies' strategies and emerging mission-critical issues, key stakeholder demands, and increasing regulatory scrutiny of board effectiveness, boards
should develop and maintain, in collaboration with senior management, a competency map (or board skills matrix) that identifies and scopes the skills and type of experience needed on the board. This analysis, which should have a forward-looking orientation, enables a more accurate and objective determination of effective board composition, size and committee structure."

Evidence of effective board composition, structure and leadership include:
  • The board maintains, in collaboration with management, a detailed board skills matrix in assessing board size and composition.
  • The board's corporate governance guidelines and committee charters clearly allocate roles and responsibilities between the board and its committees, including mission-critical issues such as strategy, risk, culture, compliance, technology, cybersecurity, and climate change.
  • Board members periodically move across different committees, and committee structure and composition are reasonably fluid based on the company's needs.
  • Committee chairs regularly collaborate on the most effective ways to govern overarching board responsibilities relating to strategy, risk and long-term value.
  • Board and committee oversight responsibilities are periodically revisited as business environments and priorities shift.
  • Committee chairs report to the board when they need additional resources, refreshed competencies or workload reallocation.

Regarding board dynamics, Ms. Pederson explains that "A positive board dynamic is one of the most critical elements in achieving board effectiveness. Many also believe that consistently maintaining a positive board dynamic can be challenging. For this reason, all board members, especially board leadership, need to work to nurture and consistently demonstrate respect and trust for each other." She adds that "Without a culture of respect and trust, boards cannot engage in constructive debate and instead devolve quickly into dysfunction. In their discussions and deliberations with each other, at meetings and informally, all board members should show evidence of their commitment to the board's mission, values and engagement model through active, informed and productive engagement."

Evidence of effective board dynamics include:
  • Director participation at meetings is balanced: No single director or group of directors dominates agenda formulation, discussions or deliberations, and no single director or group of directors is passive or disengaged.
  • If interviewed, each director would state that he or she felt included, heard and respected, and that all members demonstrate respect and trust.
  • There are no "camps" or "factions" among board members or among board members and management.
  • Directors say something when they see something, and the board takes appropriate action.
  • The board engages in informal ways between meetings to enhance trust and build personal connections.
On the topic of board decision-making, the report says "Boards should be highly conscientious and intentional about when and how they make decisions. Leading boards develop a process to support effective decision-making, based on applicable state and relevant laws and the board's mission and engagement model.

Ms. Pederson adds that "For every matter before them, boards should question and assess how well the decisions they may make align with the company's purpose, culture, strategy, risk tolerance profile, and sustainability goals. Boards need to spend the time, access appropriate resources and consider alternative scenarios and outcomes before making final decisions."

Evidence of effective board decision-making include:
  • The board and management maintain a delegated authority matrix, specifying corporate business matters that require board decisions.
  • The board maintains a checklist of approval requirements in its organizational documents and under relevant law.
  • The board chair establishes appropriate transparency around director voting by discouraging informal decision-making discussions and overseeing that the board's books and records are in order.
  • The board does not make decisions without sufficient considerations about the quality of the information, timing, and risks and rewards.

As for the final element on systemic board governance, "Board outcomes and evaluation," Ms. Pederson points out "The ultimate outcome of a high-performing board is reflected in the success and prosperity of the business itself. A board should see the evidence of its efforts manifest in company financial performance, including growth through the innovation it fosters and cost reduction from the risks it helps the company avoid."

She importantly adds that "Indeed, investors, regulators and other stakeholders are seeking greater board effectiveness and are increasingly interested in board evaluation processes and results. The final component in the pyramid," according to Ms. Pederson, "includes a board evaluation process that not only results in a more effective board, but also leads to investor trust."

Evidence of effective board outcomes and evaluation include:
  • The board, its committees and each director conducts a self-evaluation annually, enhanced by third-party facilitation when needed.
  • The evaluation process results in the identification of concrete actions the board agrees to take within a specified period to enhance effectiveness through the achievement of specific milestones.
  • The board's collective competencies map to the company's strategic and technical needs.
  • The company's disclosures around the board evaluation process enhance trust in the board.

Ms. Pederson's report concludes with the following:
A highly effective board of directors is a great asset to a management team and a critical component of company success. Our experience finds that boards must deliberately manage the board effectiveness pillars to be certain they are working on mission-critical elements of the business and procuring the right information to drive decisions. Also, high-performing boards carefully address each element of the systemic governance framework to establish the use of an optimized approach that directly drives board value.

Questions for the board to consider:
  • How does the board evaluate whether management is "living" the company's purpose and values as described in the company's code of business conduct and ethics?
  • How does the board engage with management in rigorous ongoing analyses of material and mission-critical growth drivers, risks and opportunities?
  • How can board materials evolve to include narrative stories that explain matters being presented to the board as well as practical dashboards, graphics, data, and key performance indicators?
  • On mission-critical issues, how does the board diversify its information sources beyond management by engaging with independent advisors to broaden its perspective?
  • Do the board's corporate governance guidelines provide clear standards for director qualifications, continued service, tenure, and removal?
  • Has the board discussed using additional committees to address expanding board or committee roles and oversight responsibilities, particularly around risk, technology, cybersecurity, climate change, human capital management, and material ESG matters?
  • Does the board calendar make sufficient time for board engagement with management, key investors and other stakeholders, and independent advisors?
  • Is every director consistently prepared for board and committee meetings, as demonstrated by his or her engagement and contribution? And if not, how is that feedback provided?
  • Is the board effectively managing and leveraging diversity in backgrounds and perspectives? Is there sufficient diversity in views to promote progress in the board's mission?

What are your recommendations for how to achieve enduring board effectiveness?

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.

March 1, 2024

How Technology Can Drive the Transition to a Superior Future

According to a report produced by Force for Good, a project of the F4G Foundation, a non-profit limited liability company incorporated under the laws of England and Wales, "technology can provide the means to create a sustainable, secure, and superior world. It can help us finish the job of liberating the remaining populations across the world, providing inclusion for all in finance, education, healthcare, housing, dignified work, and a technology enabled world."

The report, entitled Technology Driving the Transition to a Superior Future, includes a letter authored by Ketan Patel, chair of Force for Good's advisory council. Mr. Patel points out that the 2023 "report identified 19 technologies that the largest 100 tech companies were pursuing in a bid to lead the world into a new era. We found that these companies had universally embraced ESG, were actively making their operations across the globe sustainable, and the leaders among them were making a positive impact on society at large." Mr. Patel also notes the "19 technologies identified continue to underpin the efforts of the largest and most resourceful companies. Importantly, what is clear is that a small sub-set of these technologies are the most powerful arbiters of the future, and these are AI, quantum computing, nanotech, genetics, and fusion." 

The 19 technologies include artificial intelligence, big data analytics, quantum computing, internet of things (IoT), robotics, drones, autonomous vehicles, smart grid, renewables, energy storage, next generation nuclear (fusion), eMobility, virtualization (VR, ER, AR, XR, MR), blockchain, material science, 3D printing, nanotechnology, and space technology.

Below are the report's key messages:
  • Existing technologies enabled by AI can close nearly 50% of the SDG gap, if scaled and deployed globally, and can help position the world for the transition to the Information Age; this can bridge the otherwise unsurmountable capital of US$175 trillion needed for the SDGs, and a shortfall of US$137 trillion.
  • The tech industry is the critical player required to take the lead given its expertise, products, influence and ability to access capital, rolling out technology at scale across the world and driving the world into the next era; three of the ten initiatives identified - universal connectivity, leveraging generative AI across the SDGs, and mass financial inclusion - together contribute to nearly 30% of the SDGs and lay the foundations for levelling up the world.
  • 19 core technologies have been identified as the focus of the top 100 tech companies in competing for the future and are also the focus of geopolitical competition between countries and power blocs, and their control is increasingly seen as a key strategic asset for nation states.
  • While the US has the clear lead from a macro and technology perspective, China has drawn level with the EU on key macro fronts and built a strong position in many of the core technologies, the EU has the biggest market which positions it as a rule setter for others, and India is now rising to take a position among these power blocs; US internal political divisions and politicization of the transition among other issues represent noteworthy risks to its leadership position and ability to lead the world into the next era.
  • The risks of a dangerous transition including global climate, migration and socio-political-economic disasters are heightened unless the two-thirds of the world that were not material beneficiaries of the Industrial Age, predominantly in the Global South and also left behind in advanced nations are included; a post transition world, built on a more inclusive platform, can be powered by the identified core technologies, and a suite of others currently under development including fusion, gene-editing and nano-tech, creating a more secure, sustainable and superior future.


The report also presents AI's impact on each SDG:

SDG #1: No Poverty
  • Predictive analytics to identify regions at risk of poverty.
  • AI-driven agricultural technologies to increase crop yields for small farmers.
  • Automating and improving the efficiency of aid distribution.
SDG #2: Zero Hunger
  • Precision agriculture for optimizing food production and reducing waste.
  • AI in supply chain management to reduce food spoilage.
  • Development of AI-based nutritional planning tools.
SDG #3: Good Health and Well-Being
  • AI in diagnostics to improve disease detection and treatment.
  • Personalized medicine for tailored healthcare solutions.
  • AI-driven research in drug discovery and epidemic tracking.
SDG #4: Quality Education
  • Adaptive learning platforms for personalized education.
  • AI tools for language translation to overcome education barriers.
  • Analyzing educational data to improve teaching methods.
SDG #5: Gender Equality
  • AI algorithms to identify and reduce gender biases in hiring.
  • AI-driven platforms to support women entrepreneurs.
  • Analyzing data to better understand and address gender disparities.
SDG #6: Clean Water and Sanitation
  • AI for monitoring and predicting water quality issues.
  • Optimization of water distribution systems in urban areas.
  • AI in wastewater treatment processes for better efficiency.
SDG #7: Affordable and Clean Energy
  • AI in optimizing renewable energy sources.
  • Predictive maintenance for energy infrastructure.
  • Enhancing energy efficiency in buildings and industries.
SDG #8: Decent Work and Economic Growth
  • AI-driven job market analytics for skill development.
  • Automation to increase productivity and create new job opportunities.
  • AI tools for small businesses to access markets and finance.
SDG #9: Industry, Innovation and Infrastructure
  • AI in predictive maintenance for industrial machinery.
  • Facilitating research and development through AI-driven insights.
  • Enhancing logistics and supply chain efficiencies.
SDG #10: Reduced Inequalities
  • AI in financial services to provide credit access to the underserved.
  • AI-driven educational tools for marginalized communities.
  • Enhancing accessibility technologies for people with disabilities.
SDG #11: Sustainable Cities and Communities
  • AI in urban planning for sustainable and efficient cities.
  • AI-driven traffic management and public transport optimization.
  • Enhancing public safety through smart surveillance systems.
SDG #12: Responsible Consumption and Production
  • AI in supply chains to promote ethical sourcing and reduce waste.
  • AI tools for lifecycle assessment of products.
  • Automation in recycling processes.
SDG #13: Climate Action
  • AI in climate modeling and forecasting.
  • AI-driven solutions for carbon footprint reduction.
  • Enhancing the efficiency of climate change mitigation strategies.
SDG #14: Life Below Water
  • AI for monitoring and protecting ocean biodiversity.
  • Predictive analytics for sustainable fishing practices.
  • AI in studying and mitigating the effects of ocean acidification.
SDG #15: Life On Land
  • AI in wildlife tracking and habitat protection.
  • Predictive tools for forest fire prevention.
  • AI-driven land-use planning for sustainable development.
SDG #16: Peace, Justice and Strong Institutions
  • AI in crime prediction and prevention.
  • Enhancing legal research and access to justice through AI tools.
  • AI-driven systems for monitoring and preventing corruption.
SDG #17: Partnerships For the Goals
  • AI to analyze and optimize international aid.
  • Facilitating cross-border collaboration through AI-driven platforms.
  • Enhancing global data sharing and analysis for informed decision-making.

In its conclusion, the report asserts that "Technology is the catalyst for a civilizational shift in the world. As such, competition for technology leadership has become a matter of national security. However, in the absence of raising the Global South, the continued progress of the rich nations of the Global North is at risk." Moreover, "The SDGs can be solved with existing solutions and deliver a more equitable platform from which technology can build a far superior future. In the transition to a new civilization built on information and a new generation of technologies, the world is about to enter a whole new era that has the potential to deliver peace, prosperity, and freedom to all. The tech industry has a critical role to play in building this superior future."

What are you recommendations on how technology can drive to a superior future?

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.

February 26, 2024

Representatives From Nigeria's and Ghana's Financial Sector Learn About U.S. Cybersecurity Solutions

Sponsored by the U.S. Trade and Development Agency (USTDA), which helps companies create U.S. jobs through the export of U.S. goods and services for priority infrastructure projects in emerging economies, I attended the "Nigeria and Ghana Financial Sector Cybersecurity Solutions Networking Lunch" in San Francisco, Calif. on February 13th, 2024. This event, which was part of USTDA's Nigeria and Ghana Financial Sector Cybersecurity RTM (reverse trade mission), provided an opportunity for U.S. companies to hear firsthand from the delegation of Nigerian and Ghanaian business leaders about upcoming business opportunities and to meet one-on-one with delegates to present their cybersecurity services and solutions.

The delegation was interested in procuring products, technologies, and services from American businesses in the following areas: cyber resilience and risk management systems, electronic payments and digital processing, threat intelligence and fraud prevention, and network monitoring and data protection. I had engaging discussions with the delegates about the state of financial services sector in west Africa, the growing threat of cybersecurity, and efforts being made to train the local population to tackle the challenges and seize the opportunity to digitalize Africa's economy.

As an observer of the digitalization of the African continent, this event carried significant importance in light of the Digital Transformation with Africa (DTA) initiative, which President Joe Biden launched to expand digital access in Africa and increase commercial engagement between U.S. and African companies, support increased digital literacy, and strengthen digital enabling environments across Africa. The DTA channels the collective efforts of U.S. and allied government and private sector partners to advance these aims across three pillars including digital economy and infrastructure, human capital development, and digital enabling environment.

The DTA is part of USTDA's Access Africa initiative which supports quality information and communications technology (ICT) infrastructure across Africa. By working with the public and private sectors across the continent, Access Africa brings together critical stakeholders and designs targeted programming to advance inclusive, secure and sustainable connectivity. In addition, Access Africa partners individually contribute to the identification and implementation of USTDA activities that support Africa's ICT sector, including technical, regulatory, institutional and procurement assistance. Lastly, Access Africa provides lasting framework for Africa's public and private sector to partner with trusted U.S. providers and establish ICT relationships that are built to last.

According to the USTDA, as a leading developer and deployer of cybersecurity and data protection solutions, the U.S. private sector is well-positioned to become an essential partner in fortifying network infrastructure in emerging economies' financial sectors. U.S. firms are at the forefront of network monitoring, data analytics, vulnerability detection, artificial intelligence, and blockchain applications. Across Africa, the banking sector has been heavily targeted by cybercrime, with losses of $248 million to malicious cyber activity in 2021.

I appreciate how USTDA's Nigeria and Ghana Financial Sector Cybersecurity RTM allowed public and private sector decision-makers the opportunity to meet with U.S. entities engaged in developing and deploying cybersecurity solutions in the financial sector; establishing policies and regulations; and implementing best practices. The delegates learned about innovative U.S. technologies, financing mechanisms, and best practices to combat cybercrime in the banking sector.

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.

February 19, 2024

Empowering Least Developed Countries Through the Strategic Use of Intellectual Property Rights

In a post on this forum, I discuss how companies should explore the opportunity of generating revenue through licensing their hardware or software. While not implicitly mentioned, such opportunities are available when intellectual property rights (IPRs) are secured and the company is domiciled in a country where IPRs are enforced by strong institutions. But what happens when a company is based in a country where IPRs mechanisms are weak? How do weak institutions that fail to protect IPRs impact a country's economic transformation?

Writing the Forward for a report entitled Harnessing Intellectual Property Rights for Innovation, Development and Economic Transformation in Least Developed Countries, The Rt Hon. Patricia Scotland KC, Secretary-General of the Commonwealth, and Rebeca Grynspan, Secretary-General of the United Nations Conference on Trade and Development (UNCTAD) explain that "In an era when knowledge and innovation are at the forefront of economic transformation, the role of intellectual property rights (IPRs) in shaping the future of least developed countries (LDCs) cannot be overstated." They also point out that the "report is not just a testament to the potential of IPRs in fostering innovation and growth; it is a roadmap for LDCs to navigate the complex terrain of intellectual property (IP) and use it as a tool for sustainable development. In these pages, we delve into how IPRs can be harnessed to stimulate creativity, attract investment and promote technological advancement in LDCs, thereby contributing to their economic transformation and development."

The report's authors explain that the publication "explores how LDCs can develop IP regimes to accelerate innovation, inclusive growth and structural transformation. It examines the economic rationale for strategic IP protection in LDCs and explores practical ways in which LDCs can unlock IP-related benefits and sequence the development of IP regimes, tailored to their local needs, structural characteristics and stages of development, to support innovation and development in both the formal and the informal economies."

What is more, the report "explores various forms of IP protection, particularly copyrights; GIs (geographical indication); industrial designs; patents; trademarks; utility models; and the protection of genetic resources, traditional knowledge, cultural expressions and folklore. Using these more strategically could help businesses in LDCs develop competitive advantages, while also encouraging innovation, fostering the development of productive capacities and boosting trade and investment."

I appreciate how this report contributes valuable insights, policy perspectives and practical recommendations on how LDCs can strategically use IPRs to drive innovation and development.

What are your recommendations for how to empower LDCs through the strategic use of IPRs?

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.