tag:blogger.com,1999:blog-50449904190480850412024-03-17T20:16:15.543-07:00GT PerspectivesA Forum For Turning Perspective Into OpportunityAaron Rosehttp://www.blogger.com/profile/16914196169617403460noreply@blogger.comBlogger554125tag:blogger.com,1999:blog-5044990419048085041.post-6504432250841424822024-02-12T00:38:00.000-08:002024-02-16T12:20:02.084-08:00Infrastructure Opportunities in Latin America Are Deep and Wide<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgC8tOSNLmAmUj2UuLX8NZaZfurntfRGByHS0fTnSEXobKxBaEPh-y7O5tUf5x2TTpqlgYV4UmI9LBNoDui5tJOevuzldbQB0a29d_WH5n-NAhdfTBCL9ymacOcvQ2tSY8evDYovEyuDTjBsKU45VvAiGvadI6sXYaSidEFLGuigyFwIzRhSInZas9hbFfz/s768/Screenshot%20(489).png" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="768" data-original-width="588" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgC8tOSNLmAmUj2UuLX8NZaZfurntfRGByHS0fTnSEXobKxBaEPh-y7O5tUf5x2TTpqlgYV4UmI9LBNoDui5tJOevuzldbQB0a29d_WH5n-NAhdfTBCL9ymacOcvQ2tSY8evDYovEyuDTjBsKU45VvAiGvadI6sXYaSidEFLGuigyFwIzRhSInZas9hbFfz/w153-h200/Screenshot%20(489).png" width="153" /></a></div>A <a href="https://www.eiu.com/n/campaigns/infrastructure-opportunities-in-latin-america" target="_blank">report</a> published by the Economist Intelligence Unit (the EIU) asserts that "Latin America lags most of its regional peers in terms of infrastructure investment. According to the Global Infrastructure Hub (GI Hub, a G20 initiative), Latin America spent 2.2% of its GDP in 2023 on infrastructure, but actual investment needs are estimated at 3.5% of GDP. The difference of 1.3% of GDP represents nearly US$90bn in unmet infrastructure needs, and that gap will only widen if infrastructure investment does not pick up."<div><br /></div><div>The EIU also notes that the shortfall in infrastructure investment is reflected in its "Operational Risk scores, which place Latin America far behind OECD economies in the infrastructure category." For example, "Poor infrastructure weighs on the business environment and growth: the lack of proper transport links raises supply‑chain costs; unreliable electricity distribution disrupts economic activity; and patchy ICT coverage leaves entire regions and their inhabitants isolated."</div><div><br /></div><div>The report's other key findings include:</div><div><ul style="text-align: left;"><li><i>Latin America's infrastructure remains below par by international standards, limiting competitiveness and economic growth. Many of the region's governments are operating under significant fiscal constraints, which means that they will look to the private sector to take a more prominent role in developing much-needed infrastructure in 2024.</i></li><li><i>There are myriad opportunities for private investors in all sectors across the region. Most Latin American countries have adopted the public-private partnership (PPP) model, but policies, regulatory frameworks and risks vary widely from country to country. Uncertainty surrounding the policy direction of some governments—particularly in Argentina and Colombia—is another obstacle to attracting investment.</i></li><li><i>Even countries with well-established frameworks and experience with PPPs—such as Colombia, Mexico and Panama—will face setbacks. In particular, a lack of consensus between governments, businesses and local communities will stoke social unrest and delay development.</i></li><li><i>National governments do not have a monopoly on PPPs: in Brazil, for example, states and municipalities have used PPPs to accelerate their own projects—a trend that will continue in 2024 and beyond.</i></li></ul><div><br /></div><div><div>The EIU explains how the infrastructure gap is holding Latin America back in keeping up with new technologies. "Because of its sizeable infrastructure gap, the well of investment opportunities in Latin America is deep and wide," the report says. "The region's logistics and utilities infrastructure is in dire need of expansion and modernization, but sectors at the forefront of innovation and technology also deserve attention. The rollout of 5G technology, for example, has been slow in some countries, but progress this year—Argentina finally carried out its long-awaited 5G auction in October and Colombia in December—will generate some opportunities in 2024."</div></div><div><div><div><br /></div><div><div>The report importantly adds:</div><blockquote><div>Investment in renewable and sustainable energy sources, like solar and wind, is also growing but remains far below Latin America's potential. The region could become a crucial player in the supply chain to power the global green energy shift, owing to its large reserves of critical minerals, wide use of renewable energy sources and water availability. However, it lacks the necessary infrastructure and funding to produce the batteries and green hydrogen that will fuel the world in the decades to come. Investments in these areas are on the radar of governments in Latin America's major economies, but the biggest infrastructure opportunities—in the near term at least—will be in logistics, including road, rail, energy distribution, and ports in the likes of Argentina, Brazil, Colombia and Mexico.</div></blockquote></div><div><br /></div><div>What are your thoughts about the private sector taking a more prominent role in developing Latin America's much-needed infrastructure in 2024?<br /><br /><a href="https://www.linkedin.com/in/aaronrose/" style="font-style: italic;" target="_blank">Aaron Rose</a><i> is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of </i><a href="https://www.gtperspectives.com/">GT Perspectives</a>,<i> an online forum focused on turning perspective into opportunity.</i><div><div><br /></div></div></div></div></div></div>Aaron Rosehttp://www.blogger.com/profile/16914196169617403460noreply@blogger.com0tag:blogger.com,1999:blog-5044990419048085041.post-89619200381229390982024-02-07T11:54:00.000-08:002024-02-27T13:02:43.830-08:00Policy Recommendations for Promoting International Investment by Small and Medium-Sized Enterprises<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhnllZnRHVeyAQaPrN8ep7OWPzc0K00_-cN2la2ebhMRQY66BhCDvnE9quyxzRg4PyecptXciZz3EC1p_3wJ5ep4fHxf9HTx9O8-K1Qy3lK_WxIiesKTzPdk_hhuagNj491J69q5h6mmSlhvGJgVZ8dF7U-KzRGWiB1jw-wO076Qr5LeIesyQzUl-P3uxzV/s768/Screenshot%20(493).png" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="768" data-original-width="540" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhnllZnRHVeyAQaPrN8ep7OWPzc0K00_-cN2la2ebhMRQY66BhCDvnE9quyxzRg4PyecptXciZz3EC1p_3wJ5ep4fHxf9HTx9O8-K1Qy3lK_WxIiesKTzPdk_hhuagNj491J69q5h6mmSlhvGJgVZ8dF7U-KzRGWiB1jw-wO076Qr5LeIesyQzUl-P3uxzV/w141-h200/Screenshot%20(493).png" width="141" /></a></div><div><div>A <a href="https://unctad.org/publication/promoting-international-investment-small-and-medium-sized-enterprises" target="_blank">report</a> by the United Nations Conference on Trade and Development (UNCTAD), the trade and development body of the United Nations, correctly notes that "Small and medium-size enterprises (SMEs) are important contributors to economic development, representing a substantial portion of businesses globally. Global markets offer SMEs opportunities for growth, diversification and resilience. Access to international markets enables them to tap into new customer bases, gain exposure to diverse business practices and foster innovation through cross-cultural collaboration."</div></div><div><br /></div><div>Having supported initiatives aimed to promote international investment by SME's, I support the report's assertion that "SMEs encounter significant challenges that hinder their investment overseas. SME investors, relative to large Multinational Enterprises (MNEs), face distinctive bottlenecks including financial and information constraints, difficulties in dealing with regulatory complexities and, importantly, an international investment environment in which facilitation and investment promotion institutions are often geared towards attracting large-scale investment projects." The report points out "Foreign direct investment (FDI) by SMEs has been in decline in recent years: the number of outward greenfield investment projects in 2022 was only about a quarter of that in 2015."</div><div><br />With financial support of the Kingdom of the Netherlands, UNCTAD's report says that "Based on original empirical studies in different developing regions and selected developed economies, this report discusses how to reduce the common investment policy bias in home and host countries towards large MNEs, the role of SMEs in South–South and intraregional FDI, and ways and means to maximize the development impact of SME FDI." What is more, "It introduces a new framework to assess the relevance and effectiveness of existing investment policies for the promotion of SME investment and presents policy options to facilitate overseas investment by SMEs and reduce the existing policy bias." These policy options include:</div><div><div><ul style="text-align: left;"><li>Adjusting investment promotion and facilitation services towards addressing the needs and challenges that SMEs face, so that size does not hinder their access to financial incentives and facilitation mechanisms.</li><li>Establishing comprehensive support networks and designing accessible matchmaking program and events to help small businesses connect and to foster sustained and successful partnerships.</li><li>Improving SMEs' competitiveness by supporting their innovation capacity, including through digitalization, technology adoption and capacity-building.</li><li>Facilitating SMEs' access to capital, including by improving digital services and infrastructure development.</li><li>Simplifying the regulatory and administrative framework and improving access to information by using digital platforms.</li><li>Promoting SMEs' participation in trade to increase their international exposure and knowledge of foreign markets.</li></ul><div><br /></div></div><div>I agree with the UNCTAD that "By implementing a combination of these policies, governments can create an environment that supports SMEs in their efforts to invest and thrive in international markets and to harness the related development benefits."</div><div><br /></div><div>What are your recommendation for promoting international investment by small and medium-sized enterprises?</div><div><br /></div><i></i><a href="https://www.linkedin.com/in/aaronrose/" style="font-style: italic;" target="_blank">Aaron Rose</a><i> is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of </i><a href="https://www.gtperspectives.com/">GT Perspectives</a>,<i> an online forum focused on turning perspective into opportunity.</i></div>Aaron Rosehttp://www.blogger.com/profile/16914196169617403460noreply@blogger.com0tag:blogger.com,1999:blog-5044990419048085041.post-65714035967265925612024-01-31T11:35:00.000-08:002024-01-31T20:02:49.690-08:00Global Trends in Commodities and Threats to Watch in 2024<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg8-RiDnD60xph3d4DfWiHpDQF9gNuf_pixXjIjl0uV_JnVa59yKg_rqAHsZNR1GcGJqTecBI3nPeU4IewECFnG2KniLMonZ3LAKsw091fA2255G0Zy9PNb2gX3dRL8FmI44ranr8FK_LuLxVdJj9KDaRTDKseMwKwEm9FA76YRkudRAbEVYfz3p_JzB66j/s768/Screenshot%20(481).png" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="768" data-original-width="594" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg8-RiDnD60xph3d4DfWiHpDQF9gNuf_pixXjIjl0uV_JnVa59yKg_rqAHsZNR1GcGJqTecBI3nPeU4IewECFnG2KniLMonZ3LAKsw091fA2255G0Zy9PNb2gX3dRL8FmI44ranr8FK_LuLxVdJj9KDaRTDKseMwKwEm9FA76YRkudRAbEVYfz3p_JzB66j/w155-h200/Screenshot%20(481).png" width="155" /></a></div>"After three years of extreme volatility, commodities prices are set to broadly stabilize in 2024," according a <a href="https://www.eiu.com/n/campaigns/commodities-outlook-2024" target="_blank">report</a> published by the Economist Intelligence Unit (the EIU). Moreover, "This apparent stasis may come as a surprise given the many geopolitical headwinds buffeting the global economy at the moment. These range from adverse weather conditions to escalating conflict in the Middle East and rocketing freight rates owing to disrupted shipping routes through the Suez and Panama canals. However, this holding pattern for commodities prices in 2024 belies what will be an eventful year as markets remain volatile in the short term before secular trends, especially those linked to the green transition, come to the fore."<div><br /></div><div><div>The EIU says El Niño and the Russia-Ukraine war still loom large for soft commodities. With respect to the former, "Prices for food, feedstuffs and beverages (FFB) will rise over the course of 2024, driven primarily by beverages, as El Niño will hit production and therefore prices for coffee and cocoa will increase." The report encouragingly says "Some relief is in sight, with the US National Oceanic and Atmospheric Administration (NOAA) giving a 72% chance that El Niño will come to an end by mid-year. But the damage to this season's harvests will already be done by then, with coffee and cocoa production forecast to fall by 9% and 13% respectively in the 2023/24 crop season."</div><div><br /></div><div>As for Russia's unjustified invasion of Ukraine, the report points out that "Russia's permanent withdrawal from the Black Sea Grain Initiative poses another upside risk to global food prices, particularly wheat, maize and oilseeds. However, the impact on prices so far has been muted, as Ukraine has managed to export grains and oilseeds via alternative road and rail routes across the country's western borders." The EIU explains how "Ukraine's grain exports initially plummeted following the collapse of the grain deal last summer, but they have recently picked up after Ukraine successfully established a temporary shipping corridor through the western Black Sea with the help of Romania and Bulgaria."</div><div><br /></div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjfqJBc66iybEE0ssJ6iEaRfJa3aDB7we6_wEaC8i9HPeHpelzgLvLIVJtriBtRiyPEXolMPlnBlgn2hBIr7_4pQRBwYugV-6yHPHOWaJpEoUPyFq1YjoxxAQOxj2Ic8tvP-KZevTSKgkC5dCt28IzHFZSvQhRigiC9iVx_nQsxNOUATl9WCiI5W37XDKv1/s1200/1706691609362.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="675" data-original-width="1200" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjfqJBc66iybEE0ssJ6iEaRfJa3aDB7we6_wEaC8i9HPeHpelzgLvLIVJtriBtRiyPEXolMPlnBlgn2hBIr7_4pQRBwYugV-6yHPHOWaJpEoUPyFq1YjoxxAQOxj2Ic8tvP-KZevTSKgkC5dCt28IzHFZSvQhRigiC9iVx_nQsxNOUATl9WCiI5W37XDKv1/w400-h225/1706691609362.jpg" width="400" /></a></div><br /><div class="separator" style="clear: both; text-align: left;"><div class="separator" style="clear: both;">The report importantly says "exports will still not match pre-war levels, which will keep a floor under wheat and maize prices in the short run. At the same time, rice prices will rise in 2024, underpinned by white rice export restrictions in India — by far the largest supplier to the global market."</div></div><div class="separator" style="clear: both; text-align: left;"><br /></div><div class="separator" style="clear: both; text-align: left;">The EIU is also forecasting oilseeds prices stabilizing in 2024 and as with international soybean stockpiles remaining relatively tight, "prices will remain susceptible to perceived threats to world supplies, either from climate events or further supply-chain disruption." However, the EIU expects "a strong rise in soybean production (owing to a bumper crop in Argentina, which actually benefits from El Niño), which will drive soybean prices downwards over the course of the year. Despite a probable market deficit in the 2023/24 season (October-September), palm oil prices will remain low due to falling prices for rapeseed and sunflowerseed oils, which are also benefiting from Ukraine's temporary export route."</div><div><br /></div><div><div>The green transition will be a driver of base metals prices by end-2024, according to the report. The EIU's forecast for their "base metals price index will increase by an average of 3% in 2024, after falling by more than 11% in 2023, as the green transition supports rising demand for critical minerals. Even for metals such as nickel that will register significant year-on-year declines in 2024, prices are poised to rise from their end-2023 levels. Despite a strong supply response from producers, which will lead to a market in oversupply in 2024, low reserves will make nickel susceptible to supply-chain disruption." Furthermore, "London Metal Exchange (LME) warehouse stockpiles remain low by historical standards and the availability of class 1 nickel will be limited by end-users deciding to avoid using Russian supply."</div></div><div><br /></div><div>The EIU is predicting energy prices, excluding crude oil, will trend downwards in 2024. In the comping year, "prices of hydrocarbons will largely trend in the opposite direction than those of most industrial raw materials and soft commodities. We expect average European natural gas prices to fall by one-fifth in 2024, after plummeting by more than two-thirds in 2023, largely due to demand destruction, particularly in industry. However, there will be periodic spikes owing to market anxiety about the security of global supply chains, amid rising geopolitical tensions stoked by the Israel-Hamas war. Nevertheless, prices will remain historically high, limiting any significant recovery in industrial demand."</div><div><br /></div><div>In addition, "Strong European demand for liquefied natural gas (LNG) will push up US prices from their current low base and limit the fall in LNG prices. Coal prices will continue to trend downwards as long as gas storage levels in Europe remain seasonally high and LNG continues flowing to the continent, limiting the squeeze on gas supplies in Europe."</div><div><br /></div><div>As for crude oil prices, "The US has ramped up production and exports, and the global market has moved back into surplus (production exceeding demand). However, as Saudi Arabia is unlikely to increase output markedly this year, and with other OPEC members also implementing voluntary cuts, the market will periodically return to deficit, which will limit the downside to oil price forecasts. Global oil demand will also put a floor under prices and is set to reach record highs in 2024 and in subsequent years as consumption in the developing world continues to increase." What is more, "Heightened geopolitical risks tied to the Israel-Hamas war still threaten to cause prices to soar again. Although we expect crude oil prices to remain volatile, they should mostly trade at about US$80/barrel, essentially where they began the year."</div><br />What trends in commodities and threats are you watching in the next 12 months?</div><div><br /><div><i></i><a href="https://www.linkedin.com/in/aaronrose/" style="font-style: italic;" target="_blank">Aaron Rose</a><i> is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of </i><a href="https://www.gtperspectives.com/">GT Perspectives</a>,<i> an online forum focused on turning perspective into opportunity.</i></div></div>Aaron Rosehttp://www.blogger.com/profile/16914196169617403460noreply@blogger.com0tag:blogger.com,1999:blog-5044990419048085041.post-83688509913938620862024-01-26T00:01:00.000-08:002024-01-28T22:39:19.189-08:00How Corporate Boards Can Confront Crisis and Embrace Opportunity<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgn0k6_RsdR9QWjyX9vPP3rJD20y6PSdeGNNreZwfd30Wy3drn1sJgp_JrPR89LNvpXjPFUrU75KjMlLfFFoRM83jtvo9887n4RXyF2tdN-FVLzjITkcNZcuaBpPduM2C0X7pZFfGw78zJYi3m6rb8SCAQ_sQEs4zCnq_RTlLTVVO41KRXy4xy2AljcGgzw/s768/Screenshot%20(453).png" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="768" data-original-width="592" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgn0k6_RsdR9QWjyX9vPP3rJD20y6PSdeGNNreZwfd30Wy3drn1sJgp_JrPR89LNvpXjPFUrU75KjMlLfFFoRM83jtvo9887n4RXyF2tdN-FVLzjITkcNZcuaBpPduM2C0X7pZFfGw78zJYi3m6rb8SCAQ_sQEs4zCnq_RTlLTVVO41KRXy4xy2AljcGgzw/w154-h200/Screenshot%20(453).png" width="154" /></a></div><div>As we enter into 2024, the world is experiencing conflicts in a multitude of countries and these conflicts are having an adverse effect on global trade, which in turn, impacts global financial markets. As EY, a consultancy, says in its <a href="https://www.ey.com/en_us/board-matters/americas-board-priorities-2024" target="_blank">report</a> on how boards of American companies can confront crisis and embrace opportunity, "Dynamic global crises continue to challenge companies, with the escalation of conflict in the Middle East, the war in Ukraine, geopolitical complexities related to China, and an uneven global economy creating a sense of permanent crisis on a multitude of fronts." </div><div><br /></div><div>The multinational consultancy adds: "At the same time, exceptional growth opportunities seem at hand. Generative AI (GenAI) represents a groundbreaking leap in technology with the potential to increase productivity and transform work, business models and society. Further, the continuing energy transition demands a reframing of business strategy to mitigate risks and thrive in a low-carbon economic future."</div><div><div><br /></div><div>Moreover, "In this context of crisis and opportunity, directors are deepening their engagement. They are guiding companies to build resilience by considering multiple alternative scenarios and carefully balancing discipline and transformation."</div></div><div><br /></div><div>Below are the key findings of each chapter of the report with recommended actions for boards and questions a board should be asking (the recommended board actions and questions are copied verbatim):</div><div><br /></div><div><b>CHAPTER 1: STAY AGILE AMID CONTINUED ECONOMIC UNCERTAINTY</b></div><div><br /></div><div>The report's first chapter focuses on how to stay agile amid continued economic uncertainty. The chapter's key point is boards should enhance oversight and flexibility as uncertain economic conditions persist. "Global economic activity remains subdued heading into 2024, with rising geopolitical tensions and tightening financial conditions as key risks. As the year begins, companies can expect slower business and consumer spending, along with softer labor market conditions and still-elevated costs." Furthermore, "Companies must navigate an ever‑shifting landscape of geopolitical and economic uncertainty. To do so, they will need to build resilience and agility in their operations."</div><div><br />What boards should do in 2024:<div><ul style="text-align: left;"><li><b>Embrace agility and oversee flexible strategic planning that incorporates dynamic multi-scenario planning.</b> Boards have an opportunity to guide management, pressure-test plans, and assess multiple options for achieving strategic goals in the current operating environment. Directors should ask what economic, financial and customer demand scenarios have been considered and what the potential impacts are on financial performance, growth and strategy.</li><li><b>Confirm how the board will receive timely updates about macroeconomic developments that could impact the company.</b> The board is a strategic resource to the management team in preparing for different economic scenarios and thus needs timely and relevant information from experts beyond the management team to do this effectively. This information should directly inform scenario planning.</li><li><b>Help management focus on the long term.</b> This will be important as the company considers how to adapt to potential economic deceleration and various challenging geopolitical developments. For example, the board can oversee how productivity, training and efficiency gains can offset higher labor costs. The board can also encourage capital strategies that position the company to thrive as broader technology and sustainability trends continue to reshape the business environment.</li></ul><div><div>Questions for the board to consider in order to enhance oversight and flexibility as uncertain economic conditions persist:</div><div><ul style="text-align: left;"><li>How is the company planning for a range of economic scenarios, including those in which geopolitical developments keep inflation elevated, and potentially rising, for longer?</li><li>How often does the board ask leadership: "What if we’re wrong?" How is the company considering what it would do differently if a low-probability, high-impact scenario was to emerge?</li><li>What is the company doing to stress-test its balance sheet and develop and test a crisis playbook that gives company leaders comfort in their ability to manage through even the worst‑case scenario?</li><li>How is the company developing a resilient strategy around pricing, capacity management and location, and distribution that is nimble enough to navigate a world where demand will ebb and flow more significantly than in the past few decades? How is scenario planning supporting that strategy?</li><li>How is the company evaluating costs, investments and decisions in the context of its long-term strategy, especially regarding technology, talent and the energy transition?</li></ul><div><br /></div></div><div><div><b>CHAPTER 2: BALANCE DISCIPLINE AND TRANSFORMATION IN CAPITAL STRATEGY</b></div></div><div><br /></div><div>Focusing on how to balance discipline and transformation in capital strategy, chapter two of the report discusses how to adapt strategic priorities to a slower-growth environment. According to EY, "A mantra for many leadership teams this year will be financial discipline. Growth at any cost has given way to investments that must show a clear path to profitability or value creation. Still, companies cannot afford to retrench." In addition, "Companies cannot afford to let financial caution prohibit necessary investments for long-term growth, such as those related to technology and sustainability."</div><div><br /></div><div>What boards should do in 2024:</div><div><ul style="text-align: left;"><li><b>Encourage accelerated investment for long-term growth and competitiveness.</b> Boards must keep the long term in view for management so that companies do not miss out on innovations or avoid tough decisions that will be necessary to stay competitive in a future that will look very different from the past.</li><li><b>Enable management to maximize profitability and position for business model transformation.</b> Challenge how management is identifying opportunities for cost management, tracking the progress on investment decisions and considering how markets could evolve and impact the use of capital in existing and potential businesses. Probe how internal rationalization, cost cutting and divestitures can fund future transformation.</li><li><b>Promote enhanced communication with investors about the company's capital strategy.</b> Capital allocation can be a key area of focus for activist investors, and a bear market leaves companies more exposed at a time when investors are less forgiving. In an environment of heightened shareholder activism, boards can help challenge whether companies are doing enough to communicate the company's strategy narrative proactively with shareholders.</li></ul></div><div>Questions for the board to consider to facilitate the balancing of discipline and transformation in capital strategy:</div><div><ul style="text-align: left;"><li>How is the company optimizing its capital management and reducing direct and indirect costs through an era of continual change? How is it considering internal cost cutting as potential funding for ambitious transformation?</li><li>How is the company investing to mitigate risk and create long‑term growth opportunity despite multiple headwinds? Is it maintaining the right balance of innovation and capital strength?</li><li>How is the board defining its role as stewards of investor capital? Does that role include positioning the business to thrive as the world evolves?</li><li>How is the company's capital investment strategy changing in areas such as digital and technology, people and skills, innovation and research and development (R&D), and sustainability? How are board committees coordinating their oversight of these matters?</li><li>What types of transactions (e.g., M&A, divestment, new joint ventures or strategic alliances) is the company considering to achieve its strategic goals? Are those options explored at the board level or is the board presented only with management's decision?</li><li>How is the company's investor engagement program keeping key shareholders informed of the company’s long-term value creation strategies and the board’s related expertise? Do disclosures describing the board’s composition demonstrate that, individually and collectively, the board is fit for purpose?</li></ul><div><div><b><br /></b></div><div><b>CHAPTER 3: EMBRACING CYBERSECURITY AND DATA PRIVACY AS STRATEGIC ADVANTAGES</b></div></div></div><div><br /></div><div>The next chapter of the report addresses the importance of embracing cybersecurity and data privacy as strategic advantages. Emphasizing how companies should broaden cybersecurity and data privacy beyond compliance, the report points out that "While cybersecurity and data privacy are perennial concerns for boards, they include a complex set of always-evolving drivers, and background knowledge that can quickly stale. 2023 saw a variety of different changes in the cybersecurity landscape, such as the quick adoption of new technologies, new geopolitical influences, new regulatory requirements and increasing nation‑state bad actors." What is more, "A more complicated environment will likely cause many organizations to mature their cybersecurity oversight through 2024."</div><div><br /></div><div>What boards should do in 2024:</div><div><ul style="text-align: left;"><li><b>Reconsider whether cybersecurity oversight is structured the right way.</b> The new SEC disclosure rules may be a good opportunity for the board to reconsider whether it is structured appropriately to oversee cybersecurity in the years ahead. To do so, it may consider adding (or removing) a focused committee, concentrating or distributing cyber expertise throughout the board, changing the cadence of cyber discussions, or otherwise altering the board agenda.</li><li><b>Participate in complex cyber threat tabletop exercises.</b> These can be done either separately or with management, and complex cyber exercises can be incorporated into the board calendar. These scenarios should be varied and dynamic. Although it may be unlikely that a specific scenario will be replayed in real life, the simulation can develop the board’s muscles for dealing with a challenging crisis; pressure-test existing playbooks, discussing policy such as whether the company will pay ransoms; and uncover opportunities to improve processes and procedures.</li><li><b>Maintain a wide variety of voices in the boardroom.</b> In addition to members of the cybersecurity team, directors may seek a variety of voices, ranging from operators and internal audit to HR and strategy, to understand the company's preparation that extends beyond threat and response to data privacy and ethical data usage. This can give insight into how the company’s cyber risk appetite is being applied and whether the cyber risk culture meets expectations. Further, complexity can be a barrier to effectively combating cyber threats. The board may ask management teams to consider how IT security systems can be simplified.</li></ul></div><div><div>Questions for the board to consider to embrace cybersecurity and data privacy as strategic advantages:</div><div><ul style="text-align: left;"><li>How has management adapted the cyber response playbook to the threat environment that continues to evolve?</li><li>Have appropriate and meaningful cybersecurity and data privacy metrics been identified and provided to the board on a regular basis, and have dollar amounts been assigned to these risks?</li><li>What is the state of the organization's cyber risk culture? How can the organization minimize employees' susceptibility to online manipulation and deceit?</li><li>What information has management provided to help the board assess which critical business assets and partners, including third parties and suppliers, are most vulnerable to cyber attacks?</li><li>How does management evaluate and categorize identified cyber and data privacy incidents and determine which ones to escalate to the board?</li><li>How does the organization use data to build and maintain trust with stakeholders, such as employees, customers, suppliers and investors?</li><li>What controls are in place for ethical usage of technology to promote stakeholder trust and data privacy?</li><li>Has the board participated with management in one of its cyber breach simulations in the last year? How rigorous was the testing?</li><li>Has the company leveraged a third-party assessment to validate that the company's cyber risk management program is meeting its objectives? If so, is the board having direct dialogue with the third-party related to the scope of work and findings?</li></ul></div></div><div><div><br /></div><div><b>CHAPTER 4: GUIDE RESPONSIBLE AND TRANSFORMATIVE INNOVATION AND TECHNOLOGY</b></div></div><div><br /></div><div>The fourth chapter of EY's report addresses the importance of guiding responsible and transformative innovation and technology by enabling the company to innovate in a way that is both revolutionary and ethical. "GenAI is only one of many emerging technologies that is already impacting business in expected and unexpected ways. Other technologies and innovations include the metaverse, Internet of Things, Web3, and quantum computing. These advancements will transform the work organizations do and the environment in which they operate." The report further asserts that "GenAI's appeal puts pressure on management to take advantage of its potential for strategic advantage before their competitors do, or risk falling behind."</div><div><br /></div><div>What boards should do in 2024:</div><div><ul style="text-align: left;"><li><b>Strengthen management accountability for responsible AI.</b> Boards are in a strong position to make sure that management teams are creating responsible AI policies that effectively manage the risks and capitalize on the opportunities available for the enterprise while keeping the company's values and purpose as a north star. It is not enough to require that policies are in place. Boards should go further to push management to ensure that employees adhere to such policies, that there is a mechanism to determine if they are not and that managers are quickly fixing problems.</li><li><b>Embrace a range of perspectives and experiences in the boardroom.</b> Directors with a wide variety of professional and lived experience are increasingly important to help drive innovation and govern emerging technology. This diversity enables the board to better identify nontraditional threats and encourage management teams to responsibly leverage new technologies and innovations. Further, a variety of perspectives from within the boardroom fosters an environment that facilities robust discussion, allowing key assumptions and conclusions in strategy, operations and other areas to undergo thorough pressure testing.</li><li><b>Gain visibility into external trends and internal capabilities.</b> An intentional approach to understanding the trends likely to impact the company over the long term is critical for a "future‑back" approach to strategy. This strategy approach envisions possible future scenarios and then works backward to identify the strategic objectives in order to ensure the company is viable in that future. Further, working to understand the company's internal capabilities by going beyond C-suite presentations through hands-on experience and R&D visits can help the board better evaluate how management is placing bets across the enterprise.</li><li><b>Build agility into the decision-making process.</b> The pace of innovation is fast and may only get faster. A traditional board meeting cadence — four to six full board and committee meetings a year — may be insufficient to support the needs of the company. Boards should work with their management teams to consider a more flexible trigger-based approach to strategic planning that entails a more consistent evaluation of the future. At the same time, boards may gain value by looking inward to consider the current structure for overseeing innovation and emerging technology. Confirming that the board’s structure remains fit for purpose is critical to making sure the board does its best to support innovation and emerging technology.</li><li><b>Investigate innovation in the boardroom.</b> The board may start to consider the ways in which innovations such as GenAI can improve its own work. GenAI may be able to support boards by summarizing large and complex board materials, more efficiently schedule time for board and committee meetings, and provide background and learning curriculum for new and emerging boardroom topics.</li></ul><div>Questions for the board to consider to enable the company to innovate in a way that is both revolutionary and ethical:</div><div><ul style="text-align: left;"><li>What is the company's path to value with GenAI and other technologies? How are the risks identified and managed?</li><li>What policies has the company implemented to confirm that GenAI is used responsibly? How does management know they are working?</li><li>How is the company's innovation budget and program contributing to the creation of an informed strategic plan leveraging emerging technology?</li><li>How is the board thinking about and redefining competitors or industry boundaries? Who might now be a competitor but wasn't previously?</li><li>How are responses to changing stakeholder demands, expectations and operational disruptions leading management teams to innovate?</li><li>How are investments in innovation tracked and reported to the board? Is the board engaged in innovation discussions as part of the strategy-setting process?</li><li>How is the board building a foundational understanding of evolving technologies, including learning through hand-on demonstration and experience? How will companies create an ecosystem in which AI and data protection coexist and create synergies to generate a better value proposition for users and customers?</li></ul><div><br /></div></div></div><div><div><b>CHAPTER 5: ENABLE A PEOPLE-CENTRIC WORKFORCE STRATEGY</b></div><div><br /></div><div>Chapter five of centers on enabling a people-centric workforce strategy by guiding talent engagement and cultivation amid a rebalancing of power and a reimagining of work. "The talent landscape is constantly being disrupted by a combination of cyclical and structural forces. This has led to a divergence in perspectives between employers and employees." I agree that "Employers may be underestimating the fluidity of the labor market." As the report explains: "While 57% of employers believe that a more challenging economic climate would reduce employees' likelihood of seeking new jobs, the survey found that a significant 34% of employees expressed their willingness to leave their current jobs within the next 12 months. This highlights the importance of talent availability, acquisition and retention. For directors who view talent as a top priority in 2024, 77% said these topics were most important."</div></div><div><br /></div><div>What boards should do in 2024:</div><div><div><ul style="text-align: left;"><li><b>Seek a deeper view into employee sentiment and perspectives by hearing from employees more directly.</b> Boards should actively engage with the chief human resources officer (CHRO) and seek direct input through tools such as pulse surveys and interactions with front-line employees. This approach enables boards to hear employees' voices directly and fosters a culture of inclusivity and engagement.</li><li><b>Guide management to put people first in workforce strategy and cultivate a culture of trust.</b> This involves boards evaluating the leadership team and their incentives to energize and inspire employees, ultimately gaining their trust. Additionally, boards should oversee how management implements workforce re‑skilling and training initiatives to prepare the workforce for future challenges, while actively involving employees as partners in that transformative journey.</li><li><b>Enhance stakeholder communications around compensation committees' oversight of human capital matters.</b> With potential new SEC rules and heightened attention on high-profile strikes, stakeholders will scrutinize the board’s role in governing the talent agenda. Investors will seek to understand whether the compensation committee or full board has a meaningful impact on shaping a resilient talent strategy.</li></ul></div></div><div>Questions for the board to consider to guide talent engagement and cultivation amid a rebalancing of power and a reimagining of work:</div><div><ul style="text-align: left;"><li>How does the company's talent strategy advance its overall strategy? What changes have been made to other elements of the business to advance the talent strategy?</li><li>How is the company identifying and addressing employees' chief areas of concern?</li><li>How is the company's leadership team earning trust with employees? Do the company's employees feel connected, inspired and well-informed at work? Do they feel that leadership cares about them as people?</li><li>How often is the board engaging directly with the CHRO or equivalent and what is the substance of those discussions? How is the board getting a direct line of sight into employee perspectives below the executive level?</li><li>What human capital management metrics are the board or compensation committee reviewing? How do those metrics align with the long-term talent strategy, and what narrative is the company communicating to stakeholders about its talent agenda?</li><li>How is the company providing support for career path and progression, including mentoring, learning and development programs, and updating organizational design to open opportunities for advancement? Are upskilling and retention central to the company’s talent strategy, including key areas such as technology and sustainability?</li><li>How is the company making the use of AI compatible with talent development so that the company’s strategy can adapt quickly to the constantly changing business ecosystem?</li><li>How is the company approaching in-office, fully remote or hybrid working models and maximizing the human experience of work in its talent strategy? How is the board getting insight into employee sentiment related to hybrid and remote working across different job functions, geography, age and gender?</li></ul></div><div><br /></div><div><div><b>CHAPTER 6: KEEP OTHER FOCUS AREAS ON THE BOARD AGENDA</b> </div></div><div><br /></div><div>With the thesis of balancing top priorities with additional imperatives, being careful to not overwhelm the board agenda, the report's sixth chapter addresses the importance of keeping other focus areas on the board agenda. "The board's priorities for 2024 are not the only areas of risk and opportunity that boards will need to address this year. There are other business imperatives to consider in the year ahead" such as keeping pace with regulatory developments, guiding political considerations, overseeing supply chains as strategic assets, and addressing climate change and environmental stewardship.</div><div><br /></div><div>Questions for the board to consider 2024:</div><div><ul style="text-align: left;"><li>What systems and processes are in place to monitor international and domestic legislative and regulatory developments and keep the board informed as appropriate? How is management taking prudent action now to prepare for future regulation as appropriate?</li><li>How is the company ensuring visibility across global supply chains and considering alternative suppliers to improve resilience to shortages or price volatility? Is it evaluating supplier relationships for potential geopolitical complications and exploring alternative networks tuned to the new geostrategic environment?</li><li>Does the company view climate- and nature-related initiatives as a means of protecting and creating more value for the business?</li><li>How is it exploring opportunities to transform its business portfolios while reducing emissions?</li><li>How is the company engaging and supporting suppliers to influence emissions reduction through their supply chains? Has the company considered a strategic partnership or joint venture to help achieve its climate agenda?</li><li>How well do management and the board understand how geopolitical developments affect current and future strategy? Is scenario planning used to explore multiple plausible futures and their potential business implications systematically?</li></ul><div><div><br /></div><div><b>GOING FORWARD IN 2024: ENHANCING THE BOARD'S STRATEGIC VALUE</b></div></div></div><div><div><br /></div><div>EY concludes its report noting that "In 2024, boards will need to enhance their strategic value by enabling resilience through discipline and transformation. They must guide management to balance short-term demands and long-term growth and support the organization as it confronts crisis and embraces opportunity."</div><div><br /></div><div>Moreover, "While cyclical changes such as inflation and consumer spending require attention and may present tactical opportunities, it is structural changes such as the GenAI revolution, geopolitical fragmentation and the energy transition that are significantly impacting strategy and raising the stakes for businesses and society. Effective boards will provide valuable insights, effective challenge and leadership to enable companies to make agile decisions aligned with their values in this turbulent environment."</div></div><div><br /></div><div><div>In the report's introduction, EY notes that its "2024 board priorities relate to near-term issues (e.g., economic uncertainty and the cost of capital) as well as longer-term priorities (e.g., innovation and workforce development)." I agree that "A crucial role of the board this year will be guiding management in balancing what is urgent to address now with what is vital to invest in for the future." How is your business balancing the urgent matters that need address now with investing in vital initiatives for a sustainable future?</div></div><div><br /></div><div><a href="https://www.linkedin.com/in/aaronrose/" style="font-style: italic;" target="_blank">Aaron Rose</a><i> is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of </i><a href="https://www.gtperspectives.com/">GT Perspectives</a>,<i> an online forum focused on turning perspective into opportunity.</i></div></div></div></div>Aaron Rosehttp://www.blogger.com/profile/16914196169617403460noreply@blogger.com0tag:blogger.com,1999:blog-5044990419048085041.post-76476205130934580872024-01-18T00:57:00.000-08:002024-02-08T11:27:12.227-08:00AI Led the Global Conversation at CES 2024<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: left;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhWMJqMERum_1S2xbYSC-0c8YB2m95vgKwRKybwgErb655D3CFOX636-C82TClESfUac5cMO5Du4LE7Z28CC6oUOpVHky87t9wsCIrSgFsJKYQBWxPksY2PJ4IQeA8QnImG_c4JO9w4N-Yd6Eul4glSxIX0ny4bluggABRJSN3Wnhxg0cEMLB4zowTwla1f/s2048/CES%202024%20002.jpg" style="clear: left; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1536" data-original-width="2048" height="150" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhWMJqMERum_1S2xbYSC-0c8YB2m95vgKwRKybwgErb655D3CFOX636-C82TClESfUac5cMO5Du4LE7Z28CC6oUOpVHky87t9wsCIrSgFsJKYQBWxPksY2PJ4IQeA8QnImG_c4JO9w4N-Yd6Eul4glSxIX0ny4bluggABRJSN3Wnhxg0cEMLB4zowTwla1f/w200-h150/CES%202024%20002.jpg" width="200" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;"><span style="font-size: x-small;">Me, my mom, Lindy Rose, and my<br />colleague, Patricia Berdejo, attending<br />CES on Jan. 12, 2024</span></td></tr></tbody></table>"AI, AI, AI," was the prominent theme at CES® 2024, which saw over 4,300 exhibitors including a record 1,400+ startups from around the globe in Eureka Park®. As in previous years, this year's CES, which took place from Jan. 9-12, 2024, showcased the innovative trends shaping tomorrow and solving the world's most pressing challenges. This post focuses on a few of observations of attending this year's event in Las Vegas, Nev.<div><br /></div><div>As noted in a <a href="https://www.ces.tech/news/press-releases/ces-press-release.aspx?NodeID=a4ec7529-9431-4efd-b107-39036a7f21be" target="_blank">press release</a> issued by the Consumer Technology Association (CTA), the organization that produces CES, artificial intelligence "led the global conversation at CES 2024. Companies highlighted the enormous potential of AI to improve our world with cutting-edge applications that will transform how we communicate, do business and take care of one another." Several AI-focused panel sessions took place during the four day event including on that explored the relationship between ethics and AI in academia, AI's impact on the creative process and content businesses, and how generative AI is leading the transformation of hardware and chips.</div><div><br /></div><div>CTA's announcement also notes that "CES established access to technology as the eighth pillar of the Human Security for All (HS4A) global campaign, which focuses on the critical role technology plays to improve every aspect of the human experience." Tech is a catalyst for tomorrow, powering solutions to pressing global challenges." Attendees saw the release of a new <a href="https://www.forcegood.org/frontend/img/2024-report/pdf/2024_Technology_as_a_Force_for_Good_Report_v.1.2_09-01.pdf" target="_blank">report</a> released Force for Good on tech's influence on human securities. "Aligned with CTA's <a href="https://videos.ces.tech/detail/videos/all-ces-2024-videos/video/6344495164112/ces-2024-trends-to-watch-presented-by-cta?autoStart=true" target="_blank">CES 2024 Tech Trends to Watch</a>, the report proved that universal connectivity and leveraging AI across human securities will improve our world," the Arlington, Va.-based organization said.</div><div><br /></div><div>More companies are showing their commitment to <a href="https://www.ces.tech/topics/topics/sustainability.aspx" target="_blank">sustainable solutions</a> "through technologies, products, and services to reduce emissions and waste by streamlining electrification, developing renewable energy sources, and experimenting with new technologies such as battery recycling." As for <a href="https://www.ces.tech/topics/topics/accessibility.aspx">Accessibility</a> & <a href="https://www.ces.tech/topics/diversity-inclusion/innovation-for-all-programming-at-ces-2024.aspx">Innovation for All</a>, the CTA points out that "CES 2024 fostered a platform centered on universal design for the diverse tech industry to come together and converse on the next wave of innovation. CES featured sessions on diversity in the tech industry, a wave of new technologies that will improve lives and advances in accessible gaming. CTA also announced a new investment partnership in TFX Capital, which supports veteran entrepreneurs in tech."</div><div><br /></div><div>As for <a href="https://www.ces.tech/topics/topics/digital-health.aspx" target="_blank">digital health</a>, the CTA explains that "Tools and technologies aimed at lowering costs, improving health equity and saving lives were highlighted. Innovations included digital therapeutics, mental wellness, sleep tech, women's health tech and telemedicine. At the CES Digital Health Summit, Mark Cuban and his Cost Plus Drug Company broke news about a new partnership, while capacity crowds joined the Digital Health mixer and programming with officials from the FDA and across the health policy space."</div><div><br /></div><div>In what continues to be one of my favorite components of CES, Eureka Park grew this year with over 1,400 exhibiting <a href="https://www.ces.tech/topics/topics/startups.aspx" target="_blank">startups</a> including country and territory pavilions representing France, Hong Kong, Italy, Israel, Japan, Korea, the Netherlands, Taiwan, and Ukraine. As highlighted in the <a href="https://www.gtperspectives.com/2024/01/cautious-optimism-about-europes-tech.html" target="_blank">previous post</a> on this forum, I attended an event that preceded CES that featured several European startups. During CES, I had the opportunity to getting better acquainted with the founders at the exhibit booths in Eureka Park.</div><div><br /></div><div>Among the other exhibitors from around the globe, I was impressed with <a href="https://brickify.xyz/" target="_blank">Brickify,</a> a Nigerian startup that is turning recycled plastic waste into water-, fire-, and heat-resistant paving bricks used to construct roads and low cost homes. <a href="https://www.ghostpass.ai/" target="_blank">Ghostpass</a> is a company based in Korea that created a decentralized remote biometric authentication solution that monitors and controls large amounts of biometric information by storing it individually on users' smart devices rather than storing it in bulk in the cloud.</div><div><br /></div><div><a href="https://midbar.com/" target="_blank">Midbar</a>, which is another firm based in Korea, created an inflatable farm that enables food production anytime, anywhere. Without heavy and costly steel frames, the <a href="https://www.ces.tech/innovation-awards/honorees/2024/best-of/a/airfarm.aspx" target="_blank">AirFarm</a> is designed to be lightweight but sturdy. The AirFarm converts moisture from the air into water in real-time. It recirculates the moisture produced by crops back to the roots, making it the world's first farm that operates without water infrastructure.</div><div><br /></div><div><div>Lastly, as mentioned by the CTA, while we are experiencing "a moment of global uncertainty and rapid technology advancement, government leaders shared an optimistic view of regulation to empower tech innovation, including in AI." At the <a href="https://www.ces.tech/sessions-events/ips.aspx" target="_blank">Innovation Policy Summit</a>, over "160 international, federal, state and local government officials and staff participated in the Leaders in Technology Program, which convened top innovators and policymakers to discuss the future of pressing tech policy issues, including privacy, health innovation, trade policy, competition, artificial intelligence and self-driving vehicles."</div><div><br /></div><div>If you attended CES 2024, what were your key moments and takeaways?</div><div><br /></div><div><div><div><div><a href="https://www.linkedin.com/in/aaronrose/" style="font-style: italic;" target="_blank">Aaron Rose</a><i> is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of </i><a href="https://www.gtperspectives.com/">GT Perspectives</a>,<i> an online forum focused on turning perspective into opportunity.</i></div></div></div></div></div>Aaron Rosehttp://www.blogger.com/profile/16914196169617403460noreply@blogger.com0tag:blogger.com,1999:blog-5044990419048085041.post-78851359780066399712024-01-14T00:30:00.000-08:002024-02-08T01:37:05.213-08:00Cautious Optimism About Europe's Tech Sector<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjJNUuuroDFPvsJXYYnDz0o_nrSRtBJZFaBkAnfe4BoAaIUA4F5cFY8AbjcB3TkDgSkMSW1scxagvmg8alJsXlQXSDQA_qGMP_SNMS2nx5h73aMARK5G12Zt1yfbJVuW7eHgfXz7W96ezqOiTGdlhc01twWnh2vN7TWIFRGkBOsIurrkXUyuM9n5myoZ5yu/s1280/Silicon%20Valley%20Funding%20Summit%202024%20001.png" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="720" data-original-width="1280" height="113" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjJNUuuroDFPvsJXYYnDz0o_nrSRtBJZFaBkAnfe4BoAaIUA4F5cFY8AbjcB3TkDgSkMSW1scxagvmg8alJsXlQXSDQA_qGMP_SNMS2nx5h73aMARK5G12Zt1yfbJVuW7eHgfXz7W96ezqOiTGdlhc01twWnh2vN7TWIFRGkBOsIurrkXUyuM9n5myoZ5yu/w200-h113/Silicon%20Valley%20Funding%20Summit%202024%20001.png" width="200" /></a></div><div>European tech startups are thriving, according to an <a href="https://www.economist.com/business/2023/12/07/europes-technology-startups-are-doing-just-fine" target="_blank">article</a> published by <i>The Economist</i>. The article points out that "Europe now creates more startups than America: around 14,000 between January and September [in 2023], compared with 13,000 across the Atlantic." Furthermore, "The old continent, including Britain, has more than 41,000 young tech firms and about 3,900 more mature ones. Together they employ 2.3m or so people, about twice as many as in early 2019 and more than in Europe's property sector (excluding construction). The total value of Europe's private and publicly listed tech companies is again nearing the peak of $3trn reached in 2021." It was $2.8trn in 2022.</div><div><br /></div><div>The article adds that "European tech's relative resilience can be explained by its increasing maturity. Take the number of companies founded by ex-employees of successful startups. More than 9,000 people who worked for those of today's unicorns which were created in the 2000s have gone on to found their own businesses. That is about 50% more than the number of people who left unicorns which date back to the 1990s in order to strike out on their own."</div><div><br /></div><div>What is more, as Europe's tech industry continues to mature, it "is also developing its own characteristics. European founders are less cock-a-hoop than their American counterparts at all things ChatGPT-like: from January to September [2023] Europe saw 35 financing rounds backing developers of generative artificial intelligence, compared with 106 across the pond. By contrast, climate-related startups accounted for 27% of all capital invested in European tech in 2023, a much bigger share than in America. Climate-tech firms have now overtaken fintech, until recently Europe's most represented technology niche."</div><div><br /></div><div>But when comparing Europe's tech sector to America's, the article asserts that the former "is unlikely to become as big as America's just yet. Silicon Valley and its satellites in Austin, New York and elsewhere are still way ahead. America's herd of unicorns (about 700 on last count) is twice the size of Europe's (356)." As someone who has closely observed Europe's startup scene, I concur with the following:</div><blockquote><div>The biggest obstacle to European startups' ambitions is home-grown, however. The EU has repeatedly tried to create a single digital market as frictionless as the American one, but differences in taxes and regulations still abound. Europe has shown what is possible, says Zeynep Yavuz, who invests on the continent for General Catalyst, an American VC firm. The explosion of enterprise in fintech in recent years was a direct result of bloc-wide regulations drafted in Brussels. If EU leaders really want to strengthen European tech, which they all profess to do, they should spend less time trying to regulate various digital markets and instead create a single truly European one. </div></blockquote><div><table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: right;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiOYQ4-fceKSL4xtu3edmeamsHH6C3sUCpa8ssb7Huf3GLCu_IPjBwcsBuPMjRZ1kG0Kp-ilmv142sIErLZOpKjyeoUJQKmnFNB-fdFzkmNH4dmynTytPMYd0rw9fmWDRJXXya7Euj8ye4ruoaHdPblPg9p_v83oCATM3URliw3WTV3HzjZxsjzmrJagylK/s2922/Silicon%20Valley%20Funding%20Summit%202024%20002.png" style="clear: right; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" data-original-height="2515" data-original-width="2922" height="172" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiOYQ4-fceKSL4xtu3edmeamsHH6C3sUCpa8ssb7Huf3GLCu_IPjBwcsBuPMjRZ1kG0Kp-ilmv142sIErLZOpKjyeoUJQKmnFNB-fdFzkmNH4dmynTytPMYd0rw9fmWDRJXXya7Euj8ye4ruoaHdPblPg9p_v83oCATM3URliw3WTV3HzjZxsjzmrJagylK/w200-h172/Silicon%20Valley%20Funding%20Summit%202024%20002.png" width="200" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;"><span style="font-size: x-small;">Me and my advisor, Lindy Rose<br />(who also carries the important title<br />of being my mom), attending<br />the Silicon Valley Funding Summit </span></td></tr></tbody></table>Setting aside my concerns about differences in taxes and regulations, I continue to seek investment and partnership opportunities with European startups. As I have in previous years, I had the opportunity to attend the Silicon Valley Investment Summit on Jan. 8th, 2024 in Las Vegas, Nev. This event, which aims to connect investors to global startups who are seeking funding and strategic partnerships, precedes CES®. I was provided the privilege of serving on a panel of esteemed investor judges who provided valuable feedback to over 40 startup entrepreneurs. While most startups are headquartered in Europe, some are domiciled in North America (and a couple from South Korea) as this event received support from organizations based in the U.S.):</div><div><ul><li><a href="https://www.capito.eu/en/" target="_blank">Captio</a> (Austria)<span color="rgba(0, 0, 0, 0.9)" face="-apple-system, system-ui, BlinkMacSystemFont, "Segoe UI", Roboto, "Helvetica Neue", "Fira Sans", Ubuntu, Oxygen, "Oxygen Sans", Cantarell, "Droid Sans", "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Lucida Grande", Helvetica, Arial, sans-serif" style="background-color: white; font-size: 16px;"> </span>makes complicated texts simple through their software that translates information into easy-to-understand language, offer trainings and develop digital solutions around the topic of comprehensibility.</li><li><a href="https://colibritd.com/solution" target="_blank">ColibrITD</a> (France) has an objective to utilize the power of quantum computing and technology in the noisy intermediate-scale quantum (NISQ) era, which is the current state of the quantum industry. The Quantum Innovative Computing Kit or QUICK provides customers with technological, financial and environmental excellence in a software platform that runs use cases in the best available hardware at the lowest cost and with optimal energy efficiency.</li><li><a href="https://www.dotlumen.com/" target="_blank">.lumen</a> (Romania) aims to help visually impaired people live a better life. Their glasses for the blind reproduce the main characteristics of a guide dog, all in a scalable product. And the product allow users to have a better mobility, helping them to have easier access to education and then jobs, thus helping to improve their social life.</li><li><a href="https://photonfi.net/" target="_blank">PhotonFi</a> (USA) is transforming the landscape of wireless communication standards through the utilization of LiFi technology. Their innovative approach involves harnessing the potential of invisible light to transmit and receive information at remarkable speeds, delivering enhanced security and mobility.<br /></li><li><a href="https://sipearl.com/en" target="_blank">SiPeral</a> (France) is developing a high-performance, low-power microprocessor that will be the heart of European supercomputers essential to Europe's technological sovereignty in strategic areas such as artificial intelligence, medical research, climate change mitigation, energy management.</li><li><a href="https://www.smt7global.com/" target="_blank">SMT</a> (South Korea) has a product that measures the water quality and temperature in real time, filters water, and sterilizes it with UV rays at the same time.</li><li><a href="https://veintree-sas.odoo.com/" target="_blank">Veintree</a> (France) is providing everyone an easy access to a secure digital tool to protect their private life through biometric solution based on the capture and analysis of hand vein networks to authenticate users, without identifying them.</li><li><a href="https://www.xelera.io/" target="_blank">Xelera Technologies</a> (Germany) is a software provider for high-speed network technology and machine learning applications. They solve data rate and response time bottlenecks in software applications and systems with a performance-optimized software stack. Their product also increases the energy efficiency of data center and cloud servers.</li></ul><div><br /></div></div><div><div>I wish to thank the European Network of Research and Innovation Centers and Hubs, USA (ENRICH in the USA) for producing such a great event in partnership the University of Nevada Las Vegas Office of Economic Development, UNLV Sports Innovation, European American Enterprise Council, European Innovation Council and SMEs Executive Agency, Enterprise Europe Network, Angel Launch, Keiretsu Forum Southern California, myGlobalVillage, NGI Enrichers, Small Business Development Center (SBDC) at the University of Pittsburgh, Silicon Valley SBDC, Temple University SBDC, and the Foundry 415 Innovation Group. It is always a great experience attending ENRICH in the USA's events and I look forward to attending the next Silicon Valley Funding Summit.</div><div><br /></div><i></i><a href="https://www.linkedin.com/in/aaronrose/" style="font-style: italic;" target="_blank">Aaron Rose</a><i> is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of </i><a href="https://www.gtperspectives.com/">GT Perspectives</a>,<i> an online forum focused on turning perspective into opportunity.</i></div>Aaron Rosehttp://www.blogger.com/profile/16914196169617403460noreply@blogger.com0tag:blogger.com,1999:blog-5044990419048085041.post-88692902887768555652023-12-31T18:08:00.000-08:002024-02-06T03:20:27.584-08:00How Geopolitical Tensions, New Technologies, and Environmental Threats Could Upset the Economic Outlook for 2024<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi9g35cg1LWw_r0VUU_wdRVjWF4U02kaoe-bzeYqXYeVO-A4DLB7SIi0kiZCk4J7d-veQaLJz-k_P3PmpcU6TIypi14cJ6yX8ROqcly2w9MCxyrsBUtZQbfwsyyH4qlzZCQ-CL1OWkdDFGO4-XUcgJ1BVK6uHx61n23j3E9QG2T5e6WEPnf51mK13t1Tl09/s768/Screenshot%20(448).png" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="768" data-original-width="594" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi9g35cg1LWw_r0VUU_wdRVjWF4U02kaoe-bzeYqXYeVO-A4DLB7SIi0kiZCk4J7d-veQaLJz-k_P3PmpcU6TIypi14cJ6yX8ROqcly2w9MCxyrsBUtZQbfwsyyH4qlzZCQ-CL1OWkdDFGO4-XUcgJ1BVK6uHx61n23j3E9QG2T5e6WEPnf51mK13t1Tl09/w155-h200/Screenshot%20(448).png" width="155" /></a></div><div>Though the Economist Intelligence Unit (EIU) expects modest global growth in 2024, continued monetary tightening, supply chain disruptions and geopolitical conflict could weigh heavily on the global economy next year. In a <a href="https://www.eiu.com/n/campaigns/oct-23-risk-outlook-2024/" target="_blank">report</a> that explores how geopolitical tensions, the advent of new technologies and persistent environmental threats could upset the outlook in the coming year, the EIU explains that its "operational risk scenarios evaluate the events that could have a severe impact on its core economic and geopolitical forecasts, challenging the operations of businesses worldwide." For example, "In 2023 resilience among consumers and a gradual fall in inflation reassured uneasy investors and supported modest global growth." The EIU expects "stable, but unspectacular, global growth to continue into 2024 as economic uncertainty recedes and major central banks begin to lower policy rates in the second half of the year. The UK-based organization's report "explores how geopolitical tensions, the advent of new technologies and persistent environmental threats could upset the outlook for 2024."</div><div><br /></div><div>Below are ten risk scenarios that could reshape the global economy in 2024:</div><div><ol style="text-align: left;"><li>Monetary policy tightening extends deep into 2024, leading to a global recession and financial volatility (moderate probability; high impact)</li><li>A green technology subsidy race becomes a global trade war (moderate probability; high impact)</li><li>Extreme weather events caused by climate change disrupt global supply chains (high probability; moderate impact)</li><li>Industrial action spreads, disrupting global productivity (high probability; moderate impact)</li><li>China moves to annex Taiwan, forcing a sudden global decoupling (low probability; very high impact)</li><li>A change in the US administration leads to abrupt foreign policy shifts, straining alliances (moderate probability; moderate impact)</li><li>Stimulus policy failures in China lead to increased state controls and diminished growth prospects (low probability; high impact)</li><li>The Israel-Hamas war escalates into a regional conflict (very low probability; high impact)</li><li>Artificial intelligence disrupts elections and undermines trust in political institutions (moderate probability; low impact)</li><li>The Ukraine-Russia war spirals into a global conflict (very low probability; very high impact)</li></ol><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhzfGwwDJSgLM5soAV0a-QzoMIDSGJrusr2TlblDQ248mUu60lkdA8R6UkMu9T5NK5-HoQ_t9VoNri84k0MFclUc5xsjG89C2VovHdrVIliDFFQT1D_WVwpZz0x6-i6U9csCTzlOOb5erHbwGz5lFCpAAlNz9KzX6VW_YXJ187swC56Y5oKtngA9uwIQ6iY/s4096/1698093910668-1.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="2304" data-original-width="4096" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhzfGwwDJSgLM5soAV0a-QzoMIDSGJrusr2TlblDQ248mUu60lkdA8R6UkMu9T5NK5-HoQ_t9VoNri84k0MFclUc5xsjG89C2VovHdrVIliDFFQT1D_WVwpZz0x6-i6U9csCTzlOOb5erHbwGz5lFCpAAlNz9KzX6VW_YXJ187swC56Y5oKtngA9uwIQ6iY/w400-h225/1698093910668-1.jpg" width="400" /></a></div><br /><div><div>While business leaders should be mindful of the ten risk scenarios, there are three that I am watching closely. As someone who follows the green technology sector, I have concerns about how a subsidy race could turn into a global trade war. As the EIU explains: "Western economies are rolling out generous incentives for businesses to invest in clean energy technologies by boosting domestic industrial capacity and enabling greater competition with China, which is the leader in the production of many green technologies. These initiatives also aim to accelerate countries’ transition towards achieving net-zero greenhouse gas emissions, but most incentives include strict sourcing requirements for components (notably in the US). These requirements have already spurred tensions between the EU and the US, and will probably raise the cost of inputs and subsequently the green technologies themselves."</div><div><br /></div><div>The report importantly adds that should "relations with China experience a severe downturn (including in relation to strengthening China-Russia ties or deepening concerns over China's state-driven industrial policy), Western economies could increase existing tariffs on Chinese imports or accelerate decisions on pending investigations into anti-dumping and state subsidy charges, further fueling price growth. China would retaliate, possibly by blocking exports of raw materials that are critical to the green transition agenda such as rare earths, making decarbonization efforts more expensive for developed markets. These costs would force economies to consider returning to carbon-based technologies, limit support from Western countries to fund emerging markets' energy transition and delay timelines for achieving net-zero emissions."</div><div><br /></div><div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgYLl9-YKk8h4hiDu5PX8_eeLl0EwAVKxKs6cJasTUzrpXQ7O0PaMDc5BCCrD9TqSKqBFQqzIB-b-S2LL3r3Hm_pW4HLQvFjISsl5VlgUOo_8Sabdjhyzqv_XdS_-089S_cp7LMRC80nzfEmQSxAkiffAn02Dt4UJE98k5nnHAros195bI-3luFvT_rSto-/s638/Screenshot%20(485).png" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="618" data-original-width="638" height="194" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgYLl9-YKk8h4hiDu5PX8_eeLl0EwAVKxKs6cJasTUzrpXQ7O0PaMDc5BCCrD9TqSKqBFQqzIB-b-S2LL3r3Hm_pW4HLQvFjISsl5VlgUOo_8Sabdjhyzqv_XdS_-089S_cp7LMRC80nzfEmQSxAkiffAn02Dt4UJE98k5nnHAros195bI-3luFvT_rSto-/w200-h194/Screenshot%20(485).png" width="200" /></a></div>Regarding the spread of industrial action that will lead to the disruption of global productivity, the EIU says: "High global commodity prices, continued supply-chain disruptions, high food prices and continued currency weakness against the US dollar for some countries will continue to fuel discontent in 2024-25." What is more, "Wages have not risen as quickly as inflation in most countries, making it harder for poorer households to purchase basic staples. This could spark social unrest, expanding the small-scale protests and industrial action already seen in Europe, the US, South Korea and Argentina. In an extreme scenario, protests could push workers in major economies and who are employed by large manufacturers to co-ordinate large-scale strikes demanding salary increases that match inflation. Such movements, like those that have affected the automotive industry in the US and key services in the UK (healthcare, ports and railways), could paralyze entire industries or public services for an extended period and spill over to other sectors or countries, weighing on global growth."</div><div><br /></div><div>As for artificial intelligence disrupting elections and undermining trust in political institutions, the EIU points out that "Global firms and governments have rapidly begun to test and integrate generative artificial intelligence (AI) into existing platforms and processes." Furthermore, the EIU believes "AI will augment (rather than replace) human capabilities, presenting an opportunity for firms to improve productivity. However, the widespread adoption of AI and its use in social media will raise the risk of a spread in disinformation campaigns via text, imagery, audio and video in the coming years. Regulation across different geographies is coming, but malicious actors will still look to implement wide-ranging programs aimed at fueling existing skepticism of some citizens towards governments." The report crucially notes that "This could potentially shift the result of major elections scheduled for 2024—including for the EU parliament, and in the US, the UK, India and Taiwan—and more broadly erode voters' trust in political systems."</div><div><br /></div><div>The world is facing geopolitical tensions, the advent of new technologies, and persistent environmental threats that could upset the economic outlook for the coming year. Which of the global risk scenarios will you be watching?</div><div><br /></div></div></div><div><a href="https://www.linkedin.com/in/aaronrose/" style="font-style: italic;" target="_blank">Aaron Rose</a><i> is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of </i><a href="https://www.gtperspectives.com/">GT Perspectives</a>,<i> an online forum focused on turning perspective into opportunity.</i></div>Aaron Rosehttp://www.blogger.com/profile/16914196169617403460noreply@blogger.com0tag:blogger.com,1999:blog-5044990419048085041.post-87068467247178421892023-12-26T14:34:00.000-08:002024-01-30T14:31:38.408-08:00Growth Prospects, Risks and Trends in Six Critical Sectors in 2024<div class="separator" style="clear: both; text-align: left;"><div class="separator" style="clear: both;"><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiCFwuMkmWKgTwYaWmCPVxvdkusQoCIvmZXfCYMKKhXVC2zrYUGDYHbdX9EzeNXsS8_YwQS0swzLpBSsRXWMbZLV0vADN3DAQhLZsv-pM7yj8v_GOHpG9H1pJtAJGAjpPsuQ2YgEzZKQoVo_xZFKYI32SPsqCj6SGk0OstmO7g017khq5YW7GlBpsz-FP8f/s680/F-6p6uRXIAAymaO.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="383" data-original-width="680" height="113" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiCFwuMkmWKgTwYaWmCPVxvdkusQoCIvmZXfCYMKKhXVC2zrYUGDYHbdX9EzeNXsS8_YwQS0swzLpBSsRXWMbZLV0vADN3DAQhLZsv-pM7yj8v_GOHpG9H1pJtAJGAjpPsuQ2YgEzZKQoVo_xZFKYI32SPsqCj6SGk0OstmO7g017khq5YW7GlBpsz-FP8f/w200-h113/F-6p6uRXIAAymaO.jpg" width="200" /></a></div>The past few years have been turbulent for most companies as the pandemic, soaring commodity prices, high interest rates and political disruption resulted in profits for many and bankruptcy for some. A <a href="https://www.eiu.com/n/campaigns/industries-in-2024" target="_blank">report</a> published by the Economist Intelligence Unit (EIU) asks: Will conditions stabilize in 2024?</div><div class="separator" style="clear: both;"><br /></div><div class="separator" style="clear: both;">EIU's report provides growth prospects, risks and trends facing six critical sectors in the coming year, as inflation eases but geopolitical tensions remain high. The report argues that the biggest challenge facing businesses next year will be climate change and looks at how experimentation with artificial intelligence will give way to rapid adoption, changing corporate strategies and the nature of work.</div></div><div><br /></div><div>Key findings include:</div><div><ul style="text-align: left;"><li>Climate change will drive demand in sectors relating to mitigation and adaptation. Insurers, companies and governments will struggle to price in the increasing risks.</li><li>EU and US regulations on environmental, social and governance (ESG) reporting will push companies to scrutinize their operations and supply chains. However, skepticism about ESG will harden in the US ahead of November’s presidential elections.</li><li>Corporate concerns over taxation will increase as the OECD introduces its global minimum tax rate and individual governments try to reduce budget deficits and national debt levels.</li><li>Geopolitical tensions and wars will complicate government and corporate responses to all of the above. Investment in supply chains, particularly for technology and the energy transition, will adapt to minimize political risk.</li><li>Generative artificial intelligence will disrupt a few sectors, but most companies will find ways to use AI to increase productivity.</li></ul><div><br /></div>The report also provides key global forecasts for each sector covered:</div><div><ul style="text-align: left;"><li><b>Automotive:</b> The automotive industry will face another subdued year in 2024, weighed down by slow consumer spending, high interest rates and disruption to supply chains due to geopolitical tensions. The only bright spot will be the electric vehicles market, with sales expected to soar by 21% to 14.9 million unit as governments and consumers try to mitigate the worsening effects of climate change. The report notes that established carmakers will have to fight hard to hold off competition from China.</li><li><b>Consumer goods and retail:</b> A slowdown in inflation will bolster retail volume growth by 6.7% in US dollar terms and 2% in volume terms in 2024. However, reduced savings and high food prices, worsened by the effects of climate change, will act as dampeners. The EIU also points out that high food prices will continue to cause problems in Asia.</li><li><b>Energy:</b> Global energy consumption will grow by 1.8% in 2024, largely driven by strong demand in Asia. Despite still-high prices and unsolved supply chain disruptions, demand for fossil fuels will reach record levels, but demand for renewable energy will rise by 11%.</li><li><b>Finance:</b> High interest rates will determine the success or failure of almost every part of the financial services sector in 2024. Though painful for borrowers, banks will enjoy strong net interest margins margins and revenue flows until margins begin to narrow mildly in late 2024. Property firms and funds, however, will suffer.</li><li><b>Healthcare:</b> Healthcare spending will rise by 2% in real US-dollar terms, following two years of decline, as inflation eases. However, resources will remain constrained as governments try to bring down fiscal deficits and public debt levels.</li><li><b>Telecoms and technology:</b> Geopolitics will continue to affect technology in 2024. The tech battle between the US and China will persist in areas including artificial intelligence (AI), chips and quantum technologies. AI will continue to develop, particularly generative AI, but will encounter challenges from new regulations in the EU and other major jurisdictions, as well as complications from US-China tensions.</li></ul><br /></div>I appreciate how the annual industry outlook provides businesses with foresight of the critical global trends and threats that will affect their sector 2024. Which trends and threats are you watching in the coming year?<div><br /><div><a href="https://www.linkedin.com/in/aaronrose/" style="font-style: italic;" target="_blank">Aaron Rose</a><i> is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of </i><a href="https://www.gtperspectives.com/">GT Perspectives</a>,<i> an online forum focused on turning perspective into opportunity.</i></div></div>Aaron Rosehttp://www.blogger.com/profile/16914196169617403460noreply@blogger.com0tag:blogger.com,1999:blog-5044990419048085041.post-37890140103371412432023-12-20T12:06:00.000-08:002024-01-30T14:30:49.503-08:00Recommendations for Reinventing American Democracy for the 21st Century<div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi5rnLeTXIsGqpt1V4vjdrVILxgvVA7-osFqJ9H1NPzDast1oWVM0BQLqlriu29pFZxPtLOPwQxST30PXhz_cNdaNMUmboAxc98EkFPEbkgMZnqgSJzKf8_yrFvADLO9EK-VOMR9AkoqlIapr6nN90uB9_5PYwe2UBUn4IW3vHVvVs6pHcIDec5Tvr-StIP/s3000/Screenshot%20(446a).png" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="3000" data-original-width="2100" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi5rnLeTXIsGqpt1V4vjdrVILxgvVA7-osFqJ9H1NPzDast1oWVM0BQLqlriu29pFZxPtLOPwQxST30PXhz_cNdaNMUmboAxc98EkFPEbkgMZnqgSJzKf8_yrFvADLO9EK-VOMR9AkoqlIapr6nN90uB9_5PYwe2UBUn4IW3vHVvVs6pHcIDec5Tvr-StIP/w140-h200/Screenshot%20(446a).png" width="140" /></a></div>There is much discussion among my peers about the fragility of American democracy. Some hold the view that American democracy is unraveling through shifting political, economic, and social forces. Others see the current challenges America's democracy is facing as an opportunity to refocus on the principals the country's founders endowed over 200 years ago. Efforts to refocus will require a redesign of American institutions so that they are simultaneously responsive and accountable. A <a href="https://www.amacad.org/ourcommonpurpose/report" target="_blank">report</a> published by the American Academy of Arts & Sciences explores how to reinvent American democracy for the 21st century.</div><div><br /></div><div>Segmented into six sections, the report presents 31 recommendations on how to reinvent American democracy in the 21st century:</div><div><br /></div><div style="text-align: left;"><b>STRATEGY 1: <span style="color: #2b00fe;">ACHIEVE EQUALITY OF VOICE AND REPRESENTATION</span></b></div><div style="text-align: left;"><div><br /></div><div><span style="color: red;"><b>Recommendation 1.1</b></span></div><div><div>Substantially enlarge the House of Representatives through federal legislation to make it and the Electoral College more representative of the nation’s population.</div></div><div><br /></div><div><span style="color: red;"><b>Recommendation </b><b>1.2</b></span></div><div>Introduce ranked-choice voting in presidential, congressional, and state elections.</div><div><br /></div><div><span style="color: red;"><b>Recommendation </b><b>1.3</b></span></div><div>Amend or repeal and replace the 1967 law that mandates single-member districts for the House, so that states have the option to use multi-member districts on the condition that they adopt a non-winner-take all election model.</div><div><br /></div><div><span style="color: red;"><b>Recommendation </b><b>1.4</b></span></div><div>Support adoption, through state legislation, of independent citizen-redistricting commissions in all fifty states. Complete nationwide adoption, through federal legislation, that requires fair congressional districts to be determined by state-established independent citizen-redistricting commissions; allows these commissions to meet criteria with non-winner-take-all models; and provides federal funding for these state processes, with the goal of establishing national consistency in procedures.</div></div><div><div style="text-align: left;"><br /></div><div style="text-align: left;"><b style="color: red;">Recommendation </b><b><span style="color: red;">1.5</span></b></div><div style="text-align: left;">Amend the Constitution to authorize the regulation of election contributions and spending to eliminate undue influence of money in our political system, and to protect the rights of all Americans to free speech, political participation, and meaningful representation in government.</div><div style="text-align: left;"><br /></div><div style="text-align: left;"><b style="color: red;">Recommendation </b><b><span style="color: red;">1.6</span></b></div><div style="text-align: left;">Pass strong campaign-finance disclosure laws in all fifty states that require full transparency for campaign donations, including from 501(c)(4) organizations and LLCs.</div><div style="text-align: left;"><br /></div><div style="text-align: left;"><b style="color: red;">Recommendation </b><b><span style="color: red;">1.7</span></b></div><div style="text-align: left;">Pass "clean election laws" for federal, state, and local elections through mechanisms such as public matching donation systems and democracy vouchers, which amplify the power of small donors.</div><div style="text-align: left;"><br /></div><div style="text-align: left;"><b style="color: red;">Recommendation </b><b><span style="color: red;">1.8</span></b></div><div style="text-align: left;">Establish, through federal legislation, eighteen-year terms for Supreme Court justices with appointments staggered such that one nomination comes up during each term of Congress. At the end of their term, justices will transition to an appeals court or, if they choose, to senior status for the remainder of their life tenure, which would allow them to determine how much time they spend hearing cases on an appeals court.</div><div style="text-align: left;"><br /></div><div style="text-align: left;"><b>STRATEGY 2: <span style="color: #2b00fe;">EMPOWER VOTERS</span></b></div><div style="text-align: left;"><div><br /></div><div><div><b style="color: red;">Recommendation </b><b><span style="color: red;">2.1</span></b></div><div>Give people more choices about where and when they vote, with state-level legislation in all states that supports the implementation of vote centers and early voting. During an emergency like COVID-19, officials must be prepared to act swiftly and adopt extraordinary measures to preserve ballot access and protect the fundamental right to vote.</div><div><br /></div><div><b style="color: red;">Recommendation </b><b><span style="color: red;">2.2</span></b></div><div>Change federal election day to Veterans Day to honor the service of veterans and the sacrifices they have made in defense of our constitutional democracy, and to ensure that voting can occur on a day that many people have off from work. Align state election calendars with this new federal election day.</div><div><br /></div><div><b style="color: red;">Recommendation </b><b><span style="color: red;">2.3</span></b></div><div>Establish, through state and federal legislation, same-day registration and universal automatic voter registration, with sufficient funding and training to ensure that all government agencies that have contact with citizens include such registration as part of their processes.</div><div><br /></div><div><b style="color: red;">Recommendation </b><b><span style="color: red;">2.4</span></b></div><div>Establish, through state legislation, the preregistration of sixteen- and seventeen-year-olds and provide educational opportunities for them to practice voting as part of the preregistration process.</div></div><div><br /></div><div><span style="color: red;"><b>Recommendation </b><b>2.5</b></span></div><div>Establish, through congressional legislation, that voting in federal elections be a requirement of citizenship, just as jury service is in the states. All eligible voters would have to participate, in person or by mail, or submit a valid reason for nonparticipation. Eligible voters who do not do so would receive a citation and small fine. (Participation could, of course, include voting for "none of the above.")</div><div><br /></div><div><b style="color: red;">Recommendation </b><b><span style="color: red;">2.6</span></b></div><div>Establish, through state legislatures and/or offices of secretaries of state, paid voter orientation for voters participating in their first federal election, analogous to a combination of jury orientation and jury pay. Most states use short videos produced by the state judicial system to provide jurors with a nonpolitical orientation to their duty; first-time voters should receive a similar orientation to their duty.</div><div><br /></div><div><b style="color: red;">Recommendation </b><b><span style="color: red;">2.7</span></b></div><div>Restore federal and state voting rights to citizens with felony convictions immediately and automatically upon their release from prison, and ensure that those rights are also restored to those already living in the community.</div><div><br /></div><div><div><b>STRATEGY 3: <span style="color: #2b00fe;">ENSURE THE RESPONSIVENESS OF GOVERNMENT INSTITUTIONS</span></b></div><div><br /></div><div><b style="color: red;">Recommendation </b><b><span style="color: red;">3.1</span></b></div><div>Adopt formats, processes, and technologies that are designed to encourage widespread participation by residents in official public hearings and meetings at local and state levels.</div><div><br /></div><div><b style="color: red;">Recommendation </b><b><span style="color: red;">3.2</span></b></div><div>Design structured and engaging mechanisms for every member of Congress to interact directly and regularly with a random sample of their constituents in an informed and substantive conversation about policy areas under consideration.</div><div><br /></div><div><b style="color: red;">Recommendation </b><b><span style="color: red;">3.3</span></b></div><div>Promote experimentation with citizens' assemblies to enable the public to interact directly with Congress as an institution on issues of Congress's choosing.</div><div><br /></div><div><b style="color: red;">Recommendation </b><b><span style="color: red;">3.4</span></b></div><div>Expand the breadth of participatory opportunities at municipal and state levels for citizens to shape decision-making, budgeting, and other policy-making processes.</div><div><br /></div><div><b>STRATEGY 4: <span style="color: #2b00fe;">DRAMATICALLY EXPAND CIVIC BRIDGING CAPACITY</span></b></div><div><br /></div><div><span style="color: red;"><b>Recommendation </b><b>4.1</b></span></div><div>Establish a National Trust for Civic Infrastructure to scale up social, civic, and democratic infrastructure. Fund the Trust with a major nationwide investment campaign that bridges private enterprise and philanthropic seed funding. This might later be sustained through annual appropriations from Congress on the model of the National Endowment for Democracy.</div><div><br /></div><div><b style="color: red;">Recommendation </b><b><span style="color: red;">4.2</span></b></div><div>Activate a range of funders to invest in the leadership capacity of the so-called civic one million: the catalytic leaders who drive civic renewal in communities around the country. Use this funding to encourage these leaders to support innovations in bridge-building and participatory constitutional democracy.</div><div><br /></div><div><b>STRATEGY 5: <span style="color: #2b00fe;">BUILD CIVIC INFORMATION ARCHITECTURE THAT SUPPORTS COMMON PURPOSE</span></b></div><div><br /></div><div><span style="color: red;"><b>Recommendation </b><b>5.1</b></span></div><div>Form a high-level working group to articulate and measure social media's civic obligations and incorporate those defined metrics in the Democratic Engagement Project, described in Recommendation 5.5.</div><div><br /></div><div><b style="color: red;">Recommendation </b><b><span style="color: red;">5.2</span></b></div><div>Through state and/or federal legislation, subsidize innovation to reinvent the public functions that social media have displaced: for instance, with a tax on digital advertising that could be deployed in a public media fund that would support experimental approaches to public social media platforms as well as local and regional investigative journalism.</div></div></div><div style="text-align: left;"><br /></div><div style="text-align: left;"><b style="color: red;">Recommendation </b><b><span style="color: red;">5.3</span></b></div><div style="text-align: left;">To supplement experiments with public media platforms (Recommendation 5.2), establish a public-interest mandate for for-profit social media platforms. Analogous to zoning requirements, this mandate would require such for-profit digital platform companies to support the development of designated public-friendly digital spaces on their own platforms.</div><div style="text-align: left;"><br /></div><div style="text-align: left;"><b style="color: red;">Recommendation </b><b><span style="color: red;">5.4</span></b></div><div style="text-align: left;">Through federal legislation and regulation, require of digital platform companies: interoperability (like railroad-track gauges), data portability, and data openness sufficient to equip researchers to measure and evaluate democratic engagement in digital contexts.</div><div style="text-align: left;"><br /></div><div style="text-align: left;"><b style="color: red;">Recommendation </b><b><span style="color: red;">5.5</span></b></div><div style="text-align: left;">Establish and fund the Democratic Engagement Project: a new data source and clearinghouse for research that supports social and civic infrastructure. The Project would conduct a focused, large-scale, systematic, and longitudinal study of individual and organizational democratic engagement, including the full integration of measurement and the evaluation of democratic engagement in digital contexts.</div><div style="text-align: left;"><br /></div><div style="text-align: left;"><b>STRATEGY 6: <span style="color: #2b00fe;">INSPIRE A CULTURE OF COMMITMENT TO AMERICAN CONSTITUTIONAL DEMOCRACY AND ONE ANOTHER</span></b></div><div style="text-align: left;"><br /></div><div style="text-align: left;"><span style="color: red;"><b>Recommendation </b><b>6.1</b></span></div><div style="text-align: left;">Establish a universal expectation of a year of national service and dramatically expand funding for service programs or fellowships that would offer young people paid service opportunities. Such opportunities should be made available not only in AmeriCorps or the military but also in local programs offered by municipal governments, local news outlets, and nonprofit organizations.</div><div style="text-align: left;"><br /></div><div style="text-align: left;"><b style="color: red;">Recommendation </b><b><span style="color: red;">6.2</span></b></div><div style="text-align: left;">To coincide with the 250th anniversary of the Declaration of Independence, create a Telling Our Nation's Story initiative to engage communities throughout the country in direct, open-ended, and inclusive conversations about the complex and always evolving American story. Led by civil society organizations, these conversations will allow participants at all points along the political spectrum to explore both their feelings about and hopes for this country.</div><div style="text-align: left;"><br /></div><div style="text-align: left;"><b style="color: red;">Recommendation </b><b><span style="color: red;">6.3</span></b></div><div style="text-align: left;">Launch a philanthropic initiative to support the growing civil society ecosystem of civic gatherings and rituals focused on the ethical, moral, and spiritual dimensions of our civic values.</div><div style="text-align: left;"><br /></div><div style="text-align: left;"><b style="color: red;">Recommendation </b><b><span style="color: red;">6.4</span></b></div><div style="text-align: left;">Increase public and private funding for media campaigns and grassroots narratives about how to revitalize constitutional democracy and encourage a commitment to our constitutional democracy and one another.</div><div style="text-align: left;"><br /></div><div style="text-align: left;"><b style="color: red;">Recommendation </b><b><span style="color: red;">6.5</span></b></div><div style="text-align: left;">Invest in civic educators and civic education for all ages and in all communities through curricula, ongoing program evaluations, professional development for teachers, and a federal award program that recognizes civic-learning achievements. These measures should encompass lifelong (K–12 and adult) civic-learning experiences with the full community in mind.</div><div style="text-align: left;"><br /></div><div style="text-align: left;">Among the recommendations listed above, I strongly support ranked-choice voting in presidential, congressional, and state elections (1.2), changing federal election day to Veterans Day (Nov. 11th) (2.2), and adopting formats, processes, and technologies that are designed to encourage widespread participation by residents in official public hearings and meetings at local and state levels (3.1). While I also support amending the Constitution so that Supreme Court justices serve a term limited to a pre-set number of years, twelve- or sixteen-year terms are more reasonable than eighteen-year terms. Lastly, although same-day voter registration will improve access for people to elect their government leaders (2.3), universal automatic voter registration makes me nervous as I have concerns about any government agency implementing a registration system without the explicit consent of the individual.</div><div><br /></div><div>In a letter published in <i>Our Common Purpose</i>, David W. Oxtoby, president of American Academy of Arts and Sciences, writes: "Throughout our country's history, the American people have confronted moments of crisis with resilience and an openness to reinvention, enabling our nation to become a better version of itself." He adds that "The recommendations in this report touch all sectors of American life and offer a bold path that will require all of us to commit to reinventing aspects of our constitutional democracy." Despite the currently challenges facing our great nation, I remain optimistic that Americans will take advantage of the opportunity to create a better version of our great nation.</div><div><br /></div><div>What are you thoughts?</div><div><br /></div><a href="https://www.linkedin.com/in/aaronrose/" style="font-style: italic;" target="_blank">Aaron Rose</a><i> is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of </i><a href="https://www.gtperspectives.com/">GT Perspectives</a>,<i> an online forum focused on turning perspective into opportunity.</i></div>Aaron Rosehttp://www.blogger.com/profile/16914196169617403460noreply@blogger.com0tag:blogger.com,1999:blog-5044990419048085041.post-66485037231241689422023-12-11T23:28:00.000-08:002024-02-16T10:35:20.839-08:00Forging a Resilient Digital Indonesia<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgU6Ykn17-u7aPP6hjTVdjxBeIuFTRf7BOnIJ9dYO9eZ7SX2x03jT9dKprlN9kAYLEqd73310wuu5cYLF6eI9NGpoQ8O92GUadJjqXdSSKhvzEL34oy6IGc_klTIPZlD4P1_-ItJVlftHJH0PUhXSbqpuHEm_m87cOculrqeNv2fxus5X5gI3BOFp3f5DfH/s768/Screenshot%20(480).png" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="768" data-original-width="540" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgU6Ykn17-u7aPP6hjTVdjxBeIuFTRf7BOnIJ9dYO9eZ7SX2x03jT9dKprlN9kAYLEqd73310wuu5cYLF6eI9NGpoQ8O92GUadJjqXdSSKhvzEL34oy6IGc_klTIPZlD4P1_-ItJVlftHJH0PUhXSbqpuHEm_m87cOculrqeNv2fxus5X5gI3BOFp3f5DfH/w141-h200/Screenshot%20(480).png" width="141" /></a></div>"The government of Indonesia is keen to build a digital nation, in which digital technologies help improve the livelihoods of citizens and drive productivity in key sectors of the economy," according to a <a href="https://www.gsma.com/asia-pacific/resources/digital-nation-report-indo/" target="_blank">report</a> by the GSMA. "This has been highlighted in several digitalization plans announced in recent years. The main elements of the plans align with the five components of a digital nation: infrastructure, innovation, data governance, security and people."<div><br /></div><div>The UK-based organization adds that "Although steps have been taken towards a digital nation, there remains room for improvement and an opportunity to accelerate progress. This is particularly crucial in the context of 5G and other emerging technologies (such as AI and quantum computing) transforming Indonesian society and contributing to the government’s target for the country to become a top 10 global economy by 2030." The report encouragingly points out: "The industry (mobile operators and other ecosystem players) will invest nearly $18 billion between 2024 and 2030, mostly on 5G networks. 5G technology is projected to contribute $41 billion to Indonesia's GDP during that period."</div><div><div><br /></div><div>Having advised government leaders in countries similar to Indonesia who are trying to build a digital nation, I appreciate the GSMA's assertion that "Realizing the government's vision of building a resilient digital nation and using digital technologies to drive economic growth relies on formulating and implementing policies to advance each of the five components of a digital nation." Accordingly, the report presents the following recommendations:</div><div><ul style="text-align: left;"><li><i><b>Infrastructure:</b> Implement spectrum pricing policies and other policy initiatives to ensure sustainable private sector investment in digital networks. Such policies will facilitate the continued expansion of the high-performance mobile networks and other digital infrastructure required to build a resilient digital nation.</i></li><li><i><b>Innovation:</b> Take a holistic approach to digital innovation across government, supported by agile policy approaches, such as regulatory sandboxes and policy labs, and make a concerted effort to increase research funding in Indonesia.</i></li><li><i><b>Data governance:</b> Continue on the path to the full enforcement of the personal data protection law, which was enacted in 2022, and consult widely with stakeholders across the public and private sectors on guidelines on the use of AI and other emerging technologies.</i></li><li><i><b>Security:</b> Develop a comprehensive cybersecurity law to streamline current fragmented laws, and adopt ecosystem-wide collaboration to strengthen cyber resilience, disrupt cybercrime and tackle other online threats.</i></li><li><i><b>People:</b> Accelerate efforts to bring more people online by closing the remaining coverage and usage gaps. Implement initiatives to build a digitally-ready workforce with the necessary knowledge and skills to utilize digital technologies across different sectors of the economy.</i></li></ul></div><div><div><br /></div><div>The report's authors adds: "The task of becoming a digital nation is multidimensional, involving many different actors from the public and private sectors and non-state institutions. Meanwhile, digital technologies continue to evolve rapidly, offering new opportunities but also challenges that need to be approached holistically. In this context, a whole-of-government approach (WGA) is essential to streamline efforts and realize efficiencies in formulating and implementing digital nation initiatives. This approach will bring together multiple stakeholders and diverse resources to provide a common solution to key issues."</div></div><div><br /></div>In addition to Indonesia, other members of the Association of Southeast Asian Nations (ASEAN) have plans to building a resilient digital nation. The recommendations presented by this report can be a useful guide for how to successfully use digital technologies to drive economic growth.</div><div><br /></div><div>Do you agree with the report's recommendations?<br /><br /><a href="https://www.linkedin.com/in/aaronrose/" style="font-style: italic;" target="_blank">Aaron Rose</a><i> is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of </i><a href="https://www.gtperspectives.com/">GT Perspectives</a>,<i> an online forum focused on turning perspective into opportunity.</i></div>Aaron Rosehttp://www.blogger.com/profile/16914196169617403460noreply@blogger.com0tag:blogger.com,1999:blog-5044990419048085041.post-73112726430130414632023-12-09T19:41:00.000-08:002024-02-16T10:38:12.925-08:00Helping Policymakers and Stakeholders Understand Risk and Design Effective Policies for Urban Resilience <div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgoSCySgklJKsMsGMR-esZivWpMcoSYT2dD02y7kZxX5zIYUDcZHiOb0_XZWwT9hYLOQ98qaAqLfzv33wStamDlTATe15L3xuU927ztiVSgC2ZxNnkNbhWz73hvyNYR3CeABL1G8n5qESfThzkDXdk8maZUS-45tFqsIcETQ-rM8S75ctKZ1ZQZpmPsCmoW/s768/Screenshot%20(483).png" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="768" data-original-width="535" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgoSCySgklJKsMsGMR-esZivWpMcoSYT2dD02y7kZxX5zIYUDcZHiOb0_XZWwT9hYLOQ98qaAqLfzv33wStamDlTATe15L3xuU927ztiVSgC2ZxNnkNbhWz73hvyNYR3CeABL1G8n5qESfThzkDXdk8maZUS-45tFqsIcETQ-rM8S75ctKZ1ZQZpmPsCmoW/w139-h200/Screenshot%20(483).png" width="139" /></a></div><div><div>According to a report developed by Economist Impact and supported by the Tokio Marine Group, "The world is facing unprecedented challenges. Extreme weather events, from hurricanes and wildfires to flooding and heatwaves, are becoming more frequent and their effects more devastating." Furthermore, "Emerging risks like cyber-attacks loom larger as technology dependence deepens. Our cities are exposed to all of these risks and more. Lives and livelihoods depend on our ability to understand and mitigate the evolving threats to our urban centers."</div><div><br /></div><div>The <i><a href="https://impact.economist.com/projects/resilient-cities/en/whitepaper/the-resilient-cities-index/" target="_blank">Resilient Cities Index</a></i> highlights three phases to resilience. "Preparation and mitigation come first. Understanding the risks, how they are evolving and taking steps to minimize their impact is essential if cities are to avoid the worst. The second phase is response, necessitating swift reactions and timely assistance to save lives and diminish the impact when disasters occur. Last is recovery, emphasizing the need to learn from tragedies and rebuild stronger, better-equipped communities for future shocks and stresses."</div></div><br />Aiming to help policymakers and stakeholders understand risk and design effective policies for urban resilience, Economist Impact developed a benchmark of 25 cities. To gauge the resilience of these cities, the report's authors took measurements across four pillars: critical infrastructure, environment, socio-institutional and economic. This white paper combines index analysis with expert commentary to identify patterns, common strengths, deficits and best practices across index cities.<div><br /><div><div>Key findings from the inaugural edition of the <i>Resilient Cities Index</i> include:</div><div><ul style="text-align: left;"><li><i><b>Cities performed well in the critical infrastructure pillar of the index, but there are some weak points that require strategic focus.</b> The cities with the highest scores were Dubai, Shanghai, New York and Singapore. These capital-rich market locations have greater opportunities to develop new infrastructure, compared with European cities constrained by decades- or centuries-old systems. Within this pillar, digital infrastructure and transportation were a drag on cities' resilience.</i></li><li><i><b>Cities that use data and technology to create operational efficiencies and share information with their citizens—i.e., smart cities—are better at dealing with shocks.</b> Patchy internet quality, which can impede access to digital services, pulled down the overall resilience score in the critical infrastructure pillar. Digital technologies and advanced data analytics can help to predict risks, optimize existing systems and keep the public informed. Greater digitalization comes with risks, especially to critical infrastructure, but most cities in the index have built safeguards against this.</i></li><li><i><b>Most emerging economy cities lack adequate regulatory frameworks, strategies and incentives for futureproofing infrastructure.</b> Only a few cities in the index achieved high scores for future-proofing, which involves ensuring infrastructure preparedness for shocks while managing current and future emissions. One way cities can future-proof is by incentivizing sustainable designs for buildings, such as installing green roofs, incorporating modularity and retrofitting for energy efficiency—a practice only found in high-income cities in the index.</i></li><li><i><b>Efforts to achieve environmental resilience are led by innovative solutions.</b> Cities are employing a variety of nature-based solutions to adapt to flooding and heat stress, from planting rooftop vegetation and mangrove forests (green infrastructure) to rehabilitating wetlands (blue infrastructure). Cities are also decarbonizing by adopting renewable energy and negative emission technologies, such as carbon capture, storage and removal. However, the scalability of these technologies is likely to be challenging for resource-constrained emerging market cities.</i></li><li><i><b>Cities demonstrated poorer performance in the socio-institutional pillar, mostly due to income inequality and poor health and well-being metrics.</b> Only nine cities have a single, comprehensive plan to support vulnerable groups. However, one bright spot is that cities are promoting a culture of readiness to act in the event of a disaster. The majority of cities scored highly on this or are working to improve their readiness.</i></li><li><i><b>Cities had the lowest average scores in the economic pillar, dragging down some cities that performed well in other areas.</b> The low penetration of financial safety nets hinders safeguards against threats and undermines a city's ability to recover from shocks. Another aspect of economic resilience is a city’s ability to incubate innovation, which can foster solutions to a range of problems, from congestion to water stress. Unfortunately, most cities scored poorly on the indicator for start-up ecosystems.</i></li></ul><div><br /></div></div></div></div><div><div>The report's conclusion points out that "A resilient city is not only prepared for shocks but has the ability to bounce back and thrive. Recognizing both existing and looming threats will help cities better understand their vulnerabilities and design targeted actions. However, building such cities requires stakeholders from government, businesses and communities, as well as individual city-dwellers, to engage in holistic resilience thinking at community and municipality levels."</div></div><div><br /></div><div><div>Moreover, "While resilience needs to be tackled in myriad ways, a number of critical strategies have been identified in the course of this research and are summarized below."</div><div><ul style="text-align: left;"><li><i><b>Empower the community to be active participants.</b> This is contingent on the democratization of information. All city-dwellers should have equal access to government information, including what to do in an emergency. Some cities, like Singapore, do this very well, using digital channels to disseminate information to everyone simultaneously. Fostering a culture of readiness and the ability to manage hazards will require investment to train and educate people at governing and grassroots levels to be stewards of their city. Recognizing that information is key, municipalities could consider partnering with a digital platform to minimize misinformation and ensure the city moves in one direction, despite disruption.</i></li><li><i><b>Social cohesion efforts need greater advancement across the board.</b> Cities are nothing without the people who inhabit them. Greater attention to social cohesion will help to ensure cities are less fragmented, adaptive and better prepared for shocks. City governments should overlay resilience efforts with initiatives that aim to improve the lives of urban residents. This process should be driven by city leadership and engage civil society. The majority of cities in the index have some way to go to strengthen social cohesion through integration programs for society's most vulnerable.</i></li><li><i><b>Early warning systems (EWS) are vital for safe cities but investment is needed to hit the 2027 target.</b> National governments and municipality leaders will have to collaborate to ensure universal early warning systems coverage by 2027. There are two challenges that need to be met. First, capital is needed to bridge the investment gap for technologies with a greater push for the development and adoption of frontier and horizon tech–from drones to AI. Second, governments need to facilitate the necessary legislation to connect these EWS to emergency and response plans to ensure there are protocols and resources in place to deal with climate extremes and hazards. Community acceptance and responsiveness to early warnings are essential in the effectiveness of EWS. This can be achieved through systematic training and education and awareness programs.</i></li></ul><div><br /></div></div></div><div>What do you think of the report's findings and conclusions? Do you have additional recommendations on how policymakers and stakeholders understand risk and design effective policies for urban resilience?</div><div><br /></div><i></i><a href="https://www.linkedin.com/in/aaronrose/" style="font-style: italic;" target="_blank">Aaron Rose</a><i> is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of </i><a href="https://www.gtperspectives.com/">GT Perspectives</a>,<i> an online forum focused on turning perspective into opportunity.</i>Aaron Rosehttp://www.blogger.com/profile/16914196169617403460noreply@blogger.com0tag:blogger.com,1999:blog-5044990419048085041.post-46238060913650641282023-12-07T21:43:00.000-08:002024-02-16T10:36:54.735-08:005G's GDP Contribution in MENA Is Expected to Reach $60B in 2030, Representing 13% of the Overall Annual Economic Impact of Mobile in the Region<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhzLku52lvRwhO6XjiF_K1GOsh_9_qcqytxUURjYrt_IBpNogi8TUBPZna7e6578tnb4cu3HWVJTlSPeKkop87I8ydz1pW3IGEzTVhhKqDZQL9-b33QMm82sSHGpW4gHCXK03vrrJS2VSiZCU-zYCkRM3uGlu8C9bwG0lgcPC2JtXDameyu3cQsf6RQbWX2/s768/Screenshot%20(475).png" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="768" data-original-width="543" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhzLku52lvRwhO6XjiF_K1GOsh_9_qcqytxUURjYrt_IBpNogi8TUBPZna7e6578tnb4cu3HWVJTlSPeKkop87I8ydz1pW3IGEzTVhhKqDZQL9-b33QMm82sSHGpW4gHCXK03vrrJS2VSiZCU-zYCkRM3uGlu8C9bwG0lgcPC2JtXDameyu3cQsf6RQbWX2/w141-h200/Screenshot%20(475).png" width="141" /></a></div>As the UN Climate Change Conference finds down in Dubai, many people unfamiliar with the Middle East and North Africa (MENA) are becoming aware of efforts to diminish the reliance on fossil fuel as the key producer of economic output. Having done business in the <a href="https://www.gtperspectives.com/search/label/MENA" target="_blank">MENA</a> region for several years, I have witnessed the efforts made by several governments to promote private sector development in several key industries including mobile technology. In its most recent annual <a href="https://www.gsma.com/mobileeconomy/wp-content/uploads/2023/12/051223-Mobile-Economy-Middle-East-and-North-Africa-2023.pdf" target="_blank">report</a> on the state of MENA's mobile economy, the GSMA points out that the region "home to some of the global leaders in terms of 5G adoption, reflecting the ambitious rollout plans of operators, backed by enabling regulations and strong demand from consumers for new services." Furthermore, "5G networks now cover 75% or more of the population in the GCC states, with operators in those markets increasingly shifting focus to improving 5G coverage in less densely populated areas while also ramping up investment to support the growing momentum behind use cases enabled by 5G standalone (SA) and 5G-Advanced." The GCC, or Gulf Cooperation Council, is comprised of six nations: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates.<div><br /></div><div>The GSMA notes that "5G's GDP contribution is expected to reach $60bn in 2030, representing 13% of the overall annual economic impact of mobile in the region." The report's additional key findings include:</div><div><br /></div><div><div><b>5G SA and 5G-Advanced will be at the heart of 5G's next phase</b></div><div><br /></div><div>"By September 2023, six operators in MENA had already rolled out 5G SA networks, contributing to 15% of the global total. Operators in MENA have also begun planning for 5G-Advanced. The use case for 5G-Advanced is straightforward: to enable 5G to support new market demands while waiting for the arrival of 6G. 5G SA and 5G-Advanced will help operators to serve consumer and enterprise customers more flexibly. The adoption of private 5G networks, meanwhile, has been slower in MENA compared with other regions, but there is growing evidence that this is starting to change."</div><div><br /></div><div><b>Operators look to monetize tower assets</b></div><div><br /></div><div>"The majority of tower assets have traditionally remained in the hands of mobile operators in MENA. However, following STC's creation of Tawal in 2019, the first tower company in Saudi Arabia, an increasing number of operators in MENA have embarked upon infrastructure reshuffling, including the monetization of underutilized tower assets. Independent tower companies have been among the main acquirers of operator sites, utilizing multitenancy to drive profitability. In other instances, operators have spun off infrastructure in partnership with private equity groups or issued IPOs for their tower assets. Tower sales and spin-offs enable operators to reallocate capital towards areas with higher growth prospects."</div><div><br /></div><div><b>GCC telcos target stakes in European counterparts</b></div><div><br /></div><div>"International expansion has been a core growth and diversification strategy for GCC telcos looking for opportunities to scale up and drive new revenue and subscriber growth. Historically, GCC operators had bet big on emerging markets across South Asia, Southeast Asia, Sub-Saharan Africa and other parts of MENA. However, recent developments suggest a growing interest in long-established European operators. e& and STC are leading the charge, having made several high-profile deals and announcements since early 2022. The strategic rationale lies in the potential to become global players in the TMT space, both in terms of scale and innovation."</div><div><br /></div><div><b>The shift to circularity gathers momentum</b></div><div><br /></div><div>"In response to escalating concerns regarding the generation of e-waste and the unsustainable depletion of natural resources, the concept of circularity has surged to the forefront of the agendas for policymakers and industry stakeholders. This amplified focus on sustainability is particularly evident in view of the region's role as the host for the 2023 United Nations Climate Change Conference (COP28) in Dubai. Governments and industry participants in the region are taking proactive measures to establish new channels and suppliers dedicated to collecting, refurbishing and reselling devices and network equipment."</div><div><br /></div><div><b>Regulatory enablers and innovation hubs fuel fintech growth</b></div><div><br /></div><div>"MENA has experienced a significant surge in fintech services, driven by increased investments and regulatory enablement. Regulatory sandboxes and dedicated fintech hubs have been important contributors to this, with digital payment solutions gaining prominence in recent years, including</div><div>contactless payments, open banking and buy now, pay later (BNPL) services. Mobile operators are actively involved in the fintech space, expanding access and inclusion for consumers and businesses through a variety of financial-services products and partnerships with established fintech providers."</div></div><div><br /><div><div><br /></div><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi1AcpxexckPws9AxavTGixwWurTWaHAxSnvNom7MByEmde2-jxq9aOa6Q7dyyWTOZOZxCFTop8Y3pw5XfIyzbPj7W_rf7f_DZTWCghP5JVksh7ZeGKHO_NSIJi1OSrW5mQI1ly4OvFlq3QrEqyZmcYoOTOhOiExnoucJB30fO5heJEA7Qi01KaBh82Ven1/s1078/Screenshot%20(474).png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="768" data-original-width="1078" height="285" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi1AcpxexckPws9AxavTGixwWurTWaHAxSnvNom7MByEmde2-jxq9aOa6Q7dyyWTOZOZxCFTop8Y3pw5XfIyzbPj7W_rf7f_DZTWCghP5JVksh7ZeGKHO_NSIJi1OSrW5mQI1ly4OvFlq3QrEqyZmcYoOTOhOiExnoucJB30fO5heJEA7Qi01KaBh82Ven1/w400-h285/Screenshot%20(474).png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;"><span style="font-size: x-small;">Infographic: GSMA</span></td></tr></tbody></table><br /></div><div>Significant opportunities exist for MENA entrepreneurs to develop localized solutions in AI, IoT, cybersecurity, EdTech, fintech, digital health, e-commerce, and enterprise services. As the report explains, "Beyond its contribution to GDP, the mobile ecosystem also supports over 800,000 jobs (directly and indirectly) and makes a substantial contribution to the funding of the public sector, with $20 billion raised through taxation in 2022. This economic contribution underlines the importance of stakeholders taking the right steps to sustain the impact of mobile services on the digital economy, with spectrum availability a key driver of affordable 5G for all."</div><div><br /></div><div>What opportunities are you seeing in the region?</div><div><div><br /></div><div><i></i><a href="https://www.linkedin.com/in/aaronrose/" style="font-style: italic;" target="_blank">Aaron Rose</a><i> is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of </i><a href="https://www.gtperspectives.com/">GT Perspectives</a>,<i> an online forum focused on turning perspective into opportunity.</i></div></div></div>Aaron Rosehttp://www.blogger.com/profile/16914196169617403460noreply@blogger.com0tag:blogger.com,1999:blog-5044990419048085041.post-26257888442482979912023-11-24T09:35:00.000-08:002023-12-11T01:44:55.034-08:00SBA's Surety Bond Program<div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg3MzCUWoFK8kbz0rAlxE4E_tMHvbofpWSC53Nsh04QWcJfOQsFmE2EqX2C-ejPcvRX7wn0Ph0zDhdMWntsMmZTFstaZgO6OrVIM5eUnKJfY1q0brm77v2N98ZL3H99OE9pwCzO9Mg4y7Z_r7i9TOUshqCZ9ARuguHEkYKQv5_Btc15CI_WfSQcCuhewrjH/s2121/Surety-bond.jpeg" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="1414" data-original-width="2121" height="133" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg3MzCUWoFK8kbz0rAlxE4E_tMHvbofpWSC53Nsh04QWcJfOQsFmE2EqX2C-ejPcvRX7wn0Ph0zDhdMWntsMmZTFstaZgO6OrVIM5eUnKJfY1q0brm77v2N98ZL3H99OE9pwCzO9Mg4y7Z_r7i9TOUshqCZ9ARuguHEkYKQv5_Btc15CI_WfSQcCuhewrjH/w200-h133/Surety-bond.jpeg" width="200" /></a></div>Investopedia <a href="https://www.investopedia.com/terms/s/surety.asp" target="_blank">defines</a> surety as "a promise or agreement made by one party that debts and financial obligations will be paid. In effect, a surety acts as a guarantee that a person or an organization assumes responsibility for fulfilling financial obligations in the event that the debtor defaults and is unable to make payments." Moreover, "The party that guarantees the debt is referred to as the surety or the guarantor. Sureties can be made by issuing surety bonds, which are legal contracts obligating one party to pay if the other fails to live up to the agreement."</div><div><br /></div><div><div>Benefits of having a surety bond include:</div><div><ul><li>Protection against financial loss since a surety bond can protect your business from financial losses in the event that someone sues you or if you break a contract;</li><li>Shows that you are a responsible business;</li><li>Getting help in obtaining financing as banks and other lending institutions may be more likely to lend money to businesses that have a surety bond;</li><li>Helps you comply with regulations as certain regulations may require businesses to have a surety bond in order to operate; and</li><li>Helps you get government contracts as many government organizations require businesses to have a surety bond before they will award them a contract.</li></ul><div><br /></div></div></div><div>In conversation with a friend who owns a small business that is trying to win contracts, I introduced him to a program within the U.S. Small Business Administration Bond Guaranty Program that issues surety bonds which provides the customer with a guarantee that the work will be completed.<br /></div><br /><a href="https://www.sba.gov/funding-programs/surety-bonds#id-sba-guarantees-surety-bonds" target="_blank">According to the SBA</a>, "Many public and private contracts require surety bonds, which are offered by surety companies. The SBA guarantees surety bonds for certain surety companies, which allows the companies to offer surety bonds to small businesses that might not meet the criteria for other sureties."<br /><br /><div>The SBA Surety Bond Program is segmented into four steps:</div><div><ol style="text-align: left;"><li>Surety bonds are requested: Some contracts require that the business doing the work be properly bonded.</li><li>Surety partners with business: Authorized surety companies provide surety bonds to businesses that meet their qualifications.</li><li>SBA guarantees: SBA guarantees surety bonds for private surety companies, so more small businesses can qualify.</li><li>Small businesses benefit: Small businesses get SBA-guaranteed surety bonds so they can get to work.</li></ol>The U.S. government agency importantly explains that it "guarantees contract bonds, but doesn’t guarantee commercial bonds. Contract bonds ensure the terms of a specific contract are fulfilled. Commercial bonds ensure all applicable laws and regulations are followed. Government agencies require certain companies or individuals to obtain commercial bonds, which protect the general public against things like fraud."</div><div><br /></div><div>What is more, "Some contracts require surety bonds that cover specific situations. SBA guarantees surety bonds that cover several major categories of work":</div><div><ul style="text-align: left;"><li>Bid: Ensures full payment and performance bonding from the contract bidder.</li><li>Payment: Ensures full payment to the suppliers and subcontractors.</li><li>Performance: Ensures full completion of a contract by small business.</li><li>Ancillary: Ensures completion of requirements outside of performance or payment, such as maintenance.</li></ul><div><br /></div><div>With respect to the bond guarantee fee, the SBA notes that "all performance and payment bond guarantees require small businesses to pay SBA a fee of 0.6% of the contract price. If for some reason the bond is cancelled or not issued, SBA will return the guarantee fee. SBA does not charge a fee for bid bond guarantees."</div><div><br /></div><div>Eligibility criteria in obtaining a surety bond include qualifying as a small business according to the <a href="https://www.sba.gov/document/support-table-size-standards" target="_blank">SBA's size standards</a>, have up to $6.5 million for non-federal contracts and up to $10 million for federal contracts, and meet the surety company’s credit, capacity, and character requirements.<br /></div><div><br /></div><div>What has been your experience with surety bonds?</div><div><br /></div><div><i><a href="https://www.linkedin.com/in/aaronrose/" target="_blank">Aaron Rose</a> is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of <a href="https://www.gtperspectives.com/">GT Perspectives</a>, an online forum focused on turning perspective into opportunity.</i></div></div>Aaron Rosehttp://www.blogger.com/profile/16914196169617403460noreply@blogger.com0tag:blogger.com,1999:blog-5044990419048085041.post-75829663807179778642023-11-05T02:29:00.000-08:002024-01-24T14:12:44.135-08:00While Mobile Internet Adoption Continues to Increase, the Growth Rate Slowed in 2022<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiDFGkQFBCZh6C9yVH_h8nCCD4AM_r4vKXk90wvYAAH4qjK_hU0Jn9qIUBNFrywPcL1JdS3P_CEHOzSBRMY5TEt91T-hboyYZP_fkNEWEfpya9lPsSImckWdTRj80-NH0nfgPeVxA5gEGSFyO4W0Ns_TW1Ql5_LH15cs6Xm9tNYbzlsuLGJbEWi0pHhnzM7/s768/Screenshot%20(471).png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="768" data-original-width="542" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiDFGkQFBCZh6C9yVH_h8nCCD4AM_r4vKXk90wvYAAH4qjK_hU0Jn9qIUBNFrywPcL1JdS3P_CEHOzSBRMY5TEt91T-hboyYZP_fkNEWEfpya9lPsSImckWdTRj80-NH0nfgPeVxA5gEGSFyO4W0Ns_TW1Ql5_LH15cs6Xm9tNYbzlsuLGJbEWi0pHhnzM7/w141-h200/Screenshot%20(471).png" width="141" /></a></div><div>The previous posts in the forum addressed the economic benefit <a href="https://www.gtperspectives.com/2023/11/5g-to-benefit-sub-saharan-africa.html" target="_blank">5G will bring to the Sub-Saharan Africa economy in the near future</a> and the <a href="https://www.gtperspectives.com/2023/10/gsma-report-highlights-challenges-and.html" target="_blank">challenges and opportunities for scaling e-commerce adoption by small businesses in Africa</a>. While 5G is expanding rapidly in low- and middle-income countries and smartphone adoption is projected to increase in the coming years, which will allow people to connect to critical services such as education, healthcare, and financial services, and provide income-generating opportunities, significant digital divides exists. Not only do these digital divides inhibit entrepreneurs from developing innovative localized technology solutions, but they prevent investors from providing essential financial capital and advisory support.</div><div><br /></div><div>Therefore, it was with great interest to read GSMA's <i><a href="https://www.gsma.com/r/wp-content/uploads/2023/10/The-State-of-Mobile-Internet-Connectivity-Report-2023.pdf" target="_blank">State of Mobile Internet Connectivity 2023</a></i> that "considers the importance of not just mobile broadband coverage but 'meaningful connectivity' – users having a safe, satisfying, enriching and productive online experience that is affordable. This requires an understanding of the key barriers and enablers for meaningful connectivity, including infrastructure, affordability, skills, safety and security, and relevant content and services. Each of these is considered in this report."</div><div><br /></div><div>Below are the report's key findings (copied in verbatim):</div><div><ul style="text-align: left;"><li><b>Mobile internet adoption continues to increase, with 57% of the global population (4.6 billion people) now using mobile internet – but the growth rate at which people are adopting mobile internet slowed in 2022.</b> Only 200 million people started using mobile internet in 2022, compared to 300 million in 2021 and in 2020. Just over three quarters of the growth in mobile internet adoption in 2022 came from low- and middle-income countries (LMICs), where 95% of the unconnected population live. In least developed countries (LDCs), almost 30 million additional people started using mobile internet in 2022, meaning one in four people in LDCs are using mobile internet.</li><li><b>Mobile broadband coverage has remained relatively unchanged, with 95% of the global population living within the footprint of a mobile broadband network.</b> With only marginal growth in coverage in 2022, the coverage gap – those living in areas without mobile broadband coverage – stands at almost 400 million people (5% of the global population). The remaining uncovered communities, which are predominantly rural, poor and sparsely populated, are the most challenging to reach.</li><li><b>Most of those not using mobile internet live in areas covered by mobile broadband.</b> In 2022, 3 billion people (38% of the global population) lived in areas covered by mobile internet but did not use it. With mobile internet adoption outpacing network expansion, this usage gap has been shrinking slowly in recent years, from 40% in 2021 to 38% in 2022. However, the usage gap remains almost eight times the size of the coverage gap. Considering only adults aged 18 and above, 23% are still not using mobile internet despite being covered by a mobile broadband network. The majority of those living within mobile broadband coverage but not using it do not yet own a mobile phone.</li><li><b>Connectivity varies significantly between and within regions and countries, with 95% of the unconnected living in LMICs.</b> Sub-Saharan Africa remains the region with the largest coverage and usage gaps. In LMICs, adults in rural areas are still 29% less likely to use mobile internet than those in urban areas, while women are 19% less likely to use mobile internet than men. In LDCs, only 25% of the population use mobile internet, compared to 52% across LMICs overall and 85% in high-income countries (HICs).</li><li><b>The majority of the global population now own a smartphone, which is how most people are accessing mobile internet.</b> At the end of 2022, 54% of the global population (4.3 billion people) owned a smartphone. Of the 4.6 billion people using mobile internet, almost 4 billion do so using a smartphone (49% of the global population) and around 600 million people do so using a feature phone (8% of the global population). There are also 350 million people who own a smartphone but do not use mobile internet.</li><li><b>4G and 5G continue to expand, but 2G and 3G remain important sources of coverage in LMICs.</b> While the overall broadband coverage gap has remained broadly unchanged since 2021, the deployment of 4G and 5G continues to expand. Globally, 90% of the population is now covered by 4G, and 32% by 5G (up from 25% in 2021). Almost three quarters of the 5G network expansion in 2022 was in Asia-Pacific, and there was particularly strong growth in 4G network expansion in Sub-Saharan Africa. However, most mobile operators will continue to maintain 2G and 3G networks for the foreseeable future, with a significant portion of users continuing to use these networks, particularly in LMICs.</li><li><b>Data usage and network quality continue to increase but significant differences remain between HICs and LMICs.</b> Monthly global mobile data traffic per user increased from 8.4 GB in 2021 to 11.3 GB in 2022 – the largest absolute increase since it was first tracked in 2015. Network quality improved across all regions, driven by improved networks and consumers migrating to 4G or 5G. For the first time, all regions now have average download speeds of at least 10 Mbps, while the global average download speed increased from 27 Mbps to 34 Mbps. HICs record download speeds four times greater than those in LMICs.</li><li><b>Awareness of mobile internet continues to grow but has slowed significantly since 2019.</b> In nine of the 12 countries surveyed, more than 80% of the population was aware of mobile internet in 2022. However, women and those living in rural areas remain less likely to be aware of mobile internet, and lack of awareness remains a critical initial barrier to mobile internet adoption in some countries.</li><li><b>Affordability and skills remain the two greatest barriers to mobile internet adoption and use.</b> Across the countries surveyed, for mobile users who are aware of mobile internet but don’t use it, the top reported barriers to adopting it remain affordability (particularly of handsets) and literacy/digital skills. Safety & security concerns and lack of perceived relevance were reported less often but are also important barriers. For example, among smartphone owners, lack of perceived relevance is often cited as a top barrier to mobile internet adoption in several countries.</li><li><b>Affordability of devices and data continues to disproportionately impact the underserved.</b> Across LMICs, affordability of an entry-level, internet-enabled handset remained relatively unchanged, while affordability of data continues to improve across most regions. However, while the affordability of an entry-level device across all LMICs is equivalent to 16% of average monthly income, this increases to 40% for the poorest 40% of the population and 55% for the poorest 20%. Across LMICs, it is equivalent to 24% of average monthly income for women, compared to 13% for men.</li></ul><br /><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg4AYVyH4es72ybfzFPTolr914Mya1Q7aP7GDugi4hS_NQQWh_qjFExD7ZMvl7LFByrrT3RMDLE9i37hJMq5AZd-QHSWsRlvZ8NvrJEiGUxvBzyxY7AxkrW5LqZo-EYvfulSNDUCq5cx1Mu_yS3-J5mDAjnIUY_V7AdVF1VfpHztp3YTHxJ2D47yjK92-Ys/s1080/Screenshot%20(469).png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="768" data-original-width="1080" height="285" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg4AYVyH4es72ybfzFPTolr914Mya1Q7aP7GDugi4hS_NQQWh_qjFExD7ZMvl7LFByrrT3RMDLE9i37hJMq5AZd-QHSWsRlvZ8NvrJEiGUxvBzyxY7AxkrW5LqZo-EYvfulSNDUCq5cx1Mu_yS3-J5mDAjnIUY_V7AdVF1VfpHztp3YTHxJ2D47yjK92-Ys/w400-h285/Screenshot%20(469).png" width="400" /></a></div><br /><div>GSMA's report also points out that barriers to digital inclusion are complex and interconnected:</div><div><ul style="text-align: left;"><li><b>Knowledge and skills:</b> "Improving digital skills and literacy, as well as driving awareness and understanding of mobile internet and its benefits, is critical to increasing digital inclusion. Digital skills initiatives should focus on users' needs and circumstances."</li><li><b>Affordability of handsets and data:</b> "Approaches to improve affordability should include efforts to lower the cost of internet-enabled handsets and data through innovative data pricing strategies and handset-financing options, in addition to adopting tax policies and providing targeted subsidies that promote the uptake of internet-enabled devices and data services."</li><li><b>Safety and security:</b> "Concerns about safety and security, including online harassment or cyberbullying, misinformation, disinformation and fraud, are preventing people going online and having a positive internet experience. Appropriate mechanisms and frameworks that recognize these online risks should be put in place to help build consumer trust. Stakeholders should provide users, especially women, with the tools to increase their knowledge and skills to mitigate online risks."</li><li><b>Relevance:</b> "Local digital ecosystems in many LMICs remain underdeveloped and under-resourced. Investment in local digital ecosystems and an enabling policy environment can accelerate growth in local content, services and applications that meet the needs of people and in their own language."</li><li><b>Access:</b> "Using the internet depends on enablers such as electricity, formal identification, sales agents and accessibility features. Stakeholders can increase mobile internet adoption by focusing on, for example, facilitating inclusive and transparent registration processes for mobile, and making services, sales channels and training facilities accessible to underserved groups, such as women and persons with disabilities, alongside improving accessibility features."</li></ul></div><div><br /></div><div>I appreciate how the report addresses the importance of having reliable mobile connectivity for people to access essential services. As the GSMA points out, "In recent years, mobile operators and governments worldwide have been working on advancing digital inclusion, recognizing its transformative potential for societies. While there have been notable achievements and mobile internet adoption continues to grow, this report shows that progress has slowed. Furthermore, with an ongoing cost-of-living crisis, many are now further at risk of remaining unconnected."</div><div><br /></div><div>What are your recommendations on how to bridge the digital divide?</div><div><br /></div><a href="https://www.linkedin.com/in/aaronrose/" style="font-style: italic;" target="_blank">Aaron Rose</a><i> is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of </i><a href="https://www.gtperspectives.com/">GT Perspectives</a>,<i> an online forum focused on turning perspective into opportunity.</i></div>Aaron Rosehttp://www.blogger.com/profile/16914196169617403460noreply@blogger.com0tag:blogger.com,1999:blog-5044990419048085041.post-47026447510503121022023-11-01T00:55:00.000-07:002024-01-23T20:29:03.771-08:005G to Benefit the Sub-Saharan Africa Economy by $11 Billion in 2030 <div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEix0a-NrhyphenhyphenI5EEWLzY54G3yh5CAtPLN9pYonXjGpnMEpoPBAlZpi1l0u4mbLLV5nZbbj3xd5WrwQBOYwyEkMWc67obE1nzaE-i4k-AVjkAAXdFlks81ETQwk878HpByRAlcBN9lzoagJaqkYkde6MWLvK-HQSs0kjBi8GD1CxQhjdzCPQfJeUDMUN7LKq3Z/s768/Screenshot%20(461).png" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="768" data-original-width="540" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEix0a-NrhyphenhyphenI5EEWLzY54G3yh5CAtPLN9pYonXjGpnMEpoPBAlZpi1l0u4mbLLV5nZbbj3xd5WrwQBOYwyEkMWc67obE1nzaE-i4k-AVjkAAXdFlks81ETQwk878HpByRAlcBN9lzoagJaqkYkde6MWLvK-HQSs0kjBi8GD1CxQhjdzCPQfJeUDMUN7LKq3Z/w141-h200/Screenshot%20(461).png" width="141" /></a></div>In its annual report on the state of the mobile economy in sub-Saharan Africa, the GSMA says the mobile connectivity on the continent "continues to drive digital transformation and socioeconomic advancements. This underlines the need for continued efforts to address the persisting barriers that impact mobile internet adoption in the region, particularly the affordability of devices, online safety concerns and the lack of digital skills." The UK-based organization that represents the interests of mobile operators worldwide adds: "Meanwhile, authorities and enterprises see an opportunity to leverage growing 4G and 5G networks, alongside emerging technologies such as AI and IoT, to enhance productivity and efficiency in service delivery."<div><br /></div><div>Findings of the report, which is available in <a href="https://www.gsma.com/mobileeconomy/wp-content/uploads/2023/10/20231017-GSMA-Mobile-Economy-Sub-Saharan-Africa-report.pdf" target="_blank">English</a> and <a href="https://www.gsma.com/mobileeconomy/wp-content/uploads/2023/10/161023-Mobile-Economy-Sub-Saharan-Africa-2023-FRENCH.pdf" target="_blank">Français</a>, include:</div><br /><div><div><b>Growing 5G momentum</b></div><div><br /></div><div>"In 2022, there was a marked uptick in 5G-related activities in Sub-Saharan Africa, including 5G commercial launches in 15 countries and a growing number of spectrum allocations. This comes at a time when 3G is the most dominant technology in the region (accounting for 55% of total connections in 2022) while 4G is already dominant in other regions, implying network and customer readiness for the transition to 4G. The approach to 5G in the region will need to consider the current connectivity landscape and unique market features that could affect the rollout and adoption of the technology. 5G network ecosystem players in the region must also find ways to deliver cost-effective and efficient 5G networks, balancing investment and value creation."</div><div><br /></div><div><div><b>Steering growth with AI</b></div><div><br /></div><div>"The emergence of new AI tools and use cases is accelerating the implementation of AI across various verticals and business processes. Most AI developments are occurring in advanced markets. However, the technology can be utilized in any scenario where there is sufficient data to draw insights. As a result, several industry players are already taking steps to apply AI across a variety of use cases in Sub-Saharan Africa. The potential benefit of AI in the region is significant, given that it can help offset the impact of limited resources and poor infrastructure in the delivery of many life-enhancing services, such as healthcare and education. Mobile operators in the region have employed AI at different levels, from improving network operations and customer services to achieving efficiencies and cost savings."</div><div><br /></div><div><b>Climate-related risks spur circular economy principles</b></div><div><br /></div><div>"The concept of circularity has risen to the top of the agenda for policymakers and industry players in light of growing concerns around the generation of e-waste and unsustainable levels of consumption of natural resources. Although the technical lifespan of a mobile device is now between four and seven years, the average use period of mobile devices is only around three years. Governments and industry players have a role to play in incentivizing consumers. This includes building new channels and suppliers to collect, refurbish and resell devices and implementing awareness campaigns on sustainability. Some operators in Sub-Saharan Africa are already taking a lead in this regard, with initiatives to drive circularity in mobile phones and other digital devices."</div><div><br /></div><div><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEigIpdbJKxDHCyutywyREBUp9vlF2Vn7ibL6DeLTsRxtk_NsZZzG7aav0YLViULZeBWD-prUOxPwjZ4SD8jOm1rK15HwJdZCAEOYmNzQu8Iv5dmMAOt01JJvjo_mbXOP7Fy28dCbq7ZsljMu-1Ac0K35qUdt_4zQa5lmloJ6e-WTWtXUQjyhyPEn24SX1wU/s1082/Screenshot%20(463).png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="768" data-original-width="1082" height="284" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEigIpdbJKxDHCyutywyREBUp9vlF2Vn7ibL6DeLTsRxtk_NsZZzG7aav0YLViULZeBWD-prUOxPwjZ4SD8jOm1rK15HwJdZCAEOYmNzQu8Iv5dmMAOt01JJvjo_mbXOP7Fy28dCbq7ZsljMu-1Ac0K35qUdt_4zQa5lmloJ6e-WTWtXUQjyhyPEn24SX1wU/w400-h284/Screenshot%20(463).png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;"><span style="font-size: x-small;"><i>Infographic: GSMA</i></span></td></tr></tbody></table><br /></div><div><b>Improving smartphone access</b></div><div><br /></div><div>"Smartphone affordability is a key barrier to using mobile internet. The average selling price of smartphones in Africa has reduced significantly in recent years, with an influx of devices priced at below $100 – but the cost remains unaffordable for many. The challenge for manufacturers is to produce devices at low enough price points that align with local earning capacities and allow them to gain market share. To ease the current cost burden, operators offer a range of initiatives, including device financing plans, instalment payments and entry-level smartphones through partnerships with manufacturers."</div><div><br /></div><div><b>Collaboration and innovation in fintech is on the rise</b></div><div><br /></div><div>"Fintech has become increasingly prominent in Sub-Saharan Africa, driven by the need to improve regional financial and digital inclusion. The industry has seen a rise in partnerships and innovation, leading to the diversification of products on offer, particularly in the payments segments. Operators have partnered with ecosystem players to expand products and offer options such as buy now, pay later (BNPL). At the same time, the growing fintech startup industry continues to attract investors, allowing them to improve access to a variety of financial products for both individuals and small businesses, such as microlending and B2B payments."</div><div><br /></div><div><div><b>Policies for safe and inclusive development</b></div></div></div><div><div><br /></div><div>"As cyberattacks continue to grow in scale and scope, governments face increasing pressure to protect their citizens and infrastructure and establish a framework for the mobile industry. Sub-Saharan Africa's rapid technological evolution makes the region an attractive target for fraud and cyberattacks."</div></div><br /><div><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgeWxup0Hw6fTJRZTksaCGc-uiWIIOEnxXqRPuuzjJoiJt0ezf-DBzh0-ct5u4dUINhX-GBNbV90SeeQ6n0kSWj1wQv2M_AWrgSUJCTAiWALNeKCRCh6xq7s13pGvXeZATwFMXlROIm2BT13vmIZFkwLOTUAMTJANyQbSYLMZnmwOSM16nmI101J4AsiaMs/s834/Screenshot%20(464).png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="570" data-original-width="834" height="274" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgeWxup0Hw6fTJRZTksaCGc-uiWIIOEnxXqRPuuzjJoiJt0ezf-DBzh0-ct5u4dUINhX-GBNbV90SeeQ6n0kSWj1wQv2M_AWrgSUJCTAiWALNeKCRCh6xq7s13pGvXeZATwFMXlROIm2BT13vmIZFkwLOTUAMTJANyQbSYLMZnmwOSM16nmI101J4AsiaMs/w400-h274/Screenshot%20(464).png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;"><i><span style="font-size: x-small;">Infographic: GSMA</span></i></td></tr></tbody></table><div><br /></div>According to the GSMA, "5G is expected to benefit the Sub-Saharan Africa economy by $11 billion in 2030, accounting for more than 6% of the overall economic impact of mobile." While it is encouraging to learn that mobile connectivity in Sub-Saharan Africa continues to drive digital transformation and socioeconomic advances, I have concerns about the mobile internet usage gap, which refers to individuals who are not using mobile internet despite living in an area covered by mobile broadband networks. of 59%. Nevertheless, the continent holds significant opportunities for entrepreneurs to develop innovative solutions in AI, IoT, cybersecurity, EdTech, fintech, digital health, e-commerce, and enterprise services.</div><div><br /></div><div>What opportunities are you seeing the Sub-Saharan Africa's mobile economy?</div><div><br /></div><div><i></i><a href="https://www.linkedin.com/in/aaronrose/" style="font-style: italic;" target="_blank">Aaron Rose</a><i> is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of </i><a href="https://www.gtperspectives.com/">GT Perspectives</a><i>, an online forum focused on turning perspective into opportunity.</i></div></div>Aaron Rosehttp://www.blogger.com/profile/16914196169617403460noreply@blogger.com0tag:blogger.com,1999:blog-5044990419048085041.post-70766148591581155712023-10-19T11:02:00.000-07:002024-01-23T21:43:38.841-08:00GSMA Report Highlights the Challenges and Opportunities for Scaling E-Commerce Adoption by Small Businesses in Africa<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh7dtlTxt1Mltjawzdm9gMLYhvYitYmzpJwsr5-Lj5kt62c_KzjfFIHsDyOBmnZLqFfV2X0rfCspC_ElhNjDhSxia6jfFfjPRT2KX8I1Bx7fmwdIKC0zqV2ZqxDCzynDjivz2SqWUjbATR7lXczYnw8wYkcZrntMf5ZHPJHMDFvyATffWKdxPC97pv8Dd23/s1024/Screenshot%20(447a).jpg" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="1024" data-original-width="724" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh7dtlTxt1Mltjawzdm9gMLYhvYitYmzpJwsr5-Lj5kt62c_KzjfFIHsDyOBmnZLqFfV2X0rfCspC_ElhNjDhSxia6jfFfjPRT2KX8I1Bx7fmwdIKC0zqV2ZqxDCzynDjivz2SqWUjbATR7lXczYnw8wYkcZrntMf5ZHPJHMDFvyATffWKdxPC97pv8Dd23/w141-h200/Screenshot%20(447a).jpg" width="141" /></a></div>There is significant evidence that e-commerce can help micro, small and medium enterprises (MSMEs) reach wider markets and increase their profitability and resilience, according to the GSMA. However, in Africa, online retail as a proportion of total retail sales remains much lower than in other regions, indicating that the continent's MSMEs are not fully leveraging the e-commerce opportunity for growth. The UK-based organization, which represents the interests of mobile operators worldwide, published a <a href="https://www.gsma.com/mobilefordevelopment/resources/e-commerce-in-africa-unleashing-the-opportunity-for-msmes/" target="_blank">report</a> highlighting the challenges and opportunities for scaling e-commerce adoption by MSMEs in Africa.<div><br /></div><div>The insights presented in this study are primarily based on surveys conducted with 1,500 MSMEs currently using e-commerce in over six African markets, comprising Egypt, Ethiopia, Ghana, Kenya, Nigeria, and South Africa. In addition, the GSMA conducted an extensive literature review and interviews with over 40 experts in these six markets, as well as in three additional markets that form part of this analysis: Rwanda, Senegal, and Tanzania.<div><br /></div><div>The report's key findings include:<br /><div><ul style="text-align: left;"><li><b>E-commerce offers micro, small, and medium enterprises (MSMEs) the opportunity to operate more efficiently and increase sales and profitability.</b> "This is critically important in African markets where MSMEs play a central role in generating economic value and creating livelihoods. E-commerce can support MSMEs to scale by facilitating access to wider markets, lowering barriers to entry for micro and small firms, and enabling women to combine economic activity with other responsibilities more flexibly and efficiently."</li><li><b>There are three prevalent e-commerce channels: social commerce, the selling of goods via social media services such as Facebook, Instagram, X (previously known as Twitter) and WhatsApp; e-commerce marketplaces, which aggregate large numbers of sellers on a single platform; and own brand websites. </b>"Each channel offers its own unique set of advantages and limitations. While social commerce is most accessible to MSMEs of all sizes due to low barriers to entry for even informal and micro businesses, exclusive use of social commerce, especially informally, limits the professionalization of the business. Much of the sales process in informal social commerce may remain manual, from arranging payments to delivery offline. E-commerce marketplaces digitize the entire sales process for MSMEs, from receiving orders to processing deliveries, but this comes at the cost of commission charges as well as decreased visibility with competing sellers. Meanwhile, company websites create unique brand identities and trust with customers but require more capital and digital know-how."</li><li><b>While improving connectivity and the steady uptake of mobile phones is spurring e-commerce adoption by MSMEs, much of the e-commerce opportunity remains unexploited.</b> "E-commerce adoption is growing, and market forecasts suggest that there will be almost 600 million online shoppers in the region by 2027. However, the number of e-commerce users in the region in 2022 was estimated at under 400 million out of a total population of over 1.4 billion people, a relatively small proportion. In addition, only five to seven percent of retail payments were digital in 2020. There is therefore a vast opportunity for MSMEs to reach consumers via the trade of goods online."</li></ul><div><br /></div><div><div>The GSMA says there are several barriers to scaling e-commerce for MSMEs in Africa. These include:</div><div><ul style="text-align: left;"><li><b>Limited financial resources and digital skills:</b> "MSMEs lack access to capital and credit, restricting their growth, and do not have sufficient business and digital skills to fully leverage the opportunities e-commerce offers."</li><li><b>Regulatory gaps:</b> "Where e-commerce related policies and regulations are absent, dated, or fragmented, they are leading to low business and consumer confidence in online trade. These policies include cybersecurity laws, personal privacy and data protection laws, consumer protection laws, e-transactions laws, and intellectual property laws."</li><li><b>Implementation of legislation:</b> "Weak implementation of e-commerce related laws is contributing to low consumer trust and therefore limited consumer uptake of e-commerce."</li><li><b>Low uptake of digital payments:</b> "Cash on delivery remains the preferred payment method in many markets, impacting MSMEs' cash flows, making them vulnerable to losses and saddled with high delivery costs for items returned on delivery."</li><li><b>Challenging logistics and delivery:</b> Poor road infrastructure, lack of national addressing systems, and fragmented delivery solutions make the delivery of e-commerce goods both expensive and unreliable, reducing the revenue MSMEs can generate from online sales."</li><li><b>Low consumer confidence and readiness:</b> There are limitations to consumer readiness for uptake, such as limited penetration of smartphones, low digital literacy and digital skills that deter consumers from online purchases and transactions, and low confidence in the quality of goods that might be received via e-commerce due to lack of consistency in product quality.</li></ul></div></div><div><br /></div><div>The report importantly notes that "According to UNCTAD, digital commerce, if leveraged effectively, could add $180 billion to Africa's GDP by 2025. Improving connectivity and the steady uptake of mobile phones is spurring e-commerce adoption by MSMEs in the region." What is more, "The uptake of digital payments is steadily increasing, supporting the growth of e-commerce, although delivery challenges persist due to poor infrastructure and insufficient delivery providers."</div><div><br /></div><div>The report also explains that "On the demand side, a growing youth population that is more digitally savvy, and a growing middle class in some markets means Africa’s MSMEs have a ready market for online retail. But e-commerce remains limited in urban areas and is yet to penetrate rural areas except for pockets of innovation in agri e-commerce and better last mile penetration in some markets such as Nigeria."</div><div><br /></div><div>Moreover, "A significant opportunity for MSMEs to reach consumers via the trade of goods online to improve their profitability, create livelihoods and contribute more effectively to economic development therefore remains largely untapped. With the advancement of AfCFTA (African Continental Free Trade Area), there is an even greater opportunity to leverage e-commerce for regional gains."</div><div><br /></div><div>I appreciate how GSMA's report highlights "some of the main barriers to scaling e-commerce adoption, including MSMEs' limited access to capital and digital skills, gaps in legislation or implementation of e-commerce related policies and regulations, a persisting preference for cash payments in the region and lower trust in digital payments, and poor logistics and delivery infrastructure for the reliable and affordable delivery of online purchases. These in turn impact consumer trust in e-commerce, suppressing demand for online retail."</div><div><br /></div><div>Do you agree with the report's findings? What are your recommendations for how African MSMEs reach wider markets and increase their profitability and resilience?</div><div><br /></div><a href="https://www.linkedin.com/in/aaronrose/" style="font-style: italic;">Aaron Rose</a><i> is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of </i><a href="https://www.gtperspectives.com/">GT Perspectives</a>,<i> an online forum focused on turning perspective into opportunity.<br /></i></div></div></div>Aaron Rosehttp://www.blogger.com/profile/16914196169617403460noreply@blogger.com0tag:blogger.com,1999:blog-5044990419048085041.post-61216639153728073062023-10-05T11:32:00.000-07:002024-02-15T13:10:21.471-08:00Recommendations for Realigning the Global Financial Architecture to Achieve Financial Stability, Boost Productive Investment and Create Better Jobs<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh-Kqumbl_nhO0WgO2IhtmYiuhRJ_jrh3QOmvlQIi31rdrxiXIhQKSVFvPFz_faxGzOTz0OqFbCmB-DOdNCQFb3Nx1oWMLnlG_BA3T_WhWlb0Uo5gEfvtwywFzvjt-ZzWIKspV8Wp6PpirnQxNvEF-fQ5zebu2GzNeO79o1QfadQh4alCkSJb-oVAWIKQnF/s768/Screenshot%20(487).png" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="768" data-original-width="538" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh-Kqumbl_nhO0WgO2IhtmYiuhRJ_jrh3QOmvlQIi31rdrxiXIhQKSVFvPFz_faxGzOTz0OqFbCmB-DOdNCQFb3Nx1oWMLnlG_BA3T_WhWlb0Uo5gEfvtwywFzvjt-ZzWIKspV8Wp6PpirnQxNvEF-fQ5zebu2GzNeO79o1QfadQh4alCkSJb-oVAWIKQnF/w140-h200/Screenshot%20(487).png" width="140" /></a></div><div>"Today, we see setbacks in indicators on poverty, hunger and gender equality, to mention just a few," Rebeca Grynspan, Secretary-General of the United Nations Conference on Trade and Development (UNCTAD), wrote in the Forward to <i><a href="https://unctad.org/publication/trade-and-development-report-2023" target="_blank">The Trade and Development Report 2023: Growth, Debt and Climate – Realigning the Global Financial Architecture</a>.</i> Ms. Grynspan adds that "The</div><div>financing gap for the Sustainable Development Goals in the global South – which totaled $2.5 trillion in 2015 – now amounts to $4 trillion. Nearly half of all humanity, or 3.3 billion people, lives in countries that spend more resources on debt servicing than on funding health or education. At this pace, only 15 percent of the Sustainable Development Goals will be achieved by 2030."</div><div><br /></div><div>Ms. Grynspan points out that UNCTAD's report "identifies three specific global challenges that have crystalized during the year 2023. Weak global growth, divergence between major economies and between developing countries, as well as the increased role of geopolitical factors, indicate that we are witnessing a change in the nature of global interdependence, or a transition from the period of hyperglobalization to one of polyglobalization."</div><br /><div>Focusing on how to realign the global financial architecture, the report identifies five core policy priorities:<div><ol style="text-align: left;"><li><i><b>Reducing inequality.</b> This should be made a policy priority in developed and developing countries. This requires concerted increases of real wages and concrete commitments towards comprehensive social protection. Monetary policy is not to be used as the sole tool to alleviate inflationary pressures. With supply-side problems still unaddressed, a policy mix is needed to attain financial sustainability, help lower inequalities and deliver inclusive growth.</i></li><li><i><b>Balancing the priorities of monetary stability with long-term financial sustainability.</b> In light of growing interdependencies in the global economy, central banks should assume a wider stabilizing function within this landscape.</i></li><li><i><b>Regulating commodity trading generally, and food trading in particular.</b> This needs to be done internationally, using a systemic approach developed within the framework of the global financial architecture.</i></li><li><i><b>Addressing the crushing burden of debt servicing and the threat of spreading debt crises.</b> To do this, the rules and practices of the global financial architecture need to be reformed. The mechanisms, principles and institutions of global finance should ensure reliable access to international liquidity and a stable financial environment that promotes investment-led growth. Given the failures of the current architecture to enable the resilience and recovery of developing countries from debt stress, it is crucial to establish a mechanism to resolve sovereign debt workouts. This should be based on the participation of all developing countries and include agreed procedures, incentives and deterrents.</i></li><li><i><b>Providing reliable access to finance and technology transfer to enable the energy transition.</b> This would require not only fiscal and monetary agreements among the Group of 20, but also agreements within the World Trade Organization (WTO) to implement technology transfer, and within the International Monetary Fund (IMF) and World Bank to ensure dependable financing. Without eliminating the incentives and regulatory conduits that make cross-border speculative investment so profitable, private capital is unlikely to be channeled to measures to help adapt to climate change.</i></li></ol><div>UNCTAD's report also presents the following specific policy recommendations for a development-centered global debt architecture:</div></div><div><ul style="text-align: left;"><li><i>Increase concessional finance through capitalization of multilateral and regional banks, and issuance of special drawing rights.</i></li><li><i>Enhance transparency in financing terms and conditions, using the digitalization of loan contracts to improve accuracy.</i></li><li><i>Revise the UNCTAD Principles for Responsible Sovereign Lending and Borrowing to motivate and underpin the importance of guiding principles throughout the stages of sovereign debt acquisition.</i></li><li><i>Improve debt sustainability analysis and tracking to reflect the achievement of the Sustainable Development Goals and empower country negotiators with improved data on their potential for growth and fiscal consolidation.</i></li><li><i>Enable countries to utilize innovative financial instruments such as sustainable development bonds and resilience bonds. Develop rules for automatic restructurings and guarantees.</i></li><li><i>Enhance resilience during external crises, for example by implementing standstill rules on debtors' obligations in crises, and create a space to enable the avoidance of debt distress.</i></li><li><i>Encourage borrowers to share information and experiences, drawing inspiration from private creditor coordination.</i></li><li><i>Initiate work on a more robust debt workout mechanism and a global debt authority.</i></li></ul><div><br /></div><div><div>With the global economy at a crossroads where divergent growth paths, widening inequalities, growing market concentration and mounting debt burdens cast shadows on the future, I appreciate how the report "outlines an approach based on balancing the pace of disinflation and the impact of high real interest rates not only against inflation indicators, but also in relation to economic activity, employment, income inequality and fiscal stability."</div><div><br /></div><div>What are your recommendations for how to get the global economy moving in the right direction by using a balanced policy mix of fiscal, monetary and supply-side measures to achieve financial stability, boost productive investment and create better jobs?<br /></div><div><br /></div><i></i><a href="https://www.linkedin.com/in/aaronrose/" style="font-style: italic;" target="_blank">Aaron Rose</a><i> is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of </i><a href="https://www.gtperspectives.com/">GT Perspectives</a>,<i> an online forum focused on turning perspective into opportunity.<br /></i></div></div></div>Aaron Rosehttp://www.blogger.com/profile/16914196169617403460noreply@blogger.com0tag:blogger.com,1999:blog-5044990419048085041.post-13096215695310911152023-09-27T21:21:00.000-07:002024-01-23T22:21:26.184-08:005G Will Represent 91% of Mobile Connections in North America by 2023, Up From 39% in 2022 <div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj4wLfnuJbDog5xVJLToz2zO_YgFZ_1sepdPQSTMNkv-m6_pmjEyHv92R8SU6CUnxkLWc768S2Zy_CXN8-WtvouJaEP_L4gCA-NZiOul-v0TLeDzjLrfufe2nxBxOlbpH6ICoPoDkTgd90CLtfq_J6wsQGOyYTHVXKT0Zm21sJ9ro9QO3hQ5lTAqOHcKvth/s768/Screenshot%20(466).png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="768" data-original-width="540" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj4wLfnuJbDog5xVJLToz2zO_YgFZ_1sepdPQSTMNkv-m6_pmjEyHv92R8SU6CUnxkLWc768S2Zy_CXN8-WtvouJaEP_L4gCA-NZiOul-v0TLeDzjLrfufe2nxBxOlbpH6ICoPoDkTgd90CLtfq_J6wsQGOyYTHVXKT0Zm21sJ9ro9QO3hQ5lTAqOHcKvth/w141-h200/Screenshot%20(466).png" width="141" /></a></div><div>"The US and Canada are among the global leaders in terms of 5G adoption, reflecting the ambitious rollout plans of operators and strong demand from consumers for new services," the GSMA says in its latest <a href="https://www.gsma.com/mobileeconomy/wp-content/uploads/2023/09/260923-Mobile-Economy-North-America-2023.pdf" target="_blank">report</a> on the state of North America's mobile economy. "However, following extensive 5G network buildout over the last few years, capex levels will begin to trend downwards as operators turn their attention to generating a return on investment." The UK-based organization, which represents the interests of mobile operators worldwide, adds: "The focus over the next few years will be on improving 5G coverage in less densely populated areas while also ramping up investment to support the growing momentum behind use cases enabled by 5G standalone (SA) and 5G-Advanced."</div><div><br /></div><div>The report's findings include:</div><div><br /></div><div><div><b>The 5G monetization imperative grows</b></div><div><br /></div><div>"As 5G adoption grows, the monetization imperative will escalate. GSMA Intelligence research shows that the mobile ARPU trend in the US and Canada improved in the 12 months after launching 5G. The technology is also having a positive impact on revenue growth for North American operators beyond mobile services, as highlighted by fixed wireless access (FWA) momentum in the region. Looking forward, the enterprise sector is expected to be the main growth driver for operators. 5G SA brings a host of new capabilities that will be crucial to monetizing 5G investments, including improved support for network slicing. There are also synergies between 5G SA and private wireless networks, opening up new opportunities for mobile operators."</div><div><br /></div><div><b>Generative AI takes center stage</b></div><div><br /></div><div>"Mobile operators have utilized AI for a while now to varying degrees. However, the emergence of generative AI has pushed the envelope on AI capabilities and thrust AI technology into boardroom conversations globally. With generative AI tools, operators can attempt to automate more complex customer service functions that require a better understanding of context, improved ability to follow a conversation and advanced synthesis of information. The technology can also be used to improve network operations and deliver personalized service plans. However, ethical concerns around the technology still need to be addressed. AI regulation will therefore continue to move up the policy agenda as governments develop frameworks for regulating the use of new AI tools."</div><div><br /></div><div><b>eSIM momentum builds</b></div><div><br /></div><div>"The last few years have been crucial for eSIM development and commercialization, highlighted by Apple’s launch of eSIM-only smartphones in September 2022 in the US and Canada. There has since been an acceleration in operator eSIM deployments and commercial launches. However, eSIM awareness among consumers remains limited. As the main contact points with end users, operators and smartphone manufacturers have a key role to play in accelerating consumer awareness and adoption. Additionally, eSIM technology has long been seen as a major enabler and accelerator of IoT deployments across multiple sectors. This has led North American operators to partner with a range of players across the IoT ecosystem to accelerate eSIM adoption in the region."</div><div><br /></div><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi0rBJH18os67lhGbsPLF7tdsHO3CDALlDztIoFYaIE6SrivOBsZl-lhzz0PCSCTHKAPv5bM5JL60hbjkxliz0NPc5dQfa3G31UGlnSqOPtzfXIJ_z5LdtHWslaM_cTShv6pPBKaTxcRnRC1HbhvEV8AlGAJdymB89cLZ5ZtfX6spBbRbEhyEJ6dUEW7Eao/s1078/Screenshot%20(467).png" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="768" data-original-width="1078" height="285" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi0rBJH18os67lhGbsPLF7tdsHO3CDALlDztIoFYaIE6SrivOBsZl-lhzz0PCSCTHKAPv5bM5JL60hbjkxliz0NPc5dQfa3G31UGlnSqOPtzfXIJ_z5LdtHWslaM_cTShv6pPBKaTxcRnRC1HbhvEV8AlGAJdymB89cLZ5ZtfX6spBbRbEhyEJ6dUEW7Eao/w400-h285/Screenshot%20(467).png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;"><i><span style="font-size: x-small;">Infographic: GSMA</span></i></td></tr></tbody></table><div><br /></div><div><b>The shift towards circularity gains traction</b></div><div><br /></div><div>"The concept of circularity has risen up the agenda for policymakers and industry players in light of growing concerns around the generation of e-waste and unsustainable levels of consumption of natural resources. Although the technical lifespan of a mobile device is now between four and seven years, the average use period of mobile devices is only around three years. Governments and industry players have a role to play in incentivizing consumers, such as by building new channels for suppliers to collect, refurbish and resell devices and implementing awareness campaigns on sustainability. Operators and other ecosystem players in North America are already taking a lead in this regard, with a number of initiatives to drive circularity in mobile phones and other digital devices."</div><div><br /></div><div><b>Growing opportunities for operators as fintech demand surges</b></div><div><br /></div><div>"GSMA Intelligence survey data shows that between 2020 and 2022, the share of 4G/5G smartphone users in the US using their devices for financial services on a daily basis grew by four percentage points on average across mobile banking, online shopping, paying bills and contactless payments. This reflects growing momentum behind digital financial services as the competition heats up in the fintech market. For example, Apple recently announced the launch of a buy now, pay later (BNPL) service, which should contribute to a boost in e-commerce transactions. It has also launched a high-yield savings account through a partnership with Goldman Sachs, which reportedly brought in $990 million in deposits over its first four days. By the end of the first week, around 240,000 accounts had reportedly been opened."</div><div><br /></div><div><div><b>Policies for growth and innovation</b></div><div><br /></div><div>"The success of 5G rollouts depends on operators' 5G spectrum holdings across low, mid- and high bands to deliver both speed and geographical coverage. Additional spectrum can boost the provision of cost-efficient investment and enhance network quality in North America, which can help 5G become a central pillar of the region’s economic development strategies."</div></div><div><br /></div><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhREnKa7p7lnlJptGBBFLaorKlmDj9cRQCTQCYO_YWCprNcVaGbUpCIxisez3ZBB4_bJ-cWjyPWRHgR-4s_CgXpyNsi9zgtPS8UzpUNtLYKxPJG7aWVMuvvgdTYstLWEmxwTMGz3nbSI6T1FB795UbVuwfQDQhlZCaLwYJoR8wa_JOSfm7VaWQhPYV30mf1/s831/Screenshot%20(468).png" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="527" data-original-width="831" height="254" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhREnKa7p7lnlJptGBBFLaorKlmDj9cRQCTQCYO_YWCprNcVaGbUpCIxisez3ZBB4_bJ-cWjyPWRHgR-4s_CgXpyNsi9zgtPS8UzpUNtLYKxPJG7aWVMuvvgdTYstLWEmxwTMGz3nbSI6T1FB795UbVuwfQDQhlZCaLwYJoR8wa_JOSfm7VaWQhPYV30mf1/w400-h254/Screenshot%20(468).png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;"><i><span style="font-size: x-small;">Infographic: GSMA</span></i></td></tr></tbody></table><div><br /></div><div><div>GSMA points out that "5G connectivity is already proving to be a powerful driver of GDP growth, with 5G's contribution to GDP in North America expected to surpass $200 billion in 2030 (16% of the overall annual economic impact of mobile in the region)." What is more, "Beyond its contribution to GDP, the mobile ecosystem also supports 2.1 million jobs (directly and indirectly) and makes a substantial contribution to the funding of the public sector, with $130 billion raised through taxation in 2022. This economic contribution underlines the importance of stakeholders taking the right steps to sustain the impact of mobile services on the digital economy, with spectrum availability a key driver of affordable 5G for all."</div></div><div><br /></div><div>What do you thinking of the report's findings? Do you see the North American mobile sector more attractive for investment compared to other geographic markets?</div><div><br /></div><i></i><a href="https://www.linkedin.com/in/aaronrose/" style="font-style: italic;" target="_blank">Aaron Rose</a><i> is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of </i><a href="https://www.gtperspectives.com/">GT Perspectives</a><i>, an online forum focused on turning perspective into opportunity.</i></div>Aaron Rosehttp://www.blogger.com/profile/16914196169617403460noreply@blogger.com0tag:blogger.com,1999:blog-5044990419048085041.post-23826145535236852822023-08-17T00:21:00.000-07:002024-02-27T13:06:05.902-08:00How Africa Can Strengthen Supply Chain Diversification in High-Knowledge- and Technology-Intensive Sectors<div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjF6kbEOiSFaHrW6V4yVHLzAZ469cj8c52xxmxolovkNA-EZ2xgPaM_e6wWvjazn-bqPAO-xA-_m6Fp6E9i1ZAMi7VvM7H-1YrKy5IP2uliXeoitPXnJXgkJaOy_xlvJ0J9n9XkqGdGrb9thuy9A-obEdp-pUEX6YQw3ZOpRE8khpHoNGlREsT7K-KonlZb/s768/Screenshot%20(492).png" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="768" data-original-width="532" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjF6kbEOiSFaHrW6V4yVHLzAZ469cj8c52xxmxolovkNA-EZ2xgPaM_e6wWvjazn-bqPAO-xA-_m6Fp6E9i1ZAMi7VvM7H-1YrKy5IP2uliXeoitPXnJXgkJaOy_xlvJ0J9n9XkqGdGrb9thuy9A-obEdp-pUEX6YQw3ZOpRE8khpHoNGlREsT7K-KonlZb/w139-h200/Screenshot%20(492).png" width="139" /></a></div><div>"The global supply chain disruptions caused by recent crises, such as the 2008–2009 global financial and economic crisis, the COVID-19 pandemic, the war in Ukraine and the resulting global market slowdown, have intensified the need to promote resilience by diversifying supply chain operations across various countries and regions," The United Nations Conference on Trade and Development (UNCTAD), the trade and development body of the United Nations, says in a <a href="https://unctad.org/publication/economic-development-africa-report-2023" target="_blank">report</a> that provides a unique insight into the potential for increased integration into the supply chains in Africa by bringing together knowledge on how Africa can strengthen supply chain diversification in high-knowledge- and technology-intensive sectors.</div><div><br /></div><div>Entitled <i>The Economic Development in Africa Report 2023: The Potential of Africa to </i><i>Capture Technology-intensive Global Supply Chains,</i> the UNCTAD's report says "The risks of concentrating manufacturing and supply chains in a few markets and of sourcing and supplying sector-specific intermediate goods from a few locations can increase exposure to shocks and disruptions in production networks and supply chains. By diversifying or relocating to Africa, supply chain participating companies can source some of the inputs (raw materials and intermediate goods) from the continent, while reducing the costs of transportation and logistics and minimizing risks of supplier delivery delays and other challenges. These disruptions and opportunities for supply chain diversification or relocation come at a time when African economies are growing more sustainably."</div></div><div><br /></div><div>Moreover on the topic of turning disruption into opportunity, the report explains that "In recent years, global supply chains have come under immense pressure as a result of unprecedented trade turbulence, economic uncertainty, geopolitical events and natural disasters. Consequently, these supply chains were severely disrupted. This has led key players, such as the series of manufacturers, distributors, consigners and so on involved in producing goods of a particular kind and bringing them to market, to re-examine ways to strengthen supply chain resilience. Although the integration of African economies into supply chains is relatively low compared with other regions, disruptions to supply chain operations have a more than proportionate adverse impact on their economies."</div><div><br /></div><div>UNCTAD also points out that "African consumer markets are increasingly transitioning towards middle- and low- middle-income status with an appetite for more sophisticated goods and services. Moreover, the need for supply chain diversification emerges at a time when Governments in Africa and regional institutions have reinforced their commitments to push forward their regional integration, diversification and industrialization agendas, which are viable strategies for developing industrial capabilities and creating prosperity on the continent."</div><div><span style="background-color: white; color: #333333; font-size: 15px; letter-spacing: -0.35008px;"><br /></span></div><blockquote>The aforementioned global trends and pressures have given many economies and businesses pause for thought; they are now rethinking strategies for recovery, renewal, and resilience. Many multinational companies are looking into how they can reduce their dependence on a single supplier and diversify their supply chains to build resilience to current and future global turbulence. Others have explored a more regionalized approach with greater security, allowing firms to source and produce within their home countries and regions. While some of these evolving scenarios may have far-reaching implications for investment and fixed cost – and some companies may not be able to pay the cost – their potential benefits and impacts far outweigh the cost. This is particularly so for supply chains and industries that are highly exposed to geo-physical events, trade disputes and other global stresses.</blockquote>I appreciate how the report "focuses on the high-knowledge and technology-intensive industries – automotives, electronics, green energy technology and medical devices – that are vulnerable to global supply chain disruptions, partly due to their extensive geographic footprint." I also concur that "Opportunities for diversification of high-value and technology-intensive supply chains can strengthen resilience, foster the participation of technology-enabled enterprises in supply chains and optimize the participation of Africa in global supply chains."<div><br /></div><div>What are your recommendations for how Africa can strengthen supply chain diversification in high-knowledge- and technology-intensive sectors?<br /><div><br /></div><div><a href="https://www.linkedin.com/in/aaronrose/" style="font-style: italic;" target="_blank">Aaron Rose</a><i> is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of </i><a href="https://www.gtperspectives.com/">GT Perspectives</a>,<i> an online forum focused on turning perspective into opportunity.</i></div></div>Aaron Rosehttp://www.blogger.com/profile/16914196169617403460noreply@blogger.com0tag:blogger.com,1999:blog-5044990419048085041.post-68757616466629725312023-08-01T23:38:00.000-07:002024-01-22T00:33:40.481-08:00Financing International Transactions and 12 Steps to Exporting Success<div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhr1gRJbnF5UJ2IEoUk6lPgUZ8HyCvwAaYqRLN41cVE-xH_LQAjQuXrTsL7TeWXqSr7F1YndBbGiha5IBvoFQ24yaQJWWrJQ5UfXH_3II6eMj1ZnkQVurHFe_TZErZByIEw02q7aGahB876n9Pe8fldCoeg3RY5Xl7_fY7blO8zoPnTy-xMpppz0QGefnMZ/s768/Screenshot%20(459).png" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="768" data-original-width="588" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhr1gRJbnF5UJ2IEoUk6lPgUZ8HyCvwAaYqRLN41cVE-xH_LQAjQuXrTsL7TeWXqSr7F1YndBbGiha5IBvoFQ24yaQJWWrJQ5UfXH_3II6eMj1ZnkQVurHFe_TZErZByIEw02q7aGahB876n9Pe8fldCoeg3RY5Xl7_fY7blO8zoPnTy-xMpppz0QGefnMZ/w153-h200/Screenshot%20(459).png" width="153" /></a></div>While researching material for the previous <a href="https://www.gtperspectives.com/2023/07/empowering-american-small-businesses-to.html" target="_blank">post</a> on this forum about a publication produced by the Export-Import Bank of the United States (EXIM) that helps empower American small businesses to succeed in global markets, I discovered an <a href="https://grow.exim.gov/3-ways-ty" target="_blank">infographic</a> that presents three ways to finance international transactions:</div><div><br /></div><div><div><b>Option 1: Traditional Transaction</b></div><div>Exporter sells to buyer and arranges for either cash-in-advance (the safe choice) or open account credit terms, which is an effective sales tool but one that carries some risk.</div><div><br /></div><div><div><div><b>Option 2: Transaction with a Factor</b></div><div>The Factor buys invoices from the exporter at a fee and pays the exporter immediately. The foreign buyer is instructed to pay the Factor by the due date on the invoice.</div><div><ul style="text-align: left;"><li>Step one: Exporter contracts with Factor</li><li>Step two: Exporter ships to foreign buyer</li><li>Step three: Factor pays exporter upon shipment</li><li>Step four: Foreign buyer pays Factor for goods by invoice due date</li></ul><div>Pros of this transaction include the elimination of risk of nonpayment by foreign buyer, payment to the exporter is fast, generally fewer than 10 days, and it maximizes cash flow. More costly than export credit insurance and generally applicable for sales with terms of fewer than 90 days are two of the key risks of transaction with a Factor.</div></div></div></div></div><div><br /></div><div><div><b>Option 3: Export Credit Insurance</b></div><div>The exporter wins sale to foreign buyer by offering open account credit terms. The Exporter uses an Export Credit Insurance (ECI) policy to insure the receivables against nonpayment by the foreign buyer.</div><div><br /></div><div>With ECI, receivables are covered up to 95% of the invoice amount. Costing pennies on the dollar, ECI is a more affordable. This <a href="https://www.gtperspectives.com/2020/09/using-export-credit-insurance-myths-vs.html" target="_blank">post</a> that I published in this forum provides a thorough overview of ECI.<br /><br /><b>Trade Finance Guide</b></div><div><br />Exporters may also find value in the <i><a href="https://www.trade.gov/report/trade-finance-guide" target="_blank">Trade Finance Guide: A Quick Reference for U.S. Exporters</a></i>, which is produced by the U.S. Department of Commerce's (DoC) International Trade Administration (ITA) that explains the basics of trade finance so that U.S. companies can evaluate appropriate financing options to ensure they get paid for their sales.</div></div><div><br /></div><div><b>Export Solutions Guide</b></div><div><br /></div><div>In addition, trade professionals at the U.S. Commercial Service, part of the ITA, produced the <a href="https://trade.gov/sites/default/files/2023-12/Export%20Solutions%20Flyer.pdf?_gl=1*ke36ho*_ga*MjA0MzUwOTc0Mi4xNzA1ODk3NjIx*_ga_L884J52XQ5*MTcwNTkxMDA4OS4zLjEuMTcwNTkxMDU3Mi42MC4wLjA.">Export Solutions Guide: 12 Steps to Exporting Success</a>, which was developed to assist American exporters create successful international sales strategies. The twelve steps include:</div><div><ol style="text-align: left;"><li><a href="https://www.trade.gov/learn-how-export" target="_blank">Learn How to Export</a></li><li><a href="https://www.trade.gov/international-market-research" target="_blank">Research Foreign Markets</a></li><li><a href="https://www.trade.gov/network-and-learn-events" target="_blank">Network and Learn at Events</a></li><li><a href="https://www.trade.gov/find-buyers-and-partners" target="_blank">Find Buyers and Partners</a></li><li><a href="https://www.trade.gov/ecommerce" target="_blank">Explore eCommerce Resources</a></li><li><a href="https://www.trade.gov/finance" target="_blank">Obtain Financing</a></li><li><a href="https://www.trade.gov/negotiate-export-sale" target="_blank">Negotiate an Export Sale</a></li><li><a href="https://www.trade.gov/navigate-shipping-and-logistics" target="_blank">Navigate Shipping and Logistics</a></li><li><a href="https://www.trade.gov/comply-us-and-foreign-regulations" target="_blank">Comply with U.S. and Foreign Regulations Regulations</a></li><li><a href="https://www.trade.gov/perform-due-diligence" target="_blank">Perform Due Diligence</a></li><li><a href="https://www.trade.gov/protect-intellectual-property" target="_blank">Protect Intellectual Property</a></li><li><a href="https://www.trade.gov/resolve-trade-problem" target="_blank">Resolve Export Problems</a></li></ol></div><div>Which resources do you find useful in financing international transactions or achieving exporting success?</div><div><br /></div><a href="https://www.linkedin.com/in/aaronrose/" style="font-style: italic;" target="_blank">Aaron Rose</a><i> is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of </i><a href="https://www.gtperspectives.com/">GT Perspectives</a><i>, an online forum focused on turning perspective into opportunity.</i>Aaron Rosehttp://www.blogger.com/profile/16914196169617403460noreply@blogger.com0tag:blogger.com,1999:blog-5044990419048085041.post-16864359425364216462023-07-31T20:01:00.000-07:002024-01-22T09:37:41.866-08:00Empowering American Small Businesses to Succeed in Global Markets<div class="separator" style="clear: both; text-align: left;"><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhypz1GYBA6VQz8ZyaJsUnMyTT8ZPT5O3f4llo5wsgXv7GLBTDT8DhMQARLROM2vqH6NurPuml6rNXeA0N5zY7V55bj0vltULal0QnZM8WL73o9AVeG9mK_ckdZA55I81Mr7I4EC4ybgcfw-Izg2Nw0Vy5X4Y6ycV3j2q3Saxf_mM9qFU9DVKFh5HhNGEpt/s750/638B8D46DADFDB163E0DB061B7BA4FC3.png" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="375" data-original-width="750" height="100" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhypz1GYBA6VQz8ZyaJsUnMyTT8ZPT5O3f4llo5wsgXv7GLBTDT8DhMQARLROM2vqH6NurPuml6rNXeA0N5zY7V55bj0vltULal0QnZM8WL73o9AVeG9mK_ckdZA55I81Mr7I4EC4ybgcfw-Izg2Nw0Vy5X4Y6ycV3j2q3Saxf_mM9qFU9DVKFh5HhNGEpt/w200-h100/638B8D46DADFDB163E0DB061B7BA4FC3.png" width="200" /></a></div>While I am proud of my three decades of doing business in all corners of the world, I always appreciate the opportunity to learn more about how to seize the opportunities and mitigate the risks of global business. Therefore, it was with great interest to learn about a <a href="https://grow.exim.gov/useac-ty" target="_blank">document</a> produced by the Export-Import Bank of the United States (EXIM), an independent government agency that assists in financing and facilitating U.S. exports of goods and services, that helps empower American small businesses to succeed in global markets.</div><div class="separator" style="clear: both; text-align: left;"><br /></div><div>The document begins with presenting the services provided by the U.S. Export Assistance Centers (USEACs) as one-stop shops that equip American businesses to compete on a global scale. Specifically, USEACs bring multiple exporting resources together in one convenient location. These centers are situated throughout the country to offer support directly to businesses currently exporting or thinking about exporting. USEAC offices are staffed with three of the federal agencies engaged in assisting export businesses: (1) the U.S. Department of Commerce (DoC), (2) the U.S. Small Business Administration (SBA), and (3) EXIM.<div><div><div><br /></div><div><div>The DoC helps business owners learn how to export, connect with foreign buyers, and expand operations in new foreign markets. The SBA supports small businesses that are exporting or interested in learning more about exporting. Moreover, with the help of its partners, the SBA provides counseling and training, helps businesses find buyers with the State Trade Expansion Program, and has loan guarantee programs available specifically for exporters. One way that EXIM assists companies is by providing Export Credit Insurance. An Export Credit Insurance policy covers the accounts receivable generated by international sales, protecting your company against nonpayment by foreign buyers. The insurance policy mitigates risk while empowering companies to meet or beat their competitors. Business owners can use open account credit terms to win new customers and increase sales to existing buyers. Many posts on <a href="https://www.gtperspectives.com/search/label/Entrepreneurship" target="_blank">entrepreneurship</a> in this forum provide additional details about some of the programs offered by these government agencies.</div></div><div><br /></div>Addressing financing tools from EXIM, the document notes that running a small business comes with risks but getting paid does not need to be one of them. EXIM's <a href="https://www.gtperspectives.com/2020/09/using-export-credit-insurance-myths-vs.html" target="_blank">Export Credit Insurance</a> empowers business owners to grow sales while mitigating the risk of selling internationally. Using Export Credit Insurance empowers businesses to offer open account credit terms to compete more aggressively, protect their foreign receivables from nonpayment, expand their borrowing base and improve cash flow.</div><div><br /></div><div>EXIM's Working Capital Loan Guarantee provides exporters with access to the cash needed to fulfill sales and take on new business abroad. Exporters can use a working capital loan to cover the costs of labor, materials, overhead, and supplies required to fulfill a foreign sale. A business can use their Working Capital to pay for materials, equipment, supplies, labor, and other expenses to fulfill export orders, post standby letters of credit serving as bid bonds, performance bonds, or payment guarantees, and purchase products for export.</div><div><br /></div><div>The document correctly notes that "Locating new buyers overseas can be time consuming, expensive, and frustrating." It points out that the DoC is available to help by matching American exporters with foreign buyers. There are two programs that can businesses can utilize to grow their operations overseas:</div><div><br /></div><div>DoC's Gold Key Matching Service arranges meetings with interested partners in international markets. The Gold Key team first identifies foreign buyers, assesses them, and provides profiles of the best matches. When it comes time for a meeting with a matching foreign company a member of the Gold Key team can accompany business owners and managers and provide support.</div><div><br /></div><div>Through the Single Company Promotion, the DoC can organize a variety of promotional events to increase awareness of a company's products and services in a specific international market. These promotional events may include targeted email campaigns, seminars, webinars, direct mail campaigns, and receptions all designed to reach an audience of potential clients. The DoC handles all the logistics, project management, and provides a post-promotion review to discuss next steps.</div><div><br /></div><div>While not mentioned in the document, it is worth mentioning <a href="https://www.export.gov/" target="_blank">Export.gov</a>, which is managed by the DoC and International Trade Administration to assist businesses plan their international sales strategies and succeed in today's global marketplace.</div><div><br /></div><div>Regarding the Small Business Administration, the <a href="https://www.gtperspectives.com/2021/01/sbas-learning-center-helps-small.html" target="_blank">SBA Learning Center</a> gives businesses access to courses on all of these topics and more:</div><div><ul style="text-align: left;"><li>Planning and strategy to develop an international business plan</li><li>Legal and regulatory to help you navigate regulations and legal issues</li><li>Documentation and product requirements</li><li>Pricing development and strategy</li><li>Marketing and social media </li></ul></div><div><br /></div><div>The SBA also works with lenders to guarantee loans in support of international trade. These include the Export Express Loan, the International Trade Loan, and the Export Working Capital Loan. The SBA also has a grant program called the State Trade Expansion Program (STEP) that provides funding to state and territory governments. These STEP funds are exclusively available to help small businesses with export development.<br /><br />I possess extensive experience working with these three government agencies and can attest to the value each one provides for businesses looking to succeed in global markets. Feel free to contact me if I can be of service to you.</div><div><br /><div><a href="https://www.linkedin.com/in/aaronrose/" style="font-style: italic;" target="_blank">Aaron Rose</a><i> is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of </i><a href="https://www.gtperspectives.com/">GT Perspectives</a>,<i> an online forum focused on turning perspective into opportunity.</i></div></div></div></div>Aaron Rosehttp://www.blogger.com/profile/16914196169617403460noreply@blogger.com0tag:blogger.com,1999:blog-5044990419048085041.post-21456273510481604522023-07-07T18:36:00.000-07:002024-02-04T21:28:01.378-08:00Report Calls for Urgent Support to Developing Countries to Attract Massive Investment in Clean Energy<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj7Pi_IsqC_KD6OlTIZG_i74fOaOJNfvWFdYv4kAxT5KqxCYNL_qHAKZalNzivFbcSaEbsB3Y_kpvw5xkrgmhbChX2R2uVBtqRVbhE8hvriWM1C8Yo9PrvIpSmuHoS1j7UrLNM91cMg6pFe26xto8B6GtrH1l1Vmf6e4wxI2yh_hEvdkovmx3tCBqxGKumT/s768/Screenshot%20(484).png" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="768" data-original-width="536" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj7Pi_IsqC_KD6OlTIZG_i74fOaOJNfvWFdYv4kAxT5KqxCYNL_qHAKZalNzivFbcSaEbsB3Y_kpvw5xkrgmhbChX2R2uVBtqRVbhE8hvriWM1C8Yo9PrvIpSmuHoS1j7UrLNM91cMg6pFe26xto8B6GtrH1l1Vmf6e4wxI2yh_hEvdkovmx3tCBqxGKumT/w139-h200/Screenshot%20(484).png" width="139" /></a></div>In its 2023 edition of the <i><a href="https://unctad.org/publication/world-investment-report-2023" target="_blank">World Investment Report</a>,</i> the United Nations Conference on Trade and Development (UNCTAD) called for urgent support to developing countries to enable them to attract significantly more investment for their transition to clean energy. Through this report, the Swiss-based agency of the United Nations, which promotes inclusive and sustainable development through trade, investment, finance, and technology, shows that much of the growth in international investment in renewable energy, which has nearly tripled since the adoption of the Paris Agreement in 2015, has been concentrated in developed countries.<div><br /></div><div>In writing the report's Preface, António Guterres, Secretary-General of the United Nations, explains that the report "has an important role in the biggest battle of our lifetime: keeping temperature increases below the agreed limit of 1.5°C. By monitoring global, regional and national investment trends and developments, this report supports policymakers by showing where investment is on track, and where more is needed. The report's recommendations are an important guide to boosting climate finance and investment in developing countries – one of the most important factors in combating the climate crisis."</div><div><br /></div><div>The report presents three key messages:</div><div><b><br /></b></div><div><b>Global FDI retreats, but new project announcements show bright spots</b></div><div><div><br /></div><div><div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhUFqnC9C9PLMqSDLiYDg39vng9WpVQJrdGcV0GB0fMMRrlN0KH7hGYpxhKcJdG2YFbqPTw4mb0LhII9v2Td0QMrqrQFZRKIbUozwCdF3VfbxSa-wTHqT4n2B_eHZ3oBHWhS_WkVE7aRRhjSWpcWjf6tmMuz2xWjc83bdqqt_SVT0ZY5Ads08rzsDIotW53/s1220/global-foreign-direct-investment-fell-by-12-in-2022.png" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="1192" data-original-width="1220" height="196" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhUFqnC9C9PLMqSDLiYDg39vng9WpVQJrdGcV0GB0fMMRrlN0KH7hGYpxhKcJdG2YFbqPTw4mb0LhII9v2Td0QMrqrQFZRKIbUozwCdF3VfbxSa-wTHqT4n2B_eHZ3oBHWhS_WkVE7aRRhjSWpcWjf6tmMuz2xWjc83bdqqt_SVT0ZY5Ads08rzsDIotW53/w200-h196/global-foreign-direct-investment-fell-by-12-in-2022.png" width="200" /></a></div>"Global foreign direct investment (FDI) declined by 12 percent in 2022, to $1.3 trillion. The decline was mainly a result of lower volumes of financial flows and transactions in developed countries. Real investment trends were more positive, with growth in new investment project announcements in most regions and sectors. FDI in developing countries increased marginally, although growth was concentrated in a few large emerging economies. Inflows in many smaller developing countries were stagnant, and FDI to the least developed countries (LDCs) declined."</div><div><br /></div><div><div>The report also notes that "Industry trends showed increasing project numbers in infrastructure and industries that face supply chain restructuring pressures, including the electronics, automotive and machinery industries. Three of the five largest investment projects were announced in semiconductors, in response to global chip shortages. Investment in digital economy sectors slowed after the boom in 2020 and 2021."</div><div><br /></div><div>In addition, "Investment project numbers in energy remained stable, allaying, for now, fears of a reversal of the downward trend in fossil fuel investment due to the energy crisis. Oil majors are gradually selling fossil fuel assets to private equity firms and smaller operators with lower disclosure requirements, which calls for new dealmaking models to ensure responsible asset management."</div></div><div><br /></div><div><b>The SDG investment gap widens despite the growth of sustainable finance</b></div><div><br /></div><div><div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjqSb6rEbUIG2ztaHJRuH1m6oOIj6DHL_s9ynKxlV3bODeAYzfAtvi2MAMhyhTTipondDxjQ5-W9VLRJAitHBsHVYqyLY1aYnOtf9BKhfge1fW4GSj43uiVgV27PYvlNPmHjGmRJLyVm9Hfqew3Xwv9HMSrwsZ1Y-HiWmdfI0j7WfQ0ABGj6wOSHLxlV7WO/s1220/sustainable-development-goals-investment-gap-widens-in-developing-countries.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="1208" data-original-width="1220" height="198" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjqSb6rEbUIG2ztaHJRuH1m6oOIj6DHL_s9ynKxlV3bODeAYzfAtvi2MAMhyhTTipondDxjQ5-W9VLRJAitHBsHVYqyLY1aYnOtf9BKhfge1fW4GSj43uiVgV27PYvlNPmHjGmRJLyVm9Hfqew3Xwv9HMSrwsZ1Y-HiWmdfI0j7WfQ0ABGj6wOSHLxlV7WO/w200-h198/sustainable-development-goals-investment-gap-widens-in-developing-countries.png" width="200" /></a></div>"International investment in sectors relevant for the Sustainable Development Goals (SDGs) in developing countries increased in 2022. Infrastructure, energy, water and sanitation, agrifood systems, health and education all saw increased project numbers. However, compared to 2015 when the SDGs were adopted, progress is modest."</div></div><div><br /></div><div>Moreover, "A review of investment needs at the midpoint of the 2030 Agenda for Sustainable Development shows that the investment gap across all SDG sectors has increased from $2.5 trillion in 2015 to more than $4 trillion per year today. The largest gaps are in energy, water and transport infrastructure. The increase is the result of both underinvestment and additional needs."</div><div><br /></div><div>The report also explains that "The growing SDG investment gap in developing countries contrasts with positive sustainability trends in global capital markets. The value of the sustainable finance market reached $5.8 trillion in 2022. Sustainable funds had positive net inflows while traditional funds experienced net outflows. Sustainable bond issuance also continues; it has grown five-fold over the past five years. Key priorities for the market are increasing exposure to developing countries and addressing greenwashing concerns."</div><div><br /></div><div><b>Developing countries need vastly more support to attract energy investment</b></div><div><br /></div><div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhgIT_8gEgxX5CtFnM6MIro1cW1Tx6LIA01eE3Mh5GkLn5BSrkPcGyyLRJ45cOcIvYIyFc31rkQub0zTmzwLvEfD03WLfXfN0_o6dpQQVgRurIDhwypvuTf72M_0ERf7Nn7KWdLkpgZmSMWXdSgTlCmYEJ0j9w9JQcJrZ80tXhRsvaTCBEY4yBq8ovJWHUc/s1220/developing-economies-lack-international-renewable-energy-projects.png" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="984" data-original-width="1220" height="161" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhgIT_8gEgxX5CtFnM6MIro1cW1Tx6LIA01eE3Mh5GkLn5BSrkPcGyyLRJ45cOcIvYIyFc31rkQub0zTmzwLvEfD03WLfXfN0_o6dpQQVgRurIDhwypvuTf72M_0ERf7Nn7KWdLkpgZmSMWXdSgTlCmYEJ0j9w9JQcJrZ80tXhRsvaTCBEY4yBq8ovJWHUc/w200-h161/developing-economies-lack-international-renewable-energy-projects.png" width="200" /></a></div>The report points out that "International investment in renewable energy has nearly tripled since the adoption of the Paris Agreement in 2015. However, much of this growth has been concentrated in developed countries." What is more, "More than 30 developing countries have not yet registered a single utility-sized international investment project in renewables. The cost of capital is a key barrier for energy investment in developing countries. Bringing in international investors in partnership with the public sector and multilateral financial institutions significantly reduces the cost of capital."</div><div><br /></div><div><div>The report also importantly says "Most developing countries have set targets for the energy transition in nationally determined contributions. Only about one third of them have translated those targets into investment requirements, and few have developed the asset specifications that are needed to design targeted promotion mechanisms and to market bankable projects. As a result, many developing countries use generic fiscal and financial incentive mechanisms that are less effective for the promotion of energy transition investment."</div><div><br /></div><div>Lastly on the topic of developing countries needing more support to attract energy investments, I strongly support UNCTAD's assertion that "De-risking support to lower the cost of capital for energy transition investment in developing countries must be vastly expanded. More technical assistance should be available for investment planning and project preparation. International investment agreements need accelerated reform to expand policy space for climate action and to strengthen investment promotion and facilitation provisions." Through this report, the Swiss-based agency of the United Nations, which promotes inclusive and sustainable development through trade, investment, finance, and technology, puts forward a Global Action Compac for Investment in Sustainable Energy for All with recommendations for national and international investment policies, global and regional partnerships, financing mechanisms and capital market involvement.</div></div><div><br /></div><div>Writing the Forward, Rebeca Grynspan, Secretary-General of UNCTAD, insightfully notes that "Armed with the data and insights this report offers, it is imperative that stakeholders approach investment with a strategic mindset. The complexities and disparities highlighted demand astute decision-making, as the road ahead is fraught with challenges. Together we must navigate this landscape with resolve and intelligence, shaping a more sustainable and equitable world for generations to come."</div><div><br /></div><div>What are your recommendations for developing countries can attract investment to bolster their clean energy sector?</div><div><br /></div><i></i><a href="https://www.linkedin.com/in/aaronrose/" style="font-style: italic;" target="_blank">Aaron Rose</a><i> is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of </i><a href="https://www.gtperspectives.com/">GT Perspectives</a>,<i> an online forum focused on turning perspective into opportunity.</i></div></div>Aaron Rosehttp://www.blogger.com/profile/16914196169617403460noreply@blogger.com0tag:blogger.com,1999:blog-5044990419048085041.post-41715703690664559552023-05-04T14:51:00.000-07:002024-01-21T17:58:00.772-08:00Mobile Money Services Are Growing Faster Than Predicted, Says GSMA Report<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgvNZMo3hkz4XoF6nq16jI656zCKwp_2eq4aaSzI_gXUTUoQz-c3j5zELW7b_nsY0a1AXiPCAnkXtDFNk_G0L1aXB6uZMOtI0Gf_oiuxufasrwhJSg4rGbxenpcOq9EE0-IzvrPiXqyslAZLAu5ypErDBZZ38dv5AlenBv6d6abexqQ1Rk8NTEGYYh1by9b/s768/Screenshot%20(454).png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="768" data-original-width="542" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgvNZMo3hkz4XoF6nq16jI656zCKwp_2eq4aaSzI_gXUTUoQz-c3j5zELW7b_nsY0a1AXiPCAnkXtDFNk_G0L1aXB6uZMOtI0Gf_oiuxufasrwhJSg4rGbxenpcOq9EE0-IzvrPiXqyslAZLAu5ypErDBZZ38dv5AlenBv6d6abexqQ1Rk8NTEGYYh1by9b/w141-h200/Screenshot%20(454).png" width="141" /></a></div><div>According GSMA's <i>State of the Industry Report on Mobile Money 2023</i> report, "mobile money is now considered a mainstream financial service in many countries." Funded by the Bill and Melinda Gates Foundation, the UK-based organization says: "During the COVID-19 pandemic, mobile money enabled millions of people in low- and middle-income countries (LMICs) to access digital financial services (DFS) for their daily needs." Available in <a href="https://www.gsma.com/sotir/download/730/?tmstv=1681827666" target="_blank">English</a> and <a href="https://www.gsma.com/sotir/download/844/?tmstv=1686740461" target="_blank">French</a>, the report "looks at the growth of mobile money in a post-pandemic world."</div><div><br /></div><div><div>The report notes that adoption and active usage continue to rise. "Registered mobile money accounts grew by 13% year on year, from 1.4 billion in 2021 to 1.6 billion in 2022. This can be attributed, in part, to regulatory changes in Sub-Saharan Africa, particularly in Nigeria and Ethiopia where mobile money adoption rose rapidly."</div></div><div><br /></div><div><div>What is more, digital transactions are increasing as the use of cash slows down. "Transaction values grew by 22% between 2021 and 2022, from $1 trillion to around $1.26 trillion," the report explains. "However, the share of cash-based transactions in the overall transaction mix declined, with cash-in and cash-out transactions dropping nearly two percentage points. This is due to a significant rise in digital transactions, particularly interoperable bank transfers and bill payments."</div></div><div><br /></div><div><div>Encouragingly, global daily transaction values are exceeding predictions. "In 2020, global daily transaction values exceeded $2 billion. The State of the Industry Report on Mobile Money 2021 (covering data from 2020) suggested this could reach $3 billion a day by the end of 2022. This figure has been surpassed, with $3.45 billion transacted daily via mobile money in 2022."</div></div><div><br /></div><div><div>Mobile money remains a key savings channel, according to the GSMA. In 2022, approximately 60% of mobile money providers (MMPs) "offered users a savings account. Half of these providers did not offer a savings product in 2021. <a href="https://www.worldbank.org/en/publication/globalfindex" target="_blank">The World Bank Global Findex 2021</a> found that 15% of adults in Sub-Saharan Africa, or 39% of all mobile money account owners in the region, saved using a mobile money account."</div><div><br /></div><div><div>Disappointingly, women in LMICs are 28% less likely than men to own a mobile money account. "More women have a mobile money account than ever before and are using it at a similar rate as men on a 30-day basis. However, there is still a gender gap in account ownership that has recently widened in countries such as Nigeria and Pakistan." The report continues to explain that "One of the main barriers to closing the gender gap is mobile phone ownership: increasing mobile phone ownership can improve mobile money adoption rates among women. Other steps to close the mobile money gender gap include increasing women's digital skills and awareness of the benefits of mobile money, and tackling social norms and other barriers that are preventing women from using it."</div></div><br />Another key finding of the report is that regulation has been influenced by challenges such as taxation and fraud. "Regulation has focused on ensuring payment systems remain safe and efficient while also encouraging innovation. However, the mobile money industry is facing several regulatory challenges. Some countries have introduced taxes on mobile money transactions and fees that do not align with their financial inclusion objectives." Moreover, "Fraud also remains an industrywide issue, which many regulators are aiming to overcome through improved consumer awareness and capacity building."</div><div><br /></div><div>GSMA's report on the state of the mobile money industry draws on the results of the annual GSMA Global Adoption Survey of Mobile Financial Services and data from the <a href="https://www.gsma.com/mobilemoneymetrics/#deployment-tracker" target="_blank">GSMA Mobile Money Deployment Tracker</a>. I appreciate how this report provides insights on mobile money performance from the GSMA's engagement with the industry.</div><div><br /></div><div>What do you think of the report's findings? What is your engagement with the mobile money industry?</div><div><br /></div><div><a href="https://www.linkedin.com/in/aaronrose/" style="font-style: italic;" target="_blank">Aaron Rose</a><i> is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of </i><a href="https://www.gtperspectives.com/">GT Perspectives</a>,<i> an online forum focused on turning perspective into opportunity.</i></div>Aaron Rosehttp://www.blogger.com/profile/16914196169617403460noreply@blogger.com0tag:blogger.com,1999:blog-5044990419048085041.post-56908357779953116202023-04-28T15:22:00.000-07:002024-01-22T15:28:20.029-08:00Digitally Enabled Climate Finance Can Help LMICs Reduce Emissions and Adapt to the Impacts of Climate Change <div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjBCYlRWgN3yFnJCx9bAYiKUEAP8QjV902UagipMhpEZxPrB6Ym6l_8mqBk2gNkwhDoapLVQe0mX-F2vnFI7alHH13503lWy6-5IlUgjoRHTemF6dIkZzJG3dQybpwLy82zbUv6wC3Qz7_TBKFnldvqY-EgGIUzNek1sSAuJceY7kGrQeRbYPypO-nYSdkW/s768/Screenshot%20(460).png" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="768" data-original-width="543" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjBCYlRWgN3yFnJCx9bAYiKUEAP8QjV902UagipMhpEZxPrB6Ym6l_8mqBk2gNkwhDoapLVQe0mX-F2vnFI7alHH13503lWy6-5IlUgjoRHTemF6dIkZzJG3dQybpwLy82zbUv6wC3Qz7_TBKFnldvqY-EgGIUzNek1sSAuJceY7kGrQeRbYPypO-nYSdkW/w141-h200/Screenshot%20(460).png" width="141" /></a></div>Having engaged in the climate finance and technology sectors over the past several years, I agree with the GSMA that "Climate finance has increasingly taken center stage in debates about the future of climate action. For low- and middle-income countries (LMICs) to reduce emissions, significant financial support is needed to transition to low-carbon economies and adapt to the impacts of climate change." The UK-based organization notes in a new <a href="https://www.gsma.com/mobilefordevelopment/resources/digitally-enabled-climate-finance/" target="_blank">report</a> that provides an overview of how mobile and digital technology can be used to facilitate and accelerate climate finance, "While disruptive technologies offer great promise, they require an enabling ecosystem and robust financing to be successful."<div><br /></div><div>The report's Executive Summary importantly points out: "The use of mobile and digital technologies in delivering climate finance to underserved communities shows excellent promise. Emerging solutions moving climate finance forward include frontier technologies, such as the Internet of Things (IoT) and blockchain, as well as the voluntary carbon market (VCM).<div><br /></div><div>The report's other main conclusions include:</div><div><br /></div><div><b>Defining climate finance:</b> "The research highlighted that the public and private sectors define climate finance differently. This has an impact on the level, quality and priority of investment in climate change. Understanding the various definitions of climate finance is also key to creating an inclusive ecosystem in which all actors can execute their mandates, including the mobile and digital technology community. The knowledge and technical expertise required for climate finance can be enhanced based on agreed definitions, and will help to develop tailored products, services and capacity building tools."</div><div><br /></div><div><b>Building knowledge and technical expertise in digitally enabled climate finance:</b> "Climate finance is a new, complex and contested field. Digitally enabled climate finance has added a layer of complexity because it incorporates technology in both climate action and climate financing. As a result, there is a gap in knowledge and technical expertise, which are key to developing solutions and accelerating climate finance for those most impacted by climate change."</div><div><br /></div><div><b>Developing digital infrastructure and ecosystems in LMICs:</b> "The deployment and delivery of climate finance via mobile and digital technologies depends on strong digital infrastructure. However, there are numerous barriers to the development of this infrastructure."</div><div><br /></div><div><b>Improving access to quality data:</b> "Digital technology needs to be integrated in climate finance to ensure quality data. However, in LMICs, there are data-related barriers that make it difficult to attract investment and compete for access to climate financing."</div><div><br /></div><div><b>Reaching underserved populations:</b> "Underserved groups in LMICs, especially women, are the least likely to access and use mobile technology. This is due to a variety of reasons, including the affordability of handsets and data, a lack of digital skills and social norms. Since these groups tend to be the most vulnerable to the impacts of climate change, solutions need to be tailored specifically to their needs and access to technology."</div><div><br /></div><div><b>The development of carbon markets:</b> "[T]he adoption of Article 6 and Article 6.4 of the Paris Agreement, which outline the development of a VCM, has sparked interest in this innovative climate financing mechanism. However, there are persistent implementation challenges, largely due to complex and immature markets."</div><div><br /></div><div>I appreciate how the report showcases models and best practices for how mobile and digital technologies can ensure vital funds reach the most vulnerable people and communities. In doing so, it demonstrates the opportunities for transformative technologies to help counter the climate crisis. While climate finance is relatively new, research presented in the report "shows that mobile and digital technology are uniquely positioned to provide tools that catalyze and strengthen how it is delivered." The report also "offers a preliminary assessment of digitally enabled climate finance to guide public and private sector actors, including financial institutions and mobile network operators (MNOs). In doing so, it seeks to support the delivery of innovative solutions and partnerships that serve communities most affected by climate change."</div><div><br /></div><div>The GSMA also produced a <a href="https://youtu.be/Cx2TiPPzmqk?si=CMSzLRrnOmyeHnLG" target="_blank">webinar</a> that discussed the future of climate action and the role of mobile and digital technology in delivering climate finance in LMICs. </div><div><br /></div><div class="separator" style="clear: both; text-align: center;"><iframe allowfullscreen="" class="BLOG_video_class" height="266" src="https://www.youtube.com/embed/Cx2TiPPzmqk" width="320" youtube-src-id="Cx2TiPPzmqk"></iframe></div><br /><div>If finance is at the heart of tackling the climate change crisis, then what are your recommendations of how to use mobile and digital technologies to ensure vital funds reach the most vulnerable people and communities?</div><div><br /></div><div><a href="https://www.linkedin.com/in/aaronrose/" style="font-style: italic;" target="_blank">Aaron Rose</a><i> is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of </i><a href="https://www.gtperspectives.com/">GT Perspectives</a>,<i> an online forum focused on turning perspective into opportunity.</i></div></div>Aaron Rosehttp://www.blogger.com/profile/16914196169617403460noreply@blogger.com0tag:blogger.com,1999:blog-5044990419048085041.post-30369601635977830742023-04-14T20:28:00.000-07:002024-02-18T00:14:43.676-08:00Report Identifies Six Decarbonizing Technologies That Will Help Asia's Path to a Greener Future<div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiqkg6yfDPq3biQQzcCKRkyS2XXJdHt6Y9fpidVP7Hnpa9uiNfC-xj-t2bTtYb7b-0TLgNYKKDJXg8jWDmKjht3chj-t5I1hgCeam7qOX_FfmoKPm85U4N6JL7VFb1T-dDSpe8Tf_iWblhMFRODMYN2V_qfJ_Hh7VH3yw3ZAMJKyUlkuDCbxWODXi0P-GUM/s768/Screenshot%20(491).png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="768" data-original-width="538" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiqkg6yfDPq3biQQzcCKRkyS2XXJdHt6Y9fpidVP7Hnpa9uiNfC-xj-t2bTtYb7b-0TLgNYKKDJXg8jWDmKjht3chj-t5I1hgCeam7qOX_FfmoKPm85U4N6JL7VFb1T-dDSpe8Tf_iWblhMFRODMYN2V_qfJ_Hh7VH3yw3ZAMJKyUlkuDCbxWODXi0P-GUM/w140-h200/Screenshot%20(491).png" width="140" /></a></div>"Asia, home to vast engines of economic growth, is at the center of the climate debate," says a report written by Economist Impact and sponsored by Eastspring Investment, which is a Singapore-based asset management business of Prudential plc. The report adds that "In the past two decades, global carbon emissions from fossil fuel combustion have risen by 45%, primarily driven by Asia, for which this figure stood at 135%. The region's ongoing dependence on coal has driven its per-head carbon emissions to equal that of the global average. Asia's carbon emissions are likely to rise by 16% over the next decade.</div><div><br /></div><div>"Meanwhile, the effects of climate change are becoming more pronounced in parts of the region. In the past year, unprecedented floods in Pakistan wiped out a significant share of its crops; India recorded its highest-ever temperatures, with meteorologists sounding the alarm for more to come this year; and a severe heatwave in China exacerbated a drought that impacted food production and the power supply."</div><div><br /></div><div>The report importantly points out that Asia "is facing significant human and economic costs arising from intense greenhouse gas (GHG) emissions. Under pressure to set ambitious net zero targets and reduce emissions, technologies that enhance efficiencies and help industries decarbonize will be crucial pieces of the climate puzzle in Asia."</div><div><br /></div><div>The findings presented in <i><a href="https://impact.economist.com/sustainability/ecosystems-resources/asias-path-to-a-greener-future" target="_blank">Asia's path to a greener future: Six technologies with decarbonizing potential</a> </i>are based on an extensive literature review, an interview program, and analysis conducted between October 2022 and March 2023. The report's findings, which are listed below, are intended to act as a springboard for discussions to support the development of technologies that have decarbonizing potential and identify the roadblocks to their progress.</div><div><ul style="text-align: left;"><li><i><b>Technologies that are driving significant gains in Europe or the Americas need to be adapted to the Asian market.</b> For example, the majority of alternative protein products are tailored to suit Western preferences and are prohibitively costly for the more price-sensitive Asian market. Alternative proteins would likely see broader adoption and create more impact if adapted to specific market preferences and price conditions.</i></li><li><i><b>Decarbonization efforts should aim to address emissions and waste across the entire lifecycle of production and use.</b> Most of the hydrogen currently consumed is grey, which is produced from natural gas. The decarbonization potential of hydrogen-powered vehicles will significantly increase with the use of renewable energy to produce hydrogen fuel. Likewise, using food waste for manufacturing textiles moves away from the current highly polluting linear model of production to a circular economy.</i></li><li><i><b>Developing supporting infrastructure can enhance technology development.</b> The growth of technologies such as hydrogen vehicles and battery recycling is currently limited due to insufficient supporting infrastructure. Spurring hydrogen vehicle uptake depends on installing a network of refueling stations and green hydrogen production plants. To diminish end-of-life impacts of batteries, well-designed and managed disposable and collection mechanisms are necessary. Implementing policies that support the development of necessary infrastructure will ensure a conducive environment for the growth and expansion of these technologies.</i></li><li><i><b>Addressing poor consumer sentiment will be key in scaling up technologies.</b> Negative perceptions impede new technology adoption. In the case of alternative proteins, consumers can be deterred by concerns about taste and nutritional value. With hydrogen vehicles, safety is a key issue, while recycled batteries can be perceived as lower quality. Investigations into safety incidents can help curb concerns. In other cases, public awareness and better communication by businesses and governments can go a long way to address common misperceptions.</i></li><li><i><b>Recycling and reuse can present opportunities to overcome supply chain disruptions owing to changing global dynamics.</b> The prices of critical minerals are on the rise because of growth in demand and fluctuations in supply. Recycling products, such as electric vehicle (EV) batteries, could ease the dependence on expensive raw materials, improve affordability and facilitate the transition away from a linear take-make-waste economy.</i></li><li><i><b>Policy support in the form of subsidies and financial incentives can reduce technology costs.</b> At present, many new technologies are expensive, which is hindering their adoption and development. Government support through subsidies, grants and other financial incentives can help reduce production costs and enable economies of scale. Lower production costs could translate into lower purchase prices for end consumers and foster greater adoption.</i></li><li><i><b>Greater public and private investments are needed.</b> While climate technology is attracting investment, more financial support is needed to scale-up the next wave of innovation. Funding is also needed to help install essential infrastructure to support the uptake of climate technologies such as hydrogen production plants and EV charging stations.</i></li></ul><div><br /></div></div><div>The six technologies with decarbonizing potential include are segmented into three verticals: agriculture (alternative proteins and precision farming), transport (EV batteries and hydrogen vehicles), and waste (alternative fabrics and battery recycling). These technologies "show considerable potential for reducing Asia's carbon footprint, as well as improving sustainability and security in the region." However, "each technology has its own set of unique challenges."</div><div><br /></div><div>I support the report's assertion "Technology is a critical enabler of decarbonization efforts and, as it continues to advance, it brings greater scope to address emissions in hard-to-abate sectors." The report adds that "innovation plays a crucial role in improving energy efficiency and reducing waste, but challenges remain to the broader uptake of each technology. Investment in research, development and deployment of nascent technologies will be essential to achieving our climate goals."</div><div><br /></div><div>What technologies do you think will have the biggest impact on Asia's path to a greener future?</div><div><br /></div><div><i></i><a href="https://www.linkedin.com/in/aaronrose/" style="font-style: italic;" target="_blank">Aaron Rose</a><i> is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of </i><a href="https://www.gtperspectives.com/">GT Perspectives</a>,<i> an online forum focused on turning perspective into opportunity.</i></div>Aaron Rosehttp://www.blogger.com/profile/16914196169617403460noreply@blogger.com0