Report Examines the Factors Enabling Businesses in Sub-Saharan Africa to Scale Up

Having done business in the world's second largest continent, I concur with a report's assertion that the "rise and fall of interest in Africa has been contingent on its promise for growth." Published by The Economist Intelligence Unit (The EIU), the report adds: The demographic advantage and increasing per-head income spur investors but the regulatory complexities and political risks they encounter turn sentiment. Businesses on the continent are innovative and eager to expand but this is often impeded by limited access to new markets and growth finance. Delivering on the promise of economic growth is closely tied to the ability of home-grown businesses to scale up, so policymakers must establish an environment that enables businesses to thrive.

Sponsored by the Dubai Chamber of Commerce and Industry, Promise and perils: Scaling up businesses in sub-Saharan Africa "examines the factors enabling businesses in sub-Saharan Africa (SSA) to scale up." The report considers "the policy environment, state of technology and infrastructure, and financing options that allow businesses to access markets in other countries on the continent and beyond. In addition, it explores the role of foreign investors in facilitating business expansion, focusing on those based in the" six Gulf Co-operation Council (GCC) countries: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates.

The report's key findings include:

• Policies for regional integration are helping African businesses gain greater access to other markets.
• Expanding telecommunications networks are facilitating the growth of internet connectivity, mobile money and new digital services that build on it.
• Progress in transportation projects are improving physical connectivity within and between countries in Africa and driving operational efficiencies.
• Foreign companies with expertise in infrastructure development and emerging technologies are capitalizing on Africa's scaling-up potential.
• High interest rates offered by domestic banks are a perennial problem for businesses seeking growth finance.
• Alternative sources such as venture capital (VC), private equity (PE), development finance institutions and even crowdfunding have been more appealing.
• Corporations are fueling African business expansions, through direct stakes and VC funds.
• Gulf investment is concentrated in East Africa, with the UAE leading the charge.

The report correctly explains that "financing has long been a bugbear. A quarter of African" small and medium-sized enterprises "surveyed by the European Investment Bank between 2011 and 2017 said access to finance was their biggest obstacle. Improving the depth, speed, cost and variety of financial tools is central to business growth, whether it be from commercial banks, PE, VC, development finance institutions and even crowd-funding."

Furthermore, "PE, which tends to focus on more established firms looking to scale up, closed 1,022 deals worth US$25bn across Africa between 2013 and 2018" as reflected in the chart below. "VC also seems to be gathering a healthy head of steam: African start-ups enjoyed an almost fourfold increase in VC funding in 2018, raising a record US$725m across 458 deals. They are receiving bigger tickets above the US$5m mark too."

"In terms of investment through PE and VC," the report notes "information technology (including internet services), financial services and consumer goods and services have attracted the highest volume of investments over the past five years." As indicated in the chart below, "The fintech sector was, in 2018, by far the largest draw for finance-raising. The data show that EdTech is the fourth biggest draw, which, combined with cleantech at second, shows the centrality of social and environmental narratives to business in Africa. Other sectors of note in Africa include mobility, which is drawing interest from foreign start-ups."

I agree with the report's conclusion that "Africa's growth recovery offers hope the continent can return to its GDP surge in the earlier part of the millennium—but only if its businesses can scale within and across borders. Policy improvements, including trade and customs unions, financial harmonization, and transport integration, are helping companies build regional footprints."

Encouragingly, "Start-ups are attracting VC from some of the world's biggest brands and reaching the international stage through global IPOs. But a perception challenge remains, with many citing political risks as an impediment."

Lastly, "As businesses on the continent scale up, foreign investors are playing an important role on two fronts: building infrastructure that enables African businesses to scale and investing directly in SMEs to facilitate growth."

Do you agree with the findings of the report?

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

Deal Activity to Female-Founded Startups Has Improved, but Roadblocks Remain

A report sponsored by Microsoft for Startups and Goldman Sachs' Launch With GS accurately asserts: "The VC industry has historically been a boys' club. Women have been underrepresented on both sides of the table as investors and as company founders. Considering that women make up half of the world's population and an even larger percentage of buying power, this underrepresentation is a problem not only for talented female entrepreneurs, but also for an industry that relies on scalable ideas to reach its potential."

The report, however, encouragingly notes that "[p]rogress has been made in recent years, and the oft-cited figures mask some of these improvements. For example, deal activity to female-founded startups has quadrupled over the last decade. In 2010, 823 VC investments were made in startups led by women; by 2018, that figure rose to 3,477, and 2019 is on pace to come close to that mark. This indicates that more women are becoming VC-backed entrepreneurs every year, and we expect that number to keep growing as supportive networks for female entrepreneurs continue to expand."

Released on Nov. 11, 2019, PitchBook-All Raise All In: Women in the VC Ecosystem highlights global and US-focused trends surrounding female-founded companies and female-led VC funds throughout the last decade.

The report's main findings include:

 

Some cities are better than others for female founders. New York and Los Angeles see comparatively high tech deal activity relative to Silicon Valley, despite Silicon Valley's much larger ecosystem.

What it means: Female founders can utilize these datapoints to determine which ecosystems (and VC firms) to target when they're on the fundraising trail.

Female-founded startups have a consistent history of exiting faster than male-led startups. Moreover, female-founded companies are exiting as a faster rate year-over-year compared to their all-male counterparts.

What it means: This reaffirms past research on enhanced business performance for female-founded companies. Venture investors, family offices, foundations and other prospective startup investors can use these datapoints to bolster their arguments for investing in more female-founded startups.

Only 12% of US VC checkwriters are women. Past research has found that female general partners are twice as likely to back female founders. Many (if not most) investment pitches are initiated by company founders, who approach investors looking for an opportunity to talk about their companies, and there are numerous indications that female founders often actively seek out VC firms with female checkwriters to pitch to.

What it means: VC firms can help in a big way by hiring or promoting more women into checkwriting roles. They will likely see an increase in incoming deal flow and open themselves to opportunities that other firms may miss.

56% of limited partners have women in decision-making roles. Limited partners are the original capital source for the entire VC industry, and where they invest their money has a significant downstream effect on future deal flow.

What it means: LPs can play a role, as well. They can use their influence to push for female-focused funds-of-funds, which are funds that take stakes in funds instead of startups. Such funds would ultimately provide more resources for female founders and provide an initial source of capital for female investors looking to set up their own VC firms.

It is worth mentioning the "ratio of female-founded startups has improved substantially since 2010, when they made up only 11.8% of the market. By dollars invested, female-founded startups took in almost 18% of all capital invested last year, higher than the 12% to 14% range typically seen since 2013. More notable, though, are the combined dollar amounts in recent years. Last year, more than $46 billion was funneled into female-founded startups, more than doubling 2017's value. For perspective, only $3 billion went to female-founded startups in 2010, translating into a more than 15-fold increase over the past decade."

What is more, "The gradual rise in female-founded startups can be traced to several factors, including market awareness of the gender imbalance, stronger mentorship networks for women and more women entering the venture side of entrepreneurship."

As an investor in several female-founded startups, it is reassuring to read: "Female-founded startups are exiting at an increasing pace. 2018 saw $26 billion in total sales (through acquisitions or IPOs) for female-founded startups. 2018 was also the fourth consecutive year with at least 200 exits from female-founded companies, which have slowly gained market share over the past 10 years, with 14% of total exit count in 2018. In addition, the number of exits for female-founded companies is growing at a faster rate YoY than exits for companies with all-male founding teams."

Are you investing in female-founded startups?

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

Identify, Execute, Monitor, and Manage: A Continuous Four-Stage Risk Analysis Process

"In an increasingly interconnected and complex world, it is vital to understand the external risks to your business" The Economist Intelligence Unit (The EIU) correctly notes in a report on how to navigate corporate risk. "Whether a firm is looking to understand the possible impact of" the trade war between the United States and China on its international "investments; the likelihood of new environmental regulations being implemented; or the threat of social unrest disrupting supply chains, being able to identify and understand risks offers the chance to put in place mitigation strategies that could help avoid significant losses. Failure to do so can prove terminal for businesses."

The EIU advises that "[t]o prevent this, risk analysis can be broken down into a continuous four-stage process:"

1. Identify

"Before identifying the external risks they are facing, firms need to understand and quantify their financial exposure—an important dimension of this is geographical." Furthermore, "This type of mapping exercise has become increasingly important in recent years, as global supply chains have become stretched across a growing number of territories, including cyber space, and exacerbated by examples of growing trade protectionism and political risk more generally. A clear understanding of a firm's exposure should highlight key areas of weakness and dependency. This, in turn, allows the firm to start thinking about which risks will need to be prioritized, as there will be trade-offs required when allocating resources for mitigation.

"Once a firm's exposure has been mapped, detailed and understood, the next step is to assess what exactly could put investments and operations at risk. Some of this should already have been achieved by the exposure-mapping exercise. For example, if the majority of sales revenue is earned in a particular country, then difficulty in taking money out of that country would be an obvious primary concern. However, the likelihood of this becoming a problem has historically been much lower within the EU than in emerging markets in Asia, such as Indonesia and Vietnam."

I concur that "[a]pplying this kind of political and economic historical awareness, external country experts can help provide the contextual knowledge and experience to understand which scenarios are more or less likely to occur in particular countries, including scenarios that firms may not have previously considered. This last point is particularly important—thinking outside the box is necessary, as market consensus can severely limit risk analysis."

2. Evaluate

The report accurately explains: "Each possible risk needs to be quantified in order to compare and evaluate them." My colleagues and I have adopted The EIU's methodology by giving "each risk scenario a probability score, and also a score for the likely impact on businesses' profitability. Combined, this gives an overall intensity score . . . . This process allows for the creation of a moving intensity scale—the risk scenario watchlist—as the scoring for different risks changes over time."

3. Monitor

"Without a system in place to monitor key business risks, the assumptions and analysis made by firms can become out of date very quickly."

What is more, "Navigating such shifts requires a monitoring system that cuts through the noise. Firms need to stay in tune with exactly what is going on in a country and to stay on top of geopolitical relationships, by receiving regular country-level alerts and speaking with country experts."

I am fortunate to be surrounded by a network of talented individuals located in key economies around the world where each share information and insights on geopolitical or socioeconomic events they are observing.

The report importantly adds: "One further way in which firms can improve monitoring is through the ability to track specific triggers that are likely to set off identified risk scenarios. This can then act as a form of early-warning system. Some broad examples include: disputed elections or food price spikes as drivers of social unrest in less stable countries; currency devaluations as a precursor to the implementation of capital controls; or falling natural resource prices in commodity-export dependent countries, leading to a drop in government revenue and, consequently, cancellations or delays to government-led infrastructure projects. In addition, some other increasingly important triggers include environmental protests or tensions and major geopolitical disputes, both of which have, for differing reasons, preceded a rise in successful cyber-attacks against governments and associated companies.

"Although many political events are difficult to predict precisely, a combination of specifically selected triggers and the development of, or use of analytical firms with, on-the-ground contacts will go a long way to helping firms prepare for the worst."

4. Manage

"Once key risks have been identified and are being monitored, firms will have a better idea of how to manage them. The intensity scale allows for prioritization, which can be adjusted as events and policies change on the ground. But, to mitigate effectively, firms also need an understanding of the exact areas that will be impacted by a particular scenario, both within their business and also in the wider business environment."

Lastly, I appreciate the report's concluding paragraphs:

Certainly, the global trends towards governments introducing more active environmental and data protection policies, as well as growing trade protectionism, indicate that firms need to pay special attention to managing regulatory changes in coming years. Firms that are able to identify possible regulatory shifts and put in place contingency plans to adapt before such shifts are implemented will have a better chance of success. Whatever the best strategy for each business, the ability to identify, evaluate and monitor key external risks should dramatically improve risk-mitigation efforts.

In an age of increased unpredictability and event risk, firms and governments are more than ever seeking to insulate themselves from the consequences. Global businesses cannot avoid risk—and too much risk aversion can be bad for growth—but they can prepare for risk, just as they can for opportunity.

Does your business employ a continuous four-stage process of analyzing risks? Do you have an alternate solution to understanding the external risks to your business?

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

'Doing Business 2020' Indicates a Steady Convergence Between Developing and Developed Economies, Particularly in Business Incorporation

A post published on this blog presents a variety of risks when choosing to do international business. Such risks include government effectiveness (does political culture foster strong business environment?), stability (how stable are political institutions?), legal and regulatory (will the legal system safeguard investment?), and tax policy (are taxes low, predictable and transparent?). To help make informed decisions about effectively executing an international growth strategy, my colleagues and I find the World Bank's annual Doing Business report quite useful.

Published on Oct. 24, 2019 using data current as of May 1st, Doing Business 2020, "is the 17th in a series of annual studies measuring the regulations that enhance business activity and those that constrain it. Doing Business presents quantitative indicators on business regulations and the protection of property rights that can be compared across 190 economies—from Afghanistan to Zimbabwe—and over time.

"Doing Business covers 12 areas of business regulation. Ten of these areas—starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts, and resolving insolvency—are included in the ease of doing business score and ease of doing business ranking. Doing Business also measures regulation on employing workers and contracting with the government, which are not included in the ease of doing business score and ranking.

"By documenting changes in regulation in 12 areas of business activity in 190 economies, Doing Business analyzes regulation that encourages efficiency and supports freedom to do business. The data collected by Doing Business address three questions about government. First, when do governments change regulation with a view to developing their private sector? Second, what are the characteristics of reformist governments? Third, what are the effects of regulatory change on different aspects of economic or investment activity? Answering these questions adds to our knowledge of development."

The report's opening paragraph correctly notes:

At its core, regulation is about freedom to do business. Regulation aims to prevent worker mistreatment by greedy employers (regulation of labor), to ensure that roads and bridges do not collapse (regulation of public procurement), and to protect one’s investments (minority shareholder protections). All too often, however, regulation misses its goal, and one inefficiency replaces another, especially in the form of government overreach in business activity. Governments in many economies adopt or maintain regulation that burdens entrepreneurs. Whether by intent or ignorance, such regulation limits entrepreneurs' ability to freely operate a private business. As a result, entrepreneurs resort to informal activity, away from the oversight of regulators and tax collectors, or seek opportunities abroad—or join the ranks of the unemployed. Foreign investors avoid economies that use regulation to manipulate the private sector.

The report's main findings include:

• Doing Business captures 294 regulatory reforms implemented between May 2018 and May 2019. Worldwide, 115 economies made it easier to do business.
• The economies with the most notable improvement in Doing Business 2020 are Saudi Arabia, Jordan, Togo, Bahrain, Tajikistan, Pakistan, Kuwait, China, India and Nigeria (see image below). In 2018/19, these countries implemented one-fifth of all the reforms recorded worldwide.
• Economies in Sub-Saharan Africa and Latin America and the Caribbean continue to lag in terms of reforms. Only two Sub-Saharan African economies rank in the top 50 on the ease of doing business; no Latin American economies rank in this group.
• Doing Business 2020 continues to show a steady convergence between developing and developed economies, especially in the area of business incorporation. Since 2003/04, 178 economies have implemented 722 reforms captured by the starting a business indicator set, either reducing or eliminating barriers to entry.
• Those economies that score well on Doing Business tend to benefit from higher levels of entrepreneurial activity and lower levels of corruption.
• While economic reasons are the main drivers of reform, the advancement of neighboring economies provides an additional impetus for regulatory change.
• Twenty-six economies became less business-friendly, introducing 31 regulatory changes that stifle efficiency and quality of regulation.

How does this report help you implement your business' international growth strategy?

Aaron Rose is an advisor to talented entrepreneurs and co-founder of great companies. He also serves as the editor of Solutions for a Sustainable World.

Driven by Smart Cities and Smart Utilities, Industrial IoT Connections in the Commonwealth of Independent States Will See Strong Growth

"At the end of 2018, the Commonwealth of Independent States (CIS) was home to 235 million unique mobile subscribers, of which Russia, Ukraine and Uzbekistan together accounted for 80%," explains a report published by the GSMA. The CIS (Armenia, Azerbaijan, Belarus, Georgia, Moldova, Kazakhstan Kyrgyzstan, Russia, Tajikistan, Turkmenistan, Ukraine and Uzbekistan) "has a high rate of unique mobile subscriber penetration at 81%, though country-level figures range from 60% in Turkmenistan to almost 90% in Russia. As saturation of the region's addressable market edges closer, future growth will be limited, with less than 9 million new unique subscribers forecast by 2025."

Authored by GSMA Intelligence, the research arm of the GSMA, Mobile Economy: Russia & CIS 2019 adds that "the CIS is now seeing an accelerating shift to mobile broadband. 4G will overtake 2G as a proportion of connections in 2019," excluding licensed cellular Internet of Things (IoT), "and will become the region's leading mobile technology in 2021."

Moreover, "Greater use of data-intensive services and demand for higher speeds will drive further adoption, with 4G accounting for more than two-thirds of total connections by 2025. Only Belarus and Russia are expected to launch 5G by the end of 2020; networks in the region's other 10 markets will be live by 2025. The CIS will be home to around 54 million 5G connections by 2025, representing an adoption rate of 13%."

Source: GSMA Intelligence

On the topic of the mobile industry's significant contributions to jobs and the economy, "In 2018, mobile technologies and services generated 4.7% of GDP in the CIS, a contribution of $101 billion of economic value added. In the period to 2023, this figure will increase to $122 billion (5.1% of GDP). The mobile ecosystem supported 620,000 jobs in the CIS in 2018, either through direct employment or indirectly through activity in the wider economy. Mobile also contributes to the funding of the public sector, raising $12 billion in 2018 – mainly via general taxation. 5G technologies are expected to contribute $34 billion to the CIS economy over the next 15 years, impacting key sectors such as manufacturing, utilities and construction."

Regarding regional innovation being underpinned by mobile connectivity, the report points out that IoT "is an area where mobile operators can grow their business beyond traditional communications. Industrial IoT connections in the CIS will see strong growth out to 2025, driven by increased interest in smart cities and smart utilities. With IoT revenue set to reach $26 billion in 2025, operators are implementing strategies designed to capture opportunities at the applications, platforms and services layer."

Source: GSMA Intelligence

The GSMA further says "operators are seeking to invest or formalize partnerships in the e-commerce market, particularly as smartphone and mobile broadband adoption rates grow. The industry is also exploring potential applications of, and devising solutions based on, artificial intelligence (AI) and blockchain technologies, and injecting greater funds in the start-up ecosystem to protect itself from disruption and diversify revenues."

I concur that "5G mobile networks offer the potential to underpin a range of solutions for enterprises, in addition to serving the consumer market." I also agree that "[p]olicymakers should consider the rollout of 5G a vehicle for driving socioeconomic growth and the transformation of traditional industries. The regulatory framework should foster the mobile industry's development within an environment that is conducive to investment. Launches of 5G networks in other markets indicate that key factor behind their successful deployment and operation is the creation of a comprehensive national 5G development plan."

Infographic: GSMA Intelligence

What investment or business opportunities are you seeing in the CIS' mobile industry?

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of Solutions for a Sustainable World.

China's Three Major 'Icebergs' That Businesses, Investors and Strategists Should Put on Their Radar

Doing business in China over the past several years, I can attest to The Economist Intelligence Unit's assertion: "Chinese businesses are not just changing China, they are changing the world."

While doing business in China carries a great number of risks (e.g., government regulations, intellectual property protection, and foreign exchange risk), I often encourage startups based outside of China to consider commercializing their products or services in the world's most populated country. In fact, The EIU "projects that 480m Chinese consumers (more than the whole of the US population) should reach upper-middle and high-income status by 2030. Amid continued urbanization, China’s lower tiers (smaller and less developed cities) are likely to be growth dynamos as investment and capital fan out from tier-1 cities such as Shanghai, Beijing and Guangzhou."

Sponsored by PineBridge Investments, an American private, global asset manager, China icebergs: Forces that could reshape the world "examines hidden strengths in the Chinese economy—'icebergs'—that existing and potential investors into the world's second-largest economy should be watching."

The report's executive summary explains that the U.S. "may have held its position as the world's largest economy since 1871, but in the 1820s the world's economic powerhouse was China, at almost 20 times the size of US GDP. China's decline began in the 19th century and lasted until the country's economic reforms that began in 1979. Since then, China has rapidly re-emerged as a major economy."

Moreover, "China's boom has helped fuel global growth, but it has also raised the country's debt levels and prompted questions about economic endurance and global impact. Trends may be visible on the surface, but, like an iceberg, bigger implications lie underneath. To get a better understanding, this report aims to go below headline numbers and explore the nation’s commercial strengths and potential weaknesses."

Key takeaways of the report include:

• The economy is shifting, and consumers are the driving force. Liberalization of the private sector is shifting China from a state-backed to a consumption-led economy, which could fully transition by 2030.
• Chinese technological advances are compounding. From mobile internet to fintech to artificial intelligence and flying cars, Chinese firms are innovating and advances are feeding into the local economy as well as going global.
• New growth centers are emerging—exponentially. China's lower-tier cities are growing fast and catching up to the mega-cities in terms of technology, commerce and infrastructure.

The report correctly addresses the challenges Chinese tech companies have encountered in their expansion beyond their home market: "China's size and room for growth have satisfied most domestic tech firms to date, but they still look to expand overseas. However, this presents a more complicated landscape, with trade tensions morphing into tech disputes, with the US in particular, and regulatory tightening in the EU, Australia and Japan.

"Challenges include the complexity of local markets. Chinese companies going abroad must find ways to localize, and use local talent, but some market segments may prove beyond their capabilities."

The report adds, however, that "[s]crutiny of Chinese technology in the West may push Chinese companies towards more-welcoming developing nations, particularly within the Belt and Road sphere. The result could see Chinese capital and technology catalyze development there, just as US and European capital spurred economic development in China through the 1980s and 1990s.

"US companies like Microsoft or IBM have dominated global markets on the strength of their products and services for decades. Today, more Chinese firms are reaching that level, as Fortune's Global 500 list illustrates. Given the speed with which China has become the second-largest economy, and is pursuing technologies of the future, it would be a mistake to underestimate the odds of its top companies also becoming global leaders."

What do you think?

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

How Will New Technologies Impact the Food and Beverage Industry?

"Our preferences, and taste, for food are not as static as they seem," explains a report produced by The Economist Intelligence Unit. "But some combinations do tend to stick. Is there a science behind taste and what we find appealing?"

Sponsored by The Japan Food Product Overseas Promotion Center (JFOODO), The science behind taste: impact on the food and beverage industry of a better understanding of the human palate is a report that "explores how new technologies, new lifestyles and scientific research have contributed to new understandings of the human palate. Better insight may dispel long-held beliefs about which tastes work best together, leading to new pairings which may not only taste better together, but are also healthier. This could not only indicate new opportunities for the food and beverage industry but also challenge these traditional industries to adjust their product development and business strategies."

The key takeaways of the report are:

• How technology is informing our tastebuds: technologies such as machine learning are being developed to deal with the complexity and variety of data in the food industry and our very own taste buds. New technologies inform some of the biggest consumer companies on taste preferences to adequately meet consumer needs.
• How technologies are helping society explore new taste, and new combinations of taste: new technologies have also enabled companies to extract different aromas from food ingredients, and digitize them, to make entirely new flavors and food products—as well as revealing non-traditional combinations of food ingredients that will go well together.
• New technologies have the potential to contribute to improve our food waste issues: Algorithms such as Consumer Flavor Intelligence inform major companies to optimize food production, by meeting the preferences of the larger consumers, helping them to reduce waste and/or over-production. Artificial intelligence (AI) and big data have also been instrumental in giving consumers awareness of where and how their food ingredients have been grown, while giving producers more precise forecasting models of supply and demand.
• Globalization and the homogenized diet: as people travel more and are exposed to a wider range of food through various media, we are eating a more homogenized diet no matter where we live, which is straining resources. Therefore, supporting global diversity in tastes while keeping food systems sustainable is becoming a significant challenge.
• New scientific findings will continue to redefine our optimal diet going forward: the more we develop an understanding of our palate, the more it becomes apparent that taste preferences relate to numerous factors such as sensitivity thresholds, learning, genetics, nutritional deficiencies, and early exposure to certain foods.
• The new ordinary: new information about food ingredients and taste not only confirm the obvious ways to consume food, but also predict new and less expected ingredient pairings. There is creativity in blending human and artificial intelligence, which may open many more doors in how we could taste and perceive food in future.

In addition, the report presents the following conclusion:

Today, data analytics and AI tell us about what we prefer and why. Our lifestyle and travel preferences also have an impact on our diet and what we choose to eat, and the choice ultimately remains with us. However, what we do not have control over, where our food comes from, and how it was fished, farmed or caught, is where science can help by giving us the reassurance of digitally tracking provenance.

By monitoring consumer preferences, companies are able to accurately meet consumer needs, thereby avoiding food waste. Moreover, it also allows for new and more innovative ways to sell products, while providing access to healthier foods and more balanced diets.

We, as a species, are still evolving. While we remain unconsciously and genetically open to the five taste profiles of sweet, sour, salty, bitter and savory, our conscious palates, driven by consumer trends and external forces, have evolved to enjoy other flavors and pairings not known by our ancestors.

And in tandem, machines are working to develop new tastes and flavors that seek to mimic the choices we make ourselves. The next time you're browsing the aisles of your local grocery store, that tasty-looking pasta sauce you sling in your basket may have been the product of the latest in AI working in harmony with the human brain.

How do you think AI will influence your next dining experience?

Aaron Rose is an advisor to talented entrepreneurs and co-founder of great companies. He also serves as the editor of Solutions for a Sustainable World.

Report Explores How 'Make in India' Has Impacted the Country and the Emerging Opportunities for Medtech Multinationals

"In September 2014, the 'Make in India' initiative was started with the objective of making India an international hub for high-value technology goods," explains a report published by The Economist Intelligence Unit (The EIU). "The campaign also aimed to bring in foreign technology and capital into India and to bring self-sufficiency through domestic supply. Out of 25 shortlisted focus sectors, medical technology (medtech) is one of the sectors targeted for this initiative given its current high import intensity."

'Make in India' MedTech - Four Years On adds: "Following the launch of the 'Make in India' initiative, the Department of Pharmaceuticals (DoP) commissioned a task force to identify and promote domestic production of high-tech medical devices and facilitate the industry. In essence, in line with the 'Make in India' initiative, the task force was charged with the mandate of bringing self-sufficiency through domestic support and develop India as a Global medical device manufacturing hub."

The EIU's "report explores how 'Make in India' has impacted the country and the emerging opportunities for medtech multinationals (MNCs)."

On the topic of incentives and policies, "To build upon the initial momentum generated, the India government has committed to numerous other efforts in an attempt to make 'Make in India' an attractive proposition for the medtech industry." Furthermore, "To better align domestic development and manufacturing of medical devices with global practices, India's Ministry of Health and Family Welfare released the Medical Device Rules of 2017 (MDR 2017 or the Act) which took effect on January 1, 2018. The structure of the new regulatory paradigm appears to be on par with international standards, including the European Union's Medical Device Regulation, although the extent of these similarities will depend upon India’s implementation of the Act."

In order to create ecosystems for medical device manufacturing, "India's government has placed focus on improving local infrastructure for development and manufacturing of medical devices. State-level programs to setup specialized industrial parks to create an ecosystem for medical device manufacturing is expected to reduce set-up costs for companies, and support the production of better quality and affordable products."

Moreover, "In December 2018, the India government announced that it will set up the National Medical Devices Promotion Council (NMDPC) to boost manufacturing, attract investments and promote exports of the sector. While the medical devices industry has been growing in double digits, it is predominantly import-driven with imports accounting for over 70% of the domestic market and around 80% of critical-care medical devices such as cardiac monitors and ventilators. The setting up of NMDPC will address the issue of expansion of domestic manufacturing for critical-care devices.

"Specifically for medical devices, a slew of incentives were subsequently offered to stimulate interest in the sector" as represented in the chart below.

While there has been a positive impact in several areas after much effort in reforming infrastructure, policy and processes, the results are "below expectation in the manufacturing industry which the ‘Make in India’ initiative mainly targets at.

"Current economic data suggests that the impact of ‘Make in India’ has been lackluster and the initiative is a long way behind its intended target. Through the ‘Make in India’ initiative, Prime Minister Modi hoped to raise the share of manufacturing as a percentage of gross domestic product (GDP) to 25% by 2025, and create 100 million new jobs by 2022.

"However, GDP growth slowed between 2017 and 2018, with the manufacturing sector's contribution to GDP showing no increase. On the jobs front, published data from the World Bank records 5.5 million new jobs created yearly—hardly sufficient to catch up to the goal of 100 million new jobs by 2022."

With respect to medtech MNCs capitalizing on the country's growing medtech industry, the report says:

Unlike global manufacturing giant China, India lacks adequate infrastructure, the right set of know-how and an ecosystem to support MNCs in the 'Make in India' initiative. The prevailing perception among MNCs sees India as a hub for low-cost, entry-level products catered towards emerging markets. In 2007, medtech MNC Stryker opened an R&D hub in Gurgaon and its second facility the very next year. Stryker continues to bank on India R&D to gain edge in emerging markets. R&D at these facilities are aimed at catering to mid-tiered consumers of the value, no-frill devices segment.

While most MNCs already operating in India may not have plans for aggressive local expansion, there are a number of medtech companies such as GE Healthcare, Philips Healthcare and Intuitive Surgical that have jumped on the 'Make in India' initiative. It seems companies that have already established a significant footprint in India or want to cap its future based on Indian demographic needs might be interested to invest despite setbacks from the ecosystem in the country.

Perhaps India will begin to see positive results in the coming years. As The EIU explains:

In September 2018 the government officially launched the ambitious Pradhan Mantri Jan Arogya Abhiyan or the Ayushman Bharat National Health Protection Scheme (AB-PMJAY), which it describes as the world's largest government-funded healthcare program. The scheme will provide health insurance cover of up to Rs500,000 (US$7,400) a year to 500 million low-income beneficiaries, aiming to cover 40% of the population. To date, AB-PMJAY is the boldest national health insurance plan in India's history, providing more people with greater coverage than any previous program. While current implementation remains at a nascent stage, this plan has the potential to generate huge demand for medical technology.

The report concludes by noting:

With the 'Make in India' campaign, the government intends to manufacture high-tech cost competitive products locally. While progress since inception has been below par, the government's continued efforts show its commitment in driving this plan to fruition. The recent launch of the Ayushman Bharat National Health Insurance is likely to further propel domestic access and demand for healthcare products and services. For medtech MNCs, there are potential synergies that can be unlocked should they explore manufacturing in India. However, careful considerations need to be taken in evaluating the most appropriate strategy for medtech companies looking for opportunities in 'Make in India.'

What investment or business opportunities are you seeing in India's medtech industry?

Aaron Rose is an advisor to talented entrepreneurs and co-founder of great companies. He also serves as the editor of Solutions for a Sustainable World.

William Joern Taught Me to Choose Wisely

"Attitude is a choice. Happiness is a choice. Optimism is a choice. Kindness is a choice. Giving is a choice. Respect is a choice. Whatever choice you make makes you. Choose wisely."
― Roy T. Bennett, The Light in the Heart

My friend and colleague, William Joern, who recently passed away at the age of 80, taught me many valuable lessons including each person has the ability to choose their own attitude, happiness, optimism, kindness, giving, and respect.

I first met Bill in 2009 at an event hosted by Georgetown University in Washington, DC. The event featured a panel of academics discussing how technology can improve the lives of those people living in developing countries. I was planning on attending the event with a friend. When my friend said she was unable to attend just a few hours before the event because of a work commitment, I decide to attend nonetheless.

I asked a question during the Q&A portion of the event and upon the event's conclusion, Bill introduced himself and expressed his appreciation for my question. Meeting people like Bill at events and conferences reinforces the saying, "90% of life is showing up."

Despite being 35 years my senior, Bill and I found mutual appreciation for each other. He spent most of his childhood in the Omaha, Neb./Council Bluffs, Iowa area; whereas, I am from Denver, Colo. We both attended a Jesuit institution of higher education (Bill went to the College of the Holy Cross in Massachusetts to study history and political science and I studied philosophy at Seattle University). And we both worked in Iraq, Afghanistan, and sub-Saharan Africa at different times during our respective careers.

Bill Joern (front row on the right)
at the Afghan-American Chamber of
Commerce's Business Matchmaking
Conference in Washington, DC

At the time of meeting Bill, I had a business idea of creating applications for mobile phones that will help people in developing countries. During the weeks following our first meeting, Bill provided assistance as I prepared to present "Investment Opportunities in Mobile Applications" at the U.S.-Uzbekistan Investment Summit in New York City. Another bond Bill and I shared is he served on the board of directors of the Afghan-American Chamber of Commerce and I was a board member of the American-Uzbekistan Chamber of Commerce.

While he regularly understated his professional experiences, our relationship provided me with the opportunity to learn from Bill's expansive knowledge. He also demonstrated his passion of being a lifelong learner. Despite having little knowledge of information and communication technology (ICT) and limited experience of using a computer beyond checking email, reading news articles, and watching online video of the Holy Cross Crusaders football team (he played for the Crusaders from 1959-1961), Bill understood the potential benefits of ICT tools such as mobile phones could bring to people worldwide. He also comprehended that although the mobile phone is a useful device, developing localized content is essential to delivering the full value of mobile technology.

Bill had experience working with a business that delivered foreign language programs and I had experience working with some of the world's biggest technology companies. We also understood the business opportunities that an economically rising China could provide for any business that developed localized content for mobile devices. Bill recommended that I meet Steve Drake of Silver Spring, Md., who possesses an impressive resume as a communications executive including many years working in China. During our first few meetings together, Bill, Steve, and I pooled our respective expertise and refined the concept of developing localized content and services optimized for mobile phones and portable computers, providing instant access to valuable, life-improving knowledge.

Similar to my experience of first meeting Bill, I developed an instant connection with Steve who understood the opportunities and challenges of international business. And like Bill, Steve knows the value of learning and teaching new ideas and concepts. It seemed natural for the three of us to form a company (ROI3, Inc.) where our mission was to empower people in emerging economies through innovative, technology-based solutions​. In doing so, I learned the importance of having a shared vision for the company's product and mission. It is also important to define the roles for the founders including equity ownership early in the company's existence.

Leading a startup is stressful dealing with a steady barrage of challenges to overcome and problems to fix. During the most stressful days, Bill's positive attitude, optimism, kindness, and respect were sources of comfort. I also appreciated the generosity of his time. And when a decision was made earlier this year to change the course of ROI3's strategic direction, Bill provided his support. His optimism for our company provided the confidence and clarity I needed to stay focused on the long-term vision and goals.

Bill (far left) with our colleague,
Jingyan Zhang (second from right)
and her parents,
and Steve Drake (far right)

But it was Bill's friendship that I valued most. We often had differing political views, but always respected each other and took time to learn from one another. Bill taught me the meaning of empathy.

We were fans of various sports including American football (although I overlooked his flaw of supporting the New England Patriots as I am a lifelong Denver Broncos fan and adopted the Seattle Seahawks as my home team). Yet, Bill never gloated after each of New England's three Super Bowl wins (including the Patriots' win over the Seahawks in 2015) during the ten years I knew him.

He appreciated my thoughts about the latest announcements by global tech companies and I sought his opinion about public policy and legislative proposals, whether they were introduced by local, state or federal governments.

Most importantly, Bill and I saw each other as friends first and colleagues second.

Bill, while you may not have realized it, you made a difference in the lives of many people. You provided a sense of calmness when I needed it by helping me analyze a problem and formulate a solution. And when decisions were made about our company that you did not agree with, your respect and support were steadfast. You taught me that attitude is a choice. Happiness is a choice. Optimism is a choice. Kindness is a choice. Giving is a choice. Respect is a choice. And the choices I make will make me who I am. I will choose wisely, my friend.

Thank you and God bless.

UPDATE

The obituary below was published in the Washington Post on Sept. 4, 2019.

WILLIAM C. JOERN (Age 80)

A former executive with the D.C. based International Center for Language Studies, passed away at his apartment in Northwest Washington on August 18, 2019. Mr. Joern was born in Omaha, Nebraska and grew up mostly on the east coast and Council Bluffs, Iowa. He attended Creighton Prep in Omaha and was a 1962 graduate of the College of the Holy Cross in Worcester, MA where he played lacrosse and quarterback and safety on the football team. Following college, Mr. Joern taught for a year at the Jesuit High school in Baghdad before returning to Nebraska where he began a career in management with several firms and state agencies, mostly in the healthcare sector. In the late 1970s, he moved to Washington, D.C. and continued his career in business management with several companies until 2008. Before and after 2008, during his time in DC, he was active on a number of boards including the Nebraska Society where he served a term as president, the Afgan-American [sic] Chamber of Commerce and ROI3, Inc. where served as Executive Chairman. He is survived by a sister, Judy Ryan, of Loveland, CO; and two brothers, Steve Joern of Wyckoff, NJ and James Joern of Schroon Lake, NY; as well as by numerous nieces and nephews. A memorial donation can be made to Creighton Prep, Alumni Director, 7400 Western Ave., Omaha, NE 68114, designate: "Creighton Prep Fontenelle Class of 57 Fund". A Memorial Service will be held in the near future.

Report Explores How Finance and Procurement Executives Should Adapt to Technology Innovation and Shifting Dynamics of Global Trade

"Technology innovation and the shifting dynamics of global trade are challenging businesses in every sector to adapt," says a report written by The Economist Intelligence Unit. "This pressure is felt as much by the finance and procurement functions as any other, and their preparedness for emerging trends will greatly influence their organizations' ability to thrive in the future."

Sponsored by Basware, a Finnish software company, Whats now and next for finance and procurement? Automation, digitization and the future of global trade "examines which emerging dimensions of three broad trends—automation, digitization, and shifting trade winds—finance and procurement executives expect will affect their companies most; what their impact will be; and how they have prepared. It is based on a survey of over 400 finance and procurement executives in the US, the UK, France and Germany, as well as in-depth interviews."

The report's key findings include:

The biggest impact of automation will be on internal processes. Respondents expect the automation of payments, procurement processes and supply-chain management to have the greatest impact on their organizations, ahead of artificial intelligence (AI) powered decision-making or decision-making within other key finance and procurement processes.

This will reduce companies' headcounts. The most commonly cited impact of automation is a reduced need for staff, as identified by 36% of respondents. A smaller headcount will be performing higher skilled tasks, with nearly as many respondents (34%) believing that automation will free up time for them to focus on more strategic initiatives.

Headcount will be counterbalanced by increases in technology investment and digital initiatives. The most common way for survey participants to prepare for automation is to increase their technology budgets, a strategy adopted by 39% of respondents. This was also true of digitization.

Digitization will reduce overall costs but also intensify competition for talent, respondents believe. Just under a third (32%) expect digitization to bring down costs, the second most commonly expected impact, but almost as many (31%) agree that recruiting employees with specialist digital skills will be critical to unlocking digital transformation in their organizations.

China-US trade relations and post-Brexit trade negotiations loom large. These are seen as the two most impactful trade trends by a majority of the finance and procurement executives surveyed. They expect trade dynamics to have negative effects, most commonly an increase in procurement costs (35%) and greater supply-chain complexity (29%).

This is forcing companies to look further afield for growth. The most popular way to prepare for shifting trends in global trade, the survey shows, is to develop alternative sourcing options (37%). Securing alternative sales leads/ markets (32%) is another common response.

Companies cannot predict the future but they can prepare to adapt. A common thread linking preparations that companies have taken for automation, digitization and global trade dynamics is the ability to be responsive to whatever fate may throw at them.

The report concludes that "[t]he confidence among finance and procurement executives in their ability to adapt to automation, digitization, and global trade trends is encouraging. Although no-one can predict the future with certainty, the survey reveals that these functions have at least considered and, in many cases, made explicit preparations for potentially disruptive trends ranging from robotic process automation to Brexit."

Importantly, "while companies cannot predict the future, they can prepare themselves to be responsive to whatever fate might throw at them."

How should finance and procurement executives prepare for the most important trends shaping their future?

Aaron Rose is an advisor to talented entrepreneurs and co-founder of great companies. He also serves as the editor of Solutions for a Sustainable World.