Monthly Archives: February 2020

Simple steps to reduce the odds of a global catastrophe

By Warwick J. McKibbin and David Levine – The novel coronavirus COVID-19 may become a footnote in history – a disaster narrowly averted. It could also become a global pandemic similar to some of the worst pandemics of the twentieth century.

For example, assume the COVID-19 is as easy to spread and as dangerous as the 1957 Asian flu. Based on the epidemiological estimates of mortality and morbidity rates from that experience, our best estimate from a 2006 study on pandemics was that such a virus might kill more than 14 million people and shrink global GDP by more than $500 billion  (McKibbin and Alexandro Sidorenko. Global macroeconomic consequences of pandemic influenza. Australian National University, 2006). These estimates are far higher than the costs were in 1957 because our world is increasingly connected and urban. Preliminary results currently being updated  in 2020 suggest even higher numbers for worse case COVID-19.

We hope that scientists can rapidly develop a vaccine. Unfortunately, there is much we do not yet know about this new virus.

At the same time, we do know the virus mostly spreads when people sneeze or cough. The germs then spread when people inhale infected droplets. The germs also land on surfaces. People who touch their own mucus or an infected surface then spread the virus on their hands. For most respiratory infections, perhaps half the cases spread from people’s hands.

Fortunately, even without a vaccine, we already know how to slow an epidemic of respiratory infections.

If everyone coughed or sneezed into their elbow or a tissue (not into the air or on their hands), the germs would not travel very far. And if everyone washed hands with soap before preparing food or eating, that route of transmission would end. more>

Updates from McKinsey

Resilience in transport and logistics
The transportation-and-logistics sector is especially susceptible to economic shocks. Here’s how to prepare your operations for a smoother ride.
By Sal Arora, Wigbert Böhm, Kevin Dolan, Rebecca Gould, and Scott Mcconnell – The transportation-and-logistics (T&L) sector has benefitted from many of the most important business trends of the past half century. Globalization, the evolution of sophisticated just-in-time supply chains, and the rise of e-commerce have all helped the sector grow at a rate broadly similar to the overall economy.

But it hasn’t all been smooth sailing. Economic downturns tend to hit the sector particularly hard. Our analysis of the past five US recessions shows that T&L companies suffer more on average than the economy as a whole. And in recent cycles, the problem may have worsened. Truck transportation, for example, experienced little contraction in the recessions of 1980, 1982 and 1991. In 2001, by contrast, the industry shrank by 6 percent, and the 2008 recession triggered an 18 percent contraction.

As in all industries, sector averages don’t tell the whole story. Some companies ride out downturns much more successfully than others. When McKinsey analyzed the performance of around 1000 large, publicly traded companies through the 2007-2008 global recession, we identified a subgroup of “resilient” organizations that outperformed their peers by a significant margin over the cycle. The performance of these companies dipped less overall during the recession and improved faster during the ensuing economic recovery.

By 2017, resilient companies had delivered a cumulative total return to shareholders (TRS) that was more than 150 percent higher than their non-resilient counterparts. Among the logistics and transportation players in the study, the gap was even starker, at 267 percent. more>

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Updates from Siemens

Digitalization takes off in aerospace
By Indrakanti Chakravarthy – When you think about it, the basic mechanics behind aviation has remained the same throughout the decades.

Whether you’re talking about the B-52 Bomber from the mid-1950s. …The Concord SST that whisked folks across the Atlantic. …Or even the much-loved NASA Space Shuttle program. So many wonderful examples of how humans have taken flight over the years.

And here’s the thing – generations of engineers for the past 50 years or so have designed and built aircraft using pretty much the same methods and disciplines.

But all that’s about to change…

Today, with digitalization and the use of the digital twin for aircraft design, development and manufacturing – we are seeing a major shift on how modern aircraft are being designed and built. For the first time ever, the future of flight is boundless. There is no horizon on what we can or cannot do.

Take a look at our latest video below and you’ll see how Siemens is at the forefront of this new digital age. You’ll see how seamless integration of the latest tools and software up and down the value chain are freeing engineers to innovate with less risk. Whether you’re talking automation, simulation, integration of design and analysis tools, additive manufacturing or even artificial intelligence – Siemens has built a global reputation as the Aerospace and Defense partner you can trust. more>

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Updates from ITU

Transforming the driver experience: The connected technology under the hood of intelligent cars
By Amit Sachdeva – There was a time when any talk of a new car among enthusiasts or potential buyers revolved around engine power, fuel efficiency and the sleek design and finish.

Today, that same conversation has expanded to include sustainability and a connected experience.

Consumers expect every aspect of their life to be connected to the internet, so why should one’s car be any different? Automakers are aware of this and are responding by partnering with technology and B2B companies to find innovative ways to satisfy the demands of customers, and avoid being disrupted.

As a result, newer models with embedded Internet of Things (IoT) connectivity and intelligent applications built-in are redefining the manufacturing landscape and the driving experience for consumers.

The surge in the global connected cars market not only impacts the auto industry, it also offers several opportunities for businesses – retailers, insurers, entertainment businesses and of course, the car makers themselves – to leverage the huge volumes of data generated and captured by connected cars to achieve new levels of customer loyalty and open up new revenue streams. more>

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The IMF: The World’s Controversial Financial Firefighter

The International Monetary Fund, both criticized and lauded for its efforts to promote financial stability, continues to find itself at the forefront of global economic crisis management.
By Jonathan Masters and Andrew Chatzky – Since its inception in July 1944, the International Monetary Fund (IMF) has undergone considerable change as chief steward of the world’s monetary system. Officially charged with managing the global regime of exchange rates and international payments that allows nations to do business with one another, the fund recast itself in a broader, more active role following the 1973 collapse of fixed exchange rates, intervening in developing countries from Asia to Latin America. In 2010, it gained renewed relevance as the European sovereign debt crisis unfolded.

The fund has received both criticism and credit for its efforts to promote financial stability.

Forty-four allied nations convened at the Bretton Woods Conference in 1944 to establish a postwar financial order that would facilitate economic cooperation and prevent a rehash of the currency warfare that helped usher in the Great Depression. The new regime was intended to foster sustainable economic growth, promote higher standards of living, and reduce poverty. The historic accord founded the twin institutions of the World Bank and the IMF and required signatory countries to peg their currencies to the U.S. dollar. However, the system of fixed exchange rates broke down in the late 1960s and early 1970s due to an overvaluation of the U.S. dollar and President Richard Nixon’s decision to suspend the greenback’s convertibility into gold.

The IMF is akin to a credit union that permits its membership access to a common pool of resources—funds that represent the financial commitment or quota contributed by each nation, relative to its size. In theory, members with balance-of-payments trouble seek recourse with the IMF to buy time to rectify their economic policies and restore economic growth. The fund pursues its mission in three fundamental ways:

Surveillance. A formal system of review monitors the financial and economic policies of member countries and offers macroeconomic and financial policy advice.

Technical assistance. Practical support and training directed mainly at low- and middle-income countries help manage their economies.

Lending. The fund gives loans to member countries that are struggling to meet their international obligations. Loans, or bailouts, are provided in return for implementing specific IMF conditions designed to put government finances on a sustainable footing and restore growth. more>

Updates from McKinsey

Digital disruption at the grocery store
Five trends are shaping the transformation of the US grocery industry. Understanding them is key for grocers to achieve profitable growth in this new competitive environment.
By Steven Begley, Eric Marohn, Sabah Mikha, and Aaron Rettaliata – In the past two decades, e-commerce has altered customer shopping behaviors and transformed the US retail landscape from brick and mortar to omnichannel. Grocers have remained largely immune to digital disruption—until recently.

Powerful trends, including new competitive pressures, technological advances, and evolving consumer attitudes and behaviors, will disrupt the grocery business from coast to coast in the next few years. Some grocers are learning from other retail sectors and countries, recognizing threats early, seizing opportunities, and catching a wave of profitable growth. Others are struggling, and some may disappear.

Until relatively recently, the US grocery sector has remained sheltered from the forces of e-commerce for a couple of reasons: Most American shoppers still prefer to choose their own food (especially meat, produce, and other perishable goods), and few grocers have had the financial capacity to invest in the highly efficient, large-scale cold chains required to make home deliveries at a profit. That is changing.

While online sales accounted for anywhere from 3 to 4 percent of the US grocery market in 2019, the share could be greater than 10 percent by 2025 as major retailers—including well-funded entrants from outside the sector—invest in automation and innovative operating models to solve challenges in fulfillment and last-mile delivery. As quality rises and online grocers make more compelling offers, millions of shoppers will get comfortable offloading a task that only about 15 percent say they enjoy. We have seen that online grocery is supply driven, and as online grocers provide more supply, customers will adopt the new method of grocery shopping. more>

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Updates from Ciena

The closed and proprietary mobile networks of the past aren’t welcome any longer. Find out how Ciena is helping customers benefit from a more open, automated, and adaptable 5G wireline network.
By Joe Marsella – After years of hype, I think it’s fair to say that 5G is here. Initial deployments are underway around the world. There’s genuine excitement for a new generation of applications that exploit the massive end-to-end performance gains that 5G will provide across the mobile network. From AR/VR to IoT to gaming to streaming, our industry will push 5G technology to its limits to give consumers and businesses rich and rewarding digital experiences.

But here’s the problem. I’ve traveled the world and spoken to network operators of every size, mobile and wholesale operators alike. They all say the same thing. If the full promise of 5G is to be commercially realized, this time it must be different. We’ll need to challenge the traditional, closed way of building end-to-end mobile networks.

The world is changing. Digital disruption, virtualization, and openness are all driving a change in how networks are built. Look, we don’t shop the way we used to 30 years ago. We order transportation services with the push of a button, and many kids don’t know what it feels like to wait until 8:00 pm for their favorite show to be on (or even worse, wait through commercials!) – because of digital disruption.

It’s time for that change to come to wireless networks. For the past 30 years, successive generations of wireless networks were built a certain way: closed. Mobile Network Operators (MNOs) and wholesale operators alike had to rely on very few vendors and their proprietary architectures, interfaces, and protocols. What if your locked-in vendor wasn’t innovating at the pace you needed to successfully compete? Well – you were stuck until the next generation network was upon us and hoped this time for open, standards-based solutions. more>

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Updates from Chicago Booth

Many retailers are making a basic mispricing mistake
By Robin I. Mordfin – Retailers have long set prices ending in 99 cents, knowing that buyers view $4.99, for example, as significantly less expensive than $5. But many companies underestimate consumers’ left-digit bias and should be using these prices more than they do now, according to research by Chicago Booth’s Avner Strulov-Shlain.

Strulov-Shlain analyzed price data from 1,710 popular products in 248 stores of a single US retailer, as well as data on 12 products carried by more than 60 chains and in 11,000 of their stores. He finds that one-quarter to one-third of all prices ended in 99 cents.

But companies tend to miscalculate how customers react to a one-cent price change, Strulov-Shlain asserts. Buyers treat a price increase from $4.99 to $5 as if it were a 15–25 cent increase, while companies behave as if customers respond as though it were a 1.5–3 cent increase.

To learn how much companies should charge, Strulov-Shlain built a model that combines previously established left-digit bias models with a profit-maximizing formula that takes left-digit bias into account. Using the model and retailers’ pricing data, he estimates what price sensitivity and left-digit bias the companies had in mind when setting prices. Many items would have been better priced with a 99-cent ending, because demand dropped when the dollar digit changed, he finds. That was also the case at higher costs, where selling more units for the lower 99-cent price was more profitable than selling fewer units at a higher price. more>

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Updates from McKinsey

Skill shift: Automation and the future of the workforce
Demand for technological, social and emotional, and higher cognitive skills will rise by 2030. How will workers and organizations adapt?
By Jacques Bughin, Eric Hazan, Susan Lund, Peter Dahlström, Anna Wiesinger, and Amresh Subramaniam – Skill shifts have accompanied the introduction of new technologies in the workplace since at least the Industrial Revolution, but adoption of automation and artificial intelligence (AI) will mark an acceleration over the shifts of even the recent past. The need for some skills, such as technological as well as social and emotional skills, will rise, even as the demand for others, including physical and manual skills, will fall. These changes will require workers everywhere to deepen their existing skill sets or acquire new ones. Companies, too, will need to rethink how work is organized within their organizations.

his briefing, part of our ongoing research on the impact of technology on the economy, business, and society, quantifies time spent on 25 core workplace skills today and in the future for five European countries—France, Germany, Italy, Spain, and the United Kingdom—and the United States and examines the implications of those shifts.

  1. How will demand for workforce skills change with automation?
  2. Shifting skill requirements in five sectors
  3. How will organizations adapt?
  4. Building the workforce of the future

Over the next ten to 15 years, the adoption of automation and AI technologies will transform the workplace as people increasingly interact with ever-smarter machines. These technologies, and that human-machine interaction, will bring numerous benefits in the form of higher productivity, GDP growth, improved corporate performance, and new prosperity, but they will also change the skills required of human workers.

To measure skill shifts from automation and AI, we modeled skill shifts going forward to 2030—and found that they accelerated. While the demand for technological skills has been growing since 2002, it will gather pace in the 2016 to 2030 period. The increase in the need for social and emotional skills will similarly accelerate. By contrast, the need for both basic cognitive skills and physical and manual skills will decline. more>

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Updates from ITU

New Opportunities, New Challenges for AI
By Houlin Zhao – At ITU, we are working hard with partners across the world to ensure the trusted, safe and inclusive development of AI technologies — and equitable access to their benefits. That is why we organize the annual AI for Good Global Summit, the leading United Nations summit on how to harness the power of AI to improve lives worldwide.

The Summit connects AI innovators with those seeking solutions to the world’s greatest challenges so as to identify practical applications of AI that can accelerate progress towards the UN Sustainable Development Goals (SDGs).

This year’s Summit was organized into five “Breakthrough Tracks”: AI and Health; AI and Education; AI and Human Dignity and Equality; Scaling AI and AI for Space. There were also sessions on the future of Smart Mobility, AI and agriculture, AI’s role in arts and culture, the unintended consequences of AI — and much more.

In addition, the Summit showcased the latest in AI technologies — from drones, exoskeletons, and robotics to avatars, autonomous cars, and AI-powered health solutions. more>

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