Category Archives: Technology

As Consumer Mood Sours, Are Investors Overlay Optimistic?

Why U.S. stock markets may reflect too much optimism about consumer spending, heading into what could be a subdued year-end shopping season.
By Lisa Shalett –  U.S. consumers have a lot on their minds recently, weighed down by the coronavirus Delta variant, a more-sluggish-than-expected jobs recovery, inflation worries and the spectacle of political wrangling in Washington, D.C. At the same time, financial markets seem to be “climbing a wall of worry,” confident that these growing anxieties about inflation, supply-chain disruptions and the economic drag from the pandemic will soon pass.

We believe the consumer perspective warrants attention. Negative sentiment, especially heading into the year-end holiday season, could presage market weakness, catalyzed by lower-than-expected spending and disappointing corporate earnings.

Let’s first consider that consumer confidence and stock market moves have historically been well correlated; any notable divergences tend to be short-lived. But today, the gap between the two remains uncharacteristically wide. On the consumer side, the Conference Board’s confidence index fell in September for the third straight month, with the gauges of current and future conditions at 5- and 10-month lows, amid lingering concerns over higher prices and a slow job-market recovery. Note that job growth stalled again in September, missing estimates and signaling that the forces holding back hiring or returning to the workforce may persist.

At the same time, investors’ “buy the dip” mentality, anchored by a belief that inflation is transitory and corporate margins will be sustainable, has bolstered the stock market. U.S. equities did hit a rough patch in the third quarter, but the downturn was contained to within 5% of the pre-Labor Day highs, and advances so far in October suggest that the third-quarter speedbumps may now be behind us. more>

Why Europe needs a climate-forward innovation policy

By Lee Beck and Eve Tamme – Orca, the largest direct air capture and storage facility to date, recently commenced operations in Iceland and is expected to suck some 4000 tons of carbon dioxide (CO2) out of the atmosphere annually. With increasing climate ambition and the new climate neutrality target, the role of technological carbon removal is emerging as one of the critical points of debate in the European Union. On the one hand, it is evident from mid-century net-zero pathways that steep and transformational emission reductions must be prioritized over carbon removals. On the other hand, it is also becoming clear that carbon removal technologies will likely be needed to balance out residual emissions and reduce the stock of CO2 already in the atmosphere. This begs the question – how can we get this technology to Gigaton scale, so it is available as a decarbonization option? History has taught us that scaling technologies takes decades – time we do not have as the clock is ticking while the climate crisis rages. We need to get the policy framework right today, and there are two significant gaps to fill: commercialization and accounting.

The EU is already a climate leader and policy pioneer. However, the current EU sectoral policies will likely drive investment in advanced decarbonization tech only once technology-specific innovation policy has commercialized them. Considering that it has taken on average more than 20 years for technologies to reach crucial inflection points in deployment, we do not have time to test current, widely adopted decarbonization technologies as the main mitigation strategies before deploying technologies that are not commercially available.

With increasing climate ambition and our emissions reduction timelines shortened, carbon removal technologies will also need to be available sooner. Having multiple available technology options also increases our chances for success and provides countries and regions with the opportunity to design decarbonization technology portfolios tailored to their social, economic and resource circumstances. Hence, it’s time for Europe to embrace an innovation-forward approach to climate. more>

Updates from Chicago Booth

Does mandatory health labeling lead to healthier choices?
By Brian Wallheimer – Obesity is a global epidemic, and the large amounts of calories, fat, sugar, and salt in fast-food and packaged products get much of the blame. In response, some countries, including the United States, mandate posting nutritional information on food packaging on the theory that it helps people make healthier choices.

Recent years have seen a new wave of food packaging reforms. One of the heaviest-handed such interventions is a 2016 Chilean law limiting TV advertising for offending foods. The measure also requires manufacturers to affix prominent black stop signs on the front of food packages warning that the contents are “high in sugar,” “high in saturated fats,” “high in salt,” or “high in calories.” The same or similar labels have since been adopted by many countries including Peru, Mexico, and Israel.

As intended, the warning labels suppressed demand for such foods, according to a study of breakfast cereals in Chile by Bar-Ilan University’s Jorge Alé-Chilet and Chicago Booth’s Sarah Moshary. But the labels affected both consumers and food manufacturers, which immediately started tweaking their product formulations to avoid the labeling requirements, the research finds.

Chile’s breakfast cereal purchases total $194 million a year, Alé-Chilet and Moshary note. Just before the law went into effect, about 13 percent of the cereals fell below the cutoff of 350 calories per 100 grams, which meant that the other 87 percent were required to post a high-calorie warning on their packaging, according to the study. Just after, 28 percent of the market squeaked under the cutoff, leaving 72 percent with the package warnings. more>

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Updates from Ciena

3 unique network provider perspectives on IP/Optical convergence
What are network providers thinking about IP/Optical Convergence? Representatives from Microsoft, Telia Carrier and Cox Communications recently participated in a panel “Evolution to Coherent WDM Integration in Routers” moderated by Ciena’s Helen Xenos to discuss this very topic. Helen shares some of the interesting insights she learned during the session.
By Helen Xenos – According to a recent Heavy Reading global service provider survey, 87 percent of providers view IP/Optical convergence as important for their next-generation networks.* This is consistent with what we are hearing from customers.  There is a lot of excitement in the industry to build networks differently and offer a richer quality of experience to end users by leveraging a combination of new technology innovations – coherent pluggable optics, modern IP protocols, programmable open interfaces, and centralized multi-layer, multi-vendor software control.

What are the advantages and opportunities tied to IP/Optical convergence?  What are the networking considerations and challenges yet to overcome? I was fortunate to moderate a panel at the recent OFC Conference on this topic, where important –and entertaining—insights were shared through three unique perspectives: cloud provider (Microsoft), service provider (Telia Carrier), and multi-service operator (Cox Communications).  Here are some of the key insights I took away from the sessions. more>

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Intellectual monopoly capitalism—challenge of our times

Unregulated capitalism has always tended to monopoly. But Big Tech represents a challenge antitrust tools can’t tame.
By Cédric Durand and Cecilia Rikap – Scientia potentia est—knowledge is power. The old adage has acquired a sinister connotation with the alarming dominance of Big Tech in the economy and society as a whole. Corporate Europe Observatory recently revealed that the sector is now by far the leading business lobbyist of European Union institutions.

But this is only the tip of the Iceberg of what the Italian economist Ugo Pagano calls ‘intellectual monopoly capitalism’. Knowledge, which should be a (non-rival, non-exclusive) public good, has been privately appropriated by top companies as capital: the share of intangible assets among S&P 500 corporations increased from 17 per cent in 1975 to 90 per cent in 2020.

For Pagano, the dramatic expansion of intellectual-property rights ‘involves the creation of a legal monopoly that can be potentially extended to the entire global economy’. His claim against a strict IP regime echoes the traditional position of economists treating knowledge as a gratuity.

Friedrich Hayek, for example, contended:

The growth of knowledge is of such special importance because, while the material resources will always remain scarce and will have to be reserved for limited purposes, the uses of new knowledge (where we do not make them artificially scarce by patents of monopoly) are unrestricted. Knowledge, once achieved, becomes gratuitously available for the benefit of all.

Recent calls for a patent waiver on Covid-19 vaccines graphically illustrate this broader principle: general progress requires that knowledge accrued through the experiments of some members of society be freely gifted. more>

Updates from Chicago Booth

Without cookies, online advertisers have to piece together crumbs
By Brian Wallheimer – Google announced this year that it would eliminate automatic third-party cookies on its Chrome browser. The company joins Apple and Mozilla, which earlier made users opt in to the technology on their browsers. While Google’s move may be positive for users who want privacy, it’s bad for companies that want to target ads to specific audiences.

Boston University’s Tesary Lin and Chicago Booth’s Sanjog Misra evaluated the alternatives for advertisers. Building an analytical framework and conducting an empirical experiment, they find that advertisers have few good options for constructing accurate user profiles.

“The system was already broken and imperfect,” Misra says. “Any time there is fragmentation, anything you want to measure is going to be off to some degree. Now the rules have changed, and it will exacerbate that fragmentation to a much greater degree.”

Cookies are tags from websites that live on a person’s computer or internet-capable device. When you search for shoes online, the search page and the sites you visit leave cookies that can be collected to tell a company such as Zappos that you’d be a good target for an ad.

Because people use more than one device, a third-party company can collect cookie data to see a person’s browsing history. These companies use a data-linking strategy to cross-reference cookies to see where names, email addresses, and other identifying features overlap and then stitch together a more complete user profile. Advertisers can track if an ad is effective, even if that ad is viewed on a smartphone by someone who bought the shoes on a laptop a day later. more>

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Dangerous Environmental Changes Are Here. Do We Act or Remain Afraid?

IPCC 6th Assessment confirms the environmental peril in all too specific details. But what we do with that information is up to us.
By John Blyler – The Intergovernmental Panel on Climate Change (IPCC) has released the first portion of its Sixth Assessment Report on how climate change is altering the planet’s natural systems and environmental states. These changes are leading to worsening extreme weather events around the world.

The IPCC’s periodic reports are drafted by a consortium of the world’s top climate scientists and experts. The purpose of their work is to establish a technical foundation for policymakers to address climate change on multiple fronts, such as mitigation, adaptation, and assessing future risks.

The Intergovernmental Panel on Climate Change (IPCC) has released the first portion of its Sixth Assessment Report on how climate change is altering the planet’s natural systems and environmental states. These changes are leading to worsening extreme weather events around the world.

The IPCC’s periodic reports are drafted by a consortium of the world’s top climate scientists and experts. The purpose of their work is to establish a technical foundation for policymakers to address climate change on multiple fronts, such as mitigation, adaptation, and assessing future risks.

This gallery highlights only some of the takeaways and how technology can help. These summaries present a grim finding but not one without hope. more>

Updates from McKinsey

When agile marketing breaks the agency model
The journey to agile marketing can be hard. But for many marketers and agencies, it offers the opportunity to forge a better partnership.
By Clay Cowan, Jennifer Ellinas, and Rachael Schaffner –
Key takeaways

  • Agile marketing teams can deliver real business value for an organization.
  • But agile transformations can be challenging and place outsized strain on a marketing group’s agency relationships.
  • The most successful agile marketing teams are doubling down on sound agency management practices, including approaches to scopes of work, fee arrangements, improved operating model, talent and culture, and metrics./li>

Marketing leaders are increasingly turning to agile methodologies to help improve the speed and performance of their teams along with the many partners they use for creative, production, and measurement expertise. In our experience, though, the shift to agile is often far from seamless for these constellations of teams. Our recent survey of marketing executives found that only 3 percent characterized their transition to agile marketing with their partners as “smooth,” while more than 80 percent reported the journey to be filled with obstacles.

Managing multiple external partners can already be complicated in a traditional marketing department, and it’s an understandably significant shift to borrow operating methodologies from the IT world. Compounding that challenge is the fact that marketing requires engaging with so many more types of third parties, which include measurement, platform, and publishing partners. Google, Twitter, Facebook, and LinkedIn were mentioned by 40 percent of the executives as being among the additional partners they coordinate with today.

It’s no wonder, then, that when switching to agile methods, marketers often struggle with how best to involve their external partners and other third parties in their transformation. The result can leave some professionals feeling that agile marketing broke their agency model. more>

Updates from McKinsey

Moving beyond agile to become a software innovator
Companies need to borrow a page from the tech industry’s playbook to understand how to use agile to build better products and experiences.
By Santiago Comella-Dorda, Martin Harrysson, and Shivam Srivastava – t the end of the movie The Candidate, Robert Redford is sitting in a hotel room surrounded by cheering staffers after his character has won the election for the US Senate. Looking a little perplexed and forlorn, he turns to his advisor and asks, “What do we do now?”

Many executives who have led their businesses through successful agile programs can probably relate to Redford’s character. They have overseen sizable improvements in software product development thanks to agile; our Developer Velocity research shows that adoption of agile practices at the team level can be one of the most critical dimensions for companies that are in the early part of their journey.

But many of these businesses have run into a ceiling where incremental gains are minimal. The same Developer Velocity research, for example, showed that while third-quartile companies in terms of overall software-development performance scored 41 percent higher on agile practices than fourth-quartile companies, the differences between companies in the first and second quartiles dropped to less than 20 percent. In other words, once a business hits a certain level of excellence, improvements to how teams work in agile alone drive diminishing returns.

For companies that have realized many of the initial gains from adopting agile, there are valuable lessons to be learned from how tech companies develop products. The industry’s intense competition and pace of change have forced tech companies to develop a set of capabilities that take the fullest advantage of agile, of which the following are the most important:

  • grounding every decision on customer value through world-class product management and experience design and adopting an operating model built on products and platforms
  • creating a software-engineering culture that nurtures and celebrates technical craftmanship, empowers teams, and provides them with high levels of psychological safety in addition to supporting developers with automation and world-class tools
  • embedding data and analytics at every level of product development

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Why Are Embedded Industrial Control Devices Now Vulnerable To TCP/IP Attacks?

Critical flaws found in embedded TCP/IP stacks may widely affect industrial control devices.
By John Blyler – Cybersecurity experts have found numerous vulnerabilities affecting a commonly used TCP/IP protocol network stack used in millions of Operational Technology (OT) devices. In contrast to IT systems – which manage data – OT devices control the physical world, especially in the industrial and manufacturing spaces.

Further, the affected OT devices are manufactured by hundreds of vendors and deployed in manufacturing plants, power generation, water treatment, and infrastructure sectors. For the most part, the OT devices are part of the industrial IoT marketplaces, all of which are highly susceptible to attacks and flaws that result from issues within the TCP/IP network communications architecture.

Since its inception, the TCP/IP network protocol stacks have formed the backbone of the Internet. Smaller, tailored versions of the full-up Internet stack were created decades ago for embedded systems later used in connected IIoT devices. The embedded TCP/IP stacks – sometimes called NicheStack – combine applications, transport, network, and physical components.

NicheStack is a closed source IPv4 network layer and application implementation for operating systems. It is one of three available from InterNiche Technologies, Inc., designed for use in embedded systems.

Researchers have identified more than a dozen vulnerabilities in the NicheStack TCP/IP stack used by many OT vendors. The vulnerabilities are collectively tracked as INFRA:HALT, which targets NicheStack, potentially enabling an attacker to achieve remote code execution, denial of service (DNS), information leak, TCP spoofing, and even DNS cache corruption. more>