Tag Archives: Social economy

Updates from ITU

How can we ensure safety and public trust​ in AI for automated and assisted driving?
ITU News – Cars are becoming increasingly automated. Drivers already benefit from a wide range of advanced driver-assistance systems (ADAS), such as lane keeping, adaptive cruise control, collision warning, and blind spot warning, which are gradually becoming standard features on most vehicles.

Today’s automated systems are taking over an increasing amount of responsibility for the driving task. It is expected that soon, sensors will take the place of human impulse, and artificial intelligence (AI) will substitute for human intelligence.

This process is defined through various level steps, from low levels of automation where the driver retains overall control of the vehicle in level 1, to a fully-autonomous system in level 5.

10 years ago, manufacturers predicted many cars on today’s roads would be fully automated, but it still remains a distant future for the automotive industry. At the recent Future Networked Car Symposium 2020 at ITU Headquarters in Geneva, Switzerland, top experts joined a panel entitled ‘AI for autonomous and assisted driving – how to ensure safety and public trust’ to discuss the progress and the prospects for vehicles that drive themselves – and how we might achieve this future. more>

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The rule of law is under duress everywhere

By Ted Piccone – Anyone paying attention to major events of the day in the United States and around the world would know that the basic social fabric is fraying from a toxic mix of ills — inequality, dislocation, polarization, environmental distress, scarce resources, and more. Signs abound that after decades of uneven but steady human progress, we are digging a deeper and muddier hole for ourselves. The principal reason for this pessimism is not the material facts of decline — we have lived through worse times before — but the crumbling consensus around how to overcome such crises. The outbreak of the COVID-19 pandemic is fast becoming the latest stress test for whether the social contract can hold.

The roadmap for climbing out of the trough should begin with the understanding that the rule of law is the sine qua non of more successful societies. Societies with strong rule of law have built-in mechanisms for mediating conflicts through open and inclusive debate, in which all voices are treated equally, and outcomes are perceived as fair and reasonable.

Unfortunately, as documented by the latest findings of the World Justice Project’s Rule of Law Index, the rule of law is declining around the world for the third year in a row. The trends are widespread and persistent: The majority of countries that declined in the 2020 rule of law scores also deteriorated in the previous year, and weaker or stagnating performance occurred in the majority of countries in every region and across every income group.

Of particular concern is that countries experienced the biggest declines over the past year in the areas of fundamental rights (54 countries declined, 29 improved), constraints on government powers (52 declined, 28 improved), and absence of corruption (51 declined, 26 improved). These three factors of the World Justice Project (WJP) Index saw the worst performance globally over a five-year time period as well.

In short, the key rule of law elements that undergird accountable governance, and relatedly, citizens’ trust in their leaders, are in retreat, in both established democracies like the United States, and in entrenched autocracies, from Russia to China to Venezuela. In this context, the rise of populist anger and social protests should come as little surprise. more>

Updates from McKinsey

COVID-19: Implications for business
By Matt Craven, Linda Liu, Mihir Mysore, and Matt Wilson – The coronavirus outbreak is first and foremost a human tragedy, affecting hundreds of thousands of people. It is also having a growing impact on the global economy.

At the time of writing, there have been more than 160,000 confirmed cases of COVID-19 and more than 6,000 deaths from the disease. Older people, especially, are at risk. More than 140 countries and territories have reported cases; more than 80 have confirmed local transmission. Even as the number of new cases in China is falling (to less than 20, on some days), it is increasing exponentially in Italy (doubling approximately every four days). China’s share of new cases has dropped from more than 90 percent a month ago to less than 1 percent today.

Our perspective is based on our analysis of past emergencies and our industry expertise. It is only one view, however. Others could review the same facts and emerge with a different view.

Many countries now face the need to bring widespread community transmission of coronavirus under control. While every country’s response is unique, there are three archetypes emerging—two successful and one not—that offer valuable lessons. We present these archetypes while acknowledging that there is much still to be learned about local transmission dynamics and that other outcomes are possible:

  • Extraordinary measures to limit spread. After the devastating impact of COVID-19 became evident in the Hubei province, China imposed unprecedented measures—building hospitals in ten days, instituting a “lockdown” for almost 60 million people and significant restrictions for hundreds of millions of others, and using broad-based surveillance to ensure compliance—in an attempt to combat the spread. These measures have been successful in rapidly reducing transmission of the virus, even as the economy has been restarting.
  • Gradual control through effective use of public-health best practices. South Korea experienced rapid case-count growth in the first two weeks of its outbreak, from about 100 total cases on February 19 to more than 800 new cases on February 29. Since then, the number of new cases has dropped steadily, though not as steeply as in China. This was achieved through rigorous implementation of classic public-health tools, often integrating technology.
  • Unsuccessful initial control, leading to overwhelmed health systems. In some outbreaks where case growth has not been contained, hospital capacity has been overwhelmed. The disproportionate impact on healthcare workers and lack of flexibility in the system create a vicious cycle that makes it harder to bring the epidemic under control.

Based on new information that emerged last week, we have significantly updated and simplified our earlier scenarios. more>

Hard truths about the eurozone crisis

There has been little honest reflection within the European Commission about the eurozone crisis. Until now.
By Adam Tooze – It is not often one finds European officials quoting significant moments from pop culture, let alone an outgoing director-general for economic and financial affairs—the European Commission’s most senior economics official—quoting Ridley Scott’s Blade Runner. But that is how Marco Buti introduces a recent piece summing up his period in office between 2008 and 2019.

Buti’s contribution is significant as personal reflection but also because it raises the more general question of how the EU and its institutions will commemorate the tenth anniversary of the eurozone crisis.

When it came to revisiting the global financial crisis, Brussels did not hold back. In August 2017, to mark the tenth anniversary of its onset, the commission issued a statement blaming the spillover to Europe on the United States and giving itself credit for prompt action to stave off the worst. The press release was however issued on August 9th—anniversary of the failure of the French bank Paribas’ US property funds.

Subprime and Lehman could be safely blamed on the US. What, however, will the European institutions make of the ten-year anniversary of the eurozone crisis and its various phases between 2010 and 2015?

Last year, addressing the European Parliament on the 20th anniversary of the introduction of the euro, the then commission president, Jean-Claude Juncker, admitted there had been a lack of solidarity with Greece. He acknowledged there had been ‘reckless austerity’ (l’austérité irréfléchie). But he had the gall to suggest that the commission had succumbed to the influence of the International Monetary Fund, as though the agenda of austerity and ‘structural reform’ had been imposed from outside.

The traumatic history of the last ten years deserves better. more>

Updates from Chicago Booth

Let your customers tell you when to pivot
Small-business owners can get guidance by surveying their own customers
By Pradeep K. Chintagunta – William Wrigley Jr. spent many of his childhood years selling his father’s Wrigley’s Scouring Soap on the streets of Philadelphia. So when he set out for Chicago in the 1890s, Wrigley did what he knew and brought the soap trade with him.

Had Wrigley stuck to his original plan, it’s unlikely his name would stand today as one of the most iconic in Chicago business history. Instead, he took some calculated risks and pivoted his business twice.

Wrigley had been tossing in packages of baking powder as an incentive for purchasing his soap. When the baking powder proved more popular with customers than his soap, he made it his main product. Soon he realized that his new bonus product, chewing gum, was an even bigger draw, and he changed his focus again. The rest is history.

Despite evidence that pivots can improve productivity and competitiveness, businesses aren’t always eager to make changes. It’s difficult to consider experimenting with a business model that has worked in the past, and many small-business entrepreneurs may not feel as though they have the time and resources to do so. more>

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Technology and the future of growth: Challenges of change

By Zia Qureshi – Economic growth has been lackluster for more than a decade now. This has occurred at a time when economies have faced much unfolding change. What are the forces of change, how are they affecting the growth dynamics, and what are the implications for policy? A recently published book, “Growth in a Time of Change,” addresses these questions.

Three basic ingredients drive economic growth—productivity, capital, and labor. All three are facing new challenges in a changing context. Foremost among the drivers of change has been technology, spearheaded by digital transformation.

Productivity is the main long-term propeller of economic growth. Technology-enabled innovation is the major spur to productivity growth. Yet, paradoxically, productivity growth has slowed as digital technologies have boomed. Among advanced economies over the past 15 years or so, it has averaged less than half of the pace of the previous 15 years. Firms at the technological frontier have reaped major productivity gains, but the impact on productivity more widely across firms has been weak. The new technologies have tended to produce winners-take-most outcomes. Dominant firms have acquired more market power, market structures have become less competitive, and business dynamism has declined.

Investment also has been weak in most major economies. The persistent weakness of investment despite historically low interest rates has prompted concerns about the risk of “secular stagnation.” Weak productivity growth and investment have reinforced each other and are linked by similar shifts in market structures and dynamics.

Technology is having profound effects on labor markets. Automation and digital advances are shifting labor demand away from routine low- to middle-level skills to higher-level and more sophisticated analytical, technical, and managerial skills. On the supply side, however, equipping workers with skills that complement the new technologies has lagged, hindering the broader diffusion of innovation within economies. Education and training have been losing the race with technology. more>

Updates from McKinsey

Bubbles pop, downturns stop
Economic downturns are impossible to predict and sure as sunrise. Build resilience now, because when the sun comes up, you’d better be moving.
By Martin Hirt, Kevin Laczkowski, and Mihir Mysore – Waste no time trying to predict the next economic cycle. The running joke is that “experts” correctly anticipated seven out of the last three macroeconomic events. Unfortunately, it is unlikely that the hit rate will be any better next time around.

Geopolitics, economic cycles, and many other forces that can have substantial effects on the fortunes of your business are inherently uncertain. Higher volatility in our business environment has become the “new normal” for many. And while scenario analysis is a worthwhile exercise to rationally assess some of the uncertainties you are facing, there is no guarantee for getting it right.

So if you are concerned about the economic outlook, and if you get challenging questions from your board about the resilience of your business performance, how do you best respond?

It turns out that in times of crisis and in times of economic slowdown, not everybody fares the same. When we traced the paths of more than 1,000 publicly traded companies, we found that during the last downturn, about 10 percent of those companies fared materially better than the rest. We called those companies “resilients”—and we were intrigued. What made them different? Was it sector related? Did they simply get lucky?

As we investigated more deeply, we found some noteworthy characteristics in how resilients weathered the storms: how they prepared for them, how they acted during tougher periods, and how they came out of them.

We will share some of the more specific findings with you below, but let’s start with the core insight right here: Resilients moved early, ahead of the downturn. They entered ahead, they dipped less, and they came out of it with guns blazing.

In short, your business context is and will remain uncertain. But if you get moving now, you can ride the waves of uncertainty instead of being overpowered by them. more>

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Operation Tech Transfer

By Brian A. Weiss – The National Institute of Standards and Technology (NIST) is a world-class research organization. We have phenomenal scientists and engineers with impeccable research credentials. Our researchers are experts in a range of fields including artificial intelligence, cybersecurity, fire, forensics, infrastructure, manufacturing and public safety. They are constantly pushing the boundaries of theoretical and applied research. I am often in awe when I learn of the new groundbreaking results my colleagues achieve.

However, while we do great research, we don’t stop there. Our work doesn’t end until our target stakeholders, the American taxpayers, put our technologies and capabilities to work for themselves, so they can grow their businesses, be more profitable, and thrive on the world stage.

What I’m talking about is technology transfer. Simply put, technology transfer is the activity of packaging research into industry-consumable pieces, broadcasting the research to the appropriate communities, and promoting the adoption of these new technologies. I’m a big fan of technology transfer, and I’m thrilled to share my experiences with you!

It all starts with my research. more>

Updates from ITU

Let’s work together to improve road safety. Technology will be key.
By Yushi Torigoe – There is great concern that road traffic accidents kill more than 1.35 million people every year and are the leading cause of death for children and young adults aged 5-29 years.

Road traffic accidents cost most countries 3 per cent of their gross domestic product.

The numbers are indeed, alarming!

The 3rd Global Ministerial Conference on Road Safety was an opportunity for a dialogue on how we can provide access to safe, affordable, accessible and sustainable transport systems for all.

It is clear that while some countries have made progress on road safety in the past decade through better road safety legislation on speeding, drink driving, seatbelt use, wearing helmets, for example, much more can be done, and we need a set of innovative solutions to save lives on the world’s roads.

Participants at the Conference agreed that intensifying international cooperation and multilateralism through engagement with all relevant actors, including the private sector, is necessary to achieve global road safety targets – including the Sustainable Development Goal target 3.6 – to reduce road traffic fatalities and injuries by half.

We need to put an end to a silo mentality, when it comes to dealing with a global problem. more>

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The future will be shaped by what global productivity growth does next

By Warwick J. McKibbin and Adam Triggs – Productivity growth is a shadow of its former self. It’s one-tenth of what it was 40 years ago in advanced economies, and even emerging economies are struggling to replicate the growth of the past. As the fundamental driver of long-run living standards, weak productivity growth is a serious problem. Lower living standards, bigger budget deficits, fewer jobs, lower wages, and higher inequality await if things don’t improve.

What is most striking about this period of low productivity is that it coincides with enormous advances in technology. An extra 3.5 billion people have gained access to the internet. The processing power of computers has increased exponentially while their cost and size have plummeted. Smartphones have multiplied, and online businesses have flourished. Email, GPS and advanced software have become widespread. The sharing economy is unlocking the full potential of idle cars and empty rooms and houses. Information and communication technologies (ICT) and artificial intelligence (AI) have reshaped many industries. The accumulated history of human knowledge is now at our fingertips.

Robert Solow famously remarked that “you can see the computer age everywhere but in the productivity statistics.” Economists have put forward a variety of explanations for the so-called “Solow paradox,” each of which implies a radically different path for productivity growth in the future. Our chapter in the just-published book “Growth in a Time of Change” models each of these possible scenarios to explore what the world might look like depending on who turns out to be correct.

Let’s start with the optimists. Some economists, like the 2018 Nobel Laureate William Nordhaus and Iraj Saniee and his co-authors at Nokia Bell Labs, point to historical data showing long lag times between technological advances and increases in productivity. For these economists, a big surge in productivity is just around the corner.

If the optimists are correct and global productivity growth takes off rapidly, many of the world’s problems go away. Investment, wages, and employment rise sharply. GDP increases and inequality declines. While all sectors experience an investment boom, the durable goods sector experiences the largest increase. The sharp increase in investment sees an increased demand for investment goods, particularly durable manufactured goods and the energy and mining resources required to produce them. Countries that export durable manufactured goods (such as Germany) and energy and mining resources (such as Australia) benefit significantly. Secular stagnation becomes a thing of the past.

But new challenges emerge. The global economy is a closed system, so the resources to finance this boom in investment and production must come from somewhere: either from increased government savings or from reductions in current consumption. If governments don’t act, or if financial market rigidities prevent access to global capital markets, consumption can fall. The shock also triggers transitions that require the redeployment of labor and capital from declining sectors to booming ones. Rigid labor markets and oligopolistic product markets hamper this adjustment. Thus, the full benefits of the boom can be squandered, and its benefits may be short-lived and distributed more unequally between capital and labor.

Now consider the pessimists. Some economists, notably Northwestern University’s Robert Gordon, argue that the technological advances in recent decades won’t deliver the sort of productivity increases that we saw from the inventions of the last century. Facebook and Netflix are great, but they are no match for electricity and indoor plumbing. more>