Ged Carroll

Category: economics | 經濟學 | 경제학 | 経済

Economics or the dismal science was something I felt that I needed to include as it provides the context for business and consumption.

Prior to the 20th century, economics was the pursuit of gentleman scholars. The foundation of it is considered to be Adam Smith when he published is work An Inquiry into the Nature and Causes of the Wealth of Nations. Smith outlined one of the core tenets of classical economics: each individual is driven by self-interest and can exert only a negligible influence on prices. And it was the start of assumptions that economists model around that don’t mirror real life all the time.

What really is a rational decision maker? Do consumers always make rational decisions? Do they make decisions that maximise their economic benefit?

The problem is that they might do actions that are rational to them:

  • Reducing choice when they are overwhelmed
  • Looking for a little luxury to comfort them over time. Which was the sales of Cadbury chocolate and Revlon lipstick were known to rise in a recession
  • Luxury goods in general make little sense from a ration decision point of view until you realise the value of what they signal
  • Having a smartphone yet buying watches. Japanese consumers were known to still buy watches to show that they care about the time to employers when they could easily check their smartphone screen

All of which makes the subject area of high interest to me as a marketer. It also explains the amount of focus now being done by economists on the behavioural aspect of things.

  • Creatives outputs + more things

    Different times | Campaign magazine – It’s tempting to look at the best of today’s creatives and compare them with the greats: David Abbott, John Webster, Helmut Krone, George Lois, Ed McCabe, Mary Wells, Bill Bernbach, Paul Arden, Sir John Hegarty. And to think there’s no-one around who could hold a candle to any of them. But is it a fair comparison? They were working with account men like Frank Lowe, Tim Bell and Nigel Bogle, they were working with media guys like Mike Yershon, directors like Ridley Scott, Alan Parker, Hugh Hudson, and planning hadn’t even been invented then. Of course it was easier to do great work, everyone wanted great work. There weren’t hundreds of TV channels and big data and micro-targeting, and ad tech, and dozens of different platforms, and five campaigns shown at creative pitches. What was wanted was quality not quantity, one fantastic ad not a dozen space-fillers. It was, in fact, much easier in those days to do great work. Sure the competition was tougher, but everyone was agreed on what they wanted, ads that made the public sit up and take notice. I know the people working today may not have stood up against the greats. But I’m not sure that if any of the greats had been working today, they would have been able to produce great work either. – Dave Trott on the futility of comparisons that relate to now, versus then and changing ad environment for creatives (and everyone else for that matter). The contrast in creatives and their output is very striking. One cannot ignore the nature of the medium in the creative process. The move to social seems to have kneecapped creatives and creativity. By comparison earlier media revolutions like television enhanced creativity. Creatives were constantly learning new ways of creativity within the medium. The copywriters seems to have reduced their standing in creatives even more than visual designers. How can platforms provide creatives with a similar range that legacy media did? What can creatives do to recover their own mojo as a profession? More marketing related content here.

    Pop Mart/Asian IPOs: go figure | Financial Times – Pop Mart, which sells $8 boxes of figurines, has taken advantage of its newfound popularity to join the listing boom in Hong Kong. Shares nearly doubled in value on the first day of trading on Friday. As with other recent Asian listings, a redirection of money previously set aside for the postponed Ant Group listing appears to have fuelled the frenzy. Demand has also been boosted by the approaching holiday shopping season.

    Coca-Cola Launches Global Creative and Media Agency Reviews –Coca-Cola is launching a full global review of its media buying and planning services. The creative portion of the review encompasses creative, experiential marketing, production management and shopper marketing. “We are on a journey to fundamentally transform and dramatically improve the effectiveness and efficiency of our marketing investments,” a Coca-Cola spokesperson told Adweek. “By improving our processes, eliminating duplication and optimizing spend, we will generate significant savings to fuel reinvestment in our brands. “Media and creative agency services require significant investment from our brands. They are also a crucial component of our ongoing digital transformation journey to drive our business. With that in mind, we have decided to undergo a complete redesign of our media and creative agency models in an effort to align the strategic, operational, and commercial needs of our new, networked organization,” the spokesperson added. “This will necessitate a full review of our media and creative planning and buying practices, as well as our media and creative agency appointments and commercial relationships around the world. We expect this process will be completed by the end of 2021.”

    Pompeo shames MIT, calls Chinese authorities ‘jackbooted thugs’ in remarks about academic freedom | South China Morning Post – “A Fulbright student coming in from some country ought not be returned to their home country and to suffer from the jackbooted thugs that now want to take the information that they got, send them back into the United States only to have them just take a little bit more information that they’re going to hand off to the Chinese [Ministry of State Security] … or the People’s Liberation Army”, he said. “MIT wasn’t interested in having me to their campus to give this exact set of remarks,” Pompeo said in his opening address. The school’s president, L. Rafael Reif, he added, “implied that my arguments might insult their ethnic Chinese students and professors”. – interesting, if true, that US universities are no platforming politicians to avoid offending Beijing

    The Hottest Campaign Ads on Twitter Didn’t Really Work: Study – The PAC, Priorities USA, spent a good chunk of the cycle testing the effectiveness of ads, some 500 in all. And, along the way, they decided to conduct an experiment that could have potentially saved them tons of money. They took five ads produced by a fellow occupant in the Super PAC domain—the Lincoln Project—and attempted to measure their persuasiveness among persuadable swing state voters; i.e. the ability of an ad to move Trump voters towards Joe Biden. A control group saw no ad at all. Five different treatment groups, each made up of 683 respondents, saw one of the five ads. Afterwards they were asked the same post-treatment questions measuring the likelihood that they would vote and who they would vote for. The idea wasn’t to be petty or adversarial towards the Lincoln Project, which drew both fans and detractors for the scorched-earth spots it ran imploring fellow Republicans to abandon Trump. It was, instead, to see if Twitter virality could be used as a substitute for actual ad testing, which took funds and time. If it turned out that what the Lincoln Project was doing was proving persuasive, the thinking went, then Priorities USA could use Twitter as a quasi-barometer for seeing how strong their own ads were. But that didn’t turn out to be the case. According to Nick Ahamed, Priorities’ analytics director, the correlation of Twitter metrics—likes and retweets—and persuasion was -0.3, “meaning that the better the ad did on Twitter, the less it persuaded battleground state voters.” The most viral of the Lincoln Project’s ads—a spot called Bounty, which was RTed 116,000 times and liked more than 210,000 times—turned out to be the least persuasive of those Priorities tested. – I think that there a lot of lessons for creatives and strategists in this piece of research in terms of eliciting behaviour change, beyond politics

    China shadows the rise of Hong Kong’s next tycoons – Nikkei Asia – Avoid politics, build trust: One dynasty heir speaks on a generation’s dilemma

    How The 1985 Downturn Set The Silicon Wafer Industry On A Path To Consolidation That Continues Today – Semiconductor Digest – a great read

    A transatlantic effort to take on Big Tech | Financial Times – Companies are counting on the incoming Biden administration, which will include a number of tech-friendly officials from Barack Obama’s time in the White House, to help them stand up to Europe. It shouldn’t. One of the huge risks for the new administration is that it will be seen as too cosy with concentrated corporate power. Witness the cries already coming from the left about some of Mr Biden’s appointees who have backgrounds in private equity. Individual appointees should be judged on their own merits. If we didn’t let anyone from either the finance or the technology industries into the new administration, we would be the poorer for it. Take Gary Gensler, a former Goldman Sachs executive, who is now Mr Biden’s chief markets adviser. He cleaned up derivatives trading while at the Commodity Futures Trading Commission during the Obama years – grab the popcorn

    About Google’s approach to research publication – Google Docs – A cross functional team then reviewed the paper as part of our regular process and the authors were informed that it didn’t meet our bar for publication and were given feedback about why. It ignored too much relevant research — for example, it talked about the environmental impact of large models, but disregarded subsequent research showing much greater efficiencies. Similarly, it raised concerns about bias in language models, but didn’t take into account recent research to mitigate these issues. We acknowledge that the authors were extremely disappointed with the decision that Megan and I ultimately made, especially as they’d already submitted the paper. Timnit responded with an email requiring that a number of conditions be met in order for her to continue working at Google, including revealing the identities of every person who Megan and I had spoken to and consulted as part of the review of the paper and the exact feedback. Timnit wrote that if we didn’t meet these demands, she would leave Google and work on an end date

    Pioneer DJ reports 82 per cent rise in the sale of entry-level DJ controllers during lockdown – Tech – Mixmag 

    Hong Kong’s Civil Servants Under Siege – The Diplomat – I think the oath taking is a big deal. If you don’t sign it, they will immediately assume you will be against the government one day. Most of us don’t agree with this practice. Those who are almost retired and are older think it’s quite normal. They stress that Hong Kong is a part of China, and civil servants have the responsibility to uphold the policies issued by the government and support it no matter what we think. But most of the newer recruits, what we care about is that freedom of speech is protected. The Basic Law guarantees our freedom of speech. No matter what career we have, we should enjoy this right.

    RTOS port to RISC-V core for high reliability designs | EE News Europe – opportunities that previously would have gone to ARM

    Wikipedia Matters by Hinnosaar, Hinnosaar, Kummer and Slivko – we conduct a randomized field experiment to test whether additional content on Wikipedia pages about cities affects tourists’ choices of overnight visits. Our treatment of adding information to Wikipedia in- creases overnight stays in treated cities compared to non-treated cities. The impact is largely driven by improvements to shorter and relatively incomplete pages on Wikipedia (PDF)

  • Hydrogen fuel cells + more news

    Hydrogen fuel cells

    Hyundai and Ineos team up to develop hydrogen future | CAR Magazine  BMW details fuel cell plans | EE News – I think that this move to hydrogen fuel cells makes more sense than lithium ion batteries. Hydrogen fuel cells are well understood, having been used by NASA during the Apollo space mission, the main challenge as been the cost of the cell. Hydrogen fuel cells don’t induce range anxiety and don’t have the environmental problems that you get recycling lithium ion batteries.

    Panasonic finally looks at European battery gigafactory – but this is happening with hydrogen fuel cells being in a more effective decision. Elon Musk is down on hydrogen fuel cells, but ignores the issues with lithium ion batteries compared to hydrogen fuel cells. Lithium ion batteries have their own dangers. Hydrogen fuel cells don’t have the same recycling issues that spent lithium ion batteries have. Given the strategic hold over lithium mining by China; hydrogen fuel cells offer a better option to reduce dependence. The hydrogen lobby does a better job to combat the Tesla showmanship.

    China

    EU braces for battle despite new faces in White House | Financial Times – “ There will be a number of easy wins and enhanced co-operation on climate, the pandemic and remedying some of the offences of the past four years,” said Kristine Berzina, a senior fellow at the German Marshall Fund of the United States. “But there are real dangers that disagreements on issues like data privacy and digital taxation will make it more difficult to get agreements on other issues that are very important for both the US and Europe — particularly China

    Germany frets over its corporate dependency on China | Financial Times – Robust Chinese demand has helped Germany’s auto manufacturers and their suppliers to offset weaker European and US markets still afflicted by the pandemic. But it has also revived concerns that German industry is too dependent on China. And it has raised questions about whether Berlin will be willing to respond to growing pressure in the EU for a stronger line towards Beijing and to embrace a new transatlantic partnership on China under a Biden administration. – you can see this in the split between Merkel and her party over China engagement – Daimler, which has two large Chinese shareholders, sells nearly 30 per cent of its Mercedes cars in China. It accounts for about 11 per cent of group revenues. For several companies in the Dax 30 index, China represents at least a fifth of sales including BMW, chipmaker Infineon and plastics manufacturer Covestro. Likewise, Volkswagen is estimated to generate a similar proportion of its sales in the country last year, selling nearly 40 per cent of its vehicles there. All of this leaves you vulnerable to the Australian situation: China sends a message with Australian crackdown | Financial Times – The message is clear. If your media is overly critical, if your think-tanks produce negative reports, if your MPs persist in criticism, if you probe Communist party influence in your community and politics and if you don’t allow Chinese state and private companies into your market, and so on, you will be vulnerable to Beijing’s retribution as well

    Red Convergence | China Media Project – media policy in China – with implications domestically and internationally. It outlines how the Chinese Communist Party intends to leverage transformations in global communication, both at home and abroad (though the latter is more implied), to sustain the regime and increase its influence internationally.

    Lessons from China’s decision to halt Ant Group’s giant IPO | Financial Times – interesting points from WeBank about a sweet spot from Rmb 8,000 – 200,000 were debtors do not have an incentive to run away or speculate. SMEs are focused on having a good credit record

    Q&A: Gareth Richardson – Western Brands No Longer Have an Easy Ride in Asia | Branding in Asia Magazine – In China, there’s no access to Google and Facebook but consumers are immersed in WeChat. This is a playground where western brands have no inherent advantage. In fact, many Chinese consumers don’t know or much care about where the brand originated (save for a few specific categories such as Infant Milk Powder). In western culture individuals are heroes and this is reflected in the approach to brand storytelling. However, in Asia, the culture is more collectivist and storytelling celebrates multiple heroes. Asian brands should celebrate their cultural values. Examples include brands built on traditional values of Asian hospitality, such as Mandarin Oriental. There’s a paradox though. Asian culture is collectivist and yet Asian businesses are very hierarchical. There’s often a significant power gap between the C-suite and the frontline staff. This makes branding more challenging to implement even when its value is properly understood by the leadership – this also happens within agencies. True story: I was asked to go and present to the Chinese subsidiary of a US multinational. The global digital lead had gone in there previously with the global client ambassador and made a mess that couldn’t be cleared up. Firstly, they hadn’t recognised the great firewall. Twitter doesn’t matter in China. Secondly, they thought that democratic political campaigning experience was an example of great marketing. At the time, the person who was the global data lead had also worked on the first Obama presidential campaign. All of them had come from a political background and were clueless about brand marketing. Finally, they’d unintentionally priced a measurement solution ludicrously low. It was a shit show. We had lost the client already, but the client lead had held out hope that hanging on in there churning out a monthly report with no actionable insight would somehow provide a way back in. But at least I got to Guangzhou for the first time.

    Consumer behaviour

    Right-wing populism with Chinese characteristics? Identity, otherness and global imaginaries in debating world politics online – Chenchen Zhang, 2020 – The past few years have seen an emerging discourse on Chinese social media that combines the claims, vocabulary and style of right-wing populisms in Europe and North America with previous forms of nationalism and racism in Chinese cyberspace. In other words, it provokes a similar hostility towards immigrants, Muslims, feminism, the so-called ‘liberal elites’ and progressive values in general. This article examines how, in debating global political events such as the European refugee crisis and the American presidential election, well-educated and well-informed Chinese Internet users appropriate the rhetoric of ‘Western-style’ right-wing populism to paradoxically criticise Western hegemony and discursively construct China’s ethno-racial and political identities. Through qualitative analysis of 1038 postings retrieved from a popular social media website, this research shows that by criticising Western ‘liberal elites’, the discourse constructs China’s ethno-racial identity against the ‘inferior’ non-Western other, exemplified by non-white immigrants and Muslims, with racial nationalism on the one hand; and formulates China’s political identity against the ‘declining’ Western other with realist authoritarianism on the other. The popular narratives of global order protest against Western hegemony while reinforcing a state-centric and hierarchical imaginary of global racial and civilisational order. We conclude by suggesting that the discourse embodies the logics of anti-Western Eurocentrism and anti-hegemonic hegemonies. – This is interesting especially when the Communist Party of China is adopting a more Han nationalist stance (and in some respects reaching back into historic integration of Mongol and Manchu rulers). Secondly, Communist Party academics and legal academics from Beijing University have been drawing heavily on the work of Carl Schmitt. As have far right organisations and Russian nationalists. Schmitt was Nazi Germany’s leading legal theorist. He was known to be hostile to parliamentary democracy and supported the power of an authoritarian leader to decide the law. Schmitt’s rejection of attempts to take politics out of the operation of the law or economic policy implementation – have appeals to diverse audiences.

    Design

    Top 3 reasons why Nokia N97 failed: The “iPhone killer” that actually killed Nokia – Gizchina.com – Nokia N97 has a slide-out design with a three-line QWERTY keyboard displayed below the display. That was an advantage at the time, but it was just another manifestation of Nokia’s outdated ideas. With the improvement of input methods, touch screen keyboards have become more accurate and soon eclipsed physical keyboards. – the keyboard was very poor compared to the Nokia E90 Communicator that I used to use. I also remember that the address book feature used to crash the phone if you loaded more than 999 contacts into it. Even their ‘E’ series business handsets like my E90 Communicator and the later E71 devices. I moved to the iPhone because I wanted an address book that worked. If the iPhone ever came in a Nokia Communicator type format, I would be ecstatic. More gadget related content here.

    Ideas

    I have been watching more David Hoffman films recently, looking back to the past to try and understand the present. What becomes apparent was that there was a schism of values in the late 1960s America. What’s less apparent was how, or even if; that schism was eventually healed.

    Online

    China tightens grip on booming livestreaming sector | Financial Times – this needs to be viewed in the wider aspect of reining in internet companies

    Style

    Good Collaborations Are Art, Great Ones Are Kitsch | Highsnobiety – “You know it’s art when the check clears,” said Andy Warhol. With Roy Lichtenstein and Robert Indiana, Warhol made his way into museums by turning the mundane world into works of art by enriching it with pop references, connotations and associations. Warhol’s art is commercial and his commercials are art (a Warhol ad launched Absolut vodka in 1986)

    Technology

    A little automation goes a long way in distracting drivers | INPUT – technology creating more problems than it solves in the car driving experience.

  • M1 processor + more things

    Apple’s M1 ARM Pivot: A Step Into the Reality Distortion Field | Chips | TechNewsWorld – pretty much many of the points that I was thinking about. More here on the M1 Apple M1 Processor, Passing on the Chiplets | EE Times 

    BMW Unveils Anime-Like Electric Scooter Concept – Core77 – nice but I would still want Kenada’s bike

    The Biden team’s tug of war over Facebook – POLITICO – Facebook is the new Goldman Sachs….

    5G has been heralded as a tech game changer but consumers in China are underwhelmed by spotty coverage and hard sell | South China Morning Post 

    How to appeal to Gen Z in Asia | Vogue Business – “Chinese luxury consumers’ offline and online lives are becoming increasingly intertwined,” says Mark Morris, Burberry’s senior vice president of digital commerce. “They are demanding a more seamless blend of content and capabilities across their two worlds.”  Working with local experts like Mr Bags and relatively lower-tier influencers (Ching has 6.6 million fans on Weibo, which is mid-range for a Chinese KOL) helped reach this level of engagement. “Gen Z wants to be approached in a narrow and deep, insightful way instead of using a mass approach with a big talent [and] hashtag ads,” says Rie Tanaka, senior business strategist and senior researcher at Japanese PR firm Dentsu

    Europe is ready for Biden to start, says E.U. foreign affairs chief Josep Borrell – The Washington Post – Western governments may have been “a bit naive” about Beijing’s manipulation of global trade rules – strategic reset inbound

    Five-Year Plan, 15-Year Vision by Geoff Yu, Bank of New York Mellon – at the outset a new long-term objective for 2035 was established: China is expected to “largely realize socialist modernization” by that year. Specifically, this means achieving GDP per capita of a “moderately (or mid-level, depending on the translation) developed country”. Again, we underscore that the FYP itself does not contain a corresponding numerical target, but during his remarks at the plan’s launch, President Xi Jinping remarked that “it is fully possible for China to realize a doubling of the size of the national economy by 2035”. Assuming the doubling happens in real terms, this comes to around 4.7%y/y p.a. real GDP growth over the next 15 years (PDF)

    Micron Leapfrogs to 176-Layer 3D NAND Flash Memory | EE Times – everyone else is on 128 layers

    Japan gov’t may turn to YouTubers to promote ‘My Number’ ID cards – The Mainichi – To publicize the system, the government has inserted advertisements in newspapers and used digital signage to stream commercials at stations and in the streets, among other methods. However, it has not received as many applications as anticipated, and now places a big hope on the YouTubers’ power to transmit information. The choice is also apparently because labor costs are not as high as appointing nationally popular actors, celebrities and other public figures. Moreover, the Japanese government, by eradicating its image of stubborn bureaucracy and having people watch videos on YouTube without reserve, aspires to remove anxiety and concerns about possible personal information leaks that accompany the My Number system – surprised that Japanese influencers would be that cheap relative to their reach. More on marketing here

    Resharing this as many people still don’t know about this old paper from Ogilvy on Facebook organic reach

  • Ant Group saga + more things

    Ant Group saga

    Beijing interviews Jack Ma over $37bn Ant IPO | Financial Times – Ant Group founder and shareholder Mr Ma last month gave a speech in Shanghai criticising regulators in China and abroad. He felt that Ant Group shouldn’t suffer their excessive regulation of banking and financial technology.

    That didn’t go down that well with Chinese financial regulators and then Shanghai’s stock market operator calls a halt on Ant Group’s imminent listing, citing changes in regulatory environment | South China Morning Post which resulted in Ant to refund US$167.7 billion to 1.55 million Hong Kong investors in two batches after IPO is suspended | South China Morning Post 

    Ant Group aggregates large loans from banks and doles out the money as high interest small loans to young Chinese. Think Wonga or similar payday loan businesses that have sprung up since the 1990s. Ant also have savings and investment products that they get from other firms and act as an agent to sell. The huge IPO valuation of Ant Group already felt like hubris before Jack Ma criticised the financial regulators. More on China related stories here.

    Everything else

    MERICS China Industries Briefing – October 2020 | Merics – The laws have significant ramifications for Europe. Vague wording in both the Export Control Law and the draft Personal Information Protection Law open the door to sweeping retaliation measures against foreign companies and countries. The former cites harm done to China’s “national security and interests,” while the latter cites “discriminatory” measures taken against China concerning personal data as examples of legislative violations that warrant retaliation. On a more practical level, European firms with extensive operations in China, especially in R&D, will likely face additional compliance hurdles. These could include novel license requirements and security review procedures related to exporting goods, technologies and services, as well as collecting, processing and transferring personal information

    Battle at Arm China threatens $40bn Nvidia deal | Financial Times – Mr Wu also has backing in some corners of the Shenzhen government. In September, for example, Mr Wu was named on a high-level reform committee in the city, alongside other high-profile business figures such as Merlin Swire and Zhang Lei, founder of Hillhouse Capital, according to a document seen by the FT. Both the Shenzhen government and Beijing have a keen interest in the outcome of the battle, since Arm’s intellectual property underpins almost every mobile phone chip designed in the country. – what a mess

    Stanley Black & Decker shuts Shenzhen plant amid US-China trade war ｜ Apple Daily – Chinese media also report that most of the workers have already been recruited by other factories and obtained employment on the same day. Middle management and executives were snapped up by other firms. Staff from a neighboring electronic factory claimed they hired up to 200 former employees of Stanley Black and Decker. Kevin Tsui, an associate professor of the Department of Economics at Clemson University, casted doubt on the authenticity of these reports. While the Chinese economy has shown steady recovery, it is unlikely for firms to be able to take over unemployed workers on such a large scale. Stories of the generous compensations were published to stabilize public sentiment and prevent people from panicking as more and more foreign investors are pulling out, he added. Veteran news commentator Johnny Lau said the growing production costs in China, as well as new labor law restrictions, have prompted firms to move to South East Asian countries, which are more welcoming to foreign investors – fascinating reading on how globalisation is affecting China from a negative perspective

    Key Takeaways | ChinaFile – reading this a topline report, it reminds me a lot of the UK’s disparate CCTV operations

    In Hunt for Coronavirus Source, W.H.O. Let China Take Charge – The New York Times – it is hardly the only international body bending to China’s might. But even many of its supporters have been frustrated by the organization’s secrecy, its public praise for China and its quiet concessions. Those decisions have indirectly helped Beijing to whitewash its early failures in handling the outbreak.

    Burberry announces partnership with Tencent Games’ blockbuster title Honour of Kings – Burberry – As interactive digital content is increasingly becoming a source of inspiration in luxury fashion, games offer another opportunity for consumers to connect with Burberry’s products online. Younger consumers are redefining community spaces, choosing to connect with each other and with brands in digital environments, such as sharing experiences through online games. Chinese luxury consumers’ offline and online lives increasingly intertwine, with more demand for a seamless connection between the two. Adding virtual products into existing online games environments offers a bespoke experience that aligns with the consumer’s existing lifestyle. – only a decade or more behind sports apparel…

    Inside Apple’s Eroding Partnership With Foxconn — The Information – Foxconn has tried a variety of tactics to enhance its margins, all previously unreported, such as using Apple-owned equipment when doing work for Apple’s rivals and taking shortcuts on component and product testing, ex-employees said. In turn, Apple has tried to step up its monitoring and tracking of Foxconn employees and of Apple’s own equipment that resides in Foxconn facilities. Meanwhile, the relationship between the two companies is changing, as described by interviews with more than two dozen former Apple and Foxconn employees, including some senior managers. Apple, like its rivals Samsung, Nintendo and speaker design firm Sonos, is diversifying its manufacturing sites in an effort to hedge its bets. These companies are aiming to expand the number of manufacturers they work with and the countries where they operate in response to growing geopolitical risks such as the U.S.-China trade war. As a result, Foxconn’s bright satellite in Apple’s orbit has lost some shine. – This looks like a slow car crash

    30 female engineers from India ask Silicon Valley to do better on caste discrimination – The Washington Post – The legacy of discrimination from the Indian caste system is rarely discussed as a factor in Silicon Valley’s persistent diversity problems. Decades of tech industry labor practices, such as recruiting candidates from a small cohort of top schools or relying on the H-1B visa system for highly skilled workers, have shaped the racial demographics of its technical workforce. Despite that fact, Dalit engineers and advocates say that tech companies don’t understand caste bias and have not explicitly prohibited caste-based discrimination. A new lawsuit shines a light on caste discrimination in the U.S. and around the world. In recent years, however, the Dalit rights movement has grown increasingly global, including advocating for change in corporate America. In June, California’s Department of Fair Employment and Housing filed a landmark suit against Cisco and two of its former engineering managers, both upper-caste Indians, for discriminating against a Dalit engineer

    Tory group in push for watchdog to counter Chinese interference | Financial Times – and so it starts, I have been expecting this for a while

    How Borat 2 reveals the playbook for the streaming movie blockbuster – it had exactly four weeks to generate word of mouth. In Hollywood marketing terms, a four-week movie campaign is unheard of, ludicrous—or, as Borat would say, “Very nice—not!” Yet Amazon pulled it off by leaning on Baron Cohen’s relentless energy and creative salesmanship. There were Borat stunts galore both online and IRL, which helped create a burning sense of immediacy and helped the film explode into the cultural consciousness, as opposed to being slowly fed to audiences by an IV-drip marketing campaign over the course of lumbering months – I also imagine this was due to legal scrutiny of the film content

    Three actionable insights with… Sir Martin Sorrell | The Drum – ”Marketeers have surrendered control. Too few marketeers are CEOs of companies. There are probably too many CFOs who are CEOs of companies and I can say that as an ex-CFO. I think this started in 2008 after the Great Recession. Then there’s a huge pressure in 2009. It rebounded in 2010, but ever since then and up to 2018 there’s been a relentless pressure on cost. It‘s nonsense that it‘s Google and Facebook that are putting pressure on the holding companies. The simple fact of the matter is the clients have been so focused on cost, they put pressure on the agency middlemen or middle women, and they push them. Remember the chat around ‘non-working’ costs around advertising — basically on production costs. But you know this phrase ‘non-working’ and the implication that a lot of what the agencies did wasn‘t working or it wasn‘t working well enough, so you had to get rid of it. This is huge pressure. So, instead of asking media owners for 60-day credit or 90-day credit, they asked the agencies. – Sir Martin Sorrell is as much sinner, as sinned against but this rings true

    Breakingviews – China’s latest five-year plan girds for battle | Reuters – The message from China’s leadership seems to be that things will get worse before they get better. It elevated the status of technological self-reliance to be a “strategic support” for national development as a shield from overseas restrictions on imports. That will translate into greater R&D funding and subsidies, and diversion of funds to high-end manufacturing from property markets. There are early signs the approach is working: new registrations for semiconductor makers have jumped by a third this year, according to local media reports – the move away from overheated property markets is a good thing

    The FT – Huawei develops plan for chip plant to help beat US sanctions and a good analysis on the challenges that will be faced on Radio Free Mobile – Huawei – Nowhere to run pt. XXIV. – these will be way behind the curve, it makes more sense if Huawei partners with other Chinese chipmakers

    The resource curse and Hong Kong: Why the city has stagnated ｜Dr Michael Lawson ｜ Apple Daily – in many ways Hong Kong is now suffering in the grip of a resource curse, where the opportunities from catering for finance and tourism for mainland China have crowded out almost all other areas of the economy. It has often been said that Hong Kong is a very bureaucratic place, where trying to do anything new is almost impossible without multiple government approvals. This can be seen from the lag in adopting electric buses, the ban on electric bikes that is unique in the world, and the strange rule prohibiting tandem paragliding. This is because due to easy access to income sources which require little innovation, there has been no pressure to let anything change or develop in the Hong Kong economy. Like the rulers of other resources cursed countries, the nettle of economic reform is not grasped and vested interests are allowed to divide up the spoils. In fact, it is noticeable that the decline of the film and manufacturing sectors of the Hong Kong economy has neatly coincided with the rise of China as an economic powerhouse, with many of the established industries in Hong Kong willingly moving their operations there before being overtaken or taken over by more nimble mainland firms – pretty succinct analysis of the current economic problems facing Hong Kong

  • The Fifth Risk by Michael Lewis

    Michael Lewis’ The Fifth Risk is marketed as a Trump presidency book.

    The Fifth Risk
    The Fifth Risk by Michael Lewis mass paperback cover.

    The Donald

    The Fifth Risk starts off by telling the story of Chris Christie. How he helped the future Trump administration organise a government in waiting. Christie and the team are let go. Trump was worried about spending money.

    Given the revelations about Donald Trump’s finances in the New York Times; I can understand his desire to control cash flow. This goes some way to explaining the problems filling senior government places.

    A second thing comes out in the first part of the book; Trump’s instinct to value personal loyalty. Which is fine; but doesn’t scale that well. That meant that people were often unsuitable for the jobs that they were given.

    A final trait that came through was a massive root-and-branch concern against climate change.

    So Lewis doesn’t say that much about the Trump administration that we didn’t already know. But that is only 30 percent of the book.

    What the government does

    The remaining 70 percent of the book tells the stories of different departments of the US government. The vital, complex roles that they play. He peels back the complex relationships between the federal government and the states. That interface builds in a lot of waste and inefficiency – to meet state political goals.

    Lewis gets experts to explain how welfare payments work and why they’re needed. Or how departments like the National Oceanic and Atmospheric Administration and the Department of Energy benefit the country.

    Lewis also covers what motivated some of the government service. TL;DR – from the new deal to the Kennedy administration young Americans felt that they could make a real difference. They felt inspired in a way that probably only clergy or military service personnel feel now.

    Finally, touches on risks. The fifth risk that the Department of Energy expert talked about was programme management. This is where the name of the book comes from. How is programme management a risk?

    • If a department is managed by someone who doesn’t understand the area involved.
    • Realpolitik – NASA was for years a victim of pork barrel politics and the o-ring failure that happened on the Challenger disaster was a function of it
    • If an administration takes a short terms, or small government world view.

    In praise of Keynesian economics

    The examples in the book tear away at the popular narrative around big government. Of inefficiencies and long queues of rapacious welfare queens.

    It shows all the things that the government does for the collective good. Things that the market wouldn’t be able to address. It also shows the hucksters involved in the markets. In particular calling out Accuweather’s founders Barry and Joel Myers. That Lewis hasn’t been sued by Myers adds to the veracity of his claims.

    This is essentially a criticism of the economic orthodoxy that has governed both of America’s political parties for the past 40 years, since the Carter administration. In this respect, the educated reader would appreciate that it fires a shot across the bow of all parties. From Sanders and Biden to Trump.

    Style

    I was introduced to Michael Lewis as a writer, when I read Liar’s Poker in college. It is a deeply personal book, full of humour and self examination. In it, he provides the ley reader an insight into the financial services system. Unfortunately, that didn’t seem to have much impact as the financial recessions following the dot com boom and the housing crisis proved.

    He then wrote a slew of books that owe a good deal to the new journalism style of Tom Wolfe. His writing covered sports, financial crises and politics. Some of the books were very of their time, such as The Future Just Happened, Boomerang and Panic!. Others like Liars Poker, are ageless. A couple of his books were made into films of the same name: Moneyball and The Big Short.

    The Fifth Risk still feels like the classic Michael Lewis new journalism style. But it also feels like it has an eye on a documentary adaptation. In this respect he reminds me a lot of Ben Mezrich in term of his cinematic approach to writing.