Welcome to the weekend. It’s Davos week. (BTW… my invitation must have got lost in the mail. Are there any Weekend Briefing subscribers that can fix that for next year?) Every year there are a bunch of reports released (see two below). Each year, I continue to notice an increased interest in a revitalized vision for capitalism that includes value creation for all stakeholders.
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7,100 – Tickets for the Super Bowl between the Kansas City Chiefs and the San Francisco 49ers are selling on secondary markets for an average of $7,100.
40 – Over the past 12 months, the percentage of U.S. companies that lost money is about 40%, which is the highest level since the 1990s when setting aside post-recession periods.
20 – At the start of 2020, more than 20% of Tesla’s stock was being shorted, and as of mid-January it’s the most shorted stock on the U.S. market.
In Defense of Davos
The World Economic Forum met in Davos this year for its annual gathering. It’s very popular to bash the annual gathering as (mostly white male) out of touch elites spouting platitudes. While there’s some truth to that, the forum is also changing the conversation for the world’s most influential leaders. The Forum’s founder Klaus Schwab has consistently promoted a capitalism that, besides shareholders, counted employees and societies as stakeholders, or as he says, “free enterprise with a social orientation.” He says the concept is often misunderstood. “Stakeholder responsibility means not necessarily that you give money to some third party; it means that you use your know-how, your capacities to address social or environmental issues,” he says. “It’s not so much a contradiction between profit and society, it’s a contradiction between short term and long term.” New York Times (11 minutes)
Profit & Purpose
In Deloitte’s third annual survey of more than 2,000 C-suite executives across 19 countries, they examined the intersection of readiness and responsibility to see how leaders are balancing this transition to Industry 4.0—capitalizing on advanced technologies to help propel their businesses forward while acting in a more socially responsible way, particularly in the area of environmental stewardship. There’s ample evidence that most businesses are beginning to try to find balance between profit and purpose, thanks largely to increased pressure from customers, employees, and other stakeholders. In fact, nearly four in 10 survey respondents said they focus on societal issues because it’s a priority for external stakeholders. It’s telling that nearly all business leaders they surveyed fear that the effects of climate change could negatively affect their organizations, and half cite tackling climate change as their generation’s top priority. Business leaders accept a responsibility to act, and many are rolling out programs addressing resource scarcity and environmental sustainability. More than 90 percent of respondents say their companies have sustainability initiatives in place or on the drawing board. Deloitte (8 minutes)
Productivity in 2020
For nearly the last decade I’ve kept my notes and saved articles from the web in Evernote. I never thought I’d switch. That is until I started playing around with Notion last year. Notion does everything Evernote does, plus wikis, lightweight CRMs, Kanban boards and more… and it’s much more beautiful. So, I made the switch to Notion. Since then I’ve planned my wedding and built my epic guide to New Zealand on Notion. My switch to Notion was heavily influenced by my buddy (and Editor of the Rad Reads newsletter) Khe Hy. Khe has really gone down the rabbit hole on Notion, and is passionate about using the tool to help optimize his and other people’s productivity. I’ll be taking an online course with him starting January 28th called Supercharge Your Productivity with Notion. Imagine combining the HBS case study, a coding bootcamp, and a coaching engagement. The course’s format is tailored to the busy professional and is designed to maximize your return on time. It includes: (1) 4 weeks of live 1-hour instruction, (2) 10 video mini-modules, (3) 20+ templates, (4) Weekly private office hours via Slack. The best way to learn something is to build it. Specifically something you’ll use every day. The weekly lectures will develop your “foundation” and all the add-ons will help you customize Notion to your needs. If this sounds interesting, learn more and sign up here. (Sponsored)
A closely followed survey of CEO sentiment kicked off this year’s World Economic Forum on a somber note. Consulting firm PwC found that 53% of those it surveyed predict a slowdown in economic growth in 2020, up sharply from 29% in 2019 and 5% in 2018. It was the highest level of pessimism since 2012, the first year of the survey, PwC said. The OECD predicts global growth of 3% this year, up only slightly from its 2.9% forecast for 2019—the weakest growth rate since the financial crisis. Wall Street Journal (7 minutes)
Clearview AI, a small startup, has devised a groundbreaking facial recognition app. You take a picture of a person, upload it and get to see public photos of that person, along with links to where those photos appeared. The system — whose backbone is a database of more than three billion images that Clearview claims to have scraped from Facebook, YouTube, Venmo and millions of other websites — goes far beyond anything ever constructed by the United States government or Silicon Valley giants. The computer code underlying its app, analyzed by The New York Times, includes programming language to pair it with augmented-reality glasses; users would potentially be able to identify every person they saw. The tool could identify activists at a protest or an attractive stranger on the subway, revealing not just their names but where they lived, what they did and whom they knew. Facial recognition technology has always been controversial. It makes people nervous about Big Brother. It has a tendency to deliver false matches for certain groups, like people of color. And some facial recognition products used by the police — including Clearview’s — haven’t been vetted by independent experts. Clearview’s app carries extra risks because law enforcement agencies are uploading sensitive photos to the servers of a company whose ability to protect its data is untested. New York Times (13 minutes)
Regulation & Facial Recognition
The challenge with regulating the use of facial recognition is to work out the right level of abstraction. When Bernie Madoff’s Ponzi scheme imploded, we didn’t say that Excel needed tighter regulation or that his landlord should have spotted what he was doing – the right layer to intervene was within financial services. Equally, we regulate financial services, but mortgages, credit cards, the stock market and retail banks’ capital requirements are all handled very separately. A law that tries to regulate using your face to unlock your phone, or turn yourself into a kitten, and also a system for spotting loyalty-card holders in a supermarket, and to determine where the police can use cameras and how they can store data, is unlikely to be very effective. The really interesting question here, which goes far beyond face recognition to many other parts of the internet, is the degree to which on one hand what one might call the ‘EU Model’ of privacy and regulation of tech spreads, and indeed (as with GDPR) is imposed on US companies, and on the other the degree to which the Chinese model spreads to places that find it more appealing than either the EU or the US models. Benedict Evans (24 minutes)
Wine & Climate Change
Miguel Torres is the patriarch of Miguel Torres SA, a winemaker that has grown from a small family business back in the late 19th century to one of the largest in all of Spain. And his bet is a bold, albeit ominous, one: that a world-class vineyard can flourish in the Patgonian Steppe. All that is needed, Torres surmises, is for the wicked effects of global warming to take hold.The site is almost another 500 miles further south of the nearest wine growing region. Its average temperature is another 5 degrees Celsius colder in winter. The audacity of the initiative underscores just how high the stakes are for the industry and how resigned some are to the inexorable climb in global temperatures. “As Mr. Miguel Torres himself says, this is an experiment, a very long-term project,” Navarrete, 64, says. “Who knows where we’ll all be? I don’t think I’ll be here to drink wine made from this vineyard.” Bloomberg Green (12 minutes)
Moonwalking with Einstein by Joshua Foer. Moonwalking with Einstein draws on cutting-edge research, a surprising cultural history of memory, and venerable tricks of the mentalist’s trade to transform our understanding of human remembering. Under the tutelage of top “mental athletes,” he learns ancient techniques once employed by Cicero to memorize his speeches and by Medieval scholars to memorize entire books. Using methods that have been largely forgotten, Foer discovers that we can all dramatically improve our memories. Immersing himself obsessively in a quirky subculture of competitive memorizers, Foer learns to apply techniques that call on imagination as much as determination-showing that memorization can be anything but rote. From the PAO system, which converts numbers into lurid images, to the memory palace, in which memories are stored in the rooms of imaginary structures, Foer’s experience shows that the World Memory Championships are less a test of memory than of perseverance and creativity. Foer takes his inquiry well beyond the arena of mental athletes-across the country and deep into his own mind. In San Diego, he meets an affable old man with one of the most severe case of amnesia on record, where he learns that memory is at once more elusive and more reliable than we might think. In Salt Lake City, he swaps secrets with a savant who claims to have memorized more than nine thousand books. At a high school in the South Bronx, he finds a history teacher using twenty- five-hundred-year-old memory techniques to give his students an edge in the state Regents exam. Amazon
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For all the opportunities that arise from the Fourth Industrial Revolution – and there are many – it does not come without risks. Perhaps one of the greatest is that the changes will exacerbate inequalities. And as we all know, a more unequal world is a less stable one. –Klaus Schwab