Weekend Briefing No. 206

Welcome to the weekend. I’ve wrapped up my Winter Term course at Harvard. As much as I love my time with our students. I must say, I’m very happy to be back in Brooklyn, sleeping in my own bed again!

Prime Numbers

90,000,000,000 – At the Detroit auto show this week, electricity seems to be top of the agenda. Automakers have now committed a global total of at least $90 billion to building electric cars. $19 billion of that is from U.S. firms. The question: "Will customers be there with us?" asked Ford. "We think they will."

570,000,000 – LED bulbs contributed to a reduction of 570 million tons of carbon dioxide emissions in 2017, according to an estimate by IHS Markit—equivalent to closing more than 160 coal power plants.

3.2 – The World Bank forecasts growth for Sub-Saharan African economies of 3.2% for 2018, up from 2.4% in 2017. It also predicts slightly higher growth for 2019 of 3.5%.

A Very Important Letter

On Tuesday, the chief executives of the world’s largest public companies received a ground-breaking letter from one of the most influential investors in the world. Laurence D. Fink, founder and chief executive of the investment firm BlackRock, put business leaders on notice that their companies need to do more than make profits — they need to contribute to society as well if they want to receive the support of BlackRock ($6T AUM). “Society is demanding that companies, both public and private, serve a social purpose,” he wrote, “To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society.” When I started in the social enterprise sector, almost a decade ago, I did not in my wildest dreams imagine that the world’s largest investment firm would declare plans to hold companies accountable to profit & purpose (somebody should write a book about that). Despite Mr. Fink’s insistence that companies benefit society, it’s worth noting he’s not playing down the importance of profits and, while it’s a subtle point, he believes that having social purpose is inextricably linked to a company’s ability to maintain its profits. New York Times (6 minutes)

Cost Disease

Why has the cost of computer chips dropped dramatically since 1960 and the cost of healthcare has skyrocketed (in 1960 it was just over 5% of GDP, in 2011 almost 18%. By 2105 the number could reach 60%)? One answer is the Cost Disease – though the economy is becoming more productive as a whole, some industries outpace others. Technological advances allow for huge gains in some sectors, however in other sectors such productivity gains are much harder to come by—if not impossible. Employers in such sectors face a problem: they need to increase their wages so workers don’t defect. The result is that, although output per worker rises only slowly or not at all, wages go up as fast as they do in the rest of the economy. As the costs of production in stagnant sectors rise, firms are forced to raise prices. So prices of goods from stagnant sectors must rise in real terms. Hence “cost disease”. The disease is most virulent in industries where standardization and automation are hard. The Economist (10 minutes)

The Fall

Americans are obsessed with placing people on a pedestal then knocking them down – the rise and the fall. This is another one of those. The subject: Silicon Valley’s most loathed (former) CEO Travis Kalanick of Uber. This long form profile gives a play-by-play of his last year at Uber. It’s an interesting read. My takeaway here is threefold: 1) Assholes are excused when they are winning. 2) Culture is set early by charismatic leaders and reinforced through internal incentives. 3) In the end, how we treat people reflects our character. Bloomberg Businessweek (18 minutes)

Globalization from Below

The China-Africa story provides us familiar tropes: Chinese invaders, meek African victims. But a much more interesting part about these connections is that they form a new kind of globalization, one that a lot of the world isn’t paying attention to, what one researcher described as a form of “globalization from below.” Africa has become a platform for analyzing China’s influence in the developing world. But what about how Africa is influencing China? In African countries, increasingly you find Chinese people who never meant to stay as long as they have. But now, they say they can’t go home, because being in Africa has changed them.  Conversely, in Guangzhou, in southern China, you find entrepreneurs from Nigeria, Ghana, Kenya, Somalia running factories, logistic services, and other companies that are truly global businesses. Quartz (9 minutes)

Blockship

IBM and Danish shipping giant Maersk are teaming up to form a new company whose aim is to commercialize blockchain technology—the nifty, shared accounting ledgers first made famous by the cryptocurrency Bitcoin. The as-yet unnamed, New York-based venture is set to be owned 51% by Maersk and 49% by IBM, the companies said. The concern intends to help shippers, ports, customs offices, banks, and other stakeholders in global supply chains track freight as well as replace related paperwork with tamper-resistant digital records. IBM and Maersk first partnered on a blockchain trial where they traced a container of flowers that sailed from Mombasa, Kenya to Rotterdam in the Netherlands. The technology is built on Hyperledger Fabric 1.0, a blockchain first developed by IBM that is now maintained by the Linux Foundation’s Hyperledger group. Fortune (4 minutes)

Doing the Work

While we all hold an opinion on almost everything, how many of us do the work required to have an opinion? Doing the work counteracts our natural desire to seek out only information that confirms what we believe we know. When Darwin encountered opinions or facts that ran contrary to his ideas, he endeavored to not only listen but not to rest until he could either argue better than his challengers or understand how the fact fit. Darwin did the work. It's wasn't easy but that's the point. Charlie Mungor has noted, “You’re not entitled to take a view, unless and until you can argue better against that view than the smartest guy who holds that opposite view. If you can argue better than the smartest person who holds the opposite view, that is when you are entitled to hold a certain view.” The work is the hard part. You have to do the reading. You have to talk to anyone you can find and listen to their arguments. You have to think about the key variables. You have to consider the system. You have to think about how you might be fooling yourself. You have to think not emotionally but rationally. And you need to become your most intelligent critic. It takes humility and patience. Farnam Street (4 minutes)

52 Places to Go in 2018

Not much to say here. If you have wanderlust and just want to scroll through beautiful photos from places like Buhtan, Switzerland and New Orleans, then this is for you. It’s like crack for travelers. The Times does this every year, but it gets more interactive and fancy every year. New York Times (52 minutes)

Weekend Wisdom

“The best productivity hack is getting 8-9 hours of sleep every night. Second best is exercising 30-60 minutes each day. Both are obvious and overlooked, and yet make a more meaningful and immediate impact on the quality of your thinking than 99 percent of productivity tips.” – James Clear

Feedback Loop

"I realize that you were quoting someone else's article, but you really should be much more careful about your use of the word "slave." There is a world of difference between someone who feels social pressure to say yes to people and someone who is forced to work against their will for free. Equating the two metaphorically is grossly insulting to the millions of people around the world who work under forced or coerced labor.

Language shapes how we see the world. If we dilute the words that express the greatest crimes against humanity - rape, slavery, etc - we dilute the ability to be properly outraged by those atrocities. Thanks in advance for reading my thoughts" - Ceilidh Erikson

"Thanks Kyle, I was going through my inbox unsubscribing to every email and then I read this and I think it’s exceptional. Not unsubscribing!" - Luke Carriere

 About the Weekend Briefing

A Saturday morning briefing on innovation & society by Kyle Westaway – Managing Partner of Westaway and author of Profit & Purpose.