Categories
Environment Geopolitics Politics Science Technology

Pigs, Resilience, Distancing, Vaccines, Agents

Cascading shortfalls in production upended supply chains and left swaths of the country with little meat in the spring and summer. While East Germans queued in long lines for their roasts and sausages, they also complained bitterly that the regime continued to prioritize meat exports abroad, even as their own citizens grew more irate. The same industrial system that arose in the GDR continues to churn in every corner of the globe. It remains capable of producing unprecedented amounts of meat, but also pollution, sickness, and ecological disaster. In the era of climate change, environmental disruptions will only intensify, and as they do, the system of industrial meat will become more and more precarious. Before too long, it will break. It’s a lesson that East Germans learned a generation ago. And it’s one we should heed closely.

http://www.cabinetmagazine.org/kiosk/fleischman_thomas_6_august_2020.php

Individual organisms often respond to cues of environmental challenge by changing their behaviour or by influencing the traits of their offspring. For example, in my own work on birds, mothers in crowded populations put more testosterone in their eggs and produce aggressive offspring. Because they are good competitors, these offspring can leave overpopulated areas to find new habitat elsewhere. In contrast, mothers breeding in newly colonised habitat with a low density of breeders produce more mild-mannered offspring that are more likely to remain and acquire a territory nearby. By breeding next to their parents, these cooperative offspring are buffered from competition and from the costs of moving to a new area. But producing less aggressive offspring works only when there is lots of extra space for families to divide up. This example shows how mothers can influence offspring traits in a way that prepares their kids to deal with the environmental challenges they are most likely to face.

https://aeon.co/essays/catastrophe-drives-evolution-but-life-resides-in-the-pauses

Like other animals, humans have a long evolutionary history with infectious diseases. Many of our own forms of behavioral immunity, such as feelings of disgust in dirty or crowded environments, are likely the results of this history. But modern humans, unlike other animals, have many advantages when plagues come to our doors. For instance, we can now communicate disease threats globally in an instant. This ability allows us to institute social distancing before disease appears in our local community—a tactic that has saved many lives. We have advanced digital communication platforms, from e-mail to group video chats, that allow us to keep our physical distance while maintaining some social connections. Other animals lose social ties with actual distance. But perhaps the biggest human advantage is the ability to develop sophisticated nonbehavioral tools, such as vaccines, that prevent disease without the need for costly behavioral changes. Vaccination allows us to maintain rich, interactive social lives despite contagious diseases such as polio and measles that would otherwise ravage us.

https://www.scientificamerican.com/article/animals-use-social-distancing-to-avoid-disease1/

When you’re planning a large vaccine drive, predictability is vital. The immunization campaign that allowed India to eradicate polio in 2014, for example, worked methodically through the country’s populace of hundreds of millions of children, backed by a bank of knowledge about how the virus behaved, what the vaccine’s properties were, and where new cases could be found. Such factors dictate not only how much vaccine is manufactured but also the production of a host of ancillaries: chemical additives such as adjuvants; hypodermics, glass vials, rubber stoppers, and other parts of an injection kit; and storage equipment such as deep freezers. Without this gear, a vaccine is just a fine formula, a cure in search of its disease.

https://www.bloomberg.com/features/2020-covid-vaccine-manufacturing-essentials/

If a physical product that is widespread in American society could be manipulated by an adversary—imagine an army of home-service robots whose operating systems could be attacked by a foreign power, and turned to hold families hostage inside their houses—it would be immediately addressed as a top-priority national security threat. But social media has long had a free pass for a number of reasons that apply to the information technology industry as a whole. Today, it is protected in distinctive and persistent ways because of its “speech” functions and the constitutional protections that these functions carry.

https://www.lawfareblog.com/how-might-sleeper-agents-americans-interfere-election

View and Listen

Merriam-Webster defines Baryons as any of a group of subatomic particles (such as nucleons) that are subject to the strong force and are composed of three quarks. Half of the ordinary baryonic matter has been tough to find but Fast Radio Bursts made it possible to detect the WHIM.

The most popular high-end coffee species – Arabica – is highly susceptible to Climate change. Video talks about how Columbian economy is impacted by the environmental crisis and could affect global coffee drinkers in the longer term.

Is the pursuit of GDP growth is the best priority for human society? Listen to an interesting conversation between Stephen Dubner and Kate Raworth.

https://overcast.fm/+WaLE5dato

Know more about monastic traditions of Benedictines, Franciscans and Dominicans.

https://overcast.fm/+QDAIECDAo

Categories
Environment Science Technology

Rocks, Cooker, Change, Bezos, Dinosaur

After a long break, I am starting to share some interesting articles that I come across over the week. I believe there are many people creating interesting articles that generates passion and curiosity among readers like me. I give full credit to all the authors who have written these articles.

It’s hard to imagine that we will ever succeed in building a computer system as brilliantly complex as the interrelation of fungal mycelium, far-reaching tree roots, and soil microorganisms in your average healthy forest, what scientists call the “wood wide web.” Smart devices, connected to one another through cloud-based servers vulnerable to cyberattack and plain old entropy, could never do this. And perhaps this is the real reason fully biological computers may remain always beyond our grasp. Even now, as we dream of embedding artificial intelligence into every material surface of our lives, we are at best poorly emulating processes already at play beneath our feet and in our gardens. We’re making a bad copy of the Earth — and, in mining the Earth to create it, we are destroying the original.

“With Japanese rice, what you’re looking for is for some of the starch to almost convert to sugar so that it tastes rather sweet,” explains Itoh. Other ideal elements include a sticky texture, separate grains, and a lot of moisture: all hard to obtain, says Itoh, “without any automated way to do it. And people are very, very picky about how their rice should be.”

https://www.atlasobscura.com/articles/rice-cooker-history/

I’m going to show how shocking the changes have been in science throughout just my lifetime, how even more shocking the changes have been since my grandparents were born, and by induction speculate on how much more shock there will be during my grandchildren’s lifetimes. All people who I have known.

Amazon has invested more than $270 billion in the U.S. over the last decade. Beyond our own workforce, Amazon’s investments have created nearly 700,000 indirect jobs in fields like construction, building services, and hospitality. Our hiring and investments have brought much-needed jobs and added hundreds of millions of dollars in economic activity to areas like Fall River, Massachusetts, California’s Inland Empire, and Rust Belt states like Ohio. During the COVID-19 crisis, we hired an additional 175,000 employees, including many laid off from other jobs during the economic shutdown. We spent more than $4 billion in the second quarter alone to get essential products to customers and keep our employees safe during the COVID-19 crisis. And a dedicated team of Amazon employees from across the company has created a program to regularly test our workers for COVID-19. We look forward to sharing our learnings with other interested companies and government partners.

https://blog.aboutamazon.com/policy/statement-by-jeff-bezos-to-the-u-s-house-committee-on-the-judiciary

Your goal is the same as the impala’s: To buy time. You will have the endurance advantage. Recent studies like Dececchi’s suggest some dinosaur species may have possessed remarkable endurance for their size—but your springy hips, stretchy Achilles tendons, and efficient cooling systems make you one of the greatest endurance runners nature has ever created. The longer the race, the greater your chances.

https://www.wired.com/story/how-outrun-dinosaur/

View and Listen

GPT-3: What’s Hype, What’s Real on the Latest in AI

https://overcast.fm/+BlzHmQM3s

How reading changes your brain

Categories
Economics Environment Technology

Are the new age business supply chains turning Ouroboros?

Robert H. Goddard, the rocket pioneer, after whom the Goddard Space Flight Center was named once wrote about long-duration interstellar journeys in his essay “The Last Migration”.  He speculated that human race will send out expeditions into the regions of thickly distributed stars, taking a condensed form of all the knowledge of the human race. Pondering on the concept, I was attending the class of Prof. Sergio Chayet at WashU, where he introduced us to the concept of Just-in-time production. In the class, I realized that the business supply chains of the modern era work in a linear fashion. We produce and consume in endless supply chains. The business mantra that runs our traditional economics is the extraction of maximum profit from existing resources.

To support the model of sustainable profitability, we rely on a linear approach. We take, we make and we dispose of. To achieve profit overtimes (we do not bother whether it is sustainable or not) we transformed our economy into a cowboy economy. Since the time we settled in civilisations, the cowboy economics created the rich and poor divide in the society. The cowboy economic principle is centred on taming and exploiting a seemingly endless resource frontier. This resulted in an exorbitant appetite for resources. According to International Resource Panel, a UN body that consists of scientists and policymakers, estimates that primary materials extracted from earth rose from 22 Bn tonnes in 1970 to 70 Bn tonnes in 2010 and by 2050 the planet will need 180 Bn tonnes of material a year if the trends continue.

Is this a sustainable use of resources? It is a good time for every corporate citizen to think before it gets too late and the changes become irreversible. If we could portray the human civilization on a spaceship earth travelling to a ‘destination’, can this economics survive till we reach our destination? Is this the time to rethink our business models? We cannot allow modern business to become Ouroboros – the serpent that eats itself.

Based on the simple concepts of waste reduction, reusing and redesigning product and process flows, there is a possibility that we could still reach our ‘destination’ in a sustainable manner.  We can preserve and enhance natural capital available for future generations.  This is the concept of Circular Economics. According to Ellen Macarthur Foundation, a circular economy is restorative and regenerative by design and aims to keep products, components, and materials at their highest utility and value at all times.

The concept is congruent to the living world. There is no waste. It is just the flow of material from one form to the other. Energy is provided by the sun, things grow, then die and nutrients return to the soil and the system circulates. It is a system that has evolved over 4 Bn years. But what about human technology that runs our businesses? In the modern era when the new technology comes up, we ditch the old one. Let it be our mobile phones, Televisions, refrigerators, washing machines and the list is endless. When the iPhone X is launched no one needs the old one and Apple stops the support of the older models. Each time we use and discard, we are eating into a finite supply of resources. As an output of this process, we produce toxic waste. Technology is evolving at a much faster pace. So is the waste that is generated as part of these business ecosystems. By 2030, 3 Bn more middle class consumers will have access to latest technology. This is fantastic, but at what cost? Can the current way of consumerism be transformed by circular economics? If yes, firms can recirculate their products without any waste in their production, distribution and consumption supply chains. If companies stop selling products and start selling services, we will see this change. For example, if Apple starts selling its smartphone as a service instead of a product, the firm will have a motivation to circulate its older models within the supply chain and reduce the push of newer versions to the market.  In such a scenario, the customers can enjoy the latest technology without creating a perceivable dent on resources.  Consumers will be more interested in services and performance of such offerings rather than the product. This change in the business mantra can motivate firms to consume resources in a sustainable way and we could reach our ‘destination’.

Categories
Economics Geopolitics Technology

Emergence of the New five data sisters

On August 28, 1928, in Achnacarry Castle of the Scottish Highlands, there was a private appointment among a Dutchman, an American and an Englishman. If anyone knew the potential of oil, which could turn the fortune of corporations and empires, it was them. The Dutchman was Henry Deterding of Shell, American was Walter Teagle of Standard Oil the current Exxon and the Englishman, Sir John Cadman from Anglo-Persian Oil Company, soon to become BP.

With fuel-hungry ships, planes, and tanks on one side and the fast developing automobile industry on another side, when the oil became “the blood of every battle and economy”, it was these corporations that the oil men founded later known as the seven sisters, became the cartel that waged the merciless contest of money. There were times prior to the 1973 oil crisis when these Seven Sisters controlled around 85 percent of the world’s petroleum reserves.

Now let us consider the same perspective for the data. Since the time of counting, we have used information for making decisions. But it was never before this information used to be so concentrated in the hands of a five new emerging sisters. ‘Google’, ‘Facebook’, ‘Amazon’, ‘Apple’ and ‘Microsoft’. If we consider Google, there are over 100 million active users. It also has youtube with 1 billion unique monthly visitors. Facebook boasts around 2 billion monthly active users (Let alone the Instagram and the marketplace). Apple too has over 1 billion devices that are actively used around the world. Over half of the product searches happen on Amazon that has over half a billion active users. As far as the oldie Microsoft is concerned, 1.2 billion users use their product globally across over 100 countries. With Internet of things (IoT) developing, the world we survive is turning to a mine that churns out the new precious commodity data.

So what is the data that these companies are collecting from their users? They gather the information such as ad clicks, device details, email addresses, facial details, IP and location details, phone numbers, personal profile, search queries and the time information.They do it through cookies, device tracking and third party codes that we may not be much aware. We may not be even so much concerned about this information. But it makes a lot of logical sense for these companies to understand and predict the user behaviors. We will understand their power when PWC estimates the addressable market size of data to be at $1.3 trillion by 2019.

The question that whether the data is the new oil is not new. The data explosion has been predicted since 2006. There are 3 characteristics that are common for any resource that become such a powerful economic driver.

First is it’s omnipresence. If you consider the oil, it is not just a driver of our car. It is vital to the production of many everyday essentials. Oil’s refined products are used to manufacture almost all chemical products, such as plastics, fertilizers, detergents, paints and even medicines, plus a whole host of other products that you might not expect. Overall only 60-70% of the oil is consumed in the transportation sector that includes land, air, and water. Balance is consumed in chemicals and pharmaceuticals industry.

If the same parlance is taken, the mobile and smart devices that we use ever day has become the opportunities for interactions that produce customer data. The 2017 global edition of the GSMA’s ‘Mobile Economy’ report reveals that there is a 5 billion mobile subscriber base out of the global population of 7.5 billion. This is massive !!

Second is its economics. Through its extensive supply chain, the oil and gas industry employs hundreds of thousands of people and make a major contribution to the global economy in terms of global trade and technologies. Over 5-6 million people work directly in this industry globally and several million more indirectly. According to market research by IBISWorld, a leading business intelligence firm, the total revenues for the oil and gas drilling sector came to $5 trillion in 2014. 2015 estimates for global gross domestic product range between $77 trillion and $127 trillion. The oil and gas drilling sector make up between 6% and 8% of the global economy.

If we take the statistics, according to Forrester Research, Global tech industry is over $3 trillion and approximately it is over 3% with an average growth rate of over 5%.

The third is the potential for high correlation to the global economy. If we look at the correlation between the oil prices and the global economy, it is fairly complicated. The prices of the oil determine the fiscal and monetary policy of the governments.The fluctuations of its price could severely impact the corporate and sovereign ratings thus driving the investments in and out of a country. This is a direct impact on the common man whose daily life is impacted in all ways by the fluctuations of this commodity.

Similarly, if we take the impact of data, it is the dark horse that drives the consumer behavior. The targeted advertisements and customized product launches for specific user requirements are the ways to go.

But can we expect the nationalization drive that happened in the oil-rich nations will not happen again? The way in which governments responded to the 7 sisters, by nationalizing the oil resources, we possibly could see the nationalization of data. Since the new 5 sisters are extracting this resources free of cost and profiting from it, it may not be long enough to see this transformation. But I never expected that the history would repeat so perfectly.

Categories
Fintech Technology

Finance – A theory of transition to a new world

Working in the finance sector, possibly the only sector that I had worked since graduation, I have encountered a systematic shift in the perception of the jobs. I believe that we are in an era of transition of the financial industry for good or bad. When I joined my initial assignment 15 years back, I was working on trade solutions. We used to have over 20 people who were designing customized reports and running them at a specific time for various businesses across various continents. The requirements were flowing to refine the solutions so frequently that a significant amount of resources were deployed to tackle the future plans. Within a few years such a futuristic team underwent a significant headcount reduction and now I believe that technology itself does not exist. This is when the quote of Bill Gates becomes prominent. ‘We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten.’

When I joined my initial assignment 15 years back, I was working on trade solutions. We used to have over 20 people who were designing customized reports and running them at a specific time for various businesses across various continents. The requirements were flowing to refine the solutions so frequently that a significant amount of resources were deployed to tackle the future plans. Within a few years such a futuristic team underwent a significant headcount reduction and now I believe that technology itself does not exist. This is when the quote of Bill Gates becomes prominent. ‘We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten.’

This is when the quote of Bill Gates becomes prominent. ‘We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten.’

I had been fortunate to work a good portion of my life in understanding the investment perspectives of money. So let us understand money from that context. Being an industrial engineer, I always have been enthusiastic about the time-motion study. It is a business efficiency technique combining the works of Frederick Winslow Taylor and Frank and Lillian Gilbreth. This integrated approach to work system improvement is known as methods engineering and it is applied today to industrial as well as service organizations, including banks. Let us see how the transition could happen through a basic time-motion study of how an investment professional would approach an investment.

The first step for anyone is to get stock of your finances and spending pattern. With the intrusion of privacy through smartphones and data crunching and machine learning capabilities, the firms that we depend on for our everyday needs can predict our requirements to a reasonable extent. If our needs are translated into their sales, this information can be treated as a sales input for a company. In other words, it could serve as a leading indicator for one’s investment. This could create a vicious cycle by which users of a specific product could be made to buy the stocks of those products that they consume. These stocks would be recommended by very same companies that took the data from the same set users. Is it going to be fun? Can we say that this data tech is going to the next investment advisors?

As on today, we have many applications on our fingertips that could tell us the amount that we had spent, are spending and will be spending. If these data companies can build a predictable certainty on this consumption pattern, will there be a concept of a market? Will there be market buy and sell on risk and uncertainty? The result could be that one may not trade, he could just put money for a reasonably predictable future. Will that be an end of speculation in markets, which our modern day banks have invented?

The second step is usually to understand the products that would make sense for the user. As I mentioned today we have applications that can fairly predict the outcomes of investments through game theory and scenario analysis. With the enormous information that is being generated by us on a daily basis, the suitability of the products and judging our risk tolerance will become much easier. The feeder information for this judgment would be our own data provided through various means to the data aggregators of the internet such as Google, Facebook, Apple, Amazon, and Microsoft.

For your information, 95% of global data was created in the last 3 years. It is expected that by 2020 the digital universe – the data we create and copy annually – will reach 44 zettabytes or 44 trillion gigabytes. This is the data that would drive the future of money.  Anyway, this data would be input for the setting one’s goals and determining your risk tolerance. So tomorrow your decision to buy a car or a decision for a holiday could be taken by these technology companies. The days are not far, that even the style of investment and the returns that one can expect from a specific type of investment can be determined with a fairly good accuracy. Once this information is available to the public through, let us say ‘open source investment codes’, who would want to pay for the current products, that our banks and financial institutions sell as exotic products.

It would be something like our Android phones, which almost monopolized the mobile industry. We are currently on the Nokia Symbian environment as far as financial industry is concerned. Once we have a platform that would enable the users to transact, select, deploy, track, review and rebalance money on a universal level, that would be the death knell for the current financial industry as we see it today.

This is a pivot moment for the financial institutions. It could be the block chain, peer to peer services, internet of things, wearables or/and augmented reality, but I am sure that the future of money in the next 15 years will not the same that we see today. It will be a great concoction of these new age thoughts. Such innovations could either be with the current financial institutions or against such institutions. If they are on the other side it would be the end of such institutions as we see today.

Categories
Economics Environment Technology

Technologies in the new era of agriculture

I had been on a casual chat with my brother in law, who is running agri-business in Africa. I was surprised with the efficiency with which the agricultural economy was running and how the farmers are even using drone technology to do aerial surveillance of their farms. Curious on these advancements, I decided to do some research on the new developments in the field of agriculture.
The agriculture as a sector has a mammoth problem in hand – to feed the 9.6 billion people (as per FAO prediction) who are going to inhabit the planet by 2050. If this number is achieved by our efforts, then the food production must increase at least by 70% from the current levels. This has to be achieved despite the limited availability of cultivable lands, increasing need for fresh water and change in weather patterns that would come with the impact of climate change.
There are a few technologies that I found interesting and could change the way the food comes to our table. Have you ever imagined what is the average time for a newly harvested apple to reach to your table? One week, one month, three months..sorry! On an average, it takes around eleven months to reach your table. By that time you can be pretty sure that it is just a sugar ball rather than a fruit rich in antioxidants. So what if we could do a teleportation of such food items from one corner of the world to another corner. It is not a new Starwars movie in making.
Through the Open Agriculture Initiative at MIT Media Lab, we have made personal food computers possible. This could possibly make you and me the farmers of the future. This is a tabletop-sized, controlled environment provides agriculture technology platform that uses robotic systems to control and monitor climate, energy, and plant growth inside of a specialized growing chamber. By manipulating climate variables such as carbon dioxide, air temperature, humidity, dissolved oxygen, potential hydrogen, electrical conductivity, and root-zone temperature we will be able to yield various phenotypic expressions in the plants, means we would be able to create a “climate recipe” suiting our taste. Through this project, this information can be shared across the globe on an open architecture platform to develop customised fresh vegetable and fruit recipe.Soo tomorrow we could have an apple made suiting the crispiness and sweetness customised for our taste buds. It could potentially allow farmers to induce other abnormal conditions such as drought and saline environment producing desirable traits in specific crops that wouldn’t typically occur in nature.
Another silent breakthrough happening is the creeping of Internet of Things (IoT) to the agriculture. We have started to use remote sensing technologies to make agri-farms more intelligent – means to make smart farms or feedback farms. So how do such farms work? These farms use remote sensing technologies that would observe, measure and respond to inter and intra-field variability in crops using the data gathered from farm and crop yields, atmosphere and soil-mapping, food and fertiliser consumption and weather data and apply feedback to the support systems. Such information collection is done not just in farming, but also in livestock and fishing. There are companies such as Anemon from Switzerland and eCow and Connected Cow from UK that tracks the health of livestock and recommend live solutions to the owners.Similar technologies are coming in the fish farming too. Eruvaka from India has developed a system that would control pH, dissolved oxygen, physical composition of water thus helping the water quality to be maintained effortlessly in aquaculture.
The main concerns that could come in implementing such cutting edge techniques are the ownership of data and the issues in communicating the technicalities to the farmers. In 2000, there were 525 million farms on record, out of which not a single farm was connected to the Internet of Things. IBM expects that by the year 2025 with the same base of 525 million farms, there will be 600 million sensors in use at these farms and by 2050, there will be two billion sensors used in 525 million farms – representing a major shift towards technological advancements.
Another development that would be of my interest is the one that has been developed during the interplanetary exploration endeavours of NASA in the late 60s. Since the travel time to Mars could take a year or even longer and the space on board and the resources were limited, NASA had figure out how to produce food with minimal inputs. It involved single-celled microorganisms that used hydrogen from water and the carbon from the carbon dioxide exhaled by the astronauts and converted into a nutritious, carbon-rich crop and eventually to a meal. The types of microbes that they used were called hydrogenotrophs – nature’s supercharged carbon recyclers. These organisms created a virtuous carbon cycle that would sustain life onboard a spacecraft, thus creating a closed-loop carbon cycle.
How beautiful would it be if we can convert the increased carbon levels in our atmosphere to edible food and solve the problem of hunger? To cope up with the incoming demand of the food, I believe the modern agriculture simply cannot sustainably scale to meet that demand. We could use the existing land resources to get better outputs through the new methods of the web and dig out the techniques that could have been used for our interplanetary expeditions.
The future of food is not about fighting over what can be done and what cannot be done. The future of food is about networking the billions of farmers and the consumers and empowering them with a platform to ask and answer the question, “What if?”
Categories
Economics Environment

Economics of fashion and pollution

It is my daughter’s holy communion and my entire family was busy in getting the best fashionable attire for her. When I had the first look of the attire it was soft as silk and was magnificent. Angels would shame seeing her in that attire. As my usual practice, I was curious to know what was the material that was used for making such a beautiful attire. The content list detailed it out as 70 percent polyester and 30 percent silk. I did not take it much seriously when I saw the attire. But over the evening, I just thought of checking out what is the impact of such synthetic fashion polymers on the environment.

Over the past few decades, there has been a major shift in the materials chosen by manufacturers, designers and consumers for the clothes they are going to work and wear. There were times when we had created trade routes for the finest silk. We also know how cotton played a central role in shaping the modern social and economic institutions including the United Stated of America and the United Kingdom.

Since the arrival of NYLON the first synthetic fibre, fifty years ago, synthetic and man-made materials have taken centre stage. As of now, industry is filled with polyester, acrylic and nylon. The shift is not irrational. Synthetics are cheaper and easier to produce in large quantities. Even though these materials are good for the bottom line, it is damaging the environment in a big way. Considering a number of pollutants expelled by the clothing and apparel industry, from the estimates of Forbes, the industry is responsible for over 10% of global emissions, an estimate that gives an idea of the grand scale we are talking about.

The plastics are made from the petroleum gases and petroleum liquids, which are by-products of petroleum refining. As per rough estimates by OPEC, in a single year, almost 70 million barrels of oil are used in the manufacturing of polyester alone. This includes the consumption of oil both as a raw material and as fuel to generate the necessary energy used in the process. Globally we consumed 100 million tonnes of textiles in 2016. In that, over 65 million tonnes were petroleum based. As highlighted in Elizabeth Cline’s Overdressed: The Shockingly High Cost of Cheap Fashion, this quantum of production requires 145 million tonnes of coal and a couple of trillion gallons of water.

On the consumption side, in developed economies, it is estimated that each consumer buy anywhere between 60-70 garments every year and in developing economies it is around 20-30 garments and possibly in underdeveloped countries it may even be 0-5 too. This wide disparity of the fashion is supposed to encourage us for recycling the clothes. But do we do so?

According to the Environmental Protection Agency, 84 percent of unwanted clothes in the United States went to either a landfill or an incinerator and not to recycling. What is the impact? If we are talking about natural fibres, unlike banana peels, these natural clothes can’t decompose. The chemicals used in bleaching, dying and printing leach from the textiles and improperly sealed landfills into groundwater. The incinerators also release toxins into the air. The agency estimates that if the trashed textiles are put into a recycling program it be equivalent to taking 7.3 million cars and their carbon dioxide emissions off the road. The synthetic fibres, like polyester, nylon and acrylic on the other end take hundreds of years, if not a thousand, to biodegrade.

After this understanding, I am not so sure whether I should be in shame or the should believe that the angels would shame.

Possibly the closed-loop textile recycling could be an answer where the technology will enable a circular flow of resources in textiles. If we could separate blended fibre garments, dyes and other contaminants thus producing fibres comparable in quality and price to that produced from virgin-derived resources, the technology could be revolutionary. Tomorrow may come where we could get a discount on purchases for returning our own worn garments and could get fresh fashion made from old fashion.  Adidas, Levi’s, Nike and H&M are leading this game and would be the firms that could impact the future of what we wear and not the traditional Prada, Burberry and Gucci.

Categories
Economics Technology

Universal Basic Income – all pay and no work

How do you feel when you get paid freely for doing no work? In my previous post, we had discussed the possibility of Universal Basic Income (UBI) proposed by Thomas Paine – the price tag that we have given for the new era of the unemployed because of the emergence of automation and technology. It may surprise you to know that a partial UBI already existed in Alaska since 1982 and that a version of basic income was experimentally tested in the United States in the 1970s.

So let us understand the dynamics of universal basic income. A study, released by Oxfam, showed that just 57 billionaires in India have the same wealth as that of the bottom 70 percent population of the country. To give a global perspective, just 8 billionaires have the same amount of wealth as the poorest 50 percent of the world population. This statistics gives the extent of global income inequality. Now wonder we have just 32 million of 3210 million population of the world owns over 40 percent of the world wealth.

Anyway, what is the need of this universal income? It is predicted that automation will create nearly 15 million new jobs by 2025, but at the same time, wipe out nearly 25 million. The 10 million who is going to lose the jobs in the process would be the people who would find it difficult to upgrade their skills or those who are too old to switch the jobs. But how would they survive? Will the world of technology be morally responsible for supporting them?

Even some of the biggest technology tycoons including Elon Musk who are talking about changing the world for the better seem deeply concerned on what the very same technology could do to jobs in the long haul making universal basic income “necessary.” It is not just the individuals who are concerned about this. The entire political spectrum is concerned about this huge income disparity. The idea of unconditional or universal basic income is like social security for all. The cause of this thought is not just from the rising income inequality arising from technology dominance. It has the origins from the decades of stagnant wages, the transformation of lifelong careers into sub-hourly tasks, and world-changing events like Brexit and the vision of Trump. All of these concerns are pointing to the need to start a permanent income guarantee for everyone that could take care of the basic needs of an individual.

How will this make sense in the new economy? If we look at the operational aspect of this concept, it is a negative tax. An interesting process in which those earning below a certain point are given an additional income, and those earning above a certain point are taxed on additional income. To cut it short, even Ambani would receive the same amount as a person below the poverty line. Only difference it that Ambani will pay far more than that amount in new taxes for the government to pay for it.

But what about people then choosing not to work? Isn’t that a huge burden too? It is an interesting topic to debate. Let us look at implementing this in a developed market like the US where the data is handy. According to Gallup in the US, 70% of workers are not engaged in what they resulting in a productivity loss of around $500 billion per year. With UBI coming in, this disengaged workforce will say “no thanks” to the labour market enabling an opportunity for the rest of the people who want to do the jobs they want. The result is a transformed labour market of more engaged, more employed, better paid and more productive workers. Fewer people are excluded, and there’s perhaps more scope for all workers to become self-employed entrepreneurs. In addition, there are proven positive effects on social cohesion and physical and mental health.

Based on the evidence we already have and continue to build with the trial run of such a scheme in Mongolia, Finland and India, I firmly believe unconditional basic income as a new equal starting point for all. For resource-rich countries like Kuwait and Saudi Arabia, it will be an efficient method of utilisation and transfer of resource incomes. For populated countries like India and China, it will help the reduce the leakage of subsidies provided by public welfare distribution.Lastly, in developed economies, it will compensate for the advances in artificial intelligence, robotics, and other technologies that have questioned the future of work.

In addition, there are proven positive effects on social cohesion and physical and mental health. Based on these evidence we already have and with the trial run of such a scheme in Mongolia, Finland and India, I firmly believe unconditional basic income as a new equal starting point for all. For resource-rich countries such as Kuwait and Saudi Arabia, it will be an efficient method of utilisation and transfer of resource incomes. For populated countries like India and China, it will help to reduce the leakage of subsidies provided by public welfare systems. Lastly, in developed economies, it will compensate for the advances in artificial intelligence, robotics, and other technologies that have questioned the future of work.

If things work out as planned by the governments, we might have a better place to live with more equitable distribution of wealth.

Categories
Economics Fintech

In search of efficiency – financial exclusion and technological unemployment

Every day we hear about the firms that try to make the world a better place. The new age technology firms want to erase the sources of inconvenience and delay that irritate their consumers. Every time I take the ride-hailing services of Uber to avoid the waiting time for taxis, the Book my show to avoid the queues in the cinema halls, and pay through PayTM to avoid the inconvenience of cash, I always hear about operational efficiency. Such applications claim to bring convenience for the users and run campaigns on their ethos of innovations.
But are they sincerely doing what they are supposed to solve? Do the end users need such innovations? Do these product innovations eliminate too much of hassle? In short, are they aiding society rather than harm?
Let us take a recent economic hype created by the politicians and central bankers – the demonetization. When I went through the pain of demonetization, I realised that it is not just Indians who are suffering through the pain of cashless economy. This time when my quarterly debit card statement came, I scrolled through it. To my surprise hardly there was any cash debit from my account. Enormous emphasis is placed on improving online infrastructure and online activity, particularly in the Banking and Finance sector. When we are moving so aggressively to the presence-less, paper-less and cash-less economy, we tend to forget a few fundamentals.
Many of us are happy to tap cards or phones to get to a taxi, buy a coffee or pay for groceries. But it raises the prospect of a time when we no longer carry any cash at all.
This results in no spare change for the busker on the streets, the person sleeping rough in need of a hot drink, and the donation box. This might be the rise of a cashless nation that would be mean with street vendors, small merchants and the poorest inhabitants who cannot afford the instruments of so-called convenience. It may so happen then we may further divide the mainstream society based on such media of convenience – The traditional and the modern. The societies that are in dearth need for the financial inclusion may put pressure on the same traditional who are to be banked and signed up to the financial system through financial inclusion. Many of such poorest traditional are likely to remain outside of that system creating a bigger danger of financial exclusion.
In a keynote delivered at Mobile World Congress by Ajay Banga, Mastercard’s CEO spoke about the growing global risk of creating islands, where the unbanked traditionals transact only with each other. According to Fung Global Retail & Technology, even in Sweden and Netherlands that could become the world’s first completely cashless society, significant enthusiasm gap has emerged between the traditionals and the moderns.
Now let us look at the second aspect of automation and convenience. To give a perspective, a report put out in February 2016 by Citibank, in partnership with the University of Oxford, predicted that 47 percent of US jobs and 35 per cent of UK jobs are at risk of automation. In China, it’s a whopping 77 per cent, while across the OECD it’s an average of 57 percent. And three of the world’s ten largest employers, Foxconn, Walmart, and the US Department of Defence, are now replacing their workers with robots.
Predictions that automation will make humans redundant have been made before. During the Industrial Revolution textile workers, protested that machines and steam engines would destroy their livelihoods. The difference between the previous waves of automation and the current one is that workers had the option of moving from routine jobs in one industry to routine jobs in another in the earlier. But now the same data techniques that allow companies to improve their marketing and customer-service operations also give them the raw material to train machine-learning systems to perform the jobs of more and more people.
Are these developments leading to the concept of Universal Basic Income proposed by Thomas Paine, the 18th-century radical? Is this the price tag that we have given for the new era of the unemployed? Need to wait and see how the technologists, governments and central bankers would tame this problem.
Categories
Economics Technology

Agglomeration through hyperloop transport

A few months back I had been to a prominent hospital since my dad had to undergo an orthopaedic surgery. During my stay at the hospital, I got quite accustomed with the staff and they showed me an uncommon tranport mechanism. It moves the patient’s blood samples and prescription medicines across the hospitals through Pneumatic tubes. They are systems that propel cylindrical containers through networks of tubes by compressed air or by a partial vacuum. Even though it is an age old technology, of the late 19th and 20th century, I was impressed with the precision and the swiftness of the transport. Can such an integrated system be the framework of our future transport? Can this be the older working model of the proposed hyperloop powered by pneumatic energy?

Since the introduction of trains and cars in the early 19th century, nothing much has changed in the industry. We still rely on the modified forms of such transport mechanisms. But is the future going to be the same in the coming decades?

The transportation sector as we see it is around 5 trillion dollar industry. In the next few decades, it will be one of the industries that may see innovations. Such innovations could include driverless cars and public transports, intergalactic or interstellar travels and hyper loops. The hybrid of a Concorde and a railgun and an air hockey table – the hyperloop is expected to take the centre stage of this transformation. Even though it is not an innovative concept, the idea has gained enough of traction. Even India plans for its working hyperloop in the coming decade!  The first outlay is expected from New Delhi to Mumbai in 70 minutes flat, or three times faster than a commercial flight (a max speed of 760 miles per hour). The pilot funding of expected at $120 million. On the revenue side, a single tube could carry 1.44 lakh passengers daily at 40-second intervals with an average ticket price of under Rs 600 (around 10 dollars).

So how does it work? According to Elon Musk, the propounder of the system, it is a tube over or under the ground that contains a special low-pressure environment. The cars are propelled through this tube with high-speed fans that would compress and push the air for their propulsion. These cars would be floated in the chamber with Air bearings that would make these capsules to levitate in the tube to reduce friction. The entire system will be driven by solar power.

Now let us look at the economics of this transportation system. According to World bank the per-mile cost of building this loop is pegged at around $40 million per kilometre compared to High-Speed rail project at $56 million per km.

Can this technology play a bigger role to play in the future of freight transport too – an industry that powers the global trade? Given that we’re planning to move containers and pallets on-demand at speeds far in excess of today’s rail and highway options and far less expensively than by air freight, an integrated framework of such seamless nodal transport would be the future of not just human transport but of the goods too. This will reduce the inventory costs and have a better supply chain around each nodal city. Technically this is mentioned in economics as agglomeration – clustering of people and firms. This can lead to more innovative delivery mechanisms of medical/perishable goods and motivate regional economies for greater specialisation, thus reducing the overall cost and quality of global freight transport.