Ten interesting things we read this week

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At Ambit we spend a lot of time reading articles that are not directly relevant to Indian stocks. However, since the Indian economy is now umbilically linked to its global counterparts, the articles that we come across have relevance for Indian stocks and the Indian economy. In that context, this report contains the ten most interesting pieces that we read this week.

Here are the ten most interesting pieces that we read this week, ended July 22, 2016.

1) 25 years on, the good, the bad and the ugly of reforms [Source: Times of India]
In this piece, Swaminathan Aiyar sums up the 25 years of economic reforms in India as an era of private sector success, government failure, and eroding institutions. He talks about how since 1991 reforms companies blossomed in India and how service focused industry will continue to generate high growth. Simultaneously though he also laments that the economic success in India has not been matched by social success and that government has been unable to establish independent institutions that allow meritocracy to blossom.

2) An end to facile optimism about the future [Source: Financial Times]
Martin Wolf discusses the key takeaways from Robert Gordon’s masterpiece, The Rise and Fall of American Growth - The US standard of living since the civil war in this piece. According to him, growth is neither inevitable nor steady and ours is an age of disappointing growth because the technological breakthroughs are relatively narrow. According to him, in his book Robert Gordon demolishes both facile optimism about prospects for economic growth and facile pessimism about the end of employment. We are neither in the middle of an era of unprecedented economic advance nor on the brink of an era of exceptional job destruction.

3) The coming revolution in Indian banking [Source: Indian Express]
Nandan Nilekani in this piece says that a combination of Aadhar (a biometric identification scheme which has been rolled out to over a billion Indians), Jan Dhan (a mass bank account opening program expedited by Narendra Modi) and mobile phones has brought Indian banking to its WhatsApp moment i.e. a point in time where the old way of doing things (SMS in the case of mobile phones; traditional banking in the case of banking sector) is rapidly replaced by the new.

4) US autos: Adding new routes [Source: Financial Times]
This piece talks about how inspite of record sales, the mainstream US auto industry is preparing for an uncertain future. And as a result of increasing interest in the auto industry from the technology companies, the focus of the traditional auto makers has shifted to innovation. For instance, Ford and General Motors, determined not to find themselves outflanked in the battle to develop vehicles that can drive themselves, are rebranding themselves as providers of all round transport services.

5) Book review: The Great Derangement by Amitav Ghosh [Source: Livemint]
A review of “The Great Derangement: Climate Change and the Unthinkable”, this piece says that Amitav Ghosh disentangles the knots of the “wicked problem” that is climate change in his book. The book says that in climate change’s manifestations, we are not, and will never be, alone. And yet, just at a time when mankind needs to act as an indivisible force, we find ourselves isolated.

6) Kodak’s downfall wasn’t about technology [Source: HBR]
This piece deep dives into the cause for the downfall of a legendary firm like Kodak. While the common notion is that Kodak was so blinded by its success that it completely missed the rise of digital technologies that’s actually not true. The first prototype of a digital camera was created in 1975 by Steve Sasson, an engineer working for… Kodak. The piece goes on to dispel other popular notions around Kodak’s failure as well.

7) Let’s have dinner – but don’t bring your wife please! [Source: CNBC]
Carol Roth shares her own personal experience in this piece about how thinking of men in the financial world remains regressive and brings forward the conundrum that is at the centre of "glass ceiling" issues: If it's viewed as unsavoury in any way for a woman to network with a man, how does the woman ever advance her career?

8) Unburdening the Facebook generation [Source: Project Syndicate]
Legendary investment strategist, Mohamed El-Erian, says that the outcome of the United Kingdom’s Brexit referendum is but another reminder of a yawning generational divide that cuts across political affiliation, income levels, and race. Almost 75% of UK voters aged 18-24 voted to “Remain” in the European Union, only to have “Leave” imposed on them by older voters. He says that this is just one of several ways in which millennials’ economic future, and that of their children, is being determined by others and goes on to hope that the younger generation takes the matter in their own hands by being more proactive about the political representatives they elect.

9) Facebook team brings light based internet closer to reality [Source: Hindustan Times]
This piece describes how scientists at the Facebook’s Connectivity Lab have developed a new way to detect light signals travelling through the air, an advance that may lead to fast optical wireless networks capable of delivering internet service to remote places.

10) Scientists make single atom memory from copper and chlorine [Source: Science Magazine]
This piece talks about how scientists have developed a way to store data at the atomic scale. Although the development remains under works, it shows it’s possible to store as much as 500 terabits—or 62.5 terabytes—of data per 6.5 square centimeters, another 500 orders of magnitude better than today’s hard disk technology.

- Saurabh Mukherjea is CEO (Institutional Equities) and Prashant Mittal is Analyst (Strategy and Derivatives), Ambit Capital Pvt Ltd. Views expressed are personal.