Forbes India 15th Anniversary Special

Ten interesting things we read this week

Some of the most fascinating topics covered this week are Sports (Million dollar arm of Bumrah), Economics (Investment groups prepare for storms in 2019), Fintech (Top ten trends shaping fintech), Politics (How Sheikh Hasina used realpolitik, textbook governance to consolidate her power), Entertainment (Netflix takes on the movie industry) and Lifestyle (Secret to retirement) among others

Published: Jan 11, 2019 05:26:02 PM IST
Updated: Jan 11, 2019 05:37:41 PM IST

Ten interesting things we read this weekImage: Shutterstock

At Ambit, we spend a lot of time reading articles that cover a wide gamut of topics, ranging from zeitgeist to futuristic, and encapsulate them in our weekly ‘Ten Interesting Things’ product. Some of the most fascinating topics covered this week are Sports (Million dollar arm of Bumrah), Economics (Investment groups prepare for storms in 2019), Fintech (Top ten trends shaping fintech), Politics (How Sheikh Hasina used realpolitik, textbook governance to consolidate her power), Entertainment (Netflix takes on the movie industry) and Lifestyle (Secret to retirement) among others.
Here are the ten most interesting pieces that we read this week, ended January 11, 2019.

1) The million dollar arm of Jasprit Bumrah
[Source: Indian Express]
There were many surprises in the recently concluded Australia-India test series. But one person that stood out was Boom, as they call Jasprit Bumrah. Bumrah, in one series alone, has gifted several, definitive moments. Like the slower-ball yorker that flummoxed Shaun Marsh, or the lifter that nailed him in Adelaide, the ball kicked in from back of length and shaped a shade away after pitching, or the bouncer that clattered into Marcus Harris’s helmet in Perth. Such dread, few Indian seamers of the past, has induced. Agrees former Australian pacer Damien Fleming: “He has given that something extra for the team. Someone who can bowl serious pace, can rattle them with a variety of deliveries, bouncer, yorker and slower balls. It’s tough to think of a better-skilled Indian pace bowler in recent times”. In this series, he has far out-done the Australian seamers, which is rare.

His Gujarat coach Vijay Patel tells the story of how he nuanced the outgoing delivery. “He comes to practice with a clear mind as to what he has to do, which area he has to perfect. A couple of season ago, he struggled with the outgoing delivery, so for maybe four-five weeks, he kept working on this single delivery. This was besides other routines like the gym and a bit of batting. Once he gets his mind into it, he’s so passionate about achieving it,” he says. Now, he’s one of the finest practitioners of the out-swinger, which fixates Fleming. Not just the out-swinger, he has an assortment of tricks which he pulls out on demand. From the new-age slow-ball yorkers to the old-fashioned cutters, from conventional swing and seam to reverse swing.

Raised by his mother (Daljeet), after his father died when he was seven, Bumrah, by all accounts, was a calm and responsible child. Daljeet had reservations about her only son pursuing cricket, an unusual career choice with little success rate. Little did she know that her son had a one-in-a-million action with potential to be a never-seen-before Indian pacer who can consistently bowl in the high 140kphs. What actually caught Kohli’s eye was not his variety, but energy levels. Kohli says, “He was training like he wanted to play Test cricket, he was that obsessed about his fitness levels and his work ethic. So we discussed before South Africa that if we put him as a surprise package he could be lethal if he gets his lines and lengths right. The mindset he has is what separates him from anyone else in the world right now.” Twelve months on, he needn’t repent his decision. For Bumrah has conquered the world and transcended his quirkiness.  

2) Investment groups prepare for storms in 2019 [Source: Financial Times]
This article talks about the issues that will be on top of the minds of money managers in 2019. After a troublesome 2018, fund management bosses hope the new year will offer some relief. Costly regulatory reforms combined with tumultuous markets, floundering Brexit talks and heavy outflows led to problems for many fund companies. Will the next 12 months be less turbulent? Let’s look at these eight parameters: 1) Regulation: From a regulatory point of view 2019 promises an easier ride. “We haven’t got a Priips or a Mifid II coming down the line,” says Martin Davis, chief executive of Kames Capital and head of asset management in Europe for Aegon, the Dutch group that owns Kames. 2) Pay: Strongly performing markets have helped boost pay in recent years. Although 2018 was flat, the bonus pool in spring 2019 should still be healthy, says Tim Wright, a partner at consultancy PwC. 3) Brexit: “What’s keeping me awake is March 29,” says Mr. Davis of the date the UK is set to leave the EU. “In terms of short-term disruption, that is by far the most significant. What are the rules going to be? The whole market dislocation, markets reacting to uncertainty, that’s causing real concern.” 4) ESG investing: Investing that incorporates environmental, social and governance criteria has moved into the mainstream. “I don’t see 2019 as some sort of discontinuous break,” says Hugh Lawson, head of ESG and impact investing at Goldman Sachs Asset Management. 5) Cyber security: The risk of cyber-attacks is at the forefront of investment managers’ minds. Although more asset managers are pushing companies for assurances on how they would deal with a cyber-attack, the industry itself is seen as a digital laggard. 6) Fee pressure: Asset managers predict pressure on fees will continue amid increased regulatory scrutiny and asset owners seeking better value. 7) Return for active: The refrain of active managers is that bumpy global markets, which appear likely for 2019, will allow them a chance to shine. 8) Potential sell-off: The length of the post-financial crisis bull run is fuelling fears that it could end in a panicked sell-off amid evaporating liquidity.

3) Synergy and disruption: Ten trends shaping fintech [Source: McKinsey]
This paper throws light on ten global trends that are emerging in fintech. Almost 80% of financial institutions have entered into fintech partnerships, according to McKinsey Panorama. Meanwhile, global venture capital (VC) fintech investment in 2018 has already reached $30.8 billion, up from $1.8 billion in 2011. The investing public is also enamored of fintechs: Zhong An made waves with its $11 billion IPO valuation last year, while Ant Financial is reported to be raising a pre-IPO round valuing the company at $150 billion. “Fintech” covers a range of different models. We see four distinct variants, each operating in different niches, with different modus operandi: 1) Fintechs as new entrants, start-ups, and attackers; 2) Fintechs as incumbent financial institutions; 3) Fintechs as ecosystems orchestrated by large technology companies; 4) Fintechs as infrastructure providers.

So how is the Fintech evolving and what are the global trends? Some of the global emerging trends are: 1) High level of regional variation in fintech disruption; 2) AI is a meaningful evolution, not a great leap forward for fintechs; 3) Scrutiny of business fundamentals is increasing as funding grows more selective; 4) Great user experience is no longer enough; and 5) Infrastructure fintechs: Potential is high, sales cycles are long.

Fintech has evolved considerably in the last few years and continues to change rapidly. Fintech investors must be very selective in deploying capital, as we approach the possible endgame in this wave for some sectors and companies. With large technology companies knocking at their doors, incumbent financial institutions should proactively engage with fintech disruption, whether by building their own capabilities or by partnering or acquiring.

4) #MeToo: The economic cost of sexual harassment [Source: Institute for New Economic Thinking]
Since the Harvey Weinstein revelations, US has been thrown into a turbulent process of confronting and rapidly reassessing an insidious form of abuse that haunts American workers, often silently and mostly unchecked. But, what is sexual harassment? Under the current US federal legal framework, sexual harassment is defined as “unwelcome verbal, visual, or physical conduct of a sexual nature that is severe or pervasive and affects working conditions or creates a hostile work environment.” But, what exactly is meant by “hostile?” What constitutes “unwelcome”? There is certainly a need for more extensive and finely tuned assessments of prevalence, but polls and studies across a variety of settings and contexts suggest that sexual harassment in the American workplace is common.

A recent poll conducted by MSN, in partnership with Business Insider, revealed that one in three people (31%) in the US admitted to having experienced sexual harassment on the job. Workers across the socio-economic spectrum seem to run a gauntlet of sexual abuse in exchange for the privilege of earning a living. It happens from the top to the bottom of the workplace hierarchy and across all industries and sectors. According to an analysis by Jocelyn Frye of new, unpublished data collected by the EEOC, sexual harassment appears to happen more frequently in industries dominated by low-wage workers, with minority women working in services industries especially vulnerable.

Like a stealthy virus, sexual harassment impacts the wellbeing of society at every level. In 2003, economist Kaushik Basu of Cornell University published a paper arguing that exposure to sexual harassment has something in common with exposure to excessive health hazards and working excessive hours due to its biological impact. In a 1994 study, the cost of sexual harassment in the federal government was estimated to be $327 million, which includes the expense of job turnover ($24.7 million), workers taking sick leave because of harassment ($14.9 million), and diminished productivity ($287.5 million). Recognising that wrongdoing took place and identifying who is responsible is a crucial component of reparations. So is lifting the veil of secrecy by limiting the use of nondisclosures and ending forced arbitration.

5) How Sheikh Hasina used realpolitik, textbook governance to consolidate her power [Source: Indian Express]
 Bangladeshi PM, Sheikh Hasina, returned to power for the third time in a row despite allegations of intimidation and the opposition disputing the outcome. Over the last decade, Bangladesh’s growth rate has gone up from around 5% in 2008 to 7.86% in 2017-18, with key sectors such as agriculture, manufacturing and services growing alongside. During this period, foreign exchange reserves increased five times and both investment and savings enhanced to over 30% of the GDP. Per capita income has risen nearly threefold since 2009, reaching $1,750 this year, and the number of people living in extreme poverty, classified as under $1.25 per day, has shrunk from about 19% of the population to less than 9% over the same period, according to the World Bank. The country’s elite talk casually of flying to Kolkata over the weekend for shopping, movies, and pub-hopping.

 Apart from these evident signs of prosperity, Bangladesh’s life expectancy at birth in the country is now 72.49 years (India: 68.56 years), at least four years more than the South Asian average. But, many point to Hasina’s run-ins with the judiciary as proof of her rising authoritarianism. In 2017, Bangladesh Supreme Court Justice S K Sinha was allegedly forced to resign as he scrapped parliament’s authority to impeach Supreme Court judges. While the Hasina government has always denied the charge, in A Broken Dream, a tell-all memoir, Justice Sinha, who now lives in Canada in exile, writes that on October 1, 2017, a day before the court was to hear an appeal on its impeachment ruling, he was invited to a late-night meeting where the president, the law minister, the attorney general and Prime Minister Hasina repeatedly pressed him to rule “in favour of the government”.
All this while, as Hasina consolidated power, India has stood by her side. Prime Minister Narendra Modi and West Bengal Chief Minister Mamata Banerjee were among the first to congratulate Hasina on December 31 on her victory, along with Bhutan PM Lotay Tshering. “She has been extremely good towards India. And her approach on terrorism, when we compare her with BNP-Jamaat regimes in the past, especially the 2001-2006 term, is much better. So, the Indian government stood by her,” says an Indian diplomat in Dhaka.

6) The state of marriage as an institution [Source: Economist]
Marriages have evolved in the past decade. For hundreds of years marriage was an essential step on the road to full adulthood in Western countries. In pre-industrial England all single women, no matter how old, were “maids”, and all single men were “lads”. Preachers argued that marriage was the crucial bond holding together the household, which was, in turn, the foundation of society. By the mid-20th century marriage was almost unavoidable. As late as 1972 fully 87% of French women aged between 30 and 34 were married. These days just 43% of French women in their early 30s are married.

In 2015 two-fifths of all American babies were born to unwed mothers. In France, the proportion is 59%; in Colombia it is 84%. Just 21% of Britons aged between 15 and 24 now agree that people who want children should get married, half the share in 1989. Marriage is being transformed almost everywhere, and in many of the same ways. But different countries are at different stages of the journey. From west London to Chinese villages to Indian slums, three great changes are afoot. The first is that marriage decisions are being wrenched out of the hands of parents and relatives and made by the young people themselves. The clearest sign of this is the almost universal rise in the average age of marriage.

The second change is the emphasis on conjugal love. For much of Western history romantic love, or “familiarity”, was held not only to be unnecessary for a strong marriage but antithetical to it. Today love is triumphant. Marriage has changed from being a rite of passage to a celebration of love and commitment. The third great global change is the growing acceptance of divorce. It is now more common in many countries, especially fast-modernising ones where women are becoming economically self-sufficient. These days China and South Korea have divorce rates above the European and OECD averages. Almost everywhere marriage is becoming less obligatory, less coercive and less dutiful. It has not, however, lost any of its appeal or its private binding power.

7) The World after Trump [Source: Project Syndicate]
The world has been criticising Donald Trump for various reasons and foreign policy is one of them. The US-led international order is fraying under the leadership of Mr. Trump. But as Mira Rapp-Hooper and Rebecca Friedman Lissner explain in this podcast, rather than blaming, policymakers should focus on what the American role in the world will be the day after Trump leaves office. They have some unique views. On asking why America needs a new foreign policy, Mira says, the world has already shifted considerably. Mr. Trump isn’t the protagonist of the foreign policy movement, rather is a reflection of set of forces that predated him and are likely to last long after he leaves office.

Can the international community overcome the challenges and issues that arise from the geopolitical shift without war? That’s the crux of the research that both, Mira and Rebecca are doing together. The most creative moments of order building have come in the wake of great destruction, usually major world wars. This has been true across histories. Talking about the liberal international orders that emerged after the World War 2, emerged because the world had just been upended through this major conflict. The order that had been attempted after the World War 1 had in many ways failed. And so the liberal international order after World War 2 was an attempt to rectify the failures of the post-World War 1 and so on.

It’s not entirely clear whether orders can change in fundamentals way in the absence of violent conflict. But it’s very important that we try. Coming on the domestic front, what are the big, major issues that would be shaping US calculations as relates to shaping foreign policy ahead, in the post-Trump era? They are majorly focused on three trends that are likely to be formative: 1) Political polarisation; 2) Domestic fiscal issues; and 3) Relationship between US Government and technology (Silicon Valley). So, according to Mira and Rebecca, it’s not necessary that the post-Trump era would be better.

8) Netflix takes on the movie industry [Source:]
Today Netflix has become an alternative to going to movie theatres or watching daily soaps on TV. Netflix recently reported that over 45 million people tuned into "Bird Box," a post-apocalyptic thriller starring Hollywood heavyweight Sandra Bullock, making it the highest seven-day viewership of any Netflix original film. But it's a great number, considering that Netflix has around 130 million accounts total worldwide and Netflix barely spent to promote it. Netflix says that for "Bird Box," a view counted once a user surpassed 70% of the total running time, including credits. Each “account” may include multiple views and viewers but is only counted once.

But Michael Pachter, a research analyst at Wedbush Securities, emails: "Unless/until they give you the performance of everything else on the site (what percentage of subscribers saw their other movies?), the metric is really meaningless." "Netflix has clearly taken over TV in the last 10 years," Rich Greenfield, media analyst and managing partner at the investment firm BTIG, tells Axios. "It does not seem crazy to believe that they can do the same to the movie biz as they accelerate film production." Theater owners, beg to differ. "Netflix’s model can’t disrupt theatrical if it’s not playing on 99.7% of screens," emails Patrick Corcoran, vice president and chief communications officer of the National Association of Theatre Owners (the other NATO).

Theatrical releases are still important for pleasing talent and award consideration. So Netflix needs to play nice with theaters, even if its product competes with them. The most likely outcome could be that Netflix builds a different business altogether — one that relies on theaters while indirectly competing with them. Netflix is creating an experience that's about convenience and customization. But to make it work, it needs support from Hollywood. That's why Netflix is beginning to cave to theatrical release demands.

9) The secret to a secure retirement is not retiring at all [Source:]
A study by Aegon, a Dutch insurer and asset manager, points out that we now spend more years in retirement than in childhood. Not working for a third of your life is expensive, and unrealistic for most people. So, what’s the solution to a secure, fruitful, worry-free retirement? It’s simple, work longer and you don’t need to retire. No one knows how long you will live and living off your investment income can be stressful. Income from work, however, provides predictable income and makes savings go farther.

The current conception of retirement evolved from the latter industrial revolution when governments started to offer pension benefits in the 19th century. Before, people worked until they died or were too weak to keep working. If they did retire, they relied on their families. The modern idea of retiring to enjoy healthy years after employment was created to fit an industrial work force, and the original employer-provided pensions became popular in the first half of 20th century in part because they were a means for employers to usher out older workers.

While older employees have lots of experience and wisdom, they tend to cost more because they have accumulated years of salary increases. A culture that fetishizes youth means employers may assume older workers are more rigid, less creative and unable to quickly learn new technology. Many employers still want to retire their older workers, but they no longer have the same financial leverage they had with pensions. A joint report from ProPublica and the Urban Institute estimates 56% of Americans over age 50 will experience some form of involuntary job loss. Also, evidence shows staying in the job can even prolong your life. A survey from Flexwork finds 70% of near-retirees say they need to keep working after they retire, but 60% of them say they also want to work. Work offers retirees socialization and a sense of purpose.   

10) The 2019 agenda for India’s start-ups and venture capital [Source: Bloomberg
Lately many start-ups are propping up in varied fields that were previously unheard of. But, what was it like for the year (2018) gone by for venture capital firms and start-ups? 1) Walmart’s acquisition of Flipkart validated for the Indian ecosystem that funding life cycles work, with every significant stakeholder making money; 2) The past year/s have seen unicorn cohorts and other large tech startups leave to start their next new things; 3) Especially in the context of the Content + Commerce + Community troika in the consumer internet space, China has come here to stay; and 4) 2018 saw a period of massive capital raises, especially for consumer category leaders, who have extended their ‘time to play and win’.

But, what are the new, untapped areas/sectors? 1) Agritech: Like healthcare, this area is ‘ripe’ for disruption. Why? Cheap smartphones in the hands of every farmer, thanks to Jio’s almost-free mobile access, disintermediation of brokers across the food chain, and an interest from founders seeking to impact this core bread and butter sector of India. 2) Bharat: The Indian hinterland, beyond the metros and tier-II and tier-III cities—across both consumer and small and medium businesses—will absorb innovation across all sectors including financial services, healthcare, education, retail innovation, customer loyalty, and others. 3) B2B evolving beyond enterprise software and SaaS: We’re seeing, after a long time, emerging ideas in areas such as 3D printing, battery/electric vehicle technology, life sciences/biotech, autonomous/virtual reality/augmented reality, etc.        

With an active pipeline of unicorns, a focus on profitability, backlog of upcoming exits, and an increased interest from Chinese and other overseas investors, our entry point into 2019 will be filled with cautious optimism. To tip the scales in India’s favor, however, we need to ensure our government supports its words with real actions; our exits find scale; we create a continuous stream of exit cycles and start-up inflows; for outcomes of real and meaningful scale; from $250-500 million to $1 billion and beyond.