Some of the most fascinating topics covered this week are Learning (Don't suppress rise of private education, celebrate it), Business (Can Disney challenge streaming giants?), Lux-Culture (Luxury brand wonders how to sell to millennials), Sports (Djokovic on his personal life and his philosophies), Society (Would you live in a city where Government controls privacy?) and Politics (Why is right-wing winning around the world?)
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 Learning (Don’t suppress rise of private education, celebrate it), Business (Can Disney challenge streaming giants?), Lux-Culture (Luxury brand wonders how to sell to millennials), Sports (Djokovic on his personal life and his philosophies), Society (Would you live in a city where Government controls privacy?) and Politics (Why is right-wing winning around the world?).
Here are the ten most interesting pieces that we read this week, ended April 19, 2019.1) Governments should celebrate the boom in private education, not suppress it [Source: The Economist] Spending on private education has been increasing. The Chinese now spend 5% of household income on education and the Indians 4%, compared with 2.5% for the Americans and 1% for the Europeans. As a result, private schooling, tuition, vocational and tertiary educations are booming in developing countries. But, some governments are trying to stop its advance. Education used to be provided by religious institutions or entrepreneurs. But when governments, starting in Prussia in the 18th century, got into the business of nation-building, they realised they could use education to shape young minds. As state systems grew, private schooling was left to the elite and the pious. Now it is enjoying a resurgence, for several reasons.
All over the developing world, people want more or better education than governments provide. Where cities are growing at unmanageable speed, the private sector is taking up the slack. In India, the private sector now educates nearly half of all children, in Pakistan more than a third, and in both countries the state sector is shrinking. A study of eight Indian states found that, in terms of learning outcomes per rupee, private schools were between 1.5 times more cost-effective than state schools (in Bihar) and 29 times (in Uttar Pradesh). But private schools also increase inequality. They tend to sort children by income, herding richer ones towards better schools that will enhance their already superior life chances and poorer ones towards shoddy establishments that will further undermine their prospects.
That is one reason why many governments are troubled by their rise. Other reasons are less creditable: teachers’ unions, which often have a hold over governments, tend to oppose them, and their growth reduces politicians’ power. So for good and bad reasons, governments are squeezing private schools, banning profits, cutting or capping fees, and using regulations to close them or make their life difficult. Governments are right to worry about private education’s contribution to inequality, but they are wrong to discourage its growth. The freedom to spend your money on improving your child’s potential is a fundamental one. Governments should instead focus on improving the public sector by mimicking the private sector’s virtues. To spread the benefits of private schools more widely, governments should work with them, paying for education through vouchers which children can spend in private schools, or paying privately-managed schools to educate publicly funded children. The world has many problems, but Governments should stop behaving as though one of them was private education.
2) Declutter, Dust, Repeat: Are we cleaning to cope with our 'Existential Anxiety'? [Source: Huffington Post] Cleaning is one of the most mundane tasks and nobody loves it. But, there are a few exceptions and also there are benefits of decluttering. Currently, people like Sophie Hinchcliffe are known as ‘cleanfluencers’, and these influencers are taking the social media by storm and dusting up the debris as they go. Mrs. Hinch has a staggering 2.1 million Instagram followers, whom she lovingly calls her ‘Hinchers’ and who tune in regularly to watch her Insta stories of cleaning tips and product recommendations. Mrs. Hinch has spoken openly about how cleaning helps her mental health. Since starting her account in 2018 and sharing her cleaning journey with the world, she says other people have messaged her to say she has “changed their lives” and even helped them with their own mental health.
Keeping our home clean and tidy does make us feel better. If you come home to a messy house, you surely won’t feel good. Kara Godfrey, 27, from London finds a spring clean helps her avoid low-level anxiety. Clutter and mess causes her intense stress, which in turn can lead to “full-blown anxiety attacks” as she fears she has forgotten something or lost something amid the mess. “Being able to clean helps me see a ‘fresh start’ especially coming out of an anxious period where I’ve been unable to do basic chores and tasks,” she explains. There are studies which have noted links between cleaning and improved health outcomes. One found people with clean houses were healthier than people with messy houses. This could be because cleaning, on a very practical level, is a form of physical activity.
We also need to acknowledge that cleaning isn’t always the best thing. Sara McQueen, 25, from Leeds, has obsessive compulsive disorder (OCD) and admits to quite a complex relationship with cleaning. “It definitely does make me feel ‘better’ but I have to be careful because it spirals into something impossible,” she explains. For people who do find their cleaning habit has gotten out of control – whether that’s because it’s stopping you from going out or it’s weighing on your mind when you’re out – you might want to start thinking about whether you need some other kind of support.
3) Disney CEO Bob Iger lays out details on company’s Netflix competitor [Source: CNBC] In this interview, Disney CEO Bob Iger sits down with CNBC’s David Faber to talk about various topics. Disney’s new streaming platform Disney+, job cuts to come from the consolidation process, where Disney stands in comparison with competitors like Netflix, and much more. When asked how Disney+ is going to make money when its competitors are actually making losses, Mr. Iger says that the company has around 100 years of creating great content, and when you have great brands like Marvel and Pixar, you certainly have an advantage. The number of people spending money on their brands is huge and that’s going to turn them profitable when it comes to Disney+.
Talking about marketing, Mr. Iger says that they are going to cross-market Disney+ to their fans. Those who visit their theme park. They’ll use these platforms to connect to the customers. He also further says that you need to evolve and become better. If you stay the same, your brand doesn’t add value to your customer or gives something new, it’s going to die one day. Doing nothing new and staying the same is the recipe for ultimate extinction.
Mr. Iger also believes that storytelling is most important in their business. Disney’s decision to buy Pixar and Marvel was made because the company believes that great storytelling will stand the test of time. No matter how much the market is disrupted, a great story well told will succeed.
4) Paul Singer, Doomsday Investor [Source: The New Yorker] This longish article (you can also listen to this piece) talks about how Paul Singer, an activist investor, makes money and controls the companies where he has his stake. His hedge fund, Elliot Management, specializes in distressed debt acquisitions. And this piece shows how he and his firm get what they want. It all starts with a phone call. Jonathan Bush, the co-founder and C.E.O. of the health-care technology company Athenahealth, gets a call from Jesse Cohn, who worked for the hedge fund Elliott Management. Cohn said that he was calling as a courtesy, to give Bush a “heads-up” that Elliott had amassed a 9.2% holding in Athenahealth and was now one of its largest shareholders. It wasn’t unusual for a major shareholder to talk with the CEO, but this interaction, Bush thought, had a menacing tone. Although he wasn’t familiar with Elliott Management, an unsettled feeling came over him.
Mr. Cohn told Mr. Bush that Athenahealth was a great business, but a few changes were need. Mr. Cohn also said that he had spoken with Athena’s other investors, who were unhappy. Mr. Bush had the impression that Mr. Cohn was making his way through a script, repeating familiar talking points. Elliot detects weaknesses in companies then pressures the company to make changes to its business, with the goal of improving the stock price. Elliott’s executives say that most of their investment campaigns proceed without significant conflict, but a noticeable number seem to end up mired in drama. A signature Elliott tactic is the release of a letter harshly criticizing the target company’s CEO, which is often followed by the executive’s resignation or the sale of the company.
Mr. Bush wasn’t naïve enough to figure this out. Few of his friends in the business gave him advice and also guided him what to do next. Or at least what to expect next. Soon Mr. Bush was in the limelight with various articles cropping up every now and then, miring his image. His personal life was all over the news and this is what forced him to resign soon. A longtime Athena investor, who was an advocate of Bush’s, told that he believed Elliott was behind all this. Now that Mr. Bush has ample of time, he plans to use his free time to learn to fly a seaplane, and to attend more of his kids’ sports matches. Still, it was clear that he had been deeply hurt by the battle with Elliott. “It felt . . . dirty,” he said.
5) President of LVMH Watch Brands and chairman of Hublot Jean-Claude Biver on the popularisation of luxury culture [Source: lux-mag.com] The promotion of luxury goods using so-called low culture is a relatively new development. This change towards the popularisation of luxury culture is not just in the watches segment. In this piece, Jean-Claude Biver, celebrated as the saviour of the luxury mechanical watch industry when it was threatened 40 years ago with virtual annihilation by the rise of battery-powered watches, explains how the melding of high and low culture is the best chance of the industry’s survival for the next decades.
The most significant indication of this trend for Mr. Biver is that Hublot has become extremely successful with a very big turnover in China, where five years ago, they could barely sell one watch. Everyone was saying that in China they do not perceive sports watches as being part of luxury; they wanted wonderful dress watches like Vacheron Constantins and Patek Philippes instead. It’s the same with other goods; people don’t want classical furniture any more, they want modern furniture. People want contemporary art because a new generation brings with them new trends and influence.
For the super-rich now, luxury means uniqueness, something others cannot buy, which is why Lapo Elkann has started Italia Independent, creating bespoke cars which other people cannot get or buy. That is top luxury. And there is a scale. A young woman dreams of a Hermès bag in leather; the next step up is crocodile, then with a gold clasp, then with a gold clasp with diamonds, becoming more and more exclusive. Then you end up having something nobody else has. The association of luxury with street culture, and the blurring of lines, is becoming stronger all the time. Once, it was normal to wear a watch; twenty or thirty years ago, 99% of people were wearing a watch. Now few of this new generation think that a watch should be worn. To seduce the new generation, watch companies must understand their lifestyles.
6) This conversation will change your perspective [Source: YouTube] Most people, even non-sports fans are inspired by world class athletes like Novak Djokovic. But why? To be world class at anything it takes more than natural skill, it takes physical, personal, spiritual development and a healthy relationship with one’s own ego to begin a fulfilling journey to greatness - something we are all capable of, given we know how to use the appropriate tools. In this an hour-long conversation, Djokovic shares everything. He even talks about his childhood where he remembers confiding to his tennis coach instead of his own parents about the growing pains of being a young man.
He starts by giving some background on his family, and how he loved tennis and starting playing the sport since he was 4 years. Coming to the sport, he says that he doesn’t see winning or losing as such, but he takes it as another great lesson and moves on. And for this, he feels it’s because of the knowledgeable people that came across during his professional career. Talking about his success and his greatest achievement, he says that his greatest achievement is his open mind. He feels that with an open-minded perspective approach to life, you help all the natural processes in yourself to flourish and excel. You are embracing the natural flow of life.
On ego, Mr. Djokovic says that he does have a big ego but he befriends it and deals with it. He teams up with his ego rather than become an enemy of his ego, because he feels ego can persuade you. When you team up with your ego, both can help each other rather than fighting. Lastly, the interview ends with fast five questions about Mr. Djokovic’s daily routine and life.
7) Caught up in polls is a drought forgotten [Source: Livemint] Election is what’s on the minds of Indians. But what about the severe problems like drought? Ahmednagar is among the 26 districts in the state which have been hit by a drought that is ravaging parts of India. After the June to September south-west monsoon recorded a deficit of 9.4% compared to 50-year average, eight states, including Maharashtra, declared a drought. The drought is so severe that in some of the regions people are getting water supply once in 15 days. The situation in Maharashtra is fast approaching the bizarre episode of 2016, when consecutive years of crippling drought forced the state government to enlist the services of the Indian Railways to supply drinking water to parched Latur. That year, the train called “Jaldoot" made 111 trips between April and August.
Not only was the June to September south-west monsoon deficient by over 9% in 2018, the October to December north-east monsoon, which is critical to southern states, recorded a deficit of 44%, the sixth-highest shortfall since 1901. Overall, in 2018, the annual rainfall was deficient by 15% compared to the 1951-2000 average. In 2019 too, between 1 March and 10 April rainfall has been deficient by 34%, shows data from the India Meteorological Department (IMD). On 3 April, private forecaster Skymet said monsoon rains are likely to be deficient at 93% of normal, and pegged the probability of normal showers—rainfall between 96% to 104% of the long-period average—at just 30%. If the forecast turns out to be accurate, 2019 will mark the fourth year of sub-par rains since 2014.
2014 and 2015, the first two years of the Modi government, were marked by a crippling drought which gave way to consecutive years of record harvests and a subsequent plunge in wholesale crop prices. On 9 April, as campaigning for the first phase of the election came to a close, Modi spoke to residents of Latur. Future wars will be fought over water, Modi told the crowd, pledging a new water ministry which will initiate interlinking of rivers and ensure water to every field. But more than the promised water ministry, the crowd lapped Modi’s nationalism pitch with loud cheers.
8) WhatsApp is a dark version of democracy [Source: Financial Times] The speed at which fake news spreads is lightning fast. And WhatsApp, the Facebook-owned messaging service, is at the forefront of it. It has advertised to persuade Indians to stop using it to spread false rumours. With the election season, spreading fake news might hit the peak. But, India is not WhatsApp’s only trouble spot — it is also implicated in a fall in vaccination rates in New York City as worried parents pass on scientific misinformation about autism.
Social media are going private as governments belatedly tackle the abuses that plague Facebook and other open platforms — election propaganda, hate speech and online bullying. Mr. Zuckerberg dubs it a shift from town square to “the digital equivalent of a living room”, although WhatsApp’s group limit of 256 people would fit in few living rooms. As WhatsApp has found in India, where it has at least 210m users, harmful rumours can propagate rapidly and invisibly, even if forwarded innocently. “Share Joy, Not Rumours,” its Indian television ads implore.
But the messaging app is working to curb fake news. WhatsApp has tightened its rules to curb abuses and the propagation of misinformation. It removes 2mn accounts per month that send messages in bulk or appear to be automated, and has limited the rate at which users can forward other messages. It could do more of the same, but is circumscribed by its self-imposed encryption barrier. Facing rising pressure to control abuses on Facebook itself, Mr. Zuckerberg has clearly realised that life might be easier if his company went dark. “We will never find all of the potential harm we do today when our security systems can see the messages themselves,” he admitted last month, while noting in his blandly utopian way that moving the company towards private, encrypted services “seems right to me”.
9) Would you live in a smart city where government controls privacy? [Source: HBR] In this podcast, two Harvard Business School professors Leslie John and Mitch Weiss discuss about Toronto’s experimentation with smart city concepts envisioned by Google spin-off Sidewalk Labs. They discuss the tradeoffs of using technology to improve modern city life at potential costs to digital privacy from their case, “Sidewalk Labs: Privacy in a City Built from the Internet Up.” When asked what led to write this case, Mr. John said that one of his motivations was this pattern that he has been observing whereby managers say they care about privacy and about consumers’ privacy. But when it comes to actually doing something about it, changing policies and so on, they often stop short of that.
Mr. Weiss says that Sidewalk Labs is absolutely one of the most high-profile examples of this at the time. Google, now Alphabet, decides to spit out this company to solve urban problems. And so the question of can a tech company essentially solve city problems is absolutely in the air. And with Sidewalk it’s one of the most high profile cases. Also he says that one thing that Toronto wanted to get done was economic development for Toronto in this tech innovation space. The second objective was to solve city problems. It’s the same core objective that Sidewalk Labs has. People in Toronto want to solve issues of climate resilience, of affordability, of mobility.
On privacy concerns, Mr. John says that people are concerned about their privacy. But this concern doesn’t always translate into our behavior. Why? Because there are a variety of decision making biases, errors that get in the way. And it’s not that people are stupid, it’s just that our brains are kind of hardwired to think in certain ways and not in other ways. And when it comes to privacy, we have some consistent biases that emerged. Lastly, he says that he thinks the privacy is kind of an age old issue. It’s fundamental to human development. He doesn’t see concerns with privacy going away, even among digital natives.
10) Netanyahu win in Israel gives us reason to ask – why is right-wing winning around the world? [Source: YouTube] In this episode of Cut the Clutter, Shekhar Gupta declutters the rise of the Right across the globe and what led to this phenomenon. He says that Netanyahu Benjamin, PM of Israel, is the most Ring-wing leader in Israel, and he has continued to get re-elected. He gives examples of the leaders of the Right, including Donald Trump, Putin, Shinzo Abe, Xi Jinping, Narendra Modi Netanyahu, Viktor Orban, and others. What you can see is the destruction of the Left and re-election and popularity of the Right.
Mr. Gupta further says that these Ring-wing leaders have picked up the worst from the nationalist and the worst from the socialist. Xi Jinping has built Chinese nationalism to a level where it is a threat to all its neighbours. Coming to Donald Trump, Mr. Gupta says that Mr. Trump talks free markets but he is the one who is fighting free trades around the world. Then he comes to Narendra Modi. Mr. Modi is a nationalist, and Pakistan has become more important now than in the past 50 years. But when it comes to economy it’s not the same. He has attacked free trade; he has attacked free markets; he has created a favourable regime for the domestic manufacturers. So, this is similar to the Chinese model.
These all right-wing leaders have stolen the most useful attribute of the left, which is welfarism, populism, protectionism, etc. As democracy rose, in countries like Saudi Arabia, Egypt, Algeria and Syria, there were mass movements. But, none of these had built institutional structures of democracy. So this kind of haphazard democratization during chaos led to instability and states began to break up. All this led to the flight of refugees. Refugees went all over the world, in the western world, Europe, Canada and America. These refugees were predominantly Muslim and because their countries were unstable, Al Qaeda and ISIS rose. Lastly, he finishes by saying that liberalism will return.