Ten interesting things we read this week

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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: Business (Tech giants on a shopping spree; supply chain shocks can derail green shoots of recovery), Economy (Most EMs face a recession), Lifestyle (Focus on one thing to achieve anything; Shift small habits for big wins) and Coronavirus (India’s comfort food tells the story of its pandemic; Great cities after pandemic).

Here are the ten most interesting pieces that we read this week, ended June 19, 2020-

1) India’s comfort food tells the story of its pandemic [Source: The Atlantic] 

Parle-G is not just a product, but a memory in India. It’s a ubiquitous brand of biscuit that one can find anywhere and everywhere in India. While elites dunk them in milk and have it, the poor dip in water. Parle-G biscuits are India’s comfort food. In 1929, Mohanlal Dayal Chauhan, an Indian businessman, established Parle Products, naming it after the Mumbai suburb, Vile Parle, where it was founded. For Mr. Chauhan, the company was his contribution to a broader nationalist push toward self-reliance and resistance to British colonial imports. And as the lockdown was imposed all over the country, it affected all 135 Parle-G factories across India.

With more than 10,000 employees on the rolls and about 50,000 more working indirectly for the company, according to Parle Products—as well as many informal workers—an intricate system unraveled. The government had allowed the production and sale of essential commodities but did not clearly spell out what was “essential,” with implementation and interpretation varying across the country. After the company was allowed to restart production, permits were required for ferrying workers to and from the factories, for the 8,000 distributors who supply the biscuits to more than 5 million retail stores, and for an army of salespeople and workers at distribution centers across the country.

This piece also tells the stories of how migrant labourers had to survive on handful of food items, including Parle-G biscuits, till they reached their villages. Across the country’s varied culinary landscape—where what one eats can signal class, caste, religion, ethnicity, and income—Parle-G biscuits are neutral. The author of this piece feels that Parle-G—India’s ubiquitous biscuit, its comfort food, its egalitarian snack—was not just made for all manner of Indians. It was made by them, too.

2)    The economy is reeling. The tech giants spy opportunity. [Source: Economic Times] 

Countries all over the world are suffering due to the current pandemic. But, there are businesses who are taking advantage of this situation, especially the tech companies. Facebook recently invested in Gojek, a “super app” in Southeast Asia, and in Reliance Jio, a telecom giant in India. Other technology giants are engaging in similar behavior. Apple has bought at least four companies this year and released a new iPhone. Microsoft has purchased three cloud computing businesses. Amazon is in talks to acquire an autonomous vehicle start-up, has leased more airplanes for delivery and has hired an additional 175,000 people since March. Google has unveiled new messaging and video features.

Amazon, Apple, Facebook, Google and Microsoft are aggressively placing new bets as the coronavirus pandemic has made them near-essential services, with people turning to them to shop online, entertain themselves and stay in touch with loved ones. The skyrocketing use has given the companies new fuel to invest as other industries retrench. The expansion is unfolding as lawmakers and regulators in Washington and Europe are sounding the alarm over the tech giants’ concentration of power and how that may have hurt competitors and led to other issues, such as spreading disinformation.

Ranjan Roy, a tech commentator for The Margins, an internet industry blog, said it was clear that the tech behemoths were unafraid to get more aggressive now and that the power they were accruing should give people pause. Amazon, Apple, Facebook, Google and Microsoft, combined, are sitting atop about $557 billion, enabling them to maintain a pace of acquisitions and investments similar to last year’s, when the economy was humming, according to a tally of financial disclosures. They have been among the top corporate spenders on research and development for most of the past decade, according to the accounting firm PwC.

3)    Investment downcycle coming, most EMs face a recession: Jim Walker [Source: Economic Times] 

In this interview, Jim Walker talks about effects of Covid-19 on emerging markets, challenges for the Indian government, comparison with 2008-09 situation and much more. He expects a recession across all emerging markets. “The export side in EMs will be particularly weak but, like the developed countries, their corporate profits are being hard-hit. When profits go down, companies take extreme efforts to shore up their balance sheets by squeezing inventories, firing workers and slashing investment. It is the investment downcycle that causes recession. That is what is coming for most of us.” 

Talking about how challenging the current crisis would be for the Indian economy, he says that India is one of the least export-dependent emerging markets and one of the most benefited by a fall in the oil price. Those two factors will help mitigate the effects of global downturn. However, the domestic economy was weak already and we see no sign that the government has really understood the nature of the economic problems facing India. Sub-3% growth is highly likely and it’s quite possible that it could worsen in 2020 at least.

He further talks about how markets have reacted rather indifferently to the fresh stimulus by the Fed, oil prices and also gold. On gold, he says “Gold might recover some lustre in the next phase of this crisis because the government will be adding money direct to the economy this time rather than to the financial system which is why asset prices inflated after 2009, not consumer prices. This time the inflation is likely to be much more widespread, which is good news for gold. We would be accumulating slowly at the moment although gold mining stocks probably offer the best value.”

4) Great cities after the pandemic [Source: The Economist] 

Covid-19 hasn’t sparred any country or city. Cities with most population have been impacted the most. The virus has attacked the core of what makes these cities vibrant and successful. Bars and cafes which were crowded are now empty and closed. People are learning to toil from home; some have discovered that they like it. Facebook, until recently a heroic office-builder, has announced that it will let many employees keep working remotely even after the virus is seen off. Commercial, and residential, property markets could slump as jobs move out of cities, even if only for part of the week.

New York’s independent budget office reports “absolute gloom and uncertainty” and frets that tax revenues may fall by $9bn in the next two fiscal years. The great danger is that cities enter a spiral of budget cuts, deteriorating services, rising crime and middle-class flight. It would be the 1970s all over again. And yet cities are stronger and more resilient than they seem. As with so much else, the fate of cities hangs on the development of treatments and vaccines. But their magic cannot be woven from afar as easily as some suppose.

National governments and states will need persuading that cities should have more power, especially as many will also be begging for money. They should step back anyway. Great cities are obnoxious, but they are normally big contributors to national budgets. And the trick they perform for their countries is not just economic. Cities are where people learn to live in a modern, open society. They are machines for creating citizens.

5) How supply chain shocks can derail green shoots of recovery [Source: Livemint] 

Most of the migrant workers have returned to their homes in villages in India. In this crisis, for factories to run at full capacities, you need 100% labourers. This is the worry for most of the auto makers. This is bothering a few automakers who think the cracks in India’s supply-chain will stand exposed as demand picks up in the near future, particularly for entry-level cars and two-wheelers. With India opening up, people are expected to choose personal transportation over mass transportation fuelling orders.

The lockdown has battered the supply-chain in numerous ways. Companies had no revenues but fixed expenses. Ashok Kapur, chairman of Krishna Group, a large manufacturer of seating systems, auto textiles and metal fuel tanks among others, pointed out that his group pays out ₹20-25 crore a month in security, leasing and electricity costs among other expenses. “Being a tier-I supplier, I can write off ₹50 crore for the year. But people down the line who do not have reserves like we do will be finished," he said. In the aftermath of the lockdown, financing has emerged as the biggest headwind in the supply chain. Not just private OEMs, even government departments as well as public sector units (PSUs) have run up huge payment overdues, which are choking companies.

While industry awaits orders, the writing on the wall is clear. Many small firms would go belly-up—a survey by the All India Manufacturers’ Organisation stated that around 35% of India’s MSMEs were in the process of shutting shop. In the Darwinian fight, a few of the suppliers would eventually merge. And supply chains, as they exists today, are likely to get restructured in preparation for future demand. 

6) Indian payment providers in limbo as lockdown bites [Source: Financial Times]    

India’s lockdown brought the country’s bustling neighbourhood markets and a budding ecommerce scene to a halt overnight. Indian retail, both bricks-and-mortar and online, has since been in limbo. That has had a dramatic knock-on effect on what had been the world’s fastest growing digital payments market. The lockdown ended the roaring growth in volumes through the Unified Payments Interface, a government-backed system that allows easy, instant bank-to-bank transfers. After doubling in 12 months, UPI transactions fell to under 1bn in April from over 1.3bn in February. The figures for May, when the government started to ease lockdown measures, recovered to 1.2bn but remain lower than they were at the end of 2019.

Coronavirus and social distancing is expected to push the proportion of online transactions higher over the long term, ensuring that digital payments will be more ingrained in consumer behaviour in a post-Covid-19 world than ever before. Yet in India the pandemic also risks upsetting the financial equation for companies and investors who have spent billions of dollars in a race for market share. “We’ll continue to see a secular shift to digital payments. People will not want to hand cash over,” said Nandan Nilekani, a veteran entrepreneur who led a central bank committee to boost digital payments. Mr. Nilekani added: “The economy itself is not going to be buoyant. Payments is a proxy for the economy. . . A large part of that was predicated on the economy growing fast.”

The blow to India’s economy from coronavirus is expected to be severe, and analysts fret that growth will not rebound easily. That could leave cash-burning payments players facing an extended period in the wilderness. “It will be unclear, possibly for 12 to 24 months. One doesn’t know how long,” said Rehan Yar Khan, a managing partner at Orios Venture Partners, which has invested in a payments company. “If retail is going to continue to be subdued, then payments are going to continue to be subdued.” Investors say that the opportunities remain enormous, even if Covid-19 means tempering some of their aspirations. The companies are still collecting “all of this customer data, and [seeing] what to do with this customer data,” said Shravan Shroff, co-founder of Venture Nursery Advisors. “They know exactly where the money came from and what the money was spent on. In a time like this, that will become very valuable.”

7) Stop preparing for the last disaster [Source: Farnam Street] 

In crisis like the current one, we learn a lot. We learn whether we are resilient, whether we can adapt to challenges and come out stronger. We learn what has meaning for us, we discover core values, and we identify what we’re willing to fight for. Disaster, if it doesn’t kill us, can make us stronger. After a particularly trying event, most people prepare for a repeat of whatever challenge they just faced. The changes we make may keep us safe from a repeat of those scenarios that hurt us. The problem is, we’re still fragile. We haven’t done anything to increase our resilience—which means the next disaster is likely to knock us on our ass.

The memories of disasters are etched in our brains forever. Whether it’s emotional or physical, the hurt causes vivid and strong reactions. We remember pain, and we want to avoid it in the future through whatever means possible. Until they (disasters) occur they aren’t available enough to the public imagination to seem important. In the aftermath of a disaster, we want to be reassured of future safety. We lived through it, and we don’t want to do so again. By focusing on the particulars of a single event, however, we miss identifying the changes that will improve our chances of better outcomes next time. But preparing for the last disaster leaves us just as underprepared for the next one. We fail to analyse the past disaster. We need to think…what was it that made us so vulnerable to it in the first place.

If we want to make ourselves less fragile in the face of great challenge, the first step is to accept that you are never going to know what the next disaster will be. Then ask yourself: How can I prepare anyway? What changes can I make to better face the unknown? A good place to start is increasing your adaptability. The easier you can adapt to change, the more flexibility you have. More flexibility means having more options to deal with, mitigate, and even capitalize on disaster. Another important mental tool is to accept that disasters will happen. Expect them. Finally, we can find ways to benefit from disaster. Author and economist Keisha Blair, in Holistic Wealth, suggests that “building our resilience muscles starts with the way we process the negative events in our lives. Mental toughness is a prerequisite for personal growth and success.”

8) You can achieve anything if you focus on one thing [Source: dariusforoux.com]

We have always heard the saying that you can achieve anything that you want. But still most of the people fail to achieve what they set out to achieve. Why? Because human beings are distracted too soon. It’s a time-tested strategy that focusing on achieving one thing at a time can make you achieve the impossible. Yes, you can achieve a lot of things…But just not at the same time. You can’t build a career, get in shape, compete in marathons, write a book, invest in a business, get kids, and travel the world. But you can do all those things in a lifetime.

To achieve anything, you need to have a structure. And when there’s no structure. There’s chaos. And when there’s chaos, there’s no one thing: There’s everything. That’s bad. The natural thing to do for most people is to start setting goals or picking one priority they want to focus on. But unless you have trained your mind to focus on one thing, it’s not a smart thing to do. The author recommends practicing Mindfulness or Stoicism for that. Both philosophies talk extensively about detaching ourselves from our desires. He thinks our excessive desire for more is the reason we can’t focus on one thing.

Only after you have controlled your desires and practiced doing one thing at a time are you ready to apply the “One Thing” strategy to your life. If you take the time to become less distracted by desires, the more reliable you will become. You will become a person who does what they say. You will become a person who achieves what they set out. And after you start achieving one thing after the other, you will get momentum. Your job is to keep the momentum.

9) Changing Culture: Shift small habits for big wins [Source: medium.com] 

For any business to flourish, having a good culture is the key. Today, businesses take culture very seriously. This is why “Chief Culture Officer” is an executive position at large companies like Google, WikiMedia, and Zappos. The tricky part is that while it’s clear that culture is important, culture itself and how to change it is still murky. It’s elusive, like the energy in a room. How do you change something like that? While it’s true that culture is elusive, it’s also true that culture is a series of habits - habits at the individual, team, and organizational level. And habits can be observed, understood, and shifted. Here are 6 steps to do so.

1) Understand how habits work: Habits are made up of three parts: trigger, routine, reward. A trigger is something that prompts a certain action or reaction. It could be an event, a feeling, an object etc. A routine is a series of actions or emotions. A reward is something that reinforces the routine.
2) Identify a few key, widespread habits that need to change: What are some of the most widespread tendencies that are holding your organization back? When you reflect on your frustration, where does it start? Choosing a habit that exists broadly will help you achieve a visible win for a large audience.
3) Break those habits down into their trigger, routine, and reward: Once you’ve identified a few key habits, identify their parts. When broken down this way, it is much easier to see why behaviors persist even if leaders or team members verbally disapprove of them.
4) Identify the root cause of the current routine: If you want people to engage in a new routine, you have to make sure the right conditions are in place for them to do so. Before you can set the right conditions, you need to understand why a particular pattern is emerging.
5) Set conditions for people to use an alternative routine: The easiest way to change a habit is to keep the same trigger and reward, but insert a new routine. You can enable this shift for people by making systematic, organization-wide changes that address the root cause of a bad routine. These changes can come in the form of information, tools, and/or support.
6) Listen to feedback: Habits don’t always emerge or change as you expect, especially in a large system. Make sure you look for and listen to feedback as you make systemic changes.     

10) Sooner or later we all face death. Will a sense of meaning help us? [Source: aeon.com] 

We all know that one day or the other, we all are going to die. We might not know how or when, but death is certain. And in this piece, Warren Ward, an associate professor of psychiatry at the University of Queensland, explains why it’s important to find meaning in life and being aware of death. The relationship between death-awareness and leading a fulfilling life was a central concern of the German philosopher Martin Heidegger, whose work inspired Jean-Paul Sartre and other existentialist thinkers. Heidegger lamented that too many people wasted their lives running with the ‘herd’ rather than being true to themselves. But Heidegger actually struggled to live up to his own ideals; in 1933, he joined the Nazi Party, hoping it would advance his career.

Heidegger believed that Aristotle’s notion of Being – which had run as a thread through Western thinking for more than 2,000 years, and been instrumental in the development of scientific thinking – was flawed at a most fundamental level. Whereas Aristotle saw all of existence, including human beings, as things we could classify and analyse to increase our understanding of the world, in Being and Time (1927) Heidegger argued that, before we start classifying Being, we should first ask the question: ‘Who or what is doing all this questioning?’ Heidegger pointed out that we who are asking questions about Being are qualitatively different to the rest of existence: the rocks, oceans, trees, birds and insects that we are asking about. According to Heidegger, awareness of our own inevitable demise makes us, unlike the rocks and trees, hunger to make our life worthwhile, to give it meaning, purpose and value.

The East’s greatest philosopher, Siddhartha Gautama, also known as the Buddha, realised the importance of keeping the end in sight. He saw desire as the cause of all suffering, and counselled us not to get too attached to worldly pleasures but, rather, to focus on more important things such as loving others, developing equanimity of mind, and staying in the present. The last thing the Buddha said to his followers was: ‘Decay is inherent in all component things! Work out your salvation with diligence!’ An awareness of our mortality, of our precious finitude, can, paradoxically, move us to seek – and, if necessary, create – the meaning that we so desperately crave.