Ten interesting things we read this week

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: Technology (Computer scientist who can't stop telling stories; Would breaking up 'big tech' work?), Business (When firms go local to stay global), Parenting (11 practical tips for successful schooling at home; Changed sleeping habits of children) and Education (MERIT colleges, national track India & privilege blindness).

Here are the ten most interesting pieces that we read this week, ended August 21, 2020-

1) Boosting India’s social impact investing [Source: Livemint]
Social impact investing has been lately discussed widely globally. In India as well, in the previous Union Budget, finance minister Nirmala Sitharaman proposed the idea of setting up a social stock exchange (SSE). The Securities and Exchange Board of India (Sebi) followed it up by setting up a group to look into it. India is not the first country to be experimenting with the idea of an SSE. Attempts have been made in Brazil (BOVESPA), Canada, Portugal, Singapore, South Africa (SASIX) and the United Kingdom. While the idea is much extolled, there is surprisingly little information on how it has actually worked.

In the Indian context, the Sebi working group report on SSE has created a buzz. The report offers non-profit organisations (NPOs) and for-profit enterprises (FPEs) a platform to list themselves as social enterprises in a “market" that promotes social impact. The potential benefits include access to financial instruments and tax incentives. The report moves the conversation on the social sector ahead, but does not recognize the tensions and fails to suggest adequate checks and balances. The SSE conceived by the report is more a registry than an exchange. The details for a constructive engagement are absent, leaving the role of Sebi itself ambiguous.

The omissions suggest the need for a more diverse and representative group to engage with local and global experiences of Social Business, B-Corps, Community Investment Companies, cooperatives and farmer producer organisations, and beyond the for-profit sector. We do hope it would help the SSE realise its aspiration of becoming an instrument for transformative change in the social sector.

2) The computer scientist who can’t stop telling stories [Source: Quanta Magazine]
In this interview, Donald Knuth, a computer scientist, talks about how he is a story teller. Talking about his interest in writing, he says, “Early on, I was advised that the real world would be too hard for me. I didn’t expect to discover anything new, but I loved conveying my enjoyment of ideas in writing. In sixth grade, a couple friends and I started a two-page paper on a ditto machine. We had jokes. In high school, every Monday night as the newspaper editor, I did an all-nighter to get the paper out. I saw my first line of type in college as the student paper copy editor. In my junior and senior years, we started the engineering and science review. For example, I wrote, “Th5E4 CH3EmIC2Al2 Ca3P4Er.” Every word was a chemical formula.”

He also talks about his book, The Art of Computer Programming. It is a book series he began writing as a graduate student in 1962 and has yet to complete. “It describes the way I love to do math and the way I wish I had been taught. Beginning on Page 1, I tell the story of algorithms. Most textbooks at the time didn’t explore the human side of discoveries. They just said, “This is how chemistry works,” or “This is how physics works,” he says. 

Talking about how he approaches every day, he says that he does things that he hate, and by the end of the week, he seems to be happy with it. “It would be very easy for me to say, Oh, let me be a genius and never clean the toilet. But even cleaning toilets is doable. [My wife] Jill and I got uniforms that have a slot where the 409 cleaner fits. You go over there and squirt and feel good cleaning the toilet! A person’s success in life is determined by having a high minimum, not a high maximum. If you can do something really well but there are other things at which you’re failing, the latter will hold you back. But if almost everything you do is up there, then you’ve got a good life.”

3) Would breaking up 'big tech' work? What would? [Source: ben-evans.com]
Few of the big tech companies hold most of the businesses in this world. With Standard Oil, John Rockefeller built a network of production, processing and distribution companies that he bundled, tied and cross-leveraged in all sorts of ruthless and devious ways to squeeze out competition. Then in 1911, when Standard Oil was forcibly split up into over 30 different companies, that market power was broken and the oil industry became competitive again, or so the story goes. Splitting up Standard Oil did three things. 1) It replaced a company that was often the only buyer or the only seller with many competing companies. 2) It addressed the cross-leveraging, bundling and tying whereby the oil fields, refineries, pipelines, rail cars and retailers all worked together to squeeze out competition, by breaking those into separate competing companies. 3) More abstractly, it replaced a huge company with huge financial and market power with many smaller companies with less individual mass.

Now suppose that Windows and Office had become separate companies. So what? Well, the third point would be addressed; the overall mass of the company would be reduced. So, arguably, would the second; to the extent that you believe Microsoft was cross-leveraging Windows and Office, that would be ended. There would be no more Office/Windows bundles. However, it’s not clear that this would have resulted in more actual competition for Office or for Windows. The strength of Windows was not that it was bundled or tied or leveraged, but that it had a network effect. Indeed, these network effects would have limited the companies emerging from a broken-up Microsoft (the ‘Baby Bills’) in just the same way that they limited everyone else. The Office company could not have made a new PC operating system to compete with Windows - no-one would have written software for it.

If Google and YouTube became separate companies, Google would build a new video sharing product and Youtube would make an important new search engine. This is hard to take seriously - all the reasons that ‘Office Inc’ and ‘Windows Inc’ could not have competed with each other apply here in the same ways. If network effects are equivalent to natural monopolies, and the market position of some of the companies that you worry about are based by network effects, what do you do? Well, when faced by a natural monopoly with problems, we don’t just shrug and give up - we regulate it.

4) It’s not deglobalisation, but Akamaisation—When firms go local to stay global [Source: swarajyamag.com]
Most of the countries are thinking of going local when it comes to manufacturing. Slogans such as ‘Make America Great’ and ‘Atmanirbhar Bharat’ are just an example of the same. But, one company has been running this model for past many years now. Massachusetts headquartered Akamai roughly covers a quarter of the web traffic today. Akamai is present wherever the users reside and maintains around 3 lakh servers in 136 countries and claims to have 85% of internet users within a single network hop to an Akamai server. Going local may also apply to the world of manufacturing. Supply chain management is known to use such optimisation techniques while deciding on warehouse location. But when it came to manufacturing, scaling up at one location was usually considered an ideal way, especially in the recent decades. But this is changing now.

Geopolitics, advancements in automated production techniques, declining appetite for globalisation, rise in border barriers, and rogue behaviour of China are the precipitating factors that would push this movement for change. As per the author of this article, we cannot term such optimisation by production networks as ‘deglobalisation’. A parallel term is ‘Akamaisation’ – a solution where the firms go local in order to remain global. Data suggests that this model peaked sometime around 2012-13, few years after the financial crisis.

Akamaisation may also happen due to geopolitical pressures. For example, Taiwan’s TSMC, the largest chipmaker in the world, has announced that it would be setting up manufacturing in US in response to the Trump administration’s pressure to move critical technology back into the US. A success story for India is the mobile phone manufacturing which got an upshot due to the border duty tweaks on mobile phones during 2016-17. Apple’s decision to set up assembly plants in India and further plans to increase local sourcing of components is an example of Akamaisation. It is important to understand that Akamaisation would happen under a certain set of conditions. These conditions include a significant market size and right policies for setting up manufacturing in the country. If the market size decreases, or if the border resistance rises to unsustainable levels where it no longer makes sense to transact anything across borders, firms may give up on the market over Akamaising.

5) Will virtual-reality gyms let us work out in the pandemic? [Source: The Economist]
Black Box VR is billed as the world’s first virtual-reality gym and occupies an unassuming grey building in downtown San Francisco. Aside from the unavoidably analogue showers, locker rooms and protein-powder dispensers, the experience is almost entirely digital. Ryan DeLuca, the company’s founder, wants to cultivate the level of addiction among his gym’s users that you find among hardcore gamers. Black Box aspires to emulate the success of blockbuster titles such as “Fortnite” and “League of Legends”, habit-forming games that ensconce their players in fantasy and escapism. “That level of exploration, immersion and discovery is not something that people are typically able to do while exercising,” says DeLuca.

Not all exercise freaks are convinced by the concept behind VR workouts. Jenny Xu, who is teaching quarantine-friendly online fitness classes, reckons that many people won’t be willing to shell out for an expensive headset. She also thinks that intense exercise may compound the phenomenon of VR nausea, an effect that some people feel when movement in the simulated world falls out-of-sync with the body. Xu is touting a fitness game of her own. Her augmented-reality app, Run To My Heart, is set in an alternate universe in which humans have been turned into literal potatoes on couches. Joggers are provided with a virtual companion who encourages them and develops, the further you go, from running buddy to friend to romantic interest.

Black Box was forced to close when a shelter-in-place order was issued in San Francisco on March 16th in response to the outbreak of covid-19. The company had assured its clients that headsets were disinfected after every use but, in the current climate, the idea of sharing one with a total stranger is about as appealing as licking a car tyre. Still, perhaps VR exercise has a better chance of thriving in this strange new world than more conventional gyms and yoga studios. After all, social distancing was already part of the package at Black Box.

6) 11 practical tips for successful schooling at home [Source: pcmag.com]    
Many students would be happy that they don’t have to go to school due to the ongoing pandemic. But, their parents will surely be having a tough time in ensuring that they study at home. The author of this article talked to two ladies, Dr. Leigh Duffy (Assistant Professor of Philosophy at SUNY Buffalo State) and Caroline Ousley Naseman (she grew up being homeschooled) and came up with some tips for parents who are trying to manage schooling at home. Some of the tips are: 1) Allow for individualized learning: Every student has unique interests, as well as a different attention span, adeptness at using technology without distraction, and so on. Compared to classroom-based learning, home-based learning allows for much greater individualization.   

2) Ask for help—and give it, too: As both an educator and a parent, Duffy says don't be afraid to ask for help when you need it. Often help is available but the person who needs it doesn't know it. Duffy sees it with her college students. When they submit an assignment late because they didn't have a reliable internet connection or didn't join a live video-based class due to device limitations, she usually could have helped by extending a deadline or providing specific instructions. "I'm happy to help them figure it out if I know what the problem is," she said.

3) Pay attention to both hard skills and soft skills: "Some of the best things I learned from homeschooling," said Ousley Naseman, "were life skills that would not necessarily be taught in a traditional school environment: self-discipline, accountability, managing a workload without deadlines set in place by someone else." 4) Make a Space for Learning: Learning at home is similar to working from home. Choose a place for schoolwork, whether it's at a desk or simply a particular seat at the kitchen table. Try to make it different from where your kids have personal time. For example, if your kids work at the kitchen table, have them choose one chair for school time and a different chair for meals.

7) How children’s sleep habits have changed in the pandemic [Source: The New York Times]
The current pandemic has changed everyone’s routine. And this has changed everyone’s sleeping pattern as well. Some children, and adolescents, may actually be getting more sleep, or better sleep, while others are struggling with disrupted routines, anxiety and electronics, sometimes all at the same time. Two sleep specialists, in Cincinnati and London, published an editorial, “Perils and promise for child and adolescent sleep and associated psychopathology during the Covid-19 pandemic,” at the end of May in the Journal of Child Psychology and Psychiatry.

Stephen P. Becker and Alice M. Gregory discussed possible impacts of the Covid-19 pandemic on children’s sleep, arguing that because of the importance of sleep for many aspects of children’s well-being, ranging from mental health to immunological well-being and disease resistance, it would be important to look closely at how sleep might be changing, for children and for adolescents, at whether those changes are problematic when children have to return to school, and at which factors are associated with better, and worse, sleep.

What should you as a parent do? With younger children, enforce a regular bedtime, and don’t vary it on weekends. And with older children and adolescents, don’t let them spend the day in bed, whether they’re online or working on their homework. Because, that’s a recipe for the development of insomnia, they start to associate being in bed with being awake.

8) Covid-19 exposed 3 big flaws in the way we work [Source: inc.com]
The coronavirus pandemic has changed everything. Maybe not everything, but at least the way companies and employees work. Before all of this, it was common to believe physical company headquarters needed to exist, employees couldn't be as productive working from home, having in-person meetings was essential, and being vulnerable amongst coworkers was taboo. Now, that's all been flipped on its head. The author of this article spoke with three leaders to explore these fallacies. Here's what they revealed.

Flaw #1: Upskilling was a possibility, not a priority: Sean Chou, CEO of cloud-based enterprise software company Catalytic, thinks COVID-19 exposed our short-sightedness when it comes to prioritizing employee upskilling. "COVID disrupted every aspect of how we work," said Chou. "As a result, we're seeing many positions evolve and employees being thrust into new roles that require a greater level of autonomy and technical proficiency. And that highlights where many of us went wrong." Chou notes one positive of all this is we no longer view upskilling as a nice perk, but as a necessity.

Flaw #2: Caring wasn't at the core: Dr. Laura Hamill, chief people officer and chief science officer of employee experience software company Limeade, says, “In the past, we've seen traditional HR practices largely treated as transactional”. "Now, employers are realizing, more than previously, that caring for employees is not just good for people, but good for business - and care has the power to be transformational." Flaw #3: Mandatory office space and hour-long commutes: Christian Lanng, CEO of Tradeshift, a cloud-based business network for supply chain purchasing, believes we should revisit the idea of mandatory offices and our lack of work/life balance. "Anyone who's spent 10 hours a day on Zoom for the past five months will tell you they miss the spark and energy you get from human contact. Many will also tell you they don't miss the stress of an hour-long commute each morning and rushing home to pick the kids up each evening," said Lanng.
  
9) MERIT colleges, national track India & privilege blindness [Source: LinkedIn]
This long essay by Sajith Pai, VC at Blume Ventures, India, explores a diversity of ideas and themes: a moniker called MERIT colleges to replace the inelegant IIT/IIM we use to earmark an elite college in India, the emergence of two parallel tracks of merit, a national consciousness that elite Indians share, and finally their privilege blindness. He sees top-tier colleges in India (or even abroad) as having the following distinct characteristics. 1) They are Tough to get in to or have a high selectivity in intake: Less than 10-20% (in many cases <1%) of students who apply get in to these colleges. 2) Either based in a Metro and/or is Residential in nature: Elite colleges are usually residential in nature, the exceptions being SRCC/St. Xavier’s and their ilk located inside a Metro.

3) National/All-India intake: The student body is from across all states in India. There may be a skew towards certain regions (specifically metros) but on the whole there isn’t a single region that is not represented. 4) English-fluent students: Graduates of these institutions are fluent in English. Not all of them speak perfectly but almost all of them, if not all of them, do written English well, and are conversant with aspects of Western culture. He also elaborates on how the internet has disturbed the career path dependencies that arose or occurred due to performance on one exam, like the JEE.

Still, then why do colleges matter, and why does a VIT score over a tier 2 engineering school in Madurai or Meerut? He further goes on to explain the MERIT theory and how a number of new-age universities have already entered the MERIT colleges category. He also says how coined that term. He was tired of hearing IIT/IIM as a convenient if misleading shorthand; for no one who uses that really means that. When they say IIT/IIM grads wanted, they really mean selective institutions with a certain set of features, which really collapse in to what he calls MERIT here. Through his exploration of these features of MERIT institutions, he also wanted to shine a light on privilege, and how it is manifesting itself.

10) Don’t bring a knife to a gunfight with China [Source: thestrategybridge.org]
To compete with China, the U.S. armed forces need a carefully balanced toolkit that includes both integrated campaigning below the threshold of armed conflict, and conventional overmatch, should war come. Preparing for counterinsurgency campaigns against an adversary who is unlikely to back insurgents is not the right approach. Before Sino-American rapprochement in 1972, Chinese-backed insurgencies were a primary concern of U.S. foreign policy. From 1949, when former guerilla leader Mao Zedong seized control, China supported numerous insurgent groups conducting “people's war” including the Malayan Communist Party, the Naxalites in India, the Khmer Rouge, and the Zimbabwean African National Liberation Army. Maoist guerillas seemed terrifying and unstoppable.

America's relationship with China is now transforming again. China is more powerful and aggressive than it has been at any time since Mao died in 1976. Xi Jinping, who became General Secretary of the Communist Party of China in 2012, is pursuing an ambitious plan to achieve China's “National Rejuvenation” which ultimately seeks to make China the world's preeminent political, military and economic power by 2049. China's greatest strength is its economic might. It is the world's leading trading nation, and uses its global reach to export everything from consumer goods to high-tech tools for authoritarian repression.

Given China’s existing strategy, military thought, and fears of rebellion, renewed state support for insurgents is far from certain. Instead, China is more likely to employ economic and informational tools to achieve its aims, while focusing on partnerships with state actors and striving to remain below the threshold of armed conflict. To compete with China, what the United States armed forces need most are ways and means for integrated campaigning to further U.S. interests, which would allow them to counter Chinese actions below the threshold of armed conflict.