Image: ShutterstockAt 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: Culture (The story of how Bill Ackman took ESG investing to next level), Technology (Software is eating the car), Business (Coming regime shift towards capital-heavy companies), Economy (American renaissance has begun) and Education (Chinese parents are sacrificing everything at the altar of education).Here are the ten most interesting pieces that we read this week, ended June 25, 20211) Bill Ackman sent a text to the CEO of Mastercard, what happened next is a parable for ESG [Source: Institutional Investor] Last December, Bill Ackman was scrolling through Twitter when an article in The New York Times caught his eye. “The Children of Pornhub,” by Nicholas Kristof, told how unauthorized sex — and rape and torture — videos were being spread across the internet on a website called Pornhub, one of the most popular in the world. Mr. Ackman started thinking about what can be done. He was friendly with Mastercard’s then-CEO Ajay Banga, whom he had met through a mutual friend. Ackman texted Banga, providing a link to Kristof’s story with his tweet: “Amex, VISA, and MasterCard should immediately withhold payments or withdraw until this is fixed. PayPal has already done so.” This was taken positively, and soon other credit card companies took action. Within 24 hours of the credit card companies’ actions, Pornhub said it had taken down 10 million videos, or 80% of those on its site. “The banks that connect merchants to our network will need to certify that the seller of adult content has effective controls in place to monitor, block and, where necessary, take down all illegal content,” John Verdeschi, Mastercard’s senior vice president of customer engagement and performance, said in a blogpost. Ackman is still watching events closely. Although he applauds Mastercard for taking the lead in the battle over Pornhub, the hedge fund manager remains incensed that more hasn’t been done to stop similar abuses elsewhere. 2) How software is eating the car [Source: spectrum.ieee.org] The shortage of semiconductors has resulted in lost global vehicle production. The semiconductor shortage has underscored not only the fragility of the automotive supply chain, but placed an intense spotlight on the auto industry’s reliance on the dozens of concealed computers embedded throughout vehicles today. “Once, software was a part of the car. Now, software determines the value of a car,” notes Manfred Broy, emeritus professor of informatics at Technical University, Munich and a leading expert on software in automobiles. “The success of a car depends on its software much more than the mechanical side.” Nearly all vehicle innovations by auto manufacturers, or original equipment manufacturers (OEMs) as they are called by industry insiders, are now tied to software, he says. Peter Mertens, former-head of Audi AG’s R&D and board member, stated in a recent interview with CleanTechnica, “The German auto industry gives their most critical new products, which will determine if they survive as companies in their existing structure, to the responsibility of managers who have the least experience and knowledge about their most critical part, the software.” Mr. Mertens goes on to say that what is needed is a way to weed out executives that are not fit for their position. “Run a job assessment with all top managers at VW, Audi, Porsche, BMW, and Daimler tomorrow and ask them to code a small game or a simple but working virus,” he says. “If they are not able to do so, fire them immediately, because they are not fit for the job.” How many will be left, asks Mertens? The blood left on the floor will be a clue. 3) The Boy Who Could DeFi: Meet the 13-Year-Old Who Built a $7M Money Manager on Ethereum [Source: decrypt.co]As the vice president of growth for the fast-rising Indian crypto company Polygon, Arjun Kalsy is used to working with coders across the world. But, a message on LinkedIn from a teenager crypto developer, Gajesh Naik, made him thinking. Mr. Kalsy felt that he was a scammer. It was only after a few more unanswered messages that he conceded to a Telegram chat, which evolved into a face-to-face video call on Zoom. Gajesh Naik is, in fact, 13 years old. But he’s also chief architect of PolyGaj, a DeFi protocol built on the Polygon blockchain. Today, PolyGaj manages around $1 million in cryptocurrency. Late last month, after the billionaire Mark Cuban made an investment in Polygon, that number was nearly $7 million. As for how exactly a 13-year-old kid was able to code a multi-million dollar ecosystem on his own, Mr. Kalsy explained that Gajesh is probably more of a shrewd creative than a coding genius, since PolyGaj is “essentially a clone of Goose Finance,” a DeFi project built on a different blockchain called the Binance Smart Chain. “When you talk about coders,” Mr. Kalsy said, “there are two broad types. One is your mathematician coder, who's into algorithms and data structures. And then the second is something like Gajesh, who's more on the execution/business side. It’s not all about praise, Gajesh has been criticized as well. In a message to Decrypt, Chris Blec, a DeFi researcher, stressed that Naik is too young to understand the risks associated with DeFi. For better or worse, blockchains are mostly transparent. Naik has nearly 18,000 followers on Twitter, and his full name is out in the wild; if he were to use his administrator privileges to run off with the money, Mr. Kalsy reasoned, his reputation would be destroyed. 4) The coming regime shift towards capital-heavy companies [Source: Financial Times] Investors used to invest in capital-light business models, but now they flocking towards capital-heavy business models. The trend towards more capital-heavy companies is driven by four structural themes: investment in “reshoring”; a shift from investment in information to infrastructure; the need to develop climate-transition technologies and, finally, investment in technologies needed to secure geopolitical leadership. These all require shifts from investing in ideas and information to investing in stuff. Investing in infrastructure, not information, is a theme for governments, companies and investors. The Global Infrastructure Hub estimates global infrastructure needs $94tn of investment over the next 20 years to keep pace with demographics and replacing ageing infrastructure. After decades of neglect, this will boost demand for commodities and capital-heavy companies. the shift towards capex-heavy business models will initially be driven by those sectors that have been starved of capital over the past 20 years as they benefit from reshoring and increased infrastructure spending. However, longer term it could be the nascent technologies required for the climate transition and geopolitical “proxy wars” that deliver increased returns to investors from capital-heavy companies. 5) Will charging electric cars ever be as fast as pumping gas? [Source: National Geographic]Electric vehicles are slowly but steadily gaining prominence. But, few are still skeptical about the slow charging of these vehicles. While drivers today are accustomed to filling their gas tank in less than five minutes, EVs, depending on the size and specifications of the battery, typically take at least 30 minutes to get 80% charged at the fastest charging stations out there. But, in the next few years, far faster charging might be possible. Companies are developing new lithium-ion battery materials, as well as new “solid state” batteries, which are more stable at faster charging speeds. They could place recharge rates of 20 minute or less within reach. But the challenges remain. At high charging speeds lithium batteries can overheat, causing them to degrade over time. Because of the problems with fast charging, all EV batteries have built-in charging speed limits, set by the car’s on-board charge ports. Even if EV batteries that can charge in less than 10 minutes are technically possible, it’s not clear that ultra-fast charging will ever be practical. If all Americans were driving EVs and everyone expected ever-faster charging to be available all the time, that could place some serious strain on the grid. Jenny Baker, a battery storage expert at Swansea University in the U.K., isn’t sure ultra-fast charging is the right goal . Charging up at home overnight when demand is lower, she notes, is more affordable and environmentally friendly, since grid operators have to draw less on backup power plants, which tend to burn dirtier fuels. 6) Decentralized Finance: What it is, why it matters [Source: future.a16z.com]Decentralized finance aka “DeFi,” the ecosystem of blockchain-enabled products and services that replace traditional financial intermediaries with freely accessible, autonomous, and transparent software, has been most talked about when it comes to cryptocurrency. In this article, the author tries to explain the features and benefits of DeFi, outline some challenges ahead, and consider the road to mainstream acceptance and adoption. With DeFi, anyone in the world can lend, borrow, send, or trade blockchain-based assets using easily downloadable wallets without having to use a bank or broker. But, as with any new and evolving technology, there are challenges ahead for DeFi. These challenges are: 1) Scaling: The underlying backend infrastructure for DeFi, Ethereum, must continue to scale in order to support higher bandwidth demands. However, scaling must not come at the expense of security and decentralization. 2) Better onboarding: The DeFi onboarding experience is still too overwhelming for the average user. The process of moving fiat money (dollars, euros, sterling, etc.) into the crypto economy remains full of friction, with fiat on-ramps still limited to specific geographies and processor fees uncompetitively high. 3) Clear regulatory framework: Global regulators have a lot on their plate as technology upends new markets. In the financial sector alone, regulators today are dealing with various forms of fintech ranging from neobanks and crowdlending to gamified stock trading. The regulators are evaluating the technology, the markets, and the participants to decide on the appropriate rules. There will be many challenges, but DeFi is here to stay. 7) The Amazon that customers don’t see [Source: Economic Times] This article throws light on the grim side of working at an Amazon facility. It questions whether the towering success of the company is accruing till the lowest rank. As the pandemic struck, workers like Alberto Castillo at JFK8 warehouse were told to take as much unpaid time off as they needed, then hit with mandatory overtime. When Amazon offered employees flexible personal leaves, the system handling them jammed, issuing a blizzard of job-abandonment notices to workers and sending staff scrambling to save them, according to human resources and warehouse employees. While Amazon said publicly that it was disclosing confirmed cases to health officials, New York City records show no reported cases until November. The company and city officials dispute what happened. Also, workers were asked to do mandatory overtime. “It is very important that area managers understand that associates are more than just numbers,” an employee wrote on JFK8’s internal feedback board last fall, adding: “We are human beings. We are not tools used to make their daily/weekly goals and rates.” Jeff Bezos’ commitment in April to become “Earth’s best employer” raised questions — about what exactly that meant, and how far he and his successors would go. Soon the company announced safety initiatives and diversity plans, including a goal to “retain employees at statistically similar rates across all demographics” — an implicit admission that the numbers had been uneven across races. In Seattle, Paul Stroup, whose teams studied Amazon’s hourly workforce, watched the recent events and read Bezos’ letter. He felt caught between skepticism and hope that the company would finally deploy what he considered its best qualities — a penchant for fresh, open-minded thinking and tackling ambiguous, hard problems — in service of its workers. “Now,” Mr. Stroup said, “let’s see if they can innovate their way out of this.” 8) COVID gives Japan 'last chance' to reverse digital defeat [Source: Nikkei Asia] Japan had planned to give its citizens a 12-digit My Number card, which can be used in making online applications for administrative procedures as well as for opening bank accounts and other services that require ID verification. The government launched the project in 2015 and spent 880 billion yen ($8 billion) to make and distribute the cards. But only 15% of the population had received a card by the time the outbreak began. Japan was not always a laggard in digital technology. It built out its internet infrastructure by 2000, when it had the second most internet users in the world, just behind the U.S. In 2001, then Prime Minister Yoshiro Mori had a plan drafted for Japan to become a global IT leader within five years. The lack of change came to haunt the country during the pandemic. The recent embarrassments have renewed a sense of urgency and prompted Prime Minister Yoshihide Suga to launch an all-out effort to go digital.He is setting up a powerful digital agency that is expected to eventually control the government's entire IT system budget, worth about 800 billion yen in fiscal year 2020. By streamlining the software and standards across all ministries and local governments, he plans to expedite a digital overhaul of administrative procedures, as well as key sectors like health care and education. Japan plans to bring 98% of administrative procedures online by 2025. The targets seem ambitious. In reality, they are goals that Japan's peers have already been tackling for years. India launched its national identification system, Aadhaar, in 2010, and nearly all of its 1.3 billion people have since registered. Singapore plans to make all government services available online by 2023. Only 7.5% of Japan's 55,765 administrative procedures could be completed online as of 2019, according to the Japan Research Institute. The time will tell how good Japan does digitally. 9) What’s driving Chinese parents to sacrifice everything at the altar of education [Source: Economic Times]Everyone is entitled to a better life, but if one needs to enjoy the good life, education is the key. In this article, the author explains how parents in China believe that…”if you want to secure a place in a top-tier high school for your child, you have to start preparing when your child is in fifth grade!” The author attended the parent-teacher conferences for her elder daughter, and he was astonished by the intense session. The meeting reminded him of a popular phrase in internet slang “Jiwa xian ziji”. This roughly means: “Before parents give their children chicken blood, they should first educate themselves.” This is the No. 1 euphemism of the jiwa world. It refers to a teaching method that has made the rounds among parents in Beijing, Shanghai, Guangdong and Shanghai in recent years. Jiwa refers to the behavior of “tiger moms” or “wolf dads” who constantly sign their children up for all sorts of classes and activities and who ensure that they study well and do not slack off. The word ji refers to pumping their children with “chicken blood”, or not wasting a single opportunity to improve. Jiwa is getting one’s child to study and learn, while “ziji” is learning and studying on one’s own. Today’s parents realize that if their children fail to advance to a higher social class, hardly anything else can change their fate. To scale the social ladder and ensure that they do not fall off or lag behind, young parents who have just found their place in society would naturally educate and better themselves as well. To jiwa, they believe that they must first ziji to set a good example for their children. 10) The American renaissance has begun [Source: The New York Times] Covid-19 has come as a big blow to all the economies around the world. It has disrupted daily American life in a way few emergencies have before. But it has also shaken things up and cleared the way for an economic boom and social revival. After decades of slowing entrepreneurial dynamism, 4.4 million new businesses were started in 2020, by far a modern record. A report from Udemy, an online course provider, says that 38% of workers took some additional training during 2020, up from only 14% in 2019. Global economic growth is expected to be north of 6% this year, and strong growth is expected to last at least through 2022. In late April, Tom Gimbel, who runs the recruiting and staffing firm LaSalle Network, told The Times: “It’s the best job market I’ve seen in 25 years. We have 50 percent more openings now than we did pre-Covid.” Investors are pouring money into new ventures. During the first quarter of this year U.S. start-ups raised $69 billion, 41 percent more than the previous record, set in 2018. Americans are searching for ways to make more money while living more connected lives.
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