Title: "European Food Producers Employ Innovative Tech to Combat Counterfeits"

Parmigiano-Reggiano and Counterfeiting:

Italian producers of Parmesan cheese are combatting imitation through the use of edible microchips on their 90-pound cheese wheels. These microchips are part of the ongoing battle between makers of genuine and fake products in the market.

Protecting European Brand Names:

European food producers are taking extensive measures to safeguard their renowned brand names against knockoffs. The European Union has designated over 3,500 products with protected status, including Parmigiano, Greek feta cheese, French Champagne, and Italian Parma raw ham.

The Lucrative Market:

With the market worth nearly €80 billion annually, the demand for authenticity has driven growth, especially due to the premium pricing of protected products. This has also led to a significant market for counterfeit products.

Protected Designation of Origin:

The coveted protected designation of origin guarantees a product's specific region, raw materials, and traditional production methods. Various other designations allow the use of materials from different countries.

Innovative Methods for Authentication:

EU producers are adopting new methods to verify product origin. This includes techniques like QR codes, invisible ink, holograms, and even DNA fingerprinting of milk bacteria.

Food Fraud and Challenges:

Counterfeit products are a challenge for items like cheese, wine, meats, fish, and produce. Beyond fighting imitation, the EU is also working to protect the naming rights of products like Champagne, feta, and Gouda.

Neverending Battle:

Experts believe that the struggle against counterfeiting and protecting brand names will persist due to the continuous evolution of fraudulent tactics.

Edible Microchips for Authentication:

Microchips, created by p-Chip in Chicago, are using blockchain technology to trace the cheese's journey back to the milk producer. These chips have undergone extensive testing on Parmigiano wheels and are meant to withstand the cheese's aging requirements.

Title Suggestion: "Tech Against Imitation: Edible Microchips Guard Europe's Culinary Traditions

Infoman

Title: "U.K. Inflation Moderates, but Challenges Persist"

Key Points:

Inflation Numbers:

The U.K.'s headline inflation rate decreased in July, dropping to 6.8% from June's 7.9%. Core inflation, excluding food and energy, remained unchanged at 6.9%, contrary to expectations of a slight decline.

Pressure on Bank of England (BOE):

The persistently high core inflation and rising service inflation are putting pressure on the Bank of England to continue raising interest rates, despite some easing in headline inflation.

BOE's Rate Increases:

The BOE has executed 14 consecutive interest rate increases, bringing the lending rate to 5.25%, its highest level since 2008. The bank is expected to raise rates again during its upcoming meeting in September.

Market Reaction:

The pound saw a slight increase of 0.4% against the dollar, and U.K. government bond yields rose, with the 10-year gilt yield reaching 4.61%.

Future Rate Hikes:

Market pricing suggests the BOE may raise rates to 6%, implying three more quarter-point increases. This contrasts with other central banks, like the U.S. Federal Reserve and European Central Bank, which have halted their rate hikes. Investor Expectations: Investor expectations for BOE's policy tightening have reduced from an earlier anticipated peak of nearly 6.5%, reflecting shifts in focus towards potential economic slowdowns and how quickly central banks might adjust their policies accordingly. Inflation Outlook: U.K. inflation is projected to continue easing, yet the data indicate persistent pressures from higher service prices and wage growth, which might necessitate maintaining higher interest rates for a longer period.

Inflation Drivers:

A tight job market, rising wages, and the lingering effects of energy price spikes due to geopolitical events like Russia's invasion of Ukraine in 2022 have contributed to the U.K.'s elevated inflation.

Economic Impact:

The shock of higher consumer prices has caused a significant decline in real incomes, resulting in strikes and challenges to public services. The situation is affecting political dynamics, eroding support for the ruling party ahead of the 2024 general election.

Government Response:

Prime Minister Rishi Sunak's goal to bring inflation down from its high of 10.7% to around 5% by the end of the year is reflected in the recent decline in headline inflation, according to his statement on social media.

Factors Influencing Inflation:

The decline in headline inflation is attributed to lower gas and electricity prices, while rising prices in areas such as hotels and passenger traffic have contributed to the increase in certain components of inflation.

Economic Resilience:

Despite challenges, the U.K. economy has shown resilience and managed to avoid a feared recession, even in the face of rising food and energy prices due to geopolitical tensions.

Title Suggestion: "Navigating Inflation Challenges: U.K. Economy's Path Forward"

Infoman

Title:

Key Points:

Changing Work Environment: Gyms are adapting to the rise of remote working by offering co-working spaces to members, providing an alternative to traditional offices and home environments.

Example of Adaptation: Jessica DiGiovanna, an audit project manager, utilizes a co-working space within her local Life Time gym, working there from early morning until evening after her workout. This arrangement allows her to work comfortably, boost productivity, and avoid the isolation of working from home.

Appeal of Third Spaces: These gym-based co-working spaces offer a "third space" between home and office where individuals can work in a vibrant environment that contributes to their well-being.

Gym Co-Working Trend: Many gyms now recognize the opportunity to cater to remote workers by providing dedicated co-working spaces. Some gyms charge extra for access to these spaces, while others are creating separate work areas within their facilities.

Co-Working Market Changes: Traditional co-working models have faced challenges, with companies like WeWork facing uncertainties about their future. Gyms' co-working offerings capitalize on workers' desire for social interaction and flexibility while avoiding crowded cafes and libraries. Proximity and Convenience: Gyms have the advantage of being frequented locations, making them suitable for co-working spaces that align with workers' habits and preferences.

Evolving Office Models: The co-working trend in gyms reflects the changing nature of work environments, accommodating those who prefer not to commute to offices but still want a more social setting.

Benefits for Businesses: Business owners like Damaris Hollingsworth, a founder of an architectural firm, have found value in gym-based co-working spaces as they offer an attractive perk for employees while avoiding the expenses of setting up traditional offices. Gym Membership and Co-Working: Gym membership rates are recovering from pandemic-related shutdowns, and the addition of co-working spaces has contributed to increased attendance and spending within these facilities.

Challenges and Considerations: Working from gyms can present challenges, such as video call backgrounds and potential distractions. However, these spaces offer the benefits of community, access to gym amenities, and enhanced work-life balance.

Future Trends: As more gyms incorporate co-working spaces, the question arises whether the demand will lead to overcrowding and how the gym atmosphere will evolve over time.

Overall Implication: The convergence of gyms and co-working spaces represents a creative response to the changing work landscape, providing remote workers with flexible and vibrant environments that enhance both work efficiency and well-being.

Infoman

Ten-Year Treasury Yield Reaches Highest Level Since 2008 Amidst Economic Shifts

Key Points:

High 10-Year Treasury Yield Impact:

The 10-year U.S. Treasury note's yield has reached its highest level in 15 years, settling at 4.258%. This has raised concerns about potential consequences for various markets, including stocks, bonds, and housing. Economic Significance: The 10-year yield is a crucial benchmark for interest rates across the economy. It surged from 4.220% the previous day and reached its highest close since June 2008. The increase follows solid economic data and the U.S. Treasury's announcement of higher borrowing needs for the federal budget deficit.

Market Instability Concerns:

Historically, sharp yield surges have caused market destabilization. Despite being below the Fed's short-term rates, the potential for further increases raises concerns about unexpected market disruptions as investors adjust their strategies based on yield projections. Market Reactions: U.S. stocks fell, with the Dow Jones Industrial Average dropping by 0.5%. The rise in yields often correlates with lower asset prices and can be indicative of investor worry regarding potential risks. Inflation Connection: Demand for higher yields on longer-term bonds is tied to inflation risk. When investors seek compensation for inflation, it can lead to lower risk asset prices. Central banks' efforts to curb inflation and higher short-term rates contrast with the pandemic-era economic environment.

Mortgage Rate Impact:

Higher bond yields affect mortgage rates, which are closely linked to the 10-year yield. The rise in yields disappoints home buyers hoping for lower rates to refinance mortgages or buy homes, as the average 30-year fixed mortgage rate has climbed. Economic Changes Since COVID-19: The economy's landscape has shifted significantly since the pandemic's onset. Previous sluggish growth and low interest rates have given way to central banks' efforts to control inflation, resulting in higher short-term rates and a more active economy. Fed's Interest Rate Outlook: The expectation that the Fed may cease raising rates but delay cuts has contributed to the increase in longer-term bond yields relative to shorter-term ones.

Upcoming Jackson Hole Symposium:

The Kansas City Fed's annual symposium may hold insights into longer-term interest rate trends, contributing to further yield increases. Discussions about "structural shifts in the global economy" could shape investors' expectations. Debate Over Economic Resilience: Some investors believe that fundamental economic changes post-pandemic may prevent interest rates from reverting to pre-pandemic levels. Others remain cautious, emphasizing ongoing risks like an unsustainably low unemployment rate. Yield Volatility: The 10-year yield's past fluctuations between 4% and 3.5% within a year highlight its volatility. Inflation data remains a major factor influencing bond yields and overall market behavior.

Overall Implication:

The surge in the 10-year Treasury yield, driven by economic shifts and higher borrowing needs, raises concerns about potential market instability, mortgage rates, and the impact of central banks' efforts to control inflation on the global economy.

Infoman

The return of Sir Tony Blair

Economist (UK) 22/7/2023

SIR TONY BLAIR is now 70 years old. It is 29 years since he became Labour leader, and 16 since he left Downing Street. And yet still he puts on the slickest, most dazzling show in British politics. The Future of Britain conference, hosted by his Institute for Global Change in London on July 18th, had the aesthetics of an Apple launch and the speaker list of Davos. The audience mixed ageing New Labour ministers with the cream of parliamentary candidates for 2024 (the very bright and very loyal) for whom Sir Tony was their childhood. The event offered a relentlessly optimistic vision of a modernising Britain, fuelled by hope and technology.

And, after a long froideur, much of his party is mesmerised again. Sir Tony was repudiated mostly because of the invasion of Iraq and because it grew unwilling to wear the compromises on high ideals that electoral success demand. His successors— Gordon Brown, Ed Miliband and Jeremy Corbyn—defined their own projects against his, to electoral defeat. So did Sir Keir Starmer, who campaigned to be leader in 2020 on an overtly anti-Blairite platform of higher taxes on the rich, state ownership and “no more illegal wars.”

These days Sir Keir dresses in Sir Tony’s clothes. He has adopted the touchstones of New Labour: public-sector efficiency reforms; an authoritarian tone on crime and defence; a “prawn cocktail offensive” on business. He also borrows Sir Tony’s maxims (“the political wing of the British people”; “tough on crime, tough on the causes of crime”). And his verbless sentences

(“Respect—my guide. Unlocking aspiration—my cause”).

The two men speak often, but this was their first joint appearance in public. It amounted to a mutual public blessing. Sir Keir defined his priorities as “growth, growth, growth”, in a homage to Sir Tony’s “education, education, education.” Sir Tony, meanwhile, told Sir Keir he had taken the party from the brink of extinction to the brink of government. “You’ve done an amazing job,” he said.

Sir Tony has “been on a redemptive arc,” says John McTernan, his former political secretary. Britain’s current woes have given the party a new appreciation for his achievements of keeping the economy and hospitals ticking over. The war in Ukraine has not made the case for Iraq any stronger, but it has undone the widespread hostility towards America, interventionism and the arms industry that followed. He remains unmatched in his skill for succinct diagnosis and prescription. (It’s a risk for the ambling, dull Sir Keir to appear alongside him, says more than one delegate). Above all, say Sir Keir’s circle, they like him because Sir Tony is a winner, who believes in power over protest.

Westminster’s policy shops are often poor and parochial places of instant coffee in basement rooms. Sir Tony’s outfit has money, connections and strikingly good grub. President Emmanuel Macron of France sent the conference a video address; Henry Kissinger, the American diplomat, recorded an interview on China; a host of bosses of artificial intelligence firms spoke. Overseas, his institute acts as a consultancy to governments in Africa and Asia, and draws income from international agencies. It has expanded rapidly: it has more than 800 staff, and declared revenues in 2021 of $81m. In contrast, Policy Exchange, one of the biggest Tory thinktanks, declared last year it had 24 staff and an income of just under £4m.

The British arm of Sir Tony’s outfit is ostensibly independent and bipartisan, but it is evidently in-step with Sir Keir’s agenda. Many of its staff expect backroom jobs in a future Labour government. Its answers to Britain’s dire productivity are a mixture of the prosaic (reform planning rules and hug close to the EU) and the techno-optimistic (bring on mass digitisation of government services). Sir Tony gets into the weeds of reports, and sends long memos on “Where Britain’s At,” say staff. The goal is to stretch the horizons of a cautious Labour Party: to ask why the NHS shouldn’t have the analytical capacity of Google and the delivery of Amazon. Round the hall are graphics showing a futuristic Britain of glass-roofed trains and solar-powered towns.

Sir Keir nods along. But both men acknowledge that a Starmer government would inherit none of the benign conditions that underpinned big-spending New Labour. (In December 1997, Jonathan Powell, Sir Tony’s chief of staff, sent him a memo warning of laughably trivial concerns of the time: a row over fox hunting; the state of the Millennium dome; a concern that economic growth could prove too strong.) The sort of constitutional reforms New Labour embraced—devolution, human-rights legislation—look scarcer now. The geopolitical backdrop is far more dangerous. And the public optimism that Sir Tony rode has been replaced by cold cynicism towards an entire political class. “It’s grim right?,” says Sir Tony. He smiles.

通過分享 PressReader

通過新聞連接世界

Infoman

Cooling on China

Economist (UK) 22/7/2023

BRITAIN IS “ROBUST” and “ahead of many of our partners” in responding to a rising China, Rishi Sunak, the prime minister, said on July 13th. The House of Commons Intelligence and Security Committee (ISC) disagreed. Its report on China, published the same day, slammed the government for putting economic concerns ahead of national-security ones and human rights. In doing so, it said, the government had jeopardised even the business benefits. It laid out a “nightmare scenario” in which Chinese entities steal blueprints, win influence and exert “political and economic influence at every step”.

One problem is that Conservative policy on China has zigzagged for a decade, veering from David Cameron’s relationship-chilling meeting with the Dalai Lama in 2012 to a “golden era” when President Xi Jinping clinked glasses with the Queen at Buckingham Palace in 2015. The government largely stood by (though it later let in many refugees) as freedoms were muzzled in Hong Kong. The pandemic sharpened awareness of Britain’s reliance on China, hardening attitudes.

A “rainforest of initiatives” has followed more recently, says Kevan Jones, an MP and member of the ISC. A new National Security Law came into effect on July 11th, updating counter-espionage laws to tackle the theft of trade secrets. This was partly aimed at subversion by Chinese state entities. Scrutiny of investments has increased. A regime introduced in 2021 screens for risks when firms conduct acquisitions or mergers. Over half the interventions in the first full year involved Chinese ones. The role of Chinese firms in infrastructure is also being re-examined. Huawei telecommunications equipment from China will be phased out by 2027. Chinese investment in Britain’s nuclear programme has been limited but not halted. The government is to set up a national security unit for procurement.

China matters—it ranks fourth as a trading partner, accounting for nearly 7% of trade—but Britain lacks a co-ordinated policy on how to conduct relations, notes Mr Jones. A British prime minister last visited China in 2018. That’s partly because the Tories are so divided on how to handle the relationship, reckons Yu Jie of Chatham House, a think-tank. In contrast Germany, which is even more reliant on China, published its first China strategy this month (see the China section), pledging to reduce dependence on it.

Might policy become clearer under Labour, if it were to win the next election? Labour is more openly critical of China. In 2021 the party endorsed a House of Commons motion accusing China of genocide. That would probably remain the party’s position in government. Sir Keir Starmer, its leader, who accuses the Conservatives of “cosying up” to the Chinese Communist Party (CCP), says he wants a “full audit” of relations with the country.

That chimes with Labour’s wish to demonstrate strong Atlanticist credentials. Rachel Reeves, the shadow chancellor, is inspired by President Joe Biden’s industrial policy, which aims to reduce American reliance on Chinese supply chains. Ms Reeves says Labour would develop “national economic security”. Sir Keir also wants to show a clean break from the leadership of Jeremy Corbyn. It emerged last year that Barry Gardiner, Mr Corbyn’s shadow trade secretary, now nicknamed “Beijing Barry”, had taken donations from Christine Lee, a solicitor whom Britain’s security services declared was “involved in political interference activities” on behalf of China’s Communist Party.

Yet in practice Labour will struggle to be much tougher. Its China strategy—”compete, challenge and... co-operate” — is as wishy washy as “protect, align and engage”, the Conservative one. Sir Keir frequently says that economic growth is “the absolute foundational stone for everything”, and disengaging from China would be hard to reconcile with that.

Labour would face the same barriers to countering foreign threats. An effort launched in 2020, for example, to work out how deeply Britain’s supply chains are entwined into China’s economy, has shown that it would be extremely hard to disentangle them.

Sir Richard Moore, head of MI6, Britain’s spy agency, said on July 19th that his service now devotes more resources to China than to any other country. Yet the security agencies are preoccupied by covert challenges whereas much of China’s state activity in Britain is overt. The government has let Chinese investments flow in and thus sensitive data to go freely to China, says the security report. This has happened in various ways: through academic funding or collaboration on research; allowing access to intellectual property via manufacturing agreements; the sale of Huawei equipment for use in 5G networks; and by welcoming Chinese money in new nuclear facilities. Individual Whitehall departments are supposed to scrutinise all of this, but they lack expertise and resources. Often they are not even looking, the security committee says.

No single agency considers the overall impact of Chinese state actions, and it is unlikely a Labour government would convene one. Even in America, which has stricter restrictions on engagement with China, government agencies tussle over which one drives China strategy. Britain’s advantage may be that it lacks a large Chinese diaspora, which means that its elections are less susceptible to Communist Party meddling, reckons Charles Parton of the Council of Geostrategy, a think-tank. That’s reassuring, but only marginally.

通過分享 PressReader

通過新聞連接世界

Infoman

Alarm as voices on climate crisis quit Twitter after Musk takeoverDamian Carrington Environment editor

The Guardian 16/8/2023

Half of people regularly tweeting about the climate and nature crises abandoned Twitter after it was taken over by Elon Musk, researchers say.

Twitter, now renamed X, had previously been the leading social media platform for environmental discussion, the researchers said, describing the decline as “troubling”. The “exodus of environmental users on Twitter” was an “existential threat” to a main way of informing people wanting to take climate action.

Musk, who has called himself a “free speech absolutist”, radically cut Twitter’s content moderation staff after the takeover, which ran from April to October 2022. Reports have found rising dis- and misinformation about climate change on the platform and a sharp increase in hate speech. Scientists said in December there had been a surge in debunked climate change denialist posts on Twitter since the Musk takeover.

The researchers studied 380,000 users who tweeted regularly about global heating and biodiversity and found 47.5% had become inactive six months after the final takeover. Only 21% of a control group of 458,000 who tweeted about US politics became inactive in the same period.

“The incredible power of Twitter was that it was this open forum where people could share ideas and opinions and influence other people,” said Prof Charlotte Chang, of Pomona College in California, who led the research. “We have this immense challenge of empowering stakeholders across all sectors of society to take action to halt the loss of biodiversity and to combat catastrophic climate change. We were pretty disheartened to find that after the sale, our environmental Twitter community has really declined.”

The analysis is published in the journal Trends in Ecology & Evolution. It analysed Twitter use of the groups in 15-day intervals from July 2019 to April 2023.

X’s media office did not respond to a Guardian request for comment.

The climate scientist Prof Mark Maslin, of University College London, said in May: “There’s been a massive change [on Twitter]. I get so much abuse and rude comments now.”

通過分享 PressReader

通過新聞連接世界

Infoman

Hello Mr Arthur! How are you 😊 Can you please share this link with the school as it has my demo teaching classes.

Thank you!

https://drive.google.com/drive/folders/1gWUfi9jN6bpJRe5_Wz9FbWih60xKQUmb

Infoman

Expensive stocks

Economist (UK) 12/8/2023

TRY A LITTLE, and it is never too hard to argue that the stockmarket looks risky and a crash must be coming. But in the long run such arguments are usually best ignored. Since 1900 American shares have posted an average real return of 6.4% a year. Over three decades, that would transform the purchasing power of $1,000 into $6,400. Bonds, the main alternative, do not come close. With an average historical return of 1.7% a year, they would generate a measly $1,700. Cash would do worse still.

The lesson for today’s investors, many of whom were caught out by this year’s bull market, might seem obvious. Forget about a downturn that may or may not materialise. Just buy and hold stocks, and wait for returns that will erase any number of brief dips. Unfortunately, there is a catch. What matters today is not historical returns but prospective ones. And on that measure, shares now look more expensive—and thus lower-yielding—when compared with bonds than they have in decades.

Start with why stocks tend to outperform bonds. A share is a claim on a firm’s earnings stretching into the future, which makes returns inherently uncertain. A bond, meanwhile, is a vow to pay a fixed stream of interest payments and then return the principal. The borrower might go bust; changes to interest rates or inflation might alter the value of the cash flows. But the share is the riskier prospect, meaning it needs to offer a higher return. The gap between the two is the “equity risk premium”—the 4.7 percentage points a year that stocks have historically earned over bonds.

What of the next few years? Estimating the return on a bond is easy: it is just its yield to maturity. Gauging stock returns is trickier, but a quick proxy is given by the “earnings yield” (or expected earnings for the coming year, divided by share price). Combine the two for ten-year Treasury bonds and the s&p 500, and you have a crude measure of the equity risk premium that looks forward rather than back. Over the past year, it has plummeted (see chart).

Now consider the equity risk premium’s moving parts: earnings, Treasury yields and share prices. Both expected earnings and Treasury yields are roughly where they were in October, when share prices hit a trough. But since then shares have risen a lot, shrinking their earnings yield and bringing it closer to the “safe” Treasury yield. This might mean three things. Investors might believe earnings are about to start growing fast, perhaps because of an ai-fuelled productivity boom. They might think earnings have become less likely to disappoint, justifying a lower risk premium. Or they might fear that Treasuries—the benchmark against which stocks are measured—are now more risky.

Sustained earnings growth is the dream scenario. The second option, though, is less rosy: that investors have let their revived animal spirits get ahead of them. Ed Cole of Man Group, an asset manager, argues the squeezed equity risk premium is a bet on a “soft landing”, in which central bankers quash inflation without a recession. This has become easier to envisage as price rises have cooled and most countries have so far avoided downturns. Yet surveys of manufacturers still point to recession in that sector, and the full dampening effect of rate rises may not yet have been felt.

The third possibility is that, rather than cooing over stocks, investors are shunning the alternative. Last year was the worst for bonds in both America (where they lost 31% in real terms) and across developed markets (a 34% loss) in over a century.

After that, says Sharon Bell of Goldman Sachs, a bank, it is unsurprising if some investors are wary of bonds and inclined to splurge on shares, especially if they believe inflation has moved structurally higher— something shares, as claims on nominal earnings, protect against, whereas bonds, deriving value from fixed coupons, do not. At the same time, governments are set to issue ever more debt to cover ageing populations, defence spending and cutting carbon emissions, while central banks have disappeared as buyers. Higher bond yields, and a mechanically lower equity risk premium, will be the result. This would imply a regime change, to one where the equity risk premium has shifted lower for the long term (rather than temporarily, to be corrected by a fall in share prices).

Whatever the reason for the squeeze, investors have now placed their bets on rising profits. In a recent analysis, Duncan Lamont of Schroders, an investment firm, compared returns on the s&p 500 going back to 1871 with the yield gap against tenyear Treasuries. He found the relationship “has not been helpful in giving a steer on short-term market movements”. Over the longer term, though, there is a clear link. For stocks starting with a low yield gap to do well over ten years, “a near-condition has been real earnings growth”. Animal spirits can only take you so far before earnings must deliver. They would not have to slip far for even a long-term investor to conclude today’s market is too pricey.

通過分享 PressReader

通過新聞連接世界

Infoman

Uber lyft Ride-hailing profits

Economist (UK) 12/8/2023

IT HAS BEEN a bumpy journey for investors in Uber, the world’s biggest ridehailing company, since it was listed in 2019. In its first six months as a public company Uber’s share price plunged by a quarter as doubts swirled over whether the perennial lossmaker would ever turn a profit. Thereafter it has seesawed, soaring amid the pandemic-era craze for tech stocks, then diving back down as rising interest rates spoiled investors’ appetite for businesses reliant on cheap funding.

Since its nadir in July last year signs of greater financial discipline have pushed the price of Uber’s shares back to where they first traded in 2019. Costs have come down; fares are up. This month the company reported an operating profit of $326m for the second quarter of the year, its first time in the black. Uber’s glee was heightened on August 8th when Lyft, its domestic arch-rival, reported yet another operating loss, of $159m. Lyft’s market value remains in the doldrums, down by 85% from the level at which its shares began trading publicly in 2019, six weeks before Uber’s.

Still, for Uber, breaking even is a low bar for success. Even adding in the latest profit, the company has clocked up $31bn of net losses since its first available results in 2014. Investors now have $21bn of invested capital tied up in the company. Annualising its most recent quarterly operating profit implies a return on that capital of roughly 5% after tax. That is less than half the company’s current cost of capital, sug

gesting that investors’ money could be more fruitfully deployed elsewhere.

The hope, of course, is that Uber’s profits, having broken above ground, will now soar into the stratosphere. Hold your horses. In the past five years over 60% of the firm’s revenue growth has come from businesses other than ride-hailing. Most important has been food delivery, which surged during the pandemic. Uber’s profit margin—before interest, tax, depreciation and amortisation—when ferrying meals is less than half that when ferrying people.

Uber promises that the business will continue becoming more lucrative as it matures. Yet margins for DoorDash, which generates nearly three times Uber’s fooddelivery sales in America, are barely better. In freight, Uber’s third line of business, the company is losing money as it fights for space in a crowded industry in the throes of a downturn (see earlier article).

A further concern is Uber’s focus on expansion beyond America, where it is now scarcely growing. Although it does not split out profits by geography, its margins are probably best in America, where it captures nearly three-quarters of sales in the ride-hailing market. Elsewhere, it faces stiff competition from local rivals: Bolt and FREENOW in Europe, Gojek and Grab in South-East Asia, and Ola in India. That will keep a tight lid on margins.

Investors’ bet on Uber was predicated on the idea that ride-hailing is a winnertakes-all business. That justified torching billions of dollars in a race for market share, which Uber is, seeing Lyft’s woes, indeed winning—at least at home. Whether taking it all turns Uber into the colossal cash machine investors once hoped for is another question.

通過分享 PressReader

通過新聞連接世界

Infoman

Rosé’s summer reign

Economist (UK) 12/8/2023

WHEN TEMPERATURES reach 26°C (78.8°F) in Britain, a few things happen. People strip off their clothes and flock to parks and swimming pools. And they buy rosé. According to Majestic, Britain’s largest wine retailer, 26°C is the exact point at which sales of the pink stuff outpace those of red and white. During a heatwave last year, the company sold one bottle every 12 seconds.

Rosé is the ultimate summer tipple. Like a strong, zesty margarita, a chilled glass of pale rosé makes a perfect aperitif. (Unlike a margarita, you can probably enjoy more than two without disgracing yourself.) People have been drinking versions of rosé wine for millennia, starting with the ancient Greeks. More than 2,000 years ago the ancient Romans started cultivating vineyards in Provence, in southeastern France.

Provence remains rosé’s heartland. With 35% of the output, France is the world’s leading producer of rosé. It is also its leading consumer: a third of the bottles of wine drunk there are pink in colour. In the past 15 years, exports of Provençal rosé have increased by around 500%. Château d’Esclans sells an eye- and mouth-watering 10m bottles every year. LVMH, a luxury group that owns a number of revered champagne houses and wineries, has in recent years bought Château Galoupet and acquired stakes in Château d’Esclans and Château Minuty, rosé juggernauts. In America, Whispering Angel, a pink wine produced by Château d’Esclans, sells the most bottles of any French wine of any hue.

Travel and social media help explain the wine’s global spread. Before the pandemic, France was the world’s leading tourist destination. The pale wine came to be seen as sophisticated thanks to glitzy events such as the Cannes Film Festival. Social-media tributes like #roséallday (a celebration of day drinking) and #brosé (a hashtag used by men who enjoy the wine) have brought attention to the drink. Consumers have also realised the wine’s versatility, agreeing with Julia Child, a popular television cook, that “rosé can be served with anything.” Dry rosés, pleasantly acidic and refreshing (unlike the cloying notes rosé is infamous for, which are common in cheaper varieties), can accompany many cuisines well.

Rosé still remains a target of derision among oenophiles. It has earned the offensive moniker “bitch diesel” (so named because it is pink and has been marketed to women). According to Sacha Lichine, the president of Château d’Esclans, when he first approached potential distributors he would get the door slammed in his face: traditional folk “think that it’s not a real wine. They think that it’s a Coca-Cola wine,” he explains.

Barbara Drew, a master of wine at Berry Bros & Rudd, Britain’s oldest wine merchant, suggests that the dismissal of rosé as “not a serious wine” is partly because it generally does not age as well as red, so is not of interest to some collectors and investors. But such squabbles over value ignore rosé’s central role in summer culture. Enjoying it is nothing to blush at.

通過分享 PressReader

通過新聞連接世界

Infoman

Free exchange Twitternomics

Economist (UK) 12/8/2023

ELON MUSK is no fan of the Federal Reserve. At least a dozen times over the past year the owner of X (a firm until recently known as Twitter) has savaged America’s central bank for raising interest rates. Last December, for instance, he tweeted that its hikes might go down as the “most damaging ever”. But Mr Musk’s disdain for the Fed is not mirrored by the Fed’s attitude towards X. On the contrary, the central bank’s researchers rather like the site, treating it as a compelling barometer of the economy.

This puts X in a peculiar position. Its value as a business remains dubious, which is why Mr Musk has been scrambling to remake it, with changes including (but not limited to) the company’s name. Yet its value to the economy is a different story altogether. The firm can serve as a timely indicator of both fundamental trends and market sentiment.

There is a large, growing literature on how to decode economic signals from social-media sites, ranging from Facebook to Reddit. But even in the sea of online information and commentary, Mr Musk’s site stands out. Others simply cannot match its volume and frequency. By 2013 Twitter users were already producing more than 5,700 posts a second. By 2016 Instagram’s larger user base was producing only 1,000. Three papers recently published by the Fed explore the platform’s economic contributions.

The first is as a predictor of markets. Sentiment gleaned from tweets seems to be rather good at presaging short-term movements in both share prices and bond yields. In one paper a group of economists including Francisco Vazquez-Grande sifted 4.4m finance-related tweets posted between 2007 and April 2023 to create a Twitter Financial Sentiment Index. They used a machine-learning model to measure each tweet’s sentiments: a message about stocks going to the Moon would be positive; Mr Musk’s quips about the Fed would presumably count as negative.

The index, they find, correlates tightly with corporate-bond spreads (the difference between yields on corporate and government bonds, which usually widens as investors turn pessimistic). More than merely shadowing financial movements, posts can even foreshadow them. The overnight index before the stockmarket’s open dovetails with the coming day’s equity returns. A separate paper by Clara Vega and colleagues finds that the site’s sentiment also closely tracks Treasury yields. Indeed, the correlation is stronger with tweets than with sentiment measures gleaned from the Fed’s own official communications.

A second use of tweets is as a gauge of economic conditions. Posts about job losses in particular seem to offer timely information about the labour market. Tomaz Cajner and co-authors construct a separate machine-learning model to digest posts with keywords such as “lost job” or “pink slip”. Their measure of job losses mirrors official data on employment levels from 2015 to 2023. This correlation is potentially powerful because most government statistics appear with a lag, whereas the tweets are available immediately. Twitter, for example, would have provided a ten-day advantage in detecting the collapse in employment at the height of the covid-19 pandemic in 2020.

The Fed papers also see a third use for tweets: as a bellwether of sorts for monetary policy. Ms Vega and colleagues find that the social-media site fares better than changes in bond yields in predicting monetary-policy decisions on the day of their announcement. The Twitter sentiment index, meanwhile, is good at anticipating shocks from tighter policy such as rate increases. Tweets tend to turn sour just ahead of these moves. (That the site wastes little time in turning bitter will come as scant surprise to regular users.)

No one is about to ascribe powers of causation to X. The socialmedia posts instead reflect broader feelings that are already coursing through financial markets. Still, the cornucopia of tweets does provide an additional way of measuring such sentiment, which, if proved valid over time, would be highly valuable.

Beyond the Fed, some analysts are also finding other potential applications. Agustín Indaco of Carnegie Mellon University in Qatar calculates that the volume of tweeting alone can account for about three-quarters of cross-country variation in GDP. Rather like satellite images of night lights, tweets may therefore be a way of observing economic health without relying so heavily on tardy official statistics. This metric may work best in poorer countries, where heavy posting on social media would be a proxy for the state of telecommunications and use of smartphones.

Marking the spot

If X is so economically useful, why is it not more lucrative? The various papers do not venture so far as to examine the gulf between Twitter’s struggle for profitability and its evident utility—not just as an economic tool but as a platform for sharing information, opinions, jokes and more. Mr Musk was onto something when he described the firm as a “common digital town square”. The problem in economic terms is that a town square falls into the category of public goods such as parks and clean water. Although public goods can be privately owned, it is notoriously hard to extract profits from them given that, by definition, it is difficult to charge people for all the benefits they confer.

Mr Musk is doing his darnedest to shift the economic equation at X by giving additional privileges to users who pay $8 a month for the site’s blue-check verification. Tweets by users who cough up now receive extra promotion, among other benefits, appearing more often in the feeds of other people on the site. That, however, poses a trade-off. Paid-for tweets may start crowding out betterinformed posts from users who would rather not subscribe to the site. Over time, a social-media site that prioritises payment over credibility will function less well as a town square and, by extension, as an economic indicator. The gain to X’s finances would be a loss to the Fed’s economists.

通過分享 PressReader

通過新聞連接世界

Infoman

Orwell mania

Economist (UK) 12/8/2023

Wifedom: Mrs Orwell’s Invisible Life.

By Anna Funder. Knopf; 464 pages; $32. Viking; £20

Julia. By Sandra Newman. Mariner Books; 400 pages; $30. Granta; £18.99

FEW WRITERS have achieved the cult status of George Orwell. He is so much a part of the collective imagination that John Rodden, an Orwell scholar, goes so far as to call him “the most important writer who ever lived”. He was not the best writer of his time, explains Mr Rodden, author of several books on the writer’s “afterlife”, but his universal recognition, continuous publication and repeated spikes in popularity are “an unprecedented phenomenon rivalled only by Shakespeare himself”.

Orwell’s most celebrated novel, “1984”, tells the story of Winston Smith, an everyman who embarks on a love affair in defiance of the surveillance state led by Big Brother, the supreme leader, whom some believe Orwell modelled after Josef Stalin. With “telescreens” that snoop on citizens, “thought police” enforcers and a system called “doublethink” in which both everything and the opposite are equally true, Orwell’s fiction has been prescient, invoked to describe the ills of nearly every age. “1984” has repeatedly topped Englishlanguage bestseller lists, including in 1954 (the year the BBC did a television adaptation), 1984 and 2003 (the centenary of Orwell’s birth). Political events bring Orwell new readers, including Donald Trump’s inauguration in 2017 and fomenting of the riot at America’s Capitol in 2021. After Russia’s invasion of Ukraine, “1984” became the most-downloaded electronic fiction book in Russia last year.

Angst over totalitarianism, the manipulation of truth and the spread of surveillance technologies has hardly abated. Today’s world is increasingly Orwellian, argues Jean Seaton, director of the Orwell Foundation: consider social-media pileons, analogous to the “Two Minutes Hate” the novel’s characters spew at enemies of the state. The dangers Orwell flagged are as easily used by the left to bludgeon autocrats as by the right to denounce the left’s punishment of “wrongthink”.

It is thus no surprise that in 2023, with fears of autocracy and culture wars at fever pitch, the man who wrote so deftly about dark subjects is back in the spotlight. Films in production include a new documentary on Orwell’s life and an animated “Animal Farm”; a Russian-language “1984” was recently released. At least three Orwell books have been published in the past year, grappling with subjects including Orwell’s relationship with Russia.

Two more books are forthcoming, which look more closely at the women in Orwell’s life and work. For all his prescience and scrutiny of tyranny, Orwell was blind to another sort of repression: towards women. Along with a new biography by D.J. Taylor, a British historian, the books draw on letters discovered in the past 20 years between the writer and various paramours, as well as some written by Orwell’s first wife, Eileen, to her best friend. The picture that emerges is disheartening—but hardly unusual for a man of Orwell’s time.

Eileen O’Shaughnessy was married to

Orwell from 1936 until her death in 1945. One of the first women to attend Oxford University, she was brilliant and witty but abandoned a master’s degree in psychology to wed Orwell. Their life was one of hardship. Eileen struggled to make a remote, unheated cottage a home, nursing the tubercular Orwell back to health while typing up and advising him on his work. She was often the main breadwinner.

Anna Funder’s “Wifedom” offers bleak details, including the day Eileen cleaned a blocked toilet, standing knee-deep in excrement, when Orwell appeared at a window to ask, “Teatime, don’t you think?” His wife dedicated her life to helping Orwell “fulfil his destiny”, one friend wrote, to the point of fatally ignoring her own health. Meanwhile Orwell was conducting numerous affairs. Before and after they married, her husband was a “sexual opportunist” who pounced on women who came his way, Mr Taylor writes.

This philandering had long been known to scholars, less so to the public. In the wake of #MeToo and numerous feminist reassessments of badly behaved male artists, he is “due for a bit of reappraisal from that perspective”, says Stefan Collini, an emeritus professor at the University of Cambridge who recently edited a collection of Orwell’s essays. “Wifedom” depicts a man who relied extensively on women while erasing them from his own writings. How could it be, Ms Funder asks, that she read “Homage to Catalonia” twice and never realised that Eileen was also in Barcelona, working for a socialist group against Franco’s fascists?

Invisible woman

As the author of “Stasiland”, a prizewinning book on the East German security state, Ms Funder is well-versed in totalitarianism. Her aim is not to “cancel” a thinker she deeply admires. Her inquiry is instead a reaction to realising that she too has vanished into the invisible role of wife, doing the lion’s share of parenting and household management to the detriment of her career. Elegantly and imaginatively resurrecting Eileen, Ms Funder comes to see patriarchy as another form of “doublethink”, which Orwell defined as “a vast system of mental cheating”. Men “imagine themselves innocent in a system that benefits them, at others’ cost”, Ms Funder writes.

Yet some women take part in their own erasure, a point Ms Funder does not probe deeply enough. Orwell and early biographers wrote Eileen out of history; she colluded by minimising her own suffering. Severely anaemic on the eve of an expensive—and fatal—operation, she wrote to Orwell that “What worries me is that I really don’t think I’m worth the money.” All this makes it doubly refreshing to see Julia, the heroine of “1984”, emerge with full agency in Sandra Newman’s eponymous novel. Such feminist retellings are a booming genre today, with the women of Troy, Shakespeare’s wife and mythological goddesses narrating their lives as the protagonists in new books.

For decades feminists have called out the sexism of Orwell’s depiction of Winston Smith’s lover, Julia, who is presented as a nymphomaniac and honeypot trap, leading to their crushing by the state. “With Julia, everything came back to her own sexuality,” Orwell wrote. Whether the writer was himself a misogynist or simply satirising a group of sexist men, the author’s estate had long felt there was something missing in the story. They sought a writer who might give a new dimension to the tale, writing a spin-off of “1984” for the 21st century. “The only way to approach it was from a feminist perspective, because the whole regime was so horrifyingly misogynist,” says Bill Hamilton, Orwell’s literary executor.

Ms Newman’s “Julia” offers a female character with a rich inner life. Her Julia is a survivor, more subversive than Winston, adroit at evading control, finding a kind of liberty in “sexcrime”. “She imagined freedom as exuberance, a clumsy romping,” Ms Newman writes. If Julia entraps Winston, it is because she too has been coerced and victimised. A twisty ending in keeping with the original makes this an enjoyable read even to those unfamiliar with “1984”.

Neither Orwell’s “troubling” behaviour towards women nor the #MeToo movement inspired the estate’s decision to give the new novel its full backing, says Mr Hamilton. Yet this “Julia” cannot help but balance out his blind spots and bring his opus up to date. After all, he is the perennial man of the hour—not only yesterday but today, and almost certainly tomorrow.

通過分享 PressReader

通過新聞連接世界

Infoman

Programmable factories

Economist (UK) 12/8/2023

IN A FACTORY on the Carolinas’ border, Stanley Black & Decker is assembling cordless electric drills. As part-finished drills travel in boxes along a conveyor belt, a robotic arm photographs and scans them for defects. Another robot nestles electric motors into the drills’ casings. A third one places and tightens screws. A single piece of software oversees the entire production line, which is capable of pumping out 130 cordless power tools every hour under the supervision of just seven humans. The assembly line it replaced in China needed up to 40 workers and rarely produced more than 100 an hour.

“Thirty years from now we will laugh at our generation of humans, putting products together by hand,” predicts Lior Susan, the boss of Bright Machines, a San Francisco-based company that installed the plant’s software. It is not that the design of the electric drills or the various steps involved in making them have changed. Rather, it is the way the automated machines doing the work are being driven by instructions that have been encoded into software having been in effect copied from the brains of Chinese factory workers, who mostly did the job manually.

Making things this way resembles a model used by the semiconductor industry, where chips are designed using software that directly links to the automated hardware which fabricates them. For the Fort Mill plant, and other firms starting to employ such software-defined manufacturing systems, it promises to transform the factory of the future by allowing moresophisticated products to be designed and put into production more quickly. All of which promises big cost savings.

Make this please

To understand why, consider a simplified version of how a new power tool is made. A team of designers come up with a fresh feature, say a longer-lasting battery. They map out every element of the new product, from the battery compartment to the circuitry, that needs to be changed as a result. It is complex work, not least because a small change to one component can have a big impact on another, and so on.

The design is then “thrown over the wall” to the people responsible for making it. Sometimes that is a third-party factory, often in China. Engineers, designers and production staff exchange information and meet up, constantly tweaking the design in response to the various successes or failures involved in making a series of prototypes. Little things, such as a screw than cannot be tightened correctly because it is hard to reach with an electric screwdriver, might result in a return to the drawing board—which nowadays is mostly a computer-aided-design (CAD) program.

Eventually, all the kinks are ironed out (hopefully) and the new product is ready for production. The finer details of how all this was achieved, however, are likely to remain locked up in the minds of the workers assembling the prototypes. Humans are, after all, incredibly flexible and often come up with workarounds.

This process has been employed for decades, yet is inherently uncertain and messy. Designers cannot predict with any confidence what things the factory can or cannot easily accommodate. As a consequence, the design team may purposely leave some features a bit vague, and be put off innovative ideas for fear of being told it cannot be made or is impossibly costly.

When the hardware is controlled by

software, rather than by humans, all this changes. Designers can dream up new products with a far greater certainty that they are manufacturable. This is because the constraints of the production line—even fiddly details like the positioning of screws—are encoded in their CAD programs. Those programs, in turn, are directly connected to the software which controls the machines in the factory. So, if a design works in a digital simulation, there is a good chance it will also “run” on the production line.

This tight integration of manufacturing hardware and CAD software has been a boon in semiconductor manufacturing, where vast machines etch circuits into silicon just a few nanometres (billionths of a metre) wide. Chip designers with firms such as Apple, Nvidia or Qualcomm use specialised programs, largely produced by two companies, Cadence and Synopsys, to sketch out circuits. The design files are then sent directly to silicon foundries, such as TSMC, in Taiwan, for production.

“Until the advent of those tools, people were laying out integrated circuits by hand,” says Willy Shih of Harvard Business School. Mr Shih imagines the impossibility of attempting to do that today with, for instance, Apple’s M1 chip, which contains 114bn transistors. Producing such complexity is only possible in a system where software allows humans to ignore the detail and focus on function.

Stanley Black & Decker has not yet turned its CAD tools loose on Bright Machines’ system to design new products. But the idea is that they soon will. “What Cadence and Synopsys did to semiconductors is what we will do to product design,” says Bright Machines’ Mr Susan.

Layer by layer

Some companies have already started designing products this way. VulcanForms is a foundry, but one that makes metal components rather than chips. It operates out of a former aircraft hangar in northern Massachusetts, where its vast computercontrolled machines focus 100,000 watts of invisible laser light onto a bed of powdered metal. The powder melts and fuses into intricate patterns, layer by layer, until a component with dimensions specified to within a hundredth of a centimetre emerges. It could be part of the engine in a military drone, or a perfectly formed hip-replacement joint. This is a type of additive manufacturing, more popularly known as 3D-printing. VulcanForms’ machines are driven by CAD software and can produce any metal component with a diameter up to about half a metre.

“When I became familiar with what VulcanForms was doing, I could see predictable patterns that mirrored some of the learning with semiconductors,” says Ray Stata, the founder of Analog Devices, an American chipmaker, and a member of the foundry’s board. In chipmaking, he says, the software linking designer and manufacturer has produced huge gains in efficiency and economies of scale.

VulcanForms uses software made by nTopology. This lets people without the skills required to operate lasers, to design objects for production by the foundry. It can result in components with previously unmatched levels of performance, because they can be produced as complex geometric structures which are impossible to manufacture any other way, says John Hart, chief technology officer of VulcanForms. Objects can be created at high volumes, such as forging 1,000 spinal implants from a single powder bed. With additive manufacturing, products can also be produced in one go, as single components, rather than being assembled from individual parts. This reduces the amount of material required as the parts tend to be lighter. It also cuts down on assembly costs.

Software-defined manufacturing has an impact on some of the big trade and political challenges faced by companies. For firms that are increasingly uncomfortable with relying on Chinese manufacturers, it can make reshoring production a more viable option. Mr Susan puts it in martial terms: “Manufacturing is a weapon. When we give design files to China, we give the source code of that weapon to our enemy.”

There will be implications for manufacturing jobs. Although automation usually means a reduction in the number of people assembling things on the shop floor, it also creates some jobs. Technicians are required to program and maintain production systems, and in offices successful companies are likely to boost the numbers working in design, marketing and sales. These jobs, though, require different skills so retraining will be necessary.

Mr Shih also notes that factories themselves, not just the machine tools and processes within them, are coming under the thrall of software. He cites Tecnomatix, a subsidiary of Siemens, a German industrial giant, whose software lets designers lay out an entire factory so that the making of new products can be simulated in a virtual environment, known as a digital twin, before manufacture begins in its physical counterpart.

If the future of manufacturing is following semiconductors, then there is still some way to go. Producing mechanical objects is not the same as etching elaborate circuits that have no moving parts. For a start, things are far less standardised, with components having all sorts of end uses. “We’re just at the beginning with mechanical structures,” says Mr Stata. “The whole process of putting materials together in an additive method is in its very early stages. The flexibility and possibility that opens up is mind-boggling.”

Yet some of the implications are becoming apparent. Products could reach a level of performance and precision which is simply unachievable when their production is limited by human hands. Laying out a factory floor in two dimensions to accommodate human workers will become a thing of the past. Factories designed by software will be denser, much more complex three-dimensional places, full of clusters of highly productive, highly automated machinery.

These factories of the future may be almost deserted places, attended to by a handful of technicians. But with software also taking care of the intricacies of production, they will be easier to use by people developing and designing new products. That should free their imaginations to soar to new levels.

通過分享 PressReader

通過新聞連接世界

Infoman

Betting on life sciences

Economist (UK) 12/8/2023

Official efforts to boost the life-sciences sector are welcome, but only a start

MANY CITIES hope that success in one industry may beget success in another. Take Aberdeen, which grew rich from oil exploitation in the North Sea. By a decade ago, the Granite City laid claim to more multimillionaires per head of population than anywhere else in Britain. Now a local tycoon, Sir Ian Wood, hopes to foster growth in a different sector. In May, with government funding, his development agency, Opportunity North East, opened a university-backed research facility to help startups in the city expand their commercial initiatives.

His bet is on life sciences, a term encompassing high-tech efforts in making pharmaceuticals, biotechnology or medical devices. The city already has a decent record here. Professor David Blackbourn of the University of Aberdeen says ten companies have been spun out from his institution. One, TauRx, based in a former bus depot, is trying to develop a treatment for Alzheimer’s and has raised over $800m since its founding in 2002. Its innovation, tested in human trials, targets tau tangles (abnormal clumps of protein that stick to neurons in the brain). Regulators will soon determine if that treatment is sufficiently effective. Its chief operating officer, Glenn Corr, calls it a “life and death” moment for the company.

For life sciences in general much is also on the line. Since coming to office last year, Rishi Sunak has set great store by developing high-skilled sectors, such as artificial intelligence and the life sciences, arguing that they will bring long-term gains to the economy. Life sciences gained prominence during covid-19. The world’s first randomised trial for covid treatment was conducted by the University of Oxford and then an effective vaccine for covid was developed by AstraZeneca, a British-Swedish company. It saved millions of lives.

Already some 300,000 people are employed in the sector and the government talks of that number surging. To that end, Mr Sunak’s administration has set out several ways that Britain aims to make matters easier for life-sciences startups. Will Quince, a health minister, says the “ecosystem” in which small firms operate puts too many obstacles in the way of those eager to grow. Both politicians talk of sweeping them away.

How much is really changing? Britain undoubtedly has advantages in advanced research. It is home to world-beating universities in life sciences in Cambridge, London and Oxford (see table on next page), and in spots like Aberdeen. British universities publish some of the most-cited academic publications in life sciences, though the country falls a bit short in getting patents filed. It would help if academics were spurred harder to apply for them.

But academic excellence needs nurturing. Many had expected that, by now, Britain would have rejoined Horizon Europe, the EU’s fund (and the world’s largest) for research and innovation, worth some £85bn ($108bn). Boris Johnson, when prime minister, said this would happen after Brexit. Mr Sunak had seemed poised to unveil a deal to do so in July. He did not, apparently because of worries about paying in necessary funds. A decision may be taken soon. An alternative British-only scheme, called Pioneer, is widely seen as a second-best option.

Beyond the universities, a second series of hurdles block Britain’s startups. Here, again, the country enjoys distinct advantages, so should be able to prosper. Around

a third of all life-sciences-focused startups in Europe are reckoned to be there, more than in any country on the continent. That is partly because of abundant talent, an entrepreneurial culture and sufficient funding for early-stage growth.

But the startups face at least three more big challenges: painfully slow processes for getting trials for drugs or other products under way; the high cost of property (with knock-on effects on labour costs); and difficulty in securing access to largescale capital to allow promising firms to grow. On each of these, the government has taken some welcome steps.

Excessive delays in firms being able to conduct clinical trials are beginning to improve. The problems were created in part because the underfunded medicines regulator, the MHRA, took longer than most counterparts in other countries to let firms administer the first dose of a medication in a trial. Waiting for most of a year to get a trial started is “a really long time when your patent clock is ticking”, laments Lisa Patel of Istesso, a firm developing drugs to treat auto-immune diseases. (As 90% of products under trial end up failing, the faster the process is done, the sooner researchers can move on.)

As a backlog at the MHRA caused by the covid pandemic eases, trial efficiency is improving. Another measure for the regulator is whether companies can recruit trial participants quickly enough. By May, according to official data, 73% of trials signed up their target number of patients on time, up from just 23% in May last year. The government also promises to tackle a shortage of staff at the MHRA, which had held it back.

The main reason for optimism, meanwhile, is an independent review that reported in May, by Lord O’Shaughnessy, which offered 27 recommendations including several to accelerate the regulatory process. The government sounds eager to implement many. These include creating networks to help speed up clinical trials, giving NHS staff incentives to sign up their patients, and finding ways for new technologies to be rolled out sooner in the NHS.

Government efforts to tackle the high cost of property are more limited. Many startups want to be in the “golden triangle” near Cambridge, London and Oxford, where finding space for labs, or for staff to live, is painfully pricey. Officials have announced plans to develop new lab space in Cambridge, and to build more homes there. Campuses are expanding in Oxford; private developers in London are building labs and offices for the sector, notably in Kings Cross and Canary Wharf. Such increased activity by private actors is an encouraging sign.

The third problem of raising largerscale capital is the biggest challenge. Whereas venture funds for startups remain plentiful, investment for those moving to later stages has long been too hard to obtain. Last year only 22 life-sciences companies in Britain raised £30m or more in funding rounds. In America nearly 400 did so. Worryingly, life-sciences firms collectively were able to raise only £3.3bn in equity finance last year, down from £7.2bn the year before.

The government has tried to make up some of the shortfall. Since 2021 British Patient Capital, a subsidiary of the government-funded British Business Bank, has co-invested in eight later-stage biotechs. It also provides investment to specialist venture-capital funds. “But we really need to try to attract in much more private-sector capital to make a dent in what are quite significant funding gaps,” says Catherine Lewis La Torre, its outgoing chief.

In this, the biggest gain would be if more long-term capital from pension funds found its way to the firms. The government wants those who run definedcontribution pension schemes to invest in unlisted outfits, including life-science companies. In July the chancellor, Jeremy Hunt, said nine large investment funds had agreed to allocate at least 5% of their pension savings in such unlisted firms by 2030, up from 1%. If that came to pass, it would potentially add billions of pounds in funding for such firms.

Steve Bates, chief executive of the BioIndustry Association, calls that a gamechanger. He argues that the combined benefits of hurdles coming down at home and others going up elsewhere (such as draft legislation in the EU that could limit the patent life of pharmaceuticals) make Britain look increasingly attractive to those trying to expand in the sector.

Maybe so, but other big challenges will prove much harder to overcome. England remains a small market for pharma companies, accounting for only 2% of global pharmaceutical sales, whereas America makes up nearly 50%. Pharma firms complain about an NHS drug-pricing policy, now being renegotiated, which obliges them, in effect, to accept a discount that is currently worth 26.5% on the value of sales of most branded medicines. Those that produce new tech also grumble that the NHS has been far too slow in adopting their innovations, and changing habits here will not be quick.

The London Stock Exchange looks increasingly moribund. Brexit has not made it easier to manufacture in Britain, whereas exporting to the EU has become more complicated. Britain is a diminishing actor in export markets: its firms account for 4.3% of global pharma exports, with both production volumes and export values dropping over the past decade. Nor has Britain been able to draw hefty levels of foreign direct investment into its life-sciences firms: in 2022 these shrank by nearly half, to £1bn. By contrast Ireland’s more than doubled, to £3.7bn.

In one area, British firms do reasonably well: startups find that bigger firms are often keen to buy them. Of the ten British companies with the largest venture rounds in 2018, one has since been bought by an American pharma company, Pfizer, and another by a Swiss one, Roche. Such exits are a boon to founders, some staff and potentially to future patients. They should encourage more new firms to be founded. British buyers may themselves also grow by taking over minnows. But it’s not what Mr Sunak has in mind when he talks of creating a superpower in the life-sciences. One measure of success, in future, will be how many businesses can grow up without being forced to sell out.

通過分享 PressReader

通過新聞連接世界

Infoman

Posts by Infoman

Title: "U.K. Inflation Moderates, but Challenges Persist"

Ten-Year Treasury Yield Reaches Highest Level Since 2008 Amidst Economic Shifts

Expensive stocks

Uber lyft Ride-hailing profits

Rosé’s summer reign

Free exchange Twitternomics

Orwell mania

Programmable factories

Betting on life sciences