How to Survive and Thrive in a World of Disruption

Date: 11‑12‑2019

Source: The Wall Street Journal By Irving Wladawsky‑Berger

Looking back upon my long career, it’s frankly sobering how many once powerful IT companies are no longer around or are shadows of their former selves: Digital Equipment Corp., Wang Laboratories, Sun Microsystems…the list goes on. 

The forces of disruption might have been more powerful in the fast‑changing IT industry, but no industry has been immune. In less than two decades, the global recorded‑music industry has lost over half its revenues, while the drop in newspaper advertising revenue in the U.S. has been even steeper. Retail has undergone major changes with the rise of e‑commerce, as has the telecommunications sector with the transition to mobile phones.

Why have so many companies been done in by disruptive technological and market changes? Is it that in spite of all their efforts in strategy formulation, their leaders failed to anticipate these changes and were caught by surprise?  Or is it that, as if actors in a Greek tragedy, they saw the changes coming and understood what needed to be done, but were somehow unable to make the needed strategic and cultural transformations?

A British Test for the Populist Revolution

Date: 07‑12‑2019

Source: The Wall Street Journal By Gerard Baker

If Boris Johnson’s pro‑Brexit Tories capture a large portion of former Labour voters in next week’s election, it will transform British politics and galvanize conservatives across the West

A country that likes to consider itself the most stable of democracies, a model of government typified by steady, pragmatic, get‑things‑done‑with‑no‑drama progress, has descended in a few years into southern European‑style political chaos.

Next Thursday, the British go to the polls in a nationwide vote for the fourth time in less than five years. The result could produce the U.K.’s fourth prime minister in a little over three years. If the opposition to Boris Johnson’s incumbent Conservatives can beat the odds and win on Thursday, the Battle of Brexit, which has paralyzed politics for 3½ years, is likely to be prolonged for a while yet, with the prospect of at least one more national vote in 2020. It’s possible that one outcome could be the eventual breakup of the kingdom itself.

Brace for the Digital‑Money Wars

Date: 08‑12‑2019

Source: The Wall Street Journal

Digitizing the Chinese yuan—and eventually the dollar—would open new fronts in the fight over privacy and trade.

THE NOT‑TOO‑DISTANT FUTURE—The National Security Council holds an emergency meeting. North Korea has launched a missile, capable of carrying a nuclear warhead within range of U.S. forces in Guam. At this rate, North Korea could land a nuke on the U.S. mainland in less than a year.

The shocking advance in capability despite heavy trade sanctions is due to a stream of money that the U.S. and its allies cannot monitor—a cryptocurrency. But it’s not one of the risky ones celebrated by overnight millionaires and largely avoided by serious investors, it’s a new one, with the stamp of legitimacy: the digital yuan.

The scenario above is fiction, but it isn’t fantasy. If China digitizes its currency, as it plans to do, and the North Koreans use it to finance their missile program, it’s a flow of money that circumvents U.S. sanctions. That would force the U.S. to grapple with its own now‑antiquated currency. If the U.S. follows suit, digitizing the dollar in order to maintain its global economic dominance, it would also find itself in possession of a potentially powerful surveillance tool.

Google Management Shuffle Points to Retreat From Alphabet Experiment

Date: 06‑12‑2019

Source: The Wall Street Journal

Founders’ step away mirrors broader shift as Silicon Valley faces backlash against big tech

Sundar Pichai . His ascent to CEO of Alphabet Inc. comes as the company shifts toward being more like a conventional corporation.

Sundar Pichai’s appointment this week as chief executive of Google GOOG 0.57% parent Alphabet Inc. effectively shifts the focus back on the company’s advertising profit machine and away from its “moonshots” and other potential new businesses.

Mr. Pichai’s promotion late Tuesday amounted to the biggest managerial overhaul of the internet giant since 2015, when co‑founders Larry Page and Sergey Brin created Alphabet as a parent company above Google. Their goal then was to make Google and its highly profitable advertising businesses just one of many subsidiaries. The stated purpose, as they said in a public letter: “We are still trying to do things other people think are crazy.”

Those goals were on‑brand for the two former Stanford University graduate students. They famously celebrated a “don’t be evil” ethos and were working on driverless cars, wearable computers, beating death and a host of other money‑losing projects. The idea was to free the duo from the day‑to‑day at Google, which remains a profit machine, to build out new, world‑changing ideas.

Trump Leaves NATO Summit After Video Flap

Date: 05‑12‑2019

Source: The Wall Street Journal

U.S. president calls Canada’s Justin Trudeau ‘two‑faced’

LONDON—President Trump called Canadian Prime Minister Justin Trudeau “two‑faced” after a video emerged of a group of NATO leaders discussing the U.S. leader without him present, rattling a summit to mark the 70th anniversary of the alliance.

The bickering among Mr. Trump and U.S. allies has become a common motif of international summits as NATO members have grown increasingly divided on a host of issues, including Mr. Trump’s demand that allies lift their military spending to meet NATO’s recommendation of 2% of GDP. That is a longstanding source of tension between Washington and European capitals, many of which argue that a single figure doesn’t capture the extent of their contributions to the alliance.

The video, which was taken at a reception at Buckingham Palace Tuesday evening, captures U.K. Prime Minister Boris Johnson asking President Emmanuel Macron of France why he was late to the reception. Mr. Macron had come from a meeting with Mr. Trump who earlier in the day had held impromptu news conferences on the margins of his bilateral meetings with the Canadian and French leaders.

Mr. Trudeau chimed in, saying: “He was late because he takes a 40‑minute press conference.”

U.S. Dominance in Global Services Weakens

Date: 03‑12‑2019

Source: The Wall Street Journal

Some softness in demand reflects cyclical factors, such as slowing foreign economies, but other forces are weighing on exports and prompting Americans to buy more foreign services

WASHINGTON—Stocks sank Monday over the toll tariffs are taking on trade in manufactured goods, but trade is also showing strain in a different sector that may matter more: services.

While the U.S. usually runs a deficit in goods, it actually runs a surplus in services. Yet that surplus is shrinking. Exports of services barely rose in the first nine months of 2019, while imports rose 5.5%, the Commerce Department said.

The services surplus, at $178.5 billion through September, was down 10% from a year earlier, on pace for its steepest annual decline since 2003. October data are due out Thursday.

Artificial Intelligence and the Adversary

Date: 04‑12‑2019

Source: The Wall Street Journal By Samantha Ravich

What will Beijing do with the data it stole about American military service members and others?

The potential benefits of artificial intelligence are proclaimed loudly, for all to hear. The dangers, however, are discussed quietly among national‑security experts. The time has come to bring the general population into the discussion.

The benefits are enticing. With AI, the future promises longer life expectancy, increased productivity, and better preservation of precious resources. You will be able to take a picture of a mole on your leg and send it electronically to a dermatologist, who will use deep neural networks to determine whether it is skin cancer. Data‑driven sensors and drones will determine the perfect amount of pesticide and water to promote agricultural diversity and counter monocropping. The AI revolution in transportation will herald autonomous planes, trains and automobiles. Music will be created to improve not only mood but heart rate and brain activity.

The Five Traits of True Tech

Date: 02‑12‑2019

Source: The Wall Street Journal By Andy Kessler

Every company wants the label, but real highly valued tech has defining features.

It seems everyone wants to be a technology company these days. But not every company is worth 40 times earnings and 15 times sales in the stock market. How can you tell which growing companies might sustain that valuation? Put more broadly, in the wake of WeWork’s woes, what qualifies a company as highly valued tech?

Any company can call itself tech. Heck, Long Island Iced Tea Corp. changed its name in 2017 to Long Blockchain Corp. and the stock popped 400% to $13 (it’s now $0.16). But can companies that sell razors, glasses or mattresses be high tech? Exercise bikes? Insurance? Or even ads?

An Oil Giant Plans for Climate Change

Date: 30‑11‑2019

Source: The Wall Street Journal

Shell is test‑driving a number of eco‑friendly business models before deciding which one to buy into

Royal Dutch Shell knows that climate change means business change, but isn’t sure how. Like a savvy car buyer, it is testing out a few eco‑friendly models before it chooses one.

The approach is sensible for Europe’s most valuable oil and gas producer, given that we don’t know what a lower‑carbon future really looks like. At some point, though, investors need to brace for a big decision.

All countries except the U.S. have promised to cut their carbon emissions to comply with the 2015 Paris climate accord. Extreme weather events, ongoing climate protests and shifting public opinion are now pushing governments to deliver. The oil and gas business is on the front line of the drastic economic changes required.

Equally, though, there is great uncertainty about the pace of the transition and how lower‑carbon economies will eventually be structured to produce and sell power, food and transportation.

Faced with this conundrum, Shell has promised to halve its net carbon footprint by 2050 from the 2016 level. It has gradually moved away from oil toward lower‑carbon gas and has been adding electricity to its product mix. It is also applying its trading and retailing expertise to products other than oil and gas. With 45,000 stores—more than Starbucks or McDonalds—Shell serves 30 million customers daily.

China Is Europe’s Problem Too

Date: 26-11-2019

Source: The Wall Street Journal By Walter Russell Mead

Only the trans-Atlantic alliance can counter Beijing’s moves in the Pacific.

What will the trans-Atlantic alliance look like in a world focused on the Indo-Pacific? That, more than President Trump’s unpredictable diplomacy, is the question that haunts Europe.

During the Cold War, protecting Europe from Soviet aggression was Washington’s highest foreign-policy priority. That didn’t only mean that the U.S. put troops in Europe. Washington took European opinions seriously, engaged with Europeans, cut deals with them and was willing to make concessions to preserve alliance unity.

Clearly, some of that has changed. The next U.S. president may not share Mr. Trump’s undiplomatic instincts or his affinity for Brexiteers such as Nigel Farage and anti-Brussels figures like Hungary’s Viktor Orbán. But will he or she engage in the ritualistic ceremonies of diplomatic consultation with the various chancellors, presidents, commissioners and high representatives that Europeans so love? When America’s most urgent foreign policy worries involve smoothing over Japanese-Korean spats or facing down China in the Taiwan Strait, just how relevant will Europe be? When Europe calls Washington, will anybody answer the phone?