The challenge of misinformation
And also: The post-COVID workplace will be different. Big Tech "civil wars" and emerging platforms. Investors skeptical about China and about "green investments". Batteries as a strategic supply
Misinformation may be here to stay
After the series of articles at the WSJ last week, Facebook’s Oversight Board has demanded an investigation on how the company addresses misinformation cases for “high profile” accounts. The company is in the middle of a storm, with most governments across the world under pressure to solve the “content problem” in social networks (as seen both in Europe and Russia -in a different way- this week), and with investors demanding more returns from a model that depends on user engagement, and that could suffer from more aggressive actions against “fake”, but viral posts
This week there have even been claims for Facebook to leave some countries, like Myanmar or Azerbaijan, at least until they can dedicate the same level of resources that they have for (apparently much better managed) Western countries
Meanwhile, misinformation sites in Russia are learning new tricks to bypass the controls that either the companies or the governments are starting to set up. This includes using the reader comment sections in the web pages of traditional media outlets, like Fox News of The Daily Mail
The perspective is that this will be a long fight… Maybe a long as the one against computer viruses, that we’re still fighting
The week
1. Consumers and businesses, after COVID
What is happening
The pandemic may have changed the workplace, forever
COVID is seen as a shock that creates new opportunities (FT)
HR experts claim we’ve entered in “unchartered territory” and we need to experiment to find the right “hybrid” model (FT)
Offices are being rethought, with the objective to be “appreciably better” than working from home (FT)
In the new “hybrid” scheme, women could be winners (FT)
Labor shortages are accelerating process / workplace automation (WSJ)(FT)
Emerging risks:
Remote work has accelerated the deployment of workers-monitoring systems. This is already high in the agenda of workers’ rights’ activists (FT)
Higher accessibility of advanced DNA-manipulation technologies may be increasing the risks of bio-terror (FT)
US-trained hackers are offering their ”freelance” services to foreign governments (Bloomberg)
What it means
Companies’ journey “back to the office” will not bring back the pre-COVID workplace. In most cases, hybrid working schemes are being implemented, and many offices are being re-designed, with potential benefits to employee experience but also to cost-efficiency and productivity. Women might also benefit from the more flexible approach
Flexible work schemes also bring some risks, as companies will be tempted to deploy more “surveillance” systems to monitor employee activities. This is already becoming a workers’ rights issue
“Democratization” of technology is beneficial in general, but is also causing concerns on associated risks, e.g.: in cybersecurity and in biotech
2. Platforms and digital enablers
What is happening
Platform news:
Facebook complains about Apple’s new privacy controls, and claims they could hurt ad effectiveness measurements (WSJ)
Amazon is planning to open “next-generation” (physical) department stores (WSJ)
Live-stream shopping is seen as the future of retail (WSJ)
LinkedIn’s strategy seems to be working, according to results (FT)
Uber on the way to sustainability: first (adjusted) profit expected in the next quarterly results (WSJ)(Bloomberg)(FT)
Digital enablers:
Devices: Apple is expanding the iPhone’s health monitoring skills, now moving into mental health (WSJ). Microsoft announced a 5G phone and a new “pro” laptop (Bloomberg). Sky will launch its own smart TVs (FT). Smartphones seen as the new cars (so they wouldn’t be a market in decline, anytime soon) (FT)
Connectivity: India’s telecom market could be on the way to reform (Bloomberg). BT is negotiating the sale of BT Sport, effectively moving away from their previous content-centric strategy (FT). Microsoft helping connect rural populations in the US (BusinessWeek)
Cloud: Salesforce raises its revenue guidance (WSJ). Freshworks, a (successful) competitor focused on SMEs, plans its IPO (WSJ)(Bloomberg),. OVHcloud, an European cloud infrastructure startup, has reached a valuation of $4.7bn, apparently leveraging geopolitical interests to develop regional cloud assets (WSJ)(Bloomberg)
What it means
The Big Tech “civil war” continues, with competition between giants (like Facebook vs. Apple) potentially making regulation unnecessary. Apple’s privacy controls contribute to the pressure (also from the political side) on advertising-based business models
Both LinkedIn and Uber are on the path to building sustainable businesses and justifying (high) valuations. Both with monetization essentially not based on ads (only a third of LinkedIn sales, and irrelevant for Uber)
Apple obviously wants to be “the e-health company”, but they might be entering turbulent waters with new iPhone capabilities that monitor users’ mental health signs. Lots of potential ethical and privacy issues around that, so they really need to solve the experience (and the operations behind) correctly
OVHCloud in Europe shows an opportunity for regional IaaS cloud providers, partially driven by geo-strategic issues
3. Financing digital innovation
What is happening
Evergrande (a Chinese real estate giant) has serious liquidity problems (FT). A panic in the Chinese stock market has followed (FT), and the debate in the West about investing in China has become louder, affecting Chinese tech stocks (FT)(FT2)(Bloomberg)(WSJ)(Bloomberg)
Specialized equity funds focused on climate change might actually be impacting negatively on the fight against global warming, according to a recently published research paper (FT)
Turkish startups are hot. After Getir, here comes Colendi, a fintech firm, and seen as the “next unicorn of Turkey” (Bloomberg)
Key themes for the future:
Batteries: Mercedes in Germany and Ford in the US are making bets on battery startups with unproven technologies, looking to build local supply chains for a (highly) strategic component (WSJ)
Autonomous cars: Radar technology is becoming more precise, and an alternative to laser-based Lidar, pushed by companies like Mobileye (acquired by Intel) and Oculii (supported by GM) (WSJ)
Flying cars: Vertical, a UK “flying taxi” startup, signs a contract with an operator of civil helicopters. This seems to be a natural market, at least for starting (WSJ)
What it means
The Evergrande crisis has been discussed as China’s “Lehman moment”, but it probably won’t be so bad financially, as most of the debt is within China (under Government’s control). However, it may hurt China’s economic growth perspectives. Read about it here. Obviously, this could impact technology too
Skepticism on “green investing” keeps growing, and everybody seems to agree that we need better ways to effectively measure how different stocks are contributing against global warming
Securing critical supplies for electric cars has become a strategic priority. Car vendors are looking to build local battery supply chains, to avoid disruption, but are running some risks while doing that
4. Building new rules for the (digital) game
What is happening
Customer protection: privacy & safety:
More rules announced about political content in social networks, both in Europe (FT) and Russia (Bloomberg)
Germany has failed to control polarization before their general election (NYTimes). Also, Russian disinformation campaigns are learning to avoid controls (FT)
After the WSJ revelations last week, Facebook’s Oversight Board has launched a review of how the company deals with high profile users (WSJ)(FT). Also, Facebook’s CTO has announced his departure (WSJ)(FT)(NYTimes)
China has declared all crypto transactions illegal (WSJ)(FT)(FT2)
Antitrust:
Apple won’t let Epic bring Fortnite back to the iPhone yet (WSJ)
EU wants to force Apple to accept a “universal” charger (WSJ)
Tech geo-strategy:
Huawei reaches a deal with the US to release the company’s CFO (FT)(WSJ).
Zoom’s $15bn acquisition of Five9 under review in the US, given Zoom’s ties with China (WSJ)(WSJ2)(FT)
What it means
The fight against disinformation and political polarization in social networks is a high priority for governments, but it is revealing to be a very difficult one to deliver. To the unpredictable dynamics of complex systems, we need to add the negative incentives for companies (like Facebook) with business models based on maximizing user engagement
China’s actions against crypto transactions contribute to the inherent instability of these markets. Mass adoption remains far away in the future, for now
Apple is increasing the pressure on Epic Games, after the relatively favorable court decision, that denied the need to accept alternative app stores for the iPhone