Covid-19 and the Day After
Covid-19 and the Day After
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Author : Rachel Poole
Date : March 11, 2021
Here is our take on the articles summarized below:
The Covid-19 pandemic has disrupted many sectors of the global economy in both good ways and bad. Our summaries today focus on the developments in the technology and shipping industries as they have reacted and adapted to a pandemic environment. Furthermore, we explore the reappearance of “bond vigilantes” as markets experience increased volatility due to rising bond yields.
10 Breakthrough Technologies 2021
MIT Technology Review
MIT Technology Review’s editors compiled a list of ten new technologies, some of which are already in use today, some whose use will come into play down the road.
● Messenger RNA Vaccines: Not only are several of the Covid-19 vaccines based on this transformational therapeutic technology, but it also holds promise in treatments for sickle-cell disease, HIV, and cancer.
● GPT-3: This AI model has been trained to read and write on thousands of books and can mimic human writing with uncanny accuracy, although the content of the writing requires more development. Still, the algorithm is an important step on the road to AI integration.
● TikTok Recommendation Algorithms: The viral social media platform has tailored its recommendations to its users, allowing it to recommend niche creators and content to individual users. This personalization has certainly contributed to the app’s meteoric rise since 2016.
● Lithium-Metal Batteries: Silicon Valley startup QuantumScape has a prototype for a new type of battery whose capacity and charging capabilities will be a game-changer in electric vehicle market. The company already has a deal with Volkswagen to provide the automaker with its batteries, which they hope to offer in an electric vehicle by 2025.
● Data Trusts: In the current Internet environment, individuals are primarily responsible for their own privacy, which has allowed terabytes of personal data to be bought and sold. Data trusts, as a legal entity with responsibility to manage a person’s data on their behalf, is one alternative toward a more secure future.
● Green Hydrogen: Hydrogen has long been a viable clean alternative to fossil fuels, but the current process is energy-intensive and requires natural gas. As clean energy alternatives continue to lower their costs, electrolytic processes (separating water into oxygen and hydrogen) become more viable, making green hydrogen practical.
● Digital Contrat Tracing: While digital contract tracing showed promise for coronavirus spread mitigation at the beginning of the pandemic, social dynamics and policy missteps prevented the technology from seeing much use. The lessons learned from this pandemic will help us respond more effectively to the next one.
● Hyper-Accurate Positioning: New positioning systems have improved the accuracy of GPS from meters to centimeters and even millimeters of error. As the technology develops, a wide variety of applications from autonomous vehicles to disaster prediction will see great leaps forward.
● Remote Technologies: As the pandemic lockdowns kept the vast majority of the population inside, remote capabilities quickly developed to meet the need. Of special note are telemedicine and education applications, whose use has expanded to great benefit of its users.
● Multi-Skilled AI: Artificial intelligence is excellent at performing specific, well-defined tasks, but when it comes to even basic multi-factor applications (such as problem-solving), its capabilities are still far behind even children. That may be improved by AI trained on multiple inputs, such as an algorithm which can both “see” and “hear” its environment. Such multi-skilled AI could be the next step on the path to human-like intelligence.
Return of the Bond Vigilantes: Will Inflation Fears Spoil the Post-Pandemic Party?
Robin Wigglesworth, Joe Rennison, Eric Platt and Colby Smith, Financial Times
As rising bond yields have scourged the markets in the past few weeks, Edward Yardeni’s famous “bond vigilantes” appear to have resurfaced. The vigilantes are so called for their role as a check on excessive spending by fiscal authorities. While the widespread thesis is that the bond selloff was the result of rising optimism about the recovery and ensuing inflation, such system shocks have a way of exposing previously hidden fault lines, and some investors are concerned that the restructuring could slow or even halt some aspects of the economic recovery. Many see the historically low yields on bonds as supporting record high valuations in other securities (such as equities); a rise in yields inherently devalues these assets and could lead to a further correction (the Nasdaq has lost more than $800B from its cap in the past two weeks). As volatility increases, the central banks may be forced to take more drastic action to restore stability, flooding the markets with liquidity. Such a move would end the bond vigilantes’ ride early as the weight of bond purchases by large institutions stabilize the markets.
The rules of the tech game are changing
The Economist
This Economist article argues the tech industry is entering a “dynamic phase”: a shift from monopolies to oligopolies. America’s tech industry is dominated by five giants: Apple, Microsoft, Alphabet, Amazon, and Facebook. While the market share of these five is 35% across each of the 11 tech subsectors, the share of second and third firms has risen nearly 8% over the last five years, jumping from 18% in 2015 to 26% in 2020. This is a reflection of two major trends in the American tech industry. First, big tech firms are diversifying their core products as new technology opportunities emerge and regulatory threats mount. This trend has increased competition between the five giants and now their revenues overlap 38% as compared to only 22% in 2015. A second trend is that outsiders now have momentum. Thanks to the digital surge caused by the pandemic, there has been a major shift in market share to corporate giants like Disney and Walmart, as well as independent tech firms like Shopify and PayPal. The shift towards oligopolistic competition could benefit consumers by increasing choices as more firms compete, raising standards as platforms differentiate themselves, and spurring innovation.
‘I’ve Never Seen Anything Like This’: Chaos Strikes Global Shipping
Peter S. Goodman, Alexandra Stevenson, Niraj Chokshi and Michael Corkery, Wall Street Journal
The pandemic has wreaked havoc on the global shipping sector, causing chaos at ports around the world and driving up the cost of shipping goods. While lockdowns forced many to stay home and work remotely, online shopping became the most convenient and, in some cases, the only means for people to buy desired products from new video games to home-gym equipment. As the rest of the world slowed down, demand for shipping surged beyond the availability of containers in Asia. To keep up with the demand, shipping carriers started concentrating their vessels on the most popular routes, lines linking North America and Europe to Asia, leaving containers that carried millions of masks to countries in Africa and South America empty and uncollected. The limited availability of dockworkers and truck drivers has made matters worse. All of this disruption has caused shipping costs to surge. In February, Maersk, one of the world’s largest shipping companies, reported record-high freight prices. To put things in perspective, Peter Baum’s company Baum-Essex went from paying $2,500 to ship a 40-foot container to California to $6,000-$7,000, and he’s had to wait 90 days to secure space on a ship for his container. The chaos has forced some shippers to rearrange their schedules, as dysfunction at California’s ports has caused issues across the Pacific. Some experts say as vaccinations increase and life returns to normal, Americans will shift back their spending habits, reducing the need for containers. On the other hand, the new stimulus bill which plans to generate hiring could prompt another wave of buying as previously jobless people now have money to spend. The shipping industry could be looking at shortages for some time.
