Of Conspiracy Theories

With the Coronavirus spread and the entire world struggling to face this challenge, I have a few conjectures around how this virus started and why this has become one of the fiercest epidemic we have faced in a long time. There are four theories I’m thinking could have been a reason for this –

Theory 1: This is politically motivated, and man-made fiasco prepared in a lab with the purpose to let China down in the global race towards becoming the world leader.

As it is, China is the world’s factory. Most of the things most of the people use and buy are coming from China, even when the companies producing them are not really based out of China. This has given the country a lot of technological excellence and created a big dependency on their production. Moreover, whilst the world’s dependency on China has increased, China’s dependency on the world for its own consumption has shrinked as illustrated in this McKinsey research below:

All along, another interesting development has been the rapid progress of Chinese Supercomputers in the Quantum computing race, where 219 of the fastest 500 supercomputers are Chinese. Also, amongst the top 5, there are 2 Chinese supercomputers closely following US’s lead in this race. The conventional computers are based on bits that can process 0 or 1, hence, binary, but quantum computers are based on qubits and have the power to process 0 & 1 at the same time, thus giving them much more computing power to do advanced calculations at a much faster pace. Now, these quantum computers can theoretically help banks do better and faster risk management, solve the biggest warehousing and inventory management problems, or help tech companies ensure their code is bug-free, or even help government espionage by cracking cryptographic codes, which mandates significant number crunching.

This has deep implications for the success of an economy in this new age, where information and access to information has become the key to attaining that status. Clearly, the leaders in this race would have the power to access a lot of classified information as well, eventually giving them an uneven advantage over others.

Yet another interesting angle to this theory has been the rise of 5G and its impact on how things are done. Whilst the increases in expected speed are prodigious at an estimated 50Mbit/s to over 2Gbit/s at the start and expected to grow to even 100Gbit/s (100x faster than 4G), there are big concerns around surveillance through potential espionage by Chinese equipment vendors, primarily Huawei. Even a report published by the European Commission and European Agency for Cybersecurity warns against using a single supplier for a carrier’s 5G infrastructure.

Advancement in technology boosting fast-paced progress in supercomputers, quantum computing, 5G infrastructure are inevitable, and China’s lead in these areas could be a possible reason for concern for some of the other developed economies.


Theory 2: This is politically motivated, and man-made fiasco prepared in a lab with the purpose to reduce the global aging population (hence, the old age benefit) to help contain the ever increasing health expenditure of countries, especially the developed ones.

According to the World Health Organization, nearly two billion people across the world are expected to be over 60 years old by 2050, a figure that’s more than triple what it was in 2000. Because of such increases in their aging populations, some of the world’s largest economies have started facing subsequent increases in their health-care costs, higher pension costs, and a decreasing proportion of their respective citizenries active in the workforce.

Haider, Faraz 2017, Countries With The Largest Aging Population In The World, WorldAtlas, viewed 23 March 2020, https://www.worldatlas.com/articles/countries-with-the-largest-aging-population-in-the-world.html/


Clearly, with a diminishing fertility rate, and advancement in health technologies leading to longer average lifespans mean the global population is moving towards a higher proportion of their people above the working age. Understandable a lot is changing in terms of extension of retirement age, change in pension benefits and overall increase in the world GDP as well, but there’s a significant financial burden attached with this aging population.

https://www.oecd.org/health/Expenditure-by-disease-age-and-gender-FOCUS-April2016.pdf

A small portion of the population accounts for a large share of health care spending in a year. Although we tend to focus on averages, few people actually have spending around the average, since individual health care needs vary over the life course. Some portion of the population (the elderly and those with serious or chronic illnesses) require more and higher-cost health services than those who are younger or otherwise typically in need of fewer and less costly services.

https://www.healthsystemtracker.org/chart-collection/health-expenditures-vary-across-population/#item-discussion-of-health-spending-often-focus-on-averages-but-a-small-share-of-the-population-incurs-most-of-the-cost_2016

This is not something that has started to show up all of a sudden, global aging population has been a phenomenon we’ve known about. It has been accepted as a fact of life for the most part, and people have largely come to expect it to be that way. “In the developed world, people live longer with very intense disease — and costly treatment,” says Vegard Skirbekk, professor at Columbia University’s Aging Center.

This seems to be a sensitive issue, as countries are supposed to be working towards the welfare of their own citizens and increasing life expectancy leading to an aging population is something to be proud of in many ways, but it does mean a higher health care spend – given this disease does not give much of a second chance to an older segment of the population, it does mean even when we’ve got this pandemic under control, most of the lives lost would be elderly people.


Theory 3: This is politically motivated, and man-made fiasco prepared in a lab with the purpose to initiate an economic crises, leading to unbelievably good asset prices for fresh entry – hence, ensuring the status-quo prevails and the few wealthy continue to dominate and control the finance (hence the world) for another few decades, or more

The argument here is that the global wealth divide is sharply skewed with most of the wealth falling within few hands. It is easier to explain this through a visual depiction of how lop-sided the wealth equation currently is:

Although this is a state of affairs in general, over the past few decades and specially with the rise of the internet, telecommunication and new technologies, the composition of the few at the top has changed. This includes all the adults who became billionaires in the past decade or so. Thus, in order to keep the status-quo and keep the wealth within the selected few, this crises was needed. The thought behind this is that a crises of this proportion creates a massive shock for the economy leading to most of the assets becoming mispriced due to the confusion and negativity. This creates an entry point for extremely wealthy to take new positions at very low prices, thus ensuring that when things get back to normal, they retain their status in terms of accumulated wealth.


Theory 4: This is politically motivated, and man-made fiasco prepared in a lab with the purpose to move the global economy, thereby creating an opportunity to exert global power and influence to ensure access to the global superpower club

The thought behind this theory is that this crises would take the world by surprise and create a widespread panic (which it has already). This kind of situation would lead to fundamental changes in the way the world operates. In this situation, the ones who are able to control the healthcare access through top-notch facilities and vaccine development for instance would also be the ones which would control global capital flow. This would mean their global power and influence would increase.

Moreover, the impacts of this created situation would be asymmetrical – so even with the spread of this disease to 195 countries (as I write this), the negative impact would be varying. Now, of course the countries that have the most number of cases or where the virus is spreading fast would be hurt, but many countries from the developing world also would be hurt worse when the virus penetrates and spreads there, because they would be less equipped to deal with it due to fewer medical facilities, ventilators, testing kits, tracing challenges, fewer quarantine centers, relatively lesser doctors/nurses and medical staffs and higher density of the population. Many of these developing countries boast a growing population, but with the aftermath of this medical emergency, these states would be in terrible straits which would spiral into fewer opportunities for the skilled and educated, leading to brain drain to those countries who are competing to get the lead in the global superpower race.


In conclusion, these all are just some theories about the possibilities of how and why this virus has spread. Regardless of whatever the motivations behind this were, I sincerely hope it is contained soon, and the world doesn’t have to pay a big price for this in terms of loss of lives or a lasting disease for many.

Amen.

Retailing Trends

I came across this excellent McKinsey China podcast on e-tailing trends and thought would share the highlights and the links with my readers. I have also added my insights into the blog post:

The super-charged growth of online retail is changing this dynamic and creating incremental consumption. Millions of newly minted shoppers can now log on and purchase goods they could only dream of acquiring just a few years ago. By 2020, China’s e-tailing market may reach $420 billion-$650 billion in sales and add 4-7 percent to the nation’s private consumption. – McKinsey China

Retailing moving from location based to occasion based: With real estate getting more and more expensive, retailing has pivoted its focus from location driven business operations to occasions-based business focused on weddings, birthdays, etc etc.

Logistics & Delivery centers: With the growing e-commerce retailing space and upcoming smaller players in the market, the logistics and delivery centers market has a lot of potential for growth.

Payment gateways: Newer payment gateways need to be introduced for different market sets. Regional or Country-driven systems would emerge and then hook up with the global payment gateways. The importance of foreign exchange management and treasury operations would rise.

Mobile based solutions: With mobile penetration growing in developing countries as well, there would be a higher need for mobile based solutions for retail sales, advertising, consumer need assessment and market reach.

E-commerce platforms: More and more players would emerge, smaller ones of which would focus on niche markets with product differentiation as their key to growth.

Supply Chain Management professionals and solutions: There is going to be more need of supply chain management professionals who would likely have a degree in language as well. A good chunk of products would manufacture in China and knowing Chinese would create a definite connection with the suppliers. Also, more organized supply chain solutions would need to emerge, systems catering to the SME end of the market, not just the big players.

Less jobs for women in retailing; more jobs in logistics (mostly for men): Since traditionally, retail has been a major employer of people, especially women, there will be a decrease in jobs in the traditional retailing sector as companies reduce their square footage of retail space. This could lead to growing number of women entrepreneurs in this vertical with the requisite experience, but energies would need to be channeled in accordingly for that to happen.

Lifestyle change from routine jobs to unstructured enterprises: The nature of work would change for a vast majority of people who would now not expect to work in the safe, secure 9-5 shifts that are time-focused, but instead work on a flexible, results-based (efforts-focused) working model.

Clearly, the retailing landscape will drastically change in the next 15 years with several new names emerging and leading the show.

 

Global Demographics

The way the world operates has changed a lot in the last 100 years, a lot of which can be attributed to how things have changed due to incremental and revolutionary technologies. People are now living healthier, longer lives in many of the world’s advanced countries. With the rapid diffusion of knowledge and spread of technological research, we would see this trend grow. Think about our world. Wikipedia has this interesting table of global population breakup of top 10 most populated countries:

Top 10 countries with largest population

 

Notice how the top 3 countries in the world constitutes around 40% of world population. “Approximately 4.06 billion people live in these ten countries, representing around 58% of the world’s population as of April 2012.”

4 out of the 7 billion people live in 10 of the 196 countries. This would have implications on how marketing is done, where power circles of tomorrow would flourish and what trade balance will be like.

Moreover, 3.27 billion people form the current global labor force. With the median age of 28, the world will choose the products it will consume and the services it will pay for.

The World Demographics

 

Political leaders, businesses, marketers with a global outlook will only be ahead of the game if they understand this global demographic. Increasingly, the world is becoming so interconnected that almost anyone expecting to do meaningful work for the networked economy needs to take note here.

 

Economics of Value

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Commodities are cheap. They’re cheap because they’re standardized, easy-to-find and easier to replace. There’s nothing unique about them and their value is driven from a consistent set of expectations from each of the units in terms of shape, size, color, taste, or performance.

Economics keep coming into the equation and before I make my point, let me share two unique products with you:

Koh-i-Noor
Koh-i-noor Diamond – The most valuable diamond in the world

Cost: Priceless

Koh-I-Noor means as “Mountain of Light” from Persian. It’s a 105 carat (21.6 grams) diamond that was once the largest known diamond in the world. The Koh-I-Noor was originated at Golconda in the Andhra Pradesh state of India. It was owned by various Sikh, Mughal and Persian rulers that fought each other from time to time. The stone was found to measure 36.00 × 31.90 × 13.04 mm. The gem has now become the property of the British crown and is kept in HM Tower of London and it’s a popular tourist attraction.

Clive Christian Perfume – the most expensive perfume in the world

Cost: around $215,000

It is a mixture of pure and precious flowers from all around the world. The collection used is a rare one and of its purest forms. the lead crystal bottle to keep such a potion is handmade and the collar part of the bottle is an untainted gold-plated 24 karat and sterling silver. It is stamped with one of a kind seal and has an outstanding diamond cut solitaire. The top is twisted after the unique design granted by Queen Victoria herself. The price of this magnificence is about $215,000.

 

When we think about products, it is simpler to understand why scarcity leads the price higher and uniqueness could mean the product becomes priceless. It is uncommon to think on similar lines about skills, expertise and individual contribution – when people are just used to doing regular work and only doing the thing right, they’re seldom thinking about choosing the right thing to do and excel.

If you are always into the regular rut of churning out deliverables; working on that final budget spreadsheet; or that major sales kickoff presentation, you’re doing important work – but that kind of work will help you little to drive your value up.

Take any important brand you care about and you would find that the price it is charging and people are willing to pay for that is not significantly related to the costs – that’s the effect of brand value; it makes the costs irrelevant.

When talking about individuals, you have to take charge of your own career and direction to create that sort of value – that is the only way out. If you’re not ready to bring out the ‘unique’ in ‘you’ forward, then your value will probably keep falling down with every new innovation in technology and/or almost certainly, somebody else will come forward to do the same work you do for less. Welcome to the Globalized World.

In order for you to command respect, value and high compensation, you have to regularly endeavor to keep the unique aspects within you (your USPs) shining! Be it your own entrepreneurial negotiation or a shot at corporate decision making, you have to be scarce to be valuable – you become scarce when you consistently do what most others would not try and most of the fewer who try could not do.

How businesses operate: A Day in the Life of Various Business Operations

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Today was an interesting day. Within 1km radius in Karachi city, I encountered various types of businesses.

As I started off the day, I checked out the local food suppliers to the bakery in locality. Their business essentially thrives on effective distribution through various channels. The idea is that you need to be there every day or every few days to make sure your customer buys from you. Here, having the right person with every distribution van becomes a necessity, to get effective feedback and arrange appropriate response.

Moving on, I saw an interesting part of the old city area where auctions are the way to go to do business. These specialty shops in one lane in old city area of Nanak Wara sell special leaves called ‘paan’ in 3 different quality ranges. The product comes from within Pakistan as well as Srilanka (Ceylon). Their way of selling takes you to what you might have read about auctions in commodity markets operating in 1800’s. It was an interesting sight. Their business thrives on identifying the potential buyers in an auction and effective use of words to excite them about the lot being auctioned. Also, they usually have dedicated individuals sitting outside these shops shouting off their particular category and quality of paans being auctioned. The mental alertness of the auctioneer is at the core of this business – considering they procure these betel leaves (paans) within the same day they’re cut and auction them the next day (shelf life of 2 days at best), they have to sell off their lots in the 2 hours or so that the auction market operates.

During the day, I visited a local wholesaler in the high-end electrical parts in the refrigeration segment. His business focused on telephone-based order management and workforce focused on effective inventory management, warehousing and quick order processing. Here, the owner was sitting on the main seat for most of the day, however, his presence was necessary to make things happen around there since he was the only one who could talk to customers – in one or two rare instances where one of his employees picked the phone up, customers preferred to wait for the owner to get done with his conversation on another phone than register their orders with that employee. It’s how they worked.

How Businesses Operate

I then had a chance to notice another businessman who picked up things from the famous ship breaking market in Karachi, Shershah. These items included things ranging from small locks and handles to large chain pulleys. The real skill in this work lies in identifying the right kind of products from the huge range available and then getting it to the right kind of buyers – interestingly, most of these small vendors/operators focus on a small niche of products and buyers only.

On on way to one of the places I had to visit, I saw an old fruit vendor and approached him. His business thrived on how his fruits looked to the people passing by and his profits could be maximized based on his assessment of the buyers’ ability to pay (It may not have been right to be doing so, but he seems to be doing it as his right).

During the latter half, I found two engineering businessmen who collected old stuff from scrap markets and reingeered, renovated and reburbished several medium-range electronic equipment, sealed them and sold them forward. Their business had a chain of buyers lined up for them – so the key to their business was in effective work in the product engineering end.

In evening, at home, I worked on some current projects. These projects are mostly being done virtually from project idea generation, brainstorming sessions, communication (in many of its forms), actual work, status updates, project management, delegation, deliverables submission and follow-ups, payments as well as banking. It’s strikingly different from the paan auction business model where things are still operated the way they were done 200 years ago!

So, common themes amongst successful businesses include: focus on effective communication (with internal and external stakeholders), product optimization, customer-centricity and hard work.

All in all, a day well-spent. Now, this blog post would be posted and read by you in your country like several others from a host of other countries. One wonders how far-reaching and fast-paced impacts can be created today through the use of technology – many things that are still considered impossible with the old-economy business models.

The Battle of Minds in the New Economy

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As paradoxical it is to know man seems to have mastered the beasts since ages despite its apparently weak physical build and smaller size, it is intriguing to understand accept that technology has and will only increase this mastery – in this new economy, no more is it about brick and mortar structures any more. I can imagine many corporation heads deriving a sort of satisfaction from that lovely facade, pleasant water fountain, the corner office and brigade of people reporting to the individual.
Hofstede’s study on cultural differences took into account the space being indicative of a particular cultural setting and the power reposed in a position – I wonder if the same study conducted now would keep such high importance on space- power distance is not as important as it used to be. With the possibility of reaching infinity in various spheres now becoming realistic, things are fast changing.

In this new economy, it’s about getting smarter – no more do you need a brigade of semi-competent, highly specialized individuals to run huge departments. Now, you need competent, versatile, technology-savvy, proactive, learning individuals. It’s all about the battle of minds in the new economy – whoever has the best minds would be the winner in the long-term.

Clearly, this would mean new types of work setting, more global cultural exchange, common business terms across a wider world, more emphasis on technology, more emphasis on innovation (not just the regular rut, but actual productive work delivery) and definitely newer, higher and remarkable compensation for those who qualify. Some years into the future, all jobs, except non-tradeable ones, would be benchmarked on global parameters as far as standard of craftsmanship, quality and pay are concerned.

It’s clear the coming decade is going to produce more millionaires than in any previous decade in human history – since every mind is a factory with growth and productivity as output deliverables, innovation being the point of distinction  and the channel (internet and the new media) becoming widely available, the way the world works is bound to change.

The age of industrial revolution is fast fading, the fixed-form factory work environment is obsolete. The sooner we accept it, the better it will be for our future.

The world is changing; the question is are you geared up for it?

Paradigm of 21st Century

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The previous century was all about modern inventions. Wright brothers invented airplane flights. Henry Ford brought the assembly line to life and created a revolution in car industry. John Baird pioneered the mechanical television. Lazlo and Georg invented ballpoint pens. Thomas Edison gave us light bulb. Edwin Land created Polaroid cameras. The list goes on, but you got the point. With the overwhelming influx of the new inventions getting quickly commercialized, living standards increased tremendously. During that era, things were simply a matter of getting new inventions commercialized on a mass level. People benefited a lot by ‘Location Arbitrage’ whereby they took a technology from one place and commercialized that into another part of the world. Rules were simple. Just bring in something new to a place, or get the same old thing to a new place and you could make money. Since transportation and communication only developed faster in the latter half of the century, those who knew the right places and the right people made money. With a bit of luck and some hard work, one could definitely make it big.

In the last decade of the previous century, with the commercialization of the World Wide Web, the paradigm changed. Now, irrespective of your place, you could get to know about technology, products, people, lifestyles and living standards of people in other parts of the world. With the world actually turning into a global village and improved communication and transportation, making location arbitrage was not so simple anymore.

New Paradigm needs New Thinking!

With the turn of the century, with the onslaught of all the social media, social bookmarking, web 2.0 and ease of connecting the right people anywhere, many businesses vanished, and many had to change their norms. People watch news on Live Streaming. They read newspapers online. They bank online. They don’t look into the hard copy of Britannica Encyclopedia anymore; they just ‘google’ it. It’s not about brick-and-mortar based structures anymore. People make a living online.

For you to make big in this new paradigm, it’s not so much about inventions and some hard work, but more about innovations and a lot of hard work.

Entertainment per Capita

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Economists and thinkers often talk about GDP/GNP per capita as their discussion parameter when talking about national happiness. FT reported last week of Bhutan’s efforts in finding the the true Gross National Happiness (GNH). It also noted that most of the developed world is now bent on finding ways to maximize not the GDP, but GNH!  It’s amazing to note that possibly, money can’t buy happiness.

Some years ago the economist Richard Easterlin showed that, just as would be expected, wealthier people in any given country are more likely to tell a survey-taker that they are happy with their lives than are poorer people in the same country. However, Easterlin also found two other things that don’t fit so well with the economic perspective. First, he found that as countries get richer, beyond the level where basic needs such as food and shelter are met, people don’t report being any happier. For example, although today most Americans surveyed will tell you they are happy with their lives, the fraction of those who say that they are happy is not any higher than it was 40 years ago, when average incomes in the United States were considerably lower and few could even imagine developments like mobile phones or the Internet. Second, he found that–again, once you get above a basic sustenance level–on average, people in rich countries don’t report being all that much happier than people in lower-income countries. The finding that people in rich countries don’t report much greater happiness than those in lower-income countries–even though, in any given country, the rich say they are happier than the poor do–is called the Easterlin paradox, after its discoverer.

Funny – isn’t it, when we put this in perspective where most people seem to be running after getting richer on one hand have always wanted to be satisfied and happy on the other?

There is no denying to the fact that money is very important, however, entertainment per capita is a relevant new benchmark in this economy where we are not totally over with the ripple effects of the depression cycle worse than the Great Depression of 1929. Entertainment has to be associated with a hard form as well as a soft form. Economies and governments have to provide ways for their people to find an easy, inexpensive catharsis to their feelings to let the balance be.

Food for thought: How often do you measure life by the moments that take your breath away?

Floods in Pakistan: Worst ever in the History of the Nation

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There are instances when one feels quite helpless at the state of affairs and wonders how could he make any positive difference. Indeed, the recent floods in Pakistan is one such occasion when many Pakistanis are feeling this way. Around 20 million people are estimated to be affected by the floods directly and innumerable societal affects on a broader scale. It is a natural disaster of such a huge scale that government, military, NGOs and civil society are working together toward saving people and helping survivors still feeling quite helpless.

Some major issues that have sprung up in light of the floods and extended damage everywhere are:

  • Rescue of living people in flooded areas
  • Availability of food
  • Access to medicines, health facilities and psychological support
  • Access to clean water
  • Provision of shelter to the affectees

All these issues seek an immediate attention. It is clear that resource scarcity, ineffective resource mobilization and difficulty in doing rescue operations due to geographic difficulties are significant hurdles in the near-term.

On the longer-term, issues of higher importance remain to be resolved. Some of those issues are:

  • Channeling the floodwater out to sea and repairing/developing dams, barrages and water channels throughout the country
  • Rehabilitation of affectees back into their own areas
  • Provision of alternative homes to the affectees
  • Employment generation across all over Pakistan, especially in flood-affected areas
  • Preparing land ruined by floods for use in agriculture, again
  • Arranging for food security of the country by managing the food reserves (of wheat, rice, grains, etc.)
  • Re-establishing the social protection measures and infrastructure (schools, colleges, hospitals, clinics, roads, parks, etc.)
  • Finding hope and setting direction for the broken families, destitute adults, orphans and providing them psychological rehabilitation and some activity to keep themselves productively occupied

It indeed is a big loss and it cannot be corrected in one day, one week, one month or even one year. The short- and long-term goals for putting things back on track and bringing the house in order would need huge amounts of dedication, efforts, mutual support and commitment to a unified goal – of progressing together and reviving again. More than monetary aid, these are issues that need human care and support.

Pakistanis are a resilient nation. They have been through worst of conditions. As long as they stand united, I am sure the revival will come through. All that is needed is a firm faith in Almighty, coherent policies at the governmental level, support from all segments of the society and most importantly BELIEF in oneself and each other.

LONG LIVE PAKISTAN!