cO c oOF THE CHARM nTrA - Stern Stewart & Co › media › tssi_periodical_21.pdf · PERIODICAL #21...

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cO nTrA dIcT iOnS

THE CHARM OF c o nTrA dIcT iOnS

Osh. Agabi Koniku / Hannes Ametsreiter Vodafone / Christian Angermayer ATAI / Johannes Bussmann Lufthansa Technik / Charles Dumas TS Lombard / Toralf Haag Voith / Axel Kühner Greiner / Shyam Sankar Palantir / Jochen Schmitz Siemens Healthineers / Asher Sinensky Palantir / Ludovic Subran Allianz / Hung Tran Atlantic Council / Patrick Zhong M31 Capital /

PERIODICAL #21

February 2020 The Charm

of Contradictions

Some thoughts:Will the use of plastic force or safe CO2 pollution?Does synthetic biology impose or heal diseases?Is owning data a threat or a business model? While we tend to have an immediate opinion, very often the truth is more complex. Sometimes it depends on the timing‚ currently often on the narrative… Another case: Much of the business of our digital age so far has been about taking away products from their traditional institutions. What’s become clear at this year’s CES that also this truth has changed. It seems that we step into a wave of forward or back-ward integration again. As if Amazon, Microsoft or Uber find themselves back into an old wisdom: There are only two ways of making money: One is to unbundle; the other is bundle.

Our time is full of apparent contradictions. Our authors of this edition share their experience… I invite you to dive into their world and enjoy this 21st edition of our periodical. I wish you an inspiring read.

Yours,

Gerhard NenningExecutive Director of The Stern Stewart Institute

Gerhard Nenning Editorial Comment

Gerhard NenningExecutive Director of The Stern Stewart Institute

THE CHARM OF CONTRADICTIONS

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3The Charm of

ContradictionsEditorial Comment

Gerhard Nenning, Executive Director of

The Stern Stewart Institute

6Data is the New (Snake) Oil

Shyam Sankar, President, Palantir together with Asher Sinensky

12Plastic: A Vital Tool in the Fight Against

Climate ChangeAxel Kühner, CEO, Greiner

20Mechanical Engineering

Goes DigitalDr. Toralf Haag, CEO, Voith

26The Importance of Data

for AviationDr. Johannes Bussmann, CEO, Lufthansa Technik

32Building with Atomic Precision and

Biosphere CompatibilityOsh. Agabi, CEO, Koniku

40From Pipeline to Platform: How ATAI Life Sciences is

Transforming Mental HealthcareChristian Angermayer, Founder, ATAI

46Increasing (Shareholder) Value in a Transforming Healthcare Market

Dr. Jochen Schmitz, CFO, Siemens Healthineers

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50“The Reaction to

the Financial Crisis Was

Precisely the Opposite of What

Was Needed.”Comment

Charles Dumas, Chief Economist, TS Lombard

54Trade Wars:

May the Trade Force Be With You

Ludovic Subran, Chief Economist, Allianz SE

60Think Beyond the Thick Fog

Patrick Zhong, Founding Managing Partner, M31 Capital

66Trade War, Cold War, and Populist Backlash

Hung Tran, NonResident Senior Fellow, Atlantic Council

72Tech for Good: My Vision of

Germany’s Digital FutureDr. Hannes Ametsreiter, CEO, Vodafone

78The Stern

Stewart Institute Annual Summit

2019Review

86Imprint

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If we are lucky, we know where we want to go, but we don’t always

know how to get there. There are lots of opportunities for missteps and as

we feel the stones beneath the surface of the rushing water we can hopefully orient ourselves along the

right path to cross to the other bank.

Data is the New (Snake) Oil

Shyam SankarPresidentPalantir

co-authored by Asher Sinensky

6

Data is the New (Snake) Oil

7

Shyam Sankar / Asher Sinensky Data is the New (Snake) Oil

摸着石头过河 – Cross the river by feeling the stones

This idea was popularized by Deng Xiaoping to describe the pragmatic and gradual shifting of the Chinese economy away from the failing ideals of communism. It stands in sharp con-

trast to Gorbachev’s more punctuated approach that hastened the end of the Soviet Union. It is a life lesson that I have had to learn multiple times.

While a journey of a 1,000 miles starts with a single step (千里之行，始於足下 – Laozi, Tao Te Ching), it was certainly pecu-liar for me to discover that the first step (or stone) for the big data start-up I built was to learn that data is not valuable. That might be confusing so I should clarify – data is not inherently valuable – it’s frequently portrayed as some sort of magical curative…one can almost imagine the frontier buckboards popping up in town after town as we are all fed empty promises.

The first AI hype cycle

Let’s rewind: The year is 1968 and we are experiencing the first wave of AI hype with Kubric’s 2001 – a space Odyssey. The heuristically programmed algorithmic computer, HAL, is the certain star of the uncertain future. Three decades later Deep Blue defeats Gary Kaspar-ov in a chess game of true global significance. Y2K is just around the corner and it feels as though AI ascendant and then…we got the iPad. It’s hard to overstate the importance of smart devices like the iPad in changing us – we are now effectively all cybernetic beings – but why did we get it so wrong on AI?

Of course, there have been other AI breakthroughs of significance since then. Computers continue to become the global champions of one game after another from Jeopardy to Go. Specialized Natural Language Processing (NLP) systems are competing and winning against various versions of the Turing Test. Still, generalized AI with the capabilities of HAL isn’t even on the road map. Why is that?

1991

1989

1983

1991 19

97

AI

DEEP BLUE DEFENDS

GARRY CASPAROV

ALGORITHM

ALGORITHM

ALGORITHM

ALGORITHM

DATA

1988

PERIODICAL #21


Computational systems are brittle

It turns out that AI systems tend to be quite brittle. We are all familiar with the ways that human minds are fragile – we are susceptible to all manner of cognitive bias that fundamentally change the way we per-ceive the world. Computational systems are not free of these foibles. A lot of digital ink has been spilled concerning the bias present in algo-rithmic processing, but that’s not actually what I’m referring to here. I’m referring to the problem that AIs are not really very intelligent; they don’t actually understand the information they are interacting with in the way we think of human understanding. In 2017, a paper was published describing the use of Convolutional Neural Networks to identify the presence of pneumonia in chest x-rays. Remarkably, the AI was able to identify the disease with parity to human radiolo-gists – and much faster. As researchers started to try and determine how the AI system was making its determinations, it kept pointing to seemingly nonsensical features. As it turns out, the researchers were specifically looking at patients from Mount Sinai hospital in NY which has a generally older and sicker population. When a patient is very sick, they use a portable x-ray system to gather the films while if the patient is healthy enough to walk they are taken to the central x-ray lab. On further study, it was determined that the portable x-ray system introduces artifacts into the film and these were what the AI was becoming attuned to. Essentially, the AI was able to tell that the patients were really sick because the hospital had already determined that they were really sick and the AI had become tuned to features that reliably reflect that.

Crucially, this is not the often- invoked problem of ‘garbage in, gar-bage out’. The data being used here was appropriate to the task and the AI was operating as intended. AIs don’t understand the data they are interacting with so have no framework to determine if the interaction is faulty. It might seem like the problem here could be solved with just better training data (and that would have certainly helped). However, I would argue that this is missing the forest for the trees. Diagnosis is clearly important, but it is just one step in a larger re-imagining of what improving care could be. Here we discover another stone be-neath the water which teaches us that predictive capabilities are exoti-cized and over- valued. Overemphasizing one piece of the puzzle can lead us to the wrong end state. Neither Data nor Predictions are inde-pendently valuable; human minds and human normative views of what is allowable and meaningful are the real value. And, as the stakes gets higher, and the problems become more important, the more hu-mans are critical to the process. The reason AI’s win so many games is because the stakes are so low and the end state is uncomplicated. When the outcomes really matter, human insight become exponen-tially more important and can’t be simply substituted by technology.

Figure 1: When we look at the most important AI breakthroughs of the recent past, we see that the algo-rithms that drove them are typically decades old. Algorithmic problem solving was not the silver bullet. In fact, the proximate cause for all these “AI” breakthroughs was data infused with human understanding.

AI BREAKTHROUGHS

2010

DATA

ARABIC TO ENGLISH

TRANSLATION

IBM WATSON BECOMES

JEOPARDY CHAMPION

2010 AI

2011

AI

2014

DATA

DATA

2005

AI

GOOGLENET CLASSIFIES AT

NEAR HUMAN PERFORMANCE

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Humans are underrated

At the outset, the journey seemed like one that is about big data analysis and artificial intelligence but it is actually one that has led us back to the critical importance of humans. Elon Musk famously tweeted that ‘Humans are underrated’ when he reflected on the causes of Tesla’s Model 3 ‘Production Hell’. This should not be a surprise. The only rea-son any system has value is because it is valu-able to humans. We are the ones who define what makes a system useful or not. The way we can maximize that value is to focus on the journey and realize that it is cyclical; the value we create becomes the input for the next turn of the wheel. Each turn of that wheel is an opportunity to make decisions that are actionable and feed back on them-selves. AI can be an important tool in that process (among many) but it is not the point of the process. The point is to make the world better one turn at a time. Humans do that, not data.

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Plastic: A Vital Tool in the Fight

Against Climate Change

12

Climate change, pollution and species extinction are among

the greatest challenges of our time. The extensive media reports about these issues and global

movements such as Fridays for Future are leading to a new sense of

environmental awareness and to the realization that sustainable living

is a fundamental requirement for a (livable) future.

Axel KühnerCEOGreiner

13

Axel Kühner Plastic: A Vital Tool in the Fight Against Climate Change

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Some things are open to discussion. But when it comes to the reasons for climate change, scientists around the world do at least share the same opin-

ion: Global warming and the associated climate change are largely caused by people. This is because each time we burn coal, oil or gas to fire up a machine or drive a car down the road, whenever we fly in a plane, surf the Inter-net or engage in animal husbandry we produce green-house gases that damage the environment. Another nightmare scenario besides the global climate crisis is also dominating the daily headlines: A deluge of waste is threatening to smother our world. Images of beaches strewn with litter and animals dying as a result of our throwaway culture and dearth of waste-management and recycling systems fill our screens every day.

Climate change and pollution are two problems in need of immediate solutions if we want to leave behind a (livable) future for subsequent generations. While indi-vidual lifestyles are being intensely scrutinized, industry is also being placed under increasing pressure.

The broader context

Plastic waste in our oceans. Plastic waste in our environ-ment. The reputation of plastic materials is suffering. But despite all this, plastics are, due to their exceptional char-acteristics, essential in our daily lives – for solutions in such areas as smart medicine and mobility. These are ar-eas we don’t have alternatives for right now. At the same time plastics play a key role in climate protection because they are lightweight and comparatively resource friendly to produce.

At a time when bashing plastic is all the rage, this might sound like a paradox. But plastic is a vital tool in the fight against climate change. Using plastics, for exam-ple, drastically reduces the overall weight, and therefore the CO2 emissions, of vehicles and planes. And in build-ings, plastics ensure effective thermal insulation, just to name a few examples. Replacing plastics with another material would mean the products weighed more and re-sult in higher CO2 emissions. In a globalized economy with goods transported over long distances, this would have a catastrophic impact on the climate. Besides being lightweight, today’s plastic packaging, which is often the target of criticism, can efficiently protect products. If you consider that up to 90% of a product’s carbon footprint stems from its composition and only up to 10% from its packaging, it becomes clear that providing optimal pro-tection of a product’s contents – an essential function of packaging – is important for a good life-cycle assessment.

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Environmental impact from packaging: in figures

Consumption causes greenhouse gases. But only about 1.5% to 2.0% of an average Euro-pean consumer’s carbon footprint is attribut-able to packaging. To put some perspective on this figure, consider this: The carbon foot-print of one round-trip flight from Berlin to Singapore is equivalent to 30 years of packag-ing consumption by one person. And to stick with the topic of mobility for a moment: Mi-croplastic, a topic mentioned again and again, is responsible for about two-thirds of the plastic that makes it into the environment. Car tires are the biggest source of microplas-tic in the environment, accounting for about one-third this kind of pollution.

But let’s now return to the frequently crit-icized plastic packaging whose environmen-tal impact – because of, among other reasons, its protective function – is generally much smaller than the impact of the product. To illustrate this, let’s consider the example of roast beef or other meat products: Meats have a carbon footprint 200 times greater than that of their packaging. Enhanced packaging1 ex-tends the product’s shelf life from six to six-teen days and reduces meat waste at retailers from 12% to 3%. If you consider it takes 14,000 liters of water to produce one kilo-gram of beef, you can work out for yourself what this reduction means for the product’s climate footprint. Here’s another example: Compare unpackaged cheese located at the deli counter with cheese packaged in plastic and available from a self-service shelf. Quan-

1 Skin vacuum packaging made from the plastics polystyrene (PS), ethylene-vinyl acetate (EVA) or polyethylene (PE) instead of modified atmosphere packaging (MAP)

titatively substantiated real-world data shows that the packaging of cheese leads to a 97% reduction in wastage. That is, the benefits of the CO2 reduction from reducing cheese wastage is 2.5 times greater than the addi-tional carbon emissions for the enhanced packaging.

The examples mentioned above show that packaging can be a powerful tool in the fight against food waste: Every year, each of us tosses out around 90 kilograms of food. But there’s no need to dogmatically cling to the idea that packaging always has to be made out of plastic. We at Greiner believe that plas-tic should only be used when it contributes added value. One example of this is K3® pack-aging, a combination of cardboard and plas-tic with limited plastic content and cardboard wrap made from recycled material. Viewed over its entire lifespan, K3® is hands down the most environmentally friendly packaging available. When the cardboard and plastic is separated, the packaging is fully recyclable. At the same time, K3® packaging achieves a 24% better carbon footprint than packaging made of pure plastic.

So, it’s not the use of plastics that’s causing problems for us today; it’s quite the opposite: Using plastic is actually quite environmen-tally sound in many cases. The trouble lies with the improper disposal of plastics and the increasing pollution of the world’s oceans. This represents an environmental-policy challenge that’s in urgent need of solutions.

of food per year9090 kilogramsEach of us tosses out around

One round-trip flight from Berlin to Singapore is equivalent to

30 years

of packaging consumption by one person

Meats have a carbon footprint

200 timesgreater than that of their packaging

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24%better carbon footprint than

packaging made of pure plastic

K3® packaging achieves a

and reduces meat waste at retailers from

12% to 3%Enhanced packaging extends the product shelf life of meat from

6 to 16 days

It takes

14,000 liters

of water to produce one kilogram of beef

Only about

1.5% to 2.0%of an average European consumer’s

carbon footprint is attributable

to packaging

Meats have a carbon footprint

200 timesgreater than that of their packaging

Packaging of cheese leads to a

97%reduction in wastage

Microplastic is responsible for about

2⁄3of the plastic

that makes it into the environment

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Waste management is the obstacle

Our modern lifestyle and convenience-oriented society have fueled an exponential increase in global plastic production, which skyrock-eted from about 2 million tons a year in 1950 to 380 million tons in 2015. That’s equivalent to an annual growth rate of 8.4%. Between 1950 and 2015, a staggering 7.8 billion metric tons of plastic was pro-duced – half of which, 3.9 billion metric tons, was manufactured in the last 13 years of that time period. Establishing suitable waste-man-agement and recycling systems has not kept pace with this lightning- fast development, especially in the developing and emerging coun-tries of Asia and Africa. Many countries have recognized the problem and political stakeholders are also responding. After the Euro pean Commission presented the EU Strategy for Plastics, for instance, the EU Parliament voted to ban plastic disposable products like straws, disposable utensils and cotton swabs.

Turning old into new: Circular economy as a model for the future

We at Greiner welcome the EU Strategy for Plastics and have been working for years on sustainable solutions. However, we are con-vinced that a ban on individual products alone will not be enough to stop the deluge of waste. The future lies along a different path, one called “circular economy” – this we’re certain of. This is the opposite of the throwaway society and offers the potential to gain control of the problems and challenges posed by the use of plastic. In a circular sys-tem, (plastic) waste is not trash. Rather, it’s a valuable commodity and source material for new products.

IN A CIRCULAR SYSTEM, (PLASTIC) WASTE IS NOT TRASH.

RATHER, IT’S A VALUABLE COMMODITY AND SOURCE

MATERIAL FOR NEW PRODUCTS.

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Recycling places demands on industry, political stakeholders and society

Establishing a circular economy and using recycled plastics in prod-ucts call for creative thinking along the entire value-added chain. Some plastics can be recycled several times; others are difficult to re-use for technical, legal and economic reasons. Additional regulatory and economic incentives are needed if we’re to change the situation where the use of recycled granules continues to be an exception. The food sector, for example, faces strict regulations that have led de facto to a severe restriction on the use of products containing recyclate. Only after all legal requirements are considered and the basic stan-dards for the packaging are clarified will it be possible to begin with the actual design process for packaging intended for reuse. And then, of course, consumers also have to do their part. Depending on the recyclate content of recycled materials, they can be slightly to strongly discolored – they are not completely transparent, but rather light gray, light brown or greenish. These color deviations are often not accepted by consumers. The circumstances today with recycled plastic are like what we had many years ago with recycled paper: Consumers first need to get used to the new look.

Sustainability as an intersectional topic

Greiner is aware of its responsibility as a plastics processor and foam manufacturer and has set goals for itself that far exceed the require-ments of the EU Strategy for Plastics. These goals encompass intro-ducing an internal carbon-pricing system by 2020 and striving to lower specific CO2 emissions by 38% by 2025 and 53% by 2030 as well as the promise to make all plastic packaging 100% recyclable, reusable or compostable by 2025. Additional goals we have set include the pledge to eliminate all problematic or unnecessary plastic packaging and the commitment by 2025 to utilize recycled materials for a signif-icant portion of the materials we use.

Although Greiner is placing an emphasis on such issues as a circu-lar economy and the reduction of CO2, we consider sustainability an intersectional topic. In addition to very obvious areas like environ-mentally friendly product design and the responsible use of materials, sustainability means being a good, reliable employer that values the individuality and diversity of its employees. Sustainable corporate governance, which includes fostering long-term, transparent relation-ships with all stakeholders and ensuring profitable growth, also falls within the subject of sustainability.

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Digitalization and Industry 4.0 are highly relevant to mechanical and plant engineering.

Big data, artificial intelligence, predictive maintenance, digital assistance systems and

other digital technologies are playing an increasingly important role in digital

networking. Digital business models and new competitors in the field of digital platforms present both challenges and tremendous opportunities for mechanical-engineering

companies. But to retain their global prominence in the decades to come, these

companies need a technological (re)orientation.

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Mechanical Engineering Goes Digital

Why Digitalization and Decarbonization Present an Opportunity for the

Mechanical- and Plant-Engineering Industry

Dr. Toralf HaagCEOVoith

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Dr. Toralf Haag Mechanical Engineering Goes Digital

long been valid from an economic point of view and it’s now gaining in importance from an environmental point of view as well.

With this in mind, we at Voith have been investing more than €50 million annually into digitalizing our product portfolio. In 2016, we created a dedicated divi-sion with about 2,000 employees who deal exclusively with digital products and business models. This is where we pool our groupwide expertise in the areas of automa-tion, IT, software, data analytics and sensor technology. At the same time, we have been gearing up for climate change and the decarbonization of industry.

One example that perfectly captures the connection between digitalization and decarbonization is hydro-power. While hydropower has seen only limited use in Germany up to now, it’s highly regarded as a climate saver on the global stage. It has been tried and tested for more than a century and so far is the only climate-friendly form of energy generation that can reliably provide electricity on an industrial scale.

Water – the underestimated power source

Of the 10 most productive power plants in the world, nine are hydropower plants. The world’s largest power plant, the Three Gorges Dam in China, generates some 22.5 gigawatts of power with water. The second-largest power plant, Itaipú in Brazil, produces 14 gigawatts of power using water. So even the world’s No. 2 hydropower plant delivers almost 10 times the output of the world’s most powerful nuclear reactor.

Many hydropower plants in the world are, however, already several decades old. Digitalization not only means installing state-of-the-art turbines in new power plants, but also upgrading existing turbines. By integrating digi-tal components such as sensors and monitoring systems, it’s possible to make them smart and net-work them. Entire plants can be controlled remotely, and numerous processes run autonomously through software. Acoustic sensors have been developed that continuously listen in on the sound made by the rotating turbines and analyze whether they are still running smoothly. Defects can often be detected at an early stage through a change in sound at the power plant. This ongoing collection of data

The key to this lies in placing a strategic focus on the two “big Ds”: digitaliza-tion and decarbonization. These two

areas are directly related. The race to shape the future of the industrial sector has begun, but it’s not only Western industrial nations that are competing – China in particular is as well. The Asian powerhouse is currently in-vesting heavily in sustainable environmen-tal-protection technologies to improve the quality of life of its population. If you talk with Chinese officials, you’d be amazed at how openly they discuss the subject of envi-ronmental protection and admit to past fail-ures in this area. China has realized that de-carbonization and climate protection not only improve people’s quality of life, they also help the country’s key industries to advance technologically and create competitive ad-vantages on the world markets. At the same time, China is investing billions to earn a leadership role in digitalization. We’re facing a historic transformation of the world’s in-dustries. Those who have the courage to tack-le this transformation can develop a success-ful competitive strategy.

For us at Voith, strategic priorities com-prise digitalizing industry and protecting the climate: They will lead to totally new technol-ogies becoming established in the industrial sector. And I’m convinced the mechani-cal-engineering sector is ideally equipped to help shape this transformation.

Digitalization means automation

Let me begin by saying that when we talk about digitalizing industry, we often mean automation. This is the area where German mechanical-engineering companies have de-veloped their strength in recent years. Their position as world market leaders stems from the fact that they have perfected automation of industrial processes in customized pro-duction lines. And the increasing use of soft-ware is rapidly taking automation to a new level. A key success factor for the triumph of automation is its ability to bring considerable efficiency gains – a twofold advantage. The more efficient, the better: This motto has

THE RACE TO SHAPE THE FUTURE OF THE INDUSTRIAL SECTOR HAS BEGUN, BUT IT’S

NOT ONLY WESTERN INDUSTRIAL NATIONS THAT ARE COMPETING.

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on electronic and hydraulic units in the power plants lays the foundation for determining a diagnosis and trouble-shooting. Our OnPerformance.Lab solution provides power plant operators with all the necessary data and makes recommendations on scheduling maintenance ac-tivities efficiently and avoiding downtimes.

This example shows our company’s digital positioning very clearly: Drawing on their many years of experience, our hydro engineers developed the sensors. Employees of the Voith Innovation Lab in Berlin visited customers, ex-plored their needs on-site, gave advice on further devel-opments and gener ated an appropriate business model. Our programming experts at Ray Sono, a digital agency we acquired in 2017, then brought the concept to maturity.

To drive digitalization forward, we rely both on our own developments and on acquisitions. And, above all, we place great emphasis on closely dovetailing the exper-tise we have fostered in our divisions over the past de-cades. A family business that has grown over the course of 150 years, we see yet another challenge for us here. Our Hydro, Paper and Turbo divisions represent three very different sectors in our portfolio. The Paper division makes machines for paper production. Turbo produces high-performance gear units for trains, ships, trucks, buses and industrial plants as well as electromobility components. It is also working on components for hydro-gen propulsion systems. Our customer base today ranges from oil and coal producers to e-bus manufacturers. It therefore makes sense to pool our digital expertise so that all our divisions enjoy full access to this know-how and can learn from each other.

Innovative ideas for the future

The entire mechanical-engineering industry faces the need to make considerable investments. Companies have to prepare for digitalization and decarbonization today and set the right course through strategic investments to ensure we are still technology leaders 15 years from now. In taking these steps, it is particularly important for com-panies to not cling solely to existing products and further develop them, but instead to redefine value chains.

An example from the Turbo division: Voith has been manufacturing bus components for decades. With the ad-dition of electric buses, we have expanded our product portfolio to include a climate-friendly motor. But we’re also trying to develop completely new product-related services. By acquiring the start-up company Pilotfish, we have added a software provider to the group that brings

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algorithms to help our customers plan opti-mal bus routes. The algorithms allow them to make the best possible use of range and bat-tery capacity to keep idle times for recharging as short as possible.

We have a similar approach in the Paper division. For some time now, we’ve been sup-plying our customers with more than just machines for paper mills: We’ve been devel-oping and purchasing additional products and solutions along the entire value chain of the pulp and paper market. This has strength-ened our competitive position by helping us to become a full-range supplier for the paper industry in the areas of consumables, instru-ments, services and software. At the same time, efficiency plays an important economic and ecological role in the energy-intensive production of paper. And all this is paying off: Lately this division has been generating record sales for us.

In the future, digital applications will per-meate our complete portfolio. And I believe that our technological expertise and deep market penetration gives us and many other mechanical-engineering companies a great opportunity to increase digitalization in our products and make them more climate friendly. It will be crucial for the mechani-cal-engineering industry to offer solutions that are precisely tailored to the digitalization strategies of individual customers, not least because new product-related services and joint developments with customers help strengthen customer relationships.

IT IS PARTICULARLY IMPORTANT FOR COMPANIES TO NOT CLING SOLELY TO EXISTING

PRODUCTS AND FURTHER DEVELOP THEM, BUT INSTEAD TO REDEFINE VALUE CHAINS.

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Dr. Johannes BussmannCEOLufthansa Technik

26

The Importance of Data for Aviation

Nothing escapes the notice of state-of-the-art sensors. Not even a single spark. When an Airbus A350, a Boeing 787 or a similar new aircraft heads into the skies, you can monitor every

single ignition spark that occurs during flight. When you consider this, you realize what gigantic amounts of data are produced and

recorded during a single flight by a modern aircraft: about a terabyte per day. That’s more than 100 full-length motion pictures.

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Dr. Johannes Bussmann The Importance of Data for Aviation

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But why are such masses of data collected in the first place? Is it simple fascination with what is technically possible? The clear answer is: Absolutely not. This data forms the

foundation for critically important developments in aviation and the industries that support it.

Today’s aircraft are some of the world’s most complex ma-chines. Diverse subsystems that include hydraulics, avionics and electronics interact with one another. And each individual system consists of a multitude of individual components such as hydraulic pumps, electric motors and individual valves. Every-thing – the systems, subsystems and individual components – is now equipped with sensors that amass status data. From the temperature of brake discs during landing to the pressure of a hydraulic circuit and the exact position of the turbine vanes – and, well, even the number of ignition sparks.

Data networking: That’s how to increase efficiency in aviation.

All by themselves, the individual pieces of data are not very use-ful. But if you intelligently link them together, you can observe patterns, spot undue wear and tear early, and determine ahead of time when a part is likely to break down. Thus the decisive value of the data is the analytic ability to identify trends from it and then to develop measures and work steps that will improve the systems.

The result is new services and business models that enable airlines to operate their fleets more efficiently. It is a change that is transforming the way the entire industry works. Maintenance cycles can now be adjusted to meet actual needs. Spare parts can be distributed to locations around the world, reducing the chances of an AOG situation to a minimum. The greater the amount of available data, the better the networking and coordi-nation of air operations in the air and on the ground. This, in turn, can also lead to greater reliability and punctuality. The efficiency gains created by digitalization are therefore obvious.

And they are desperately needed as well: The aviation indus-try is facing the challenge of minimizing the environmental im-pact of flying. The best solutions at the moment appear to be the introduction of new synthetic fuels and new engine con-cepts. Both will require great effort and investments totaling billions of euros. To ease this burden to a certain degree, the industry will have to boost its efficiency by progressively in-creasing its level of digitalization. Just as the combination of large amounts of sensor data enables the system “aircraft” to become ever more efficient, the continued networking of air-craft fleets with airports, air traffic controllers and other fleets will improve overall flight operations. In the end, this will create an aviation system that can be operated more efficiently – and this, too, saves resources.

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Figure 1: More and more people are flying – but the low number of accident victims continues to decline (Number of fatalities in commercial civil aviation* and trends in global passenger volume)

Source: Aviation Safety Network 2019, the International Civil Aviation Organization

*Aircraft with a capacity of ≥14 passengers, including skyjackings and acts of sabotage, Last update: 1 January 2019


Safety: Why airlines need access to data

Data can also be used in the area that has always been the most im-portant aspect of aviation around the world: safety. In legal terms, responsibility lies with the airlines that operate the aircraft and must always ensure airworthiness.

Fortunately, the industry has been experiencing a positive trend for a number of years now: The number of accidents has been falling even as global air traffic has risen. Airlines will need an even deeper understanding of the systems if they are to live up to their responsibil-ity of maintaining safety at this high level – and even increasing it. Yet they can gain this understanding only if they have control over all available technical and flight operation data from their aircraft. They need complete access to both flight operations data and to data that are related to aviation in the broadest sense of the term, such as design data and maintenance instructions. This is the only way that they can tap the full potential of digitalization to keep flight safety at the highest possible level and increase it further.

Thousands

4.0

3.5

3.0

2.5

2.0

1.5

1.0

0.5

0

Billions

4.0

3.5

3.0

2.5

2.0

1.5

1.0

0.5

01970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2018

■ Passenger totals■ Fatalities (passengers and crew)

30 PERIODICAL #21


Risks: Isolation can hinder innovation

Just as access to huge amounts of data creates huge oppor-tunities, the control of access to this data creates risks. In this context, the aftermarket – the market for aircraft ser-vices – is especially endangered. This market is almost as large as the market for new aircraft. But unlike the air-plane manufacturing industry with its limited number of major players, the aftermarket is extremely diverse, with more than 2,500 airlines and 1,600 providers of MRO ser-vices (maintenance, repair and overhaul).

The aftermarket is currently being swept by change as aircraft manufacturers enter the market as new competi-tors. By limiting access to the data over which they main-tain technical control, they can gain market share. Yet such restrictions could result in a bunker mentality and inhibit innovation, because the biggest potential for inno-vative services is currently seen in digitalization or, more precisely, in the development of data-based services. To create such services, MRO providers must have the op-portunity to develop them on the basis of large amounts of data and then offer them to airlines and MRO opera-tors. A precondition for this is that airlines offer selected service providers access to the operational data of their aircraft.

Outlook: The industry needs rules governing access to data

Competition in most industries is subject to rules and/or market-access restrictions. Such rules include certifica-tion requirements, customs, taxes and environmental regulations or anti-trust law. On the other hand, access to data is largely unregulated today. All rules are based solely on contractual arrangements between the customer and the service provider.

If data is the new form of crude oil, then we need to ensure that access to sources of data remains in place and that a well-structured network of pipelines is set up to connect the various sources of data and users. One fre-quent idea mentioned in this connection is the develop-ment of open data hubs: neutral centers that, like custodi-ans, collect all the data, categorize it, and then deliver it to various users separately and in packages at the request of the data owners. But before these hubs can go into opera-tion, many questions must still be answered – from the acquisition of data and its preparation, structuring and quality assurance to processing. One key question is how data can be automatically assigned to a variety of catego-ries such as “safety-relevant,” “confidential” and “general-ly accessible.” Finally, platform operations must be regu-lated, including the topic of cybersecurity, an area that is becoming increasingly important for data transmission.

Once the appropriate regulations for data access and platform operations are in place, the aviation and aircraft service industries will be able to develop further success-fully. The vision: Airlines, data platforms, IT service pro-viders, aircraft manufacturers and service companies will become increasingly connected to one another. This transformation will enable data to be analyzed and diag-nosed in a largely automated process. Measures can be developed from these findings, and companies can be then be hired to implement these steps. This development offers tremendous potential for fleet operations and further research into the technologies of the future, such as digitalization, automation and artificial intelligence.

AIRLINES WILL NEED AN EVEN DEEPER UNDERSTANDING OF THE SYSTEMS IF THEY ARE TO LIVE UP TO THEIR RESPONSIBILITY OF MAINTAINING

SAFETY AT A HIGH LEVEL.

31 PERIODICAL #21

Building with Atomic Precision and Biosphere Compatibility

A business case for transformational growthBuilding with Atomic Precision

and Biosphere Compatibility

32

In the climate of 2019, we seem to be collectively unsure about the pace,

nature, or even the need for economic growth.

Osh. AgabiCEOKoniku

33 PERIODICAL #21

World Greenhouse Gas Emission in 2005Total: 44,153 MtCO₂ eq.

Sector

TransportationRoad

Carbon Dioxide (CO2) 77%

Methane (CH4) 15%

HFCs, PFCs, SF₆ 1%

Nitrous Oxide (N₂O) 7%

10.5%

10.2%

6.3%

3.8%

4.1%

5.0%

7.0%

2.2%6.4%

5.2%

5.4%

4.0%

Residential Buildings

Commercial Buildings

Unallocated Fuel CombustionIron & Steel

Chemicals

Cement

Other Industry

T&D Losses

Agriculture Soils

Livestock & Manure

Oil/Gas Extraction, Refi ning & Processing

DeforestationAff orestationHarvest/Management

11.3%–0.4%

1.3%

Air 1.7%

1.7%Other Agriculture

Wastewater, Other Waste

(Tropics only)

Machinery 1.0%1.1%Pulp, Paper & Printing Food & Tabacco

Aluminium/Non-Ferrous Metals 1.2%

1.0%

Coal Mining 1.3%

Rail, Ship, & Other Transport 2.5%

14.3%

24.9%

8.6%

14.7%

4.0%4.3%

12.2%

13.8%

3.2%

Electricity & Heat

Other Fuel Combustion

Industry

Fugitive EmissionsIndustrial Processes

Land Use Change

Agriculture

Waste

EN

ER

GY

End Use / Activity Gas

Agricultural Energy Use 1.4%

Rice Cultivation

Landfi lls 1.7%1.5%

1.5%

WORLD GREENHOUSE GAS EMISSIONS IN 2005Total: 44,153 MtCO₂ eq.

Osh. Agabi Building with Atomic Precision and Biosphere Compatibility

The issue of growth

Economic growth appeared to be a good indicator of societal wellbeing. That is, high GDP means a good life for most of the population living within the geo-

graphical area where said GDP was measured. But deep cracks are beginning to show in this simple but power ful idea or model.

Capitalist-driven growth has done more to improve the lives of more people on this planet than anything else or any other system. Why are these cracks forming if the system works so well? One word – angst! The zero-sum game, bellied by something more sinister, the carrying capacity of our planet.

How do we square growth with the carrying capacity of the planet? It may be simple for those who enjoy the pleasures of modern life to dismiss growth as a “fairy tale”. But I assure you, economic growth is a life or death issue for billions on this planet. The carrying capacity of the Earth for humans is loosely defined as the maximum number of people this planet can sustain indefinitely given the prevalence of the natural resources to do so. Hence, the factors which influence the carrying capacity of this planet include affluence, environmental impact from consumption, technology factors, and the popula-tion count. The affluence is, of course, directly related to the ecological footprint – our demand on nature.

Therefore, on a foundational level, how do you keep up with the Joneses? On a local scale and global scale? How do you nullify this angst? How can we ameliorate this zero-sum game? How do you show that capitalism is not a dead-end road paved with unsustainable fairy tales of growth? I can see the answer forming in your head already…fairness, equitable growth, fairer taxation, production efficiencies, carbon tax, philanthropy, democ-racy, freedom, recycling and waste management, circular economies, and so on1. I think these are excellent reme-dies, but the most foundational issue you, I bet, have probably missed out.

1 I have even heard population control, which in my view is just wrong!

34 PERIODICAL #21

World Greenhouse Gas Emission in 2005Total: 44,153 MtCO₂ eq.

Sector

TransportationRoad

Carbon Dioxide (CO2) 77%

Methane (CH4) 15%

HFCs, PFCs, SF₆ 1%

Nitrous Oxide (N₂O) 7%

10.5%

10.2%

6.3%

3.8%

4.1%

5.0%

7.0%

2.2%6.4%

5.2%

5.4%

4.0%

Residential Buildings

Commercial Buildings

Unallocated Fuel CombustionIron & Steel

Chemicals

Cement

Other Industry

T&D Losses

Agriculture Soils

Livestock & Manure

Oil/Gas Extraction, Refi ning & Processing

DeforestationAff orestationHarvest/Management

11.3%–0.4%

1.3%

Air 1.7%

1.7%Other Agriculture

Wastewater, Other Waste

(Tropics only)

Machinery 1.0%1.1%Pulp, Paper & Printing Food & Tabacco

Aluminium/Non-Ferrous Metals 1.2%

1.0%

Coal Mining 1.3%

Rail, Ship, & Other Transport 2.5%

14.3%

24.9%

8.6%

14.7%

4.0%4.3%

12.2%

13.8%

3.2%

Electricity & Heat

Other Fuel Combustion

Industry

Fugitive EmissionsIndustrial Processes

Land Use Change

Agriculture

Waste

EN

ER

GY

End Use / Activity Gas

Agricultural Energy Use 1.4%

Rice Cultivation

Landfi lls 1.7%1.5%

1.5%


Consequences of growth

The most foundational issue in my view is that our pro-duction system is broken at its heart. A vast number of what we have collectively built today is foundationally weak. At its core, it’s incompatible with the biosphere and, crucially, it is atomically imprecise. These two issues are urgent foundational issues that need to be solved. The greenhouse gas emissions according to data from the EPA include 22% from industry, 28% from electricity genera-tion2, 12% from commercial & residential processes, 9% from agriculture, and 29% from transportation. The World Resources Institute categorizes greenhouse emis-sions by needs but in a more specific way. Energy is

2 Of course, it’s not politically correct, but why we are not generat-ing all our power from nuclear energy or massively investing in 21st century atomic power generation, is quite beyond me to be honest but that’s another conversation. It defies all logic.

66.5%, of emissions from industry, but current chemical productions constitute about 4.1% of greenhouse gas emissions. Cement production emits 5.0% of greenhouse gases. Oil and gas yield about 6.4%. Deforestation for farming yields 11% while livestock and manures yield 5.4%. Agricultural energy, soils, cultivation, harvest, and land management costs 11.1%3. Putting a dent of these numbers, especially for a growing population with more demands, is not only an efficiency, policy, or governance problem. A lot of these issues are around what I call bio-sphere incompatibility, and while others are atomic preci-sion problems.

3 It should be stressed that there is a fair degree of uncertainty about the precise contribution of some activities, especially those which include biological processes such as land use change and agriculture.

Figure 1: Every sector emission impacts other industries. Being able to diminish each lane of emission provides positive knock-on effects. For example, if you affect chemical and cement production, how many other fields do you impact?

Source: World Resources Institute

35 PERIODICAL #21


A humble factory or processor, by biology – the cell

One of my favorite scientists – Richard Feynman, came up with the saying that there is plenty of room at the bottom. What can we accom-plish if we can precisely engineer all the materials we need? I posit we can probably control the entire lifecycle of a product. We can control the production process and, more importantly, we can control what the waste products are. We can design waste products that are bio-sphere compatible. That means waste products that organic matter can recognize, distill, and recycle. As it turns out, we have such a system today. That system is life! That system is synthetic biology. There is no technology today which can compete with the molecular precision of biology. A system where we can control the information delivered to a biological cell via DNA and instruct the cell to perform any desired activity, from materials production to computation. Biology as a technology is the most significant trend that will shape the 21st century.

Artificial intelligence, deep or machine learning, will become gen-uinely transformational to create the age of abundance once the merger with synthetic biology is fully realized. These bio-hybrid sys-tems will be the most exciting or consequential change within the next 15 to 20 years. I believe the age of DNA will be dominant for the foreseeable future after that. Crucially, synthetic biology harnessed in my view will keep economic growth going and usher in an era of abundance without the guilt. Why am I so bullish? Why does this sound eerily like science fiction? Let me answer with some facts.

THERE IS NO TECHNOLOGY TODAY

WHICH CAN COMPETE WITH THE MOLECULAR PRECISION OF BIOLOGY.

36 PERIODICAL #21


37 PERIODICAL #21


Meaningful growth

I want to share with you a kernel of an emerging trend, the – synthetic bay, or the Syn Bay. Her bigger sister – Silicon Valley – just south of San Francisco, has been dra-matically changing the world since 1967. But it has simi-lar underpinnings or foundations. Essentially, the Syn Bay does not invent or build anything spectacularly new. Instead, the synthetic biology industry siphons off estab-lished traditional biotechnology and fulfills old demands with groundbreaking solutions. It connects the dots. Just like silicon replaced vacuum tubes, software and home computing obliterated mainframes, and the Internet industry was built on existing telecom infrastructures. Synthetic biology uses similar molecular tools and supply chains found in the pharma industry a little bit better and more nimbly in terms of automation available to any industry. It also leverages the famed Silicon Valley ecosys-tem, business models, and computing power. Imagine the merger of Google and Roche with the nimbleness of a

ZBiotics

BenchlingTeselaGen

Clara Foods

Mammoth Biosciences

Twist BioscienceSerotiny

Senti Biosciences

Emerald Cloud Lab

Sutro Biopharma

Distributed Bio

3T Biosciences

Impossible Foods

Codexis

Calysta Energy

AntheiaNovoNutrients

Agilent Technologies

Chai

ATUM

Kiverdi

GeltorBerkeley Brewing Science

Riff yn

Demetrix

Finless FoodsBolt Threads

Amyris Biotechnologies

Wild EarthPivot Bio

Zymergen

Caribou Biosciences

Perfect Day Foods

iMicrobesLygos

Checkerspot

Koniku

Atomwise

Figure 2: The emerging Syn Bay, the combined funds attracted by the companies in the perimeter surrounding San Francisco Bay exceed $2.5B and counting. A similar trend is taking place in Boston primarily evidenced by Gingko Bioworks.

Source: Modified from the original. Image courtesy of John Cumbers, SynBioBeta.

38 PERIODICAL #21


startup. You can see the geophysical realization of this in the so-called Synthetic Bay (Figure 2). A cluster of com-panies that has raised more than four billion dollars to date and counting. The de-facto industry gathering, SynBioBeta, founded by John Cumbers, is now one of the hottest tickets in Silicon Valley every fall.

An impressive array of products is being crafted in the Synthetic Bay. Take Zymergen, as an example, which reportedly use genetically altered microbes to make anti-biotics, an alternate feedstock, and electronic OLEDs. Gingko Bioworks, the organism company, though based in Boston, does similar things as Zymergen and produces industrial ingredients for foods, cosmetics, and many other materials. Geltor is another materials producer cur-rently focusing on animal-free collagen. Companies like Perfect Day, New Age Meats, Memphis Meats, Finless Foods, and others produce animal-free dairy, meat, and fish. Kiverdi is working on basically making proteins from thin air. Companies like VitroLabs, Modern Meadow and MycoWorks produce leather and even building materials.

In the electronics/automation space, there are compa-nies like Catalog DNA which is working on a commercial realization of DNA storage with significant successes and a sustainable business model. Twist Bioscience is the world’s largest precision synthesizer of DNA. Twist Bioscience, which held its initial public offering in October 2018, has steadily grown and doubled in its share price. Emerald Cloud Labs lets you do state-of-the-art experiments in a lab without leaving your office. At Koniku, we are working on mapping all the volatile organic compounds (VOCs) that touch human life. Think about being able to breathe on the Konikore and have your disease diagnosed. This is similar to what Owlstone Medical is aiming to accomplish using silicon in Cambridge. The range of possibilities to build with syn-thetic biology is probably limitless. Many of these compa-nies are testing different business models, and that pro-cess is playing out.

THE RANGE OF POSSIBILITIES TO BUILD WITH SYNTHETIC

BIOLOGY IS PROBABLY LIMITLESS.

The old and new must join forces

I am convinced this industry should not be delayed, and the growth should proceed steadily. It is an industry that can inspire young people to build positive again. There is no question that many societies need reforms, but reforms without economic fundamentals are powerless in my view. Economic funda-mentals rest on technology and delivering value. I am quite fascinated by the German initiative Industry 4.0. Industry 4.0 coupled

with bio logical transformation as my col-league, Thomas Bauernhansl of the Fraun-hofer Institute, has been proposing, will put German industrial precision right in the mid-dle of this revolution. It is an opportunity for guiltless and inclusive growth. If we collec-tively chose to dither, think about the conse-quences of inaction. For a majority of the population of this planet, that dystopian future is already in the rearview mirror, and we must push on the pedal with synthetic biology!

39 PERIODICAL #21

From Pipeline to Platform: How ATAI Life Sciences is

Transforming Mental Healthcare

40 PERIODICAL #21

Christian AngermayerFounderATAI

Against the backdrop of declining U.S. life expectancy driven primarily by overdoses and suicides, traditional psychiatric drug development has

failed to produce meaningful solutions. Now, a unique approach to mental healthcare driven by ATAI Life Sciences stands to bridge the gap.

41 PERIODICAL #21

Christian Angermayer From Pipeline to Platform: How ATAI Life Sciences is Transforming Mental Healthcare

More than 45 million Americans suffer from some form of mental illness, about one-fourth of whom experience symptoms severe enough to

interfere with daily functioning. Each year, approximately 40 million Americans suffer

from an anxiety disorder, 16 million Americans experi-ence a depressive episode, and a full 2.1 million people qualify for a diagnosis of opioid use disorder. Impor-tantly, nearly one-half of those diagnosed with depression are also diagnosed with an anxiety disorder. Overall, 1 in 5 Americans lives with a mental health or substance use

disorder, translating to an annual earnings loss of $193.2 billion. Globally, the numbers are even more startling.

The World Health Organization estimates that one in four people will be affected by mental illness at some point in their lifetime, with about 450 million currently living with such a condition. Although diseases like bipo-lar disorder and schizophrenia receive the lion’s share of media attention, depressive disorders account for the vast majority of mental illness, with some 350 million people affected. This makes depression the leading cause of dis-

42 PERIODICAL #21


ability worldwide – as well as one of the costli est. In 2013 alone, depression cost the global market $1 trillion in lost productivity, with an additional $71 billion in treatment expenses. Viewed collectively, the Lancet Commission released a report in 2018 show-ing that, without a meaningful response, the mental health epidemic could cost the world economy up to $16 trillion by 2030.

And this is to say nothing of the societal costs of mental illness.

Suicide rates are rising

Given that 60% of people with a mental ill-ness do not receive treatment – and those that do often delay it for years – it is unsur-prising that suicide rates have been climbing for decades. In the United States, there were close to three times as many deaths by suicide as homicide in 2017. Currently, the number of completed suicides is the highest it’s been since the Second World War. Globally, nearly 800,000 people take their own lives each year, making it the second leading cause of death for 15–29-year olds (exceeded only by acci-dental deaths). In developing countries, where data on mental illness and suicide is less readily available, these issues are likely even more pronounced.

So how did we get here?While the American Psychological Asso-

ciation’s latest survey found that most Americans “harbor positive views about mental health disorders and treatment,” more than 1/5 of respondents nevertheless indicat-ed they’d be uncomfortable discussing men-

tal health issues with others. Even more concerningly, 1/3 people agreed with the state-ment “ people with mental health disorders scare me.” As such, it is therefore extremely important to continue to address stigma around mental health head on, and numerous high-profile busi-ness leaders have spoken openly about their mental health issues and implemented programs to support their employees.

Stigmas must be dismantled

Research has long pointed to a strong stigma around mental illness. Indeed, the National Alliance on Mental Illness reports that eight out of ten workers with mental health condi-tions say shame and stigma prevent them from seeking treatment. This ought to be ex-tremely concerning for employers, since nu-merous studies have concluded that the indi-rect costs of mental health disorders exceed most companies’ direct costs for health insur-ance and pharmacy expenses. Therefore, re-searchers suggest that investments in the mental health of workers is valuable not only for workers themselves, but for businesses’ bottom lines.

Speaking in Davos at the World Economic Forum, John Flint, CEO of HSBC, had this to say: “[Mental health support] will be the most critical enabler of our business strategy. The suggestion that this is in some way in competition with the hard-edged, competi-tive, testosterone-driven nature of banking, I don’t agree with at all (…) I know personally the profound difference between being at my best and not at my best.”

But even with improvements in culture and employer support, there is still the issue of few treatment options and low remission rates.

A 2018 study found that of those who re-ported a serious mental illness, more than two-thirds continue to experience issues caused by their condition. For the more than 340 million depression suffererss, currently available front line treatments – typically se-lective serotonin reuptake inhibitors (SSRIs) coupled with cognitive behavioral therapy – have moderate response rates of 40–50%, with remission rates as low as 30%. Indeed, more than 80% of people who experience one episode of depression will continue to suffer from the condition six years later. Moreover, SSRI’s and other frontline treatments come with a bevy of potential side effects, ranging from fatigue and hair loss to hypertensive crisis and mania. Paradoxically, adults start-ing on antidepressants for depression are 2.5 times more likely to attempt suicide than the rest of the population.

CURRENTLY, THE NUMBER OF COMPLETED SUICIDES

IS THE HIGHEST IT’S BEEN SINCE THE

SECOND WORLD WAR.

43 PERIODICAL #21

Discovery Target Validation

Pre- Clinical Phase I Phase II

USD 6B annually (mostly public, e.g. NIH)

Insufficient funding contributes to huge unmet medical need

DRUG PSYCHIATRIC DRUG DEVELOPMENT


No cure but side effects

The landscape for those with addictions and anxiety dis-orders is no better. Current treatment options for all types of addiction are scant and produce variable results, with relapse rates across substance use disorders estimated to be between 40 and 60%. Among those with anxiety disor-ders, only 36% of those affected go on to receive effective treatment, meaning most anxiety disorders persist indef-initely. Moreover, benzodiazepines, the most commonly prescribed therapeutic for anxiety, lead to addictions in up to 15% of users.

This lack of meaningful options ultimately stems from a profound lack of innovation in psychopharmacology, largely stemming from what’s known as the “Valley of Death” of drug psychiatric drug development, high-lighted in the figure below.

This area of insufficient funding and development arose for several reasons. Firstly, a reductionist focus on therapeutics with single targets poses intrinsic challenges as mental illnesses are complex and multifactorial. Secondly, there are significant translational issues in moving from animal to human models, and drugs that have shown efficacy in the former often fail to do so in the latter, discouraging investment from big pharma. The result is a field that has seen little to no meaningful inno-vation since the introduction of SSRI’s and SNRI’s in the 80’s and 90’s.

The tide is turning

Enter ATAI Life Sciences, a unique, global biotech com-pany builder founded in direct response to the aforemen-tioned unmet medical needs. ATAI employs a decen-tralised, technology- and data-driven platform model to minimize investor risk and responsibly accelerate the de-velopment of impactful and evidence-based therapies. Moreover, in contrast to traditional drug development, ATAI cultivates early stage poly-pharmacological drugs that impact key mental health biomarkers and have been de-risked, either through anecdotal evidence or off-label clinical experience. In particular, ATAI sees significant potential in 5HT2A agonists, atypical opioids, as well as drugs that act on the glutamatergic and GABAergic sys-tems. Importantly, despite the presence of psychedelics on the platform, ATAI is modality-agnostic and does not bill itself as a “psychedelics company”, but rather a mental health innovation platform.

ATAI’s companies are also pursuing pre-market activi-ties necessary to ensure broad access and impact. Chief among these is a focus on producing strong pharma-coeconomic data and building partnerships with payers, actions necessary to secure insurer coverage of therapies immediately upon approval. By the same token, compa-nies are also building networks of providers who will be in a position to rapidly deliver treatments in safe and sup-portive settings.

44 PERIODICAL #21

Phase II Phase III Filling & Approval

Insufficient funding contributes to huge unmet medical need

USD 64B annually (pharma & biotech)


Perhaps most importantly, ATAI’s comprehensive ap-proach to development coincides with a broader shift in the landscape of mental healthcare: Regulatory momen-tum for psychedelic medicine in the United States has grown at the federal level; advances in neuroscience have transformed our understanding of the neural correlates of both mental illness and wellbeing; technology and artifi-cial intelligence can streamline drug development to an unprecedented extent; and diminished stigma coupled with increased awareness of the current system’s failings have stoked public interest in alternatives.

In short, we’ve reached a tipping point as a field. After decades of stagnation, ATAI is poised to deliver a diverse and effective collection of treatments in an environment that has been cultivated to be most receptive to uptake. While the needs of each patient vary, and not every treat-ment will work for everyone, a broad expert network coupled with a holistic approach to mental wellbeing ensures that new solutions are always in the pipeline.

While there’s still much to be done, ATAI and its com-panies represent the next step in the development of a responsive, person-centered mental health system. This system will value interdisciplinary collaboration, connec-tions between developers, providers, regulators, and payers, and will boast a singular focus on the patient experience.

For the hundreds of millions of people suffering from treatment resistant mental illnesses, this can’t happen soon enough.

45 PERIODICAL #21

The healthcare market is highly attractive, dynamic and innovative. The demographic change, a growing population as well as an increasing

amount of people having access to healthcare are trends MedTech companies like Siemens Healthineers are benefitting from. On the other side, healthcare

providers – our customers – are challenged with rising cost pressure and forced to consolidate as governments and insurers are changing financial incentive systems to transform healthcare delivery from volume to value. On top, the increasing use of digital solutions and Artificial Intelligence in

clinical workflows are starting to change the way how healthcare is delivered.

Increasing (Shareholder) Value in a Transforming Healthcare Market

Dr. Jochen SchmitzCFOSiemens Healthineers

46 PERIODICAL #21

47 PERIODICAL #21

Dr. Jochen Schmitz Increasing (Shareholder) Value in a Transforming Healthcare Market

All these factors provide tremendous opportunities for Siemens Healthineers – but they also bear huge risks in case fundamental (technological) trends are

missed. With our medical imaging, image-guided therapy and diagnostics businesses, we have been among the leading MedTech companies worldwide for years, and it is our clear goal to expand our position. But against the backdrop of the changing healthcare environment, there is the need to increase adaptability. Only the companies that adapt will survive. With the suc-cessful initial public offering in March 2018, Siemens Healthineers gained the entrepreneurial flexibility which is necessary to be focused and to capture the opportunities in a changing healthcare market.

That flexibility comes with new tasks, such as additional reporting require-ments and a constant dialogue with investors who expect a return on their invest-ment. But should we put the investors in the sole focus of our actions? While I do think that investors are indeed a very crucial stakeholder group for a listed com-pany, I also think that it would be too narrow to focus only on shareholders and shareholder value, and that we must broaden the view to other stakeholders as well, such as customers, employees and patients. All these groups depend on each other, and the way they interact is crucial for success – especially in an innovative ecosystem such as healthcare.

In healthcare, innovation is the main business driver. Our products help pro-viders worldwide to improve outcomes, i.e. the quality of a diagnosis and treat-ment, at lower costs. Siemens Healthineers invests very significant resources to achieve this goal. We spent more than 1.3 billion euros on research and develop-ment in the past fiscal year. That is more than nine percent of our annual revenue. Our employees are looking to constantly improve our products in close alignment and for the benefit of our customers. We are collaborating with the vast majority of leading healthcare providers to drive our innovation pipeline and to get access to clinical data for clinical AI-applications. We are the innovation leader in most of the fields we are active in. Let me give you two examples.

Siemens Healthineers has recently introduced a new feature for Computed Tomo graphy scanners which puts the precision of CT scans on a new level. With the help of a regular 3D camera using Artificial Intelligence and deep learning technology, the scanner automatically facilitates precise and consistent isocentric positioning of patients and reduces unwarranted variations. That term describes that examination results can vary due to different user skill levels or the physio-logical characteristics of each individual patient. The use of our AI-powered tech-nology minimizes unwarranted variations and avoids scan repeats, making diag-nostics more precise and less costly.

The second example comes from the field of laboratory diagnostics, in which a lot of time and money can be saved by increasing automation. Our new modular Atellica Solution platform features a patented bi-directional magnetic sample

IF WE DO NOT INVEST IN OUR EMPLOYEES,

WE RUN INTO THE RISK OF LOSING THE

BRIGHTEST MINDS TO THE COMPETITION.

48 PERIODICAL #21

Dr. Jochen Schmitz Increasing (Shareholder) Value in a Transforming Healthcare Market

transport technology that speeds up sample pro-cessing and contributes to the instruments’ ability to analyze urgent and routine tests on the same sys-tem without interrupting the overall sample throughput. This is a real gamechanger for cus-tomers as labs have been using dedicated sys-tems, staff or even special labs to meet the strin-gent turnaround time requirements for urgent tests. And as a highly flexible modular platform, Atellica Solution also enables an efficient use of space within the lab with high quality and throughput.

The message from these examples is simple. Cus-tomers demand continuous improvement of our prod-ucts as they need to counter rising costs and budget con-straints. For them, better outcomes at lower costs simply means: “Do more with less”, and as their partner of choice, it is up to us to deliver on that challenge. Technology plays a critical role to address that chal-lenge, and that is where our em-ployees come into play, as well as all the academic institutions that

Siemens Healthineers cooperates with around the globe and which also represent a stakeholder group for us as customers. Without a highly skilled workforce and strong research partnerships, Siemens Healthineers would not be able to address the customers’ needs.

If we do not invest in our employees, we run into the risk of losing the brightest minds to the compe-tition. If we do not invest in innovation, we will lose important partnerships in the academic arena and damage our ability to remain innovation leader.

The good news is: All these investments, if done right, will significantly improve the patient experience,

enhance precision medicine and transform the delivery of care by using the power of new technologies like digi-talization and AI. And ultimately, this will drive prof-itable growth and value creation. Only if we create value for all stakeholders, we can at the same time create signif-icant shareholder value.

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To our commentator and TS Lombard’s chief economist Charles Dumas it is self-evident that Germany is now suffering the reward for the multiple follies of the Merkel governments, whether alone or in the Grand Coalition…

“THE REACTION TO THE FINANCIAL CRISIS WAS PRECISELY THE OPPOSITE OF WHAT WAS NEEDED.”

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51 PERIODICAL #21

Comment “The Reaction to the Financial Crisis Was Precisely the Opposite of What Was Needed.”

“Germany is now suffering the results of the multiple follies of the Merkel governments, whether alone or in the Grand Coalition. It goes back further in fact, as the admission of Italy and Spain to the euro from the start (1999) was a major blunder, and the admission of Greece completely absurd. (Apparently, the only two European countries compliant in the late-1990s with the Maastricht criteria were Luxembourg – which arguably does not count – and the UK!) And the deeply anti-communitaire deflation of the German economy in 2002–05 under Finance Minister Hans Eichel established from the start of EMU the imbalances of costs that have plagued it since. The Eichel policies were, of course, entirely consistent with German policy traditions in the deutschemark era – if Germany had had a separate currency in the early-2000s, currency appreciation would have rewarded German workers for their wage restraint by cutting import costs (including foreign travel) as it did in the 1970s.Moving into the Merkel Chancellorship, the reaction to the financial crisis of passing the so-called Schwarzer null ‘debt brake’ was precisely the oppo-site of what was needed. The massive fiscal tighten-ing in the euro area (EA) between 2010 and 2013, em-bodied during the euro crisis in the self-destructive ‘fiscal compact’ (basically reproducing the Schwarzer null across the EA) left the EA totally

THE MERKEL ERA – A VIEW FROM ABROADby Charles Dumas, Chief Economist, TS Lombard

dependent on net export surpluses for growth. This meant ex-porting deflation and forcing other countries into deficits to match the EA surpluses achieved not through the much- proclaimed ‘competitiveness’, but by simple demand and wage deflation. Now that the rest of the world is no longer willing or able to absorb EA sur pluses, and China’s absurd over-invest-ment and metal-bashing is being curbed, while other EMs suffer, the bankruptcy of German policy – and indeed eco-nomic attitudes – is being revealed. Interestingly, over the first 20 years of the euro, German and British real-GDP per head of population went up by the same amount – just under 30%. (Most other European countries did far worse.) But while real household disposable income (per head) rose by about the same 30% in Britain, in Germany it was more than 10% behind, only up 19%. So what have Germans got for this sacrifice of the income they have earned? Well, the short answer is trade and current- account surpluses. But adding up the cumu lative German current-account surplus over this cen-tury, the total has been €2¾ trillion. Yet the net foreign assets of Germany are only up by just over €2 trillion. So somehow, the people investing the sur-plus product of German wage restraint have lost €700 bil-lion, about a quarter of the amount invested. This loss dwarfs any damage from negative interest rates to German savers.But the negative interest rates are themselves the result of excessively tight budgets. Tight fiscal policies have forced the ECB – the only European institution concerned to achieve full employment – into ultra- stimulative monetary policies, in the (vain) hope that a combination of negative interest rates and a grossly under valued euro will somehow make up for the chronic and major deficiency of domestic demand that results from excessive budgetary rigour. In fact, of course, negative interest rates force people saving for retire-ment to save more – thus reducing consumer demand. And now, whereas in 2010–15 the Germans retiring were the minimal ‘cohort’ born in the late-1940s, the people retiring are increasingly the large cohort of baby- boomers. The potential for a very unpleasant trend in pro-test votes is obvious, and it is largely the result of the major policy mistakes of successive German governments, notably the folly of ‘Schwarzer null’.”

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Comment “The Reaction to the Financial Crisis Was Precisely the Opposite of What Was Needed.”

53

In 2019, trade of goods and services grew at its slowest pace in a decade (+1.5%). On top of decelerating global

growth (+2.5% in 2019, after +3.1% in 2018), 2pp over two years (2019 and 2020) can

be directly attributed to high uncertainty, and higher global tariffs, according to our estimates.

Trade Wars: May the Trade Force

Be With You

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Ludovic SubranChief EconomistAllianz SE

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China

United States

Canada

United Kingdom

Netherlands

Brazil

Germany

Mexico

Belgium

Nigeria

United Arab Emirates

France

Spain

Switzerland

Italy

Austria

Egypt

Singapore

Japan

Thailand

Australia

Saudi Arabia

Ukraine

Hong Kong SAR

Israel

■ 2019 ■ 2020

–80 –60 –40 –20 0 20 40 60 80 100 120

90

87

35

25

21

20

18

17

16

15

14

11

10

10

10

10

10

9

9

7

7

6

6

6

5

15%

10%

5%

0%

–5%

–10%

–15%

■ Volume ■ Price Value

13 14 15 16 17 18e 19f 20f

3.3% 4.0%

3.0% 2.5%

9.9% 9.0%

1.4%

2.3%2.8% 2.0%

–10.3%

–1.7%

5.5% 3.6%

–1.7%

1.7%

Ludovic Subran Trade Wars: May the Trade Force Be With You

Global trade: the force weakens

China (–USD67bn), Germany (–USD62bn) and Hong Kong (–USD50bn) were the three main victims of the trade recession. Though the currency effects explain most of this, the export

shock was clearly widespread across European countries (the UK, the Nether lands, Spain and France) and export hubs ( Singapore, for e.g.). Political risk in the UK and Hong Kong explain their counter perfor-mance. Conversely, North America and Japan continued to exhibit positive export gains1.

In 2020, we expect trade to remain in a low-growth regime, slightly accelerating to +1.7%, while the global economy continues to deceler-ate (+2.4% after +2.5% in 2019). Indeed, a superficial “phase 1” deal between the U.S. and China may bring some comfort but renewed threats of tariffs and a busy political year (global summit, U.S. elec-tions) in 2020 should bring higher volatility, leaving no hope for siz-able improvement going forward. The strongest export gains will be seen in China (USD90bn) and the U.S. (USD87bn). However, their trade feud has taken a toll: export gains for both countries would be roughly half of what they were in 2018. Other main winners include Canada (USD35bn), the UK (USD25bn) and the Netherlands (USD21bn). The most notable losers could be India (USD–5bn), South Africa and Sweden (USD–4bn for both).

1 It is worth reminding the reader that export gains in USD are based on three main indicators: (i) the forecasts of exports in volume terms (higher exports in 2020 mean higher export gains), (ii) the exports deflator (higher prices of exports also boost gains) (iii) and finally the currency exchange rate forecast with the USD (a currency appreciation boosts export gains in USD).

Figure 1: Global trade of goods and services, growth in volume and value (%, y/y)

Sources: IHS Markit, Euler Hermes, Allianz Research

Figure 2: Export gains for 2020 – top 25

Sources: IHS Markit, Euler Hermes, Allianz Research

56 PERIODICAL #21

130

125

120

115

110

105

100

95

90Feb 18 May 18 Aug 18 Nov 18 Feb 19 May 19

Exports from Japan to the U.S. Imports of Japan from China Imports of U.S. from China

Implementation of List 3 tariff s by the U.S.


A U.S.-China trade truce only offers a temporary respite to mar-kets and some postponement of tariffs. It is not a game-changer for the global economy. For the last two years, we have been carefully monitoring and analyzing U.S.-China trade tensions and their im-pacts on the global economy and companies. Our framework is com-posed of three scenarios: First, a benign “Trade Games” scenario, with negligible economic impacts. From March 2018 to March 2019, the global economy was in this scenario, and we now see a 35% prob-ability of going back to it. We are currently in the intermediate scenario of a “Trade Feud,” which and should remain the case well into 2020 (55% probability). This scenario should subtract -0.5pp from GDP growth in total over 2019 and 2020, and -2pp from trade growth. The worst-case scenario is a “Trade War,” which could trigger a global recession and strongly harm both the U.S. and China’s economies (10% probability).

The phantom trade menace

When faced with escalating U.S.-China trade tensions, small and agile exporters benefited the most from trade diversion. We have compared the 2019 change in import market share for both the U.S. and China of their import partners compared to their 2018 level. The main take-away is that the largest trade partners are losing market share or gain-ing less than average, while much of the smallest trade partners are rapidly gaining.

Figure 3: Phantom trade with Japan in machinery, mechanical appliance

Phantom Trade (companies shipping their merchandise to a third market before exporting to the final destination) is un-veiling tariff circumvention mechanisms and artificially inflating trade figures. Tar-iff circumvention mechanisms that we call “Phantom Trade”. It provides evidence that Chinese exporters rerouted products through third countries/regions to evade U.S. anti- dumping duties between 2002 and 2006. This rerouting avoids tariffs and artificially inflates trade figures (because

the same good travels to an additional market before reaching the final partner). Our preliminary analysis on South East Asia, with not more than a year and a half of data, shows that Japan and Taiwan are used as rebound countries for machinery and mechanical appliances, and for electrical machinery. Indeed, while imports of the U.S. from mainland China (in machinery subsectors) decreased after the impo-sition of tariffs in September 2018, exports from Japan and Taiwan to the U.S. increased. Trade diversion alone cannot explain this phenom-enon as production capacity has not magically changed location, nor have providers swapped instantly. Trade rerouting must be part of the equation as imports of the third market from China in the same sec-tor reflects similar growth. Hence, some Chinese companies could simply be creating phantom trade with Taiwan and Japan just to ship their goods to the U.S. and avoid U.S. tariffs.

PHANTOM TRADE IS UNVEILING TARIFF CIRCUMVENTION

MECHANISMS AND ARTIFICIALLY INFLATING

TRADE FIGURES.

57 PERIODICAL #21

Figure 4: Capabilities and irritability of key markets amid trade tensions

50,000

45,000

40,000

35,000

30,000

25,000

20,000

15,000

10,000

5,000

0–15% –10% –5% 0% 5% 10%

India

US

Russia

China

GermanyCanada

FranceUK

Italy Indonesia JapanBrazilTurkey Australia

South Korea

South AfricaSaudi Arabia

Mexico

IRRITABLE BUT NOT

EQUIPPED

IRRITABLE AND

EQUIPPED

NOT EQUIPPED

AND NOT IRRITABLE

EQUIPPED BUT NOT

IRRITABLE


The return of the trade jedis

Protectionism is the new normal.In 2019, Global Trade Alert (GTA) shows only a slight decrease from the 2018 record high level in the number of new trade barriers (1,291 in 2019, after 1,382 in 2018; compared to 331 in 2009). The U.S.-China trade dispute has brought the U.S. average tariff to ~8%, close to levels last seen in the 1970s, from 3% end-2017, and a higher share of global trade is now being tariffed. Between 2017 and 2019, countries signed three times fewer major regional trade agreements (RTA) than between 2015 and 2017.

Trade policy is becoming just another political tool for many different policy ends, such as economic diplomacy, geopolitical influence or environmental policy. This ac-tivism is not restricted to the U.S: it has spread to Japan and South Korea, India and the EU. This trend is visible both in the questioning of existing treaties (renegotiation of NAFTA, Brexit, Paris Agreement called into question, and challenges for NATO, the RCEP, the TPP or the EU-Mercosur deal) and in the emergence of new bilateral trade agreements (U.S.-China mini-deal, U.S.-Japan

agreement, EU-Singapore etc.). It is also visible at the in-creasing level of geo-politicization of trade agreements. For example, the recent trade pact that Serbia is expected to sign with Russia, as an answer to the EU’s timid open-ing to the Balkans. We designed a framework to analyze which countries would be most “irritable” or tempted by the trade war in the current tense environment, and which countries would actually be “equipped” of winning such war. We iden-tified three groups of countries by trade arsenal: 1. The Ewoks (nor irritable, nor

equipped) among them Australia and South Korea,

2. the Stormtroopers (irritable but not equipped) such as Japan, Mexico, South Africa and France); and

3. the Jedis, both irritable and very capable in case of a trade star war like the U.S., China, India and Russia.

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TRADE POLICY IS BECOMING JUST ANOTHER POLITICAL TOOL FOR MANY

DIFFERENT POLICY ENDS, SUCH AS ECONOMIC DIPLOMACY, GEOPOLITICAL

INFLUENCE OR ENVIRONMENTAL POLICY.

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Think Beyond the Thick Fog

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“Media is ultimately entertainment.” Rolf Dobelli had this line,

and it has long echoed with me.

Think Beyond the Thick Fog

Patrick ZhongFounding Managing PartnerM31 Capital

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Patrick Zhong Think Beyond the Thick Fog

My job as an investor is to stay contrarian and to think beyond the scope of news coverage, as en-tertaining as news has become. So unlike Dobelli,

I am constantly observing the news. And even in a global world, news remains local in its impact and relevance.

If you live in Shanghai, you wonder whether US – China trade tensions will continue to escalate. If you live in London, the debate over Brexit occupies your mind. If you live in Seoul, you are losing hope in the economy, and a prospective fight with Japan adds to your anxiety. If you live in Mumbai, you are glued to the TV watching the army march into Kashmir. Of course, there is also Hong Kong, where the protests continue to dominate headline news. And in a surprise to most of us, similar demonstra-tions also erupted in Santiago and Barcelona. As if this weren’t enough, all of us are worried about a synchro-nized global slowdown. When will recession happen? Or maybe it might already be under way?

Bad news, one after another, wears down our spirits.

Life is like a movie. You are your own audience. For my movie, winter of 2008 was a cold and frightening one. I was seated at our company’s meeting room in Boston, surrounded by some of the best investors in the business. We could not believe what we were seeing: a crashing stock market that was breaching downside targets for pretty much everything in which we had an investment. The sentiments went extremely negative, and there was simply no good news.

But when there is blood on the streets, that is the time to buy. Instead of doing nothing, we started to think beyond the bad news, and we became constructive in our approach. What information do we know? What are most of our peers not focused on? Through the big, thick fog, we saw a large innovation cycle coming and decided to embrace it. As a result, many of the tech and consumer investments we made that winter brought us strong returns.

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One of top economic policy makers in the US govern-ment confessed to me several years later that he felt help-less during those dark times, but he nevertheless main-tained the hope that every ten years, a quarter of the US economy is replaced by new businesses – mostly driven by innovations. My fellow investors and I believed essen-tially this same thing.

For the ten years following 2008, the twin focus of my investment interests became innovations driven by mo-bile Internet proliferation and rising Chinese consumer-ism. Now, I am even more intrigued with what’s looming large on the horizon. There are currently a multitude of technologies rising, with each one having the opportunity to create at least tens of billions of dollars in value. These trends include the Internet of Things, Big Data, Block-chain, Augmented Reality, Autonomous Driving, Gene Therapy and Editing – just to name a few. It will be even more remarkable when these technologies start to converge.

Still sound abstract?Let’s think through these looming questions:

WILL CELL PHONES DISAPPEAR IN TEN YEARS?

DOES AI BRING US TO A POST-HUMAN WORLD, WHERE AI IS AS COMMON TO US LIKE ARTIFICIAL HIPS?

WILL OUR CHILDREN BE ENTITLED TO CUSTOMIZED EDUCATION, WITH AI TEACHERS AS THE SOLUTION?

WILL CLIMATE CHANGE DAMAGE REAL ESTATE PORTFOLIOS FOR ASSETS LOCATED IN SAN FRANCISCO, HONG KONG, MIAMI AND SHANGHAI?

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We have spent many long hours, with many entrepre-neurs and thinkers. Regardless of their location, many of them are working on projects that could have a huge impact on our world. Some might even turn our world upside down.

Some of these entrepreneurs are based in China. Just like in the US, Europe and Japan, China has become a major theater for innovators, and this theater is attracting many actors.

In 2018, considered a trough year due to economic slowdown, about 850 companies received Series B or later rounds of funding. In China, every five years there is a new generation of consumer. In that same timeframe, there are also new generations of entrepreneurs. Unlike Jack Ma, Pony Ma and their peers, who have never lived, studied or worked in the West, many of rising thirty year old founders are the ones who have received the best ed-ucations both in China and in the West. They’ve worked at top companies both in China and abroad, and more importantly, they are developing products serving con-sumers both in China and globally.

The startup darling of CES in 2018 was a Chinese company called NReal. The founder is a thirty year old, who has received a doctorate degree at the University of

Minnesota and worked at NVidia and Magic Leap in the US. NReal, an augmented reality company (AR), has suc-cessfully brought down the form factor of AR goggles to 88 grams. All of sudden, AR has become a real wearable technology, light enough to be practical and with a cool enough look to be marketable. For our human eyes, AR googles are simply so much more natural than a smart phone.

In the innovation theater of China, NReal is not alone. We have seen innovative companies leading their fields in many areas – Internet of Things, robotics, autonomous driving, cancer screening, AI-driven customized educa-tion driven, intelligent farming, new retail, mobile pay-ment and others. If kids are learning faster with AI teach-ers, I don’t see why the technology cannot be introduced to inner city Chicago or Detroit. After all, every young person needs to learn math and English.

Being an investor, my job demands curiosity and for-ward thinking. I constantly move myself back and forth between today’s world and the possibilities of tomorrow. When we invest, we have deep respect for prevailing sen-timents, economic cycles, and market realities. Invest-ment as such is an art, not a science. Man is a determinis-tic device thrown into a probabilistic universe. And in this match, surprises are expected.

Our future is a probabilistic exercise. No one has a crystal ball, but we will miss the target if we don’t even try to think about, to analyze, and to adapt to what’s coming.

Future is full of surprises. Many more will come in the next ten years. And they come fast. So we should act.

IS THE TOILET OUR MOST INTIMATE DIAGNOSTICTOOL?

IS BLOCKCHAIN, WITH ITS MISSION TO DISSEMINATE CONTENT IN A DECENTRALIZED FASHION, GOING TO DISRUPT NETFLIX, ITSELF A MULTIPLE-TIME DISRUPTOR?

65 PERIODICAL #21

Most business people and market participants have focused on the trade war between the US and China as the source of geopolitical tension and uncertainty. The reality is more sobering. The trade war has morphed into a new cold war –

encompassing contention and potential conflicts in the economic, technological, military and geo-strategic as well as ideological arena.

Trade War, Cold War, and Populist Backlash

66

Hung TranNonResident Senior FellowAtlantic Council

67

Hung Tran Trade War, Cold War, and Populist Backlash

The new cold war is mainly between the US and China (increasingly allied

with Russia) with Europe caught in the middle – amidst a wave of populist backlash across many Western countries. These developments are inter-related – being the internation-al and domestic manifestations of the unraveling of the West-ern liberal democratic world order which had ushered in a long period of world peace and prosperity. In the future, a new world order is required to pro-vide a framework to reconcile international and domestic conflicts. This is crucial for re-storing political stability and trade rule certainty as neces-sary, though not sufficient, con-ditions for renewed growth.

From trade war to new cold war

President Trump’s decision to impose tariffs on solar pan-els and washing machines in January 2018 triggered a series of US tariffs and retaliatory moves by other coun-tries. By now, tariffs and counter-tariffs cover about $393 billion (or up to $1,025 billion including proposed measures) of US imports from China and elsewhere; and about $97.5 billion (or $112 billion including proposed measures) of US exports – according to the US Congres-sional Research Service. The past two years have seen the

highest volume of world trade covered by tariffs on record. These tar-iffs and ensuing trade uncertainties have been key factors in reducing world economic growth – by 0.6 percentage point to 3% from 2018 to this year, according to the IMF.

Tariff was first imposed as part of Trump’s efforts to reduce the persistently large US trade deficit and to bring back manufacturing jobs by disrupting global supply chains – essentially reflecting economic motives. However, justifications for tariffs and financial sanctions have expanded quickly to include “threats to US national security” and violations of human rights. More importantly, the US demands on China have gone beyond discriminatory trade practices to emphasize key structural features of the Chinese political and

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economic system – basically, maintaining an uneven playing field by supporting and guiding China’s state-owned or -directed enterprises in both domestic and international markets. These demands reveal the structural differences between the two largest trading blocs in the global trading system, going beyond the narrow focus on export sub-sidies and tariffs of the WTO, making trade conflicts more difficult to resolve.

Technological competition

China’s technological progress has attracted increasing scrutiny from the US government which has viewed China as engaging in a “great power competition”. First and foremost are concerns about potential threat to US national security represented by China’s telecom compa-nies such as Huawei and ZTE – especially in supplying equipment and infrastructure for 5G networks. These concerns also reflect a desire to defend US leadership positions in key high technology areas such as telecom, artificial intelligence, quantum computing, biotechnology etc. – both for economic and national security reasons.

As a consequence, the US has strengthened its control of export and inward investment in technologies and sectors deemed sensitive to national security. Export control is done by putting foreign compa-nies and entities on the Entity List, requiring US persons to obtain government permission to deal with them. So far the US has put more than 200 Chinese companies on the Entity List (but not yet on the stricter Denied Persons List which would bar all exports without exception). Inward investment screening has also been tightened by a reinvigorated CFIUS (Committee on Foreign Invest ment in the US) which has widened its scope to examine foreign, mainly Chinese, companies acquiring interests in sensitive US enterprises – which is much broader than the previous threshold of acquiring controlling interests.

Since these actions come from concerns for national security, they are not amenable to negotiation and compromise: they will only dis-sipate when or if US perception of China as a strategic competitor changes.IN THE FUTURE,

A NEW WORLD ORDER IS REQUIRED TO PROVIDE A

FRAMEWORK TO RECONCILE INTERNATIONAL AND

DOMESTIC CONFLICTS.

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Military escalation / geo-strategic competition

In the past few decades, China has ramped up its military budgets to modernize its armed forces. While the US still maintains an overall military superiority globally, China has made significant progress in strengthening its capability to pursue an “Anti Access/Area Denial” (A2/AD) strategy in an armed conflict – increasing the risks and costs of US forces approaching close to the Chinese mainland to be effective. According to a recent report by the US Study Center, Univer-sity of Sydney, “Chinese counter-intervention systems have undermined America’s ability to project power into the Indo- Pacific…challenging US security guarantees.”

Concurrent with military upgrading, China has become more assertive in pushing its claims over the nine-dash area in the South China Sea, including building military installa-tions on artificial islands as well as intensifying offshore oil/gas explorations and fishing activities in disputed waters. China has also heightened pressure on Taiwan, demanding progress on reunification. In short, China wants to enhance its influence in the region and beyond.

In response, the US has refocused its national defense strategy (2018) to prioritize preparations to fight a “great power” war instead of several regional and conventional conflicts. It has also sent more warships on patrol near the Chinese-claimed islands and through the Taiwan Strait to demonstrate its commitment to the freedom of navigation in international waters – exercises condemned by China as provocative. In a move certain to further escalate tension, the US Congress has almost unanimously passed the Hong Kong Human Rights and Democracy Act to express support for the protesters there. Subsequently, President Trump signed it into law despite the fact that China has issued strong warnings of serious retaliation.

The contentious maritime maneuvers are difficult to re-solve or regulate, creating opportunities for misunderstand-ing, miscalculations and mistakes, potentially leading to ac-cidents and serious conflicts.

Ideological competition

In the new ideological rivalry, the emphasis is no longer on the export of revolution to developing countries. Instead China has made a virtue of its “non intervention” foreign policy – accepting the powers that be in developing coun-tries; without prodding them to improve democracy, trans-parency, corruption or human rights. Basically, China ex-ports justifications and enabling tools to autocratic regimes on ground of efficiencies in economic development. Such

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tools include infrastructure investment underpinned by Chinese finance, technology and construction expertises as well as telecommunication, surveillance and facial recognition tech-nologies. In this context, the Belt and Road Initiative (BRI) and high tech export pushes serve China’s ideological and economic objectives. In short, as the EU describes it, China seeks to “pro-mote alternative models of governance”.

Europe caught in the middle

Meanwhile, Europe has been put in a very difficult spot. It faces a revanchist Russia under Putin while growing more dependent on Russian energy supply, especially when the Nord Stream 2 project is completed, augmenting the Nord Stream 1 gas pipe-lines. The EU shares many of the US criticisms of China trade practices including lack of a level playing field. It has recalibrat-ed its relationship with China in a more complex 2020 Strategic Agenda – viewing China not only as a cooperation and negoti-ating partner but also as an economic competitor and systemic rival. However, Europe is divided on how to deal with China’s Belt and Road Initiative – 12 EU members have signed up to the BRI while the remainders oppose. Moreover, the EU also has to deal with a messy process of Brexit; an immigration time bomb from its African neighbors; and heightened citizen concerns about climate change.

But at the time Europe needs it, the transatlantic alliance which has been the foundation for peace, security and prosper-ity in the world is fraying at the edges. The global rule-based trading system represented by the WTO which the EU has re-lied on has been marginalized by growing unilateral protectionism triggered by Trump. NATO which has been the guarantor of peace and security for Europe has been called “obsolete” by President Trump and more recently declared “brain dead” by French President Macron. With the postwar trade and security interna-tional cooperative institutions undermined, Europe will find it very difficult to confront those challenges on its own.

Domestic political backlash

The driver for many countries to turn inward and behave more unilaterally in pursuing their interests has its roots in the discontentment and frustration of many of their citizens against the prevailing political establishments in many Western countries. This has fueled a populist backlash, rallying around simplistic but misguided slogans, mainly aimed at immigrants and “global elites”. While growing inequality in wealth and income distribution is a main cause of discon-tent, it has been further reinforced by rapid technology-driven changes, threaten-ing job and economic security, as well as by rising immigration, causing worries about social protection and cultural identity. Those concerns need to be ad-dressed, especially by moderate politicians who want to wrest control from elected populist leaders.

Conclusions

Overall, the challenges facing us are multi-faceted and complicated. Dealing with them requires much more than just restoring the currently low economic growth back to the pre-2008 crisis level (difficult as that is) and reaching a “phase one” trade agreement between the US and China. What it takes is a new world order with a new policy paradigm that could address the concerns of dis-content citizens and accommodate the coexistence between two different economic and political systems moving in different directions.

As a first step, the Western liberal democracies have to get their houses in order, forging a social consensus for inclusive and more equitable growth policies, which in turn can encourage more internationally cooperative behaviors – urgently needed to tackle common critical challenges such as climate change. Until we see concrete progress on this first step, be prepared for more unsettling developments both internationally and domestically. Things will probably get worse before they can get better.

WITH THE POSTWAR TRADE AND SECURITY

INTERNATIONAL COOPERATIVE INSTITUTIONS UNDERMINED,

EUROPE WILL FIND IT VERY DIFFICULT TO CONFRONT

THOSE CHALLENGES ON ITS OWN.

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Dr. Hannes Ametsreiter CEOVodafone

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Tech for Good: My Vision of

Germany’s Digital Future

Departure and disunity. These are the two associations

that come to my mind when I think about Germany’s vision of the future. The country is reunited for 30 years.

Yet, it is still torn apart. In terms of progress and boldness.

73 PERIODICAL #21

Dr. Hannes Ametsreiter Tech for Good: My Vision of Germany’s Digital Future

I see two contrary tendencies: Some embrace the progress whereas others push it away and cling to the old ways. Has it not always been like this in the history of human-

kind? Aren’t we now experiencing a process that has always existed, that only now goes much faster? There have always been skeptics and daredevils. However, the division of soci-ety is becoming even more extreme. Because the digitization has a centrifugal force that accelerates everything and puts society in a state of dissension. I would even say that the technology debate in Germany is dominated by fear. Which arises from ignorance and uncertainty.

The “Tech Divide” study by the Vodafone Institute shows that countries such as Italy, Spain, or Bulgaria are more opti-mistic about and interested in digitization. While Germany is only in seventh place. Interestingly enough, the countries mentioned are economically worse off than Germany. But yet, some countries realized digitization is the driving force for prosperity, usually even the only chance. In Estonia and Latvia, the state is the role model for digitization.

Our task is to eliminate uncertainties through transpar-ency. We can only overcome this with a confident look ahead. I can only build something new on confidence and courage. Thus, we need to move away from fear scenarios and towards solutions that use technology to make the world a better place. Moreover, give answers to the question of how to deal with it more sustainably. Technology must not be an end in itself. Technology has improved our lives in many ways – and will improve them in the future. Technology is neither good nor bad. What matters is what we do with it.

The economy must shape digitization in such a way that it also influences people socially without excluding them from the design process. For this, we need a transparent ap-proach to data. We are on the right track with the GDPR. Many criticize it, but I believe that it is the beginning to give the individual back his or her data sovereignty. The key to trust is transparency. That is one of Europe’s strengths.

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HOW ENTHUSIASTIC ARE YOU ABOUT DIGITIZATION AND THE USE OF NEW TECHNOLOGIES COMPARED TO THE SOCIETY YOU LIVE IN?

dont’t know not so / not at all enthusiastic neutral very enthusiastic / enthusiastic

Source: “The Tech Divide: People and Society” by the Vodafone Institute

3%

43%

37%

18%

UK

1%

35%9%

53%

ESP56%

33%

10% 1%

ITA

83%

14%2%

1%

IND

86%

11%2%1%

CHN

3%

24%

38%

36%

SWE

USA4%

47%

32%

18%

GER

4%

43%

34%

19%

BGR11%1%

66%

23%


Not give way to panic, but pave the way to invent

We at Vodafone dream of a highly networked society that is inclusive. We are those who look forward to the future. Optimism helps us to shape the future. We strive to take society as a whole with us and inspire it. We must not give way to panic, but pave the way to invent.

There are countless examples of how techno-logical progress can do good. I bet we all know examples which we are experiencing every day and which we are not even aware of: Everyone has a smartphone that can do much more than the strongest computer earlier on. At the same time, there are wonderful examples, which en-courage participation in society. To name just a few: The innovations by No isolation and We Walk show how technology helps visually im-paired people to “see” and isolated people to take part in the everyday life like you and me. What is more, the world’s first clinically approved 3D-printed bionic arm by Open Bionics turns disabilities into superpowers. Furthermore, with the help of connected trackers, seniors can be easily located and emergency calls placed. All these innovators are using digital applications to create a better life for people.

To my mind, we can even take a step further: When we think about making our cities and mo-bility smart we can help to prevent accidents. Like, for example, cars that will never collide again. For example, a mobility that becomes cheaper and available to more people. In that sense, intelligent cities also contribute to con-serving resources and energy. Digitization is one of the most powerful measures our society can use to combat greenhouse gases. In large corpo-rations as well as in smart start-ups. Yet, lip ser-vice does not help. Time is pressing us to act. All

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WHICH ARE THE 3 MOST PRESSING QUESTIONS

EUROPE MUST ANSWER IN THE NEXT FIVE YEARS?

Source: “Digitising Europe Pulse” by the Vodafone Institute

Mitigating climate change

Addressing challenges posed by increased migration

Fighting poverty

Fighting diseases and improving health

Ensuring financial stability

Securing economic growth

Fighting youth unemployment

Fighting the rise of populism

Improving data security

Strengthening social cohesion

Safeguarding ethics in business and society

Increasing the participation of elderly people in society

Increasing quality of digital education for young people

46%35%34%30%28%

23%19%

13%

12%

12%

8%

8%

6%


of us. Above all, we companies must be aware of our responsibility and help to tackle it. Another study by the Vodafone Institute has also shown that climate change is the prevailing topic that drives people. This comes even before the fight against migration, poverty or diseases. Technology can help to reduce these and fight these problems: energy- saving devices in the smart home, digitalization of bureau cracy and so on. We are all part of the problem. Let us also become part of the solution. It is the small steps that make a big difference.

Digital education has no age limits

Having an excellent infrastructure is of little use if people are not able to fully exploit its potential. In my view, digitalization should be part of every curriculum. Coding should become the second or third foreign language. So does everyone have to learn how to be a programming expert? Of course not. How ever, they will need some basic programming skills to navigate the digital world. We have to teach our children to be team players instead of lone wolves. To be creative instead of narrow- minded. To embrace spontaneity instead of simply learning things off by heart. Let us teach our children to be exponential agile thinkers – because our future will depend on mental agility. Most of all though, let us teach them how to make mistakes. Because mistakes are only mistakes if you do not learn from them, especially in German classrooms. Apart from this, I strongly appeal that we should not only focus on the young generation but also support elderly people to take part in the digital everyday life. Because coding has no age limits.

Start with why

Companies must become more transparent so that digitization is not a black box. They have to enlighten about what they do and not do. Here, companies have to deliver, not just talk. As well as drive digitalization. But more importantly: compa-nies have to explain why they do what they do to inspire action. And that is ex actly why we need leadership. As Simon Sinek wisely stated: “If the leader of the orga-nization can’t clearly articulate WHY the organization exists in terms beyond its products or services, then how does he expect the employees to know WHY to come to work?” Every employee wants to see meaning in what he or she does. Only then is he or she is willing to do more.

I hope we in Germany and Europe will soon no longer have to discuss digitiza-tion, but the benefits of digitization. We must find an optimistic narrative to em-phasize the benefits of digitization and thereby encourage action to use new tech-nologies for good rather than fear them. For this, we need a vision that people can follow ratio nally and emotionally. Lastly, we must not only discuss things, but we must also have the guts to implement them. Let us get started.

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THE STERN STEWART INSTITUTE ANNUAL SUMMIT 2019

REVIEW

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There is much to suggest that a phase is currently dawning in which more and more fundamental questions are being asked: How long will our planet as we know it continue to exist? In

which direction is humanity as a whole developing? Can we imagine a positive development at all, in view of daily new horror reports? (Spoiler alert: more than 36% of the participants in this year’s survey are just that optimistic).

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One issue that has been on our minds for many years now, without ever giving rise to new interesting aspects, is the ques-tion of how to increase the agility of our companies, which is still regarded by large companies in particular as a poten-tial risk for their complex company struc-ture built up over many years. This wait-and-see attitude is also reflected in the figures of our poll, in which the majority of respondents (38.57%) stated that less than 10% of their employees still work in agile projects. 31.43% re-sponded that this was true for up to a quarter of their staff and 30% could say this for more than half of their staff (see Figure 1). But already in the first presentations it became clear that agility is no magic work, but that it is also about the right methodology and the right handling of the employees. It was also pointed out that an agile business is not an obstacle to the sustainable development of the company, but rather the most important prerequisite for it. Agility must also not be seen as a blan-ket solution for all pending problems, especially since there will always be industries that are more risk-averse than others due to their business model (such as insurance companies).

What share of your staff works in agile projects rather than rigid line functions?

<10%

38,57%<25%

31,43%>50%

30,00%None

0,00%Figure 1

AGILITY VS. COMPLEXITY –HOW TO SPEED UP DECISIONS AND ACTIONS ONCE AND FOR ALL

Review The Stern Stewart Institute Annual Summit 2019

As it is a good tradition at the annual meeting of the Stern Stewart Institute, we want to try again this year to gain something like a snapshot of the present. What do we ex-pect from the future and how does this expectation differ from last year? In addition to a number of top-ics that we have dealt with at several previous meetings, this year was also about tak-ing a critical look at our own actions and jointly considering how improvements can be achieved in areas such as data protection and the promotion of elites, which advance our societies as a whole. The re-sults of our survey, but above all the exciting and, as always, lively discussions, showed once again the enormous range of existing opinions and the value of such an exchange of ideas.

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Entrepreneurship means risk: do people beyond the C-level really want to participate in taking on that risk?

No59,38% Yes40,63%Figure 2


As far as methodology is concerned, it is crucial to define clear responsibilities and clearly define in which areas agile action should be taken and in which areas not, in order to avoid unnec-essary risks. This cannot work if traditional, too steep hierar-chies are maintained at the same time. Instead, it will be neces-sary to redefine the old mentoring if necessary, in the sense that young talents are increasingly called upon to teach senior management.At the same time, however, it must always be asked whether the willingness to take risks, which is an essential part of entrepre-neurial spirit, is also sufficiently present below C-level manage-ment. Significantly more than half of Poll participants (59.38%) deny this, while only 40.63% recognize this characteristic in their company (see Figure 2). These risks will also lead to failure time and again; however, that this failure does not lead to a veri-table catastrophe, but to a learning effect, must be ensured by a healthy error culture.

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Artificial Intelligence – hardly any other topic is able to electrify the financial world in such a way at present. The multitude of different aspects touching on this question contributes to this. In addition to the technical and economic issues, these are above all still unsolved ethical problems that need to be solved. Autonomously driving cars, personal health data and many other topics are touched upon here.

Even though all these issues were openly addressed in the discussions, there seems to be a consensus that the final issues are technical issues that are as manageable as many other technical problems have been in the past. As long as the premise applies that technology must always serve man and never become a pure end in itself, all remaining problems should be solved. To underline this, some fascinating application areas were presented in which AI is already being used with great benefit, such as the identification of trees to be felled in the Amazon rainforest or the improvement of medi-cal diagnostics.What is certain is that there are hardly any companies left that consider AI a mere hype with no influence on their business (see Figure 3). More than half (56.25%) consider artificial intelligence highly relevant to their busi-ness processes or business model.

MIND-BLOWING –POTENTIAL MEGA AI APPLICATIONS TO HIT US SOON

What is the impact of AI for your business processes or business model?

It is highly relevant

56,25%

It is somewhat relevant

34,38%

It’s only a hype, there is no impact

9,38%

Figure 3


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The Brexit, this seemingly endless political epic, which Europeans – but not only Euro-peans – have been following for years with wonder and irritation, cannot go unnoticed at this year’s Summit. And it is still difficult to order all the political interests and assess the various economic implications. Irrespective of the final outcome of the Brexit dra-ma, however, the participants in the discussion endeavoured to reflect on a possible reform of the European Union in line with the theme of the workshop.Already in the opening speech, a number of far-reaching ideas were found, such as a possible relocation of the EU headquarters to Prague or a radical reform of the veto right. Among the issues most raised in the discussion was the question of a better ed-ucation policy and the strengthening of citizens’ cohesion and identification with the EU. There was broad agreement on the lack of proximity of the EU institutions to citizens. As far as the concrete effects to be expected from a hard Brexit are concerned, gloomy forecasts were heard, both with regard to the economic consequences and the consequences for the political culture of the EU area. But as much as there was agreement among the participants in the discussion about the negative effects of a hard brexit, there was also disagreement about how the situation in Great Britain would look in the medium term. For example, 38.82% of respondents to our poll believe it is likely that the United Kingdom will be back on the side of the other EU countries in five years’ time, while an equal pro-portion see the British in an isolated role on the side-lines. Significantly fewer Poll participants (22,35%) expect a strong transatlantic alliance that Britain will have formed (see Figure 4)

LIFE AFTER BREXIT – WHAT HAS TO CHANGE IN EUROPE TO AVOID A FUTURE AS THE LIVING DEAD?

5 years down the road: Where will Britain be?

Back in Europe

38,82%

Declined stand-alone position

38,82%

Strong trans-atlantic partnership

22,35%Figure 4


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Almost 30 years after the beginnings of the commercial Internet, we cannot avoid a so-bering realization: As high as expectations were at the time when the revolutionary po-tential of this technology began to emerge, the negative aspects of the Internet have moved into focus today: the rapid spread of fake news, political agitation and incitement, the influence of foreign governments on elections and much more. A gigantic reservoir of knowledge on the one hand and an incubator for all kinds of sinister activities from cyber-bullying to the arms and drugs trade – all this is the Internet at the same time.But what does this mean for our political system and for our society? Even if it may be a truism in the meantime, it is worth pointing out the central importance of education, which must enable citizens to deal more competently with the social media and more critically with reports in news portals – a hint that has been taken up by several of our discussants. It was also pointed out that confidence in the power of algorithms alone would not help us in these efforts. Critical thinking is like a muscle that slackens if it is not trained again and again.This educational task, which should be a central concern of the European Union, according to some participants, is made more difficult by the still too strong focus on an enlargement of the Community. Instead, a reduction in bureaucracy should lead to greater proximity to citizens and greater interconnectedness among the European countries.

Looking back today on the discussions that took place in the 1980s on the subject of state surveillance of pri-vate individuals and recall-ing the immense protests that any kind of census could provoke, it seems al-most surreal today how much personal data many people voluntarily disclose today.

Does Europe invest enough to protect its data?

Yes

No

17,95%

82,05%

Figure 5

NO BEAUTY, ONLY BEASTS? DOES IT MATTER IF SILICON VALLEY, NSA OR CHINA OWNS ALL DATA?

DEMOCRACY 4.0 – HOW TO BUILD A ROBUST SYSTEM IN THE AGE OF POPULISM, FAKE NEWS AND MEDIA TECHNOLOGY?


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What is the bigger problem?

Elites are too detached

Elites do not take responsibility 44,09%55,91%

Figure 6

Are our elites too out of touch? Is it really the case that they are less and less willing to take responsibili-ty? In the discussion on this topic, there was quite a lot of unanimity

that there is a lot of catching up to do, both in terms of appearance and in terms of assuming responsibility. In our poll more than 55% of the respon-dents said that they consider this lack of assumption of responsibility to be the biggest problem of our elites, the rest think that it is too much detach-ment (see Figure 6).There were therefore less differences of opinion in the diagnosis than in the question of how to react appropriately to the findings. One suggestion was a kind of compulsory social year for all school leavers; another was to personally take on someone whose social background made it harder for them to move forward without support. This could also serve as a role model for others, until a proper network of supporters is formed, through which such supporters could find an easier way into careers. On the other hand, systems such as those in China, where it is possible to collect points through “desirable social behaviour”, were rejected. This is hardly compat-ible with our Western ideas of liberalism and personal freedom. On the other hand, there was agreement among the participants that we are dealing here with a problem whose solution requires an early solution so that the gap between privileged and underprivileged people does not become too wide.

THE FUTURE OF ELITES – DETACHED AND UNWILLING TO TAKE RESPONSIBILITY?

But it is also about elementary security issues, both with regard to future pay-ment transactions and the question of possible manipulation of elections. And here it can very well be seen as an alarm signal that more than 80% of the partici-pants in our survey are of the opinion that too little is invested in the protection of our data in Europe (82.05%; see Figure 5) And it can be assumed that this does not only refer to government spending, but also to corporate spending. In the discussion, all aspects of the topic were addressed, whereby not only differ-ent technical solutions for the existing se-curity problems were mentioned, but also the co-responsibility of each individual was pointed out, who so far still deals too carelessly with his data. Because, this was also noted, pure technology is nei-ther good nor bad. Rather, in the future it will be more and more important to han-dle it responsibly and cautiously.

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Imprint

About this publicationThe periodical of the Stern Stewart Institute

21st Edition, February 2020Published half-yearly

Publisher and Chief EditorGerhard Nenning

Board of The Stern Stewart InstituteMarkus Pertl Gerhard Nenning

Managing EditorAnja Deucker

Editorial SupportCharlotte Kotowski

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PrintingIndustrie-Druck Haas

The opinions, beliefs and viewpoints expressed by the various authors in this publication do not necessarily reflect the opinions, beliefs and viewpoints of the editorial staff or of The Stern Stewart Institute. The publisher accepts no responsibility for errors, omissions or the consequences thereof.

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Picture Creditsistockphoto / Maxiphoto (p. 8), FangXiaNuo (p. 10/11), narvikk (p. 14/15), xmocb (p. 18/19), James_Gabbert (p. 24/25), Ivan Mattioli (p. 36/37), Rainer Lesniewski (p. 38), tadamichi (p. 42/43), wundervisuals (p. 44/45), FotografiaBasica (p. 48), yodiyim (p. 52/53), BrendanHunter (p. 59), gremlin (p. 62/63), mfhiatt (p. 68/69), lissart (p. 70), martinwimmer (p. 74/75);shutterstock / Tudorean Fotoschuting (p. 50/51)All other images are property of the authors or companies.Illustrations by Madlen Bereuter for KW NEUN Grafikagentur.

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