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(#28) Strategy and how geopolitics will shape this decade and probably the next ones too
The end of globalism. We are seeing in front of our eyes how the economic shifts are changing. This is an opportunity once in a century for many of us, especially for countries and companies.
🇪🇺 EU can’t compete with the USA.
In 2008 these two economies were more or less on par, now the gap has widened so much that should raise some alarms in each country and, of course, in Brussels. LINK
What can be done?
2/ Allow the entry and exit easily of companies
3/ Reduce taxes, hence restructure the state
4/ Allow educated emigration that can easily be integrated
5/ Develop cheap energy (e.g. nuclear energy)
Nothing sophisticated, after all. The USA needs strong business and military partners and the EU proves that is not there yet.
The re-industrialization of the US: Massive new investment is pouring into US heavy industry, shaping the economic landscape for years to come.
The 2010s were a period of chronic underinvestment. Now, billions are flooding into big, expensive megaprojects to make batteries, solar cells, semiconductors & much more. The boom is fueled by hundreds of billions of dollars from President Biden's Inflation Reduction Act. Why we don’t have something of this magnitude in the EU? LINK
WSJ: “Germany Is Dragging Down Europe’s Economy”. LINK
Indeed, here are my comments:
1/ “Manufacturing accounted for 19% of Germany’s gross domestic product in 2021, roughly twice as much as in the U.S., the U.K., or France, according to the Organization for Economic Cooperation and Development” - high energy prices make a large quantity of the products expensive, hence uncompetitive. Now you can understand why Europe never had a common energy policy and why disconnecting from cheap Russian gas is the end for many businesses in the EU (including for those producing parts for the German companies)
2/ Germany is totally unprepared for the skillset of the future: software. Why? Because software ate the world. LINK
3/ Germany’s economy is unique in the sense that is developed to export, making it fragile to any global trends. The internal market will never compensate for the eventual disruptions globally. (ie. including the EU market)
🇨🇳 China will lead the EV trend
1/ With access to talent (ie. new skillset = software), raw materials (ie. rare minerals), and other hidden subsidies in the supply chain the country is best positioned to outcompete the Japanese and German manufacturers. LINK
2/ China added 649,000 public chargers last year, more than 70% of what was installed globally. LINK
3/ BYD is one of China’s ‘success stories’. What was its strategy? Total control of its supply chain. LINK
4/ China is apparently banning the export of graphite to Sweden. How can you compete in a field if you don’t secure your supply chain? EV is bringing so many unseen disruptions. LINK
My two cents: This decade will be India’s decade. The country has already acknowledged this status and is preparing for it…together with 6 large companies to drive this change. LINK
Twitter’s new strategy
According to Reuters, Twitter just shared plans to revamp its business at a private investor's presentation, where both Elon and Linda Yaccarino attended. Here are my thoughts:
1/ Transition to video + creators (e.g. Tucker Carlson shows)
2/ Invest in payments: becoming a “SuperApp”
3/ Ads will remain the backbone of Twitter’s business model. LINK
Big Tech’s Biggest Bets (Or What It Takes to Build a Billion-User Platform)
Matthew Ball has a great analysis of how to build a billion-user platform. This is a must-read for every business leader. LINK
EVs and software
VW’s boss discovered the hot water: “According to Volkswagen Group CEO Oliver Blume, Audi lags behind its rivals, and software is to blame”.
1/ Integrating a new skillset into the organization shouldn’t be left to engineers. LINK
2/ You can see the level that Tesla has reached. LINK
Conclusion: except for major (really major) players, everybody else will license their software from Tesla, Apple, and Googe. (not sure about Tesla’s willingness to license)
With all their devices subsided the only way for the company to make money is through a subscription: Meta Quest+ ($7.99 / month)
What’s in it? Games?
Was this the plan from the beginning? Yes, but not like this. In the end, you have to be realistic with you as a company and what’s really doable outside your bubble (ie. bubble = Silicon Valley). LINK
Marc Andreessen on the podcast
From the famous authors of “Software is Eating the world” to “It’s Time to build”, Andreessen has been one of the most respected voices in Silicon Valley. I’ve spent 3 hours listening to and learning some new stuff: from history to AI (of course) to China and capitalism. Great listening. A must listen. LINK
Going after the top 1%
Canada is going after the H-1B USA visa holders, offering 3 years of work permits. Why we don’t have a strategy at the EU level for these workers? They are some of the brightest minds and are looking for high-end jobs. LINK
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AI video-to-video translation. LINK
Lex Friedman had Stephen Wolfram invited on his podcast. Heavy topics, from Chat GPT to dangers of AI and the future of education. Stephen is an old-school OG. LINK
“China now generates 650 terawatt-hours of wind electricity, almost twice as much as America. It provides a third of the world’s solar power, 330 terawatt-hours, more than twice as much as the US.“ LINK
Ericsson mobile data traffic forecast
1/ 5% of users consume over 50 GB ('extreme') a month and drive 45% of mobile data traffic. This reminded me of Assos where 6% of the clients’ returns accounted for a 100 million GBP loss.
2/ 65% subside the 15% most heavy users. LINK
💰In 2022, in the EU, actual individual consumption (AIC) per capita, expressed in purchasing power standards (PPS), varied from 67% of the EU average in 🇧🇬Bulgaria to 138% in 🇱🇺Luxembourg.
Romania is at 88% of the EU average surpassing countries like Spain, Portugal, Czech Republic, Hungary, and others. LINK
The most common blood types around the world. LINK
Almost 40% of the world’s installed software is unlicensed. LINK
Chris Dixon, an OG when it comes to crypto, has written a book on this topic. Soon to be published. LINK
Canadian wildfires are sending smoke to Europe. LINK
Most cities plant only male trees because it’s expensive to clear up the fruit that falls from female trees. On the other hand, male trees release pollen…LINK
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