Carlos Costa

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On November 20, 2016, Carlos Costa commented on Omada: preventing diabetes through digital therapeutics :

Edmundo, tha’s a great discussion. I am sure there are a lot of opportunities for prevention, regardless of factors such as age, income, etc. We all know that many chronic diseases are the main cause for premature deaths among citizens around the world, especially in emerging economies, where the debate about prevention is still in early stages.
I think that companies such as Omada can play an active role not only on raising awareness around prevention but also on directly helping people to improve their health.
However, I am confident that governments should be part of this process and enable such initiatives to flourish at a larger scale. As you mentioned, there are high costs for scaling this therapeutic program, and the public officials could help to reduce the burden by, for example, providing tax exemptions for companies like Omada.

On November 20, 2016, Carlos Costa commented on AccorHotels: Battling against Online Travel Agents :

Another interesting discussing is how this new strategy of allowing independent hotels to be listed on its website will affect Accor’s margins. Inevitably, the more the company provides travelers with more options, the more visits to its website Accor can expect. However, there is a risk of cannibalization, since Accor’s existing customers will be more incentivized to book hotels from outside the chain.
Additionally, I think we should discuss about breakthrough innovation aimed at optimizing the hotels physical space. For example, the interior space of hotels, particularly in high-density urban centers around the world, has become too expensive to be static and unresponsive. Within this context, some companies are designing dynamic environments that act and feel as though they are substantially larger. By doing this, hotels can significantly reducing their costs and as a consequence, provide customers a great experience at lower prices.

On November 20, 2016, Carlos Costa commented on TED – A Company Worth Spreading :

I am a huge fan of TED. Its short and powerful talks form a great way to spreading ideas around some of the most important topics in the world, ranging from science to education to politics. I agree that as a next step TED should also focus on knowledge creation, but I think that the organization has been making some efforts towards this goal. For example, the TEDx events help share ideas in diverse and multiple communities around the world, having their local people as protagonists.
However, I think that TED could provide a more dynamic iteration between the speakers and the fans around the world. For example, I think that the company should foster a debate around the top watched videos, capturing the ideas and perspectives of the public. This feedback would enrich the discussion at a large scale.

That’s an interesting discussion. I do agree that social media data could fill holes in the data available to credit scoring particularly where there is little other information about a person. However, since there are some major risks associated with this strategy, it is important to assess the efficiency of this new credit scoring system and compare its predictive power to the traditional methods.
In my opinion, a good way to do this is by taking a group of people with credit history and a heavy use of social media, and assess their credit risk under both methods. Within this context, we would have a solid and objective baseline, which would serve as a parameter to analyze the accuracy of each model. After a year, I would take the default rate of this sample portfolio and compare to the expected default of each method.
Anyways, this is a very valid discussion. The Fin Tech industry will definitely play a big role in the banking industry in the coming years!

On November 20, 2016, Carlos Costa commented on Can Pearson shape the future of Education? :

Nico, this is a great article! Having worked with education for a while, I saw very closely the magnitude in which the digital era is reshaping the currently education landscape.
However, I think that since the pace of such transformation greatly varies across different countries, and that’s why Pearson is still making investments based on the “legacy model” you mentioned. For example, in 2013 Pearson acquired the Multi Group, owner of the largest chain of English schools in Brazil. The idea behind this acquisition was capturing the emerging middle class individuals who want to learn the language and who still demand the “traditional teaching method”. The point is that since Brazil is getting more and more connected to the digital world, the prospects of this investment do not seem to be very attractive in the long run.
Another interesting question that your article raises is: how will governments adapt to such transformation? For example, Brazil has approximately 3 million teachers, and most of them aren’t well prepared to teach their students through the use of technology. Thus, this fact creates some barriers (at least in the short term) for companies such as Pearson to penetrate in emerging economies at large scale.
Anyways, the disruption is happening and the fact is that the education industry will be completely reshaped. The only doubt resides on when and at what pace.

On November 7, 2016, Carlos Costa commented on Starbucks: Practicing What It Preaches When It Comes to Climate Change? :

Jasper, that’s a great discussion. First of all, I want to say that in my opinion, one good way to assess the greenhouse gas emissions by Starbucks is looking at its GHG emissions per store. As you mentioned above, one of the reasons that drove the increase in the company’s emissions was the number of new stores, but this fact by itself doesn’t necessarily imply that Starbucks is not trying to adopt sustainable practices.
In addition to that, another interesting factor you brought relates to the tension between profits and sustainability. As Eric commented above, it is important to discuss the main reasons behind the Starbucks initiatives towards the support of social responsibility practices. Does the company have a deep-held sense of social responsibility or it just wants to strengthen its appeal to customers who care about these issues? Within this context, I think that the government can play an active role on monitoring the levels of GHG emissions in this industry and requiring certain standards that will protect the environment against the climate change effects.
Great discussion. Thanks for bringing this topic to the table!

I think that competitors working together to overcome the challenges imposed by the climate change sends a very powerful message to the whole industry. For example, back to 2004, Coca-Cola joined with Unilever and McDonald´s to promote the sales of refrigeration units free of fluorinated gases. This new product could push for new regulatory frameworks, and ultimately benefit the companies involved in the partnership. Another example backs to 2011, when Unilever and P&G partnered to develop lower impact laundry detergents. This partnership, however, was considered to have breached the European anti-trust laws, according to “The Guardian”.
In order to avoid such issues, it is important to have respected third parties (ex.: federal agencies, NGOs, etc.) involved in the negotiations to guarantee that the companies works toward the greater good, keeping the level playing field in the competitive environment.

On November 6, 2016, Carlos Costa commented on Aramco: Oil Giant Feels the Heat :

Ahmad, interesting article. I am sure that the effects of the climate change go beyond the specific oil producers and affect whole economies. That´s the case of countries such as Venezuela, Russia, Brazil and Angola, for example. As you said, Aramco is able to produce oil at a cost of $5 per barrel and this operational efficiency allows the company to undertake several initiatives to mitigate the GHG emissions. However, some of the other countries mentioned above are not able to achieve such performance and, as a consequence, they need to innovate. For example, Petrobras – the Brazilian national oil company – just developed the Technological Program for Climate Change Mitigation (Proclima), which helped the company to reduce CO2 emissions by 11% in one year whereas didn´t require large investments. In addition to that, Petrobras is also sponsoring some environmental projects designed for water conservation, carbon fixation, and emission mitigation. Those projects contribute to create an environmental friendly culture in the country that is expected to generate good results in the future. Great discussion.

David, this in a very interesting article. From one perspective, citizens around the globe (especially in the US, considering the facts in the article) are constantly at risk of losing their properties due to natural disasters, which are more likely to occur in case the climate change effects are not mitigated. On the other hand, as you said, insuring flood risk is extremely challenging because of the complexities on forecasting the outcomes associated with climate changes and because of the massive premium needed to cover for potential losses.
I think that one alternative to reduce the financial burden on the NFIP is to create a national contribution that would require each household (excluding those citizens in very poor financial condition) to collect a monthly payment aimed at covering for the costs associated with natural disasters. According to the results of the last Census, the United States has approximately 115 million households. If on average each household paid $ 20 per month, the federal government could collect almost $ 30 billion annually, an amount that could offset the NFIP current losses. I know this recommendation also carries several risks and limitations, but I think this is a debate that governments around the world should at least take into consideration.

On November 6, 2016, Carlos Costa commented on Tesla: Accelerating the Transition to Sustainable Energy :

Edmundo, this is indeed a very important topic. Major governments around the globe are struggling on how to reduce the emissions of GHG into the atmosphere and having companies such as Tesla contributes to create a viable alternative for them.
However, as you said, one big challenge for companies such as Tesla is having the necessary scale and incentives to reduce costs and guarantee that the new sustainable products are accessible on the mass market. Within this context, governments can play an active role on providing the necessary conditions to foster these innovative products (i.e.: electric cars) by offering tax incentives for example.
On the other hand, I think that initiative such as “Hoy no Circula” are important not only to reduce the emissions of gases such as CO2 but also to create the culture of environmental protection. However, it is hard to imagine how such initiative could be implemented in large scale around the world given the fact that most of the public transportation systems (especially in developing countries) do not appear as a viable alternative for the citizens. Before requiring the citizens to not use their cars, governments should give them alternative options for circulation.
Anyways, this issue should be a top priority on the agenda of any government. Thanks for bringing this topic into discussion