Thanks for covering the Trump administration’s desire to shake-up NAFTA and how it may affect Ford, one of America’s most respected manufacturers. One of the challenges behind the notion that companies will adhere to US-specific content and origin requirements is that smaller and medium-sized suppliers to the auto companies may not be able to remain compliant (https://www.reuters.com/article/us-trade-nafta-autos/auto-groups-side-with-canada-mexico-on-nafta-origin-rules-idUSKCN1AX2R9). This could be due a lack of competencies or just due to the cost-prohibitive nature of production in the US for certain components.
Another consideration for the US auto industry is the reaction that foreign countries will have to the US’ protectionist policies. Today ~2 million cars made in the US are sold abroad, out of a total production capacity in the US of 12.2 million (https://www.uschamber.com/above-the-fold/offshoring-american-jobs-the-risk-posed-tighter-rules-origin-nafta). With the increasing wealth creation in developing markets it seems unclear how US car makers would benefit from the US government ruffling feathers of governments where they export. A long-term view is required in order for Ford and other US auto companies to succeed, and emerging markets will likely play a prominent role in future revenue growth.
Charlie, thanks for covering Brexit, and in particular the effects it will have on one of Britain’s most revered brands. Having grown up in the UK, your essay piqued my interest in uncovering what the potential impacts Brexit may have on smaller retailers versus a behemoth such as Tesco. Initial sentiment seems largely positive. In fact, it appears as if many small businesses are investing in growth in a dynamic and uncertain environment. As of October 2016, applications for small business loans had increased 132 percent YoY (http://www.telegraph.co.uk/connect/small-business/how-have-small-businesses-fared-since-brexit/). This suggests that while smaller businesses may be feeling the pressure of currency devaluation, they do believe that in order to survive they need to invest in growth.
The other side of the same coin suggests that perhaps SME owners do not fully understand the implications of Brexit. 55% of SME participants in a recent BCG report stated that they had so far made no plans with regards to Brexit, and that their banks will still continue to lend to them in a post-Brexit world (http://www.telegraph.co.uk/business/2017/07/04/small-businesses-likely-hit-hardest-brexit-disruption/).
So while there may be continued optimism, there still exists a high level of opacity particular for smaller market participants. It may be that the larger corporations, who are in constant dialog with policy makers and legislators, may be best prepared for the hard Brexit that Theresa May is leading Britain towards.
I really enjoyed this essay as it touches on how GE has had to shift its business model from effectively financing and selling industrial goods to selling industrial goods and collecting data. This PAAS model is furthered by the focus of making these industrial tools “smart” and more efficient. Not only will this lead to lower energy consumption, but it will also lead to less under-utilized labor. It can be a win-win for both GE and its customers. In fact, according to estimates, productivity gains from industrial IoT may add up to $10 trillion of GDP in the US over the next several years (https://www.ge.com/reports/ge-digital-positioned-lead-industrial-internet-things-2/).
In light of the shifting priorities and focus on data-driven industrial products, GE may have to think about what types of talent they are attracting to the firm. It seems to me that the types of people who may have been good fits for GE 20 years ago are not the type of technologists that are needed in the connected 21st-century world. GE will have to compete with top tech companies for talent, and I believe they are well-positioned to do so if they continue to focus on IoT as that is the future of their business.
This article was eye-opening with regards to some very real impacts climate change is having on the supply of coffee beans. While it may seem unclear what actions Starbucks needs to take, it appears that Starbucks is indeed focused on trying a variety of strategies out. For example, one strategy Starbucks seems to be employing is creating a gene bank; this would maintain the biodiversity of the specific coffee . Furthermore, Starbucks is cataloging information on specific beans’ yields, pest resistance and other related factors. This will allow them to track data and be more adaptive when choosing which beans to grow and in which markets (https://www.nytimes.com/2016/09/23/science/climate-change-threatens-worlds-coffee-supply-report-says.html). Ultimately, the problem that Starbucks is facing is one that all major food and beverage suppliers that rely on basic commodities as primary inputs have to deal with. It will be interesting to see what methods they can employ in order to avoid selling inferior or more expensive coffee, due to a challenged supply chain.
I found this to be a particularly unique use case of blockchain, given much of the discussions we read about tend to deal with cryptocurrency and money transfers, etc. While I agree that blockchain will certainly play a valuable role in verifying the transfer of artwork, I do believe that the social element that Sotheby’s and other auction houses provide will still remain relevant. To many of the points raised in the comments, individual buyers, when making multi-million dollar purchase decisions, will want to consult with art experts and physically inspect a piece before bidding on it. Therefore, I think the value of Sotheby’s will actually increase; the only aspect that changes is how the transaction is recorded. Building off of this, it appears to me that the common thread for all use cases for blockchain is this notion of eliminating the middleman in all transactions. This works to some extent, but loan officers, lawyers, and art experts will still be required to conduct “analysis” that cannot necessarily be done by a computer. Therefore, institutions such as banks, auction houses and law firms will become even more specialized and more efficient.
I enjoyed reading your article and wanted to build on Mo’s comments a little bit further on the global nature of the avocado shortage issue. From a supply perspective, Europe is paying the price for Mexico’s drought, albeit in an indirect way. In fact, Europe’s main supplier of avocado’s is not Mexico but Peru. In light of the shortage for avocados in the US due to the drought in Mexico and even California, supply from Peru has diverted to the US. This presents a clear issue for restaurants and grocery stores, particularly in the UK where demand has been growing ~30% over the last few years (https://www.ft.com/content/d99e786c-3011-11e7-9555-23ef563ecf9a). It will be interesting to see how the supply/demand dynamics play out on the global stage over the next several months.