Author: Ben Debski

Japan becomes the first country with more electric car chargers than petrol stations

Posted on by Ben Debski

Japan has become the first country in the world to boast more electric car charging points than petrol stations. The Asian nation now has 40,000 places to charge an electric vehicle, but only 35,000 traditional petrol stations.

While some of the charging points are privately owned, the remarkable growth in their number has a lot to do with Japanese government subsidies for electric cars. This spurred a large-scale uptake, which in turn made the provision of charging points a viable business offering.

New electric vehicles will cost the same as their petrol-powered counterparts by 2022

As Nissan’s CFO Joseph Peter told The Guardian: “An important element of the continued market growth is the development of the charging infrastructure”, raising the point that in other countries, customers may be put off buying electric cars by the lack of a reliable charging infrastructure. In other words, nobody wants to run out charge in the middle of nowhere.

According to Bloomberg statistics, new electric vehicles will cost the same as their petrol-powered counterparts by 2022. This is predicted to be, according to Bloomberg, “the point of liftoff for sales”. However, this only applies to new cars, as it will be at least another 10 years before electric vehicles have a second-hand market to rival that of traditional cars.

And, in any case, whether or not electric cars can begin to outsell older models, the true tipping point will be when a truly sustainable form of energy production is rolled out to produce the electricity they use in the first place.

Saudi Arabia dismisses Minister of Petroleum and Mineral Resources

Posted on by Ben Debski

Following 20 years of service, Saudi Arabia has fired its powerful Minister of Petroleum and Mineral Resources, Ali al-Naimi. Recognised as one of the oil industry’s most powerful figures, Al-Naimi was often seen as having the ability to singlehandedly control Saudi output and, by extension, the global price of the commodity.

He played a vital role in Saudi Arabia maintaining high levels of production in the face of the gradual and sustained fall in oil prices that started in 2014. However, his dismissal being part of the decision to reverse this policy seems unlikely, as his successor, Khalid al-Falih, is already a member of the inner circle of oil decision making in the country, as well as being chairman of state firm Saudi Arabian Oil Co.

Al-Naimi was often seen as having the ability to singlehandedly control Saudi output and, by extension, the global price of the commodity

Speaking to the The Wall Street Journal, Jason Bordoff, Director of Columbia University’s Center on Global Energy Policy, said: “Khalid al-Falih has been a key part of the team making these decisions for many years”, and therefore his appointment “represents a continuation of the path they’ve been on.”

At 80 years old, Al-Naimi had already hinted at his wish to retire in the near future. The minister’s dismissal from his role – which he has held since 1995 – also comes amid a wider ministerial reshuffle. His own ministry has also been restructured to become the Ministry of Energy, Industry and Mineral Resources. The broadening of the ministries portfolio should allow Saudi Arabia to better coordinate a joint strategy on both domestic energy and oil exports.

Doha meeting ends with no deal

Posted on by Ben Debski

A group of the world’s biggest oil producers failed to reach an agreement to freeze output on Sunday April 17, at a meeting in Doha. The meeting, which included officials from countries representing nearly half of the world’s oil supply, was widely expected to reach some sort of compromise on freezing output, in order to stabilise the past two years of soft oil prices.

Saudi Arabia’s tough line towards Iran would be the primary cause of an agreement failing to be reached. Iran had already decided not to send a representative to the meeting, while Saudi Arabia had signalled the day before that it no longer believed that Iran should be subject to any exceptions from freezing production.

Iran – following the onset of tough sanctions in 2012 that saw its ability to export oil severely curtailed – had lost significant market share over the past few years. Now that Iran has had many of the sanctions against it lifted, it hopes to increase its daily production by 700,000 barrels of oil per day.

Agreeing to any deal to freeze production would have made this impossible, meaning that Iran had hoped to be allowed some exemption, in order to recover its oil industry. While sources had previously suggested that the Saudis were open to the idea, at the meeting it was made clear that it was no longer prepared to allow concessions for Iran, dashing any hope of an agreement being reached.

Both Iran and attendees of the Doha meeting expressed disappointment. Oil producers had hoped that the price freeze would be the first step to a cut in production, helping to raise prices after an almost 70 percent decline since 2014 – which has wreaked havoc on the state budgets of many producer nations.

According to the Financial Times – Falah Alamri – the representative for Iraq, noted that his country was “very very disappointed”, and that “This will affect the [oil] price and our earnings. We wanted a deal.” Russia’s Oil Minister Alexander Novak, also noted his surprise at the change in demands from OPEC members in attendance of the meeting.

Markets were also dismayed by the decision, setting off a fall for both Brent crude and the West Texas Intermediate prices, each by over four percent. As a UBS economic research roundup note pointed out: “Oil agreements are often more honoured in the breach than in the practice, but oil markets are disappointed producers have not set themselves a target to aim at.”

Groundbreaking LSD study opens up new medical and philosophical applications

Posted on by Ben Debski

Lysergic acid diethylamide, more commonly known by the abbreviated name LSD, gained massive popularity as a recreational drug in the 60s. Among anecdotal reports of ‘bad trips’ and users feeling like they could fly, a common experiential thread was a sense of heightened creativity and a feeling of ‘oneness’ with the wider universe.

Such claims are routinely dismissed, either as hippy nonsense or unworthy of further exploration due to the seriousness of the drug’s dangers, particularly the regularly cited link between LSD and schizophrenia.

Now, however, a new study, published in the journal European Neuropsychopharmacology, could completely overhaul the drug’s image, explaining the recreational experience in scientific terms and demonstrating the usefulness of controlled doses in the treatment of psychiatric conditions. MRI scans of the brains of volunteers were taken by Professor David Nutt and his team – some of the volunteers were given LSD, others a placebo. The scans revealed a drastic change in the internal brain communications of the former group.

Effectively, the drug caused the barriers between three segregated networks of the brain – those relating to paying current attention, problem solving, and reflecting on the past and future – to relax. As The Guardian reported: “The impact of LSD was to diminish connections within each of these networks, relaxing the bonds that kept them intact and distinct, while increasing the cross-talk among them. In other words, the normal etiquette of the brain requires segregation among networks that have different functions, and that etiquette was blown to bits.”

The results are hugely significant – Professor Nutt clamed that “this is to neuroscience what the Higgs boson was to particle physics”, according to The Guardian.

Effectively, the drug caused the barriers between three segregated networks of the brain – those relating to paying current attention, problem solving, and reflecting on the past and future – to relax

In step with the widely known effects of LSD, the non-placebo volunteers noted a significant amount of ‘ego dissolution’, i.e. a loss of individuality and sense of the unique self, often described anecdotally as the aforementioned sense of oneness with existence. That this sensation could be explained by a relaxation of the brain’s natural segregations is a huge step forward in our understanding of human consciousness, with applications both medical and philosophical.

Indeed, the research team noted that controlled use of the effect could help knock the brain out of the cyclical thought patterns that characterise issues such as depression. PhD student Mendel Kaelen observed: “A major focus for future research is how we can use the knowledge…to develop more effective therapeutic approaches for treatments such as depression; for example, music-listening and LSD may be a powerful therapeutic combination if provided in the right way”, according to Imperial College London.

Peabody files for Chapter 11 bankruptcy as coal industry continues to suffer

Posted on by Ben Debski

The world’s largest coal mining company, Peabody Energy, filed for Chapter 11 bankruptcy on April 13, amid insurmountable pressure in the commodities market. With coal prices continuing to plummet, in addition to the group’s $10.1bn level of debt, St Louis-headquartered Peabody had little choice but to seek bankruptcy protection and reorganise its US operations.

While Peabody’s Australian assets are not including in the filings, much of its debt has resulted from an imprudent expansion in Australia, which involved the $4bn acquisition of MacArthur Coal in 2011.

As indicated in a company statement, the decision was made in order to reduce overall debt and improve liquidity in the hope of stabilising the business for the long term. Despite the move, the company has indicated that both its mines and offices will continue functioning normally.

While Peabody’s Australian assets are not including in the filings, much of its debt has resulted from an imprudent expansion in Australia, which involved the $4bn acquisition of MacArthur Coal in 2011.

That said, many of the problems facing the company are industry-wide, and Peabody is actually the latest in a string of coal miners to have filed for Chapter 11 bankruptcy recently, including Arch Coal, Alpha Natural Resources, Patriot Coal and Walter Energy. According to the Mine Safety and Health Administration, since 2010, these companies have collectively lost a stock market value of $30bn, while 31,000 people have lost their jobs since 2009.

This trend correlates with a series of deep and lasting changes facing the coal industry, including the growing popularity of natural gas, declining steel production and more stringent environmental regulations. As such, although reorganisation and bankruptcy may help coal miners such as Peabody for the time being, whether the industry as a whole is sustainable in the long-term future is another question entirely.

Facebook unveils Messenger chatbots for businesses

Posted on by Ben Debski

On April 12, Mark Zuckerberg opened F8, Facebook’s annual developer conference, by announcing that ‘chatbots’ are now available on the platform’s Messenger service. The automated programme aims to improve customer service and boost transactions significantly through the provision of direct and instant communication between consumers and companies.

The software, which is powered by artificial intelligence, allows companies to send both live and automated text, images, links and action buttons, thereby reducing the need for phone calls, which can be both costly and time consuming for customers. The tool will also allow companies to reduce their own costs, while providing a superior level of engagement with consumers. Naturally, if Messenger chatbots take off as expected, traditional call centres will come under threat.

While other sites already use chatbot technology, such as Kik and Telegram, Facebook has a unique market advantage given its 1.6 billion users, approximately 900 million of which use Messenger each month, together with around 50 million businesses.

The possibilities for this tool are endless; restaurants can take reservations, airlines can take bookings, retailers can receive purchases, taxis can be ordered, and updates on deliveries and services can all be provided instantly

During Zuckerberg’s announcement, he revealed the names of several companies that are already on-board with Messenger’s chatbot, including media giant CNN and e-commerce start-up Shopify. CNN’s chatbot, for example, will determine a user’s preferences and provide relevant article recommendations and summaries suited to the individual.

The possibilities for this tool are endless; restaurants can take reservations, airlines can take bookings, retailers can receive purchases, taxis can be ordered, and updates on deliveries and services can all be provided instantly.

There is freedom in the software that companies use as well; they can either build their own chatbots, work with Facebook’s partners or use its Bot Engine, a technology from the Wit.ai team that was also revealed on April 12.

Some have already raised the argument that the elimination of human contact will have a negative impact on the corporation-consumer relationship, while eventual job losses could be significant. However, it cannot be denied that consumers stand to benefit from chatbots that will provide them with prompt services, instant answers and personalised information; essentially, chatbots are the next step in the rapidly evolving area of consumer technology.

ZTE shares suffer on continued uncertainty

Posted on by Ben Debski

Shares in ZTE, China’s second-largest supplier of telecoms equipment after Huawei, slumped by the most in nine months on the company’s return to trading. The day of trading was ZTE’s first since its suspension on March 7, after US authorities alleged the company had violated trade sanctions with Iran. On the day, ZTE shares were down by as much as 16 percent, and will likely remain low as investors await the outcome of a US investigation into the company’s supposed violation of export controls.

The slump is all the more surprising given that ZTE posted a 22 percent surge in net profits

The slump is all the more surprising given that ZTE posted a 22 percent surge in net profits to 3.2bn yuan, although in January the company quoted the higher figure of 3.8bn yuan. The revised figure, according to ZTE, was due to a “reassessment” of future cash inflows after US export restrictions cast a shadow over certain contracts.

Sanctions imposed by the Department of Commerce have been suspended until the end of June – although this threaten ZTE’s ability to procure US components and software nonetheless. The company’s functioning relationship with the US rests on the condition that it remove any person in management connected to the alleged violation. The company’s CEO and two executive vice presidents so far have stepped down as a result.

ZTE wrote in a recent regulatory filing that “the investigations are still in progress, and may result in criminal and civil liabilities under US laws.” No public statement has been issued regarding its innocence, though Zhao Xianming, as the company’s newly appointed chairman and chief executive, sent a letter to employees stressing that the company must “attach high importance to complying with the law and with regulations”.

Tesla Model 3 takes over $10bn in pre-orders in first 36 hours

Posted on by Ben Debski

Initial orders for Tesla’s new Model S electric sedan have outperformed expectations some way, with the company having clocked over $10bn worth of orders in only the first 36 hours. As the company’s first high volume vehicle and its lowest-cost car to date, Tesla will need to fulfil hundreds of thousands of orders each year if it is to make good on its intentions to become a staple of the auto industry. The 276,000 orders it took on the initial day and a half is as good a start as any.

The figure in question was tweeted by the company’s CEO, Elon Musk, along with a series of design sketches and signs that the response to the new car was more positive than he expected.

It should be said, however, that Musk’s $10.6bn projection is based on an average price of $42,000 per car, far and above the $35,000 base price. What’s more, prospective car owners were asked to put down a refundable $1,000 deposit to reserve a car, which means not all of the orders will translate into sales.

The new Model 3 won’t hit showrooms until late 2017, and, given that the company delivered barely over 50,000 vehicles last year, production will need a fair few upgrades before it finally reaches capacity at 500,000 cars a year. For the time being, the pre-orders go some way towards rebuilding enthusiasm for the brand before an equity offering later this year, now that its share price is 60 percent higher than a 12-month low in February.

Tesla goes mainstream with Model 3

Posted on by Ben Debski

More than 115,000 pre-order reservations rolled in overnight after Tesla unveiled the latest in its line of electric vehicles. The new Model 3 is the company’s cheapest to date; at $35,000 – not including federal and state government support – is less than half the price of any of its previous entries and underlines the company’s ambition to take its products mainstream.

Tesla has pledged to double the number of stores and Supercharger stations by the time of the car’s release

The S and X Models have only limited appeal and are marketed mostly as luxury – albeit functional – products for a relatively niche audience. The launch of the Model 3, meanwhile, offers proof of Tesla’s intentions to create a high-volume product, and one that could at last cement the company’s reputation as a staple of the auto industry. Should it do so successfully, the company will have triumphed where others have failed – most notably Fisker Automotive, which in 2008 was beset with software failures and ultimately succumbed to spiralling prices.

The average purchase price for a car in the US right now is around $33,000, which again underlines the company’s newfound focus on affordability. According to the company site, the Model 3 “combines real world range, performance, safety and spaciousness into a premium saloon that only Tesla can build”.

Elon Musk stated at the product’s unveiling that a lower-priced vehicle was always his intention. “We needed to figure out how we, as a tiny company with very few resources, could make a difference”, he said. The company has also pledged to double the number of stores and Supercharger stations by the time of the car’s release late next year, and install thousands more of its destination charger stations.

Tesla’s Model S saloon outsold Nissan’s Leaf last year to become the world’s best-selling electric vehicle, and its dominance looks only to continue once production reaches its target of 500,000 cars a year. “Unless there’s an affordable car, we will only have a small impact on the world”, Musk told the BBC. “We need to make a car that most people can afford in order to have a substantial impact. If we could have made an affordable car straight off the bat we definitely would have, it’s just that it takes time to refine the technology.”

Foxconn agrees to revised Sharp deal

Posted on by Ben Debski

After months of stop-start discussion and stilted negotiations, Taiwan’s Foxconn Technology Group has agreed a deal to take over struggling Japanese technology company Sharp, albeit at a lesser price than originally proposed. The final deal, according to Foxconn, is worth $3.5bn, and gives the world’s top electronics contract manufacturer a two-thirds stake in the Japanese firm, to be signed on April 2.

The news is significant in that it marks the first foreign takeover of a major Japanese electronics company, and could signal a wind change in the way in which business is conducted in the country. In a joint press release, the two called the deal a “historic strategic alliance”, and later stressed a commitment to “restoring profitability and strengthening operations to once again make Sharp a leader in the global electronics arena.”

The Japanese company has fallen on hard times recently, which goes some way towards explaining the $2.5bn reduction on Foxconn’s original offer. In November of 2012 Sharp became the world’s worst performing major stock and suffered predicted losses of $5.6bn on the back of falling demand for TVs the world over. More recently, it has been reported that Sharp’s financial liabilities could number in and around the $2.7bn mark, a figure that is reflected in Foxconn’s revised offer.

Terry Gou, Founder and CEO of Foxconn, said, “I am thrilled by the prospects for this strategic alliance and I look forward to working with everyone at Sharp. We have much that we want to achieve and I am confident that we will unlock Sharp’s true potential and together reach great heights.”

Now that the deal is done, the Taiwanese electronics assembler will be looking to expand on its mobile display business and improve on its smartphone screen manufacturing capabilities. Smartphone screens are still the most expensive component in the mobile manufacturing process, and its two-thirds share in Sharp could help Foxconn climb up the value chain.

Language: the hidden lubricant of international trade

Posted on by Ben Debski

Increasingly, the value of translation, localisation and interpreting services is being recognised and capitalised upon both in the UK and the wider world. Organisations of all sizes and across all sectors, from digital services to life sciences, are always looking to expand the markets in which they operate and meet the needs of a growing global population. To do so successfully, they must engage with people in their own language.

Language Service Providers sit at the heart of dealing with an influx of refugee applicants

As Geoffrey Bowden, General Secretary for the Association of Translation Companies noted: “Language Service Providers (LSPs), wherever they are based, act as the hidden lubricant for international trade and the provision of public sector services.” Such services provide organisations with the invaluable support they need to communicate effectively in a wealth of languages. “As we look ahead over the next 12 months”, Bowden noted, “there are a number of international challenges and events destined to keep the industry firmly in the limelight.”

Mass movements
Across Europe, the demand for language services – largely resulting from the tens of thousands of people fleeing conflict zones – continues to grow. According to UN estimates, almost 350,000 Syrian applied for asylum within the European Union since 2011.

With such mass movements comes the urgent need to both process entries and manage the integration of refugees into host nations, placing pressure on public and private sector services. And it is here that LSPs play a vital role. Whether commercial or charitable (such as Translators without Borders), LSPs sit at the heart of dealing with an influx of refugee applicants, and, as Bowden made clear, “it is only with their support that European societies can embrace and benefit from increasing diversity”.

Rio 2016
On top of that, 2016 also brings a significant opportunity for the global language industry to support economic growth in the form of the Rio Summer Olympics, Bowden told The New Economy. Already, over 8,000 linguist specialists have volunteered to help Protocol and Language teams manage athletes and delegations in more than 30 languages. In addition, Bowden said, “there are a wealth of commercial opportunities resulting from the Games, as international brands, whether official sponsors or not, try to capitalise on Olympic fever within their marketing strategies”.

The successful activation of such strategies, as with any international campaign, is reliant on professional and accurate translations that recognise the unique cultural references of each country’s language. And it is this need for brands to portray a thorough understanding of cultural variations that is driving one of the most significant debates within the language service industry at present: human or machine translation?

Man vs machine
A host of leading international brands are embracing machine translation; it seen as beneficial in terms of efficiency and consistency across suites of corporate communications, and is itself a growing sector within the global language industry. There are, however, “significant limitations that must be recognised and addressed”, noted Bowden. Primarily, the translations provided are often very literal and can’t compete with the delicacy and local knowledge of content translated by a human.

A more sophisticated solution is machine translation engines that are trained by humans. “Professional linguists both input relevant content and monitor and edit machine output to prevent errors”, said Bowden. These provide more accurate translations that are suitable for tailored marketing content that necessitates colloquialisms and cultural references are correct.

So, what does the future look like for the language service industry? In a nutshell, according to Bowden, it is “bright, with plenty of opportunities for the sector to support international economic growth and in doing so realise the potential for its own continued expansion”. However, in a sector trying hard to reinvent itself in line with 21st century capabilities, competition is fierce. As Bowden said: “Only those willing to embrace the inevitable changes to come will continue to prosper.”

Yahoo sets deadline for bids

Posted on by Ben Debski

The ongoing rumours that Yahoo’s core business could soon be up for sale have been confirmed as the troubled tech group has set an April 11 deadline for all bids. According to The Wall Street Journal, Yahoo has sent letters to potential buyers, asking for proposals that include the assets they are interested in, as well as the price and how they plan on financing the purchase. It is expected some bidders will only be interested in the company’s core business, while others could propose sole offers for Yahoo’s stakes in Alibaba or Yahoo Japan.

This is the second time Microsoft has shown an interest in Yahoo, the last being in 2008

Among those expected to make a bid for Yahoo’s core business are publishing powerhouse Time, Verizon Communications (the largest wireless communications provider in the US) and New York-based media company IAC. Also included in the list of around 40 entities that have signed non-disclosure agreements during the bidding process are various private equity firms, such as KKR and TPG.

Reuters has reported Microsoft is also in talks with private equity firms to assist with their financing in a bid to maintain the long-standing partnership in place between itself and Yahoo. This is the second time Microsoft has shown an interest in Yahoo, the last being in 2008 when an unsuccessful attempt was made to purchase the company for around $45bn.

The news comes just a week after a proxy fight was launched by Starboard Value (a hedge fund that owns around 1.7 percent of Yahoo) in an effort to overthrow the company’s nine board members, including incumbent CEO Marissa Mayer. As such, the company has been under increasing pressure to start the bidding process before shareholders cast their votes on whether to replace the board at the company’s annual meeting. Although a date for the meeting has not yet been set, it is expected to take place sometime in June or July.

Given Yahoo’s highly disappointing performance in recent years, there is little room to manoeuvre for Mayer and her board. Attempts to grow the business through acquisitions have failed repeatedly, while a lack of innovation has left the company trailing behind rivals Google and Apple. Yet with millions of users worldwide, as well as valuable assets in various entities, Yahoo still has some life in it, and could once again become a goldmine – with the right partners and leaders at the helm. Whether the successful bidder can master such a feat is yet to be seen. And should that be the case, the start of the bidding process could very well be the last breath that this failing company takes – as one of the internet’s first generation of tech giants expires.

For more on Yahoo’s rise and fall, make sure to read the upcoming Spring/Summer print edition of The New Economy