Peru works to make up its infrastructure deficit by looking to private sector

Over the past decade, Peru has become one of Latin America’s fastest-growing economies. According to Central Reserve Bank Governor Julio Velarde, the country’s average annual growth rate has been five percent over the past two decades – the highest rate in Latin America – which is thanks in large part to continued investment in its growing mining sector. However, the country’s infrastructure development has fallen behind in recent decades, meaning that the overall infrastructure deficit is set to remain at $110bn over the next 20 years.

A developed infrastructure is crucial for countries to meet their national goals and be economically successful, as it connects supply chains and allows goods and services to move across internal borders. Additionally, developed infrastructure can unite metropolitan areas and increase social mobility by granting better opportunities in terms of employment, education and healthcare.
In Peru, the current infrastructure gap presents a formidable barrier to investment opportunities. As a private investment promotion agency, ProInversión champions public-private partnerships (PPPs) in an attempt to boost Peru’s infrastructure and global competitiveness. ProInversión has strong links with the Ministry of Economy and Finance, as well as numerous government bodies for various industry sectors, making us an excellent first point of call for budding investors. Further, we have a streamlined approach, enabling us to offer investment opportunities that facilitate sustainability and social reform.

A developed infrastructure is crucial for countries to meet their national goals and be economically successful, as it connects supply chains and allows goods and services to move across internal borders

ProInversión currently identifies sectors such as transportation, energy, health, education, and water and sanitation as lucrative avenues for foreign investment. In addition, Peru’s non-discriminatory and modern legal framework creates a stable investment climate and allows foreign investors to enjoy the same rights as Peruvian investors. Demonstrating this is the projected growth of our project portfolio for 2019 to 2022, which will consist of 55 projects at a total investment value of more than $9.2bn (excluding VAT). At present, there are nine projects in the structuring phase and eight that are approaching transaction, i.e. close to bidding. As new investment ventures emerge and develop, our portfolio value could easily climb to $15bn.

Shaping the market
Peru offers private investors an eclectic range of sectors in which to do business. The use of PPPs to fund infrastructure projects has received broad support from organisations around the world. ProInversión uses PPPs for a number of reasons – first and foremost, it allows the public sector to benefit from the advantages usually associated with privately funded projects. For example, PPPs grant public sector projects access to the private sector’s research and development facilities, which can improve operational efficiency and offset some of the associated risk. Meanwhile, private sector companies benefit from the support of large international firms and government resources, thus further developing capabilities and increasing potential.

We are regarded as one of the most experienced agencies in Peru, and have been recognised as a good example for many neighbouring countries in Latin America. Our wide-ranging portfolio, combined with Peru’s macroeconomic stability, has boosted the appetite of foreign investors from across the globe.

In the driver’s seat
The transport sector is a top priority for the country at present, boasting 35 percent of ProInversión’s portfolio. Peru’s commitment to meeting its transport and logistics needs is apparent in its fiscal planning. As part of a public spending programme, the Ministry of Economy and Finance has prioritised a fund of roughly $30bn for infrastructure developments, of which over 80 percent are in the transport sector. A significant portion of the funding comes from PPP projects, with more expected to come from the private sector. For 2020, we are tapping into the many investment opportunities available along Peru’s 78,000km of roads – a fundamental aspect of the country’s transportation system, which crosses most of the mountain and coastal regions.

For example, the Peripheral Ring Road project, which is currently in the structuring phase, will build a 34.8km-long beltway around Lima and Callao, with an investment value of $2.05bn. This project will improve connections between the districts of the north and east areas and the rest of the metropolitan Lima area.

Another important project is the Longitudinal Sierra Highway, which has an investment value of roughly $900m. This project’s scope handles the improvement and rehabilitation works of an important section of the highway, which will connect 12 areas across the Andes mountain range. Meanwhile, our major rail projects include the construction of lines three and four of the metro network between Lima and Callao. Although these lines are still under formulation with the Ministry of Transport, they will directly impact the profitability and sustainability of the surrounding areas.

Social good
Water and sanitation projects form another important strand of our infrastructure strategy, comprising around 25 percent of our portfolio. Projects include increasing clean water capacity and improving waste treatment, as well as building potable water treatments and desalination plants, each of which require sizeable investment. Lima’s potable water supply project, for example, requires design work, construction and maintenance, bringing the total investment value up to $720m. Indeed, over the next 30 years the capital will see a great deal more work in sanitation: dams will be enlarged, while new canals, water transfer tunnels and reservoirs for treated water will be built.

Another important sector with a vital social impact is health. Although Peru has traditionally suffered from restricted access to healthcare services, significant steps have been made in achieving universal coverage in recent years. In particular, the Universal Health Insurance Law, which was signed in 2009, was a major step towards this goal.

At present, our portfolio has five commissioned hospitals set for 2020, covering both their operation and maintenance – a fundamental concession that is becoming the norm in projects across all industries. The total investment for next year through ProInversión into Peru’s health sector totals $591m.

After two decades of stable economic growth, Peru increasingly finds itself in a position to invest in resources for education. Following the Peruvian Government’s 2015 initiative to improve the population’s English skills, the number of applicants to English-language degrees is expected to rise. The number of schools and educational institutions teaching in English is already increasing in response to demand from local corporate sectors. ProInversión has five important projects designed to improve the quality of education by giving a boost to each respective school’s infrastructure, guaranteeing they remain in operation throughout the concession period. This investment amounts to around $301m.

An attractive framework
The opportunities across these sectors are coupled with Peru’s favourable legal framework. Foreign investors receive non-discriminatory treatment and thereby unrestricted access to most economic sectors, as well as enjoying free transfer of capital and shares. The framework also grants the freedom to both purchase stocks from locals and access internal and external loans. Finally, owing to the political stability Peru has enjoyed in recent years, buyers are guaranteed to retain any private property they purchase.

At ProInversión, we’re proud of our three-pillars strategy, which we believe sets us apart from other agencies in the region that use the PPP model

In the event of litigation, investors have access to international dispute settlement mechanisms. Peru notably participates in the Investment Committee of the Organisation for Economic Cooperation and Development (OECD), which promotes the implementation of environmental and social guidelines for multinational enterprises. Peru is a strong candidate to become a member of the OECD in the near future.

Ultimately, a stable legal framework helps to facilitate profitable projects. What’s more, ProInversión recently simplified the legal process to hire the best technical, legal and financial firms to serve as advisors and to strengthen the formulation and structuring phases of projects we collaborate on.

The Peruvian Government also recognises how tax regimes can further incentivise private investment. An example is the VAT refund scheme, which grants any company the right to recover the VAT of an investment valued above $5m within a preoperative stage of more than 24 months. Significantly, ventures within the agricultural sector do not need a minimum investment capital requirement to qualify.

Support from within
As the organisation that promotes the country’s private investment policy alongside the Ministry of Economy and Finance, we are best placed to support investors in breaking into the Peruvian market. We provide crucial information and guidance to investors, with the aim of creating a conducive and fruitful environment. For example, sector officers are available across the board to provide information on all our projects and mechanisms. Through this approach, ProInversión can effectively channel information requests from investors to experts in the relevant sector to aid investors’ understanding of market conditions.

ProInversión employs a triple-pronged approach to ensure the very best projects are brought to market. We are often the main contact for investors due to our ability to identify and liaise with the various ministries, regulatory authorities and entities governing a particular sector’s environment. Importantly, we also work with the best advisory firms (technical, legal and financial) to guarantee the project’s execution and maintain a great relationship with the investor from beginning to end. We also believe that opening a dialogue with the communities affected by the projects is vital to any initiative’s ultimate success.

Finally, it’s also important to develop a promotional plan based on a commercial strategy that leads us to the market: this should include identification, segmentation and customer satisfaction. ProInversión ensures the projects it supports are sustainable by observing the life cycle of numerous PPP projects and their five phases (planning and scheduling, formulation, structuring, transaction and contract execution). This guarantees quality at every stage of development.

Internal strategy
At ProInversión, we’re proud of our three-pillars strategy, which we believe sets us apart from other agencies in the region that use the PPP model. The first pillar is the hub of excellence: we continually strive to achieve excellence when advising the government on the formulation and structuring of PPP projects. This is made possible by recruiting top-tier consulting firms and facilitating standardised contracts that ensure predictability within any given market.

Our second major focus is to promote private investments with productive, social and environmental management at their core. We recognise the value of social and environmental consciousness in our work in order to guarantee sustainable and successful projects that are equally beneficial to society and the population of Peru. This ethos is exemplified by a project that we are particularly proud of – the wastewater treatment system within Lake Titicaca. ProInversión granted this project, which is located in the Puno region – one of the poorest in Peru – under a co-financed and private initiative. It designed a solution for the treatment and final disposal of municipal wastewater in Lake Titicaca, consequently decreasing pollution in this sensitive area of Puno. In the awarding process, ProInversión conducted an international public tender, which had five potential bidders.

The completion of the Lake Titicaca project will help to reduce the water sanitation gap in the country by improving a public service for the benefit of all citizens in Puno. This is especially important as, for ProInversión, a project’s significance also lies in its social impact. The project will provide benefits for more than 1.2 million Peruvians across 10 towns in the Puno region by improving public health, increasing commercial activity and creating an overall positive impact on the region’s progress.

The third pillar is our commercial strategy. Here we have been applying a systematic and informed methodology to identify, consolidate and attract potential investors. Our commercial intelligence is highly specialised to retain the right investors for each project. We will continue to participate in local and international campaigns, as well as utilise digital tools to keep attracting first-rate investors who are highly committed to our growing economy.

Peru’s VAT refund scheme grants any company the right to recover the VAT of an investment valued above $5m within a preoperative stage of more than 24 months

Looking forward
With growth and internal development as an unwavering priority, plans for the future at ProInversión are varied and numerous. Having recently presented the National Infrastructure Plan, which was issued by the Ministry of Economy and Finance, we have an infrastructure development agenda in place to help support our long-term vision. What’s more, prioritisation of our projects further helps to anchor and manage the expectations of our stakeholders.

Our key objective is to reduce the $110bn infrastructure gap over the next 20 years. Investing capital to close the gap is a huge investment opportunity that is expected to return quick dividends. Furthermore, we are currently collaborating with a top consulting firm to finalise a financial guideline to standardise the development of financial models in the structuring stage. In a similar sense, in order to improve efficiency, reliability and transparency, we have retained the services of a leading Anglo-American law firm that is in the process of finalising a contract for the standardisation of PPP projects. To complement these initiatives, we have begun internal discussions to establish a project management department in each government ministry that is looking to further optimise the project’s formulation.

Stepping into the digital transformation sphere, we have been put forward by the Inter-American Development Bank as one of the countries to incorporate the online data management platform Source. This will keep track of our portfolio and monitor project milestones, ensuring accountability at every stage. Another benefit of this digital platform is being able to follow the development of projects with corresponding and integrated data. Source is a tool that will allow us to plan our project’s next steps accurately and efficiently.

These new developments will provide us with fresh impetus and insight into the future of our project portfolio, which is expected to reach the $15bn mark as more mandates continue to be allocated in the transportation and sanitation sectors.

China gives a dam about improving its green energy infrastructure

An engineering project of bewildering size, some of the statistics pertaining to the Three Gorges Dam are hard to believe. The dam, which bestrides the Yangtze River in Central China, is 7,661ft long and more than 600ft high. It required 463,000 tonnes of steel to build and is so large that the mass of water that built up behind it caused the rotation of the Earth to slow down slightly.

For now, the dam is the largest in the world, but that may not be the case for much longer. Proposals are being explored for the construction of the Grand Inga Dam, which would use the power of the Congo River to generate 40,000MW of electricity – more than twice the amount currently produced by the Three Gorges Dam.

If plans to build another hydroelectric megastructure do get the go-ahead, they will no doubt benefit from the successes and pitfalls that the Three Gorges Dam has already experienced. It is a project that has attracted controversy for economic, social and environmental reasons.

The project’s green credentials ring rather hollow given the ecological damage it has already caused

Need a lift?
Construction of the Three Gorges Dam was completed in stages, taking 17 years in total. Today, the dam has a maximum electrical capacity of 18,300MW, produced by 32 generators that use high-pressure water to spin huge turbines at a rate of 75 revolutions per minute. This drives an electromagnetic generator that converts the water’s kinetic energy into electricity.

The Three Gorges project also aims to open up shipping routes to China’s interior. In late 2016, the dam’s hydraulic ship lift was officially launched, boasting the capacity to raise vessels 371ft in order to pass over the dam. The system uses reinforced concrete, cables and counterweights to allow for the passage of ships weighing as much as 3,000 tonnes. While it took ships three to four hours to cross the dam using the previous system of locks, the new method takes just 40 minutes.

The dam’s main goal, however, remains power generation. The project originally aimed to produce around 10 percent of China’s total energy needs, but the country’s rapid economic development has brought this target crashing down.

Outta the dam way
Sustainability was, of course, a major reason for building the dam: not only would it lessen the need for fossil fuels, but it would also reduce the potential for flooding further downstream. However, the project’s green credentials ring rather hollow given the ecological damage it has already caused.

During construction, 1.3 million Chinese citizens were forcibly relocated to make space for the dam’s reservoir. In total, two cities, 11 counties, 116 towns and countless sites of cultural importance were flooded. The risk of geological hazards occurring, principally landslides, has also risen significantly as a result of changes to local water levels.

More trouble arose earlier this year amid claims that the dam was breaking apart. Reports of an impending collapse spread across social media after one Twitter user posted a satellite image purporting to show that the dam had become deformed. Officials were quick to debunk the rumours, stating that any changes to the dam’s structural integrity remained within normal parameters. Hopefully they are right – if the dam were to collapse, the environmental, economic and human damage would be monumental.

Barring catastrophe, then, the Three Gorges Dam will remain the largest hydroelectric plant in the world for the foreseeable future. Even if it is eventually usurped by the Grand Inga Dam or another such structure, it will continue to stand as a testament to humankind’s engineering brilliance; a project of scarcely believable scale.

Could automating email admin save companies time and money?

Email, the most popular communication tool of the modern workplace, could soon be obsolete. Invented in the 1960s to facilitate digital communication between workers, it has been overtaken by speedier and more efficient applications. From messaging apps with document-sharing features to inboxes with inbuilt profile pop-ups, today’s communication tools not only aim to reduce the time we spend engrossed in our inboxes, they also promise increased privacy and faster communication.

For those unwilling to relinquish the classical email format just yet, there’s Superhuman, which claims to be “the fastest email experience ever made”

One of the major disruptors of email, Slack, has seen a huge uptick in clients in recent years as workers seek more efficient ways to collaborate with their international colleagues. Founded in 2013 by Stewart Butterfield, the cloud-based chat platform now has more than 10 million daily users and was valued at $23bn when it debuted on the New York Stock Exchange in June this year. The application allows communication to be organised into channels: office water cooler chat is separated from strategic debates, making it easier for employees to choose which messages take priority, unlike an email inbox, where users have to sort through themselves.

Slack’s capabilities extend well beyond sending and receiving messages – it also integrates with a number of third-party services including Dropbox, GitHub and Trello. This means employees can share files, work together on code and keep track of daily tasks, all within one platform.

Top of the line
For those unwilling to relinquish the classical email format just yet, there’s Superhuman, which claims to be “the fastest email experience ever made”. Every action – whether that’s starting up the service, sending an email or searching for a contact – takes less than one tenth of a second. It boasts a host of inbuilt tools designed to save time, from keyboard functions (one allows users to send a timely RSVP to decline invitations if their diary is booked up) to pop-ups reminding you of your last message exchange with a contact.

Since its launch earlier this year, Superhuman has been lauded by the who’s who of the technology sector. David Ulevitch, a partner at venture capital firm Andreessen Horowitz, called it the “future of work”, while both Jager McConnell, CEO of Crunchbase, and the founders of payments firm Stripe are also rumoured to be fans.

Part of Superhuman’s appeal lies in its exclusivity – the system comes with a $30-a-month price tag and is currently invitation-only, with a waiting list of more than 180,000 people, according to CEO Rahul Vohra. For Silicon Valley buffs, the subscription fee is a small price to pay to reclaim some of the time they spend emailing during a typical workday. The cachet that comes with being one of the first to use the service is simply a bonus.

Productivity boost
If privacy is the priority, services such as ProtonMail, Tutanota and Runbox all provide end-to-end encrypted email services, meaning no one – not even developers at the company – can read a message’s contents. Runbox’s Norway-based data centres even run solely on renewable hydropower, minimising the environmental impact typically associated with facilities of this type.

Given the amount of time and energy the average employee dedicates to sending and receiving email, it’s reasonable to expect our inboxes to work a little harder for us. After all, the more efficient and streamlined our communication apparatus, the more time we are able to dedicate to productive activities that drive businesses forward and leave us feeling more accomplished at the end of the day. It’s increasingly clear that email is no longer able to fulfil that role, making it ripe for disruption by tools that can.

Smart cities: future-proofing for tomorrow

Most smart city projects start small and focus on a vertical market – street lighting, for example, is a typical entry point. While this is one of the most commonly used smart city technologies, Trilliant has assisted in the implementation of additional tools, such as environmental monitoring, traffic management and enhanced security.

Trilliant is making smart cities a reality by creating solutions that solve challenges associated with the compatibility of disparate technologies, enabling them to share information with each other and with non-scalable solutions. Because we approach smart cities differently, we’re able to deliver solutions that are open, flexible and future-proof.

To do this, Trilliant enables and provides consultative services to establish a network before installing any devices. With the right digital infrastructure in place, our cities have the architectural support to create smart cities for the future. Long term, this approach is more sustainable than simply piecemealing solutions together one by one.

Delivering value
While it’s true that smart cities can deliver huge benefits, they are difficult to establish. Beyond capital challenges, getting projects past the pilot stage can be a real hurdle. Many cities already recognise the benefits of smart technology, but city leaders are challenged to not prioritise its development over other important projects, like affordable housing or school funding. The question of city funding and investment doesn’t have an easy answer, but it is something many cities across the world are facing.

Cities that do implement smart technologies are often under pressure to deliver long-term value creation

Cities that do implement smart technologies are often under pressure to deliver long-term value creation. Solutions from different vertical markets use proprietary systems, but without a network solution like the one Trilliant provides, cities can face a major connectivity challenge. By not considering how they can harness data from multiple systems, cities can miss out on the long-term value that smart-city technology can provide.

Similarly, data streams from closed sources that don’t converge in a single place can also cause issues. At Trilliant, we’ve been connecting critical infrastructure for almost 20 years. We understand data can be challenging, but there are ways to make managing it easier. Our clients have found that data management from various sensors has grown into a key part of their business operations, even uncovering untapped revenue streams. Because our platform can bring together disparate devices, data can be managed in one place, no matter what kind of technology it’s streaming from.

Smart money
A good communications platform is incredibly important, as it opens doors for cities to find the best possible solutions for their unique situations. Trilliant’s platform uses a standards-based application programming interface to surface data in a single pane, giving places the ability to tailor their smart city to the needs of their citizens.

We believe in working with customers to create practical solutions for their energy and smart-city needs. When considering short and long-term returns on investment, cities should first invest in their connectivity infrastructure. This is where Trilliant helps them stand apart.

We support the technology – lighting, sensors and CCTV cameras, for example – but also have a critical understanding of the infrastructure required to make them operate at peak performance. Having a structure in place to leverage this technology allows for investments in the future that are managed by the city. Through ownership of things like data and the network, cities can develop both direct and indirect revenue-generating opportunities. At the moment, however, a lot of cities don’t appear to be interested in acquiring this extra revenue. In many markets, such as the US, there has been very little capital prioritisation for smart-city projects. The US market is missing out on a huge opportunity to prioritise the type of infrastructure that can facilitate smart cities.

Until there’s prioritisation from the public and private sectors, consumers will continue to buy individual systems without a long-term plan on how to manage them. Although some smart-city opportunities are being embraced, many more remain underutilised.

Could the world’s asset holders be the answer to the climate crisis?

When President Trump was elected to office in 2016, the US tore up its commitment to the Paris Agreement, striking a blow to global efforts in the fight against climate change.

However, there were those that felt Paris was an inadequate proposal from the very beginning. The signatory countries are not legally bound by the targeted emission reductions and, worse, the targets are to be self-policed and met through each country’s own means.

When viewing this limitation in light of the falsified emissions reports by Volkswagen in 2015, there is the possibility that some countries could take a similar course of action in the absence of international accountability or unified approach. In addition, subsequent studies have highlighted the shortcomings of the agreement in light of the knock-on-effects of increasing global temperatures.

Off one’s own back
If the Paris Agreement is a half-measure, what can ordinary people do while they wait and hope for their governments to make impactful reforms?

One of the biggest hurdles facing meaningful reform is the climate funding gap – the estimated total sum needed to effectively tackle climate change – which is currently estimated to stand at $16.8trn over the next 15 years.

One foundation, called Parents Pledge, has suggested a way to bridge the gap: by using a small fraction of the world’s total assets under management, which The Wall Street Journal estimates to be worth around $140trn. The organisation’s website claims if every asset holder paid an annual 0.25 percent from their savings, the fund would produce $350bn annually.

Parents Pledge takes these donations and gives them to groups around the world that are trying to reverse climate change, such as those planting new forests, developing clean energy solutions or lobbying governments to pass new environmental laws and uphold existing ones.

One of the biggest hurdles facing meaningful reform is the climate funding gap – the estimated total sum needed to effectively tackle climate change

Among notable figures to have made the pledge are Rowan Williams, the former Archbishop of Canterbury. “I made the Parents Pledge because it is essential not just to protest but to contribute positively in protecting our environment for our children and all the world’s children,” he said, according to the Parents Pledge website.

By 2030, two thirds of the world’s wealth is predicted to have been amassed by the world’s wealthiest one percent, with inequality continuing to rise to unfathomable levels. This raises questions about a potential ‘funding ceiling’ if members of the world’s richest one percent do not contribute some of their wealth to combatting the climate crisis. Ultra-high-net-worth individuals may be difficult to convince, owing to the link between the success of capitalism and climate change: wealth is generated through the acquisition and application of natural resources. Our economies have been founded around this collective agreement, which is why some have been able to make their fortunes from damaging industries, such as herding cattle, chopping down trees and drilling for oil and gas locked safely away underground.

Another company, Poseidon, makes use of ‘carbon tokens’ through its Reduce programme. Through this, firms can offset their carbon footprint by paying a levy for the environmental impact of running their business – for example, a company could offset the carbon footprint it creates when manufacturing and delivering its products by funding reforestation projects to ‘lock up carbon’.

In Poseidon’s model, responsibility is shifted away from individuals and towards corporations – an approach that makes sense, given the huge impact that some industries have on the environment.

“Our groundbreaking Reduce platform allows everyone to participate in addressing social as well as environmental challenges,” Laszlo Giricz, Founder and CEO of Poseidon, told The New Economy.“We use… tokens – for example, our forest carbon credit… tokens on the Stellar blockchain – in order to create small fractions of carbon credits that can be allocated to emissions fast and in an affordable manner.”

Vivobarefoot is one such company that has committed to offsetting its carbon footprint. “Every single shoe sold at its stores in Zurich and Lucerne, as well as every shoe sold through its online store, has been turned into climate action,” said Giricz. Both of these initiatives, it could be argued, are a form of voluntary ‘climate change tax’ in the wake of ineffective government policies.

Bring it back home
If radical action on the climate crisis is not taken soon, the consequences could be disastrous. “Nobody knows how bad it will really be, as this has never happened before,” Giricz told The New Economy. “We have no reference. There will be food shortages, as well as extreme weather events. The future will be challenging for all life on Earth.”

In 2012, Australia became the first country to introduce a carbon tax, which was levied against industries as a means to encourage the development of sustainable energy sources. However, subsequent political and public pressure over fears of rising energy prices also made Australia the first country to repeal a carbon tax in 2014. When more political consensus is found for how best to tackle climate change, it is possible that the world’s governments will be able to take inspiration from initiatives such as these to ensure the planet is preserved for future generations.

Málaga is set for continued growth and development

Globalisation has had a transformative impact on today’s business models. As a company’s customer base is no longer limited to a city, region or country, companies are now able to target far more people. Further, international business is no longer limited to just a few large multinational corporations; small and medium-sized enterprises can operate across borders with greater ease than ever before. This increased competition tends to lower operating costs, as companies can search around the world for the best prices for raw materials. Customers, meanwhile, are becoming more price-sensitive, reducing businesses’ margins on goods and services.

Operating a business has become more complex in certain respects, too. Companies now have to manage employees, customers and suppliers across several time zones, speaking different languages and using multiple currencies. Management teams must also consider cultural differences among employees, as well as the implications of operating under different laws and taxation structures. Perhaps the most pressing challenge for companies in today’s globalised world, though, is ensuring that they meet the changing needs of their workforce.

Málaga is a beautiful coastal city that offers the amenities of a major European capital without the traffic congestion, pollution or stress

Attracting top talent
Improvements in technology and transport – such as high-speed trains, low-cost airlines and video conferencing – have allowed employees to work from home or alternative locations. At the same time, social media has broadened people’s horizons with regard to what a company can offer them. It’s no longer just about the paycheque – increasingly, people seek out employers that can offer them a good quality of life, too.

Given the growing expectations of younger sections of the workforce, it’s becoming more difficult to retain talented people. For example, companies that choose isolated locations to reduce costs often have trouble keeping hold of employees. In order to retain talented individuals, companies must choose office locations that bring value to the workplace and foster positive employee morale.

Recently, companies such as EPAM Systems, ITRS Group and Ciklum have leveraged the enviable quality of life in Málaga as a way of attracting highly qualified people and creating the best teams possible. Málaga is a beautiful coastal city that offers the amenities of a major European capital without the traffic congestion, pollution or stress. It is renowned for its wonderful climate, beautiful beaches, mountainous landscapes, delicious cuisine and hospitable residents. With a population of around 570,000, Málaga is a cosmopolitan Mediterranean city where residents of more than 150 nationalities live together.

Málaga is also the birthplace of Pablo Picasso and Antonio Banderas, so it’s easy to see why its citizens have a strong appreciation of the arts. There are more than 30 museums – including the Museo Picasso Málaga, the Centre Pompidou Málaga and the Contemporary Art Centre of Málaga – and dozens of cultural events throughout the year, such as Holy Week and the Málaga Film Festival. Further, the city’s historical centre has many pedestrian spaces where one can enjoy diverse cultural offerings, including the Cathedral of Málaga, Alcazaba and the Roman Theatre.

A thriving economy
It is the responsibility of local governments to generate a prosperous environment and create employment. As such, authorities must have a strategic plan in place that guides the development of the city. Key aspects of a solid city plan include public transportation, utilities, security, education, productive business zones and green spaces. These plans should be developed with local stakeholders and the business community. For instance, in Málaga, we collaborate very closely with bodies such as the Chamber of Commerce, Industry and Navigation, the General Confederation of Labour, the provincial and regional governments, and many other local business associations.

At the same time, city authorities should provide services that make it as easy as possible for foreign companies to relocate and invest in their city. To this end, municipal governments should consider organising or sponsoring cultural and business events as a way of attracting international experts, students, tourists, professors and business executives. Finally, it is important that the local government has a plan to promote the city through both online and traditional media – after all, a strong image increases awareness of what a city has to offer and engenders pride in local citizens.

These strategies have helped Málaga blossom into an entrepreneurial smart city. In fact, the city’s economy grew 3.4 percent in 2018, only slightly below the 3.9 percent growth of the previous year. What’s more, it is surrounded by an innovative ecosystem, known as Málaga Valley, and is home to the Andalusia Technological Park, where 646 companies employ some 19,873 workers. Software development, wireless solutions, telecommunications, big data analytics, radio frequency identification, aeronautics, biotechnology and renewable energy are just some of the sectors represented at the park.

Companies that choose to be located in technology hubs can hugely benefit from economies of scale. It is also easier to recruit talented people, as there is a higher concentration of similar companies with like-minded employees. Given the variety of employment options, individuals are more inclined to choose innovative regions. At the same time, being geographically close to universities and leading companies exposes businesses to new skills, unique processes, advanced research and cutting-edge technology. If implemented correctly, these can improve efficiency and lower operating costs, resulting in more profitable companies. Finally, investors and financial institutions tend to pay close attention to these tech hubs, making it highly advantageous for companies to be located in such regions.

Spain’s shining light
Málaga has transformed into an innovative smart city and has plans that will help it keep evolving. Currently, the city’s overall strategy is aligned with the United Nations’ Sustainable Development Goals, and it has specific aims to boost mobility and technological innovation between now and 2022.

In addition to the 198 smart city initiatives defined in the plan, we created an experimental urban laboratory within a municipal building. This holds specialised equipment and a co-working space where companies can operate side-by-side with the city’s best engineers to test, certify and demonstrate new services and technology within the smart city concept. We have also employed the use of a smart cities accelerator, which is sponsored by Spain’s largest telecommunications provider, Telefónica. In fact, Spain’s first National Digital Content Hub – equipped with the latest technology in videography, 3D animation and virtual reality – opened in Málaga in 2017.

At present, plans are underway to build offices and residential buildings along the coast, at the port and at the Andalusia Technological Park. There are also proposals to build four more hotels, including a convention centre that will support international conferences from various industries, including Gamepolis, Transfiere, Greencities, the S-Moving Forum and the Smart Agrifood Summit. What’s more, a second metro line that will connect the city centre with the high-speed railway station is under construction. We also plan to build an auditorium at the port and a planetarium.

Málaga will continue to provide companies and their employees with all the assistance they need during the relocation process. Málaga is a city well prepared to face the challenges of the future – as a business location, it can add tremendous value to a company by lowering overall operating costs while rewarding employees with a very high quality of life. Although the sun is always shining in this part of the world, the coming years look especially bright for Málaga.

Russian Government goes cloak and dagger about nature of recent explosion

The medical staff at Arkhangelsk Regional Clinical Hospital in Russia were not told much about the three patients who arrived at approximately 4:30pm on August 8. They were rushed to the emergency room – naked save for some translucent plastic bags that had been wrapped around them – before being moved to separate operating theatres.

Explanations from Moscow were characteristically vague. Initially, the Russian Ministry of Defence declared that a fire caused by an explosion of a liquid-fuelled rocket engine had killed two individuals and injured four others. It also stated that background radiation remained at normal levels. However, local authorities in the city of Severodvinsk, some 25 miles away from where the explosion took place, provided contrasting information: they saw a spike in radiation levels 200 times that usually recorded.

It wasn’t until two days later that Rosatom, the state atomic energy corporation, issued a statement revealing that the explosion occurred during work on “an isotope power source”. Although the agency hadn’t used the word directly, the truth was out – a nuclear incident had occurred. Immediately, thoughts turned to the Chernobyl disaster of 1986 and the fallout that followed.

Although the US may have shelved plans for a nuclear-powered missile of its own, that doesn’t mean the country has laid down its arms completely

Fortunately, the explosion that took place by Russia’s White Sea coast was far less damaging than the one that occurred some 33 years ago. Nevertheless, the incident served as a reminder of the huge number of nuclear weapons that remain in the hands of governments all over the world today, and the destruction they can cause.

The mystery missile
Amid a slew of claims and counterclaims, facts regarding the explosion on August 8 remain difficult to pin down. So far, expert consensus points towards an experimental nuclear-powered cruise missile – specifically, the 9M730 Burevestnik. The weapon, which is claimed to have virtually unlimited range, is also sometimes referred to by its NATO code name, Skyfall.

“Currently, it is believed that the explosion occurred during a recovery operation of a Burevestnik missile, rather than during a failed flight test,” Anne Pellegrino, Project Manager and Research Associate at the James Martin Centre for Nonproliferation Studies at the Middlebury Institute of International Studies at Monterey, told The New Economy in September. “It is unclear exactly what caused the explosion, though reports indicate that it occurred as the missile was exiting the water. One hypothesis is that the reactor developed for the Burevestnik is cooled with liquid sodium, a common coolant for fast reactors. Liquid sodium is highly reactive with air and would cause an explosion similar to the one described during the August 8 incident.”

The existence of the Burevestnik is not disputed – Russian President Vladimir Putin revealed the missile himself in March 2018, along with a host of other hypersonic weapons. Since then, however, the development of the weapon has largely been kept under wraps. The information that has been gathered thus far indicates that the missile is powered by a nuclear reactor, allowing it to travel for thousands of kilometres at low altitude and very high speeds. This could allow it to avoid defence systems like those the US currently has in place.

It’s a formidable weapon, but also an unwieldy one. According to US intelligence, the missile was tested four times between November 2017 and February 2018, crashing every time. The danger of these tests, as the incident of August 8 proved, is that when a nuclear fuel source is involved, the risks are significantly higher than with conventional propellants.

In the aftermath of the explosion, some of the medical professionals at the Arkhangelsk hospital were flown to Moscow to undergo further tests. One of them was found to have traces of caesium-137, a radioactive isotope, in their muscle tissue. Although it is highly likely that the contamination resulted from treating survivors of the missile’s explosion, Russian officials had a different theory: they claimed the caesium-137 must have originated from “Fukushima crabs” that the doctor had eaten while on holiday in Thailand. Just like with Chernobyl, the cover-up was in full force.

The Skyfall-out
The exact cause of the explosion on August 8 may never be known. It is possible that Russia believes revealing more information about the event would risk other states developing similar technology. What is becoming clear, however, is the consequences of such developments: aside from caesium-137, other radioactive fission products, including strontium-91, barium-139, barium-140 and lanthanum-140, have all been detected near where the explosion took place.

“Theoretically, the reactor on the [Burevestnik] missile would be unshielded, meaning that anyone in its vicinity would be exposed to very high levels of radiation,” Pellegrino explained. “This is a system that I hope the Russians are never able to make fly. More generally, systems like the Burevestnik are incredibly destabilising and are not a good sign for what may be coming during a renewed arms race between the United States and Russia.”

Certainly, Russia is not the only nation to have considered using nuclear power to give its military arsenal a boost. The US tried to develop a similar weapon to the Burevestnik missile in the early 1960s, under the codename Project Pluto. It was, according to Pellegrino, “a crazy idea”, and was shut down in 1964.

One of the reasons Pluto was cancelled was that the nuclear reactor powering the weapon had to be unshielded to keep its weight down. This meant radioactive particles were continuously expelled throughout its flight. The missile would not simply destroy its target upon impact – it would irradiate everything and everyone it passed over. Even at a time when Cold War tensions were running extremely high, this technology caused too much collateral damage to conscionably be further developed.

Science and technology have advanced considerably in the decades since those early Project Pluto tests, but whether they have progressed enough to guarantee that only identified targets are affected by a nuclear-powered missile remains unknown. But, depending on who was in charge of such a weapon, this may not be a problem: given that apocalyptic outcomes are an inherent part of nuclear weaponry, perhaps the idea of collateral damage does not hold much water.

Clouds on the horizon
Although the US may have shelved plans for a nuclear-powered missile of its own, that doesn’t mean the country has laid down its arms completely. Already in possession of the world’s strongest military, the US is working on increasingly sophisticated new weaponry: lasers, hypersonic projectiles and high-velocity drones represent just a few of the projects under development. And, of course, the US continues to maintain and modernise its nuclear arsenal.

“I am not optimistic about the likelihood of seeing a world without nuclear weapons any time soon,” Pellegrino said. “I am equally worried about the backwards trend in arms control between the United States and Russia. The collapse of the Intermediate-Range Nuclear Forces Treaty and the lack of discussion between the two parties regarding the extension of the New START arms reduction treaty beyond 2021 means that we are rapidly approaching a time when there will be no legally binding limits on the world’s largest nuclear arsenals. Backsliding on arms control and this renewed arms race paint a grim future for nuclear disarmament.”

The Burevestnik missile explosion showed the unique risks that come with the development of nuclear weapons. It also demonstrated how much secrecy continues to shroud the technology. Initially, not even the death toll could be agreed upon: the Russian Ministry of Defence reported that two people had been killed; Rosatom said five. One thing is certain, however: for as long as the world is developing nuclear weaponry, lives will continue to be at risk.

More plastic could help create a circular economy

Plastic is a valuable material with good versatility. Its value, however, is lost if it’s not treated correctly throughout its life cycle. While consumer awareness grows, governments continue to set regulations to reduce plastic consumption, and companies around the globe are responding with commitments to use recycled materials in their products and packaging. However, this increased demand has created a plastic paradox: there isn’t enough plastic being collected and recycled to meet fresh demand and preserve the planet’s non-renewable resources.

A resource revolution is needed to solve this problem. The planet’s resources are limited, and a new strategy is required to create a circular economy.

Rethinking the system
The amount of plastic waste being produced is growing rapidly, and society’s failure to return plastic into a closed loop is having a negative impact on the environment and on our health. The current linear model means the end of life for plastics is mismanaged, and a valuable resource is lost in the process.

Consumer expectations for recycled plastic have increased due to the wave of information relating to the harm that misused plastic is causing. In response, governments and companies are making pledges to use recycled plastic. EU member states, for example, have signed several legislative proposals on waste, including an aim to hit a recycling rate of 70 percent for packaging waste by 2030.

Plastic has become public enemy number one, but it doesn’t need to be: if the management of plastic were to be improved, consumers would value its versatility more

The European Commission recently announced that plastic drinking bottles must include a minimum of 35 percent recycled content by 2025, while member states must collect and recycle 90 percent of beverage containers. Fast-moving consumer goods companies like PepsiCo and Unilever have pledged to increase recycled content in their packaging to 25 percent by 2025, while German company Werner and Mertz has shown even greater ambition, aiming to use 100 percent recycled materials for 65 percent of its packaged products by 2025.

These pledges are ambitious and to be admired, but without a system in place to collect and sort the plastic, the paradox remains. According to the Ellen MacArthur Foundation, of the 78 million tonnes of plastic produced annually, 40 percent goes to landfill, 32 percent becomes litter and harms nature and 14 percent is incinerated. While 14 percent is collected for recycling, only two percent of this remains in the circular economy.

The paradox is amplified by the fact that eight percent of the plastic we do collect is downgraded, meaning it can only be used once more and then does not remain in the circular economy. Essentially, the entire value is lost.

If companies want to switch to recycled materials, a considerable amount of recycled plastic is needed, which is currently not available on the market. Plastic manufacturers need a constant supply of recycled material; to create a circular economy, the system needs to change.

Revitalising recycling
If society is going to meet its recycling ambitions, we need to catalyse the circular economy. At the heart of this is the need to view plastic differently – not as waste, but as a valuable resource that is worth collecting. We need to make sure plastic stays in a closed loop through better management of its life cycle.

Everybody knows the adage about square pegs not fitting in round holes. The same can be said for a linear design for a proposed circular economy: no matter how you try and force it, it won’t work. Plastic packaging must, of course, maintain its current function to protect and communicate information about the product inside. If packaging isn’t fit for purpose, it can’t protect the product it is designed for, and the environmental and financial costs only increase.

Manufacturers must design packaging for the circular economy in a way that allows it to be easily recycled by not mixing it with different types of plastic, making the recycling process needlessly more complicated. The Ellen MacArthur Foundation’s 2017 New Plastics Economy report suggested that 30 percent of plastic packaging needed fundamental redesign and materials science innovation. A further 20 percent could incorporate better design for reuse.

Using recycled materials saves resources and lowers carbon emissions. It takes 60 percent less energy to manufacture recycled polyethylene terephthalate plastic bottles compared with bottles from new plastic, but despite this fact, not enough recycled materials are finding their way back into a closed loop. Manufacturers and brand owners with commitments to use recycled content must optimise and identify ways to increase the amounts of recycled material they use if they are to meet their targets.

Creating value
High-profile campaigns in the media have brought plastic waste to the forefront of our collective environmental conscience. Plastic has become public enemy number one, but it needn’t be: if the management of plastic was improved, consumers would value its versatility more. We must remove single-use plastics that belong to the linear economy.

There needs to be a collection system – possibly enforced via legislation – that encourages and incentivises consumers to put the plastic we use into the closed loop. Such a system would help to educate consumers, change habits and transform industry while ultimately providing plastic with greater value.

Deposit return schemes (DRS) are proven systems that encourage consumers to recycle their plastic drinks containers and increase collection rates, while also maintaining the purity of the material. Eight EU nations now have a DRS, with Germany leading the way with a 98 percent return rate. In Lithuania, TOMRA’s innovative reverse vending machines enable the automated collection of beverage containers and saw collection rates soar from 34 percent in 2016 to 92 percent by 2018.

In the current linear system, plastic with value is being lost. Mixed-waste collections, which include plastics that could be recycled in the same way as those collected separately, often end up incinerated or sent to landfill. This needs to be remedied, and the technology to do so already exists.

Optical sorting machinery, currently used in countries like the Netherlands and Norway, enables plastic to be recovered from mixed-waste streams and kept in the closed loop. The recycling industry must adopt better technology to prove to brands that materials recovered from mixed-waste streams can meet their requirements. Once collection rates increase, it must be recycled at the highest quality to make sure it can be used in new products.

Quantity and quality are needed to solve the plastic paradox. As the quantity of recycled material in the loop increases, the mindset of the industry must turn to quality. Using the best available technology for the processes of sorting, washing, extrusion and decontamination of the materials will be essential to achieve the desired quality levels for reuse. Increased use of recycled plastics reduces the demand for new material in many applications, thereby closing the loop further.

A circular economy for all
The plastic paradox can be solved, which is why TOMRA has set ambitious targets to accelerate the implementation of the circular economy and drive the industry forward. We aim to increase the global collection of recyclable plastic from 14 percent to 40 percent, as well as increase the recycling of plastics in closed loops from two percent to 30 percent by 2030.

Redesign and recycling will go some way to achieving this, but the main challenge is to work together to improve plastic collection and change the system. We cannot do this on our own; a collaborative value chain across industries is what’s needed.

We are dedicated to increasing the recycling rates of plastic and many other materials, and have been developing solutions since 1972 to do this. Our newly formed Circular Economy team is devoted to enabling the circular economy by working with manufacturers and retailers.

The desire from governments, companies and consumers to find the solution to the plastic paradox and plastic waste is present and growing. TOMRA’s resource revolution calls on everyone to recognise plastic as the valuable resource that it is, and use it to catalyse the circular economy. In doing so, we hope to contribute to improving the health of both the
planet and society.

Out for blood: the fight against the planet’s deadliest creature

The deadliest creature on the planet is not a great white shark, a starved lion, an enraged hippopotamus or a poisonous snake – it’s the minute mosquito. According to the World Health Organisation (WHO), mosquitoes kill millions of people each year, with malaria – the most deadly mosquito-borne disease – responsible for more than half of these fatalities. The Bill and Melinda Gates Foundation has noted: “Malaria’s economic impact is estimated to cost billions of dollars in lost productivity every year.”

Fortunately, positive developments have been made in recent years to bring the death toll down. Between 2000 and 2015, deaths caused by malaria fell by around 62 percent, meaning that 6.8 million lives were spared. But this number may start to rise once again, especially as funding for malaria control plateaus.

Dr Nathan Rose, Head of Scientific and Regulatory Affairs at Oxitec, a UK-based biotechnology company that develops insect population controls, spoke to The New Economy about the issue: “Over recent years, the number of deaths per year has been decreasing, but that number has now stabilised and may even start to increase again soon because a lot of the tools that have been used for malaria are starting to lose their impact and that includes, unfortunately, some of the main classes of drugs that have been incredibly effective. We’re now starting to see resistance against those, particularly in South-East Asia.”

Yellow fever is spreading and resurfacing in areas where it was thought to be eradicated, including most large urban centres in the American tropics

Dropping like flies
There are thousands of mosquito species, only some of which are vectors for disease. Malaria, for example, is caused by Plasmodium parasites, which are transmitted to humans through the bites of infected Anopheles mosquitoes. Aside from malaria, other mosquito-related viruses have a considerable impact on human health. Several viral diseases are transmitted through the bites of the Aedes aegypti species, including yellow fever, dengue, chikungunya and the Zika virus.

While the Zika virus is not fatal for those bitten, infection during pregnancy can cause severe birth defects. The condition, called microcephaly, causes brain development issues in mild cases and is life-threatening in more severe cases. In 2015, a Zika outbreak that spread across Asia and South America caused a spike in the number of infants born with microcephaly. In fact, in 2016, women in several Latin American countries were warned by government officials to wait until the epidemic was over to conceive.

Dengue, which causes symptoms such as a high fever, painful headaches and vomiting, can be fatal if it’s caught more than once or develops into severe dengue. The spread of the disease, which is a leading cause of death in children in various Latin American and Asian countries, shows no signs of slowing. According to the WHO: “The global incidence of dengue has grown dramatically in recent decades.”

Yellow fever, meanwhile, can be fatal in around 30 percent of cases, Rose said. The WHO states that in sub-Saharan Africa, it is a major public health problem, with 610 million people at risk. It’s also spreading and resurfacing in areas where it was thought to be eradicated, including most large urban centres in the American tropics.

Of these mosquito-borne diseases, only a vaccine for yellow fever exists. “These diseases potentially could impact half the people on the planet because the mosquitoes that transmit them are found so ubiquitously and their range will only spread in coming years as climate change progresses,” Rose told The New Economy. “We’ll see these mosquitoes heading north into Europe and North America and probably further south into other parts of South America, Australia and Africa as well. And so, although these diseases are not as frequently fatal as malaria, they
still have massive impacts.”

Bug off
Thanks to cutting-edge technology, there are new ways to suppress wild populations of Aedes aegypti mosquitoes. The team at Oxitec, for example, breeds male mosquitoes and releases them into the wild to mate with their female counterparts. “All of the female offspring of those matings will die,” said Rose. The process works by adding two new genes to male insects: the first is a fluorescent protein, which helps the team at Oxitec identify their mosquitoes in the wild. The second, and more important, is the self-limiting gene, which produces a protein in females that stops them from developing normally. “It actually stops the female mosquito from developing past the very early larval stages of development,” Rose explained.

The female mosquito will perish before it reaches the reproductive stage of its life cycle, and even before it can fly. “And that’s really important because female mosquitoes are the ones that bite humans and transmit disease. Males don’t. Males just feed on nectar from plants.” The surviving male offspring will continue mating with wild females. Any further female offspring will inherit this self-limiting gene, meaning they too will die. “By doing this, we can actually pretty quickly reduce the population of these disease-transmitting mosquitoes in the wild,” Rose said.

As funding for research has plateaued, fatalities have started creeping up once more

Crucially, the self-limiting protein can be disabled in laboratory settings using an antidote that, along with feed, is added into the water where the larvae develop. “That allows us to produce these mosquitoes in the production facility,” said Rose. “But in the wild, they won’t have access to this antidote, so they won’t be able to survive.”

Oxitec has just completed the first trial of its second-generation mosquitoes – the first used a protein that caused both the males and females to die. The trial took place in the Brazilian municipality of Indaiatuba, just outside of Sao Paulo, in May this year. “We saw up to 96 percent suppression of the wild mosquito population when we released our mosquitoes,
so it was very effective.”

Out of control
Given the success that the project has had so far, it is now expanding. At present, Oxitec is working with the US Environmental Protection Agency (EPA) to conduct its first field demonstrations in the US, which it hopes will take place in 2020. “[The EPA will first] evaluate the safety and the efficacy of the mosquito before we take it into the field, hopefully in Florida,” Rose told The New Economy. “That’s quite important because in the US in recent years they’ve actually had outbreaks of dengue [and] they’ve had locally transmitted Zika, even in Miami. And so there’s a desperate need there for new tools to control these mosquitoes as well.”

Such research is so desperately needed because the Aedes aegypti mosquito is rapidly becoming resistant to the insecticides that are typically used to control mosquito populations. “The mosquitoes have now developed the ability to survive even when those insecticides are sprayed, and so that means the number of tools available to control these mosquitoes is becoming ever more limited,” Rose added.

In fact, according to the WHO’s Global Report on Insecticide Resistance in Malaria Vectors: 2010–2016, there is now widespread resistance to the four most common insecticide classes – pyrethroids, organochlorines, carbamates and organophosphates – throughout the Americas, Africa, South-East Asia, the Western Pacific and Eastern Mediterranean regions. “Since 2010, a total of 68 countries have reported resistance to at least one class of insecticide, with 57 of those countries reporting resistance to two or more classes,” reads the WHO’s website.

Oxitec’s technology could well act as a formidable tool in the fight against mosquito-borne viruses. To this end, the organisation recently received funding from the Bill and Melinda Gates Foundation, the largest private foundation in the world. “We’re developing the same self-limiting technology in Anopheles that can be used in Central America and also in South Asia, [specifically] in India,” said Rose. It will take two to three years of intense research to produce Anopheles mosquitoes with the right set of characteristics to kill female offspring while ensuring males stay healthy enough to be able to mate and to attract mates. “So those are quite significant challenges,” Rose added.

Self-destructive behaviour
Another approach to mosquito control is to use gene-drive technology, which propagates a certain gene in a population to encourage its transmission to offspring. Dr Tony Nolan, a molecular biologist at the Liverpool School of Tropical Medicine, is working on a gene drive using the CRISPR technique. He previously worked on the same research at Imperial College London. He explained: “[It] aims to rapidly transform mosquito populations with genetic elements that either lead to suppression of the mosquito population or to its modification in ways that make the mosquitoes incapable of transmitting the parasite. Gene drives are a type of ‘selfish’ genetic element that bias their own inheritance every generation – every time a mosquito with a copy of the gene drive mates with one that doesn’t, nearly all the offspring inherit the gene drive, meaning that their numbers rapidly increase in the population over a very short time, even if they cause a cost to the population.”

Describing his work thus far, Nolan told The New Economy that his team has recently designed gene drives that can disrupt the fertility of female mosquitoes. This means the gene drives will increase in frequency within a population at the same time that the population’s ability to reproduce is suppressed. “We have shown in the lab that this can lead to invasion of the population and its complete crash very rapidly, even starting from a very low number of released gene-drive mosquitoes,” Nolan added.

The next stage of the project is to test the technology on a much larger scale. Nolan explained that this will take place in bigger enclosures with more realistic settings, which will allow more complex mosquito behaviour to take place. This stage is crucial because understanding behaviours such as mating and egg-laying in the wild is key to successful gene drives. “In the meantime, there are many studies… [into] basic mosquito behaviour and distribution in the wild [being carried out] in order to better understand how this type of technology might work and how best to employ it,” Nolan said.

Such technology does pose risks that must be considered. First, it’s worth noting that there are two main types of gene drives: the first affects the local area only, while the second impacts an entire species. Kevin Esvelt, Director of MIT Media Lab’s Sculpting Evolution group, recommends starting locally to demonstrate how the technology works in various countries and ensure that negative ecological side effects do not transpire. Following these trials, targeting the entire species could theoretically take place.

“Because they spread indefinitely, self-propagating gene-drive systems are much more efficient, but our models predict they will spread on their own if just a handful of carrier organisms escape or are deliberately introduced,” Esvelt told The New Economy. “That’s why self-propagating gene-drive systems should only be constructed or introduced into affected countries once all affected nations have agreed. Crucially, several such systems are likely to be required to overcome pockets of resistance that are likely to evolve… One gene-drive system is extremely unlikely to be enough for eradication, even with the best coordinated effort.”

Esvelt explained that it’s important to gain permission from the authorities before carrying out releases to reduce the risk of a country refusing to cooperate with eradication efforts. Any such blockage would disrupt a project, which could lead to a resurgence in malaria and countless unnecessary deaths. Esvelt added: “Perhaps most importantly, it would set a dangerous precedent for the unilateral use of biotechnologies anticipated to spread across borders without securing permission. As a general rule, scientists should never build constructs that could plausibly spread uncontrollably without the explicit support of all nations
that would be affected.”

No silver bullet
It’s tempting to think that these kinds of solutions could be a panacea for malaria and other mosquito-transmitted diseases, but it’s not so simple. “I think it’s one part of a toolkit that needs to have several different tools in it,” said Rose. “It’s very important to try and get rid of the mosquitoes, but it’s also really important to try and have drugs that you can actually use to deal with the diseases directly where you do have transmission… No single tool is going to be a silver bullet that deals with everything.”

Esvelt added: “Eradicating malaria will require a coordinated effort involving all affected countries, all current prevention and treatment methods and at least one powerful new technology. That technology could be a highly protective and long-lasting vaccine, a long-lasting antimalarial drug or a series of gene-drive systems to alter or suppress the primary mosquito vectors. Vaccine and drug development have proven difficult, whereas functional gene-drive systems have been constructed in malarial mosquitoes.”

The problems caused by the Anopheles and Aedes aegypti loom large. These insects kill millions, cause irreparable health problems and have an enormous economic impact. The war against mosquito-borne diseases cannot be neglected. This is evidenced by the fact that as funding has plateaued, fatalities have started creeping up once more. As such, funding into various avenues must continue, if not increase. Fortunately, gene-editing technology may prove to be so effective it could push the issue over the crucial edge, offering hope to populations around the world.

Some argue that killing off entire species is immoral as we cannot possibly know the harm this could cause to ecosystems. While that may be the case, the extermination of wild mosquito populations would be limited to species that carry diseases that are harmful to humans; there are thousands of others that are not. Neither the Anopheles nor Aedes aegypti species are of any further importance to their environments. In fact, very few mosquitoes are: those found in the Arctic, which do not carry human diseases, are a food source for birds and other insects, but these are not the mosquitoes that will be targeted. It is thanks to the work being carried out by Oxitec, Imperial College London and the Liverpool School of Tropical Medicine that we may soon have a solution that could save countless lives and loosen the grip that mosquitoes have on human health.

Research hotspot: Carinthia is an ideal home for hi-tech companies

Over the past few years, Villach, the second-largest city in the Austrian state of Carinthia, has developed into a hotspot for micro and nanoelectronics technology. Austria’s leading research company, Infineon Technologies, is based in the state, demonstrating its credentials as a tech hub.

In November 2018, Infineon invested €1.6bn ($1.8bn) into its Villach headquarters. Today, it is the world’s most advanced semiconductor factory, with a perfected, fully automated production process that produces ultra-thin, 300mm semiconductor wafers, alongside a cutting-edge research and development complex. The company is one of the leading global exporters in electrical technology, all of which is manufactured in-house in Carinthia.

There are other market-leading big tech firms located in Villach, including Lam Research and Intel. These companies work alongside research-intensive SMEs to chart the course of future developments in electronics, microelectronics, mechatronics, sensors and robotics.

Powered by research
Carinthia’s commercial viability is enhanced by its mature research landscape. Five independent research centres, together with the work carried out by the Alpen-Adria University and the Carinthia University of Applied Sciences, contribute to the province’s high degree of innovation. The largest research and development institution in the state is Silicon Austria Labs, one of Europe’s leading research institutions in electronic-based systems. In fact, Villach is one of the three locations in Austria (along with Graz and Linz) that specialise in intelligent sensors and power electronics.

As well as being a melting pot for research and innovation, Carinthia has a highly skilled and productive workforce on offer

While Villach is the home of microelectronics, Klagenfurt is the provincial capital of Carinthia and the state’s world-class IT centre. At its heart lies the 34,000sq m Lakeside Science and Technology Park, which provides excellent synergy between companies, researchers and educational institutions. The park is currently home to more than 70 companies and around 1,300 employees. In addition, there are three research facilities and the Educational Lab, which offers modules in a variety of topics, such as new areas of research. It also offers inspiration to young people, encouraging them to get involved in the sciences. Furthermore, the park is home to Carinthia’s start-up developer, build! Gründerzentrum Kärnten.

This highly conducive environment provides an optimal framework for organisations making cutting-edge advances in their respective fields. For example, the park is home to a branch of Joanneum Research, a pioneering robotics institute, and Lakeside Labs, which specialises in ‘self-organising networked systems’. At present, the park is investing around €30m ($33m) for an additional 9,000sq m of innovation space and laboratories to attract more forward-thinking researchers from all over Europe.

Why Carinthia?
BABEG Invest in Carinthia is currently designing a 5G Playground and a new digital innovation hub, which will be based inside the Lakeside Science and Technology Park. Once complete, companies and researchers will be able to use the playground to test, develop and research all kinds of applications, software systems and 5G products in this unique indoor and outdoor laboratory.

In addition to such fantastic infrastructure and investment, one of the biggest advantages to Carinthia is its enviable position on both European transport corridors – the Baltic-Adriatic Corridor and the Tauern Line. Everything is quick to get to within the state as well, making it extremely convenient for businesses.

As well as being a melting pot for research and innovation, Carinthia has a highly skilled and productive workforce on offer. Carinthia’s business-friendly policies provide companies with a stable environment, a good funding structure and the security to plan ahead. These factors complement Carinthia’s high quality of life, family-friendly environment and excellent education system for children of all ages. Carinthia is a truly special place in which to live, work and innovate – with its beautiful surrounding landscapes, sublime mountains and crystal-clear lakes, it is easy to balance highly productive industry with natural beauty.

Collection of genetic data leads to privacy concerns

A DNA test can reveal surprising facts about us – certain genes make us more inclined to have dry earwax, for example, and others make us more likely to sneeze when we see a bright light. Some genes even result in people being more attractive targets for mosquitoes, so if you’ve ever felt personally singled out by the insect during the summer months, it’s not a cruel conspiracy – it’s your DNA.

Innocuous facts like these were what DNA kits were used for finding out when they first became commercially available. However, as the tests have become more sophisticated, the companies behind them have shifted their marketing focus. Users of at-home DNA tests have been known to uncover deep-rooted facts about themselves, from discovering long-lost relatives to learning of their ancestors’ origins and their susceptibility to genetic diseases.

Finding out that you have a pre-existing health condition might not seem like the best idea for a Christmas present, but that hasn’t stopped the test kits from enjoying a surge in popularity. MIT Technology Review estimates that by the start of 2019, more than 26 million people had taken an at-home ancestry test. The market is expected to be worth $45bn by 2024.

Nevertheless, despite the emerging industry’s rampant growth, there have been mounting concerns that its practices could infringe on consumers’ rights. Whenever people fork out $100 to $200 for a DNA test, the hidden cost of that transaction is their personal data – which, from then on, is held in the databases of a private company. Once these companies obtain genetic information, it’s very difficult for users to get it back.

By taking DNA tests at home, many have unwittingly stumbled upon long-kept family secrets. Some have seen their parents go through a bitter divorce after their test revealed they were actually conceived through an affair

Ignorance is bliss
Long before people were able to take DNA tests from the comfort of their own home, psychologists worried about their possible impact on people’s mental health. Ever since the Human Genome Project was started in 1990, many scholars have maintained that DNA tests should be used with caution, on the grounds that understanding one’s own health risks could lead to anxiety or depression.

Conversely, a study by the Hastings Centre found that discovering an increased risk of developing Alzheimer’s disease did not make people more depressed or anxious. And in the event that people discover a particularly urgent health risk – like a mutation of the BRCA1 or BRCA2 genes, which puts individuals at a high risk of developing cancer at a young age – any adverse psychological effects are presumably worth it to obtain this life-saving information.

However, at-home DNA tests could still pose a risk to mental health, in part because they remove medical professionals from the equation. Adrian Mark Thorogood, Academic Associate at the Centre of Genomics and Policy, warned that this is far from best practice for receiving a DNA test result. “Results should be communicated through a medical professional who can interpret the result in the individual’s specific context, and offer a clear description of the test’s limits,” he told The New Economy.

Without a professional’s assistance, users could be left alone to battle with a troubling revelation about their health. There is also a danger that without guidance, some people could misinterpret their test result, placing undue stress on their mental health.

There is another unpleasant discovery that people can make through a DNA test – one they may be even less prepared for. By taking DNA tests at home, many have unwittingly stumbled upon long-kept family secrets. Some have seen their parents go through a bitter divorce after their test revealed they were actually conceived through an affair. Others have discovered they were conceived by rape and that their mother decided to never tell them. What began as a seemingly harmless urge to find out more about their heritage ends in psychological trauma and family breakdown.

Brianne Kirkpatrick, a genetics counsellor, is part of a growing sector of therapy specifically tailored towards helping people come to terms with receiving unexpected DNA results. One can’t help but wonder whether her patients end up wishing they’d never taken the test at all.

“I don’t recall anyone saying they wish they could go back and not learn the truth,” Kirkpatrick said. “But I have had a number of people say to me they wish they had found out their shocking information from a person, rather than a computer.”

While we might think we’d prefer to suffer a DNA leak than a leak of our credit card details, genetic data has its own unique set of complications

The fact that virtually anyone can now find out their real parentage through a simple DNA test has wide-reaching repercussions for the accountability of paternity. Historically, men have always had a much greater ability to conceal their status as a parent, as they don’t have to bear the child. The world of direct-to-consumer DNA testing blows this capacity for anonymity out of the water.

This is particularly problematic when it comes to sperm donation. Anonymity is a key selling point for many potential donors, but now all their future biological offspring has to do is swab the inside of their cheek to completely compromise that anonymity. Research suggests that we could see a drop in donor rates as a result. A 2016 study in the Journal of Law and the Biosciences found that 29 percent of potential donors would actually refuse to donate if their name was put on a registry.

The wave of parental discoveries made through direct-to-consumer DNA tests raises questions about where the responsibility of the seller sits in all this. Most health professionals recommend that individuals seek out genetics counselling once they receive DNA results. Some, like Invitae, offer counselling services but aren’t direct-to-consumer companies. Many of those that are – including 23andMe – do not offer such a service. It could be argued that this shows a certain disregard for the consequences of using their product. Unfortunately, irresponsible decisions like this have tended to characterise the industry’s path to success.

Genetic Wild West
In September 2019, 17 former employees from the Boston-based genetic testing company Orig3n accused the firm of giving consumers inaccurate results. Allegedly, if a customer took the same test twice, their results could be extremely different each time. A former lab technician produced a leaked report to Bloomberg Businessweek that revealed 407 errors like this had
occurred over a period of three months.

Part of Orig3n’s USP was that it offered advice supposedly calculated based on a consumer’s genetic profile. Former employees have cast doubt over the company’s modus operandi by claiming that the advice they gave was in fact routinely lifted from the internet. The advice given ranged from the technically correct but uninspired to the broadly unhelpful – such as telling people to eat more kale – and the utterly bogus, like advising clients to eat more sugar to eliminate stretch marks.

Although Orig3n is a relatively small player in the sector, news of this scam nonetheless illustrates how little protection consumers have in this nascent market. Analysts say we are currently witnessing a ‘Wild West’ period in the consumer genetics space thanks to a lack of regulation, raising concerns over whether we can trust these companies with our genetic data. While we might think we’d prefer to suffer a DNA leak than a leak of our credit card details, genetic data has its own unique set of complications.

“In the United States, if my social security number is stolen, that is difficult, but not impossible, to get frozen, changed, etc,” said Natalie Ram, an associate professor at the University of Maryland Francis King Carey School of Law and a specialist in bioethics and criminal justice. “But there’s literally no way to change your genetic code.”

Genetics platforms like 23andMe, AncestryDNA and FamilyTreeDNA are now sitting on a goldmine of very personal data. In 2013, a 23andMe board member told Fast Company that it wanted to become “the Google of personalised healthcare”. If this statement makes anything clear, it’s that the company wasn’t planning on making its millions simply by selling DNA test kits: its mission was always to amass significant amounts of data on its users, which it could then monetise.

There is a wide range of reasons why companies might want to buy genetic data. Perhaps the most benign is medical research, which genetics platforms allow users to opt in or out of. But other companies might use your genetic data to better sell you products or, conversely, deny them to you – for instance, one sector that would see a clear monetary value in obtaining genetic data is insurance. In the US, the Genetic Information Nondiscrimination Act of 2008 prevents employers and health insurers from using a person’s genetic information when making decisions about hiring, firing or raising rates. However, this does not include life insurance or short or long-term disability insurance.

At first glance, it seems as if there’s a simple solution: if users are concerned about these risks, they should just choose for their data to be kept anonymous. However, choosing this option is not as foolproof as it once was. As long ago as 2009, researchers demonstrated that they could correctly identify between 40 and 60 percent of all participants in supposedly anonymous DNA databases by comparing large sets of that data with public datasets from censuses or voter lists. Since that experiment, DNA databases have grown massively.

“With access to four to five million DNA profiles, upwards of 90 percent of Americans of European descent will be identifiable,” said Ram. “It’s verging on a comprehensive DNA database that no US state or jurisdiction has suggested would be appropriate.”

Shaping the law
With comforting statements like “your privacy is very important to us” (ancestry.co.uk) and “we won’t share your DNA” (familytreedna.com) emblazoned on their websites, some genetics platforms seem to be making privacy their number one priority. In the US, 23andMe and Ancestry are part of the Coalition for Genetic Data Protection, which lobbies for privacy protection in the DNA space. However, while the coalition advocates genetic data privacy in a specific context, it argues for a one-size-fits-all policy concerning all data. By comparison, the EU’s General Data Protection Regulation regards genetic information as ‘personal data’, which makes DNA unique from other kinds of data.

There is a fundamental legal problem with boxing genetic data in with all other varieties, including the data that social media websites collect about us. In most cases, what a person does on the internet implicates them alone – genetic data is different. We share our DNA with members of our family, which means that sharing it without their consent can be problematic.

“Even if I can consent to using my DNA to identify me, that should not extend to my ability to consent to using my DNA to identify my relatives,” said Ram. “The reason I think… that’s a really critical distinction is because genetic relatedness is almost always involuntarily foisted upon us. So we don’t choose our parents, we don’t choose how many siblings we have. It’s a product of biology, not a product of choice.”

The legal issues surrounding genetic relatedness were put to the test in 2018 when police discovered the true identity of the Golden State Killer, who terrorised California in the 1970s and 1980s in a homicidal spree. Law enforcement officials were able to convict him only because they had succeeded in connecting the DNA of the suspect with that of a family relative on GEDmatch, a genetic database in the public domain. Across the US and around the world, people celebrated the arrest of a notorious criminal. The only problem was that the means of capturing him was not necessarily legal.

Prior to the case, GEDmatch’s site policy made no explicit reference to the potential use of consumer’s data by law enforcement. However, the company defended itself by saying that users should have assumed it could be put to that use.

“While the database was created for genealogical research, it is important that GEDmatch participants understand the possible uses of their DNA, including identification of relatives that have committed crimes or were victims of crimes,” said GEDmatch operator Curtis Rogers in a statement.

Some genes even result in people being more attractive targets for mosquitoes, so if you’ve ever felt personally singled out by the insect during the summer months, it’s not a cruel conspiracy – it’s your DNA

However, privacy advocates like Ram argue that users’ consent for law enforcement to look at their data should not have been assumed. “At least from a constitutional perspective in the United States, individuals ought to be recognised to have what’s called an expectation of privacy in their genetic data, even if they use one of these services,” she told The New Economy.

After the case, genetics platforms updated their policies to clarify their position on law enforcement’s use of people’s data. Interestingly, they took very different stances. While 23andMe and Ancestry said they would not allow law enforcement to search through their genetic genealogy databases, FamilyTreeDNA updated its policy to say it would give up data to officials, but only in the investigation of violent crimes. Users didn’t know it at the time, but FamilyTreeDNA’s policy update was already too little too late: in January 2019, it was revealed that the company had been secretly working with the FBI for nearly a year to solve serious crimes, without informing its users.

The Golden State Killer case exposed how little protection consumers really had in the direct-to-consumer genetics market. It showed that genetics platforms were capable of suddenly changing or contradicting their own policies and even, in the case of FamilyTreeDNA, betraying the trust of consumers.

Some might argue that this infringement on genetic privacy is simply the price we must pay to catch dangerous criminals. Of course, without the use of a genealogy database, the Golden State Killer may never have been caught. But the fact that genetic data can be harnessed to solve very serious crimes should not justify law enforcement’s unbridled access to such databases. Abuses of power do happen and, in the context of direct-to-consumer DNA tests, they already have: in 2018, for example, Canadian immigration officials compelled a man to take a DNA test and upload his results to FamilyTreeDNA’s website. They then used the website to find and contact some of his relatives in the UK to gather more evidence in order to deport him.

Today’s consumers are continually adjusting to shrinking levels of privacy. From the introduction of video surveillance and the mapping of residential areas on Google Earth to the revelation that Facebook harvests vast amounts of user data, we have seen the public react in the same way again and again: there is an initial public outcry, and then consumers simply adjust to the new level of diminished privacy. Our response to the rise of genetics platforms risks the issue being consigned to the same fate.

It is up to regulators to protect individuals’ right to privacy. While our genetic data may be something of a genie out of the bottle, that should not give the companies that collect it free rein over who sees it and what they choose to do with it.

New rice-milling solutions could give a boost to SME mills

Globally, there is a relatively small number of large commercial rice mills producing more than 100 tonnes of product per day – fewer than 50,000, in fact. These mills perform well and use less power for each tonne milled (around 40kWh) than small and medium-sized enterprise (SME) mills, which use around 80kWh per tonne milled. However, larger mills require lots of capital to build, operate and maintain, and also require substantial quantities of rice in order to operate at a cost-effective level.

There are some 1.5 million SME mills worldwide that mill under 100 tonnes of rice per day. Many of these smaller mills do not benefit from modern milling solutions due to their existing infrastructure, limited capacity and lack of finance to reinvest. Thus, SME mills are locked in a perpetual cycle of operating destructive, antiquated machinery, or are forced to replace like-for-like, having little choice but to opt for cheap and poor-performing machinery.

Over 90 percent of the $4bn of projected sales of rice-milling equipment between 2018 and 2023 will be from machinery largely superseded in the 1980s. Outdated machinery is both ineffective and wasteful; a modern mill can return 70 percent of milled rice (both broken and unbroken) from paddy. Meanwhile, according to the Institute of Mechanical Engineers in its Global Food: Waste Not, Want Not report, using poor storage and old machinery can cause up to 80 percent of the entire rice crop to be lost post-harvest. These losses are unsustainable with a growing
population and demand.

Over 90 percent of the $4bn of projected sales for rice-milling equipment between 2018 and 2023 will be from machinery superseded in the 1980s

Empowerment through technology
Koolmill provides empowering technology that enables efficient distributed milling on demand and at the point of use. We address three key problems in milling: lowering power consumption, quantitative improvement (more milled rice from the same input) and qualitative improvement (the milled rice is of a higher quality). As such, Koolmill produces more food from existing harvests with less power, less loss and less damage. By integrating simpler distributed storage and milling solutions, we are working to minimise these post-harvest losses, thereby maximising the return of food and high-value by-products from bran and husk. This is vital, because modern rice mills can’t be efficiently scaled down to meet the needs of SME mills. Indeed, there is now a push for larger mills to reduce the cost of production, which requires the trucking in and redistribution of massive quantities of rice.

Heavy losses occur throughout the lengthy rice value chain. Our technology helps to prevent this by shortening and rebalancing the existing value chain to minimise the interface losses in transportation. Improving the storage and transportation of rice and maximising the return of undamaged rice from milling will contribute to significantly less food loss.

Essentially, we seek to create shared value, to retain value locally and to distribute it more equitably between stakeholders in a shortened value chain. What’s more, Koolmill is affordable, accessible and available to all millers, regardless of size or location. It provides SME mills with the opportunity to transition from low-value commodity producers to value-added, market-leading food producers.

We also contribute to 16 of the 17 Sustainable Development Goals set by the UN. Koolmill is driven by its vision and values – we believe that sustainable employment produces improved economic opportunities, leading to higher incomes which, in turn, improve education and nutrition, and contribute additional tax revenue for local economies.

Market focus
China is the largest rice market globally, and demand is growing. The support we have seen in China, both through grants from the government and private investment, has enabled us to progress there. We have also just embarked on a two-year Newton Project, supported by Innovate UK and the Chinese Government, further extending our activities in the country.

There are other markets that also show great promise. On August 31, 2019, we completed an Innovate UK Newton Bhabha Fund project in India, working alongside local academic, manufacturing and milling partners. The Indian rice market is the second-largest globally and is currently more advanced than the Chinese market, making it our primary target market.

We have patents covering over 70 percent of global rice production and will launch our services to key markets such as Indonesia, the Philippines, Vietnam, Thailand, Myanmar, Sri Lanka, Greece, Turkey, Brazil and the US, as resources allow. Key to this roll-out is our established global network of collaborative partnerships, including academic, manufacturing, technological and milling partners, as well as our proven unique selling points and novel pay-as-you-mill business model.

Food security
The Food and Agriculture Organisation of the UN estimates that rice production will need to increase by 70 percent in order to satisfy demand from the growing global population, which is estimated to reach 10 billion by 2050. This need is set against the backdrop of decreasing harvest yields, as well as extreme weather events, which put stress on farmland. Yet, the annual triple bottom line (people, planet and profit) loss from rice globally is estimated at $127bn. It takes 2,500 litres of water to grow 1kg of rice, but each year some 60 billion kilograms will be lost post-harvest thanks to poor storage and ineffective milling. The input cost of this rice – land, water, seeds, chemicals, power, fuel and labour – lost post-harvest each year amounts to $14bn.

Koolmill, and project partners Siemens, Sheffield Hallam University and Aston Business School, are pioneering the introduction of a fully digital and affordable auto-tuning rice-milling solution, available to millers through a unique business model that effectively allows SME millers to pay as they mill.

After 150 years of mechanised milling, Koolmill’s technology is recognised as the third generation of milling technology. We are at the start of a very long road of innovation and development, driven by a mantra of producing more by milling less. Koolmill’s vision is to transform an antiquated and wasteful global industry, move it to a sustainable future and lift millions from poverty.

Our primary objective is simple: create and build momentum to move towards delivering our vision. Through this, we will create a profitable, global business that has a positive impact economically, socially and environmentally.