Sunday, August 20, 2017

Efficiency eludes the construction industry

NINE years ago the first concrete was poured for Berlin Brandenburg airport. It was expected to open in 2012, to cost €1.2bn ($1.8bn) and to welcome 34m passengers each year. Today the only people in its terminals are those with hard hats. Six times over budget, the project has had 66,500 building errors in need of fixing. Last year its spokesman was sacked after calling the project a “shit-show” and saying no manager who was not “addicted to pills” could guarantee an opening date.
Berlin’s airport is an extreme example of a broader problem. Superficially, the construction industry would seem healthy enough. The global market is worth $10trn. Euler Hermes, an insurer, expects 3.5% growth this year. Yet more than 90% of the world’s infrastructure projects are either late or over-budget, says Bent Flyvbjerg of Saïd Business School at Oxford University. Even the sharpest of tech firms suffer. Apple’s new headquarters in Silicon Valley opened two years behind schedule and cost $2bn more than budgeted. Smaller projects have similar woes. One survey of British architects found that 60% of their buildings were late. 

Construction holds the dubious honour of having the lowest productivity gains of any industry, according to McKinsey, a consultancy. In the past 20 years the global average for the value-added per hour has inched up by 1% a year, about one-quarter the rate of growth in manufacturing. Trends in rich countries are especially bad. Over the same period Germany and Japan, paragons of industrial efficiency, have seen nearly no growth in construction productivity. In France and Italy productivity has fallen by one-sixth. In America, astonishingly, it has plunged by half since the late 1960s.
Prices for building materials are not to blame. They are subtracted from measures of value-added (and have not risen in any case). The burden over time of complying with regulation—applying for permits, for instance—is only partly responsible. In America such rules account for one-eighth of the productivity lost since 1987, according to the Bureau of Labour Statistics.
More culpable are two broader structural trends. First, the industry has become less capital-intensive, with workers replacing machinery. This shift is more understandable in countries with access to inexpensive labour. In Saudi Arabia, for example, it is cheaper to import workers from India or Pakistan than to buy machinery. In many countries, however, labour costs might be expected to spur firms to substitute workers with capital.
Instead, volatility in demand for construction has trained builders to curb investment. “The industry has learned through bitter experience to prepare for the next recession,” says Luc Luyten of Bain & Company, a consultancy. Capital-heavy approaches to construction bring high fixed costs that are difficult to cut in downturns. Workers, in contrast, can be fired.
The second big problem is that the industry has, for the most part, failed to consolidate. Efficient firms should theoretically squash laggards, yielding bigger, more productive companies. “But construction is an industry that appears to have defied Adam Smith,” says Mr Luyten. That is partly because building codes differ not just between countries but within them, which makes it harder to reap the benefits of scale. The customised nature of most projects further limits the usual advantages of size. Because the designs of most projects differ, contractors have to start from scratch for each one.
America now has about 730,000 building outfits, with an average of ten employees each. In Europe there are 3.3m with an average of just four workers. Competition is fierce and profit margins are thinner than for any industry except retail. This fragmentation creates its own problems. Slim margins make investment even less likely. Often projects have more than a dozen subcontractors, each keen to maximise profit rather than collaborate to contain costs, says Thijs Asselbergs, a professor at Delft University of Technology.
The result is an industry that raises prices for clients and mostly ignores tools that might improve productivity. “While we are all using iPhones, construction is still in the Walkman phase,” says Ben van Berkel, a Dutch architect. Many building professionals use hand-drawn plans riddled with errors. A builder of concrete-framed towers from the 1960s would find little has changed on building sites today, except for better safety standards.
Examples of how the industry might move forward are not hard to find. More builders could use computer-aided design, as is standard among architects. Other methods are in earlier stages, but show promise, such as remote-controlled cranes and self-driving bulldozers (Komatsu, a Japanese equipment-maker, is developing the latter). A few niches, such as maritime construction, have shown how investments in technology and mass production can boost efficiency.

On land, a few firms are mass-producing homes. BoKlok, a spin-off from IKEA, a Swedish flat-pack-furniture seller, does only one-fifth of its construction work on site; the rest is done in factories. Parts can be standardised and costs cut as a result. BoKlok reckons that it builds twice as quickly as the industry norm. An American firm called Katerra also builds prefabricated sections of apartments at a factory in Arizona. It helps that each firm does every stage of construction itself, rather than relying on a tangle of subcontractors.
The fastest gains are in China. Labour productivity is racing ahead at 7% a year, albeit from a low base. Tightening labour supply has prompted firms to test automation—WinSun, a construction company, has built flats using 3D printing. Modular building is also on the rise, with one company erecting a 57-storey tower in 19 days.
However, such techniques remain unusual. For most firms, slim margins and the spectre of future downturns continue to restrain investment. Even for companies that do adopt new methods, growth may be limited by doubts about the quality of new techniques. A few modular towers in China have seen water seep between units. In Britain, past attempts at mass-produced housing are a sour memory: poorly built modular social housing from the 1960s has been demolished. British mortgage lenders shun homes built with “non-traditional construction methods”. BoKlok and Katerra hope their buildings will last a century. But perceptions, like so much else in construction, can be slow to change.

Friday, August 18, 2017

In India, an Uber for farm machinery aims to make a difference in rural areas

Uber has inspired countless businesses to adopt its asset-light and on-demand approach to their industries. The examples are countless. Food delivery, dry cleaning, jet planes, home services rental bikes, or even phone chargers to name but a few — but how about farming equipment?
That’s the case in India, where a startup called EM3 AgriServices is helping rural farmers literally get their hands on specialist (and expensive) equipment and machines that would ordinarily be out of their reach. The goal is to help them earn their livelihood with cutting-edge tech without breaking the bank.
The concept is actually quite straightforward. EM3 works with farmers who own equipment like tractors, harvesters and other mechanical implements by allowing them to ‘rent’ out their assets to help pay off the purchase or generate additional revenue. Farmers, typically those in remote regional with small holdings and limited capital, then get access to quality implements and machines on a pay-as-you-use basis on either an hourly or acreage pricing.
That’s important when most farms in India are smaller than three acres. Tight economics, and a reliance on loans to make big-ticket purchases, are thought to be a key factor responsible for a high level of suicides among farmers over the past twenty years.
“The average Indian farm holding is just one percent of what you’d find in U.S., so farmers aren’t able to afford technology, even basic mechanization, because the capital load is too high,” EM3 founder and managing director Rohtash Mal (pictured above) told TechCrunch in an interview.
And he should know. Mal, a 63-year-old self-confessed “corporate world veteran,” started EM3 with his son Adwitiya Mal (CEO) in 2013 after a spell in charge of agriculture machinery manufacturer Escorts gave him a glimpse into the struggles of Indian farmers.
“In the farm equipment business one thing became clear, we did everything we could to help customers buy our products, but the fact is that the small farm could not afford the rate of technology,” Mal senior said.
“We’re inspired by what happens in tech world, but this hasn’t been done in agriculture before. The need wasn’t there in a lot of markets, such as the U.S., which were the foundation heads of technology, but the need is here in India,” he added.
The company calls its business farming-as-a-service — or Faas.
Unlike Uber, which has pioneered an online business model, EM3 is ‘tech-enabled’ rather than ‘tech.’ That’s to say that while it uses common on-demand tech to manage supply-demand, customer data and more, the majority of its business is offline. That’s because, quite simply, its customer base remains disconnected from the internet.
“The majority of farmers are not on smartphones,” Mal junior said. “The smartphone penetration is increasing but it isn’t at critical mass yet so we have a physical on the ground presence.”
So where there are apps for those ahead of the curve, EM3 operates call centers for handling requests from farmers — both inventory owners and prospective renters — and it deploys local representatives in the villages that it serves. But even the select farmers who are online and own smartphones find something comforting and secure about talking to a person on the other end of the phone when it comes to business matters that impact their life, the EM3 execs said.  
To date, EM3 has focused on central parts of India where it claims to have worked with 8,000 farms through its 10 service centers. Mal senior explained that its platform covers machinery and services that span all seasons, but customer activity levels do vary during different parts of the farming calendar and based on location, crop type, etc.
The startup recently partnered with the local government of Rajasthan, India’s largest province by size and a major agriculture producer, to make a push into helping thousands more farmers. It is planning further forays, too, after raising significant funding from investors.
EM3 closed a $10 million in Series B financing led by Global Innovation Fund and VC firm Aspada which will be put to work expanding into more regions, increasing its inventory and developing tech. EM3 previously raised a $3.3 million Series A round led by Aspada in 2015.
Further down the line, Mal senior said he can envisage its business moving into other areas of a farmer’s business where it believes it can add value.
“There’s no other company [offering this service yet, but I’m sure there will be me-toos,” he said.
“We are still significantly ahead, but will have to add more and more to the menu of services to keep our lead. We want to become more dedicated to the farmer and look for more opportunities in farming and adjacent spaces.”
Already there is competition with Gold Farm and Trringo, a subsidiary of automotive conglomerate Mahindra & Mahindra, opening similar services over the past year.
Interest in agritech in India has heated up in recent years. Earlier in 2017, Accel backed AgroStar, a startup that offers a range of guidance and e-commerce services targeted at rural farmers, in its first deal in the sector. Plenty of other VCs in the country have expressed their interest about getting into the space, which has the potential to harness the power of technology to help many farmers in a profound way.

Exports and low unemployment fuel rapid growth in central Europe

Central Europe’s economies have continued their rapid expansion, outpacing their peers in western Europe as rock bottom interest rates and record low unemployment fuel consumer spending. With the eurozone’s recovery also pushing up exports from the region, Romania’s economy grew at the fastest annual rate in the EU in the second quarter. The Czech Republic, Poland, Slovakia and Hungary also reported strong growth, according to preliminary data on Wednesday. Romania grew by 5.7 per cent year on year in the second quarter. The Czech Republic grew by 4.5 per cent, Poland by 4.4 per cent, Hungary by 3.6 per cent and Slovakia by 3.1 per cent. The EU grew by 2.3 per cent. “Obviously we need to get the detailed breakdown but the economies in central Europe are close to being in boom territory,” said Piotr Kalisz, an economist at Citi Handlowy in Warsaw. “The cyclical recovery is well under way, and we expect the strong readings to continue for the next few quarters.” Part of the reason for central Europe’s surge has been increased demand from the rest of the eurozone. Countries such as Slovakia and Hungary are closely integrated into the German industrial supply chain, and have profited as the EU’s biggest economy has accelerated to its fastest rate of expansion since 2014. Domestic demand has also picked up as low unemployment has begun to drive inflation-beating wage increases across the region and encouraged households to spend. However, economists caution that the current rate of expansion is also partly due to government spending programmes, such as Poland’s “500 plus”, which pays families 500 zlotys every month for every second and subsequent child. Such fiscal stimulus, they say, is unlikely to be sustainable. “Romania definitely stands out, but the quality of growth is not as impressive as the headline figure because the economy is mainly driven by government’s fiscal stimulus. That means the current rate of growth may not be sustainable when the positive impact of fiscal measures fades and both exports and investment remain sluggish,” said Piotr Matys, an economist at Rabobank. “There is a similar situation in Poland where the government has introduced a lot of policies which support families and increase households’ incomes. But unless investment also picks up, growth is likely to moderate in 2018.” Monetary policy is also unlikely to remain so supportive. The Czech central bank earlier this month increased rates for the first time since the financial crisis, and economists expect that others across the region will eventually follow suit. “If you look at monetary policy across the EU in recent years, rates have fallen to historic lows, and so the growth we are seeing at the moment is partly the cumulative result of that stimulus,” said Mr Kalisz. “But at some point rates are going to have to go up again, and that is one thing that could slow growth in central Europe.” Perhaps the biggest challenge for central Europe, however, is demographics. In combination with ageing populations, the post-2004 outflow of young workers to western Europe has led to growing labour shortages in the region. Economists warn that the situation is likely to get worse. The Polish government’s decision to lower the retirement age this autumn could see 200,000 people drop out of the labour market, according to estimates from Citi Handlowy. Mr Matys warns that it is also possible that Ukrainian workers — who have helped plug gaps in Poland’s labour market — could be tempted to move further west, after regulations making it easier for them to travel to western Europe came into force this summer. “Demographics are a big concern in the region,” said Mr Kalisz. “And that is not something that you can solve overnight.”

Rare earths make electric comeback after bust

After a spectacular bust in 2012 and several years of stagnant prices, rare earths mined mainly in China are making a comeback. The expansion of electric vehicles and the renewable energy industry are partly behind this year’s renaissance for the 17 minerals, which are also used in smartphones and consumer electronics. Back in 2010 their soaring price caused such angst in Washington over China’s stranglehold on the market that the subject earned a subplot on the House of Cards TV series. Additional mining capacity, as well as end users turning to alternatives, triggered a dramatic price collapse in 2012. Five years on and it is the role of rare earths in permanent magnets used in electric vehicles and wind turbines that has reignited interest. The price of two rare earths, neodymium and praseodymium, has soared more than 50 per cent this year, sending investors into shares of the Chinese companies that mine such minerals. “Where prices had been was not sustainable for Chinese miners,” says Stephen Gill, a portfolio manager for Pala Investments. “And now there’s a new source of demand.” The price for neodymium and praseodymium oxide, which are priced in tandem, is trading at $73.50 a kilogramme in China, compared to an annual average of $38.94 last year, according to consultancy Adamas Intelligence. China Northern Rare Earth Group, the country’s largest producer of rare earths, has been among the biggest beneficiaries of the renewed excitement. Its Shanghai-listed shares have risen 52 per cent this year, and last month the company forecast that its first-half profits would be up as much as 260 per cent from a year earlier. The enthusiasm has extended to Beijing Zhong Ke San Huan, a Shenzhen-listed rare-earth magnetmaker, which last year signed an agreement to supply electric carmaker Tesla Motors. The Chinese company’s shares have jumped almost a third this year as Tesla rolls out its mass-market Model 3 electric vehicle. The likes of Tesla are choosing to use rare earth-based permanent magnet motors, rather than induction motors, in some vehicles, as they are lighter and more powerful. That is key to improving how far the vehicles can go without being recharged, according to David Merriman, an analyst at consultancy Roskill. Argonaut Research analysts estimate that use of magnets in electric vehicles and wind turbines will cause demand for neodymium and praseodymium to increase almost 250 per cent over the next 10 years. Electric vehicles use roughly 1kg more rare-earth oxides than conventional internal combustion cars, according to their research. Chinese and overseas carmakers are now looking to sign long-term supply agreements with Chinese rare-earth producers, according to Ryan Castilloux, an analyst at Adamas Intelligence. “We’re really just at the outset of electric vehicle demand really taking off and having a material impact for magnets,” he says. The effect of rising demand on prices is amplified by the Chinese government’s efforts to curb the illegal supply of rare earths that helped create a glut during the previous boom. Since last year, inspections against illegal suppliers have covered more than 400 companies in 23 provinces, with the provinces of Jiangxi and Fujian undertaking a second round of inspections, Chinese media has reported. Beijing has also sought to consolidate its rare-earths industry under six main state-owned groups, which means a more disciplined approach to supply, according to Mr Castilloux. Persistently low rare-earth prices over the past few years have meant that most Chinese producers have been operating at a loss, he says. “Now they want to restore value at the mine site,” he says. “Given they are vertically integrated they’ll pass the price increases throughout the supply chain so they stand to benefit. It’s a compound benefit which will increase costs and margins.” Yet the giddy rebound in prices is stirring memories of the collapse that followed the previous surge. Higher prices are likely to encourage fresh supplies, which ultimately threaten the upward trend. Rare-earth projects outside China are already gearing up, with London-listed Rainbow Rare Earths aiming to start production at its Burundi project by the end of this year. Canada-listed Mkango Resources is also exploring rare-earths deposits in Malawi. Share on Twitter (opens new window) Share on Facebook (opens new window) EmailShare this chart “The same forces that were set in train with [the] last price spike will now operate more powerfully,” says Amory Lovins, chief scientist at the Rocky Mountain Institute in Colorado. “Despite the increase in the number of EVs and wind turbines, I wouldn’t bet my money on sustainable rare-earth prices.” It is also not in China’s interest for rare-earth prices to head too high. The previous spike forced users to cut their use of rare earths or find alternatives, a process no producer wants. “The [rare-earth] magnets are very good at what they do but you don’t need them,” Mr Lovins argues. “There are other ways to do the same thing as well or a bit better.”

EM worries over swelling influence of ETF flows

Exchange traded funds have helped power the emerging markets rally this year but their increasing sway is creating concerns that the damage could be severe if the flows reverse. The bond and stock markets of the developing world have been on a tear this year, defying initial expectations that the election of Donald Trump would present a major headwind. But the swelling EM ETF industry is worrying some analysts and investors, who point out that developing markets are much less liquid than in the US or Europe. The FTSE Emerging Index has gained more than 19 per cent this year and JPMorgan’s EM bond index has returned 7.3 per cent, markedly outpacing gains in developed markets. The Federal Reserve’s cautious interest rate increases and the slumping dollar have helped buoy emerging markets but much of the rally has been driven by flows into ETFs, passive investment vehicles whose popularity have grown sharply in recent years. Luis Costa, a strategist at Citi, calls this the “ETF-isation” of emerging markets. He estimates that EM ETFs now have almost $250bn under management, with $196bn in equities and $48bn in fixed income. That represents close to a fifth of total EM mutual fund assets under management. Just two years ago, the figure was just above 12 per cent. The figures highlight how the boom in passive investing is not limited just to developed markets that have more liquid assets. In fact, the sixth-biggest ETF by assets tracks emerging markets stocks, data from show. “ETF flows themselves are increasingly representative of asset class sentiment as a whole,” Mr Costa wrote in a note this week. The growth in ETFs appears to have contributed to the drop in global volatility but he cautioned that “vol spikes may become nastier than the ones from the past”. The worry is that if flows into EM ETFs abruptly reverse — perhaps caused by global central banks tightening monetary policy, or renewed concerns over China’s economy — then there won’t be enough buyers to absorb the outflows, causing prices to “gap” lower. This is particularly a concern in EM bond markets, which are far less liquid, or actively traded, than those in the developed world. “There has been a tsunami of money coming into EM debt,” Robert Koenigsberger, chief investment officer of Gramercy, an alternative asset manager, told the FT earlier this summer. “[When the tide] goes out, the damage is going to be unprecedented.” The ETF industry argues that these concerns are overdone and Min Dai, a Morgan Stanley strategist, estimates that EM ETFs only hold about 1 per cent, 5 per cent and 4 per cent of EM local currency bonds, dollar-denominated bonds and equity markets, respectively. He also argues that ETF flows are “stickier” than many fear, given that at least 20-25 per cent of ETF investors are big institutional investors that tend not to shift allocations quickly. “This is in line with our conversations with asset managers that revealed that investors, especially cross-asset strategy funds, use ETFs as part of their allocation into EM. Hence, ETFs’ flows could be more sticky than expected,” Mr Dai wrote in a recent note.

Three megatrends to drive digital business into the next decade: Gartner’s Hype Cycle

Gartner’s Hype Cycle for Emerging Technologies, 2017 reveal three distinct megatrends that will enable businesses to survive and thrive in the digital economy over the next five to 10 years.

Artificial intelligence (AI) everywhere, transparently immersive experiences and digital platforms are the trends that will provide unrivaled intelligence, create profoundly new experiences and offer platforms that allow organizations to connect with new business ecosystems.

The Hype Cycle for Emerging Technologies report is the longest-running annual Gartner Hype Cycle, providing a cross-industry perspective on the technologies and trends that business strategists, chief innovation officers, R&D leaders, entrepreneurs, global market developers and emerging-technology teams should consider in developing emerging-technology portfolios. 

The Emerging Technologies Hype Cycle is unique among most Gartner Hype Cycles because it garners insights from more than 2,000 technologies into a succinct set of compelling emerging technologies and trends. This Hype Cycle specifically focuses on the set of technologies that is showing promise in delivering a high degree of competitive advantage over the next five to 10 years (see Figure 1).

"Enterprise architects who are focused on technology innovation must evaluate these high-level trends and the featured technologies, as well as the potential impact on their businesses," said Mike J. Walker, Research Director - Gartner. "In addition to the potential impact on businesses, these trends provide a significant opportunity for enterprise architecture leaders to help senior business and IT leaders respond to digital business opportunities and threats by creating signature-ready actionable and diagnostic deliverables that guide investment decisions."

Three megatrends to drive digital business into the next decade: Gartner’s Hype Cycle

Figure 1. Hype Cycle for Emerging Technologies, 2017

Note: PaaS = platform as a service; UAVs = unmanned aerial vehicles
Source: Gartner (July 2017)

AI Everywhere
Artificial intelligence technologies will be the most disruptive class of technologies over the next 10 years due to radical computational power, near-endless amounts of data, and unprecedented advances in deep neural networks; these will enable organizations with AI technologies to harness data in order to adapt to new situations and solve problems that no one has ever encountered previously.

Enterprises that are seeking leverage in this theme should consider the following technologies: Deep Learning, Deep Reinforcement Learning, Artificial General Intelligence, Autonomous Vehicles, Cognitive Computing, Commercial UAVs (Drones), Conversational User Interfaces, Enterprise Taxonomy and Ontology Management, Machine Learning, Smart Dust, Smart Robots and Smart Workspace.

Transparently Immersive Experiences
Technology will continue to become more human-centric to the point where it will introduce transparency between people, businesses and things. This relationship will become much more entwined as the evolution of technology becomes more adaptive, contextual and fluid within the workplace, at home, and in interacting with businesses and other people.

Critical technologies to be considered include: 4D Printing, Augmented Reality (AR), Computer-Brain Interface, Connected Home, Human Augmentation, Nanotube Electronics, Virtual Reality (VR) and Volumetric Displays.

Digital Platforms
Emerging technologies require revolutionizing the enabling foundations that provide the volume of data needed, advanced compute power, and ubiquity-enabling ecosystems. The shift from compartmentalized technical infrastructure to ecosystem-enabling platforms is laying the foundations for entirely new business models that are forming the bridge between humans and technology.

Key platform-enabling technologies to track include: 5G, Digital Twin, Edge Computing, BlockchainIoT Platform, Neuromorphic Hardware, Quantum Computing, Serverless PaaS and Software-Defined Security.

"When we view these themes together, we can see how the human-centric enabling technologies within transparently immersive experiences — such as smart workspace, connected home, augmented reality, virtual reality and the growing brain-computer interface — are becoming the edge technologies that are pulling the other trends along the Hype Cycle," said Walker.

"AI Everywhere" emerging technologies are moving rapidly through the Hype Cycle. Technologies such as deep learning, autonomous learning and cognitive computing are just crossing the peak, which shows that they are key enablers of technologies that create transparent and immersive experiences.

Finally, digital platforms are rapidly moving up the Hype Cycle, illustrating the new IT realities that are possible by providing the underlining platforms that will fuel the future. Technologies such as Quantum Computing (climbing the Innovation Trigger) and Blockchain (having passed the peak) are poised to create the most transformative and dramatic impacts in the next five to 10 years.

"These megatrends illustrate that the more organizations are able to make technology an integral part of employees', partners' and customers' experiences, the more they will be able to connect their ecosystems to platforms in new and dynamic ways," said Walker.

5G Is Closer Than You Think, And Here’s How It Will Change The World: Qualcomm

The real challenge for the Internet of Things (IoT) isn’t security or cost, but sheer scale. Take an example of millions of autonomous cars, each with a couple of IoT devices on board to manage the engine and electronics, tracking and mapping systems and infotainment. All these IoT devices will be connected to various servers. Now imagine if today’s 3G or 4G mobile services powered them? You would have network blank spots every few minutes, causing chaos.
Or take what happens when you disembark after a flight into a crowded immigration hall, or at an IPL match or concert with thousands of other people. It’s often tough to even get a tweet out in such densely-packed places. That’s because thousands of users are connected to the same cellular tower. Surely, IoT is a bad dream in such scenarios, when you consider that IoT projections state that we will have around 50 billion connected devices by 2020. In fact, even that massive number seems conservative today. To put it quite simply, existing 3G and 4G networks are simply not designed to cope with the IoT revolution, which will include autonomous cars, robots in factories, smart cities, virtual reality immersive experiences, smart public transport, remote healthcare, and much more. 
To make the future possible, to make IoT and the awesome potential of IoT-enabled technology a reality, we need 5G. We need a world where connectivity is like the air we breathe — ubiquitous, ever-present and never failing. Though not a very precise comparison, it’s a bit like electricity, which powered the modern industrial revolution. If you don’t have electricity, everything comes to a standstill – from homes, to factories, busy airports to railways.
While 3G has meant faster access, and 4G has given us even better reliability and speed. To keep up with the demands of use cases like IoT, 5G technology needs to be built from a wholly different mettle. While 5G will definitely feature a quantum increase in communication speeds and lower latency, it’s not about mere ‘faster’ alone, but about absolute transformation — metaphorically, moving to 5G from today’s mobile networks will be like going from black & white to colour or from reality to virtual reality. Quite simply, it will be a transformation in connectivity and communication the world has never seen before.
Qualcomm readies itself for 5G with these technological breakthroughs (Source:
Qualcomm readies itself for 5G with these technological breakthroughs (Source:
Circle back to the IPL match where you could barely send a tweet because thousands of others were connected to the same cellular tower; in 5G, thanks to a decentralized approach, it would be as if each user has his or her own tower with ample bandwidth to connect to. Even from a crowded stadium you could stream HD video with ease. That’s how 50 or even a 100 billion IoT devices can be connected through a communication fabric that is constantly available, instantly scalable and highly secure. Distance will collapse, the world will be served up on-demand. Access will become a fundamental feature of our lives in the age of 5G; always-on, context aware and intelligent, thanks to the use of Artificial Intelligence technologies that will complement 5G.
And if you think mobile has already changed the world, you haven’t seen the beginning yet. 5G will actually be the wind that powers mobile to change the world like never before. That’s because 5G will bring new opportunities with increased speed, reliability, high-availability and security. It will catalyse the creation of new products and services that have yet to be invented, increase productivity, make education far more accessible – new industries will emerge as 5G becomes reality.
5G to Generate $3.5 trillion in Revenue in 2035, says Qualcomm Study (Source:
5G to Generate $3.5 trillion in Revenue in 2035, says Qualcomm Study (Source:
Take remote healthcare for instance — remote surgeries are still in the realm of strictly controlled experiments; in the age of 5G they will be daily reality because surgeons, healthcare professionals and even patients can trust that connectivity will not fail, that latency will be extremely low and that surgical outcomes will never be impacted by communications failure. In a country like India with young demographics, this means a whole breed of new entrepreneurs will take flight in areas like automotive, healthcare, manufacturing, entertainment and helping the government deliver citizen services. According to an IHS 5G economic impact study, by 2035, industries from retail to education, transportation to entertainment, and everything in between, could produce up to $12.3 trillion worth of goods and services enabled by 5G mobile technology. The 5G mobile value chain could generate up to $3.5 trillion in revenue and support up to 22 million jobs.
Does that mean you need to wait till 2035? 5G is closer than you think. Qualcomm, the R&D engine of the communications and technology industry, and the pioneer of 3G and 4G, is working towards enabling 5G while continuously enhancing today’s LTE and Wi-Fi networks. Qualcomm and allied mobile industry leaders, including AT&T, NTT DOCOMO, SK Telecom, Vodafone, and Ericsson, have committed that the global 5G standard (5G New Radio) will be ready for large-scale trials and deployments starting 2019; just around two years from now. Qualcomm is also the leader in smartphone processors with the Snapdragon family, which means that availability of both the backend, the network and the end-point devices that can leverage 5G will align perfectly. Closer home, the Indian government is preparing to auction 5G spectrum in 2018, which means that India should be among the first countries to benefit from the massive technology and economic advances that 5G will bring.
5G is closer than you think. Get excited about not just using 5G, but leveraging it for your business, your education, and perhaps even to create a whole new set of products and services around it.

Thursday, August 17, 2017

"Smokey and the Bandit’ Charm Fades as Truck Driver Hiring Lags

It’s been 40 years since Burt Reynolds starred in “Smokey and the Bandit” and made driving a rig on the open highway seem like a cool way to make a living. That same year, only “Star Wars” sold more tickets.
These days, “Star Wars” still fills theaters but trucking no longer captures the imagination of movie goers or, it turns out, the young and unemployed. Veteran drivers are leaving the profession, and young people entering the workforce are put off by long hours away from home and the profession’s low-brow image. The result is a U.S. trucking industry with high turnover and a dwindling number of new recruits.
“The question is where we’ll be in five or 10 years,” said Steve Viscelli, a sociologist at the University of Pennsylvania and former driver. “If e-commerce goes up a lot and the introduction of autonomous vehicles is slow and the industry does not shift to millennials, we could see actual shortages 10 years out.”
Most trucking companies have been able to make do so far, but as older truckers retire and an online-buying boom leads to surging deliveries, the fear is a driver shortage will spur delays and lost revenue. Offering generous signing bonuses, new technology and cozier cabs hasn’t done enough to overcome the aversion to lengthy times spent alone on the road. The industry is running out of time, with the baby-boomer demographic nearing retirement and millennials continuing to skirt the sector.

Not Glamorous

The annualized driver turnover rate at large truckload fleets was 74 percentin the first quarter and the industry was short about 48,000 drivers at the end of 2015. That shortage is expected to balloon to almost 175,000 by 2024, according to the American Trucking Associations.
“Every truckload carrier is always scrambling to fill their trucks,” Stephen Burks, an economist at the University of Minnesota Morris who used to be a driver, said in an interview.
Brick Kepler, a recruiter from the Professional Drivers Academy in Milton, Pennsylvania, often gets the cold shoulder when visiting high schools in search of potential workers. He said students have little interest in the trucking industry, with many pressured to pursue college rather than a blue-collar job. Young workers also know they might train for a career only to be replaced by driverless semis in a decade.
“I don’t think people look at the trucking industry as the easy, glamorous, high-paying job they want,” he said. “It doesn’t appeal to the younger generation.”
When they do attract young recruits, operators often encounter another snag: Drivers have to be 21 to take their trucks across state lines, a law that many industry stakeholders are working to change.

Pay, Bonuses

To boost recruitment and keep drivers invested in their jobs, Don Daseke, chief executive officer of specialized tucking operator Daseke Inc., is giving them free stock in the company that vests over five years. “It’s our way of showing our drivers that we respect them and they’re really important to us,” he said.
Some companies offer hefty signing bonuses. According to the American Trucking Associations’ 2014 Driver Compensation Study, 48 percent of newly-signed drivers received a signing bonus averaging $1,500. Some drivers have learned to cheat the system by signing up for a company just long enough to get the bonus, then jumping ship for another one -- a practice operators are trying to limit by withholding payouts until drivers hit certain milestones.
Timothy Judge, director of research at driver-retention consultant Stay Metrics, called such payouts “an act of desperation” and a poor long-term strategy. “What are you communicating to the drivers? That it’s all about the short-term,” he said.
Raising salaries is another option, but it would cut into profit margins. The University of Pennsylvania’s Viscelli said companies would have to double driver pay -- now about $41,000 -- to reduce turnover. About 30 percent of new drivers quit in the first three months, according to Stay Metrics.

Women Workers

Even if they can’t get millennials, shipping companies would do well to reach a new audience. The average worker in the trucking industry is 45 and nearly 75 percent of workers are white, according to the U.S. Census Bureau. About 95 percent are men, according to Ellen Voie, chief executive officer of Women in Trucking.
Truck drivers are “Donald Trump’s base in demographic terms,” Burks said. 
There’s been a growing push to make the job more appealing to women, such as by designing cabs that accommodate shorter bodies and hiring for regional routes that allow drivers to go home at night, Voie said. They’re also adding features that women drivers request like porta-potties, smoke alarms and additional cabinet space.
To boost retention, some companies like Prime Inc. offer new female drivers a female mentor, she said. The industry also starts young, hosting Girl Scouts who crawl into the truck cabs and receive a patch.

Work, Life

Trucking companies could attract more millennial and women workers by improving work-life balance for drivers, Viscelli said. Trading home-cooked meals for fast food pit stops and freshly-washed sheets for a cot in a truck cab takes its toll, and for many would-be drivers, bonuses and raises aren’t enough to compensate for the lifestyle.
“It doesn’t matter what you like in life; it’s going to be affected by living out of a truck,” Viscelli said.
Judge said salary isn’t as important to drivers as companies think. They place a greater value on home time, reasonable hours and their relationship with their dispatcher.
“If you ask executives what is causing people to quit, seven out of eight believe it’s pay,” he said. “For employees, one out of seven say it’s pay.”

An Autonomous Future

Then there’s the threat from autonomous trucks. In the long run, self-driving trucks that companies including Uber Technologies Inc. and Tesla Inc. are working to develop will save freight companies money. But it makes recruiting young people even tougher.
Last week, Tesla met with California and Nevada agencies about testing its autonomous semi truck ahead of Chief Executive Officer Elon Musk’s unveiling of the next addition to the electric-car maker’s lineup.
Bob Biesterfeld, president of North American transportation at C.H. Robinson, said autonomous trucks may still need a driver in the cab to make sure nothing goes wrong.
“Companies are not developing technology with a goal of replacing drivers,” he said. “Their goal is creating safer highways.”
But not everyone buys that, and Viscelli says truckers across the board are worried about their job stability -- a challenge for a sector in search of new recruits.
“The hype might be a little more intense, but this is a really big deal and provoking all kinds of uncertainty,” he said. “There are people with a lot of skin in the game who are very nervous right now.”

Tuesday, August 15, 2017

Agriculture: On the cusp of self-sufficiency

Since Independence, India’s foodgrain production has registered an over a five-fold increase, to around 273 million tonnes in 2016-17. The country has largely attained self-sufficiency as it transformed itself from a status of ‘ship-to-mouth’ to an exporter over the past 70 years.
Despite this progress, the agriculture sector faces major challenges as yields stagnate amidst dwindling average size of landholdings and the vagaries of climate change.
The adoption of Green Revolution in the 1960s gave a major impetus to foodgrain production in the country, which then had largely depended on imports to feed the demand. The rise in irrigation cover, coupled with the adoption of improved and hybrid seeds, largely led to the increased foodgrain output.
The average yields of cereals such as rice and wheat have more than doubled since the 1970s, but are still lower than that of China or the US. The sluggish growth in yields of pulses and oilseeds still remain a concern. Cotton yields have more than doubled since 2001 with the introduction of genetically modified seeds.
The irrigation cover, which stood at around 18 per cent of the area in the early 1950s, has now inched up to over 50 per cent. Despite this, the dependency of Indian agriculture on the south-west monsoon is still high and the output is still vulnerable to any major fluctuations in the annual rainfall pattern.
The share of agriculture in the country’s gross domestic product, which stood at around 53 per cent in the early 1950s, has now come to around 15 per cent. Despite this dip, over half the population in rural India still depends on agriculture and allied sectors such as dairying and poultry among others for livelihoods.
The record food output notwithstanding, in recent years, the per capita net availability of foodgrains per day (including cereals and pulses) has been below 500 grams. As per provisional estimates for 2017, the per day per capita foodgrain availability is estimated at 485.4 grams. This is almost similar to the trend witnessed in the 1960s and 1970s. In 1961, the per day per capita food availability stood at 468.7 grams, while in 1971 it was at 468.8 grams.
The slower pace of growth in per day per capita food availability indicates a trend that production has barely kept pace with the growing population.
Though India has emerged as an exporter of food produce — mainly rice, cotton, fruits and vegetables — in recent years, the country still remains a net importer of edible oils as the oilseed production is still way below domestic demand. So is the case with pulses till recently, although production of legumes had shot up last year.
Cultivation costs
This apart, the rising cost of cultivation coupled with lack of remunerative prices has aggravated the agrarian distress and made farming unviable, at least for a large section of the small and medium farmers. Also, the issue of labour shortage and rising wages has driven Indian farmers to adopt mechanisation.
As farmers diversify from foodgrains to high-value crops such as fruits and vegetables, the adoption of technology is on the rise — be it in terms of hybrids and high-yielding varieties or the practices and techniques.
Going organic
Also, there is a renewed interest in the past few years in concepts such as organic farming. This apart, the forgotten grains such as millets — considered to be nutri-rich and which require less water to grow — seem to be finding favour among farmers as well as consumers. The demand for organic and nutri-rich foods is driving the trend.
The Economic Survey 2016-17 suggests that the response to the agrarian distress needs to be addressed by increasing productivity, mainly by increasing the coverage of water saving irrigation systems like micro irrigation systems and routing inputs through direct benefit transfer mode in a crop neutral manner.
“The controversies on the adoption of high yielding varieties and genetically modified seeds need to be resolved and extended to all crops, not just mustard,” the Survey said.