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Michael Bloomberg to Bring Together Heads of State, International CEOs for 2nd Annual Global Business Forum and One Planet Summit

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Michael Bloomberg to Bring Together Heads of State, International CEOs for 2nd Annual Global Business Forum and One Planet Summit

GBF to Address Strengthening Trade and Economic Alliances with Partners Including Alphabet, BNP Paribas, Credit Suisse, Dangote Industries Limited, ENGIE, EXOR, LVMH, Mahindra Group, Misk Foundation and SOHO China

President of France Emmanuel Macron, Secretary-General of the United Nations António Guterres, President of the World Bank Group Jim Yong Kim and UN Special Envoy for Climate Action Michael Bloomberg to Host One Planet Summit to Drive Climate Progress

GBF-Morning Consult Poll Shows Significant Rise in Support for Free Trade Since September 2017

Michael R. Bloomberg today announced the second Bloomberg Global Business Forum will be held in New York City on September 26th at the Plaza Hotel during the 73rd session of the United Nations General Assembly. Supported by Bloomberg Philanthropies, the daylong forum is the sole convening dedicated to encouraging presidents, prime ministers and CEOs to collaborate on trade issues by reaching a better understanding of one another’s challenges and mutual opportunities, thereby strengthening global economic prosperity. With protectionism on the rise – as well as worldwide population growth, economic inequality and climate change threats – it has never been more important for the world’s public and private sector leaders to uncover common goals and engage in economic diplomacy to promote continued globalization, innovation and competition. This one-of-a-kind forum will move beyond analysis and provide participants with the chance to shape the next stage of the global economy.

“The Forum comes at a critical time as tensions around tariffs create economic uncertainty in many industries,” said Michael R. Bloomberg, founder of Bloomberg LP and Bloomberg Philanthropies, mayor of New York City from 2002-2013, UN Special Envoy for Climate Action and WHO Global Ambassador for Non-communicable Diseases. “We’ll bring together business and government leaders to focus on increasing trade and investment, and work together on other shared challenges. The dialogue at the Forum will be a powerful counterweight to talk of trade wars and will help spur new investment and growth around the world.”

The inaugural Bloomberg Global Business Forum held in September 2017 was attended by more than 50 heads of state and 250 global CEOs from all regions of the world including French President Emmanuel Macron, Canadian Prime Minister Justin Trudeau, Ghanaian President Nana Akufo-Addo, former U.S. President Bill Clinton, Apple Inc. CEO Tim Cook, Blackrock Co-founder Larry Fink, Microsoft Corp. Founder Bill Gates, Alibaba Founders Jack Ma and Lucy Peng, PepsiCo CEO Indra Nooyi, SoftBank CEO Masayoshi Son and many others. The Forum also served as the stage for several major announcements including announcements by World Bank President Jim Kim and UNFCCC Executive Secretary Patricia Espinosa Cantellano who joined Michael Bloomberg to announce a new initiative to ramp up finance for climate action; California Governor Edmund G. Brown Jr.’s announcement of the 2018 Global Climate Action Summit being held in San Francisco; Turkish President Recep Tayyip Erdoğan views on security for a region in flux; and discussions by European Commission Vice President Federica Mogherini, ENGIE CEO Isabelle Kocher and Econet Founder Strive Masiyiwa on climate change, mass migration and economic transformations.

The 2018 Bloomberg Global Business Forum partners are Alphabet Inc./Google CFO Ruth Porat, BNP Paribas CEO Jean-Laurent Bonnafé, Credit Suisse CEO Tidjane Thiam, Dangote Group President/Chief Executive Aliko Dangote, Engie Global CEO Isabelle Kocher, EXOR Chairman and CEO John Elkann, LVMH CEO Bernard Arnault, Mahindra Group Chairman Anand G. Mahindra, Misk Foundation Chairman and His Royal Highness Crown Prince of Saudi Arabia Mohammad bin Salman bin Abdulaziz, and SOHO China Founder and CEO Xin (Shynn) Zhang.

Heads of state from five continents are already confirmed to attend this year’s Forum. Prominent attendees expected include United Nations Framework Convention on Climate Change Executive Secretary Patricia Espinosa Cantellano; Mark Carney, Governor of the Bank of England; Adriana Cisneros, CEO of Cisneros Group; Valdis Dombrovskis, Vice President for the European Commission; Roger Ferguson, President and CEO of TIAA-CREF; Dawn Fitzpatrick, CIO of Soros Fund Management; Ken Griffin, Founder and CEO of Citadel; former U.S. Secretary of State Henry Kissinger; Christine Lagarde, Managing Director of the International Monetary Fund; Bill McDermott, CEO of SAP; Nicholas Moore, Managing Director and Chief Executive Director of Macquarie; South African President Cyril Ramaphosa; The Rt HonPatricia Scotland QC, Commonwealth Secretary-General; FeikeSijbesma, Chairman and CEO of Royal DSM; Barry Sternlicht, Founder and CEO of Starwood Capital Group; Margrethe Vestager, European Commissioner for Competition; Alexa von Tobel, Founder and CEO of LearnVest; and Fernando Zóbel de Ayala, President and COO of Ayala Corporation.

Recognizing that saving our planet in the race against global warming is a shared responsibility requiring cooperation between governments, leaders from the public and private sectors and civil society, French President Emmanuel Macron, Secretary-General of the United Nations António Guterres, President of the World Bank Group Jim Yong Kim and United Nations Special Envoy for Climate Action Michael Bloomberg will host the second One Planet Summit on the afternoon September 26th at the Plaza Hotel. They will convene key influencers to account for the implementation of commitments made at the inaugural One Planet event in December 2017, celebrate progress made and further engage public and private actors to raise ambition for multilateral climate action. The One Planet Summit will show how high-level institutional decision-makers as well as individual citizens can all work as one planet to deliver solutions to mitigate the effects of climate change and invent our collective future.

According to a Bloomberg Global Business Forum-Morning Consult poll conducted online from June 22 – 24, 2018, among a national sample of 2,202 adults 18 years and older, support for free trade and expansion of trade across borders has risen significantly since September 2017 to 63 percent (up from 52 percent), while support for globalization has held mostly steady (up to 50 percent from 47 percent).
Overall, the poll shows half of Americans (50 percent) feel that the global economy is on the wrong track compared to less than a third (30 percent) who say it is moving in the right direction. Americans are also “nervous” and “worried” about the potential for a trade war with China with 44 percent of people polled saying they think we are already in a trade war with China. The poll also shows that 46 percent of Americans believe U.S.-imposed tariffs on goods has a negative impact on consumers, versus 28 percent who say it has a positive impact. More people (44 percent) support imposing tariffs on foreign-made goods that compete with U.S.-made goods than oppose it (32 percent). Morning Consult is a leading survey research, media and technology company. More details of the Bloomberg Global Business Forum-Morning Consult poll can be found here.

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Deloitte: Middle East organizations need to rethink their workforce in the wake of COVID-19

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Deloitte: Middle East organizations need to rethink their workforce in the wake of COVID-19 1

Organizations in the Middle East have had to take immediate actions in reaction to the COVID-19 pandemic, such as shifting to remote and virtual work, implementing new ways of working and redirecting the workforce on critical activities. According to Deloitte’s 10th annual 2020 Middle East Human Capital Trends report, “The social enterprise at work: Paradox as a path forward,” organizations now need to think about how to sustain these actions by embedding them into their organizational culture.

“COVID-19 has created a clarifying moment for work and the workforce. Organizations that expand their focus on worker well-being, from programs adjacent to work to designing well-being into the work itself, will help their workers not only feel their best but perform at their best. Doing so will strengthen the tie between well-being and organizational outcomes, drive meaningful work, and foster a greater sense of belonging overall,” said Ghassan Turqieh, Consulting Partner, Human Capital, Deloitte Middle East.

According to the Deloitte report, many organizations in the Middle East made quick arrangements to engage with employees in the wake of the pandemic through frequent communications, multiple webinars where senior leaders addressed employee concerns, virtual employee events, manager check-ins, periodic calls and other targeted interactions with the workforce.

The report also discussed how UAE and KSA governments have reexamined work policies and practices, amended regulations and introduced COVID-19 initiatives to support companies and the workforce in the public and private sectors. Flexible and remote working, team-building and engagement activities, well-ness programs, recognition awards and modern workspaces are among the many things that are now adding to the employee experience.

Key findings from the Deloitte global report include:

  • Only 17% of respondents are making significant investments in reskilling to support their AI strategy with only 12% using AI primarily to replace workers;
  • 27% of respondents have clear policies and practices to manage the ethical challenges resulting from the future of work despite 85% of respondents saying the future of work raises ethical challenges;
  • Three-quarters of leaders are expecting to source new skills and capabilities through reskilling, but only 45% are rewarding workers for the development of new skills; and
  • Only 45% of respondents are prepared or very prepared to take advantage of the alternative workforce to access key capabilities despite gig workers being likely to comprise 43% of the U.S. workforce this year according to the Bureau of Labor Statistics.

“Worker well-being is a top priority today, and similarly to the rest of the world, companies in the Middle East are focusing their efforts to redesign work around well-being by understanding workforce well-being needs,” said Rania Abu Shukur, Director, Human Capital, Consulting, Deloitte Middle East.

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One in five insurance customers saw an improvement in customer service over lockdown, research shows

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One in five insurance customers saw an improvement in customer service over lockdown, research shows 2

SAS research reveals that insurers improved their customer experience during lockdown

One in five insurance customers noted an improvement in their customer experience over lockdown, according to research conducted by SAS, the leader in analytics. This far outweighed the 11% of customers who felt it had deteriorated over the same period.

This is positive news for insurers during such challenging times, with 59% of customers also saying that they would pay more to buy or use products and services from any company that provided them with a good customer experience over lockdown.

The improvement in customer experience also coincides with a rise in the number of digital customers. Since the pandemic started, the number of insurance customers using a digital service or app has grown by 10%. Three-fifths (60%) of new users plan to continue using these digital services moving forward.

However, while the number of digital users grew over lockdown, half of the insurance customer base has not yet chosen to move to digital insurance apps or services.

Paul Ridge, Head of Insurance at SAS UK & Ireland, said:

“It’s impressive that there was a net improvement in customer experience during lockdown, despite the challenges the industry was facing with a transition to remote working and increased claims for things like cancelled holidays. While many were forced to wait on customer help lines for long periods, part of the improvement may be explained by even a small (10%) increase in the number of digital users.

“However, it’s clear that a huge number of customers are still yet to make the move online. It’s vital that insurers provide the most accurate, timely and relevant offerings to customers, and this is best achieved by having additional insight into online customer journeys so they can understand them better. Using analytics and AI, insurers can seize this opportunity to digitalise their customer experience and offer a more personalised approach.”

Meanwhile, for insurers that fail to offer a consistently satisfactory customer experience, the price could be severe. A third (33%) of customers claimed that they would ditch a company after just one poor experience. This number jumps to 90% for between one and five poor examples of customer service.

For more insight into how other industries across EMEA performed during lockdown, download the full report: Experience 2030: Has COVID-19 created a new kind of customer? 

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The power of superstar firms amid the pandemic: should regulators intervene?

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The power of superstar firms amid the pandemic: should regulators intervene? 3

By Professor Anton Korinek, Darden School of Business and Research Associate at the Oxford Future of Humanity Institute. Gosia Glinska, associate director of research impact, Batten Institute for Entrepreneurship and Innovation, Darden School of Business

Recent news that Apple hit a market cap of USD2 trillion highlights an extraordinary success story: A once struggling computer-maker on the verge of bankruptcy innovates its way to becoming the most valuable publicly traded company in the United States.

Apple’s 13-figure valuation is indicative of a larger trend that is not entirely benign — the rise of a handful of superstar firms that dominate the economy. Over the past three decades, advances in information technology, mainly the Internet, have supercharged the superstar phenomenon, allowing a small number of entrepreneurs and firms to serve a large market and reap outsize rewards. And COVID-19 has greatly accelerated the phenomenon by pushing us all into a more virtual world.

Apple — along with Amazon, Facebook, Google, Microsoft and Netflix — is a case in point. The combined market value of those six companies exceeds USD7 trillion, which accounts for more than a quarter of the entire S&P 500 index. Even amid the pandemic’s economic wreckage, these megacompanies continue to prosper. The combined share price for Apple and its five peers was up more than 43 percent this year, while the rest of the companies in the S&P 500 collectively lost about 4 percent.[1]

Superstar firms can be found in almost every sector of the economy, including tech, management, finance, sports and the music industry. They command increasing market power, which has consequences for technological, social and economic progress. It is, therefore, critical to understand how their advantages arose in the first place.

THE FORCES BEHIND THE SUPERSTAR PHENOMENON

The “economics of superstars” was first studied by the late University of Chicago economist Sherwin Rosen. Forty years ago, Rosen argued that certain new technologies would significantly enhance the productivity of talented workers, enabling superstars in any industry to greatly expand the scope of their market, while reducing market opportunities for everyone else.[2] Digital innovations, including advances in the collection, processing and transmission of information, is what Rosen envisioned would lead to the superstar phenomenon.

Digital technologies are information goods, which are different from the traditional, physical goods in the economy. What it means is that fundamentally different economic considerations apply. Unlike physical goods — a loaf of bread or a car — information goods have two key properties: They are non-rival and excludable. Non-rival means that something can be used without being used up. Excludability means that an owner of digital innovation can prevent others from using it, by protecting it with patents, for example. These two fundamental properties of information goods are what give rise to the superstar phenomenon.

In a working paper I co-authored with Professor Ding Xuan Ng at Johns Hopkins University[3], we described superstars as arising from digital innovations that require upfront fixed costs that allow firms to reduce the marginal costs of serving additional customers.[4] For example, once an online travel agency has programmed its website at a fixed cost, it can easily displace thousands of traditional travel agents without much additional effort, scaling at near-zero cost.

Because a firm can exclude others from using its digital innovation, it automatically gains market power. The innovator then uses that power to charge a mark-up and earn a monopoly rent — basically, a price superstars charge in excess of what it costs them to provide the good — which we call the ‘superstar profit share’.

THE POLICYMAKER’S DILEMMA

In a vibrant free market economy, businesses compete for customers by innovating and improving their offerings while keeping prices low; otherwise, they are displaced by more innovative rivals entering the market. Unfortunately, the increasing monopolization of the economy by technology superstars is weakening the competitive environment around the world.

Monopoly power is the main inefficiency from the emergence of superstar firms, because superstars can exclude others from using the innovation that they have developed.

So, what policy measures can be employed to mitigate the inefficiencies arising from the superstar phenomenon?

We do have antitrust policies designed to promote competition and hence economic efficiency. Authorities could take a drastic measure and break up monopolies. Or they could tax all those excess profits megacompanies make.

Another policy to consider involves giving consumers control rights over their data. Right now, only companies have that data, and they are selling it. If you free it up and don’t allow them to sell it anymore, it reduces their monopoly profits. And if you give consumers more freedom over their data, they could, for example, share it with the latest start-up and create a more competitive landscape.

However, such policy remedies can be a double-edged sword. On the one hand, they reduce monopoly rents. On the other hand, they can also reduce innovation.

Innovation requires investments in R&D, which represent a significant sunk cost that only large firms can afford. Government regulations can easily backfire, discouraging large firms from making long-term R&D investments.

What, then, is the best policy intervention? Professor Ding Xuan Ng and I believe that basic research should be public. Digital innovations should be financed by public investments and should be provided as free public goods to all. This would make the superstar phenomenon disappear, and the effects of digital innovation would simply show up as productivity increases.[5]

We live in a brave new world that is increasingly based on information. Because the information economy is different from the traditional economy, antitrust policy should be revamped to reflect that. Instead of worrying about the economy being eaten up by these gigantic monopolies, policymakers need to focus on the question ‘What specific actions can we pursue to make the economy more competitive and efficient?’

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