Two Asian financial giants deserve to be better known
Thu, 20 September 2018 14:46:34 GMT

TOYOTA, Unilever, Barclays, Amazon, Tata. There are 71,000 listed firms in the world, but only a few hundred that many people know at least a little about. Schumpeter would like to propose two Asia-centric candidates: AIA and Prudential PLC. They pass the key tests of relevance. They are big, with a combined market value of $160bn. They are special, having grown profits faster than two-thirds of listed companies over the past decade. They have prospered against the odds, surviving wars, revolutionary Shanghai, decolonisation and the 2008 Wall Street crash. And they illustrate a global trend: the rise of Asia as a mighty force—perhaps eventually the dominant force—in global finance.

AIA and Pru are specialists in getting Asians to save through long-term insurance, typically life or health policies. They span 20 Asian countries, have over 60m customers and employ almost a million agents to sell their services. They are big investors in local financial markets. And they are beneficiaries of...

The high costs of staff turnover
Thu, 20 September 2018 14:46:34 GMT

WORKERS are in a phase of being footloose and fancy-free. The proportion of Americans leaving their jobs voluntarily is at a 17-year high. A survey by Gallup in 2017 found that around half of American employees were hoping to leave their current job.

Some of this is cyclical. The unemployment rate is 3.9%, close to its lowest level in the past 50 years. Workers rightly think that it will be easy to find a new job. But there is also a structural problem in some industries. The hospitality sector, for example, is largely staffed by low-paid, low-skilled young people. In Britain the industry’s annual job turnover is as high as 90%, says Polina Montano, co-founder of Job Today, an app that links employers with potential workers.

It is tempting to blame this restlessness on millennials—people who reached adulthood after 2000 and who are sometimes portrayed as being less committed to their careers than their seniors. Another Gallup survey, this one in 2016, found that 21% of the...

A startup tries to revive train travel in America
Thu, 20 September 2018 14:46:34 GMT

RAILWAYS played an integral role in the development of modern America. The first coast-to-coast line, finished in 1869, allowed the West to be settled. But after the second world war people abandoned trains for cars. After several rail lines went bust, in 1971 Congress nationalised the remnants as Amtrak to stop passenger services from ending completely. But Amtrak has not revived rail’s fortunes.

Brightline, a startup from Florida, thinks it can. Instead of being greeted by grey concrete and the whiff of urine, as at many Amtrak stations, Brightline’s Miami terminus looks like the lobby of a posh hotel. Early this year it opened its debut line, costing $3bn, between Miami and West Palm Beach in Florida, America’s first new privately-funded passenger line for over a century. On September 18th it announced plans to expand, starting with a new line between Los Angeles and Las Vegas.

Wes Edens of Fortress, a private-equity firm, is the founder of Brightline. He...

What Ganesha statues reveal about Indian business
Thu, 20 September 2018 14:46:34 GMT

Is it green enough?

AT THE gate of an old warehouse in Lower Parel, in what was Mumbai’s mill district, a cannon fires a burst of confetti to celebrate the exit of a god. The Hindu deity in question is the smiling, elephant-headed Ganesha, who is thought to bring good luck and remove obstacles in people’s lives. This Ganesha is 20 feet tall and mounted on a blue cobra throne; he is pushed by a team of young men. Inside the gates, amid a fog of spray-paint, workers are putting the final touches to perhaps 50 more Ganeshas of only slightly more modest size. One rides a plaster tiger the size of a large horse, suspended in mid-leap.

Ganesh Chaturthi, the festival celebrating Ganesha, which started on September 13th and lasts 11 days, is one of the year’s biggest events in Mumbai. Modest Ganesha statues are brought into family homes and worshipped; bigger, gaudier ones are mounted in public spaces by community groups and firms. At the festival’s end, hundreds of...

Marc Benioff is the latest tech billionaire to buy a famous magazine
Thu, 20 September 2018 14:46:34 GMT

And for my next trick…

IN THE 20th century people could become wealthy philanthropists by starting publications. Henry Luce and his business partners raised $86,000 to start Time magazine in 1923, but he left a fortune of more than $100m when he died in 1967. These days, wealthy philanthropists become press barons by rescuing publications like Mr Luce’s brainchild.

On September 16th Marc Benioff, a co-founder of, a cloud-software company, and his wife, Lynne Benioff, purchased Time for $190m. They are the latest in a series of tech billionaires to invest in print journalism, following Jeff Bezos, the boss of Amazon, who bought the Washington Post in 2013, and Laurene Powell Jobs, widow of Steve, Apple’s co-founder, who took a majority stake in the Atlantic last year. Each has avowed a civic interest in supporting journalism, not meddling in it.

Tesla’s latest troubles
Thu, 20 September 2018 14:46:34 GMT

“WE ARE about to have the most amazing quarter in our history.” So declared Elon Musk in an email on September 7th to employees of Tesla, his electric-vehicle (EV) firm. This cheery promise came on the heels of self-inflicted blows, most obviously when Mr Musk tweeted carelessly that he had “funding secured” to take the company private, prompting a spike in its share price.

Trouble is looming on several fronts. On September 18th Tesla confirmed that America’s Department of Justice (DoJ) has asked for documents relating to the problematic tweet. Mr Musk later jettisoned the plan to go private (while still maintaining that the funding to do so had been available). The DoJ’s interest comes on top of a civil investigation by the Securities and Exchange Commission into the tweet and into the company’s claims about sales and manufacturing targets. But Urska Velikonja of Georgetown Law School says the DoJ’s involvement is a significant escalation because it raises the spectre of criminal...

Can the EU become another AI superpower?
Thu, 20 September 2018 14:46:34 GMT

ANGELA MERKEL, Germany’s chancellor, has a reputation for being dour. But if she wants to, she can be quite funny. When asked at a recent conference organised by Ada, a new quarterly publication for technophiles, whether robots should have rights, she dead-panned: “What do you mean? The right to electric power? Or to regular maintenance?”

The interview was also striking for a different reason. Mrs Merkel showed herself preoccupied by artificial intelligence (AI) and its geopolitics. “In the US, control over personal data is privatised to a large extent. In China the opposite is true: the state has mounted a takeover,” she said, adding that it is between these two poles that Europe will have to find its place.

Such reflections are part of a wider realisation in Europe: that AI could be as important to its future as other foundational technologies, like electricity or the steam engine. Some countries, including Finland and France, have already come up with...

South Korean firms are keen to invest in the North
Thu, 20 September 2018 14:46:34 GMT

SHIN HAN-YONG likes to think of himself as a pioneer. “We had the spirit to see potential where others didn’t,” says the South Korean businessman. Shinhan, his fishing-gear company, was among the first to begin production in the Kaesong industrial complex, a special economic zone just across the border with North Korea, when it opened in late 2004. Mr Shin had a supervisory role at the complex until it was abruptly shut down in February 2016 following a nuclear test by the North. He still feels bitter about the closure. “Nobody asked us before they closed it,” he complains. “We were hostages to politics.”

But since the spring Mr Shin’s bitterness has been sweetened by renewed hope. In April, Moon Jae-in, South Korea’s president, and Kim Jong Un, North Korea’s dictator, signed an agreement in which they vowed to revive inter-Korean ties. Mr Moon has since outlined ambitious plans for infrastructure investment across the peninsula, including the revival of road and railway links between the countries...

AI may not be bad news for workers
Thu, 13 September 2018 14:54:59 GMT

A SPECTRE is haunting workers—the rise of artificial intelligence (AI). The fear is that smart computer programs will eliminate millions of jobs, condemning a generation to minimum-wage drudgery or enforced idleness. Never mind the robots, fear the software.

There is no need to be so gloomy, say Ken Goldberg of the University of California, Berkeley, and Vinod Kumar, the chief executive of Tata Communications, a unit of India’s biggest business house (which stands to profit from the spread of AI). They have produced a report* that is much more optimistic about the outlook for ordinary employees. In many cases, it says, job satisfaction will be enhanced by the elimination of mundane tasks, giving people time to be more creative.

Their views are backed up by a survey of 120 senior executives, conducted for the report, which found that more of them (77%) thought that AI would create new roles than believed it would replace existing positions (57%; respondents could choose both...

America can’t control the global flow of ideas
Thu, 13 September 2018 14:54:59 GMT

ONE of the quirks of LinkedIn, a career-oriented networking site with over 562m users, is that strangers wish you a happy birthday even when your mum has forgotten. If this happens to you, don’t respond: it could be a Chinese spy. According to Reuters, American counter-intelligence chiefs think that China is running a “super-aggressive” campaign on LinkedIn to recruit experts in health care, green energy and technology. Other agencies are nervous, too. The FBI complains of an “unparalleled” level of economic espionage. The National Security Agency says America is being “pummelled”.

The spooks’ warnings are part of a wave of anger in the West about ideas leaking across borders. On June 1st the European Union complained to the World Trade Organisation (WTO) that China prevents European firms from getting a fair price for their intellectual property (IP). A 215-page White House report on China’s trading practices published in March was filled with accusations of IP violations, including outright...

The FDA moves to harsh the mellow of e-cigarettes
Thu, 13 September 2018 14:54:59 GMT

Genuine device addiction

FOR some, e-cigarettes are nothing short of a miracle. Over time tobacco kills half of its users, according to statistics from the World Health Organisation. But when a solution of nicotine is heated up, the inhalable vapour that results both satisfies smokers and does away with most of the harmful effects of ordinary cigarettes. An array of enticing flavours, such as cherry, dessert, mint and mango, adds to the allure.

As the number of people who vape has risen, from around 7m in 2011 to 35m in 2016, fortunes have been made. The most popular brand in America is Juul, a San Francisco-based startup which has captured 71% of the e-cigarette market there. Part of its appeal comes from the fact that its discreet device, shaped like a USB flash drive, uses a proprietary blend of nicotine to deliver a more immediate hit, closer to that of a cigarette.

But success has brought scrutiny. The problem for Juul, and for firms that want to...

A controversial new copyright law moves a step closer to approval
Thu, 13 September 2018 14:54:59 GMT

LUDWIG VAN BEETHOVEN has been dead for nearly 200 years. The copyright on his music is long expired. But when Ulrich Kaiser, an academic at the University of Music and Performing Arts Munich, recently tried to upload a public-domain recording of his Fifth Symphony to YouTube, he was thwarted by Content ID, an automated copyright filter. Mr Kaiser tried again with recordings of music by Schubert, Puccini and Wagner. Despite being in the public domain, all were flagged for copyright violations by the algorithm.

YouTube built Content ID a decade ago, under pressure from copyright-holders worried that users were uploading commercial music and videos without permission. Ever since users have complained that the algorithm is too aggressive. Now YouTube and other big internet firms may be obliged by European law to employ similar methods there. On September 12th members of the European Parliament approved, by 438 votes to 226, a draft of a new copyright law designed to update the EU’s copyright...

Tech firms disrupt the property market
Thu, 13 September 2018 14:54:59 GMT

SELLING a home is stressful and time-consuming. You must first put up with estate agents’ admonishments about old carpets that need replacing, then with intrusions by prospective buyers who find more faults. A good offer can take months to materialise, only to fall through later. “It’s just not worth your sanity,” groans Anne Aviles, a schoolteacher in Atlanta.

To preserve her equanimity Ms Aviles turned to a firm called Opendoor. She entered her property details on its website and received an offer of $298,500 in seconds. A few days later the company sent an inspector, who deducted $4,000 for a faulty air-conditioning unit and a shabby paint job. It offered Ms Aviles $278,000, after knocking a further 5.5% off for its own benefit. This price was a bit lower than listings for similar homes. But the hassle-free experience, which took about a week, made up for it. She accepted.

Although listings services such as Zillow, a property portal based in Seattle, began to...

Volvo abandons its plans for an IPO
Thu, 13 September 2018 14:54:59 GMT

Less boxy, still safe

VOLVO puts safety first. The Swedish carmaker was the first to introduce three-point seat belts in 1959. Its aspiration is that its technology will ensure that no one is killed or seriously injured in any Volvo sold after 2020. Safety issues may also explain the decision on September 10th to shelve long-held plans for an initial public offering, which Volvo had hoped might value the firm at $30bn. At that lofty price it might have struggled to protect investors’ money as conscientiously as it looks after the well-being of passengers.

The firm said the unpredictability of a brewing global trade war had persuaded it to wait. But an IPO that valued the upmarket Swedish carmaker on a par with Audi—which makes nearly 2m cars a year, three times as many as Volvo produces—always looked a stretch. Its owner, Geely, a Chinese carmaker, decided to delay when it became clear that the firm would not merit such a high valuation.

Volvo is...

CBS faces up to its #MeToo moment
Thu, 13 September 2018 14:54:59 GMT

IT SAYS something about the power Les Moonves wielded in the entertainment industry that one bombshell report of allegations by multiple women of sexual misconduct and harassment could not dislodge him as chairman and chief executive of CBS. Instead, it took two.

But fall he finally did. On September 9th Mr Moonves, long considered one of the most astute executives in the media business, was forced out hours after the New Yorker reported allegations that he sexually assaulted or harassed six women in incidents dating from the 1980s to the early 2000s. That followed another report in July, also in the New Yorker, of accusations from other women of misconduct.

Mr Moonves denies both sets of allegations, although in response to the earlier ones he said he “may have made some women uncomfortable by making advances”. He has surrendered $60m of $180m in severance pay that he would ordinarily be due, pending the outcome of an...

China’s tech founders mostly keep an iron grip over their firms
Thu, 13 September 2018 09:33:26 GMT

A WRY joke has been circulating on China’s internet. The founders of the country’s three most prominent technology firms—Jack Ma of Alibaba, Pony Ma of Tencent and Robin Li of Baidu—go for a stroll. One drowns. How would their stocks react? If it were Mr Ma of Alibaba, its shares would fall. If it were Mr Ma of Tencent (no relation), they would remain unchanged. And if it were Mr Li of Baidu, they would rise.

The joke is one small indication of how China’s entrepreneurs-turned-billionaires, symbols of the rise of its internet, engross citizens. They publish collections of their speeches and pen books, such as “Intelligence Revolution” by Mr Li and “China At Your Fingertips” by Tencent’s Mr Ma, and their various pronouncements on how to succeed are memorialised as quotes.

Lately China’s corporate superstars have given social-media crowds plenty more to parse. The joke proved partially correct about Jack Ma (pictured above): a report that he would abruptly retire, later clarified...

Tencent’s kingdom is under assault from China’s regulators
Thu, 06 September 2018 14:48:53 GMT

LAST December, at a conference in the southern city of Guangzhou, Pony Ma joked that he felt a little nervous to be parted from his phone while on stage. He was responding to criticism about the addictive nature of smartphones, fuelled by what some in China call “electronic opium”: video games, among Tencent’s best-known products and its single-biggest revenue source. Mr Ma, its boss (and China’s richest man, according to the latest annual ranking from Forbes, a magazine), added that his myopia had worsened of late and that eye strain was “also a problem”.

Xi Jinping, it emerged, takes such things more seriously. Last week, according to state media, China’s leader read with dismay a report on the poor eyesight of his young citizens. Late on August 30th the ministry of education and other bodies published a plan to prevent myopia in children and teenagers. Among encyclopedic instructions to beef up the training of optometrists and to adjust the height of school chairs,...

The Trump administration takes on the international postal system
Thu, 06 September 2018 14:48:53 GMT

SINCE Donald Trump became president, economists have been fretting that America is bent on undermining international institutions. The World Trade Organisation is the body most have worried about. But another target has just come into view: the international postal system.

On September 3rd, at a congress in Addis Ababa of the Universal Postal Union (UPU), a little-known UN agency, the Trump administration launched a campaign to reform “terminal dues”. These are the fees a post office pays a foreign mail service to take packages from the airport they land at to the final recipient. Under UPU rules, developing countries currently pay less for the final local delivery of their international mail than developed ones do. Peter Navarro, Mr Trump’s trade adviser, thinks that the Chinese are exploiting these rules to flood America with cheap e-commerce packages. He noted this week in the Financial Times that it costs more to post a package from Los Angeles to New...

How social-media platforms dispense justice
Thu, 06 September 2018 14:48:52 GMT

EVERY other Tuesday at Facebook, and every Friday at YouTube, executives convene to debate the latest problems with hate speech, misinformation and other disturbing content on their platforms, and decide what should be removed or left alone. In San Bruno, Susan Wojcicki, YouTube’s boss, personally oversees the exercise. In Menlo Park, lower-level execs run Facebook’s “Content Standards Forum”.

The forum has become a frequent stop on the company’s publicity circuit for journalists. Its working groups recommend new guidelines on what to do about, say, a photo showing Hindu women being beaten in Bangladesh that may be inciting violence offline (take it down), a video of police brutality when race riots are taking place (leave it up), or a photo alleging that Donald Trump wore a Ku Klux Klan uniform in the 1990s (leave it up but reduce distribution of it, and inform users it’s a fake). Decisions made at these meetings eventually filter down into instructions for thousands of content reviewers...

The pros and cons of collaboration
Thu, 06 September 2018 14:48:52 GMT

COLLABORATION at work is generally seen as a good thing. Production of The Economist is a co-operative process. A crack team of editors removes most of the bad jokes before this column makes it into print. All writers sign a “gag” clause. (How did this get through? Ed.)

Businesses value collaboration. The latest survey by the Financial Timesof what employers want from MBA graduates found that the ability to work in a team, to work with a wide variety of people and to build, sustain and expand a network of people were three of the top five skills that managers wanted. Practical qualifications like accounting, programming and applied microeconomics were among the least-desired attributes.

But managers always have to balance the merits of teamwork, which help ensure that everyone is working towards the same goal, with the dangers of “groupthink”, when critics are reluctant to point out a plan’s defects for fear...