BAM nr. 98 - January 2021 - Global economy seen rebounding by early 2022

ENJOY the QUALITY

*******

ADMIRE the VALUE

No.98/2021

29lei

m a g a z i n e

www.business-arena.ro

GLOBAL ECONOMY SEEN REBOUNDING

BY EARLY 2022

Experts say the global economy is expected to grow in 2021 by around 5%, with pre-pandemic levels of output expected by the end of 2021 or early 2022. However, the recovery will be uneven across various countries, sectors and income levels.

LUXURY & LIFESTYLE

pages 04-13

pages 38 - 71

www.businessarena.ro

TOP BRAND

ENJOY the QUALITY

A B ev e n t s

serving leading businesses and business leaders in Romania

business

l u x u r y &

Inheriting a long tradition in the area of business events, Business Arena Magazine continues to diversify and expand its programs, covering a wider range of subjects, investors, cities and business sectors.

Business Arena is constantly adjusting its business event portfolio to meet market demand, while its long-established award galas and business roundtables continue to represent the highlights of the business year.

*******

ADMIRE the VALUE

EDITORIAL

by

Cristian Cojanu

YEAR OF HOPE With a new government at the helm, Romania hopes to return to growth this year, while treading a narrow path between macoreconomic constraints and social pressure. Europe hopes to see a revival of transatlantic relations now that the new US administration has taken over in Washington, while the launch of vaccination campaigns around the world has brought a ray of hope to end the COVID-19 pandemic.

There is so much to hope for in 2021, but the World Bank has warned that global recovery will not reach the expected levels, “unless policy makers move decisively to tame the pandemic and implement investment-enhancing reforms.” In its January 2021 Global Economic Prospects, the financial institution emphasizes that “top near-term policy priorities are controlling the spread of COVID-19 and ensuring rapid and widespread vaccine deployment. To support economic recovery, authorities also need to facilitate a re-investment cycle aimed at sustainable growth that is less dependent on government debt.”

The report also points out that the short-term outlook is uncertain. “A downside scenario in which infections continue to rise and the rollout of a vaccine is delayed could limit the global expansion to 1.6% in 2021. Meanwhile, in an upside scenario with successful pandemic control and a faster vaccination process, global growth could accelerate to nearly 5%.”

Moreover, the report notes that the pandemic is likely to have long lasting adverse effects on global activity, and “if history is any guide, the global economy is heading for a decade of growth disappointments unless policy makers put in place comprehensive reforms to improve the fundamental drivers of equitable and sustainable economic growth.”

World Bank Group President David Malpass said: “While the global economy appears to have entered a subdued recovery, policymakers face formidable challenges - in public health, debt management, budget policies, central banking and structural reforms - as they try to ensure that this still fragile global recovery gains traction and sets a foundation for robust growth.”

Meanwhile, Romania expects its economy to return to 4.3% growth in 2021, after an estimated 4.4% decline last year.

The National Prognosis Commission (CNP)forecasts the country’s 2020 gross domestic product at 1,040 trillion lei (over 213 billion euro). According to CNP’s projection, agriculture is to shrink by an annual 21.9%, services by 2.3% and industry by 8.7% in 2020. In turn, construction is expected to increase by an annual 10.6%. Exports of goods and services are expected to decrease by 10.6%, while imports are projected to contract by 5.9% in 2020.

Find more expert opinions and economic predictions in this edition of Business Arena.

FROM ALL OF US HERE AT BUSINESS ARENA, ENJOY THE QUALITY, ADMIRE THE VALUE!

http://www.business-arena.ro

1

OPINION

CENTRAL BANKS ARE BETRAYING THE CAUSE

WHY?

Central banks seem more and more inclined to reinvent the role they play in the economy. Their boldness is a result of the fact that, faced with the dramatic turn of events during the 2008 crisis, they shattered all taboos, which has failed to generate the negative impact foreseen by the economic theory. That only confirmed the lesser of the two evils principle.

BY RADU CR|CIUN

http://www.business-arena.ro

A first historic step into the forbidden area was the large-scale rollout of quantitative easing (QE) by the main central banks with the intent of reigning in the 2008 economic and financial downturn. Purchasing the bonds of

2

their own governments and providing limitless liquidity has prevented a complete freeze of the financial system and a global meltdown.

Subsequent attempts at reversing the trend by withdrawing the printed money have been tentative at best due to central bank heads’ anxiety over the prospects of a run on the financial market and a stock market crash.

Efforts to direct expectations towards a QE reversal, such as that by the Fed chair, Ben Bernanke, in the summer of 2013, adversely impacted financial markets. So much so that the Fed had to step back and acknowledge the fact that politically independent institutions, such as the central banks, ended up loosing their independence.

That was probably the decisive moment when central banks took the critical step towards losing the independence of their monetary policy. Had they done so knowingly?

Probably not at the beginning. They entertained hopes that the unorthodox policy could be reversed to reach pre-crisis status quo. The proof lies in the attempts to RADU CR|CIUN reverse it which were quickly abandoned, fearing a stock market decline.

As we moved on, the hostage situation central banks found themselves in went from bad to worse. Economic reliance on printed money increased dramatically in the economic crisis triggered by the recent pandemic. The 2008 quantitative easing seems like a warmup compared with the amounts of money thrown at

the economy by central banks in 2020. “At the economy* is a bit of a stretch, as a large portion can be found in overly inflated financial or real-estate assets.

And it was financial and real-estate assets price inflation and a flat level of prices of consumer goods that fired central banks’ boldness and imagination. On the one hand, a low inflation rate put people’s worries to rest whereas higher prices of financial and realestate assets suited the financial elites owning them. It made everybody happy, even though the cracks in an increasingly polarized society were increasingly visible with political consequences.

Just as prolonged antibiotic use ends up being ineffective, quantitative easing is about to run out of steam. An even more potent antibiotic is needed. For central banks, that means abandoning the primary goal that they have been religiously upholding throughout the last decades: keeping a low inflation rate in check.

The central bank messages that we have been hearing these days show virtually no concern over inflation whose higher rate they seem willing to tolerate. Another shattered taboo. The main concern is to target or rather pin down interest rates. In other words, interest rates must remain low across all maturities, even as inflation goes up. Interest rates will most likely stay below the inflation rate for quite a while, both in the short term, through low or negative key interest rates, and in the medium and long run, through government bond purchases.

Why? What is the reason behind central banks’ decision to agree to this financial repression of holders of interest-bearing financial instruments? There are at least three reasons for which an interest rate increase is not desired.

Firstly, cheap money is a prerequisite to restarting the economy: on the one hand, loans remain accessible, and on the other hand, central banks hope that by penalising savers they will be encouraged to consume and thus drive economic growth.

Secondly, pandemic public spending has generated a huge amount of debt which is funded by mounting government borrowing.

This means that higher interest rates will put more pressure on already significant budget deficits through higher financing costs.

Thirdly, stocks are usually valued based on

the net present value of future cash flows. The discount rate is directly influenced by interest rates. The higher the interest rate, the lower the net present value of cash flows.

As a result, stock will look overvalued.

Consequently, a hike in interest rates will lead to more orders to sell and ultimately to a stock market decline.

Together, these reasons have caused central banks to completely overturn the paradigm according to which they had been operating. Instead of restricting the rise in inflation through flexible interest rate policies, they now restrict interest rate movements through flexible inflation targeting.

Is the National Bank of Romania following the same MO? Not quite. In the past 10-15 years, the NBR’s strategy has run contrary to that of its counterparts in Europe or the developed world: it has focused on stable exchange rates at the expense of interest rate, which more than once rendered the key interest rate irrelevant. Exchange rate stability has been at least as important as a stable inflation rate.

This is not by accident given Romania’s widespread euro-tied prices.

However, over the medium term, the NBR might prove more lenient towards higher inflation rates than in the past. Its explicit reason lies in its concern to keep the rising current account deficit in check. Increasing the key interest rate in response to higher inflation may cause a real or nominal appreciation of the national currency which drives imports and dampens exports.

As far as capping the interest rate at which the state budget is funded, as I explained on a different occasion, the NBR is not willing to offer a free lunch without some strings attached. It is most likely waiting to see evidence of responsible fiscal policy before helping to finance the deficit cheaply by purchasing government bonds on the secondary market. If the evidence is there, then we may expect that its policy will be brought in line with other central banks.

The conclusion is clear and unforgiving. We are entering an age of sacrificing people’s savings for the sake of financial market and national budgets stability. The good news is that economies will not collapse and may continue to provide jobs and prevent rising social tensions. The bad news is that economic polarization will continue and be a driver of social tensions.

http://www.business-arena.ro

3

BUSINESS & ECONOMY

http://www.business-arena.ro

GLOBAL ECONOMY IS EXPECTED TO REBOUND BY EARLY 2022

4

The global economy is projected to grow in 2021 by around 5%, the fastest rate recorded in the 21st century, returning the global economy in aggregate to prepandemic levels of output by the end of 2021 or early 2022, according to PwC Global Economic Watch 2021.

5 http://www.business-arena.ro

While the global economy is likely to be back to its pre-crisis levels, the rebound will be uneven across different countries, sectors and income levels. Growth will be contingent on a successful and speedy deployment of vaccines and continued accommodative fiscal, monetary and financial conditions in each country. �The global optimistic forecasts give confidence that the recovery of the past year losses will be faster than previously thought at the start of the pandemic. Romania is following the global trend, given that the National Commission for Strategy and Prognosis forecasts an increase of 4.5% this year, after the decline of 4.2% in 2020. This is good news for the business environment that will need, however, further government support. Once the pandemic is under control by vaccination, it would be good if the government takes measures for sustainable growth with particular focus on investments and creating jobs. As well, companies need to plan now both in terms of growth and investment, including in their existing workforce, to deal with both the problems caused by the pandemic and the lasting changes it has already imposed on the economy and society,� said Ionu Simion, Country Managing Partner PwC Romania.

GROWTH WILL RETURN BUT BE UNEVEN According to Global Economic Watch 2021, the Chinese economy is already bigger than its pre-pandemic size, but other advanced economies, particularly heavily service based economies like the UK, France and Spain or those focused on exporting capital goods, such as Germany and Japan, are unlikely to recover to their pre-crisis levels by the end of 2021.

The predictions caution that the next three-to-six months will continue to be challenging, particularly for the Northern Hemisphere countries going through the winter months as they could be forced to further localised or full economy-wide lockdowns, as recently displayed in the UK and Germany. So, these economies could contract in Q1 and growth overall is more likely to pick up in the second half of the year, when it is expected that at least two thirds of their population will be vaccinated. In economies such as the UK, France, Spain and Germany, growing but lower levels of output are projected to push up unemployment rates, with most of the jobs affected likely to be those at the bottom end of the earnings distribution, thus exacerbating income inequalities.

MORE INVESTMENTS IN GREEN INFRASTRUCTURE The environment will be an important focus for 2021, significant investment and policy shifts related to the Paris Climate Agreement being expected in the major trading blocks including the US, China and the EU. In this context, global green bond issuance is expected to top USD 500 billion for the first time with investor appetite expected to continue to increase in Environmental, Social and Governance (ESG) funds.

ESG funds will continue to increase and could account for up to 57% of total European mutual funds by 2025. Green bonds, which are used to directly finance environmental projects, currently make up less than 5% of the global fixed income market.

OTHER FORECASTS FOR 2021 In the previous edition of the Global Economic Watch, the Netherlands was credited with the best chance of winning the Euro 2020 championship, which due to the pandemic was postponed to 2021. Meanwhile, the form of the Dutch team has decreased and France now has the best chance to win. The annual average oil price is expected to remain below 60 USD per barrel but likely to pick in the second half of the year. Italy is expected to re-join the two trillion USD GDP club, while the public debt levels in G7 is projected to exceed 57 trillion USD.

BUSINESS & ECONOMY

M&A sector stays strong

GLOBAL M&A ACTIVITY IS SEEN POISED TO ACCELERATE IN 2021 AND BEYOND

http://www.business-arena.ro

Following a rollercoaster year for mergers and acquisitions (M&A), the increase in year-over-year (YoY) value of deals recorded since the beginning of Q3 2020 is likely to continue into 2021, as companies position themselves for improved economic activity and reframe their future for the post-COVID-19 pandemic era.

6

According to EY research looking at global M&A trends in 2020 and the outlook for transactions in 2021, with an overall value of US$ 2.9 trillion, global M&A in 2020 is tracking below 2019’s value of US$ 3.3 trillion, but still ranks fifth for value of deals in the post-global financial crisis period. M&A activity has varied across regions, with values in Asia-Pacific slowing dramatically in the first two months of 2020 before finishing the year with an increase of 19% to US$ 805 billion. In the Americas, M&A values declined by 29% to US$ 1.27 billion, with the US market seeing a fall of 80% at the height of the lockdown compared with 2019. In EMEIA, the decline in deal value is more limited (3%) to US$ 815 billion, with the region having regained most of the lost ground from earlier in the year.

The most active sectors were technology, media and entertainment and telecommunications (TMT) with 5,755 deals valued at US$ 973 billion (up 6% YoY), financial services with 901 deals valued at US$ 352 billion (up 8% YoY), and power and utilities with 525 deals valued at US$ 142 billion (up 34% YoY).

The EY research also reveals that the sectors that have been most exposed to the COVID-19 pandemic have seen a more marked slowdown in 2020, as a result of lockdown restrictions and economic slowdown. The industrials sector (down 18% at US$ 262 billion compared with 2019) and consumer sector (down 16% at US$156 billion during the same period) were particularly exposed.

“In Romania, as expected, the M&A market was affected as well by the Covid-19 pandemic, which generated delays or transaction freezes.

Despite witnessing a significant slowdown in the first part of the year, an unexpected come-back took place in the second half of the year. There is still an appetite for transactions, especially on

the acquisition side, with investors seeing opportunities within this area and during these times.

The energy sector remained the most attractive to investors, supported by the interest in renewable energy, where the largest transactions were recorded, as well as by the IT sector, a leader in terms of adaptability to the new business environment. Traditional sectors such as real estate, agribusiness and services continued to be active. 2021 will bring interesting opportunities in terms of political change, consumer behaviour and entrepreneurs’ ability to adapt to the challenges of post-pandemic uncertainty. The key factor for the success of future transactions will be the efficiency of the actions taken by companies during this period and their positioning towards the future,” said Florin Vasilic\, Strategy and Transactions Leader, EY Romania.

BOLD SECTOR MOVES TO DEFINE THE MARKET IN 2021 AND BEYOND Looking ahead to 2021 and beyond, the sectors that showed deal-making restraint during the COVID-19 pandemic will drive the next wave of activity, according to the research.

For example, the consumer sector has seen an increase in M&A involving assets that struggled through the COVID-19 pandemic, led by more financially resilient competitors, while acquisitions driven by innovative companies with a strong link to their customer base have also emerged. Private equity (PE) firms have also been active in 2020, and they will likely be even more so as businesses and sectors reposition themselves during the anticipated recovery stage in 2021 and beyond. With US$ 2.8 trillion in drypowder available, including nearly US$ 1 trillion dedicated to buyouts, private capital is well-positioned to take advantage of the value creation

during anticipated 2021. The growing presence of special purpose acquisition companies (SPACS) in the market could bring other forms of capital to the deal table this year.

In addition, the increasing trend for alternative deal models, such as joint ventures and alliances, as companies take an ecosystem view, as well as divestments to enable strategic business shifts and reinvestment, are also expected to fuel deal making intentions.

Andrea Guerzoni, EY Global Vice Chair – Strategy and Transactions, says: “Companies in the consumer and industrials sectors will look to combine to take advantage of the anticipated recovery. These businesses will also be looking to adapt to a new environment, in which customer behaviours and preferences have changed dramatically, as a result of the COVID-19 pandemic. There are already signs of such developments through the strong shift to e-commerce amid moves to downsize bricks-and-mortar retail, and the reassessment and de-risking of supply chains for manufacturers.”

IMPACT OF TECHNOLOGY AND GEOPOLITICS TO INFORM CORPORATE STRATEGIES The expected increase in M&A activity comes as nearly two-thirds (62%) of executives believe that their organizations must radically transform their operations over the next two years, accord-

ing to the EY Digital Investment Index. To achieve that, they are starting to turn to emerging technologies, with the internet of things (IoT), artificial intelligence (AI) and cloud computing among the most likely investments in the next two years (67%, 64% and 61%, respectively). With 52% of executives who pursued digital technologies via M&A saying that the approach exceeded expectations and 45% reporting similarly for digital partnerships, 2021 is set to see an increase in deals, corporate venture capital and partnership investments. Geopolitical changes will also inform strategic capital decisions, such as M&A and entering or exiting certain markets.

According to the EY 2021 Geostrategic Outlook, analysing these risks is becoming more important in the current environment, with the COVID19 pandemic acting as a great accelerator for geopolitical change overall.

In Europe and the US, variables such as Brexit, and the impact of any new policies as a result of the US election outcome, will play a key role in how executives are rethinking their corporate strategy and capital allocation. With M&A values in the UK already up 40% in 2020, and with 79% of US companies indicating that they are likely to accelerate M&A strategies, alliances and joint ventures if corporate tax rates increase following the presidential election, the foundations are there for 2021 to be a stronger year for M&A.

ROMANIAN M&A ACTIVITY SAW SIGNIFICANT LEVELS IN A DIFFICULT YEAR The Romanian mergers and acquisitions (M&A) market recorded 91 transactions in 2020, compared to 110, in 2019. According to Deloitte estimations, the total market value, including the transactions with undisclosed values, was of 3.7-4.3 billion euros in 2020 (compared to 4-4.4 billion euros in 2019), while transactions with disclosed value totalled 1.5 billion euros (compared to 1.7 billion euros in 2019).

“2020 saw a decrease in the number of transactions compared to the previous year, which represented a record for the period after the financial crisis, but, considering the unprecedented general context created by the COVID-19 pandemic, we can say these are good results. A quarterly analysis indicates that the second quarter was the most affected, and the following ones saw a notable revival.

2020 also brought the largest transaction of the last decade: the acquisition of assets owned by CEZ in Romania,” said Radu Dumitrescu, Financial Advisory Partner-incharge, Deloitte Romania.

Nine transactions with a disclosed or estimated value of minimum 100 million euros were announced last year. In 2019, their number was similar.

BUSINESS & ECONOMY

“The local M&A activity is fuelled by a real interest of both financial and especially strategic investors for sectors with growth potential.

We have noticed important names of strategic investors targeting the Romanian market for the first time, a phenomenon that suggests an increasing interest for new expansion opportunities in the context of reassessing their strategic plans,” said Iulia Bratu, Corporate Finance Director, Deloitte Romania.

http://www.business-arena.ro

THE LARGEST DEALS OF 2020 WERE:

8

- Macquarie Infrastructure and Real Assets (MIRA) acquiring a portfolio of assets owned

by CEZ in Romania (undisclosed value); - Czech developer CPI Property Group SA acquiring a minority stake in Globalworth, the largest office building owner in Romania and Poland, following a series of successive transactions, among which the largest amounted to around 280 million euros; - Orange Romania acquiring a majority stake of 54% in Telekom Romania Communications (transaction value: 268 million euros); - the 225 million dollars (200 million euros) financing round of UiPath, company active in robotic process automation (RPA), which raised its value to 10.2 billion dollars; - OMV Petrom selling 100% of its stake in Kom-Munai LLP (KOM) and Tasbulat Oil Corporation LLP (TOC) in Kazakhstan to Magnetic Oil Limited (undisclosed value).

According to Deloitte, the most active sec-

tors considering the number of transactions were real estate (including construction), energy and the financial sector. Together, they generated 50 transactions. From the deal value point of view, the most active sector was real estate, followed by technology and energy.

“Our expectations for the M&A evolution during 2021 are optimistic, but reserved. There are signals that the market players will maintain their interest in transactions this year, both on the sell side and on the buy side, but, considering the uncertainty that governs the entire economic spectrum as the pandemic continues, we remain prudent,” added Radu Dumitrescu.

THE ROMANIAN M&A MARKET IN 2020 VERSUS 2019 - market value (disclosed transactions): 1.5 billion euros in 2020 versus 1.7 billion euros in 2019; - estimated market value (including undisclosed transactions): 3.7-4.3 billion euros in 2020 versus 4-4.4 billion euros in 2019; - number of transactions (including transactions with undisclosed values): 91 in 2020 versus 110 in 2019; - number of transactions with disclosed values: 36 in 2020 versus 24 in 2019; - average deal value (calculated for disclosed transactions, excluding mega deals): 42 million euros in 2020 versus 52 million euros in 2019.

HOSPITALITY

HOTELS FOCUS ON SURVIVAL STRATEGY COVID-19 has had a very rapid and drastic impact on the Romanian hotel sector. Looking ahead, hoteliers are prepared to do their best to attract guests and continue operations in 2021, according to a survey prepared by Cushman & Wakefield in partnership with FIHR. Accordingly, 43% of the respondents expressed that they will keep the hotels open if no further lockdown will be applied, while 19% have no intention to close their business in any scenario.

When projecting the performances for 2021, hoteliers believe that the revenues generated by the restaurant, conference/event facilities and spa facilities have high importance to support a sustainable revenue line.

The survey, targeting Romanian hoteliers, was launched in November 2020 to understand the impact of COVID-19 on the Romanian hotel industry, and their perspectives on the outlook of this sector. This survey is the second instalment after a previous questionnaire that was launched in April 2020.

FIGHTING TO SURVIVE 2020 represented a challenging year for everyone, especially for the hotel sector. The high performance achieved in 2019 was preparing hoteliers for an optimistic year in 2020. However, based on the survey results, the reality is that the Romanian hotel market recorded an average YTD fall in profit of 73% in October 2020, compared to the same 2019 period. In terms of hotel KPIs, YTD October 2020 data revealed by STR shows that Romania achieved an average occupancy of

http://www.business-arena.ro

9

HOSPITALITY

24% and ADR of 293 lei. This translates to a 72% decline in RevPAR for YTD October 2020 when compared to the same period in 2019.

Although projecting performance for such an uncertain period is difficult, according to the current survey, Romanian hoteliers are forecasting an average annual occupancy of 31% for 2021. Most of the respondents believe that their properties will achieve a maximum occupancy of around 40%, while only 7% account for a projected occupancy level of around 70%. In terms of ADR, hoteliers are expecting an average rate of 197 lei in 2021.

this revenue generator is important to support sustainable revenue for their properties.

While hoteliers are trying to decrease operation costs, the current survey highlights that as of October 2020, an average of 35% of employees have been laid off. Comparing this result with the previous survey performed between April and May 2020, this figure increased by 6%. Most importantly, 65% of the respondents reported that without governmental support, their hotels will not be able to survive beyond March 2021. In contrast, only 7% of the respondents mentioned that their business can survive for more than one year. Therefore, the survival and recovery of the Romanian hotel sector will remain dependent on governmental support in 2021.

http://www.business-arena.ro

RECOVERY AND FUTURE OUTLOOK

10

This represents a significantly lower ADR compared to the YTD October 2020 provided by STR, and this lower rate forecasted may be an indication that hoteliers will be focusing on maximizing occupancy during the recovery period, as highlighted in the previous survey.

Additionally, as the recovery period will be led by domestic travelers, the hoteliers may be strategizing a lower ADR in order to appeal to the domestic segment.

Furthermore, 89% and 87% the hoteliers respectively expect the revenue generated from Restaurants and Conference/Event facilities to be highly important when forecasting their hotels’ performance in 2021. In third place was the revenue for Spa and Wellness, with 56% of the respondents indicating that

Despite the short-term challenges that the Romanian hotel sector is currently facing, the longterm outlook for the sector remains positive, as evidenced by the robust tourism growth in recent years, healthy pipeline, attractiveness of the country as a leisure and business destination. In fact, according to Oxford Economics, the number of nights spent in paid accommodation in Romania is expected to already reach pre-crisis levels by 2023.

Looking ahead, hoteliers are keeping their morale up, with most respondents indicating their intention to stay open in 2021, as long as no further lockdowns are implemented. On the other hand, 20% of respondents are considering closing their hotels during the low season to save costs amid the lack of demand. Some hoteliers, 3% of the respondents, are planning a strategy shift to change their concept to long-term stays (above six months) in 2021.

The current survey also indicates that 40% of hoteliers believe that a faster recovery can be ensured when travel and interior events restrictions are eased, and if the government is able to offer financial and wage support.

Additionally, 10% of the respondents see the benefit of implementing governmental travel incentives which can produce an increase in domestic demand.

REAL ESTATE

REAL ESTATE SECTOR EXCEEDS EXPECTATIONS Romania is preparing to close probably the most difficult year for the local economy after the 2009-2010 recession, but results surpassed the pessimistic expectations seen during the spring period. 2020 was one of the peaks of the current economic cycle in terms of investments in commercial real estate assets, according to Colliers International. The industrial and logistics sector had another very good year, and in the office sector we can already see some positive signals, despite a decrease in rental activity that is forecasted to be in the area of 40%. Looking ahead, 2021 is expected to be a year of recovery, but questions remain with regards to the speed and way it will happen.

Emphasizing that 2020 was not as bad as it looked like back in spring, Lauren]iu Laz\r, Managing Partner at Colliers International, pointed out that it was a very good year for the investment area, in line with initial expectations. “And, although the market has a certain inertia - so probably 2021 could be a little weaker in terms of investment - 2020 confirmed that Romania has the potential to punch above its current weight at the regional level.”

The real estate investment market closed last year with a volume in the area of 900 million euros (up by around 40% over 2019), which is the equivalent of about 9% of the estimated volume for the six largest countries in Eastern Europe, almost double compared to the 4.7% share that Romania had in 2019. At the same time, the industrial and logistics market closed another very strong year, after nine-month lease transactions exceeded by almost a third the volume of the same period last year, approaching 400,000 square meters. The stock is underdeveloped compared to the real needs of the Romanian economy, which suggests that there is much room for growth in the coming years in this regard.

The strong growth of consumption throughout the country, in parallel with an even greater dynamic of online commerce, will be strong anchors from this point of view, according to Colliers specialists.

OFFICES AND MALLS, THE CINDERELLAS OF 2020. ONLINE COMMERCE, GROWTH DRIVER IN 2021 The office sector was among those more severely affected by the pandemic, considering that most employees worked from home for a long time. Offline retail also suffered, after many commercial spaces were temporarily closed during the state of emergency. A stronger integration of online commerce with more traditional channels is coming, which will change the retail market over time.

“The office and retail sectors have been affected by the evolution of the Covid-19 pandemic, but even here we see some positive signs. In absence of major shocks to the labor market, consumption has already returned to pre-pandemic levels, while for the office sector, recent months have strengthened the belief that, in most cases, it is not possible to work from home constantly and in the very long run.

The vaccine gives us hope that, in these two sectors, things will return to normal to a fairly large extent”, continues Lauren]iu Laz\r.

The office and retail vacancy rates will increase, with the former continuing the trend of 2020 when the market reported a decrease in demand for new spaces, of 40% in the office segment, especially since almost 300,000 meters square are expected to be delivered in 2021 in buildings under construction, double compared to 2020. Moreover, it is possible that an important number of companies will reduce their occupied areas in order to accommodate a permanent remote work approach. However, Colliers officials say that even in these sectors the stock in Romania is much underdeveloped, so that rising vacancy rates can be successfully absorbed by the market over time.

“2021 is expected to bring many challenges, but so far we have had enough signs that indicate that scenarios from 2009-2010 will not repeat at all. These signs include the much faster return of multiple macroeconomic indicators, as well as the high confidence of foreign investors and banks in the local economy,” added Lauren]iu Laz\r.

http://www.business-arena.ro

11

SAFETY & WORK POLICY

ORGANIZATIONS TACKLE EMPLOYEE SAFETY AND RETURN-TO-WORK POLICIES

http://www.business-arena.ro

Two thirds of legal departments are currently involved in employee safety issues and they expect return-to-work policies to be one of the top legal priorities going forward, as half of Chief Legal Officers (51%) anticipate their organizations will return to a normal level of operation in the first half of 2021, according to Deloitte 2020 Legal Department COVID-19 Survey, conducted on legal and compliance executives in US.

12

Two thirds of legal departments are currently involved in employee safety issues and they expect return-to-work policies to be one of the top legal priorities going forward, as half of Chief Legal Officers (51%) anticipate their organizations will return to a normal level of operation in the first half of 2021, according to Deloitte 2020 Legal Department COVID-19 Survey, conducted on legal and compliance executives in US. Regulatory issues (47%), employee benefits (44%), contractual and supply chain impact (43%) and cyber issues (42%) come next in the top of the COVID-19-related legal issues, according to the survey respondents.

The majority of legal executives (78%) indicate their workload has increased because of COVID-19, as their departments address numerous pandemic-related issues while actively participating in business continuity and cybersecurity efforts and as cost-containment measures forced reductions in workforces.

According to the survey, 81% of organizations that place cybersecurity among the top three legal priorities report having a plan to handle the legal ramifications of a cyberattack and 55% of organizations facing contractual and supply chain disruptions have started analyzing impacted contracts.

“Legal departments were already facing a series of pre-COVID-19 challenges, such as the pressure to increase operations’ efficiency while containing costs and to collaborate more closely with other areas of the business. At the same time, the pandemic has intensified expectations, as business leaders turn to the legal teams for informed perspectives before making decisions. In order to move forward,

the first options at hand for legal departments are to adjust the operating models and to adopt new technology solutions, such as specialized chatbots and solutions for automating some processes,” said Simina Mut, Partner at Reff & Associates | Deloitte Legal and leader of the Deloitte Legal’s Global Centre of Excellence and Deloitte Legal’s Management Consulting practice in Central Europe.

In order to meet rising demand, 62% of respondents expect legal digital investments to grow even as other cost containment measures are implemented. Organizations are investing in technologies such as artificial intelligence (AI), natural language processing (NLP) and robotic process automation (RPA) and they are transforming their approach to contract lifecycle management (CLM).

In Romania, Deloitte and Reff & Associates | Deloitte Legal partnered with Druid, Future WorkForce and RPAbox, leading local companies in the field of digital transformation, to create technology solutions for legal, HR and financial departments, such as chatbots and automation of repetitive and manual processes through RPA and proprietary natural language processing algorithms.

Reff & Associates | Deloitte Legal is recognized as a leading law firm in Romania for the quality of services and ability to deliver solutions on complex legal matters. The areas of practice include banking and finance, competition law, employment law, energy and environment law, insolvency law, legal management consulting, litigation, mergers and acquisitions, public sector, real estate. The firm represents in Romania Deloitte Legal, a global network with more than 2,500 lawyers in 85 countries.

A B magazine

AWARDS for

EXCELLENCE Enjoy the Quality ***** Admire the Value in partnership with

With its strong tradition in creating new opportunities for the business community to express fresh views and ideas, and in recognizing business success and outstanding achievements, Business Arena is pleased to announce the upcoming Awards for Excellence, the latest highlight in the business events calendar. Guests gather to celebrate excellence in business, sports, culture, and community, enjoying the company of friends and industry colleagues.

Innovation, resourcefulness, perseverance and a culture of responsible risktaking have helped many overcome major challenges. Thus, this edition of our awards gala brings recognition to individuals and organizations that recorded outstanding results and achievements during a challenging year 2020.

FIND MORE DETAILS ON OUR WEBSITE AT WWW.BUSINESS-ARENA.RO. For more information please contact Cosmin Stangaciu at cosmin.stangaciu@business-arena.ro or phone 0755.274.125

ECONOMY

EPIDEMIC, MOBILITY AND THE ECONOMY The latest data from the National Statistics Board (INS) showed that Romania’s economy recorded a robust quarterly growth rate of 5.6% in the third quarter of 2020, partially offestting the 12.2% decline posted in the second quarter. Thus, in annual terms, the country’s GDP decreased by “only” 6.0% in the third quarter after a 10.3% contraction in the second quarter.

BY CSABA BÁLINT

http://www.business-arena.ro

1. What is the progress of the recovery process?

The Q3 quarterly growth rate (5.6%) represents a new historical record, however, it is below experts’ preliminary expectations by a significant margin. At the same time, Romania’s third quarter economic performance seems to

14

CSABA BÁLINT be slower than the average EU level: the EU member states saw an average annual decrease of 4.2% (vs. 6.0% in Romania). Therefore, initially, the aggregate GDP figures caused disappointment among analysts.

However, it should be noted that the domestic economy’s year-on-year contraction was

more severe than the EU average primarily due to poor results in the agricultural sector, caused by unfavorable weather conditions. This sector’s contribution to the third quarter GDP is particularly high, and thus a steep decline in agriculture translates into a significant negative contribution to GDP formation. Eliminating the specific effect of agriculture, compared to the corresponding 2019 period, the Romanian economy would have seen a 3.6% decline in the third quarter.

As for the financial conditions, it is important to note that after an extremely turbulent period immediately after the onset of the pandemic, the tension was relieved relatively quickly. Then, in the third quarter, we saw a strengthening of the situation based on the indicator published by the ECB (the index tries to measure the level of financial stress), which stabilized at relatively low values. Regarding the consumer price evolution, we saw that the headline inflation was within the range associated with the stationary target.

Thus, overall, the third quarter developments can be considered as favorable in terms of the economic recovery process. But the road to full recovery still seems to be a challenge, especially in the context of the new wave of the epidemic.

2. The narrow path between two extreme alternatives Until the vaccine or other effective medical solutions become widely available, decision-makers in countries severely affected by the epidemic are forced to find the narrow path between two extreme alternatives. The measures are also dependent on the capacity and level of preparedness of healthcare and other specific systems to prevent the spread of the virus (such as the infrastructure needed to perform tests, detect infected people, etc.).

On the one hand, unless restrictive measures

are imposed, SARS-CoV-2 can spread particularly quickly. In Europe, during the spring wave, estimates suggested that, on average, one infected person passed the virus to two-three other people. Basically, this means that the number of active cases can double or even triple in just two weeks. In a month, this fast pace would lead to four-nine and, in six weeks, to eight-27 infected people. The healthcare systems, both in Western Europe and in Romania, could not cope with such an exponential wave. In this extreme scenario, the absence of intervention could lead to a humanitarian crisis, social unrest and other potential systemic damage with severe negative effects, not only in the short term but also in the medium and long term. In this hypothetical context, an economic collapse would seem inevitable.

The other extreme option available to decision makers would be to impose widespread lockdown measures. Unfortunately, most countries, including Romania, have been forced by the worsening health conditions to use such tools in certain phases of the coronavirus crisis. This approach is very effective in combating the epidemic, but it involves immediate and particularly high economic costs. From an economic point of view, in this scenario there is a risk that such solutions could have more harmful side effects than the pandemic.

In conclusion, it seems that the choice is not a simple and easy one, as both extreme options involve an exceptionally heavy burden for the society and the economy. Therefore, in this difficult period, it is the responsibility but also the common interest of both individuals and decision makers to seek a compromise solution that lies somewhere between the two extreme options.

3. Epidemic and mobility To get a more accurate picture of the seriousness of the situation, we need tools to help us measure the main parameters of the epidemic and, implicitly, its effects on the economy. What are the most commonly used indicators for monitoring an epidemic situation?

Of course, there are many options. In the studies and in the applied analyzes, the experts in the field follow a series of indicators simultaneously. In the present analysis, a simplified approach is to be presented, the central element of which is the actual reproduction number, also known as the R indicator.

The R indicator represents the average number of infected patients from a single case, in

other words, how infectious the virus is or how fast the epidemic spreads. To stabilize the epidemic it is necessary to reduce the indicator R to 1, while values below this threshold already indicate the diminishing of the epidemic.

A simple calculation of the reproductive number can be based on information published by the authorities, dividing the number of new cases by the number of active cases from the previous day and then multiplying the result by 14 (the number of active cases can be approximated as a sum of new cases in the last 14 days). Due to the specific characteristics of the testing procedure (for example, fewer tests are usually processed on Mondays), daily data show significant fluctuations, but with the help of the seven-day moving average, trends can be more easily identified.

It is important to note that the R indicator calculated as described above shows a significantly delayed picture of the epidemic. Specifically, from the time of infection untill the onset of the first symptoms it usually takes five-seven days, from the onset of symptoms until the actual testing it takes another one-five days, with another one-two days for the final result to be obtained.

Thus, the data on the epidemic evolution suffers delays of around seven-14 days in total.

Moreover, there may be situations in which an even longer period of time passes from the time of infection until a positive test is confirmed.

Therefore, it is important for us to take this specific aspect into account when interpreting trends.

For a more structured understanding of the trends, it was assumed that the indicator R for day t can be described by three main factors plus the residual value E (t), according to the equation below: When the epidemic began, the level of the indicator R (t) was much higher, because we were facing a completely unknown virus. Among other things, it was not known how to manage the situation and, moreover, contradictory information was circulated publicly. With time, however, we began to gather more and more information about defense measures against the virus. We became more careful, consciously avoiding personal contact, keeping our distance, wearing a mask and so on. This learning process, marked with Rlc (t) in the equation, can be described by a curve which at the beginning of the analyzed period is at relatively high levels (which would correspond to a low level of knowledge about preventive measures). Then the curve begins to descend rapidly and then, in the

http://www.business-arena.ro

15

http://www.business-arena.ro

16

long run, it flattens gradually approaching the threshold of 1. In other words, the stabilization of the epidemic through this learning process requires a relatively long time. Of course, with the use of various effective vaccines on a large scale, it cannot be ruled out that the R index will fall below the threshold of 1, so that the virus can disappear completely from our daily lives.

The second factor Rdev (t) allows temporary deviations from the long-term trend. We can think of this component as a series of waves around the learning curve that are caused by various circumstances. One such circumstance may be seasonality. We do not have a complete understanding of the phenomenon, however, many signs suggest that the evolution of the epidemic is influenced by seasonal factors. Similar to the common flu, the SARS-CoV-2 virus seems to spread more slowly during the summer, when temperatures are higher and faster during periods of low temperatures. Specific measures to manage the epidemic adopted by the authorities, a relaxation of discipline among the population or the appearance of local outbreaks can trigger waves similar to those caused by seasonal reasons. Unfortunately, the first two factors (learning curve Rlc (t) and Rdev (t), temporary devia-

tions from the learning curve) are not observable indicators and for this reason, they cannot be measured accurately. Thus, their approximate values must be estimated using statistical techniques, such as the application of different filtering methods.

The third main factor influencing the value of the R (t) indicator is the mobility of the Rmob population at time t-l, and the measurement of the main trends can be captured using data published by the technology giants. Because mobility can be measured without specific testing process delays, the indicator is entered with t-it in the equation.

For example, let’s suppose that the epidemiological wave is in its infancy, so the learning curve Rlc (t) suggests a rapid transmission of the virus, its value being at level 2. In addition, if the epidemic breaks out in the cold season, Rdev ( t) would indicate a positive deviation (1.1) from the trend determined by the learning curve.

Therefore, without interventions, the indicator R (t) should take the value of 2.2 (2 * 1.1 = 2.2).

In this particularly difficult situation, unfortunately there are not many options left, the mobility of the population must be significantly reduced in order to slow down the spread of the virus. If the

mobility of households decreased from the usual level (1.0) to only 0.4, the value of the indicator R (t) would fall below the threshold 1 (2 * 1.1 * 0.4 = 0.88) . During the first epidemic wave, many countries went through a similar situation as a result of the introduction of widespread social distancing measures.

With the arrival of the autumn, the epidemic started to spread faster both in Romania and in Europe, and, with some delay, the indicators worsened in the United States. Subsequently, from the end of October until the beginning of November, a change of direction can be observed in the European Union. In this respect, the reintroduction of administrative social distancing measures in parallel with the decrease in population mobility played a particularly important role. The spread of the epidemic could be slowed down most effectively in countries with lower levels of mobility. Although significant variations can be detected among individual economies for several country-specific reasons - country-level learning curves and cyclical deviations may be quite different - the data suggests that reducing mobility to 0.75 (uncertainty degree: 0.66-0.83) could be enough to stabilize the epidemic situation. It is important to note that in the case of the first wave, a much more drastic reduction was needed, near the 0.40-0.50 range, to regain control over the spread of SARS-CoV-2.

In conclusion, the virus is not invincible, but significant efforts are needed to maintain a manageable situation. Until vaccination or other effective medical solutions become widely available, reducing mobility (through measures taken at the level of authorities or at the individual level) remains one of the most powerful tools available for managing the health threat.

4. Mobility and economy As previously highlighted, reducing mobility and, more generally, the number of personal contacts are effective tools in combating the epidemic. However, the solution could have major negative effects on the economic activity.

In real time, an accurate measurement of the effects seems to be an almost impossible challenge, as the associated costs depend on a country’s economic structure, digital training, level of integration in global production and distribution chains, and a number of other specific factors. However, in a simplified framework, it might be reasonable to assume that a country’s level of economic activity is strongly influenced

by the evolution of mobility at national level.

Unsurprisingly, a strong correlation can be observed between the level of mobility and economic activity. More precisely, research suggests that, in Romania’s case, a one percent reduction in household mobility may imply a decrease in economic activity of around 0.25 (0.16-0.33) percentage points. The evaluation of relationships in an international context goes beyond the scope of this paper. However, following the publication of GDP data for Q1 2020 - Q3 2020, assessments can be relatively easily extended to EU member states, the United Kingdom and the United States. As businesses adopt increasingly effective solutions to overcome the challenges posed by the epidemic, the sensitivity of economic activity to mobility fluctuations is expected to weaken to some extent.

Of course, the results obtained from information collected over a very short period of time should be used with due caution. However, in a rapidly changing environment, the simplified framework presented in this section can provide early signals, thus complementing the wide range of in-depth analyzes carried out by decision-makers.

5. Outlook In terms of economic outlook, it is important to note that due to the autumn epidemic wave, with the reintroduction of administrative social distancing measures, a further GDP decline is expected in most EU member states in the last quarter of the year. However, this unfavorable image associated with T4 must take into account that the new decline will be much more moderate than in T2. In quarterly terms, most analysts expect a decline in the range of 2% - 3% for the EU. In this context, the recovery process could be interrupted or even slightly reversed, and the domestic economy makes no exception.

However, as a result of the dissipation of the basic effects generated by the agricultural sector, the Romanian economy could present somewhat more favorable figures than the EU average in Q4.

Regarding the long-term prospects, although uncertainties have increased significantly, the full recovery of the domestic economy in 2022 is still plausible, but depends on the production and efficient delivery of the COVID-19 vaccine, a wise use of EU funds, and a gradual correction of structural deficits.

http://www.business-arena.ro

17

ECONOMY

WORLD BANK STUDY FINDS ROMANIA AMONG THE MOST ACTIVE COUNTRIES IN TAKING FINANCIAL MEASURES IN RESPONSE TO THE PANDEMIC A recent World Bank study examines actions taken in the financial sector by authorities in 154 countries and other jurisdictions in response to the current pandemic to provide support to debtors in financial distress and maintain the provision of critical financial services to the real economy. Romania appears in the category of states with the highest level of activity in this regard.

BY CRISTIAN BICHI

http://www.business-arena.ro

The working document Taking Stock of the Financial Sector Policy Response to COVID-19 around the World was published in December 2020. It captures the policies on that sector adopted by governments, central banks, financial regulators and standard-setting organizations, following the macro-financial shock induced by the Covid-19 pandemic. The authors of the study consider this activity to be of interest, as it allows: (1) comparing state policies with best practices in the field, (2) assessing the effectiveness of measures and their possible undesirable consequences, and (3) providing information support which will represent the basis for future policies.

18

STUDY CONTRIBUTIONS In the authors’ view, the study makes three important contributions: - presents a new global World Bank-managed database on policies implemented in the financial sector in response to the Covid-19 crisis and a simple framework for their classification; - shows the common measures taken worldwide and introduces a simple index, at country level, which highlights the total number of measures taken (by 1 September 2020); - explores the association between the relevant characteristics of the country and the measures taken and the reaction time, respectively.

MEASURE CLASSIFICATION FRAMEWORK The study presents four categories of measures, with the name and content described below:

CRISTIAN BICHI Banking - includes measures to encourage the lending flow to the real economy by easing regulatory requirements (e.g. stimulating the use of liquidity and capital reserves, flexible approach to non-performing exposures and asset classification) and measures to ensure direct support to borrowers (e.g. public loan guarantees, interest rate cuts, moratoriums on debt repayment, encouraging loan restructuring).

This category also includes measures to relax financial integrity requirements and crisis management measures (mainly in the area of deposit resolution and guarantee); Liquidity and financing - measures are taken to ensure adequate financing and liquidity conditions for financial intermediaries (e.g. direct injections of liquidity from central banks, lower minimum reserve requirements, purchases of own government bonds on the domestic market

by monetary authorities, US dollar or euro swap lines between central banks); Financial markets and non-banking financial institutions - measures aimed at ensuring an adequate functioning of the financial markets (e.g. prohibiting short selling, circuit breakers), as well as regulations designed to provide support and guidance to financial institutions other than banks.

Payment systems and financial market infrastructures - include measures for the proper functioning of payment systems, including the facilitation of cash payments and digital methods. Some of these measures have been taken in order to facilitate the distribution of government financial aid to businesses and the general public.

WHAT DOES THE DATABASE REVEAL? Processing the information in the database shows that, as of September 1, 2020, the countries and other surveyed entities took 3,129 policy measures. As expected, given its importance to national financial systems, most of the measures (54%) were concentrated on the Banking sector. It was followed by the categories Liquidity and financing (25%), Financial markets and non-bank financial institutions (12.75%) and Payment systems (7.9%).

To facilitate international comparisons, the study authors developed the Financial Policy Response Activity Index (FPRAI), which is the sum of the number of measures implemented by a country up to a certain point in all four categories. Although the index does not provide information on the size and impact of the policy response, it makes it very easy to highlight the level of activity related to policy responses in the financial sector. As of 1 September 2020, the average FPRAI for all the surveyed countries stood at around 20 measures. The HIC (high income) and SAR (South Asia) countries represent the groups of countries, established according to the World Bank methodology, that have the highest median at group level (around 32 measures).

The research conducted by World Bank’s experts shows, among other things, that High Income Countries (HICs) relied on banking sector measures to a greater degree than emerging and developing countries (EMDE), prudential measures taking the biggest share. While HICs acted within the flexibility allowed by international standard prudential regulation, EMDE countries relaxed certain regulations of this nature to a greater degree (e.g. rules on asset

classification and provision of non-performing loans, risk weights attached to asset classes), which could affect the soundness of their banking sector in the medium term. Fiscal support measures are also fewer in EMDE countries compared to those implemented in advanced economies. In contrast, EMDE countries resorted more frequently than HIC countries to foreign exchange liquidity measures.

According to the authors of the study, the simple correlations suggest a positive association between the FPRAI index and the relative number of Covid-19 cases, population size and level of economic development. The correlation between the index and the rigor of lockdown policies “appears limited”. More detailed analyzes of the factors that determine the policy response of the authorities in EMDE countries are made towards the end of the study, but these are only early steps, requiring further investigations for a better understanding of the issue.

THE SITUATION IN ROMANIA The World Bank study shows that Romania, which is included in the category of HIC countries, has an FPRAI index of 43. The measures taken are distributed in the four categories as follows: Banking sector - 25; Liquidity and financing - 10, Financial markets and non-banking financial institutions - 7, and Payment systems - 1.

Based on this FRAI index value, Romania is represented in dark blue on the world map, a color reserved for countries with the highest level of activity in terms of response measures in the financial sector to the Covid-19 crisis.

For example, other countries in the same category are the USA, Canada, Australia, Germany, France, Russia, China, India.

For lovers of international comparisons, here are the FPRAI index values recorded at the reference date for Romania’s neighboring countries: Poland - 35, Czech Republic - 36, Croatia - 43, Hungary - 46, Slovenia - 54, Slovakia – 56.

CONCLUSIONS The World Bank study confirms, despite local opinions claiming otherwise, that the Romanian government, central bank and financial supervisory authority were not passive in the face of the Covid-19 crisis, the intensity of their policy response in the financial sector leading to an honorable place for our country in a world ranking compiled in this regard by the specialists of the international financial institution.

http://www.business-arena.ro

19

MONETARY POLICY

CLARIFICATIONS ON BNR'S POLICY INTEREST RATE: DETERMINANTS

AND INTERNATIONAL COMPARISONS In 2020, the National Bank of Romania (BNR) gradually reduced the monetary policy interest rate from 2.50% per year to 1.50% per year; a further cut, down to 1.25% per year, taking place on January 18, 2021.

This gradual approach has generated discussions in the public sphere about BNR's current monetary policy interest rate, its reduction rate and whether it is adequate to support economic recovery. However, some opinions have been based on distorted figures or questionable comparisons with other countries.

BY VALENTIN LAZEA In order to make a correct assessment of BNR's monetary policy, I would like to make some clarifications based on official, public and comparable figures, presented in the two tables below. The clarifications start from the fact that there are several factors generating the stimulative nature of the monetary policy, but, indeed, the monetary policy rate plays a main role. A clarification is required, as we are looking at the real rate (the difference between the monetary policy interest rate and the inflation rate).

http://www.business-arena.ro

COMPARISON WITH DEVELOPED ECONOMIES

20

The comparison between Romania and the developed countries must take into account the fact that the latter have a much greater credibility among markets and international investors, which is reflected in much better country ratings, resulting in relatively cheaper loans. Putting these differences aside and comparing the stimulative character of the monetary policies based on the real interest rates levels, we find the following: - BNR's monetary policy interest rate was in real-negative territory (it was lower than inflation) continuously from the second half of 2017 until December 2020; - the level of real-negative interest rates (calculated ex-post) in Romania was almost similar to that in the euro area from mid-2018 to mid2020. Currently, the monetary policy interest rates in the euro area have become real-positive (given the very low inflation), while the monetary policy interest rate in Romania is still real-nega-

tive (about -0.8%), which means that, in relative terms, it is more stimulating than the policy interest rate monetary policy in the euro area; - a similar comparison with the monetary policy interest rate of the Federal Reserve (US central bank) shows an approximately similar stimulus level at present: -0.8% real-negative interest rate in Romania; -1% real-negative interest rate in the USA. COMPARISON WITH CENTRAL AND EASTERN EUROPEN (EEC) ECONOMIES The real-negative interest rates are now much higher (over -2%) in the three countries we usually compare ourselves with: the Czech Republic, Poland, and Hungary. These low rates are the result of much steeper declines in nominal interest rates with the onset of the pandemic (in a first phase), but also of an unexpected increase in inflation (in a second phase) in those countries.

An aggressive policy to cut interest rates has (at least) two costly effects: a nominal depreciation of the exchange rate and (related to it) a resurgence of inflation. For example, compared to the end of 2019, the Czech koruna exchange rate saw a maximum depreciation of 12.2%, the Polish zloty depreciated by a maximum of 9.6%, and the Hungarian forint had a depreciation maximum of 12%, all as a result of aggressive interest rate cuts. By comparison, the maximum depreciation of the leu did not exceed 2.3% in 2020. Towards the end of the year, the depreciation was milder, as reflected in Table 2, which looks at the average level in December 2020, compared to the same month of the

Inflation rate (yearly change, year end)

Real key interest rate (adjusted to remove the effects of inflation, percent, year end)

Euro area

previous year. As a counterfactual Czechia exercise, if the leu had depreciated by 12%, the exchange rate would have reached 5.34 lei/ euro, which Hungary would have caused panic in a country where the population still sees the exchange rate as a key Poland indicator.

The second effect of a sharp decline in monetary policy interest Romania* rates is the resurgence of inflation.

Not coincidentally, the three countries mentioned have reached the highest inflation rates in the European Union: 2.3 percent in the Czech Republic, 2.4 percent in Poland, 2.7 percent in Hungary, compared to 2.1 percent in Romania (data for December 2020).

Under the circumstances, the question is why those countries enjoy lower interest rates than Romania on the international markets? The answer lies in the much smaller twin deficits in those countries, the result of much more prudent policies in the years leading up to the Covid-19 pandemic. Thus, at the end of 2019, Romania registered a budget deficit of -4.4 percent of GDP; Hungary -2.1 percent of GDP; Poland -0.7 percent of GDP, while the Czech Republic had a budget surplus of 0.3 percent of GDP. Similarly, at the end of 2019, when Romania's current account deficit was -4.7 percent of GDP, the Czech Republic and Hungary had a current account deficit of -0.3 and -0.2 percent of GDP, respectively, and Poland had a current account surplus (0.5 percent of GDP).

Their prudent policies resulted in much better country ratings than Romania. For example, the Standard & Poors rating is currently AA- (stable) for the Czech Republic, A- (stable) for Poland, BBB (stable) for Hungary, and BBB- (negative) for Romania.

In turn, the country rating is reflected in the

Key interest rate (percent, Jan 2021)

Inflation rate (Yearly change, end 2020)

Euro area Czechia Poland Hungary Romania* * Jan. 2021 BNR cut the key interest rate to 1.25%

interest charged. But, considering the above, we can say that Romania borrows at a reasonable cost. For example, the yield for the five-year euro bonds issued by Romania at the end of 2020 was about 0.45 percent, compared to Hungary (0.06 percent), the Czech Republic (-0.27 percent) or Poland (-0.28 percent) on the secondary market.

CONSIDERATIONS ABOUT ROMANIA The gradual approach of reducing the monetary policy interest rate was the most appropriate for Romania, given the following: - the pre-existence of large economic imbalances, reflected in the budget deficit and the current account deficit, as well as in the country rating; - the risks that a more aggressive reduction in monetary policy interest rates would have created in terms of exchange rate depreciation and rising inflation; It is estimated that the gains in financing costs that a possible steeper reduction in the monetary policy interest rate would have generated would have been entirely offset by the depreciation of the exchange rate; the Romanian state would have ended up paying more for external financing, to which a deteriorated macroeconomic balance would have been added.

Real key interest rate (adjusted to remove the effects of inflation, percent, end 2020)

Nominal exchange rate depreciation against euro average Dec. 2019/ average Dec. 2020)

21 http://www.business-arena.ro

Key interest rate (percent, year end)

FINANCIAL

POSITIVE DEVELOPMENTS IN A GRADUAL CATCHING UP Almost one year after the onset of the COVID- 19 pandemic in Romania, studies mention an increase in the level of financial inclusion and in digitalization, all across the banking sector.

Lending data showed a 4% advance in non-government credit in November 2020, while the economy shrank by 5.2%, according to estimates. Thus, paradoxically, we could be witnessing an increase in financial intermediation starting from 25%. In turn, saving increased by 15% during 2020.

BY GABRIELA FOLCU} EXECUTIVE DIRECTOR, ROMANIAN ASSOCIATION OF BANKS

http://www.business-arena.ro

Even if now our analysis is based on November data, there are prerequisites for a gradual catching up if we are to compare

22

Romania to the European Union Member States on financial inclusion and intermediation levels.

According to the survey, "The digitalization of the banking sector as perceived by the Romanians," drawn up in December 2020 by the Romanian Institute for Evaluation and Strategy (IRES), two out of three Romanians (67%) use a type of banking product and service such as a current account, a card, a loan or a deposit and make payments. In 2017, Romania ranked last in the EU in terms of financial inclusion (58%), far behind the countries ranked immediately above, i.e. Bulgaria (72%), Hungary (75%) and Poland (87%). The EU average of unbanked individuals stood at 5%.

The IRES survey states that 16% of the respondents using banking products and services have a personal loan, 11% have an outstanding mortgage/real estate loan, 36% have a credit card (shopping card), while 7% of responGABRIELA dents have an overdraft FOLCU} facility. A customer can use simultaneously several

banking products and services. The survey took place in December 2020 on a sample of 1,479 adult respondents, of which 1,158 are users of banking services, the maximum tolerated error being +/- 2.8%.

Currently, about 79% of the users of banking products and services make use of a current account (including a payroll card). Men aged 36-50 and having a degree rank first in the top of current account users. The survey does not show a gap as regards the usage of current accounts by the population living in rural areas (79.5%) compared to those living in urban areas (77.9%).

Concerning saving now, 14% of respondents have bank deposits and also 14% of them bet on savings accounts. Moreover, during the pandemic, about four out of ten Romanians have managed to save (39%), taking into account that before the pandemic outbreak, in an ordinary month, two thirds of the respondents (68%) managed to save. Despite a lower weight of the people who save, the COVID-19 pandemic has brought about an acceleration in the growth speed of customer deposits up to 15% annually, i.e. by 3-4 percentage points over the level reached before the pandemic. The deposit balance stood at 410 billion lei, according to the data for November 2020. The fast advance of saving in the context of the pandemic tells us that the population and companies have considered the Romanian banking sector a safety belt, namely the depository of their money and not merely a shock buffer of the healthcare crisis; this was so due to the support via new financing granted to the customers who had liquidity problems.

Two thirds of the savings of the population and of companies is denominated in the domestic currency, the rest of the savings being in foreign currency. The bulk of deposits are short-term deposits, less than one year, that is. About 61.4% of the saving balance deposited in banks belong to the population. At the end of Q3 last year, the number of depositors in the credit institutions members of FGDB (Bank Deposit Guarantee Fund) stood at 14.9 million, of which 13.8 belonged to individuals. A depositor who has several deposits with several banks is recorded in

the statistical record several times. The ceiling of the deposit guarantee is â‚Ź100,000, the lei equivalent, per depository, per bank.

The survey demonstrates the increase in digitalization compared to the previous years, this trend being accelerated, among others, by the sanitary protection measures adopted during the pandemic. Among the users of financial services, 43% make card payments at merchants (POS), 27% pay via Internet/Mobile Banking while 61% of respondents mentioned that they withdraw money from ATMs (the question being a multiple choice question). The card usage behaviour shows a cut by 30% in the weight of the people who withdraw cash from ATMs compared to five years ago. 14% of the users of the Mobile Banking application use it daily, just like 10% of the users of Internet Banking, smartphones being the device mostly used to access the Internet/Mobile Banking service.

These developments - in the indicators object of comparisons - have created the prerequisites for a moderate but safe advance toward the EU averages that we have as targets. However, Romania still has a long way to go in order to catch up in terms of GDP/capita, but the enhancements in the usage of banking services and products, in digitalization and in financial intermediation represent the start of the consolidation of a trend to increase economic welfare in general.

The banking industry has a key role as regards the smooth functioning of economic and financial mechanisms, with impact on macroeconomic developments, the dynamics of the business environment and the improving of economic prosperity in Romania.

The role of the banking sector pertains to assuring financial intermediation, one of the main goals being to protect the savings of the population and of companies. The banks operating in Romania have the resources needed for lending, the loan/deposit ratio standing at 68.88% at the end of September 2020, while the solvency ratio is almost three times higher than the accepted minimum, standing at 22.76%.

http://www.business-arena.ro

23

ARTIFICIAL INTELLIGENCE

HOW ARTIFICIAL INTELLIGENCE CAN POWER CLIMATE CHANGE STRATEGY Slowing down climate change is an urgent matter. If we fail, our world will face a more extensive crisis than we experienced because of the global COVID-19 pandemic. When artificial intelligence (AI) technology helps solve a problem, problem-solving can be done quicker, and the solution is often one that would have taken longer for humans to discover. Could artificial intelligence power climate change strategy? Yes, and it’s already doing so.

AI CAN ACCELERATE OUR RESPONSE TO CLIMATE CHANGE There\rquote s no time to waste: atmospheric CO2 levels are the highest ever (even with significant drops from the stay-at-home orders for COVID-19), average sea levels are rising (3 inches in the last 25 years alone), and 2019 was the hottest year on record for the world’s oceans.

Artificial intelligence isn’t a silver bullet, but it can certainly help us reduce greenhouse gas (GHG) emissions in various ways. According to Capgemini Research Institute modeling, AI is estimated to assist organizations in industries from consumer products to retail to automotive and more fulfill up to 45% of the Paris Agreement targets by 2030. AI will likely reduce GHG emissions by 16%. Here are a few of the most promising ways that artificial intelligence already is or can impact climate change strategy:

http://www.business-arena.ro

IMPROVE ENERGY EFFICIENCY

24

According to the Capgemini Research Institute, artificial intelligence should improve power efficiency by 15% in the next three to five years. Machine learning supports efficiencies in power generation and distribution, from autonomous maintenance and leak monitoring to route optimization and fleet management.

Google\rquote s Deepmind AI can predict wind patterns up to 36 hours in advance to optimize wind farms. Electricity systems create vast amounts of data. So far, energy companies aren\rquote t leveraging this data for learning to

the extent that\rquote s possible. Machine learning can comb through this data to understand and forecast energy generation and demand to help suppliers better use resources and fill in gaps with renewable resources while reducing waste. The uses of AI for energy efficiency might start at the industry level, but use cases go down to the household and individual levels.

OPTIMIZE CLEAN ENERGY DEVELOPMENT In the Amazon basin, developers of hydropower dams have typically developed one at a time with no long-term strategy. A group led by Cornell University that included computer scientists, researchers, and ecologists developed an AI computational model to find sites for dams (hundreds of hydropower dams are currently proposed for the basin) that can produce the lowest amounts of GHG emissions. The AI model revealed a more complicated and surprising set of considerations to lower GHG emissions than had ever been considered before.

AVOID WASTE Companies, governments, and leaders frequently deploy AI solutions to avoid waste.

Whether AI is used to reduce energy waste from buildings (accounts for one-quarter of CO2 emissions) or understand supply and demand, a huge way AI can power climate change strategy is to reduce waste in all forms (time, money, material, etc.)

http://www.business-arena.ro

25

Make Transportation More Efficient Another quarter of global CO2 emissions is from the transportation sector. AI is already the technology that powers autonomous vehicles, including shared cars and smart transportation systems in some cities. Further adoption will help curtail emissions in the future. Artificial intelligence optimizes routes for fleets, traffic signals, and more. All of these incremental changes add up to make a significant impact on climate change.

Tools to Help Understand Carbon Footprint They say \ldblquote knowledge is power,\rdblquote and when it comes to climate change mitigation, AI can help build tools to help individuals and companies understand their carbon footprint and what actions they can take to reduce it.

MONITOR ENVIRONMENT This year, there were severe weather events that caused massive destruction and loss. AI is used and will continue to be used to enhance weather prediction and response. Changes to complex systems such as cloud cover and ice sheet dynamics caused some recent weather changes. Grasses, trees, and other plant life store carbon, but deforestation and unsustainable agriculture release carbon into the air. As a result, this is a major contributor to climate change. Satellite imagery and AI help conservationists monitor where this is happening to create change.

CREATE NEW LOW-CARBON MATERIALS The production of steel and cement accounts for 9% of global GHG emissions. If AI could develop new materials with similar properties but with a smaller carbon footprint, it could help slow climate change. Artificial intelligence supports scientists by making the process of mixing various chemical compounds into combinations never tested before much faster and easier.

DOESN’T AI HAVE A CARBON FOOTPRINT? The appeal of AI to mitigate climate change was questioned after a report released by the University of Massachusetts at Amherst estimated the power required to train a neural network was approximately five times the average U.S. car’s lifetime emissions (including its manufacturing). Yes, artificial intelligence does have a carbon footprint, and it’s quite severe when the model is developed.

Researchers are making progress in reducing the power required to train AI models. The adoption of AI server farms powered by renewable resources, development of AI once-for-all neural networks, and more are ways researchers reduce AI’s carbon footprint. In the meantime, when considering AI’s carbon footprint, the tremendous value of AI, and the real-world outcomes it can have on reducing carbon emissions need to be considered as well. Some of those downstream offsets can counterbalance the emissions created when the model is trained.

ARTIFICIAL INTELLIGENCE

TEN TOP AI TRENDS IN 2021

http://www.business-arena.ro

For several reasons, the pandemic only sped up the adoption of AI in the enterprise. Here’s what to watch in the year ahead with regard to AI talent, tools, and ethics, and other key issues.

26

Pre-pandemic, artificial intelligence was already poised for huge growth in 2020. Back in September 2019, IDC predicted that spending on AI technologies would grow more than two and a half times to $97.9 billion by 2023.

Since then, COVID-19 has only increased the potential value of AI to the enterprise.

According to McKinsey’s State of AI survey published in November 2020, half of respondents say their organizations have adopted AI in at least one function.

“As the grip of the pandemic continues to affect the ability of the enterprise to operate, AI in many guises will become increasingly important as businesses seek to understand their COVID- affected data sets and continue to automate day-to-day tasks,” says Wayne Butterfield, director of ISG Automation, a unit of global technology research and advisory firm ISG. Also, IT operations faced a lot of challenges

and stress in 2020 given all of the shifts toward work-from-home capabilities, and that will most likely continue in 2021. AI plays here, too: “With businesses more digitally connected than ever before,” says Dan Simion, vice president of AI and analytics at Capgemini North America, “AI can ensure that they stay operational.”

AI TRENDS 2021: WHAT’S HAPPENING IN THE ENTERPRISE However, the focus of AI adoption will not be simply to improve the efficiency or effectiveness of operations. “There has been a visible shift towards leveraging AI to improve stakeholder experience owing to the pandemic,” says Alisha Mittal, practice director with management consultancy and research firm Everest Group.

The AI trends expected in 2021 that IT leaders should monitor include the following:

http://www.business-arena.ro

27

1. AI TALENT WILL REMAIN TIGHT Talent supply is expected to be a key issue accompanying the accelerated adoption of AI going into 2021. “Enterprises have started realizing the importance of democratizing AI to address this persistent AI talent gap,” Mittal says.

Just as CIOs have worked to make data accessible to non-technical users, they will need to make sure AI is usable by a wider set of users. “Successful implementation of AI democratization requires focus on key aspects of data, technology, and learning strategy, supported by a decentralized governance model,” says Mittal. “Enterprises must also focus on contextualization, change management, and governance.”

2. AI FUELS SELF-DIRECTED IT In 2021, we will see more AI solutions that can detect and remediate common IT problems

on their own, predicts Simion of CapGemini.

“These solutions will self-correct and self-heal any malfunctions or issues in a proactive way, reducing the downtime of a system or critical application,” Simion says. “This will allow teams to allocate their resources to the complex and higher-priority projects they should be focusing on.”

3. AI STRUCTURES UNSTRUCTURED DATA In the year ahead, enterprises will leverage machine vision and natural language processing (NLP) to facilitate the structuring of unstructured data such as images or emails, says ISG’s Butterfield. The goal? To create data that robotic process automation (RPA) technology can more readily use to automate transactional activity in the enterprise.

“We have seen a rise in RPA, which is the fastest-growing area of software adoption in the last 24 months. But RPA has its limitations –

ARTIFICIAL INTELLIGENCE

predominantly in that it can only process structured data,” Butterfield explains. “Using AI to complete the complex task of understanding unstructured data and then provide a defined output such as a customer’s intention will enable RPA to complete the action.”

4. IT PUSHES AI AT A LARGER SCALE “In 2020, we continued to observe significant AI adoption within IT organizations,” says Simion.

“In 2021, I expect organizations to start to see the benefits of executing their AI and ML models – not only getting them into production, but also pushing them to scale.” One of the advantages of AI is that it can achieve ROI in real time, Simion notes, so this could be the year many organizations see their AI efforts begin to pay off.

http://www.business-arena.ro

5. MORE AI BECOMES EXPLAINABLE As compared to black-box AI, look for models to become more transparent. “There will be a bigger focus on explainability,” says Dave Lucas, senior director of product at customer data hub Tealium. “Being able to clearly articulate to a layperson how each individual characteristic or data point contributes to the end prediction or result of the model.” As more and more data regulations surface, AI trust will be pivotal.

28

6. AIOPS GETS BIG The complexity of IT systems has been exponentially increasing for the past several years.

Forrester recently noted that vendors have responded with platform solutions that combine several once-siloed monitoring disciplines – such as infrastructure, application, and networking. As mentioned in our recent primer on the topic, an AIOps solution enables “IT operations and other teams to improve key processes, tasks, and decision-making through improved analysis of the volumes and categories of data coming its way.”

Forrester advises IT leaders to look for AIOps providers who can empower cross-team collaboration through data correlation, provide end-toend digital experience, and integrate seamlessly into the whole IT operations management toolchain.

7. AUGMENTED PROCESSES ENTER THE PICTURE Data and AI are key to competitive advantage and will be part of a bigger strategy for process automation and innovation. “Within that strategy, data ecosystems are scalable, governed, lean, and provide timely data from heterogeneous

sources, but at the same time need to provide playgrounds and adapt fast to foster innovation,” says Ana Maloberti, big data engineer with Globant. “Companies are going a step further in optimization with augmented processes, both within business and development.”

Augmented coding tools, which are Globant’s main focus, optimize software development processes using AI, aiming for benefits including improved collaboration and wider collective intelligence. “The main challenge in making the most of this technology is a cultural one,” Maloberti says. “Fostering a data-driven organizational mindset first and growing out of experimental stages of AI are needed to create a sustainable and robust delivery model.”

8. VOICE- AND LANGUAGE-DRIVEN INTELLIGENCE TAKES OFF The increase in remote working will drive greater adoption of NLP and automated speech recognition (ASR) capabilities, particularly in customer contact centers, predicts ISG’s Butterfield.

“Historically, less than five percent of all customer contacts are routinely checked for quality and agent feedback,” Butterfield says. “With a lack of one-to-one coaching at the moment of support – a given in an office environment – enterprises will need to use AI to complete checks on agent quality, customer intent understanding, and to ensure continued compliance.”

9. AI AND CLOUD BECOME SYMBIOTIC “Artificial intelligence is going to play a significant part in broader adoption of cloud solutions,” says Rico Burnett, director of client innovation at legal services provider Exigent. “The monitoring and management of cloud resources and the vast amounts of data that will be generated will be supercharged through the deployment of artificial intelligence.”

10. AI ETHICS AND STANDARDS COME INTO FOCUS “In 2020, international partnerships like global Partnership on AI have moved from ideas to reality,” says Natalie Cartwright, co-founder and COO of AI banking platform Finn AI. “In 2021, they will deliver expertise and alignment on how to ensure that we leverage AI against major global problems, ensure inclusion and diversity, and stimulate innovation and economic growth.”

Algorithm fairness and transparency of data are just two of the issues in the spotlight as AI ethics becomes more important to organizations across industries and society as a whole.

WHAT WILL ROBOTICS AND AI BE LIKE IN 2040?

Marvin was a fictional cybernetics prototype with Genuine People Personalities (GPP). As such, he was perfect in every way except for the ways in which he was similar to humans. He was therefore the most depressed individual in the galaxy.

Thanks to ongoing advances in Artificial Intelligence (AI), real robots are getting smarter without as yet having any distracting emotions.

They might not be sentient; they might not ever be sentient; but every year they are becoming more capable at analyzing data and making decisions which simulate human reason. What they do, they do fast and accurately.

Humans still have many advantages over robots and AI. Our artificial counterparts will continue to improve, though, and will likely surpass us in many of the areas we currently dominate.

At best, we can make educated guesses regarding what robotics and AI will be like in the future.

To be as authentic as possible, forecasters shouldn’t look too far ahead, so here are some queries and predictions about what a world with smart robots might be like in the year 2040.

AT HOME Dust and dirt will still exist in 2040, so chores will still demand human attention. Humans, in response, will continue to demand labor-saving devices that make their lives easier.

By the middle of this century, Roomba descendants will do more than roam and vacuum. They could be more like Rosie, interacting with humans and sharing detailed information about the state of the domicile. Rosie’s standard tools were housekeeping gadgets that emerged from her metallic torso, but her true talent was sassing the Jetsons—largely because the show’s writers were able to project their creative license onto scripts and characters.

In reality, creativity remains an obstacle for AI, making them better suited for home entertain-

http://www.business-arena.ro

29

ARTIFICIAL INTELLIGENCE

ment systems than home entertainment producers. The best that any current AI can deliver seems to be patched together from existing human achievements, although perhaps by 2040 a script or two will demonstrate originality instead of flighty mimicry.

In any case, personal robots might be as commonplace in 2040 as smartphones are today. Acting as a communications hub and allaround assistant, these smart devices will coordinate with humans and machines alike to facilitate both efficient productivity and timely leisure.

As kitchen robots prepare family meals, assistants will help professionals squeeze more work into a typical evening while their children’s will help them master school subjects in less time.

In addition to performing chores and providing personal assistance, robots will also help human owners monitor their health, identify concerns, and then either administer treatments or make necessary appointments. Some AI already demonstrates diagnostic equivalency, even superiority, though they could improve their bedside manner. As Marvin would say with clinical detachment, “I could calculate your chance of survival, but you won’t like it.”

http://www.business-arena.ro

ON THE JOB

30

During the first two decades of this century, the workplace changed dramatically. Billions of people headed online, and remote jobs became more accessible. Factories and farms became more automated as the Fourth Industrial Revolution gained momentum.

As robots and AI have become ordinary elements of the economy, some people have started to fear for their jobs. Such concerns, though, seem to be based on the same shortsightedness by which loom-destroying Luddites gained antitechnology notoriety. The truth will likely be more advantageous for all of humanity as new careers, including robot maintenance and even robot counseling, inspire opportunities for training, entrepreneurship and entire industries.

By 2040, HR departments will themselves be more hybrid, integrating the best of people and machines to support employees as they work to improve themselves. Humans and AI will team up to expand business automation and preserve hiring opportunities even during uncertain times.

Eventually, efficiencies of production and economies of scale will make autonomous machines affordable for every firm from blue

chip to startup. Robots will be able to build their own replacements, and AI will design next-gen versions of themselves. Human oversight will remain important for preventing any kind of HAL 9000 misstep.

BETWEEN HOME AND WORK Workers might sometimes forget, but between home and work lies the rest of the world. As augmented careers bring opportunities to produce more of the goods and services that consumers demand, prices for most things will tend to decrease.

Many present luxuries become future necessities. By 2040 there could be an abundance of not only self-driving cars and motorcycles, but also a complete transportation system with affordable commuting options for road, rail and flight. Commuting might offer opportunities to catch up on work or socializing or sleep.

What about stops during the commute? Is anyone in the future going to shop at brick & mortar stores? What will customer service be like in 2040, when the convenience of online shopping meets the practicality of just-in-time manufacturing and drone delivery? Will humans praise or curse a cocoon-like routine from home to work and back again? Will aspiring butterflies book flights on autonomous jetliners serviced by robotic pilots, only to spread their metaphorical wings on a beach serviced by robotic cabana boys? Will remote, off the grid locations become this century’s most popular luxury retreats?

CONCLUSION When discussing the future of robotics and AI, references to Marvin or Rosie or HAL 9000 are helpful because speculation is a type of fiction.

Could robots in 2040 have the ennui of Marvin, the sarcasm of Rosie or the psychopathy of HAL 9000, or will they always lack that metaphysical spark separating prosaic from spiritual?

Practical innovations are nevertheless propelling AI toward a future that will likely realize at least some of the current speculations. Machine minds experience deep learning with unforeseeable results. Memristors promise a sea change in neural networks. Quantum computing is, by definition, a perplexing consideration.

Predictions don’t guarantee results, but without them there would be little to no human innovation.

WHAT EVERY ENTREPRENEUR MUST KNOW ABOUT ARTIFICIAL INTELLIGENCE Boost efficiency and productivity. Reduce errors. Plus more cool stuff.

Artificial intelligence continues to be increasingly used throughout the general public and businesses to enhance consumer experiences. Research from Gartner predicts AI will generate a business value of $2.9 trillion by 2022. It's making doing business easier because it offers entrepreneurs several benefits that can help them grow their businesses. Here's how: 1. ARTIFICIAL INTELLIGENCE HELPS INCREASE EFFICIENCY. Being able to run your business efficiently is essential to maximizing your resources. It also helps you save time and money for your business in the long run. AI helps entrepreneurs increase operational efficiency. For example, you can create speech recognition software applications that help doctors of your medical practice take notes aloud. This removes the need to handle the transcription of notes that medical billers and coders need to effectively process invoices.

You can even use AI-powered voice assistants to help increase efficiency in the office and assist you with scheduling meetings, setting up reminders and recording points you need to discuss in a team meeting or client presentation.

2. ARTIFICIAL INTELLIGENCE ENHANCES PRODUCTIVITY. If you're looking for a way to increase your businesses performance and output, then AI offers some promising results. With AI, you can enhance productivity. For example, you can build software to speed up the process of tracking inventory for your warehouse or manufacturing facility. AI can also be helpful in improving the productivity of procuring leads for your business.

For instance, Harley Davidson employed an AIpowered marketing platform to increase its daily lead generation. This led the company to realize a 2,930 percent increase in leads over three months since its implementation. With increased productivity and speed, you can leverage the power AI to scale your business, too.

3. BUSINESSES CAN INCREASE AUTOMATION WITH ARTIFICIAL INTELLIGENCE. Automating manual tasks can help your business save time and money so you can continuously grow. With AI-powered software applications, businesses can expect to increase automation. For instance, you can create software applications to automate business processes and save time in manual labor.

Walmart used robot process automation (RPA) technology and automated a variety of business processes with the help of an estimated 500 bots, including retrieving relevant data from audit documents and answering questions from employees. This helps remove repetitive tasks from workers' responsibilities as well as enables the business to scale its automation intelligently for efficient operations.

4. YOU CAN ENHANCE CUSTOMER EXPERIENCE. Improving your customers' experiences means being available to assist them when they need you the most. However, humans cannot single-handedly be available around the clock.

It also can become increasingly expensive to run an operation that supports a workforce of employees with multiple shifts, especially if your business is just starting out.

However, chatbots can help amplify your workforce and enhance the customer experience. For example, you can use chatbots to improve customer service. These AI-powered software algorithms can be present to answer frequently asked questions and take care of tasks when human workers cannot.

http://www.business-arena.ro

31

ARTIFICIAL INTELLIGENCE

ROBOT MD:

HOW ARTIFICIAL INTELLIGENCE PROMISES TO REVOLUTIONIZE MEDICAL DIAGNOSIS

http://www.business-arena.ro

When it comes to medical ailments and their diagnosis, time is absolutely of the essence. The sooner we're aware of a developing condition, the better chance we have of treating and ultimately overcoming it. Lately we're seeing how artificial intelligence is poised to play a greater and greater role in detecting tell-tale signs of disease long before doctors can, with potentially life-saving ramifications.

32

In terms of machines outperforming humans that excel in certain fields, artificial intelligence has claimed some pretty big scalps of late.

This includes toppling professional poker players at Texas hold 'em, outperforming the world's best players of the ancient Chinese game of Go and mastering the notoriously difficult game of Ms. Pac-Man on Atari.

When we consider this rate of technological progression in the medical realm, things get even more exciting. The reason it holds so much potential in this area is because through machine learning and the power of computing, AI has the ability to look at medical imaging data and health records to spot subtle, yet crucial changes that human clinicians can't.

"AI is particularly strong in recognizing patterns in data," Shlomo Berkovsky, associate professor at the Australian Institute of Health Innovation, explains to New Atlas. "For example, patterns in medical imaging like brain scans, X-rays or time series data like ECG or respiratory measurement. It can then map these patterns to past clinical records and outcomes of procedures. Sometimes it can even recognize patterns that cannot be spotted by a human clinician. Thus, it can learn from large volumes of data and support clinicians with automated decision support."

The latest technology to make headlines in

this area comes from the Google-bought and now Alphabet-owned DeepMind, which is purported to accurately predict acute kidney injury 48 hours ahead of our current best diagnosis methods. Acute kidney injury is a lifethreatening condition whereby the organ suddenly stops working. It is difficult to detect and affects more than 300,000 people in the US every year, so there are plenty of reasons why doctors would like to pick up on it ahead of time.

The DeepMind team trained its AI on health records from more than 700,000 adult patients, an amount of data far too large to be pored over by mere humans. By considering tidbits such as vital signs, the AI was then able to predict the likelihood of acute kidney injury with 55.8 percent accuracy, two full days before its occurrence. It does so by spotting signs of deterioration much earlier than we currently can, and in more severe cases where patients went on to require kidney dialysis the AI was able to correctly predict acute kidney injury nine times out of 10.

DeepMind describes this advance as its biggest medical breakthrough yet, and while indeed significant, it may only be the tip of the iceberg when it comes to AI and improved medical diagnosis.

http://www.business-arena.ro

33

CHANGE OF HEART

EARLY-STAGE CANCERS

Heart trouble is another medical ailment where every second can count, particularly when it results in heart attacks or other serious cardiac events. But by mixing artificial intelligence with heart data gathered through more traditional means, algorithms may be able to tell us early on when something's not quite right.

Researchers at the Mayo Clinic published a paper describing a new kind of AI-assisted electrocardiogram (ECG) that could pick up on left ventricular dysfunction, a difficult-to-detect condition that is a major precursor to heart failure. The AI was trained on data from over 600,000 patients and the resulting algorithm was able to detect the condition with around 85 percent accuracy. With more work, this technology promises far cheaper and more accessible diagnosis of a key early sign of impending heart failure.

Today, that same group of researchers has published another paper in The Lancet , detailing their latest breakthrough in using artificial intelligence to detect potential heart issues.

The new AI searches through heart scans for signs of atrial fibrillation, or abnormal heartbeat rhythm, which is associated with heightened risk of stroke, heart failure and death.

Subtle changes to the organ's structure as a result of these irregular heartbeats, such as chamber enlargement and scarring, are difficult to spot through current imaging techniques. But by training artificial intelligence for the task using data from around 180,000 patients, the Mayo Clinic scientists say their algorithm can detect atrial fibrillation with 83 percent accuracy.

Back in 2017, a secretive Chinese startup called Infervision emerged from stealth mode trumpeting a new kind of imaging technology designed primarily to detect lung cancers through CT scans. It did so by building artificial intelligence trained on a huge stock of digital health records into a tool called AI Scholar, which then helped radiologists work through CT scans at triple the speed, while helping reduce the rate of missed cancer diagnoses by around 50 percent.

Earlier this year, a Google technology designed to better model and predict lung cancer was able to outperform certified radiologists, in some cases. The machine learning algorithm was trained on more than 45,000 chest CT scans, some of which featured cancers of various stages. With an ability to detect tiny malignant tissue in the lung nodules that would otherwise go unnoticed, Google says the algorithm was able to detect five percent more cancer cases than a board of six certified radiologists, while reducing false-positives by more than five percent.

Ovarian cancer is another area where AI has shown exciting potential, with a study published in February describing a new system that was able to help clinicians grade the severity of tumors and therefore design better treatments. Back in May, meanwhile, MIT scientists tuned this type of technology to breast cancer, training a deep learning algorithm on thousands of mammograms to produce an AI system that could predict breast cancer risks more accurately than current models, by identifying subtle changes in the breast tissue.

ARTIFICIAL INTELLIGENCE

DISEASES OF THE MIND

http://www.business-arena.ro

Neurological conditions may not bear the same physical signs as the diseases mentioned above, but that doesn't mean they are beyond the reach of cutting edge AI technologies. A small study published late last year explored their potential in this area by training a machine learning algorithm on neuroimaging data, among other data points, and seeing how it fared in predicting outcomes for psychosis and depression.

The team found that the AI tool was able to correctly predict social outcomes 83 percent of the time in patients who were at high-risk of psychosis, and 70 percent of the time when predicting the onset of depression. Both of these proved more accurate than clinicians in predicting a patient's social functioning a year down the track, and though it is a small sample size, it is an interesting glimpse at how the future of mental health treatments may evolve.

Alzheimer's is another example of where AI could improve outcomes for patients with neurological conditions. In November last year, an international team of scientists published a study detailing a new AI system that could detect the onset of Alzheimer's up to six years earlier than current diagnostic methods.

It built the system by training a machine learning algorithm on around 2,100 brain images, one of the clearer Alzheimer's diagnostic tools we currently have at our disposal.

The AI system was more adept at detecting patterns of glucose uptake in the brain than human clinicians, a metabolic biomarker that can be indicative of the disease.

34

A LOOK TO THE FUTURE The AI systems discussed above are all in very early, experimental stages with a lot of further work needed before they enter clinical use. But they do highlight the potential of machine learning as a way of improving patient outcomes, with skin cancers, life expectancy, height and bone density just a few more elements of human health that AI could help track and predict.

Because health data is this type of AI's stock and trade, things could be about to get a whole lot more interesting. The advent of wearable computers such as smart watches and fitness trackers means that never before have we had access to such an abundance of data on our health and well being, and we're already seeing how AI might play doctor when

things seem awry.

Back in 2017, the FDA approved its first medical attachment for the Apple Watch. The KardiaBand sensor integrates into the watch's band and acts as a sort of wrist-worn version of an electrocardiogram device, taking 30-second recordings of a wearer's heartbeat and helping to detect atrial fibrillation, among other things.

One of the features of the band is something called SmartRhythm, which uses AI to monitor the relationship between physical activity, as tracked by the Apple Watch, and the user's heart rate. If it feels like the two are out of sync, it will automatically suggest the user uses the KardiaBand to perform an ECG. This early mish-mash of AI, medical intervention and discreetly worn wearable computers could very well be a sign of things to come, and one of the interesting paths this tech could take.

"In the future, more and more information collected by wearable technologies will be used for diagnosis purposes," Berkovsky tells us. "There exists a range of sensors and devices that can monitor patients unobtrusively and transmit the collected data. This data will allow the clinicians to build a more encompassing understanding of the patient's condition and improve the accuracy of the AI decision support."

Though there may be a time a lot further down the track when AI displaces your local doctor, for the foreseeable future it is likely to play more of a complementary role.

"It's important to note that in the near future I'd expect AI to remain a decision support tool, while the diagnosis will still be done by the humans," says Berkovsky.

ENERGY

USTDA PROVIDES GRANT FOR SMR SITTING ASSESSMENT IN ROMANIA The U.S. Trade and Development Agency (USTDA) and Nuclearelectrica (SNN) have announced the awarding by USTDA of a 1,277,115 USD non-refundable grant that aims to fund the cost of services required in connection with the delivery of technical assistance related to identifying and performing a preliminary assessment of new potential SMR compatible nuclear sites in Romania.

http://www.business-arena.ro

“USTDA is an ideal partner for Romania as it seeks cutting-edge civil nuclear energy technology for its future energy needs,” said Todd Abrajano, USTDA’s Chief Operating Officer and

36

The grant funds to be provided by USTDA will be used to fund the costs of technical assistance for identifying and assessing suitable sites for small and modular nuclear tehnologies (SMR), and a licensing roadmap for these.

According to the 2020 Romanian Energy Strategy Project, the employment of small and modular nuclear reactors might be beneficial to increase energy capacities without CO2 emmissions and sources of hydrogen production, after 2035. Therefore, Nuclearelectrica’s interest is to timely initiate the assessment of potential sites, others than Cernavoda area, through this USTDA non-refundable grant.

“In addition to the current development of reactors 3 and 4, SNN is also interested in assessing the development of Small Modular Reactors as a long-term solution to further develop the Romanian Small modular nuclear reactors, like the one seen illus­ nuclear industry. We are interested in featrated here by the firm Babcock and Wilcox, bring tures like flexibility, modularity and higher together components that are usually housed sepa­ efficiency that could provide advantages rately at full­scale plants. That design feature can for both the energy system and businessboost safety or increase vulnerability, depending on es after 2035. The grant awarded by whom you ask.

USTDA will allow us to further explore sitting and technology compatibility with the Head of Agency. “Our assistance will build proper technical assistance and have this stronger ties between our respective industries assessment process initiated in due time for and create new business opportunities for U.S. further decision-making,” said Nuclearelectrica industry in an important market.”

CEO Cosmin Ghita.

US DEPARTMENT OF ENERGY BACKS FIVE ADVANCED NUCLEAR REACTOR CONCEPTS The US Department of Energy (DOE) is backing five projects to develop advanced nuclear reactor designs to be built in the United States by private industry. Under the Advanced Reactor Demonstration Program (ARDP), the DOE’s Office of Nuclear Energy's US$30 million initial funding is expected to grow to US$600 million over seven years with industry providing an additional 20 percent.

Though nuclear power has been very unpopular in the West over the past few decades, the need for a carbon-neutral future looks poised to spark a new generation of advanced reactors that will be very different from the light-water pressurized reactors that have dominated the nuclear power industry since the 1950s.

The goal of the latest DOE grants is to promote the development of reactors for deployment in 10 to 14 years that are not only more efficient and more economical to operate, but are also inherently safer to run, with designs that use more robust fuels and have cooling systems that can passively keep a reactor from melting down even if there's no power available.

The five reactor concepts under development include the Hermes Reduced-Scale Test Reactor by Kairos Power in Alameda, California. Intended to lead to the building of the commercial-scale Kairos Power Fluoride Salt-Cooled High Temperature Reactor (KP-FHR), this advanced test reactor is based on Tri-structural ISOtropic (TRISO) particle fuel and is cooled by a low-pressure fluoride salt coolant.

TRISO fuel comes in particle form and is composed of uranium, carbon, and oxygen, which are formed into kernels and then encapsulated in three layers of carbon and one of ceramic to prevent the release of radioactive waste. These poppy seedsized kernels are then collected together into cylindrical pellets or billiard ball-sized spheres, which can withstand high temperatures in gas or salt-cooled reactors.

The second project is the Westinghouse Electric Company's eVinci Microreactor, which is a heat pipe-cooled micro-reactor as part of a technology demonstrator to be completed by 2024. A heat pipe reactor is usually made up of a solid core with the

http://www.business-arena.ro

37

TRISO fuel particles are coated in three layers of carbon and one of ceramic to prevent the release of radioactive waste

fuel inserted in holes in the block. Heat pipes contain a liquid that removes heat from the core as it vaporizes and then carries the heat to a heat exchanger for both cooling and power generation.

The purpose of the demonstration is to assess the risks of such a design and to determine how to improve the manufacturing and efficiency of the heat pipe system.

Third is the BWXT Advanced Nuclear Reactor (BANR) by BWXT Advanced Technologies in Lynchburg, Virginia. This is a transportable microreactor that also uses TSIRO fuel to achieve higher concentrations of uranium as well as an improved core design that uses a silicon carbide matrix.

The fourth is the Holtec SMR-160 Reactor from Holtec Government Services in Camden, New Jersey. This is a small modular reactor that is based on light-water reactor design. Modular reactors have the advantages of being mass-produced in factories as well as scalability by adding additional modules on site.

Finally, there's the Molten Chloride Reactor Experiment by Southern Company Services, Inc. in Birmingham, Alabama. In this 1,200 MW critical fastspectrum salt reactor design, the fuel is mixed in with the molten salt coolant. The reaction takes place inside the salt, keeping it molten. Molten salt reactors are more efficient because they can operate at higher temperatures than conventional reactors.

"All of these projects will put the US on an accelerated timeline to domestically and globally deploy advanced nuclear reactors that will enhance safety and be affordable to construct and operate," says US Secretary of Energy Dan Brouillette. "Taking leadership in advanced technology is so important to the country’s future because nuclear energy plays such a key role in our clean energy strategy."

special section

TOP BRAND

A NEW DESIGN AWARD FOR MEMORIS SUPERLIGHT

http://www.business-arena.ro

Memoris Superlight is once again rewarded for its unique design!

38

A memorable 2020, rich in prizes, for Memoris Superlight.

A "Platinum Award" from the Muse Design Awards has been added to its list of achievements. An avant-garde international competition created in 2018, the Muse Design Awards honours design professionals and only rewards exceptional concepts, especially in the field of architecture.

More than 4,500 candidates, from 57 different countries, have registered so far in an attempt to win a prize. The chronograph mechanism, fully visible on the dial side, gives Memoris Superlight an unusual aesthetic. This symmetry between construction and design ultimately convinced the panel and Memoris Superlight was once again rewarded.

MEMORIS SUPERLIGHT, THE ONLY WATCH OF ITS KIND IN THE WORLD Louis Moinet invented the chronograph in 1816; we transformed it in 2020. It all began with a 100% ingenious design within which the traditional mechanism has been dissociated: automatic winding on the back, and the chronograph system on the front. This new, unique and distinctive vision makes it possible to admire the measurement mechanism at every interaction: start, stop, reset. More than 500 components had to be devised in aim to achieve this incomparable feat. Memoris design is bold and contemporary. To highlight the mechanical aspect of the creation, the counters have been manufactured in an avantgarde entirely translucent material. The rules of comfort require harmony and attention to detail. Memoris has a particularly light case (only 31 grams) and our design studies have shown that the use of chevĂŠ concave sapphire crystals, enables optimal arrangement of volumes, while ensuring unrivalled wearing comfort. Finally, the fact that the chronograph functions are handled via a single pushpiece (at 2 o'clock) is an additional user-friendly factor for the wearer.

Jean-Marie Schaller created Les Ateliers Louis Moinet in St-Blaise (NE) in

L

U X U R Y

& LIFESTYLE pages 38 - 71

2004. The fully independent firm was established to honour the memory of Louis Moinet (17681853): master watchmaker, inventor of the chronograph in 1816 (certified by Guinness World Records™), and pioneer in the use of very high frequencies (216,000 vibrations per hour). Louis

Moinet was a watchmaker, scholar, painter, sculptor, and teacher at the School of Fine Arts – as well as the author of the Traité d’Horlogerie, a watchmaking treatise published in 1848 that remained a definitive work of reference for a century.

http://www.business-arena.ro

39

SPACE REVOLUTION

http://www.business-arena.ro

Is it a flying satellite double tourbillon – or the first space object from Louis Moinet? “The technology of the former has given birth to the interstellar world of the latter!” says Jean-Marie Schaller.

40

Two spaceships battle it out beneath a sapphire crystal dome, facing off eighteen times an hour: the upper spacecraft completes a clockwise rotation every five minutes, whilst the lower vessel turns in the opposite direction, completing a counterclockwise revolution every ten minutes. Meanwhile, two constantly revolving space stations stage a powerful defense against the effects of gravity.

To ensure they can float freely in space, the craft weigh barely 0.5 grammes each and are made entirely from titanium, with a hybrid ceramic colour finish applied by hand. Their movement can be measured in terms of the speed of light – almost 300,000 kilometres per second. The depths of space have been reproduced by inserting a floating flange between the cylinder and the sapphire crystal dome.

LUXURY & LIFESTYLE TOP BRAND

PATEK PHILIPPE, THE GRAND COMPLICATION This new grand complication was created explicitly for connoisseurs of striking watches. It stands out with its open architecture that allows the minute repeater mechanism including the hammers and gongs to be admired in action while the watch is being worn on the wrist.

The aesthetic appeal of the manually wound caliber R TO 27 PS was subtly reworked to highlight its full beauty. The rose-gold case features white-gold intarsias engraved with foliage motifs.

http://www.business-arena.ro

Transparent sapphire, black hour circle with minute markers printed in white and golden powdered dots. Rose gold. White gold decorative inserts. Diameter: 42 mm. Height: 12.13 mm.

Humidity- and dust-protected only (not waterresistant). Sapphire crystal case back. UVprotected sapphire crystal glass. Alligator leather with square scales, hand-stitched, shiny black.

Fold-over clasp. Minute repeater with classic gongs. Tourbillon. Power reserve: min. 40 hours max. 48 hours. Minute repeater with chime on two classic gongs. Tourbillon. Small seconds.

42

Manual winding. Caliber R TO 27 PS. Minute repeater with chime on two classic gongs.

Tourbillon. Small seconds.

DIAL: Transparent sapphire, black hour circle with minute markers printed in white and golden powdered dots.

CASE: Rose gold. Sapphire crystal case back.

UV-protected sapphire crystal glass. Humidityand dust-protected only (not water-resistant).

Diameter: 42 mm. Height: 12.13 mm.

STRAP: Alligator leather with square scales, hand-stitched, shiny black. Fold-over clasp.

As the first minute repeater that always strikes local time (a patented mechanism), the Reference 5531 World Time Minute Repeater innovatively unites two of Patek Philippe’s most emblematic complications.

This micromechanical masterpiece is also remarkable for its exterior beauty. The rosegold case is adorned with a hand-guilloched hobnail pattern and a dial center in cloisonné enamel depicting the Lavaux vineyards on the shores of Lake Geneva.

Mechanical self-winding movement.

Caliber R 27 HU. DIAL: Cloisonné enamel center, Lavaux landscape. 18K gold dial plate and 24-hour ring.

CASE: Rose gold. Interchangeable full back and sapphire-crystal case back. Humidity and dust protected only (not water resistant).

Diameter: 40.2 mm. Height: 11.49 mm.

STRAP: Alligator strap with square scales, hand-stitched, shiny chocolate brown. Foldover clasp.

URWERK LIGHTENS UP WITH THE UR-100V IRON Urwerk has added a new watch to its UR-100 series.

The UR-100V Iron comes cased in steel and titanium, monochrome and unadorned, to highlight its most delicate finish — all done by hand. No colors here but subtlety. Form and finish together create an ever-changing chiaroscuro over polished, matte, sanded and shot-peened surfaces. Here is the UR-100V Iron!

“The main reason to fall in love with a watch is an emotional reaction to its looks,” declares Martin Frei, Urwerk’s chief designer and co-founder. “Beyond the complexity of its mechanism we have tried to refine this watch as much as possible.

The UR-100V Iron appears in all its naked glory, leaving only the light reflecting on the metal to reveal its beauty.”

In addition to Urwerk’s trademark satellite configuration of the wandering hours and minutes, the UR-100V Iron brings your spin through space into sharp focus.

When the minutes hand has completed its 60minute journey, it reappears on a 20-minute scale of 555 kilometers. This is the distance you travel in 20 minutes if you are standing on the equator of our rotating planet. The opposite scale tracks your journey through space around the sun: 35,740km every 20 minutes.

In the display on the UR-100V Iron, time and distance are on a par, the hours and minutes in blue, and the kilometers in bright white. Watchmaker and Urwerk’s co-founder, Felix Baumgartner, reveals that he got the idea from a clock given to him by his father, Geri, a noted restorer of antique clocks. “It was made by Gustave Sandoz for the Universal Exhibition of 1893.

Instead of showing the time, it showed the distance traveled by a point on the equator.”

Under the UR-100’s dome, Urwerk’s new caliber 12.02 drives the carousel carrying the wandering hours on three satellites. Felix Baumgartner says: “This new movement enabled a redesign of the carousel, bringing the hours closer to the minutes as they travel in

succession along the 60-minute scale. The result is an easier and more intuitive reading of the time.”

This carousel, as well as the structure on top of the hours, are forged from anodized aluminum then sanded and shot-blasted, while the satellite screws are each circular sanded. The satellites rest on a carousel of sanded brass plated in ruthenium.

The structure on top of the hours display is in sanded and shot-blasted aluminum. The self-winding rotor of the UR100 is governed by a profiled airscrew known as the Windfänger.

There’s a nostalgic look about the case of the UR100V Iron. Many owners of Urwerk watches will recall the independent brand’s first models.

“We have adopted some of the stylistic features of our first constructions, and then deconstructed them,” explains Martin Frei.

LIMITED EDITION: 25 PIECES Case: titanium and stainless steel Size: 41 x 49.7mm Movement: automatic-winding manufacture caliber UR 12.02 Function: measures the distance travelled on Earth’s equator in 20 minutes, and the distance Earth travels around the sun in 20 minutes Power Reserve: approximately 48 hours Water Resistance: 30m Dial: wandering hours, retrograde minutes Caseback: sapphire crystal Hands: hour and minute indications in SuperLumiNova Strap/Bracelet: blue Alacantra Factory Warranty: two years

http://www.business-arena.ro

43

LUXURY & LIFESTYLE

TOP BRAND

A NEW LOOK FOR HYSEK’S FURTIF

http://www.business-arena.ro

The new version of Hysek’s square-case Furtif is powered by a new, 100%-manufacture caliber. Boasting the ultimate in skeletonisation, the piece’s meticulous design and finishings gleam and sparkle as never before. The charbonnage finish on the movement, performed in-house by hand, will make every watch unique.

44

While it is also to be known as a ‘Furtif’ – a reference to the bevellededge geometry characterising the collection – the name is perhaps the only thing this new model has in common with its illustrious forebears: everything else is radically new, bespoke, and created with the aim of producing nothing but unique, customisable timepieces.

A shaped movement featuring extreme skeletonisation Hysek is probably one of the last remaining fully-independent manufactures to be developing and assembling ‘shaped’ calibers, as they are known. Now almost wholly extinct, these calibers are designed to mirror the shape of the case they are housed in. For the new Furtif 44 mm Squelette, the movement is a perfect square – a design by legendary watchmaker Laurent Besse, who joined the Hysek manufacture in 2018.

Boasting 172 components and 24 jewels, this new HW34 caliber thus offers a layout optimised for the square proportions of the Furtif with its 44 mm sides. The aim is to achieve total transparency; light passes right through the Furtif 44 Squelette. Each component has been hollowed out as much as is humanly possible without losing its rigidity, so as to allow light to shine right into the heart of the movement – perpetuating Hysek’s characteristically extreme skeletonisation, now one of its hallmarks.

AN ASSERTIVE BRAND IDENTITY Connoisseurs will also spot other features that have helped forge the

brand’s identity. These include the layout of the 1, 5, 7, and 11 hour markers, serving once again as cardinal points around which the HW34 caliber has been arranged. At 1 o’clock, there is the seconds wheel. At 5 o’clock sits the barrel, providing a 45-hour power reserve.

Its bridges, suspended in mid-air, stretch all the way to 7 o’clock. And last but by no means least, the escapement is located at 11 o’clock, beating at a rhythm of 28,800 vibrations per hour.

The design of each wheel required for this exceptional movement to operate features three double spokes, providing perfect technical and aesthetic balance – as well as being a recurring style signature for Hysek.

EACH TIMEPIECE WILL BE UNIQUE The most distinctive feature is visible on the movement’s square chassis, running all around the case: a ‘charcoaled’ finish. The charbonnage technique in question is hardly ever used in watchmaking, but Hysek has chosen to give it pride of place here. It involves applying a stick of a specific type of charcoal, by hand, leaving a unique pattern and forming an extremely soft, gentle abrasion that brings out all the highlights of the surface.

Four different options are available for the painstakingly lengthy and detailed movement finish: anthracite, rhodium-plated, blue, or violet, together with a choice of titanium and gold, titanium and PVD, or titanium cases. Gold, titanium, or titanium/PVD plates will be inserted in the frames.

45

IO- HYSEK SENDS TIME INTO ORBIT – TWICE The Hysek IO Double Orbitale marks a resurgence of the firm’s creative fibre at its best. A new, fully manufacture-made movement has allowed Hysek to create a display that’s literally revolutionary, with both minutes and seconds travelling in orbit.

Simply breath-taking.

The Double Orbitale is the latest addition to Hysek’s IO collection, based on a fully manufacture-made movement: the HW63 caliber.

The hours are displayed in a window at 12 o’clock, while the minutes and seconds appear on an orbital display, resulting in the watch’s name – “Double Orbitale”.

The minutes are displayed in a module that completes a full revolution around the dial. This orbital module includes a central hand that points inwards to the minute display: this takes the form of two semi-circles showing minutes 05 to 25 and 35 to 55: the time shown on the photo is thus 23.25.

The seconds are embedded within the minutes module itself.

They are marked out by a smaller, more discreet hand, positioned beneath the minutes hand and pointing to another semi-circular display.

The piece comes in four configurations, combining a case in titanium or rose gold with either of two dial variations.

IN DETAIL Reinventing tradition; disruptive creativity; unashamedly contemporary aesthetics – never have so many superlatives been in order in the field of mechanical watchmaking. The fact is that there are few ‘creations’ really deserving of the term; such watches must ‘create’ a genuinely new horological artefact: a complication, a display, a material, or some other, similar

‘creation’.

Hysek has pulled off such a feat more than once, notably with the Colossal, unveiled last year: the first perpetual calendar in the world to use only rollers. This year, the brand’s done it again with the IO Double Orbitale.

ONE CREATION, TWO REVOLUTIONS Hysek is one of the last remaining fully-independent manufactures, and as such enjoys complete stylistic and technical freedom – as its new IO Double Orbitale amply demonstrates. It is indeed an authentic watchmaking ‘creation’, featuring an unprecedented dual orbital display for both minutes and seconds.

For this new timepiece, powered by the HW63 manufacture caliber, the minutes display is not powered from the centre: instead, it rotates around the inner edge of the bezel in a module mounted on an external arc, linked to a gear arrangement concealed beneath the bezel. This puts the module in orbit around the outside of the dial, guided by the gear system.

Within the module itself, a broad openwork hand marks out the minutes by pointing towards two central arcs featuring graduations from 05 to 25 and from 35 to 55.

True Hysek connoisseurs will spot that the arcs are fixed to the dial at the 1, 5, 7, and 11 positions on the hour track – a nod to one of the firm’s signature touches.

LUXURY & LIFESTYLE

TOP BRAND

JACOB & CO RELEASES NEW BUGATTI CHIRON TOURBILLON WATCH EDITIONS

SAPPHIRE CRYSTAL EDITION WITH BLUE STRAP

http://www.business-arena.ro

Jacob & Co Bugatti Chiron Tourbillon – Sapphire Crystal The new sapphire crystal edition is created from a solid block of sapphire crystal and is secured on a blue or white rubber strap with a titanium buckle. The case back is also sapphire crystal, along with sapphire crystal crowns and pushers.

46

Jacob & Co Bugatti Chiron Tourbillon – 18ct Rose Gold Limited to 72 pieces, the new Rose Gold edition features an 18ct Rose Gold case on a black rubber strap. It also features a special antireflective sapphire crystal and an 18ct Rose Gold open case back with black DLC titanium crowns and pushers embossed with the Bugatti logo.

Jacob & Co Bugatti Chiron Tourbillon – 18ct Rose Gold & White Baguette-Cut White Diamonds Limited to 52 pieces, the 18ct Rose Gold &

THE 18CT ROSE GOLD EDITION

JACOB & CO BUGATTI CHIRON TOURBILLON WITH 18CT WHITE GOLD AND BAGUETTE-CUT WHITE/BLACK

Baguette-Cut White Diamond edition is an option that features sparkling white diamonds and is secured on a rubber strap with an 18ct rose gold buckle clasp. The case back, crowns and pushers are also made of 18ct rose gold and set with baguette-cut white diamonds – embellished with an embossed Bugatti logo.

Jacob & Co Bugatti Chiron Tourbillon – 18ct White Gold & White/Black Baguette-Cut Diamonds The final version has been created using 18ct White Gold, and the case is set with 291 black and white diamonds (approximately 20 carats in total). The 18ct White Gold version also features another 18 white diamonds (approximately 1.76 carats) on the crowns, pushers, and white gold buckle clasp.

Carrying on with the same case shape and tiny animated replica of Bugatti’s iconic 8.0-liter W16

Jacob & Co have released four new editions of the Bugatti Chiron Tourbillon watch featuring sapphire crystal, 18ct Rose Gold, 18ct White Gold, and baguette-cut diamonds.

Earlier this year, New York-based jeweler Jacob & Co collaborated with the French car manufacturer Bugatti to create a Chiron supercar inspired watch. Now to coincide with the holiday season, four new editions of the Jacob & Co Bugatti Chiron Tourbillon watch designs have been created using entirely new materials.

SAPPHIRE CRYSTAL EDITION WITH WHITE STRAP

engine beating at the heart of the Tourbillon, the timepiece features a stunning movement in all versions of the watch, comprised of 578 components and is powered by a flying tourbillon movement, inclined at 30 degrees.

The miniature Bugatti “engine” comes to life once the right-hand crown of the timepiece is pushed. Just like the engine in the hyper sports car would come to life, the ‘crankshaft’ in the watch – one of the smallest and most complicated watch parts ever manufactured, made out of solid steel – turns and the ‘pistons’ pump up and down, mounted at varying angles to add to the complexity.

The movement is held in place in four places by miniature Chiron-style shock absorbers, appearing as though floating inside the case and can be observed moving slightly up and down.

This suspension detail created an additional challenge for the watch designers, who had to develop and patent a unique automotive-inspired

http://www.business-arena.ro

47

THE 18CT ROSE GOLD WITH BAGUETTE-CUT WHITE DIAMONDS

transverse system to ensure the movement in the case doesn’t damage the crown posts.

The crowns are found at the bottom of the case. The left crown sets the time, the middle crown winds the movement and animation for 60 hours of power reserve, while the push of the right-hand crown starts the animation. The power reserve for the animation and timekeeping are separate, yet both are wound through the winding crown – clockwise for the movement (60 hours), counterclockwise for the engine animation (approximately three activations). The power reserve for the movement even features the universal gas pump symbol on the side of the gauge.

Although no prices were announced as part of the release, if the previous release was anything to go by, it will be well above the $280,000 asking price of the previous non-diamond encrusted versions.

A B

MOST ADMIRED BUSINESS

e veevnetnst

AW ARDS Gala2021 Enjoy the Quality

* * * * *

WOMEN

Admire the Value

in partnership with

The World Bank’s Women, Business and the Law index reveals wide variations in women’s rights at work. Overall, it says women have only threequarters of the employment rights that men enjoy.

The nations with a perfect score in the Index are Belgium, Denmark, France, Iceland, Latvia, Luxembourg, Sweden and, joining the list this year, Canada, which recently improved parental leave rights. In these countries, the index shows, women who work are on an equal legal standing with men, measured on indicators including access to jobs and protections on gender discrimination and sexual harassment in the workplace.

Although there have been improvements in many areas, with 40 nations enacting reforms to improve gender equality in the past three years, in the Middle East and North Africa, women workers still have just half the legal rights of their male colleagues.

An increasing number of women manage industrial facilities, major companies and build their own successful businesses in Romania nowadays.

They have achieved a high level of recognition.

Therefore Business Arena Magazine proudly announces the upcoming special awards gala dedicated to the ladies that make a difference in business.

Experts agree that Romania has seen some improvement in gender equality in recent years, but efforts must still be made to ensure equal opportunities for men and women in the workplace.

In this context, Business Arena continues its tradition, celebrating women’s achievements and their vital contribution to the success of business and banking activities throughout Romania. On this note, our publication proudly announces the upcoming special awards gala dedicated to the ladies that make a difference in business.

The Most Admired Business Women Awards Gala 2021 will bring together entrepreneurs, investors, business leaders, diplomats, and professionals from a wide range of sectors to celebrate the successes of women in business.

For more information please contact Cosmin Stangaciu at cosmin.stangaciu@business-arena.ro or phone 0755.274.125

PANTONE COLORS OF 2021

PANTONE 17-5104 Ultimate Gray + PANTONE 13-0647 Illuminating

INSPIRE OPTIMISM THROUGH STYLISH OUTFITS As you already know, every year, Pantone Institute chooses a color that is meant to inspire all the creative fields and influence customers’ buying decisions for the whole year to come. From fashion and deco to interior and industrial design, everything is created after the crowned start color. This time, inspired by the Pantone symbol colors, I’ve decided to write about the way you can use and include these shades in your outfits, to gain style, hope, and a good mood. the pandemic but also the stability, the camaraderie, and the dependability between people to be able to pass over these hard times. Illuminating Yellow, a shade of sunny yellow comes to give us hope and happiness. This chromatic duo sends a powerful message of unity and hope.

That being said, I won’t talk too much about the factors which influence Pantone entire outfit. Actually, grey acts as the non-colors it comes from. You can mix it with any other shade and use it instead of black to blur sobriety. You can use it in your office outfits, but also in your formal attire because it transmits an approachable formality. Thus, you can use a grey suit instead of a black or dark blue one, to build elegant but less sober event outfits. For example, you

http://www.business-arena.ro

This year, Pantone chose two shades as a collective color, a chromatic team inspired by natural elements and made of contrasts that highlight both the tumultuous year 2020 and the hope and optimism that follows in 2021, the sunshine that rises after the clouds and the storm.

Ultimate Gray, the first chosen color, is a shade of stone gray which evokes the incertitude of

50

specialists in choosing the color of the year. I won’t insist on symbolism. I’ll just help you understand how these colors can influence your mood and how you can approach them in your everyday outfits.

HOW TO WEAR THE COLORS OF 2021 Solid gray is, by nature, a basic color in your wardrobe, a neutral shade that supports the chromatic spectrum of the

can wear a grey suit with a white shirt for absolute formality or you can pair it with a pastel shade shirt – as illuminating yellow – in a style equation for a softer formality, ideal for daytime events such as a brunch, a baptism ceremony or an engagement party.

Also, the illuminating yellow is a great option to add color to your outfits. You can wear grey pants or jeans with a white shirt and yellow blazer in a smartcasual outfit. Usually, when you mix these two colors in an outfit,

it’s ideal to use the base color on your pants and the accent color on your top – such as grey pants and a yellow shirt or coat.

But, as an exception, in a more relaxed situation, you can reverse the colors and wear yellow pants, a white shirt, and a grey coat.

Speaking about color mixology, black is a great option to mix and match with these chosen shades because it supports the grey shade and creates a powerful contrast with the bright yellow color.

If you want to be both elegant and creative don’t be afraid to wear prints, either made of the two shades, or prints contrasting with the mentioned colors. The prints have the power to break the monotony in a boring outfit.

For example, if you wear a gray

suit, use a printed shirt in order to transform the simple outfit into a statement one.

HOW TO USE COLORS FOR YOUR MOOD The colors therapy exists and it’s used to make you feel better. So, the way you dress and the colors you wear can change your mood in an instant.

Speaking about the colors of 2021, the ultimate gray transmits melancholy, calm, being also a very stylish shade.

That’s why, the Pantone specialist paired it with the illuminating yellow, which transmits happiness, in order to balance the gray sobriety.

Keep in mind that the outfit you choose to wear at a certain moment reflects your mood.

Also, choosing the right clothes

and colors for your outfit can change your mood, because the colors are unconsciously absorbed by your body. You’ll be surprised to notice how you regain your energy just wearing a yellow scarf in a completely neutral outfit.

Sometimes, you tend to avoid a certain color because you believe it doesn’t match you.

Actually, that color doesn’t match your mood at that certain moment. But if you try and wear it, you’ll notice an emotional change and you’ll continue to wear that color afterwards. It might also become your favorite color.

Basically, the gray and yellow mix is a safe one in any outfit.

You can choose to remain in the safe zone using this mix with non-colors, or you can

http://www.business-arena.ro

51

experiment with prints or bright colors. In this case, you must be careful how many colors you use, because you can easily destroy the chromatic balance.

If you have more questions about style or subjects you want to read about, text me on Adina Buzatu Facebook or Instagram.

We are waiting for you in our TRENDS by Adina Buzatu shop in Baneasa Shopping City, Road Bucharest-Ploiesti no. 42 D, ground floor and on www.adinabuzatu.ro

MERCEDES-BENZ FASHION WEEK 2021 IN BERLIN

http://www.business-arena.ro

As you already know, every year, Pantone Institute chooses a color that is meant to inspire all the creative fields and influence customers’ buying decisions for the whole year to come. From fashion and deco to interior and industrial design, everything is created after the crowned start color. This time, inspired by the Pantone symbol colors, I’ve decided to write about the way you can use and include these shades in your outfits, to gain style, hope, and a good mood.

52

http://www.business-arena.ro

53

MERCEDES-BENZ FASHION WEEK 2021 IN BERLIN Mercedes-Benz launched Mercedes-Benz Fashion Week (MBFW) Berlin on the evening of Monday, 18 January with a live art performance by Tom Van der Borght, upand-coming Belgian designer and winner of the renowned International Festival of Fashion, Photography and Fashion Accessories in Hyères (organised by villa Noailles).

As a sign of its commitment to sustainability within the fashion industry, the luxury brand will also be continuing its cooperation with the independent British sustainability initiative Fashion Open Studio at MBFW Berlin. Due to ongoing measures to combat the coronavirus pandemic, MBFW Berlin will for the first time be streamed in a purely digital format from the "Kraftwerk" (a former power station) in Berlin-Mitte.

http://www.business-arena.ro

"We are delighted that we have been able to work with NOWADAYS to stage Mercedes-Benz Fashion Week Berlin completely digitally for the first time.

As the new year begins, we are continuing our commitment to fashion, which we have been supporting passionately since 1995. Our relationship with the fashion industry is so important to MercedesBenz and allows us to continue supporting extraordinary design and talent. For Tom Van der Borght to be opening MBFW Berlin as the winner of last year's Festival Hyères, our aim is to further motivate and support emerging designers from around the world", affirmed Bettina Fetzer, Head of Marketing at Mercedes-Benz AG.

54

MBFW BERLIN OPENING SHOW: THE WINNER OF FASHION CATEGORY GRAND PRIX AT THE 35TH HYÈRES FESTIVAL TOM VAN DER BORGHT The T.VDB label of the Belgian multidisciplinary artist Tom Van der Borght is characterised by complex, multi layered fashion experiences that convey a positive message. The designer's "HighTech Bricolage" collection combines haute couture and the avant-garde, celebrating non-conformism

and encouraging diversity.

At the heart of his work is the individual in all their different facets, together with a etermination to conserve resources by creating something new out of existing materials. For this work, Tom was awarded the Grand Prix du Jury Première Vision at the 35th International Festival of Fashion, Photography and Fashion Accessories in Hyères.

In a live catwalk performance at the "Kraftwerk" in Berlin, as part of the Mercedes-Benz Fashion Talents programme, he showed 21 looks in total, fourteen new looks as well as seven restyled looks

http://www.business-arena.ro

55

from his Hyères collection. The performance was created in collaboration with Blanca Li, the famed French-Spanish dancer, choreographer and director, and addressed the topic of mutual support within the community, particularly in times of pandemic-induced isolation. The models move along the catwalk as if taking part in a procession. They are met by a group of performers, who take on a variety of forms - from workers with the face of the designer to muscular, fantastical-looking figures of horses. The climax of the show reflects Tom Van der Borght's artistic vision of an inclusive universe. The designer also applied his signature style to the presentation of the all-electric

Vision EQS vehicle at the "Kraftwerk".

The latest all-electric member of the Mercedes-EQ family will be appearing live at the "Kraftwerk" from 12 noon. The EQA provides a visual highlight within the luxurious setting of the fashion world, in a presentation set against a backdrop of large-scale EQA campaign images that bring a breath of spring air to wintry Berlin.

The EQA campaign offers a preview of a completely redesigned visualisation of the sub-brand Mercedes-EQ and initiates the previously announced market launch of new EQ models, led by the EQA and followed by the EQS.

SUPER CARS

MERCEDES-AMG PROJECT ONE: FORMULA 1 TECHNOLOGY FOR THE ROAD

World premiere at the IAA.

The Mercedes-AMG Project ONE will celebrate its world premiere at the International Motor Show (IAA) in Frankfurt/Main: for the first time, the two-seater supersports show car brings the very latest and efficient, fully-fledged Formula 1 hybrid technology from the race track to the

road almost par for par to represent the highlight of AMG’s 50th anniversary. This highperformance hybrid is said to produce over 1,000 PS and reach top speeds beyond 350 km/h. The show car combines outstanding race track performance and day-to-day suitable Formula 1 hybrid technology with exemplary efficiency. This is a world first.

http://www.business-arena.ro

One turbo engine and four electric motors.

56

The high-performance plug-in hybrid drive system of the Mercedes-AMG Project ONE comes directly from Formula 1, and was realised in close cooperation with the motorsport experts of Mercedes-AMG High Performance Powertrains in Brixworth. It consists of a highly integrated and intelligently networked unit comprising one hybrid, turbocharged combustion engine with a total of four electric motors. One has been integrated into the turbocharger, another has been installed directly on the combustion engine with a link to the crankcase and the two remaining motors drive the front wheels.

http://www.business-arena.ro

57

Rear mid-engine with up to 11,000 rpm.

The 1.6-litre V6 hybrid petrol engine with direct injection and electrically assisted single turbocharging comes directly from the Mercedes-AMG Petronas Formula 1 racing car. To achieve high engine speeds, the mechanical valve springs have been replaced by pneumatic valve springs. The vehicle is midengined (ahead of the rear axle) and it can easily reach speeds of 11,000 rpm, which is currently unique for a roadgoing vehicle. However, for higher longevity and the use of commercially available Super Plus petrol instead of racing fuel, it remains significantly below the F1 engine speed limit.

Driving Performance of the future.

Ever since the early days of motorsport, engineers have dreamed of bringing motor racing technology to the road. Mercedes-AMG is now making this dream a reality at the very highest level. “Motorsport is not an end in itself for us. Faced with intense competition, we develop technologies from which our production vehicles also subsequently benefit. We are drawing on our experiences and successes from three constructors’ and drivers’ world championships to bring Formula 1 technology to the road for the first time: in MercedesAMG Project ONE”, says Dr Dieter Zetsche, Chairman of the Board of Management of Daimler AG and Head of Mercedes-Benz Cars. The concept car gives specific indications of what to expect from the upcoming production model. “The hypercar is the most ambitious project we have ever undertaken. It marks yet another pinnacle of the successful, strategic development of Mercedes-AMG towards a performance and sports car brand. Project ONE raises the bar in terms of what is currently technologically feasible and thanks to its combination of efficiency and performance it represents an absolute benchmark. At the same time, Project ONE provides an outlook on how AMG will define driving performance in the future”, Tobias Moers explains as the Head of Management at MercedesAMG GmbH.

SUPER CARS AUTO

Rev wonders on the front axle.

The electric motors on the front axle are also true rev wonders, with rotor revolutions up to 50,000 rpm – current state of the art is a speed of 20,000 rpm. The very high-revving engine is additionally boosted by a high-tech turbocharger. The exhaust gas and compressor turbines are separated from one another and located at an optimum position to the exhaust side and to the intake side of the V6 engine, and connected to one another by a shaft.

This shaft features an electric motor with approximately 90 kW which, depending on the operating status, electrically drives the compressor turbine with up to 100,000 rpm – for instance when moving off or following load changes. The Formula 1 designation for this unit is MGU-H (Motor Generator Unit Heat).

http://www.business-arena.ro

Responds faster than a naturally aspirated V8 engine.

58

The major advantage: the dreaded turbo lag – the delayed response to accelerator pedal commands owing to the inertia of the large charger – is completely eliminated.

The response time is greatly reduced, and is even shorter than that of a naturally aspirated V8 engine. The electric turbocharger brings about another advantage: it uses parts of the surplus energy from the exhaust system to generate electricity, and either stores it in the high-voltage lithium-ion battery as part of recuperation or provides additional drive power by feeding it to an additional electric motor. This motor produces 120 kW, has been installed directly on the engine and features a link to the crankshaft via a spur gear (MGU-K = Motor Generator Unit Kinetic) – another technology that ensures maximum efficiency and performance in Formula 1.

ORDER NOW YOUR BOOK OF EXCELLENCE, A COMPREHENSIVE AND EXQUISITELY PRINTED COLLECTION OF SUCCESS STORIES, INTERVIEWS AND FEATURES FOCUSING ON BUSINESS ARENA'S AWARD GALAS AND AWARD WINNERS

We at Business Arena Publishing Group keep an eye on the latest trends in the business media and put our readers' wishes first, as we constantly aim to extend our readership potential and gain greater coverage and circulation. In keeping with our expansion strategy, we are happy to introduce The Book of Excellence 2020. Widely acclaimed for its prestigious annual awards dedicated business, culture, civil society, and sport personalities, Business Arena Magazine has heard its business partners and readers alike, who have been asking for a new platform that could put under the spotlight all the Business Arena award winners, with their success stories, challenges, expectations and hopes.

Business Arena is committed to providing the business community with useful insights and tools to manage their operations, and with platforms where business leaders and leading professionals can express their views and ideas.

We have decided to build the new publication around our dynamic award events, and showcase their winners: Most Admired Business Women Awards, Financial Leaders' Hall of Fame, Business Arena Awards for Excellence. Our readers deserve to know more about these successful people and Overall, this new magazine organizations, so more than 30 business leaders, is designed to include a wide variety entrepreneurs, highly-regarded professionals, of exciting topics and promote business companies, and banks will be included in our excellence. We plan to publish the magazine first edition, with interviews, biographical annually and jam-pack the pages full of success details and company profiles. stories to inspire you. Our aim is to inspire readers with

new ways of thinking; promote greater awareness of issues affecting their business opportunities; and expand our audience to a new generation of business people, entrepreneurs, and professionals.

The Book of Excellence will cover the most dynamic business sectors in this country, including banking, car manufacturing, IT&C, real estate, agribusiness, hospitality, retail, pharmaceuticals and so on. It will have a company profile section, lists of top companies in multiple categories and of course exclusive interviews.

cosmin.stangaciu@business-arena.ro or paul.madrio@business-arena.ro or abonamente@business-arena.ro

AUTO

FARADAY FUTURE INSISTS IT HAS A FUTURE, PICKS NVIDIA AGX FOR POTENTIAL CAR

3 Electric Motors 0-60 in 2.39 secs 1050 Horsepower Dynamic Vehicle Control

http://www.business-arena.ro

FF 91 is our first production vehicle and flagship model.

All-electric, autonomous-ready and seamlessly connected, it embodies our latest mobility advancements in performance, intelligence, and user experience. This is the reason why we gave FF 91 a future-forward design that visually sets it apart from anything else on the road.

Buried amongst a slew of product launches and company announcements at Nvidia’s annual GTC event, a troubled startup revealed it would use Nvidia’s Drive AGX Xavier platform for its upcoming electric vehicle.

60

Or at least, it hopes to do so. Faraday Future is a company whose name has often felt like a cruel joke, as it stumbled from crisis to crisis, perpetually moments from destruction, forever teetering on the edge.

But, maybe, just maybe, it will finally build something that rolls out the door. And it’ll have an Nvidia chip behind the wheel.

DO ANDROIDS DREAM OF ELECTRIC SEDANS? At one point, Faraday Future was heralded as a competitor to Tesla. Founded by Chinese billionaire Jia Yueting in 2014, the business expanded rapidly, promising to spend $1bn on a factory in 2015, growing to 1,000 employees in 2016.

Then, signs of distress, missed payments and

confused public statements. It appeared Yueting’s success wasn’t as guaranteed as first thought, his empire back home built on sand, straddled with copious amounts of debt.

As his Chinese tech conglomerate LeEco crumbled, creditors came calling. More than $182m in assets was frozen, and the Chinese government demanded that Yueting – living in a coastal mansion in the US at the time – return home.

The businessman sent his wife instead, and was put on China’s debt blacklist. She later filed for divorce, and is currently seeking $571 million, mostly in the form of mansions on the coast.

Faraday Futures has long tried to distance itself from its troubled, now former, CEO. But with a business model designed to

BEST LUXURY CAR

ROLLS-ROYCE GHOST DEBUTS REIMAGINED GHOST FOR 2021

http://www.business-arena.ro

Reflecting the minimalist philosophy that underpins new Ghost, highlights of this transformative motor car are listed in short form.

Rolls-Royce has finally debuted the updated 2021 Ghost after several weeks of hinting at the completely overhauled model that has been designed around the concept of “post-opulence.”

62

First launched in 2010, it’s been ten years since the Ghost joined the family as a more minimalist model alongside the larger flagship Phantom, becoming the most successful model to-date in the marque’s 116-year history.

▲ The

most technologically advanced Rolls-Royce yet

▲ Succeeds

the most successful product in the marque’s 116-year history

▲ Reflects

▲ Built

‘Post Opulent’ design philosophy, rejecting superficial expressions of wealth

on rigid aluminium Rolls-Royce spaceframe architecture

▲ All-wheel

drive and all-wheel steering for unprecedented poise and surefootedness

▲ World

first Planar suspension system significantly increases agility and effortlessness

▲ Equipped

with hallmark 6.75-litre twin-turbo V12 engine, delivering 571PS and 850nm

▲ For

effortless egress, doors now electrically open as well as close

▲ Interior

components tuned to specific resonant frequency to create a sense of serenity

▲ Down

lit Pantheon grille discreetly illuminates Rolls-Royce iconography

▲ Illuminated

Fascia debuts featuring Ghost nameplate surrounded by more than 850 stars

http://www.business-arena.ro

63

http://www.business-arena.ro

BEST LUXURY CAR

64

▲ While the Cullinan SUV may give the Ghost a run for its money in the upcoming years, there is still a place in the Rolls-Royce lineup for younger owners who still love the drivers sedan.

“The first Goodwood Ghost was a response to a whole new generation of clients, both in age and attitude.

These men and women asked us for a slightly smaller, less ostentatious means to own a Rolls-Royce” said Rolls-Royce Chief Executive Officer Torsten Müller-Ötvös. “To create a new product that would resonate with our Ghost clients for the next ten years meant we had to listen carefully to their demands. Today we set new standards in customer centricity by creating a completely new motor car for a unique group of RollsRoyce’s clients.

The only components that we carried over from the first Goodwood Ghost were the Spirit of Ecstasy and umbrellas. Everything else was designed, crafted and engineered from the ground up. The result is the most

technologically advanced Rolls-Royce yet. It distills the pillars of our brand into a beautiful, minimalist, yet highly complex product that is perfectly in harmony with our Ghost clients’ needs and perfectly in tune with the times.”

The interior of the Ghost has also been updated with 388 individual leather panels joined with a simplified straight stitch line (a deliberate move away from some of the more intricate stitching designs favored by other automakers) and a new Starlight Headliner with 850 individual stars that migrates down to the dashboard where another 152 twinkling LEDs illuminate the passenger’s dashboard.

Powered by a 6.75-liter V12 engine capable of producing 563 horsepower and 627 lb.ft of torque (same as the Cullinan), the new Ghost can reach 060mph in 4.6 seconds and a top speed of 155mph.

Signature Rolls-Royce features like the magic ride experience has also been given an upgrade thanks to the enhanced “Planar Suspension System” that allows the new Ghost to anticipate and react to even the most demanding road surface and offer a “sense of flight on land” never before achieved by a motor car.

http://www.business-arena.ro

65

BEST LUXURY CAR

SALON PRIVÉ DEBUT OF THE NEW CONTINENTAL GT MULLINER

http://www.business-arena.ro

THE ULTIMATE LUXURY GT

66

Bespoke craftsmanship and unique Mulliner features define the pinnacle of luxury in the Continental family

http://www.business-arena.ro

BEST LUXURY CAR

68

Bentley Mulliner is adding to its new Collections portfolio and creating the new luxury pinnacle of the Continental GT family with the new Continental GT Mulliner coupé. This sibling of the GT Mulliner Convertible celebrates modern craftsmanship and offers the client even wider possibilities to commission a unique Bentley to their individual specification.

The Continental GT Mulliner coupé makes its global debut at Salon Privé which is being staged in the grounds of Blenheim Palace, UK, from 22 September where it will be displayed alongside the Bentley Mulliner Bacalar, also making its public debut, and an as-yet-unannounced example of the Mulliner Classic portfolio.

A suite of exclusive exterior design features separate the Continental GT Mulliner from the rest of the family. At the front, the new ‘Double Diamond’ matrix grille defines the new Mulliner signature style, complemented by matching front fender vents echoing the same silver and black design and with chromed Mulliner branding. Approaching and opening either doors reveals the other Mulliner design features – Satin Silver mirror caps with Mulliner Welcome Lamps beneath, and illuminated outer door sills with Mulliner text.

The car sits on new and unique 22” Mulliner wheels, with a bespoke design of elegant beauty in a painted and polished finish. The centre badge of each wheel is self-levelling, keeping the iconic Bentley ‘B’ upright at all times. The cabin of the Continental GT Mulliner is one defined by luxury,

and showcases a level of choice and customisation that only Mulliner can provide. A unique colour split is exclusive to the car, with a new combination of primary and secondary hide joined by a third colour through a flowing design line. Eight different threecolour combinations are proposed by Mulliner, using Bentley’s palette of hides and threads to create striking yet elegant contrast throughout the cabin.

The Mulliner Driving Specification is fitted as standard, bringing the “Diamond in Diamond” quilting to the seats, doors trims and rear quarter panels, now with both contrast and accent stitching running through the diamonds design.

It takes almost 400,000 stitches to deliver this quilting across the cabin of the car, with each diamond containing exactly 712 individual stitches – each one precisely aligned to point to the centre of the diamond it creates. Developing the embroidery process to deliver this process alone took 18 months.

Customers of the Continental GT Mulliner can choose either Bentley’s iconic 6.0-litre W12 powertrain delivering 635 PS (626 bhp), or its sublime 4.0-litre V8 offering 550 PS (542 bhp), for a level of performance to juxtapose the car’s handcrafted luxury.

Bentley’s pioneering 48V electric active anti-roll technology – Bentley Dynamic Ride – is fitted as standard*, delivering incredible body control and stability during cornering and a relaxed, cossetting ride when cruising.

http://www.business-arena.ro

69

Bentley Mulliner is renowned throughout the automotive world for crafting some of the most individual Bentleys ever created. Bentley Mulliner is the birthplace of coachbuilding – the oldest automotive coachbuilder in the world. Bentley Mulliner operates three distinct divisions, each with its own artisanal specialism: Bentley Mulliner Coachbuilt provides customers with the ability to work closely with a team of specialist designers to create or enhance their vehicle with a unique body style, different materials and specially curated options. The Bentley Mulliner Bacalar will be the first – but other new bespoke Bentleys will follow as part of the portfolio.

The Bentley Mulliner Classic offering was introduced last year with the announcement that Bentley’s 1929

Team Blower is to be reborn with a new build of 12 supercharged 4½-litre examples of the iconic car. These models, each individually handcrafted by a team of specialists from Bentley Mulliner, will form the world’s first pre-war race car continuation series.

The third division of expertise – Bentley Mulliner Collections – will continue to offer customers luxuryfocused derivatives of the core Bentley range, such as the new Continental GT Mulliner, as well as the opportunity to personalise their new Bentley. The experienced team, supported by in-house engineers and designers at Crewe, prides itself on a long history of fulfilling the desires and demands of Bentley’s most discerning customers worldwide.

H E A LT H

http://www.business-arena.ro

Health & fitness hour powered by World Class

70

Why do we love to exercise? Find out now all the answers that matter How often do you exercise? How motivated do you feel? Do you often postpone exercise to another time? Starting 2021, put exercise first because it is worth it. Physical exercise is a champion of health, longevity, and immunity!

Medical studies and research prove it, the World Health Organization states it and all those who have already turned exercise into a lifestyle already enjoy the benefits: exercise is medicine. It prevents and relieves the most common chronic diseases in the world: cardiovascular disease, diabetes, and obesity.

Moreover, movement strengthens bones, maintains joint flexibility, supports brain health, fights stress, depression, and anxiety, improves sleep quality and gives you a state of well-being that can be seen on your face.

The official recommendation has changed!

300 minutes of exercise a week, not 150!

Are there enough reasons to make a change also? The COVID-19 pandemic could be another serious reason. The World Health Organization also states that exercise is extremely important in the fight against COVID-19. Moreover, during this period, the WHO doubled the daily period of recommended moderate exercise each week, from 150 minutes to 300 minutes! Put your health where it belongs, on your daily list of priorities. When you realize the amazing changes that exercise brings to your life, it will be the time when you make the best decision for health, immunity, and longevity: transforming movement into a lifestyle. The #BeHealthy lifestyle, as the 65,000 World Class members call it.

When you don’t have time for anything else, choose high-intensity workouts that last only 30 minutes!

Did you know that an intensive World Class Les Mills Grit Cardio session only takes 30 minutes? Half an hour in which you get maximum results for your health and fitness! Your cardiovascular system will become stronger, you will burn a large number of calories during training and many hours later, your metabolism will work with the accelerator pedal pressed to the maximum, and your physical strength will increase rapidly. Only 30 minutes, two or three times a week! That’s all you need to move on to the next level of health & fitness. You work your body like an athlete and you enjoy an extraordinary energy all day because cardio exercises really do what they say: they contribute significantly to your heart health!

If you take a break, it’s harder to restart, but not impossible. Be SMART! It may be difficult to resume intense physical activity after a break of a few months. Find out what steps you need to take to quickly get back in top shape. First, make sure your goals meet the SMART criteria.

SPECIFIC: It is not enough to say that you want to “be in shape”, you must have a more precise goal.

For example: I want to be able to climb four floors again without getting tired. Or, more specifically: I want to reach X kilograms!

MEASURABLE: Once you identify the specific goal, make sure you can measure your progress.

After all, if you don’t evaluate, you just guess and you never really know if your effort was a success. Are you trying to reach a certain weight? Weigh yourself periodically or take measurements of your body composition.

APPROACH: Regardless of your goal, you need to be confident that you can achieve it. If you are afraid that it is not a very realistic goal, consider dividing the goal into smaller objectives. For example, instead of trying to lose 10 pounds in a month, try to lose only three. He’s even healthier.

RELEVANT: Before you set your goal, think about what you enjoy and start from there. This is also true for smart diets. A good nutritionist will first ask you what you like to eat and will build your new eating plan based on your preferences.

TIME: Goals like “I train to be fit” or “feel good” are vague and without a deadline. You choose a date when you think you will reach the goal. If your goal is to lose weight, then you should know that the doctors’ recommendation is to aim for between 1.5-3 kg less per month. At first, it is possible to lose weight more drastically, but after the first period of change (new training, a new diet, etc.), your body will adapt, and losing weight will become a slower process. But the change for the better will be long-lasting.

In 2021, get into the #BeHealthy rhythm!

Whatever your goals are related to mind and body wellness, the health & fitness club is the place where they can quickly become reality. If you want to combine fitness with fun, try the group fitness classes at World Class. Our members say they are addictive! Music, energy, great atmosphere, lots of smiles and laughter, instructors who are passionate about what they do, everything combines perfectly so that every day is lived in the #BeHealthy rhythm!

On you can find out which classes are best for you, meet the World Class personal trainers and find the nearest World Class club.

A B e veevnetnst

BRAND

EXCELLENCE AWARDS 2021 HALL OF FAME

Enjoy the Quality * * * * * Admire the Value OUR PARTNERS

The latest addition to Business Arena's events calendar is a project designed to expand the scope of its annual award ceremonies.

The Brand Excellence Hall of Fame Awards is the fourth major gala event in Business Arena’s portfolio, joining the list alongside the Awards for Excellence, Most Admired Business Women Awards and Financial Leaders’ Hall of Fame.

Innovation, resourcefulness, perseverance and a culture of responsible risk-taking have helped many overcome major challenges.

Thus, the new awards gala recognizes organizations that have achieved outstanding results through initiatives that demonstrate excellence in brand management.

Celebrating achievement, innovation, and strong brand strategy, the 2021 Brand Excellence Hall of Fame Awards cover the following categories: • Automotive Brand of the Year; • Best Pharmaceutical Brand of the Year; • Brand of the Year in Hospitality; • IT Brand of the Year; • Most Admired Telecom Brand; • Best Real Estate Brand; • Romanian Brand of the Year; • Retail Brand of the Year; • Romanian Banking Brand of the Year; • Best Banking Brand; • Most Admired Banking Product

For more information please contact Cosmin Stangaciu at cosmin.stangaciu@business-arena.ro or phone 0755.274.125

w w w. b u s i n e s s - a re n a . ro

THE

Bookof

EXCELLENCE BUSINESS ARENA

P UBLISHING

GROUP

ENJOY the QUALITY

*******

ADMIRE the VALUE w w w. b u s i n e s s a re n a . ro