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As per the International Monetary Fund, global economic growth will slow down from 6.0% in 2021 to 3.2% in 2022 and 2.7% in 2023. Inflation will rise from 4.7% in 2021 to 8.8% in 2022, followed by a decline to 6.5% in 2023 and to 4.1% by 2024. These are scary stats, as the growth pace of the global economy slows down due to the fallout of supply chain-related disruptions. Central banks across the world have entered into the rate hike race and developed economies like the UK and US have been witnessing uncontrollable inflation.
The World Bank in June 2022 issued outlooks for developing, middle and low-income economies and, as per that data, these countries are predicted to be in a better place to combat the economic slowdown. At a time when the Fed rate hike and the resultant strengthening of the Dollar have made imports a costly affair, will these economies live up to the expectation?
Meanwhile, Japan, which used to be in a state of deflation, a situation where the prices of goods and services go down due to a decrease in the money supply/demand for goods and services, is witnessing an economic shift. The country's inflation has now accelerated and is standing at 2.8%, the highest since 2014. The central bank of the world's third-largest economy now has to meet the challenge of meeting its 2% inflation target. However, the ongoing economic slowdown has been unable to deter the aviation sector, where concepts like 'Sustainable Aviation Fuel', 'Electric Jets' and 'Hydrogen Aircraft' are becoming the new catchwords. Our cover story revolves around the trend of industry stakeholders speeding up their R&D investments to find alternatives to conventional fuel sources, as they face the task of ensuring a 'Net Zero' carbon footprint by 2050.
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A recent report from Telus International laid out a roadmap for financial institutions, in terms of making the best use of fraud analytics software
The banking sector is steadily moving towards digitisation, with artificial intelligence and metaverse predicted to drive commercial activities in the coming years. However, another demon is slowly raising its ugly head in the form of fraud.
The incidents of online fraud attacks are rising at a good speed. As per a PwC crime survey, in 2021 alone, the global banking sector suffered some $42 billion in losses at the hands of scammers.
Outseer data, which came out in the first quarter of the 20222023 financial year, says that APP fraud (where consumers are duped into romance and crypto scams), made up some 75% of all fraudulent banking payments. While customer education on these matters is important to stop fraud from happening, banks’ role becomes even more important, when it comes to analysing and countering these threat actors. That’s where the participation of fraud analytics becomes important.
Fraud analytics performs a set of functions such as data mining, machine learning, and putting into use applied data science to detect and prevent fraudulent transactions from happening.
The ecosystem involves banks accessing information from a large dataset and then analysing and examining those details to establish fraud patterns, following which they come up with their threat response mechanisms. To make it highly successful, the key word here is more and more data.
The efficiency of a financial institution to identify and prevent fraud early depends on how good they are at sharing data with
businesses and law enforcement agencies across time zones and geographies. With the power of machine learning and artificial intelligence, automation can immediately take corrective action when these threats are detected.
Quick threat perception time: All the mechanism needs is the combination of machine learning and artificial intelligence to deliver effective results. The fewer fraudulent transactions are, the better it is for the banks, in terms of lessening financial losses. Deploying artificial intelligence to do this job gets rid of the monotonous job of manual data research. With effective artificial intelligence, financial organisations can be a step ahead of the threat actors by having a fast, smooth investigation and research process. The more you identify the scams early, the more you can save your banking data, customers’ money and most importantly, your intellectual property.
Not only money, but protects brand values as well: We have come across many reported instances of fraudsters impersonating bank officials and tricking their victims into revealing their sensitive financial details such as bank account numbers, credit and debit card information. These scams not only hurt the customers, but destroy the
banks’ brand values as well. As per UK Finance data, in the first six months of 2020 alone, banks saw some 15,000 impersonation scams, which resulted in a total theft of £58 million.
What's even scarier is that during the same year, a Hong Kong bank manager got duped by scamsters who used artificial intelligence voice cloning to pull off a $35 million heist. The UAE investigators had to take the help of their US counterparts to trace the stolen money which got transferred into the accounts of Centennial Bank, whose director's voice was cloned by the scammers with the help of "deep voice" tech. The fraud involved 17 anonymous cyber criminals in total.
Spoofed domains and brand smartphone apps, fake social media accounts and phishing sites have become principal weapons for these scammers, which a proper fraud analytics mechanism can detect and remove, with artificial intelligence and machine learning help.
Since the year 2007, some 200 cyber incidents have taken place, targeting financial institutions. In 2017, the G20 warned that these incidents could “undermine the security and confidence and endanger financial stability.”
With the rapid growth of the internet and cashless
economy, people are making their transactions through digital payment portals and credit card scanners. Here comes the threat from darknet operators, as they can hack one of these cyber tools and hijack the crucial banking details of the customers. Using the compromised data, these criminals can log into victims' accounts and perform malicious acts such as changing the account security settings and making purchases.
The banks have to go through the traumatising process of shelling out a huge sum to release the data. Recently, a report from IT firm Claysys has warned about a new phenomenon called "spoofing", where these darknet operators are opening fake websites while imitating the original URL of the bank. If someone is using his/her sensitive information and passwords to access these websites, their data is directly landing in the laps of these threat actors. Even third-party tools such as chatbots and customer relationship management software used by banks to communicate with their customers can be hacked as well, as per the above report.
Using artificial intelligence and modern data science, fraud analytics mechanisms can take care of the above threats by accessing and analysing the customers' transaction data from
his/her login ID. This process studies the "suspicious money transfers" and classifies the destination accounts as "friends" or "foes". Accounts identified as "foes" will come under the scanner of the banks and cyber security officials.
Already financial institutions are using a large chunk of their operational costs on maintaining their fraud detection software. Same thing they need to do on the data science front as well. The daily operations of a bank revolve around a pile of data. While gathering and maintaining consumers’ data can be performed with regular tech solutions, we are living in the age of cybercrime, with dark net operators always up on their toes to find new victims and swindle money out of them.
How can a bank identify someone logging into one of its customer's online accounts as actually a genuine user or a dark net operator?
As per cybersecurity research firm “One Span”, there are more than 15 billion stolen credentials up for sale on the dark web. Cybercriminals can purchase them for an average of $15.43, when it comes to abusing stolen customer credentials. For big financial institutions, the price tag is over $3,139.
To stop this, investing heavily in machine learning is the only option. Machine learning is all about coming up with intelligent algorithms. Apart from analysing huge data flow with the help of complex algorithms to figure out potential fraud patterns, machine learning can also help computing devices to respond to such threat situations. These algorithms take the help of data sets to identify fraudsters and genuine customers. These programmes gather and categorise data all the time. They have two catalogs, “good data",
information about legitimate customers and "bad data", information dealing with fraudulent transactions committed by potential scamsters.
Under machine learning, the algorithms are "trained" on differentiating between genuine customers and offenders, with the help of massive data sets. Once the process gets completed, the programme becomes "business specific", ready to be embedded inside the bank's fraud detection system. To ensure the success of this solution, these algorithms needed to be updated on a timely basis.
These algorithms can not only process big sets of data quickly, but they can also perform repetitive tasks and detect even the smallest of changes in data patterns. This function helps the bank to identify potential frauds much earlier than the time taken by a team of human analysts to perform the same work. By analysing hundreds of thousands of payments per second, it saves the organisation's costs, while improving its response mechanisms, in case of financial irregularity.
Since these algorithms continuously collect and analyse new data, the accuracy factor against fraud always remains high. As opposed to human analysts bogging down, while finding and evaluating the relevant information, amid a huge data flow, these machine learning solutions are time, cost savers for businesses, while providing top-notch efficiency and accuracy against threat actors.
These algorithms work on the principle of "the more data flow gets bigger, the better it becomes". With the ability to identify the smallest of the changes in the data flow patterns, these tools cut down the rate of undetected fraud.
A recent report from “Telus International” laid out a roadmap for financial institutions, in terms of making the best use of fraud analytics software.
The report said that the banks can use machine learning to not only create catalog of financial and non-financial types of data, but to create customer profiles as well. These profiles will help these institutions to understand and predict customer behaviors. A single profile can be updated after each transaction, following which the artificial intelligence-guided mechanism can decide upon the transaction pattern and issues red flags if there is something fishy.
These transactions can also be given a fraud score by the artificial intelligence, with the help of data carrying the content from past legitimate transactions. This will help the banks to decide their action plan based on their fraud and financial risk parameters. This fraud score can be decided by using variables such as transaction amount, transaction times, frequency of credit and debit card usage, and many more. These scores can be programmed for purposes such as automatically approving a transaction, sending it for a threat review or rejecting the transaction request.
Since this particular fraud analysis module will be using machine learning, it can even use neural networks to have the advantage of making quick decisions. This solution will be flagging the massive number of fishy transactions, which otherwise would have been a difficult function to perform for a team of human analysts. On top of that, artificial intelligence will give periodical lists of flagged transactions, which requires more investigation. Here, the role of Augmented Intelligence will play a crucial role to prioritize transactions, which require immediate probes from the banks. Overall it is high time that global financial networks embrace fraud analytics software to get the much-needed upper hand over these scammers.
Under machine learning, the algorithms are "trained" on differentiating between genuine customers and offenders, with the help of massive data sets. Once the process gets completed, the programme becomes "business specific", ready to be embedded inside the bank's fraud detection system
Nearly 60% of purchasing organisations do not presently use cybersecurity exposure assessments
Despite the increasing economic challenges brought on by inflation and international political unrest, mergers and acquisitions (M&As) in the financial services sector keep growing. The number of M&A transactions in the banking industry increased by 89% in 2021, with an average deal value of $693 million.
M&As are generally complex and resourceintensive processes. The two companies' activities are combined, as are their finances, assets, human resources, and compliance frameworks. Evaluating and integrating these factors can be tricky when they are digitally connected.
It's critical to realise that various financial institutions operate inside diverse IT ecologies. Their size, markets, product or service offerings, and budgets frequently significantly impact the solutions, tools, and network infrastructures
they use. Without a thorough analysis of these unique IT infrastructures, an M&A may expose both businesses to higher security risks.
What are these dangers?
The two factors most likely contributing to security concerns in an M&A project are complexity and lack of visibility. Integrating various IT systems can make managing network security more difficult without clearly defined policies and procedures. What personnel, for instance, have access to resources across multiple systems? What is the process for cross-platform communication? And how will resources be distributed concurrently among the many systems of the combined organisations?
Databases and network systems that are isolated or poorly linked can also leave holes for threat actors to exploit, leading to sophisticated cyber-attacks and security lapses.
During the M&A process, there is also a considerable danger of inheriting a data breach. As a result, current M&A projects now routinely include cybersecurity evaluation. However, it is frequently just done on internal network components. For instance, financial organisations might assess a firm's internal security policies and procedures, but they often overlook the possibility of vulnerabilities outside of a firm's guarded network perimeter.
Even with the most acceptable security measures and tools, organisations likely already have vulnerabilities in their attack surface that might lead to data leaks or stolen passwords. Attack surfaces are exposed, and data leaks don't always occur for nefarious reasons. Almost 88% of all data breaches are the result of employee error.
Therefore, if organisations don't assess the external threats, they risk stepping into a data breach that has already occurred and waiting for a threat actor to exploit it. In actuality, threat actors approach infiltrating these access ports from the outside, which is the best method for evaluating a company's level of risk exposure over an external attack surface.
According to Gartner, nearly 60% of purchasing organisations do not presently use cybersecurity exposure assessments. It is problematic since businesses will exchange significant assets and data before and during an acquisition. As a result, the acquired company's exposed data and open attack surface will invariably expose the acquiring corporation to more danger.
Organisations need a thorough and current understanding of the target company's security posture for an M&A deal to be successful. Firms need to be aware of the real risks related to the company being bought; simply knowing what tools and technologies are in use is insufficient.
Acquiring organisations should implement sophisticated due diligence frameworks. For example, they should use assessment tools that offer recommendations for improvement in addition to a rating based on security policies and procedures and a landscape picture of present risk exposures. It's also crucial to evaluate how the target company's security posture stacks up
against that of other financial sector companies.
What standard procedure does your company follow when a security breach occurs? What happens after the danger is identified? How do you conduct security testing at your company?
If answering these questions is difficult, you must strengthen your security posture.
It has been said that your security posture measures your organisation's cybersecurity practices and level of preparedness for an attack.
Your organisation and apps are protected from attacks and vulnerabilities if you have solid security procedures. However, IT teams and practitioners must prioritise improving their security posture in a world where bad actors can continually compromise critical data.
Your firm's level of risk directly relates to how robust your security posture is. The danger you encounter decreases when you strengthen your security posture to make it the best it can be. By addressing the issue, you can start to lower the risk as soon as you take measures to examine the condition of your company's security posture. Knowing what is wrong will enable you to take the necessary steps to remedy it before assessing your security posture.
Many security tools include evaluations and questionnaires to assist firms in determining their security posture. These assessments aid in assessing the degree of risk and weakness your assets are exposed to, allowing you to rank changes in terms of their seriousness. Your security posture will be more affected by some changes and modifications to security procedures. Therefore, it's crucial to focus on those initially.
According to Gartner, nearly 60% of purchasing organisations do not presently use cybersecurity exposure assessments. It is problematic since businesses will exchange significant assets and data before and during an acquisition
The first step in enhancing
posture should always be risk assessment because it gives you a comprehensive understanding of the security situation at your company. It will be helpful to complete a cybersecurity risk assessment to find all potential vulnerabilities across all assets. Your company's most crucial IT assets, the possibility of an exploit, the possible consequences of a data breach, and other information are all revealed by a risk assessment. To understand the worth of the information in the event of a violation, you must go through this exercise. Security technologies can perform this assessment for you, but an internal security team can also conduct it.
To be proactive about your firm's security, you must have an incident management plan. IT staff will be disoriented when a security breach happens and won't know where to begin without an incident management plan. The time it takes to remediate in the future can be shortened by developing a set of actions to perform once a breach is discovered. A clear understanding of which teams will handle specific tasks during this event will improve communication and teamwork. You will strengthen your incident management plan over time by conducting a test breach to evaluate its efficacy.
The next stage is patching and remediating after identifying the risks and vulnerabilities your company is exposed to. Prioritising the threats that will impact your business can help you save time and money. Also, you will help efforts to set priorities by knowing how these risks and vulnerabilities will affect essential apps. Once you've mastered this procedure, you can begin implementing
fixes and allocate your time and resources more effectively.
Adopt a DevSecOps strategy
Delaying security audits until the end of the quarter gives plenty of time for attacks and breaches. However, you can incorporate security into routine application monitoring by putting a security testing mechanism in place. Static application security testing looks at your code to find weaknesses. Dynamic application security testing helps administrators find holes and vulnerabilities by placing them in the attacker's shoes. SAST and DAST are combined in interactive application security testing, which uses software instrumentation (either active or passive) to track application performance. Real-time app data is used by runtime application self-protection to identify and stop threats as they happen.
Siloed IT teams put organisations at greater risk since they can't appropriately interact with one another in the case of an attack. All groups will benefit from developing a collaborative culture as they learn how they are interconnected and how a breach impacts each team. Teams need to interact to understand how working together can help handle security concerns quickly and effectively rather than pointing fingers after data is compromised. Moving to a DevSecOps philosophy, where security is considered from the start of software development helps to promote effective team communication and strengthen a collaborative culture.
Modern applications include so much data that it is practically hard for administrators to stay on top of all potential hazards. There are many opportunities for human mistakes and security weaknesses when relying only on the admin. For app security to remain proactive rather than reactive, it is essential
to incorporate technology that aids in automating the threat detection process. By integrating security into your application, RASP helps to automate the threat detection process so that the app can detect risks on its own and take appropriate action.
It would help if you allowed your security processes and tools to become stale to maintain a solid security posture. However, they must be continually updated and improved for the best outcomes. Because of this, security teams should be ready to make changes and adjustments often to keep up with new security technology and threats. In addition, IT and security teams should schedule these updates and reevaluations to ensure that bad actors can't take advantage of out-of-date technologies. By improving your company's security posture, you can be sure that security won't be neglected or treated as an afterthought. Whether the related risk is high or low, keeping cybersecurity in mind when integrating innovations into your
applications will offer a layer of defence against threats and breaches.
As per a report from Deloitte, M&A activities, which witnessed a decline during the COVID period, will witness a strong revival from the 2022-23 financial year onwards. However, the narratives around threat actors and cyber security will play crucial roles in major deals, since any breach on the data security front can negatively influence market dynamics, competition, shareholder interest, business partners, etc.
While technology is playing an important role by not only enabling the M&A integration and driving the new business operating models, it is very much vulnerable to cyberattacks, and any such incident can slow down the company’s acquisition process.
The report also spoke in detail about the serious implications of not conducting a thorough diligence and tech audit before pulling off M&A deals by citing the 2017 example of an American telecommunications firm's not-so-successful deal with a web services provider. The acquisition pact resulted in a whooping $350 million wipeout. The web services provider faced a data breach, thus compromising more than 1 billion customer accounts.
In April 2020, another pending merger deal had 5% of its total purchase price set aside to cover the potential fallout of a ransomware attack.
As per a Forescout survey report, 53% of the respondents stated that their organisations went through critical cyber security issues during the M&A process, thereby affecting the deals severely.
The Deloitte report, while acknowledging the disruptive nature of the technology assisting companies to evolve into new business models and upgrade their traditional business operations, also suggested that the corporate leadership must be vigilant in identifying dormant threats in the acquired infrastructure and implement effective
mechanisms for mitigating them. Also, vulnerability identification should happen at the earliest to reduce the attack surface before they can harm the acquiring company.
They also identified two more concern areas haunting the M&A process. While the IT resources are overburdened in order to run a smooth integration between entities, the phenomenon is leading to extended periods of IT change gap, and subsequently, giving chances for threat actors to carry out significant damages.
While the acquiring and the target companies both have critical data in their repositories, the acquiring business must determine the cybersecurity posture of the target company to mitigate the risk of a data breach.
Then there are issues like a lack of cybersecurity artefacts, documentation and evidence, which pose a challenge during diligence checks before the M&A deal. This problem has been evident with small and medium-sized organisations (SMEs). At times, the acquiring businesses need to rely on the limited information available of the target company’s cyber landscape to make their decision.
Even after the M&A deal is done, still the acquisition risk exposure is high during the transition phase for both the organisations involved due to the possibilities of open networks that support integration activities.
Sometimes, companies prefer full hybrid integration, but this too becomes challenging when trying to integrate new disruptive technologies with legacy ones. In this case, the main roadblock comes in the form of a difference in the infrastructure, which might also pose incompatibility and scalability challenges when integrating the applications and systems.
Even after acquirers conduct a questionnaire survey and penetration testing to understand the target company’s risks and issues, the methods only provide a snapshot in time and do not reveal any historical background.
During integration, unclear roles and responsibilities, disgruntled employees, modifications in the operating model, language barriers, and changes in location also become a challenge.
Talking about cyber security and hacking attacks at the enterprise level, since 2021, the tally is growing. As per a Forbes report, recent numbers of such incidents are somewhere around 500 million (at the global level). In 2021, out of the total number of entities attacked, 16% were hacked once, but 60% were hacked more than two times. In September 2022 alone, hackers successfully gained access to and compromised 35 million files, targeting companies’ “crown jewels” or crucial data like flagship assets and other highly sensitive files.
Breaches caused by ransomware have increased both in number (by 41% in 2022 alone) and in cost. After these breaches, the attackers are requesting a hefty amount of money in exchange for a company’s stolen assets, files, data, or systems. Over $800,000 were paid by businesses per attack in 2021. The same number was closer to $500 in 2016. The total cost to companies for the entire recovery effort is now averaging $1.4 million. Small businesses have also been significantly impacted, as some 43% of these data thefts involve these MSMEs, leading 60% of these businesses to file for bankruptcy within six months of the attack.
Cybercrime is now expected to amount to 1-2% of the global GDP/$1-2 trillion and it will grow further.
Mark Warner, head of the U.S. Select Committee on Intelligence, has said that the United States loses some $600 billion annually in Intellectual Property theft. It is becoming more difficult to safeguard an enterprise from ransomware attacks, and business leaders need to take note of that. It’s high time they put cyber security as the top priority, while pulling off M&A deals.
Breaches caused by ransomware have increased both in number (by 41% in 2022 alone) and in cost. After these breaches, the attackers are requesting a hefty amount of money in exchange for a company’s stolen assets, files, data, or systems. Over $800,000 were paid by businesses per attack in 2021
negative interest rates by raising its main refinancing rate to 0.50% and promising another hike in the month of September, with other increases to come in the following months. According to ECB President Christine Lagarde, the bigger move was justified by a clearly worsening inflation outlook and widespread support for the anti-fragmentation instrument.
The European Central Bank (ECB) increased interest rates by more than anticipated as fears about runaway inflation take precedence over worries about growth, even the eurozone economy is suffering from the effects of Russia's war in Ukraine. The ECB increased its benchmark deposit rate by 50 basis points to 0%, deviating from its own
prediction of a 25 basis point. It joined global groups in jacking up borrowing costs. It was the first rate increase by the ECB in eleven years. With a new bond purchase programme, policymakers also decided to give assistance to the euro zone's major debtor countries, including Italy.
The European Central Bank (ECB) ended an eight-year experiment with
The World Bank invested more than $5 billion in its most recent fiscal year, which concluded on June 30th, in response to a number of shocks that affected nations in the Middle East and North Africa (MENA). Together with strategic and reform-focused advisory and analytical support, these investments are assisting people throughout the region in reducing the effects of the Russia-Ukraine war on food and energy prices. The funds continue to respond to the COVID-19 pandemic's effects, and build resilience to climate and other shocks.
"Overlapping crises, including the war in Ukraine and its impacts on food and energy prices, have further burdened the poorest and most vulnerable in the region. Food price inflation is a major challenge. As many as 23 million people in the MENA region are at risk of falling into deeper poverty. The World Bank is committed to doing, even more, to help the people and the countries in MENA as they
"Price pressure is spreading across more and more sectors. We expect inflation to remain undesirably high for some time," Christine Lagarde said.
Meanwhile, the amount of interest charged to commercial lenders for borrowing money is at 3.5%. The socalled deposit facility — the amount banks receive for capital deposited is at 3.0%.
continue to strengthen food security, respond assertively and equitably to the COVID-19 pandemic, and build resilience against a range of other shocks that threaten to roll back hard-won progress," said Ferid Belhaj, World Bank Vice President for the Middle East and North Africa.
The Asian Development Bank announced that it will invest at least $14 billion through 2025 to assist alleviate the region's escalating food crisis. The development lender claimed that due to poverty and rising food prices, 1.1 billion people in the region lack access to a healthy diet and will be helped through a comprehensive programme of assistance. The news was made at the ADB's annual meeting, which was held in Manila, Philippines.
"This is a timely and urgently needed response to a crisis that is leaving too many poor families in Asia hungry and in deeper poverty," ADB President Masatsugu Asakawa said.
The plan argues for enhancing longterm food security, to cope with climate change and loss of biodiversity. The monies will help both new and ongoing initiatives in the areas of agriculture, food production and distribution, water resource management, and social support, according to the ADB.
Asakawa said that in the short-term, support will be targeted at and designed to help the most vulnerable, particularly women. The bank downgraded its forecast for growth in the region to 4.3% from an earlier estimate of 5.2%. Next year's outlook is for 4.9% annual growth.
Decarbonizing the Australian Economy
An Australian bank will stop providing personal loans for new petrol and dieselpowered cars starting in 2025. The market share for electric vehicles this year remains a little at 1.6%, with starting prices of $47,000 and a lack of charging stations turning off many potential motorists.
The decision has been taken in order to cut carbon emissions which are linked to climate change.
"The bank's new policy is an important step in decarbonizing the Australian economy," Sasha Courville, Chief Impact Officer, Australia bank said at the National Electric Vehicle Summit.
She said, "By ceasing car loans for new fossil fuel
vehicles, we are sending a signal to the Australian market about the rapid acceleration in the transition from internal combustion to electric vehicles we expect to see in the next few years."
"We've chosen 2025 because the change to electric vehicles needs to happen quickly, and we believe it can with the right supporting policies in place to bring a greater range of more affordable electric vehicles to Australia," she added.
The press release said, "Apart from Russia, Australia is the only OECD country to not have, or be in the process of developing, fuel efficiency standards."
While 2022 was marked by higher oil prices, it seems that the US companies did not cash into it to maximise their growth throughout the year. The latest Dallas Fed energy survey suggests that the growth pace in the US oil and gas industry has slowed down in the fourth quarter of 2022 despite the industry facing not many steep challenges.
As per an ING report, energy prices may be off those highs witnessed in 2022, with immediate supply worries easing recently. Demand concerns, however, are weighing on sentiment for oil. So the sector may remain on the tightening trajectory this year as well.
"The key supply uncertainty for the oil market this year has been how well Russian supply would hold up following a number of countries banning Russian exports, along with an increased amount of self-sanctioning. Russian supply has held up better than many were expecting, with India, China and a handful of other smaller buyers increasing their purchases of Russian crude oil, given the steep discounts available. As a result, exports were 7.7 million barrels a day (MMbbls/d), down just one hundred thousand barrels per day (Mbbls/d) Year-onYear (YoY)," it said.
"However, the impact of the EU ban on Russian crude oil is still playing out, and we will have to wait until early February for the ban on Russian refined products. The ability of India and
The US energy sector is not really in the most comfortable position to boost growth as fast as the White House wants it to
China to absorb a still more significant amount of Russian oil is likely limited. As a result, we expect Russian supply to fall in the region of 1.6-1.8MMbbls/d Year-on-Year in the first quarter of 2023. As for the G-7 price cap, we expect it to have a little direct impact on Russian oil supply for now, given that at $60/bbl, it is above where the Russians are trading," the study elaborated further.
While a de-escalation of the Ukraine crisis may not ensure pre-war oil trade flows, it will remove supply risks from the market.
"The decision by OPEC+ might appear to be the right one, at least in the near term, as it offers stability to the market. Given that most of its members are producing well below their production targets, OPEC+ supply cuts work out to an effective cut of around 1.1MMbbls/d. In aggregate, OPEC+ production was 3.22MMbbls/d below target levels," the report said.
However, the cuts may prove to be more destabilising in the medium term, given the expectation of a tighter market throughout 2023.
"High energy prices, a gloomier macro outlook and
China’s zero-COVID policy have all weighed on oil demand this year. At the beginning of 2022, global oil demand was expected to grow by more than 3MMbbls/d YoY and hit pre-COVID levels. However, demand is estimated to grow at a more modest 2MMbbls/d this year, leaving it below preCOVID levels. While for 2023, demand is expected to grow in the region of 1.7MMbbls/d. Almost 50% of this growth is expected to come from China with the expectation of an economic recovery," it said.
The response from US producers to the higher oil price environment has been unimpressive, the ING study cited.
"This appears to have also given OPEC+ confidence to cut supply without the risk of losing market share. US crude oil supply is forecast to grow by less than 600Mbbls/d to average around 11.8MMbbls/d in 2022. While for 2023 supply is forecast to grow by less than 500Mbbls/d to around 12.3MMbbls/d. This growth is much more modest than the supply growth seen in previous upcycles," it said.
The study also noted the shift in the mentality of US
Gas prices spiked to over five dollars per gallon across the country, reaching a high of 120.31 dollars per barrel in March 2022. It then went back down to just under 79 dollars per barrel
producers from producing as much as possible to focusing on shareholder returns, thus showing discipline in terms of capital spending. Supply chain issues, labour shortages and rising costs have also played a role in the more modest supply growth expected over the next year.
US Energy Information Administration to shares similar emotions. It said that even though oil output would reach a record 5.6 million bpd by January 2023, it would constitute a third of the growth rate in Permian Basin output. It saw a dip in the number of active drilling rigs by seven, as per the data from energy firm Baker Hughes.
The total rig count fell to 772—184 rigs higher than the rig count this time, and 303 rigs lower than the rig count at the beginning of 2019. Oil rigs in the United States fell by three to 618. Gas rigs fell by four to 152. Miscellaneous rigs stayed the same at two. The rig count in the Permian Basin and Eagle Ford stayed the same.
Crude oil production, within the country, however, increased to 12.1 million bpd. US production levels also went up just 300,000
bpd versus the 2021 tally. Gas prices spiked to over five dollars per gallon across the country, reaching a high of 120.31 dollars per barrel in March 2022. It then went back down to just under 79 dollars per barrel.
As per a report from MarketScale, the phenomena may have contributed to drop-offs in recent US shale output production growth.
While US' energy output is set to reach a record 9.32 million barrels per day (bpd) in January 2023, the month-over-month US shale oil production increase is small, sitting at 94,500 barrels per day more than the month before compared to the 207,500-bpd month-over-month increase in August 2022.
Joe Palaia, Vice-President of Business Development at Pioneer Energy, told MarketScale, "I personally think that that has a lot to do with the price of oil right now. So, we’re back down on the $75 per barrel range, which is a more modest price per barrel, barrel of oil. And so, you’ve got the producers, you know, that have been burned in the past by you know, the whole drill, baby, drill mentality."
"You’re produce as much as possible, quickly as possible. These producers have been burned bad by that in the past. So, their stakeholders in the street are demanding them to exhibit more fiscal responsibility, not get too ahead of themselves, you know, borrow money wantonly, and tend to drill with abandon," he added.
"In fact, instead what they’re doing is they’re being much more measured on, you know, how much they develop, focused on good financial returns, and satisfying their stakeholders. So, I think if anything is showing there’s maturity happening in the oil field, oil companies are being much more physically responsible. I think there are some other factors, other things which are driving the market, right now. Obviously, we still have ESG concerns and
something that’s of great significance and importance to these stakeholders and then therefore to these oil companies. So, they’re out there trying to implement policy to reduce emissions, produce oil in a more responsible manner," Joe Palaia remarked.
He added, "And so I’m sure that some of this plays into well, we have to allocate resources to do this responsibly and not just drill, even if we don’t have a place, for instance, to get the associated gas to market. I don’t know, let’s just focus on drilling and getting the oil outta the ground. There’s a lot less of that, you know, oil at any cost type mentality."
"I think also we’ve got some pressure from the Biden administration on these oil companies. Hey, we need to produce more, we have this whole energy security issue where we need to, mindful of trying to, produce oil domestically, not only for our own needs, so that we don’t have to import oil from others that perhaps we would rather not have to import oil from, but also so that we can provide energy for our allies," he commented.
"And so, I think that there is push coming from the administration, but you know, how much that’s influencing whether these oil companies are going to drill and produce more? I don’t know. All I know is that it’s definitely a factor. It’s a force acting on the industry right now, and we’ll have to see, you know, in the months ahead how much that really impacts the number of holes that are being put in ground, the amount of oil produced. So that’s pretty much my take on what’s going on right now, and I hope this is useful,” Joe Palaia further said.
We had earlier mentioned about the energy survey from Dallas Fed. The survey respondents informed that the sector witnessed higher costs for the eighth quarter in a row. However, the price hike pace slowed down towards 2022 end.
The supply chain snags persist, thus resulting in longer waiting times for oil and gas producers to access raw materials and equipment. As per oilprice.com, the US energy sector is not really in the most comfortable position to boost growth as fast as the White House wants it to. The prioritization of shareholder returns over output growth appears the best strategic option right now.
Amid this, the optimism expressed in the Dallas Fed survey is an important indication of the state of the industry. However, the optimism is not that strong either, given the increasing uncertainties ahead. So we are not going to see any drastic policy change from stakeholders anytime soon, thus slowing down both production growth and new investments. Moderate spending will be the go-to formula in 2023.
Pioneer Natural Resources’ chief executive Scott Sheffield told Reuters that the production growth in the shale patch in 2023 would be even more modest than 2021. He predicted that this year’s annual increase at just 300,000400,000 bpd, noting that drillers were running out of their high-quality acreage.
Some 39% of Dallas Fed survey respondents said that their companies’ spending would increase moderately; with a quarter saying they expected significant increases in spending.
The immediate outlook for the US oil industry reads “caution above all”. Uncertainty remains rife, as noted by Sheffield who said, “Because they would charge another 30% to 40% more, and we don’t know what is going to happen in three or four years, by the time we’ve made that investment.”
US oil and gas output will remain close to record highs in 2023, but the figure won’t return to the pre-pandemic level anytime soon.
United Airlines has committed to $15 million in investments in Eve Air Mobility, an electric aviation start-up
Aviation
The UK Department for Transport in July 2022 launched its new ‘jet zero’ strategy, in order to boost the country's Sustainable Aviation Fuel (SAF) sector and attain net-zero emissions in domestic aviation by 2040. The strategy, which is part of the nation's bigger goal of reaching net-zero emissions across all walks of the economy by 2050, aims to have at least five commercial SAF plants under construction by 2025.
It has also mandated the production of at least 10% of aviation fuel from sustainable sources by 2030, apart from launching the $197.8 million (£165 million) 'Advanced Fuels Fund' to support related pioneering projects.
While the UK government is now moving ahead with the next phase of a $1.19 million (£1 million) competition to provide the first ever net-zero 100% SAF-driven transatlantic flight, the 'Jet Zero strategy' has also included a plan for the country's aviation industry’s carbon emissions to stay below pre-COVID levels.
The European Parliament in the same month approved a set of draft rules to significantly increase SAF usage. The rules say that the aircrafts refuelling at European Union airports would be obliged to uplift kerosene mixed with SAF. The percentage of SAF in the mix would be increased after fiveyear intervals.
Under the European Parliament’s position, aviation fuel must include 2% SAF from 2025 and raise it to 85% by 2050, a significant increase from the Commission’s original proposal of 63%
The European Parliament also pushed up sub-targets for synthetic fuels to 50% of all jet fuel by 2050.
The proposed rules have to be agreed upon by negotiators from the European Parliament and EU member states during the talks slated to start in September 2022. The European Parliament has also proposed the creation of a 'Sustainable Aviation Fund' to support research and investment into clean aircraft propulsion technologies.
The SAF race has started Boeing and Alder Fuels in July 2022 announced a new partnership to expand SAF production around the world.
Using Boeing aircraft, the companies will certify Alder-derived SAF, apart from advancing policies to expedite the transition to renewable energy in aviation, and grow the amount of SAF for the global aerospace market. Boeing is also planning to establish
a research and development facility in Japan to expedite SAF-related works, apart from starting projects on electric and hydrogen aircraft technologies.
In the United States, the Joe Biden government has launched its Sustainable Aviation Fuel (SAF) Grand Challenge Roadmap. The policy outlines the government-wide strategy for scaling SAF production across the country. The Roadmap aligns government and industry actions to achieve the goals of the SAF Grand Challenge, which was signed in 2021, keeping in mind goals like achieving a minimum of a 50% reduction in life cycle GHG emissions compared to conventional fuel, producing three billion gallons of SAF yearly by 2030 and supplying sufficient SAF to meet 100% of aviation fuel demand by 2050.
Vienna-based energy firm OMV and Lufthansa Group have now entered into a Memorandum of Understanding (MoU) for the supply of over 800,000 tons of SAF for the years 2023 to 2030. Expanding their existing partnership, these companies will
Under the European Parliament’s position, aviation fuel must include 2% SAF from 2025 and raise it to 85% by 2050, a significant increase from the Commission’s original proposal of 63%
scout new locations and technologies for SAF production and delivery. The news came amid OMV beginning the supply of the first volumes of SAF to Austrian Airlines.
Carbon transformation company Twelve, Alaska Air Group and Microsoft have entered into an MoU to collaborate on advancing the SAF market to include fuels derived from recaptured CO2 and renewable energy, apart from working toward the first commercial demonstration flight in the United States powered by Twelve's E-Jet. The US-based Delta Airline will buy 385 million gallons of green hydrogen-derived SAF, making it the largest deal of its kind. Its rival American Airlines bettered the tally by finalising an agreement with biofuel company Gevo to purchase 500 million gallons of SAF over the next five years.
In July 2022, Formula One giant Mercedes announced investing in SAF as part of their commitment to reach 'Net Zero' by 2030. The SAF usage will help Mercedes achieve a near 50% reduction in the team’s air travel footprint for their race personnel, with flights
currently accounting for over a quarter of the team’s projected carbon footprint. The motorsport team’s SAF purchase currently falls outside of the Formula One cost cap.
In short, SAF and other forms of carbonneutral energy sources are now seeing a lot of investments from the leading airlines around the world, as the aviation sector races aggressively towards the target of ensuring 'Net Zero' carbon footprint by 2050.
As per stats, a commercial aircraft emits around 100 times more CO2 hourly than a bus/train ride, and the emissions of global aviation are around 1 billion tons of CO2 per year. The sector contributes an estimated 2.4% of global annual CO2 emissions. Across various climate summits of late, commercial aviation has faced flak for its growing share of the carbon footprint behind global warming. So the desperation of moving towards a 'Net Zero' scenario has been clearly evident from the stakeholders, and the carbon-neutral energy sources will see more R&D activities in the coming days.
The European Commission has predicted
Delta Airline will buy 385 million gallons of green hydrogen-derived SAF, making it the largest deal of its kind. Its rival American Airlines bettered the tally by finalising an agreement with biofuel company Gevo to purchase 500 million gallons of SAF over the next five years
that by the middle of the 21st century, demand for flying will increase greenhouse gas emissions from this sector by 300% over 2005 levels.
In October 2022, the UN’s International Civil Aviation Organization (ICAO) led a twoweek-long negotiation involving 184 nations to agree on carbon emissions reduction measures. Some of the discussed measures under the framework are ramping up innovative aircraft technologies, streamlining flight operations and the
SAF.
As per the US Department of Energy Bioenergy Technologies Office, "Sustainable Aviation Fuel (SAF) is made from renewable biomass and waste resources, which have the potential to deliver the performance of petroleum-based jet fuel but with a fraction of its carbon footprint, giving airlines solid footing for decoupling greenhouse gas (GHG) emissions from flight."
SAF is basically a biofuel, which can power aircraft having similar properties to conventional jet fuel but with a smaller carbon footprint. Some emerging SAF pathways even ensure a net-negative Greenhouse Gas footprint.
Electric aircraft, on the other hand, is a concept where jets powered by electricity, will be providing zero emissions and quieter flights in near future. Investments have been growing here as well.
DHL Express’ Alice electric cargo plane saw its maiden flight on September 2022. The cargo giant will have twelve such jets, manned by a single pilot, apart from carrying a maximum payload of 1,200kg and providing a maximum range of 815km. United Airlines has committed to $15 million in investments in Eve Air Mobility, an electric aviation start-up. United Airlines will buy 200 electric air taxis, referred to as eVTOL (electric vertical take-off and
landing vehicle). Air Canada has entered into a purchase agreement for 30 ES-30 electric-hybrid aircraft under development by Sweden-based Heart Aerospace. The regional aircraft, expected to enter service in 2028, will generate zero emissions flying on battery power. GE Aviation has proven the operations of its hybrid-electric propulsion system at 45,000 ft. The programme will enter the full-fledged flight-testing stage in the coming years.
A hydrogen-powered aircraft generally uses hydrogen fuel as a power source. Hydrogen can be burned in a jet engine/ internal combustion engine, or can be used to power a fuel cell to generate electricity for powering a propeller. In July 2022, engine maker Rolls-Royce announced pairing up with US airline easyJet to develop and test hydrogen combustion engine technology. The two companies will work together on a range of ground-based tests from 2022 onwards.
For example, take SAF and the ‘jet zero’ strategy, scientists are not so impressed, especially when it comes to policy execution.
A hydrogenpowered aircraft generally uses hydrogen fuel as a power source.
Hydrogen can be burned in a jet engine/internal combustion engine, or can be used to power a fuel cell to generate electricity for powering a propeller
The country will have to devote half its farmland or more than double its total renewable electricity supply to fulfil its “jet zero” ambitions.
The Royal Society, the country's national academy of scientific studies, has stated that "there is no single, clear, sustainable alternative to jet fuel," which can support the current level of aviation operations.
The apex research institute has even remarked that while the UK government and aviation industry have set a target of 2050 to balance out Greenhouse Gas emissions from civilian aircraft activities, massive challenges remain around the availability, costs and impacts of alternative fuels, as well as the need for new types of passenger jets and required airport infrastructure changes around the world to allow the most probable long-term solutions.
However, stakeholders have carved out some solutions towards the execution of this 'Jet Zero' strategy.
Virgin Atlantic has been reportedly scrutinising its fleet efficiency to support netzero targets and has made headway with the SAF use in its daily operations.
British Airways has been offsetting carbon emissions on all of its United Kingdom-based flights since 2020 and became the first airline to implement the commercial use of SAF in the country, after signing a deal with Phillips 66, a diversified energy manufacturing and logistics company. This deal will enable the airline to power its flights with SAF and as part of its British Airways' 'Better World sustainability' programme, the aviation giant is delivering a range of short, medium and long-term initiatives to decarbonise and achieve netzero emissions by 2050.
The airline has recently also invested in sustainable aviation company ZeroAvia to understand how hydrogen-powered aircraft can play a leading role in the future of sustainable flying. ZeroAvia completed the world’s first hydrogen fuel cell powered flight of a commercial-grade aircraft around 2020 and is now eyeing introducing a zeroemission system capable of flying a 20-seat aircraft by 2025.
To know whether the aviation sector will be able to fulfil at least some part of its 'Net Zero' carbon emission goals, the Global Business Outlook caught up with Keith Tonkin, Managing Director of "Aviation Projects", a leading Australian company which provides airport and aerodrome infrastructure-related solutions. Mr. Keith Tonkin, who is also the co-founder and Director of both strategic and commercial advisory, "AVISTRA" and advanced air mobility collaboration platform, "GREENBIRD", gave his insights on the aviation sector's climate goals, technologies that can be used towards fulfilling it, prospects of Sustainable Aviation Fuel and much more.
GBO: The global aviation industry has adopted the goal of reaching net-zero carbon emissions by 2050. Can it be achieved?
Keith Tonkin: I think the idea of netzero by 2050 is a wonderful aspiration but
British Airways has been offsetting carbon emissions on all of its United Kingdom-based flights since 2020 and became the first airline to implement the commercial use of SAF in the country, after signing a deal with Phillips 66, a diversified energy manufacturing and logistics company
Think the banning of short-haul domestic flights in France, and the limitations being imposed on aircraft movements at Amsterdam Schiphol. These movement reduction measures are a surefire way of reducing carbon emissions, but are we all ready to stop travelling by air?
Keith Tonkin, Managing Director of Aviation Projects
it is going to be very difficult to achieve. The interesting thing that is happening alongside all the very costly technology developments aimed at allowing unabated air travel is the curtailing of flights in certain jurisdictions – think the banning of short-haul domestic flights in France, and the limitations being imposed on aircraft movements at Amsterdam Schiphol. These movement reduction measures are a surefire way of reducing carbon emissions, but are we all ready to stop travelling by air?
As per a report from World Economic Forum, aviation is causing around 2.5 % of global CO2 emissions. The European Commission predicts that greenhouse emissions will go up by 300 % over 2005 levels soon. What is your take on this?
Travel restrictions and other consequential impacts of the COVID-19 pandemic on air travel have demonstrated that we can get by without flying around the place for business, tourism etc, but pent-up demand is now coming back to the market and it’s clear that we like to travel by air. Notwithstanding some of the measures being taken to curtail air travel in the short term, I think it’s appropriate that we work out how to reduce the aviation industry’s overall contribution to greenhouse emissions in the longer term.
Sustainable Aviation Fuels can reduce emissions by 80%, as per IATA. Do you think that the sector needs to invest heavily in this solution?
Sustainable Aviation Fuels are a significant part of the overall emissions reduction solution. The challenge is scaling the production and supply of these fuels to meet demand.
Honeywell recently said that it would introduce technology that might enhance the supply of ethanol-based, lower-carbon aviation fuel. Do you think more such innovations are needed?
Absolutely. At the moment we need to explore all economically feasible options to replace carbon-based fuel sources.
Sustainable Aviation Fuel is only available at a select number of airports worldwide and the industry is adopting a 'book and claim' accounting system. What should be the roadmap to meet the growing demand for SAF?
These accounting measures are a good start to encouraging investment and supply of SAF, but ultimately the global aviation industry needs to physically produce this fuel and have it available for uplift to aircraft wherever they operate. There are some markets where SAF is not economically feasible to produce and make available at airports where it is needed, and so the cost (and associated carbon emissions) of transport and storage is a significant challenge to overcome.
WEF says that double-claiming problems will become more severe as more nations enforce a specific amount of SAF mixed in all aviation fuel. How to deal with this problem?
First of all, we need to apply the lessons learnt from other carbon-offsetting schemes in terms of ensuring that the accounting is accurate and valid – this will give confidence to users and investors. I expect that industry participants are sufficiently motivated to see the program work and that they will ensure appropriate rigour in this regard. Ultimately, SAF will simply need to be available at airports so that it can be uploaded to aeroplanes, and then the accounting problem will become effectively redundant.
Airbus is working on the concept of hydrogenfuelled zero-emission passenger aircraft. Do you think this will be a game-changer for the aviation sector?
The idea of hydrogen-fuelled zero-emission passenger aircraft is very enticing. There are some challenges in terms of producing, storing, transporting and carrying hydrogen that need to be overcome to make it viable at scale.
Also Embraer has this project called Energia Hybrid, which works on parallel hybrid-electric propulsion. What is your observation on this?
I think the focus on developing smaller aircraft for the short-haul market is a good starting point for developing this technology, and I look forward to seeing
Asmall British start-up is trying to write a little history of its own by becoming one of the forerunners of commercial electrified aviation from a tiny office overlooking an airfield that was once the base of the United Kingdom's first Spitfire squadron.
In order to compete in the regional aviation market, Faradair intends to build and commercialize a hybrid-electric passenger aircraft. It might have up to 19 seats and be propelled by an electric motor-driven fan. A little gas turbine would supply the required electricity.
It would also include a triple-level wing to add additional lift and enable takeoffs and landings from short runways. Even though it had cuttingedge aerodynamics, this would give it a little
resemblance to a fighter from World War I.
Faradair CEO Neil Cloughley says that such a plane would have fewer moving parts than a typical propeller aircraft, making it less expensive to operate. It would also emit less emission and be considerably quieter.
"Why do we not use aeroplanes like we would a bus?" Neil Cloughley asks during an interaction with BBC.
"The reason is the cost of operation, primarily. Also if you start using lots of aeroplanes it creates a lot of noise, and of course, we have now got into an age where sustainability really is a key part of our future. So we decided we would come up with an aircraft that would not only be economic to use, and therefore cost-effective, but would also be quiet and
sustainable," Neil Cloughley added.
According to him, the Faradair design would enable quick travels between places like London and Manchester for £25 each way, which is much less expensive than a rail ticket.
To eradicate the need for substantial investments in road or rail systems, such planes could provide a transport lifeline from small airstrips in more isolated or inaccessible places. The aircraft will be in the air by 2025, and commercial use will begin in 2027.
At a time when governments all over the globe are looking for ways to cut carbon emissions, Faradair is far from the only company to recognize the promise of electric aviation and at the same time, its project is also not the most challenging.
Wright Electric, a startup situated in California, for instance, wants to put into service a 100-seat aircraft that is entirely electric by the middle of the decade. Based on the current Bae146, it would include four electric motors in place of the turbofan engines.
According to the firm, which has a partnership with Easyjet, the aircraft would be used for one-hour flights, enabling it to serve routes like London-Paris, New YorkWashington, or Hong Kong-Taipei.
The aircraft will, however, operate as a hybrid during testing. One of the four engines will be switched out at first, with the remaining three following suit, if the tests are successful.
According to Wright Electric CEO Jeffrey Engler, prospective clients believe this is a solid strategy and one they may use when the aircraft goes into production.
"When we spoke to the airlines, they said, ‘Well, why don't you go hybrid initially, instead of full-electric from the start?'" Jeffrey Engler explains.
He said, "Just like the car industry started with hybrids as well. So that's something we're looking into."
Even the best batteries carry significantly less energy per kilogram than conventional aviation fuels, making them much too heavy to operate an airliner over long distances. This is the major reason why electrifying aircraft is so challenging.
Dr. Andreas Strohmayer, head of the University of Stuttgart's Institute of Aircraft Design, said, "The specific energy of today's batteries is far from what you would need."
The Institute initially flew its own experimental two-seater electric plane, the e-Genius, more than 10 years ago. Since the mid-1990s, the Institute has been studying the potential of electric and hybrid aviation.
"We build our own battery systems for our electric aircraft. We are getting in the region of 200 watt [hours] per kilogram, where we would need 1,000 or 1,500. So we are far from what we would need for a large aircraft," Dr. Andreas Strohmayer explains.
His opinion is that modern technology can be used to create small, light electric aircraft with up to six seats.
Even though it would be "near the edge of what is now conceivable," Dr. Andreas Strohmayer thinks it should be possible to
construct a commuter plane with up to 19 seats that run solely on batteries.
This would include the nine-seater Alice aeroplane being built by the Israeli company Eviation. The aeroplane, which has been in development for many years, is intended to go up to 600 miles entirely on electric power.
In contrast, anything big would require a hybrid design, combining electric motors with internal combustion engines or onboard generators.
According to Dr. Andreas Strohmayer, these types of aircraft have the ability to build new aviation networks by transporting passengers over short distances from local airfields to regional hubs. They would be able to go up to 500 kilometres there on larger hybrid planes.
"It would be a denser aviation network. It would be of most use in regions like Scandinavia or in mountainous areas, where you can't really just build networks of high-speed railways. There are places like Indonesia, Polynesia, where you have all these islands that have to be connected. There are places in the world where such networks are desperately needed," Dr. Andreas Strohmayer added. This summer, Eviation will conduct the first Alice test flights. However, such technology is not expected to be of much value on long-haul flights, which may help to explain why Airbus, a major player in the European aerospace industry, has determined that its own priorities lie elsewhere.
In collaboration with Rolls-Royce and Siemens, the firm started building the E-FanX, a prototype hybrid aircraft, in 2017. It was based on the existing Bae146, just like Wright Electric's proposal.
But the programme was cancelled three years later. The section of Airbus Upnext, which is in charge of investigating new technologies, is led by Dr. Sandra BourSchaeffer, and she believes it was the right choice.
Dr. Sandra Bour-Schaeffer said, "Our focus is to achieve carbon neutrality by
2050. In order to achieve that we need to look at two different technologies, associated with different time horizons."
The firm is concentrating on employing sustainable aviation fuels generated from waste and renewable sources in the short term to cut emissions.
Beyond that, Airbus is focused on developing a new generation of environmentally friendly aircraft that are powered by hydrogen.
"Our ambition is to bring the first zeroemission commercial aircraft based on hydrogen to the market in 2035. I already have teams working on cryogenic and superconducting technologies. We are already exploring what will come next," Dr. Sandra Bour-Schaeffer added.
Maintenance and Servicing Organizations should reevaluate their operations to address issues like what kind of physical infrastructure will be required moving forward. This is because aircraft electrification could present a huge opportunity. The number of extra batteries that will need to be kept ready at airports, the best place for charging stations, and even how long it will take to charge or replace the batteries in between flights are all issues that need to be taken into account. The latter will be a major factor for airlines to take into account, as an electric aircraft won't be making any money while it is being recharged.
The aircraft industry's continued expansion has boosted production rates and allowed Airbus and Boeing to seize the top positions in the industry. The mergers and acquisitions of smaller businesses have only served to strengthen this duopoly (Bombardier and Embraer). Because this new paradigm in propulsion levels the playing field for new players entering the market, the change to electrification poses a risk to incumbents.
The current energy storage capacity per unit weight of batteries, as well as the development of lightweight and
"Our ambition is to bring the first zero-emission commercial aircraft based on hydrogen to the market in 2035. I already have teams working on cryogenic and superconducting technologies. We are already exploring what will come next"
-Dr. Sandra Bour-Schaeffer
efficient electrical generators, motors, and power electronics capable of converting, conditioning, and switching to high voltage power, are just a few of the major technical challenges that both existing players and new entrants will have to overcome.
The current state-of-the-art battery technology does not deliver enough energy density to be suitable for commercial flights. If a civilian aircraft comes up with this technology in the current scenario, it would require close to 40 times as much battery weight as it could ever take off with, which means that the airframe needs to be on the heavier side. As per an 'AZO Cleantech' report, only 8% of aircraft could feasibly be powered by the most energy-dense batteries available right now.
While the growing popularity of electric vehicles is helping the battery technology in this domain to upgrade at a faster pace, energy density is improving as well at a similar rate. Research concepts such as Bye Aerospace’s eFlyer craft and Pipistrel’s Velis Electro have been proven to fly with battery energy densities of around 260 Wh/kg. However, the current generation of electric motors is way heavy for aerospace projects
and at the same point in time, less powerful than the existing jet engines.
Also, aircraft manufacturers will need to alter aircraft designs to efficiently integrate an electric propulsion system, which means investment requirements in new manufacturing processes, upgraded facilities, and R&D-related efforts.
As commercial aeroplanes have not departed from the gas turbine-driven architecture for more than 50 years, airworthiness authorities will need to devise methods to certify novel aircraft architectures. In order to move toward greener solutions, the European aviation industry has come together under the leadership of the Advisory Council for Aeronautics Research, which has set ambitious goals like reducing CO2 emissions by 75% per passenger.
As airlines have pledged to an initiative called 'Fly Net Zero', under which they will achieve net zero carbon emission by 2050, it brings electric power as a viable alternative in the sector. However, to realize this, the players need to identify a feasible combination of available technologies.
While small-scale aircraft (like the one in Faradair) can serve as an ideal platform for hybrid-electric propulsion systems, the same solution may not be beneficial for medium and long-haul flights, due to the limitations of the current battery technology. These medium and long-haul flight categories are primary revenue sources for the airlines. While the aviation sector has taken up its own climate goals, it has to be a profit-friendly one.
Researchers from UiT The Arctic University of Norway have put forward an electrificationroute as a short-term basis in a paper titled 'Transportation Engineering'. The study bats for turboelectric designs and says that this solution is the best candidate for a viable electric aircraft. Turboelectric systems store energy in fuel and convert it to electric power to drive propellers. While investing in turboelectric aircraft can be
a way forward for the future all-electric aircraft, as it has the potential to solve the less technologically challenging aspects of the electric motor development and aircraft integration, giving the battery technology its own sweet time to get developed. This will set the ball rolling for the phased implementation of the 'Fly Net Zero' programme.
While all-electric aircraft configuration is simpler than turboelectric propulsion, the power source for an all-electric jet will be batteries charged from renewable energy sources. It will be a silent aircraft, and the operators won't need to spend on the fuel front. However, the problem is that the technology we are talking about is currently unfit for medium and long-haul jets, due to the limitations in the current state-of-the-art battery technology.
Beta Technologies’ Alia-250 and Eviation’s Alice and the Lilium Jet have demonstrated that electric-powered flight is possible at small scales, so the airlines can invest in this option and make sure that short-haul air travels witness this innovation first.
Airbus and Renault Group have recently signed a research and development agreement, which aims at enhancing transversalities and synergies to accelerate both companies’ electrification roadmaps, improving their respective range of products. This tie-up will also help Airbus to mature technologies associated with future hybrid-electric aircraft.
As per Airbus' press release, engineering teams from Renault and the aviation giant will join forces to mature technologies related to energy storage, which remains one of the main roadblocks to the development of long-range electric vehicles. This will cover technological roadblocks related to energy management optimization and battery weight improvement, apart from looking for the best pathways to move from current cell chemistries (advanced lithium-ion) to all solid-state designs which could double the energy density of batteries in
the 2030 timeframe.
The joint work will also study the full lifecycle of future batteries, from production to recyclability, in order to prepare for the industrialization of these future battery designs while assessing their carbon footprint across their entire lifecycle.
“For the first time, two European leaders from different industries are sharing engineering knowledge to shape the future of hybrid-electric aircraft. Aviation is an extremely demanding field in terms of both safety and energy consumption, and so is the car industry. At Renault Group, our 10 years of experience in the electric vehicle value chain gives us some of the strongest feedback from the field and expertise in the performance of battery management systems. Driven by the same ambition to innovate and reduce the carbon footprint, our engineering teams are exchanging with those of Airbus to converge transversal technologies that will enable both hybrid aircraft to be operated and the vehicles of tomorrow to be developed,” said Gilles Le Borgne, EVP, Engineering, Renault Group, as quoted by the Aibus' press note.
Meanwhile, United Airlines has also announced a new investment in battery manufacturer Natron Energy, to boost the electrification of the airline’s ground equipment. As part of its commitment to reduce aircraft emissions, United Airlines has been eyeing its ground operations, where greenhouse gas emissions can be reduced.
Natron Energy produces highperformance sodium-ion batteries, which, compared with lithium-ion batteries, are safer and have greater power density and recharging speed, according to the company. Lithium-ion batteries are common in consumer electronics, but have a tendency to overheat. Natron’s sodium-ion batteries are non-flammable. The investment is part of United Airlines Ventures, a fund that focuses on investing in sustainable solutions to help the company meet its goal of net-zero emissions by 2050.
Airbus and Renault Group have recently signed a research and development agreement, which aims at enhancing transversalities and synergies to accelerate both companies’ electrification roadmaps, improving their respective range of products.Feature \ Electrified Aviation
According to Agence France-Presse, people are hard at work scrubbing the Nile's western bank in Giza, Egypt, an initiative under the 'Very Nile' project that was started in 2018 to collect plastic waste and spread awareness of the value of environmental protection. Under this initiative, people created strategies for recycling and upcycling solid waste through collaborations with neighbourhood stakeholders. Volunteers constructed the massive sculpture, which weighs more than 7,500 kg, using plastic waste.
"We chose to build a pyramid as a huge Egyptian symbol. We built a pyramid made of plastic collected from the Nile to show people the scale of the problem. In order to build a pyramid, we started collecting plastic
a while ago," a volunteer, Farah Abd Elbakey explains.
The volunteer states that it had been a long time since there had been a plastic collection. They also stated that more than 100,000 kg of plastic has been gathered since VeryNile's inception.
"Plastic can stay in the Nile for hundreds of years without breaking down," another volunteer along with the initiative said.
According to author Maurice van Sante, a Senior Economist Construction & Team Lead Sectors, the EU construction sector could suffer multiple setbacks this year and next. The EU's construction output was 2.3% less in June 2022 than it had been in February
before the start of the Ukraine war. The productivity of the various nations varies greatly. The construction industries in Austria and Germany have fallen the most, by -6.3% and -4.5%, respectively. These nations suffer from significant labour and resource
constraints. Additionally, compared to customers in many other EU nations, German consumers are currently less likely to make home upgrades. Austria will issue fewer building permits, which will probably have an impact on production in 2022 and the following.
The Netherlands experienced the least decline (-0.1%), but despite this, Dutch contractor volumes climbed by a startling 5.3% over the previous year. The growth was especially high in the Dutch residential and commercial building sector. For Dutch civil engineering, the level of nitrogen emissions is still an issue. On the other hand, Poland's construction industry experienced the biggest year-over-year growth of 6.7% in June.
Volunteers constructed the massive sculpture, which weighs more than 7,500 kg, using plastic waste
Sales of new cars in the United States fell more than 21% in the second quarter compared to the same period last year as the global semiconductor shortage continued to cause production problems for the industry. Even with gasoline costing $5 per gallon, soaring inflation, and rising interest rates nonetheless outstripped supply from April through June. Due to the record-high pricing and insufficient availability, many people are no longer purchasing new cars.
According to Edmunds. com, automakers sold 3.49 million vehicles in the quarter, which is over 933,000 lower than during the same time the
previous year. The average sales price of a new car for the first half of the year was approximately $45,000, setting a record that is 17.5% more than the previous year. Around 12.7% of consumers who financed a new car in June had monthly payments of $1,000 or more.
Jack Hollis, head of Toyota sales in North America, said the chip shortage didn't improve as much as the company expected in the first half of the year, and he doesn't see it getting much better until next summer.
" Every microchip producer is producing at maximum speed because they have maximum demand," Jack Hollis said.
Elon Musk sold $6.9 billion worth of Tesla Inc. stock to raise money ahead of a trial that would make him fulfil his promise to buy Twitter Inc. According to regulatory documents, the CEO of Tesla sold 7.92 million shares over the previous three trading days. However, Musk remains comfortably ahead of Jeff Bezos as the world’s richest man with an estimated $250bn fortune, according to the Bloomberg. Musk, who still owns about 15% of the electric vehicle manufacturer, declared in a tweet that he has stopped selling and would purchase Tesla stock if the Twitter transaction falls through." In the (hopefully unlikely) event that Twitter forces this deal to close *and* some equity partners don’t come through, it is important to avoid an emergency sale of Tesla stock," Musk wrote. Tesla's stock rose 3% to $875.51 in New York, while Twitter climbed 3.2% to $44.19.
Since November 2021, Musk has sold nearly $32 billion worth of Tesla stock. The richest man in the world claimed less than four months ago that he had no more stock transactions planned. Since then, he has tried to cancel his $44 billion purchase of Twitter. The trial for the lawsuit filed by social media companies to compel Musk to complete the transaction is set for October.
Since the late 1990s, Japan has been in a state of deflation. Deflation is when the prices of goods and services go down. It is the opposite of inflation, which is when prices go up. Inflation is usually caused by an increase in the money supply. It hikes the amount of money chasing after goods and services, driving up prices.
Deflation, on the other hand, is often caused by a decrease in the money supply/demand for goods and services. Japan's deflation has been caused by several factors.
One is the country's demographics. Japan has a rapidly ageing population, and as people grow old, they spend less. This demand decrease has helped to push prices down. Another factor is the country's high savings rate. Japanese households save a larger percentage of their income than their counterparts in other developed nations.
It means there is less money to be spent, which can help to keep prices down. Finally, Japan's export-oriented economy has also contributed to deflation. When other countries are in recession, they tend to buy fewer Japanese goods and services. It decreases the demand for Japanese goods and services and can cause lower prices.
The Japanese government has been trying to fight deflation for many years now. One way it has done this is by increasing the money supply. It has also implemented stimulus programs and cut interest rates.
These efforts have not been very successful. Japan's deflationary spiral continued, and the country's economy was stuck at its pre-recession levels. The situation in Japan is a reminder that deflation can be a very difficult economic problem to solve.
The situation in Japan is a reminder that deflation can be a very difficult economic problem to solve
The governor of the country’s apex financial institution is a very patient man. Nine years ago, when Haruhiko Kuroda took over as the chief of the Bank of Japan (BOJ), he made a promise to get rid of the deflationary pressures that had been limiting growth ever since 1990, in the third-largest economy in the world. To achieve a 2% inflation rate, which would increase wages and purchasing power, was his objective. He finally appears to be on track to succeed, with commodity price inflation causing fears around the world. Although the most recent data is extremely unstable, economists forecast japan will eventually experience an inflation rate of 2%, probably higher, in the coming months. The numbers are still low by international standards thus far. Japan's consumer price index increased by barely 1% in March 2022 compared to the same month in 2021, while the US Consumer Price Index increased by 9%, the fastest growth since 1981. However, that also accounts for a 50% decrease in smartphone rates following a government crackdown on the cartel of three companies.
Other numbers were staggering even by Japan's standards. The cost of energy grew by 20.8%, the highest increase since 1981, while the price of cooking oil rose by 34.7%. The Corporate Goods Price Index, a different indicator of wholesale inflation, increased 9.5% year over year in March, partly due to the circumstances in Ukraine.
After adjusting for the different one-time factors, analysts believe that overall inflation is currently roughly at the target of 2%. But nobody seems to be having a party. The Japanese yen is plunging dramatically in value as the government struggles to create subsidy packages for people who will be most impacted by the elections. However, Kuroda doesn't seem concerned, seeing the greater expenditures as a temporary problem that won't stop him from achieving his objective.
The costs of Japan's more than 20-year deflationary period are evident. The nation is still prosperous, secure, and comfortable, but many Japanese are unaware that while their
country has mostly remained the same, the rest of the globe has been getting richer overall. According to OECD data, average yearly salaries have only increased by 3% over the previous 30 years, but they have increased by 47% in the United States. Prices have progressed along a similar path.
Tokyo was once the costliest city in the world, but in 2022, it is no longer in the top 10 of most worldwide rankings as a result of cost-cutting measures, a progressive lowering of tariffs, and increased import substitution.
In an extraordinary program that made it the buyer of nearly all new government debt, the central bank has been flooding the markets with cash for the past nine years to escape this trap. There is a lot of debt to be purchased because, on average, only 60% of government spending is covered by tax income.
It causes two significant issues. The Japanese government has a total debt of almost 190% of its yearly economic output, making it the most indebted nation in the world. According to data from the World Bank, this covert funding of government handouts has doubled the balance sheet of the BOJ, increasing its assets to 92% of annual GDP in 2020, compared to 22% in the US and 18% in Germany.
With all of this, Japan appears to be experiencing a different kind of inflation in 2022. Kuroda's objective was to establish a demand-driven positive cycle in which higher-paid employees spend more, driving up demand, stimulating new investment, and ultimately raising wages.
Instead, rising import costs due to a strong dollar will now raise prices and lead customers to purchase only fewer items. In resource-starved Japan, where almost all raw resources and commodities are imported, the issue is particularly serious. That comprises more than 60% of the food consumed and over 95% of its energy,
primarily from imported oil.
That has not been a major concern up until now due to the fairly calm global commodity markets over the previous ten years, but due to Russia's invasion of Ukraine, both wheat and natural gas are at risk, and the issues are projected to get worse.
The government seeking a larger mandate for Japan's upper house of parliament is not blind to any of these. The amount of support in the second chamber is frequently used as a barometer of public mood about how things are going, even though the ruling Liberal Democratic Party is in no danger of losing control.
According to reports, the government is putting together a sizable $48 billion package of subsidies to aid consumers and small companies to lessen the impact of price increases. According to Nikkei, the help includes anything from further gasoline subsidies to low-interest loans and cash support.
Even though Japan's core consumer prices are getting closer to the central bank's 2% target, renowned businessman Ernie Higa says it's still too early to celebrate. He said that inflation is kind of like cholesterol — there's good cholesterol and a bad one, and what we're dealing with right now in Japan is bad inflation. Higa is the chairman and CEO of Higa Industries and the man credited with introducing Domino's Pizza to Japan.
In the meantime, Japanese Prime Minister Fumio Kishida is promoting his "new kind of capitalism" to spread the wealth created by large corporations and wealthy retirees over the previous ten years of Abenomics under former Prime Minister Shinzo Abe. During a March parliamentary session, Fumio Kishida stated, "To deal with rising prices, we will employ every conceivable policy tool to defend people's livelihoods
According to OECD data, average yearly salaries in Japan have increased by 3% over the previous 30 years
by allowing companies to pass on costs and establishing conditions for them to raise wages for workers."
Hiromichi Shirakawa, a former official of the BOJ and economist at Credit Suisse, is one sceptic who believes it is unrealistic to demand salary increases from businesses when other costs continue to go up. Every time costs rise; Japanese consumers have historically reduced their purchases. Retailers have historically been hesitant to try to raise prices as a result, giving rise to the idea of "shrinkflation," wherein smaller amounts conceal higher unit costs.
A dramatic drop in the value of the Japanese yen has made things worse and will only make imports more expensive. The yen has dropped by 10% since the year's beginning and is now close to 130 to the dollar. The economic gap that PM Fumio Kishida is trying to bridge will only widen as a result. Large corporations with significant foreign investments will experience dramatically higher profits when they send money home, but the common worker will wind up paying more at the register.
Ryutaro Kono, chief Japan economist at BNP Paribas said that as people's eyes turn to higher imported inflation and a weaker yen, it will be essential to re-examine and weigh the benefits and drawbacks of not only short-term stimulus spending but also the long-term negative impacts of locking in ultra-loose monetary policy.
There are signs everywhere. Umaibo, a puffed corn snack, is now 20% more expensive than when it was first sold for 10 yen ($0.08), a price it held for more than four decades. After 40 years, the top conveyer belt sushi chain in Japan, Sushiro, is raising the cost of its 110-yen plates to 120 yen. Schools now serve cheaper jelly instead
of pricey fruit and veggies, and the price of onions has doubled in only one year.
This presents a conundrum for Japanese officials. The political risk of voter discontent among those who have not recently experienced inflation is so obvious that the Japanese government set aside $21 billion to help those who are feeling the strain from rising food and energy prices. A cycle of low-to-moderate inflation may also awaken the economy at the same time. Bloomberg quoted Sumitomo Mitsui Banking economist Hirofumi Suzuki as saying: "This is perhaps the finest opportunity for the economy to turn inflationary.”
PM Fumio Kishida is unlikely to abandon Abenomics in the near term, but he will be unwilling to continue along that free-spending, debt-exploding route in the medium-to-long run.
He has so far committed to using fiscal spending to soften the impact of inflation, such as gasoline subsidies, which critics say are untenable for a nation burdened with significant public debt.
Analysts said persuading businesses to raise pay to assist families to cope with growing costs and increase productivity is a better strategy to allay public anxiety. These, however, are still longer-term goals that previous governments have also failed to achieve.
The question is whether these recent concerns will result in a prolonged and possibly irreversible decline given Japan's ageing population, declining workforce, and slow growth. Despite the unfavourable outlook, Japan has frequently confounded doubters in the past. Willem Buiter, who was Citigroup's chief economist at the time, declared during a 2010 event that Japan is the most difficult economy in the world to comprehend.
"To deal with rising prices, we will employ every conceivable policy tool to defend people's livelihoods by allowing companies to pass on costs and establishing conditions for them to raise wages for workers"
As per International Monetary Fund, global economic growth will slow down from 6.0% in 2021 to 3.2% in 2022 and 2.7% in 2023. Inflation will rise from 4.7% in 2021 to 8.8% in 2022, followed by a decline to 6.5% in 2023 and to 4.1% by 2024.
United States Federal Reserve has gone for aggressive rate hikes. Central banks in other leading economies too got indulged in the race. World Bank has been vocal against the move.
The World Bank has already cut down global growth projections from 5.7% in 2021 to 2.9% by 2022 end and the story will continue till the 2023-24 period (GDP growth may go down to as low as 0.5% to 0.4% per capita). The developing economies will witness a per capita income
nearly below 5% than the pre-COVID period. The challenge for the central banks will be to keep the core inflation at or below 5%, so expect consistent monetary policy rate hikes as well.
What’s in store for smaller nations?
Analysing World Bank’s zone-wise projection data for the financial year 2022-23 shows a recession threat for the USA, Canada, United Kingdom, Germany, Japan, South Korea, and
countries outside Eurozone. And the phenomenon has been underway.
Some developing, middle and low-income economies still look in better shape. The article will not only present the exact numerical GDP growth projections for those nations in the coming few months (taking the help of the World Bank’s June data), but will give the readers know-how about these economies.
Here is the list of small economies predicted to sail the recession wave without many hiccups throughout
2022 and 2023: Cambodia (4.5%-5.8%), Fiji (6.3%7.7%), Indonesia (5.1%-5.3%), Mongolia (2.5%-5.8%), Thailand (2.9%-4.3%), Vietnam (5.8%-6.5%), Bahamas (6.0%-4.1%), Barbados (11.2%-4.9%), Dominica (6.8%5.0%), Guyana (47.9%-34.3%), Nepal (4.1%), Bhutan (4.7%). The percentages here indicate the GDP growth projections for the coming months.
Cambodia has textiles, tourism, and agriculture as its main economic activities. Since its transformation from a planned one to a market-driven one in 1995,
The challenge for the central banks across the countries will be to keep the core inflation at 5%, so expect regular monetary policy rate hikes as well
Cambodia has seen steady GDP growth, despite facing political and civil unrest during the 1997-98 periods. While its garment industry has driven its export figures, the nation has recently found oil and natural gas reserves in its off-shore. The country's foreign policy is a businessoriented one, as it has enlisted itself in ASEAN and WTO trading systems. It has emerged as an attractive investment destination due to its low wages, cheap labour force, easy raw materials access, and favorable tax system.
IMF recently said that the country's economy will grow by 5% in 2022, followed by 5.4% in 2023. However, it will be constrained by slowing demand in its main export markets in Europe and the United States.
Fiji, with a population of less than 1 million, is one of the most developed ones among Pacific islands, with agriculture and fishery being the primary source of
income among the residents. It earns foreign exchange through sugar, mining exports, and tourism.
As per FocusEconomics, it is estimated to be among the top five fastest-growing economies in the world for 2022, as the nation's growth rate would witnessed an average growth of 7.7% in 2022-2026.
Indonesia is the largest economy in Southeast Asia. Classified as a ‘newly industrialized’ nation, it is the world’s 17th largest economy by nominal GDP standards and 7th in terms of PPP (Purchasing power Parity) figures of GDP. It has a growing digital economy, which is expected to go over the $130 billion mark by 2025. As per their governmental predictions, by 2045, Indonesia will become the world’s fourthlargest economy, with a growth rate of 5-6% and a GDP of $9.1 trillion.
As per the latest World Bank forecast, Indonesia will experience a 5.2% growth in
Fiji, with a population of less than 1 million, is one of the most developed ones among Pacific islands, with agriculture and fishery being the primary source of income among the residents
2022 due to the post-COVID reopening of the economy, along with the rise in commodity prices. The GDP growth will maintain an average of 4.9% over the medium term (2023-25). Domestic inflation has reached 5.7% in October 2022, with food prices increasing by 7.9% in September. Inflation will peak at 4.5% in 2023 and will remain at 3.5% in 2024 and 2025.
Mongolia’s economy is based on farming and livestock. Mongolia’s economy is dependent on Russia and China, and has seen slowdowns in past due to the geopolitical crisis. Of late, mineral activities have driven Mongolia’s GDP growth (It reached its record high of 11.7% in 2013).
The nation has been witnessing a rise in flour and rice prices, as the overall inflation reaches 14.5%. Coal prices have gone up by 40%, gasoline is costing 65% more than its February 2022 prices. It depends on Russia for energy imports (some 60%), while its export market lies in China (over 80%).
Economic activities with Beijing constitute over 40% of Mongolia's GDP.
In 2021, the country's economy contracted by 4.4%. Unemployment peaked at 8.5% in April of that year and then fell to 5.4% in 2022. Mining revenues, which account for over 20% of GDP, fell by almost a quarter in the first two months of 2022. Iron ore exports to China too declined by 38% in 2022.
The European Bank for Reconstruction and Development (EBRD) has given a sovereign loan of up to $62.8 million and a capital grant of up to 5 million euros to realize a 220-kilometre double-circuit 220kV transmission line in the country. Also, Mongolia has opened a new rail line with China, in order to boost its exports to Beijing.
Thailand’s economy revolves around exports. In 2019, it earned about 60% of its GDP through this avenue. Like Indonesia, It falls in the same category of ‘Newly Industrialised Country’, with a GDP size of 16.316 trillion baht ($505 billion), as per the 2018 figures. Industrial and service sectors comprise 39.2 of Thai GDP, followed by
agriculture (8.4%), trade, communications and logistics (over 23%), construction, mining (4.3%), and tourism (24.9%). The nation has come up with a policy of allowing foreigners to live and invest in its economy, as telecommunications and trade in services show the potential to grow further.
Thailand’s economy is projected to recover to its pre-COVID level in 2022, but the pace will be slower than expected in 2023. The economy will expand by 3.4% in 2022 and 3.6% in 2023, as against the World Bank's projection of 4.3%, due to a faster-thanexpected decline in global demand. Growth accelerated to 4.5% in 2022 due to resurgent private consumption and strong tourism inflows after the economy reopened in May.
Vietnam is the 37th largest economy right now, as per the nominal GDP numbers. In terms of PPP standards, its GDP stands as the 23rd largest. Apart from being an active member of APEC, ASEAN and WTO, Vietnam uses directive and indicative planning as per the old five-year method. Since the 1980s, it has followed this method and excelled in the small and medium enterprises (SMEs) sector. Its agricultural export is also steadily growing, apart from the country getting a handsome chunk of Foreign Direct Investments (FDIs). It has an attractive tourism sector as well. As per the latest World Bank projections, while China’s GDP growth has been lowered to 2.8%, Vietnam continues to drive Asia’s growth bandwagon with a 7.2% mark.
Vietnam is spending around 6% of its GDP on infrastructure, the highest among the ASEAN region. Its big-ticket projects are the 1,800 km HCMC–Hanoi highway; the Long Thanh International Airport, metro projects in Hanoi and HCMC, as well as thermal and waste-to-energy power plants. The government also has announced incentives for hi-tech industries. It has also banned the sale of used machineries more than 10 years old.
While the EU-Vietnam free trade agreement (EVFTA) has boosted the
Countries' Expected GDP Growth 2022 & 2023
Cambodia
4.5% 5.8%
Fiji
6.3% 7.7%
Indonesia
5.1% 5.3%
Mongolia
2.5% 5.8%
Thailand
2.9% 4.3%
Vietnam
5.8% 6.5%
Bahamas
6.0% 4.1%
Barbados
11.2% 4.9%
Dominica
6.8% 5.0%
Guyana 47.9% 34.3%
Nepal
3.7% 4.1%
Bhutan
4.4% 4.7%
Source: World Bank
country's exports despite COVID, in 2021, the UK-Vietnam free trade agreement (UKVFTA) helped the bilateral trade to reach close to $6.6 billion. Similar increases were also noted with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) as Vietnam's exports to Canada and Mexico got boosted.
The country is offering competitive wages, thereby giving countries low-cost manufacturing alternatives. Over 40% of Vietnamese university graduates major in science and engineering and the country is among the top 10 countries with the most engineering graduates.
Apart from growing fuel prices, the country is also facing headwinds due to slowing demand, rising inflation, and geopolitical circumstances. S&P Global’s Purchasing Managers’ Index for Vietnam (which measures manufacturing activity) fell to 50.6 in October from 52.5 in September, the lowest since October 2021. The Vietnamese dong has lost 9.1% of its currency value against the dollar in 2022. However, the depreciation has been lower compared to other countries.
Vietnam’s long-term growth remains stable, with manufacturing businesses eyeing to relocate here from China. The
country's FDI figures look healthy as it received $17.5 billion till October 2022, a 15% rise from 2021.
The Bahamas is the richest among the island countries in the Caribbean region. While it has growing tourism and infrastructure industries, it has manufacturing and agriculture contributing to its GDP as well (around 10%). Financial services constitute the second-most important sector of the Bahamian economy, accounting for about 15% of GDP. It gets around 17% of its GDP from financial services (classified as an offshore one) as well, with the companies only having to pay payroll taxes towards the country’s social insurance benefits.
However, Bahamas, known as 'Tax Haven' for cryptocurrency businesses, is set to suffer massively due to the recent collapse of the FTX Exchange. Not only FTX, but many crypto companies also have their headquarters in the island country and it would be interesting to see whether and how these headwinds affect the country's economy.
The economy of Barbados, which is projected to grow around 12% in 2022, became a high-income one, using its tourism and the offshore sectors, after staying in recession from 1990-93. Foreign Direct Investments (FDIs) has also been a key contributor to the island nation's economy. Its main export items are fish and milk, while it imports natural rubber and cocoa beans from Nigeria. Talking about its sugar industry, the total number of factories within its territory has come down from 10 to 2. The World Bank’s 11.2% growth projection for the nation comes despite it defaulting on bonds in 2018 and currently having the fourth largest debt-to-GDP ratio in the world.
Barbados government has recently announced that the country's growth in 2022 was higher than in 2021 despite the challenges faced. The year-end growth will be 10% more than the 2021 figures. IMF too has approved $302 million in loans for Barbados.
Dominica relies upon banana agriculture,
Vietnamese university graduates major in science and engineering and the country is among the top 10 countries with the most engineering graduates
apart from its financial services and passport sales. Despite the 6.8% growth projections, Dominica's economy faces challenging times ahead as the European Union plans to cut down its banana import. The island nation has been working towards agricultural diversification, especially in fruit farming. The country has also entered the offshore financial services sector, apart from its steadily growing ecological tourism.
Unlike Barbados and Dominica, Guyana has seen fast economic growth. In 2021, when the whole world was battling economic disruptions due to COVID, it recorded some 19.9% of GDP growth. The nation’s turning point came in 2015, when an offshore oil field was found some 120 miles away from its capital Georgetown. Economic activities around that area have been going on since 2019.
Guyana also announced in late 2022 about developing a downstream oil and gas industry including a power generation plant and a crude oil refinery. A contract has been signed for the construction of a 300-megawatt power plant in an integrated facility with a Natural Gas Liquid (NGL) plant, at an estimated $759 million. This is seen as a first step to building up a power grid to power the industries. Guyana's percapita GDP has expanded over five times since the mid-2000s due to the new oil export revenue mechanism.
Nepal’s economy falls under the ‘developing’ category, with agriculture and remittances being primary sources of its income. Like its neighbour India, Nepal too used five-year plans and in 2002, privatized 17 of its state business enterprises, apart from making its domestic currency convertible to the counterparts of other nations. Farming gives the nation 31.7% of its GDP. Remittances add a further 9.1%. While restricted import activities, the dengue outbreak, and low tourist inflow have taken out much of the sheen of the country’s economy ahead of the festival season.
Over one million Nepalis have left the
country, shows government data, which tracked the pattern since 2019. As per the analysts, the fiscal year of 2022-23 may just see another one million leaving the nation, as the political instability grows. Official statistics show that 347,340 Nepalis had left the country by the first five-month period of the current fiscal year. Experts are even saying that the country's proliferating imports show it has turned into a remittancedriven economy from a farm economy. Increasing domestic production, earning more foreign currency through electricity exports, creating more development projects and jobs, along with commercializing the agriculture sector are some of the measures suggested by the analysts, if the country wants to match or even do better than the World Bank's 4.1% GDP growth projections.
Bhutan is also reliant on agriculture and forestry for its economy. Despite the nation’s rugged terrain making it unfit for infrastructure activities, it has one of the richest per capita GDP in South Asia ($3,491), but as per global rankings, it stands at 153rd. Its total GDP is $2,653 million and as per the International Monetary Fund (IMF) rankings, stands at the 178th. Apart from the benefit of having good trade and financial ties with India, the reopening of its tourism sector after two years of COVID hiatus will likely help the country’s economy to stay afloat amid the recession threat.
Bhutan is likely to be upgraded from 'Least Developed' status to 'Middle-Income' one after successfully clearing two recent United Nations Reviews. The process is due in 2023 and will likely draw more foreign investments, once the upgrade takes place.
Apart from these regions, the World Bank has backed the sub-Saharan countries to do well in this tight environment. The region will witness average GDP growth of over 7% in 2023.
While the big, advanced economies are reeling currently, some of the smaller economies have now put up a fight. How long that continues, remains to be seen.
Over one million Nepalis have left the country, shows government data, which tracked the pattern since 2019. As per the analysts, the fiscal year of 2022-23 may just see another one million leaving the nation, as the political instability grows
The Bank of England (BoE) predicted that the UK will experience a recession in the fourth quarter (Q4) of 2022 and that inflation will be 13% by the end of 2022. The UK's central bank increased interest rates for the sixth time in a row this year in an effort to control inflation, which
In order to curb rising inflation, Australia's central bank raised interest rates for a third consecutive month and hinted at more in the future. The Reserve Bank of Australia raised its cash rate by 50 basis points to 1.35% as it wrapped up its July policy meeting, marking the fastest string of increases since 1994 with 125 basis points since May.
reached a 40-year high of 9.4% in June. The estimated Q4 inflation rate of 13% would be the highest level since 1981. According to the BoE, the UK is severely impacted by the conflict in Ukraine and the subsequent increase in oil and food costs worldwide.
"GDP growth in the UK
is slowing. The latest rise in gas prices has led to another significant deterioration in the outlook for activity in the UK and the rest of Europe. The UK is now projected to enter a recession from the fourth quarter of this year. Real household post-tax income is projected to fall sharply in 2022 and 2023, while consumption growth turns negative," it said.
Experts say, when an economy experiences negative growth for two consecutive quarters, it enters recession. This negative growth is also forecast for Q1 2023, with Q4 would mark the start of a recession.
In a statement, RBA Governor Philip Lowe said, "The Board expects to take further steps in the process of normalizing monetary conditions in Australia over the months ahead."
The hike was widely expected in markets, the local currency modestly depreciated in response to $0.6863 while futures reduced the likelihood of a second half-point increase in August.
With the unemployment rate at a fivedecade low of 3.9% and the number of open positions at an all-time high, Lowe was optimistic the economy could withstand the shock. Household demand has also held up well, thanks in part to 260 billion Australian dollars ($178.59 billion) in extra savings accumulated during the pandemic lockdowns. After a strong 2021, property values have begun to decline and there is a $2 trillion mortgage debt.
According to CNN news, four prominent German economic institutes almost lowered their spring economic growth forecast for Germany, the largest economy in Europe this year and drastically cut their projection for 2023 from 3.1% to -0.4%. In contrast to the 2.7% growth reported in the spring, the four institutes now predict 1.4% growth this year.
According to recent World Bank projections that underscore the damage done by President Xi Jinping's zero-COVID policies and the collapse of the largest property market in the world, China's economic output will lag behind the rest of Asia for the first time since 1990.
According to the World Bank, the second-largest economy in the world is expected to grow its gross domestic product by 2.8% this year, down from its April forecast of between 4% and 5%.
On the other hand, the expectations for the rest of east Asia and the Pacific have improved. The region, excluding China, is expected to grow 5.3% in 2022, up from 2.6% last year, thanks to high commodity prices and a rebound in domestic consumption after the coronavirus pandemic.
Aaditya Mattoo, the World Bank’s chief economist for east Asia and the Pacific said, "China, which was leading the recovery from the pandemic, and largely shrugged off the Delta (COVID variant) difficulties, is now paying the economic cost of containing the disease in its most infectious manifestation."
China had set a GDP target of about 5.5% in 2022, which would have been a three decade low. World Bank said Indonesia, Thailand and Malaysia, government fuel subsidies have helped keep inflation low.
The World Bank also worried that the property slowdown represents a deep 'structural' problem. To reduce the immediate risk of contagion from the property sector "turmoil", the bank said Beijing needs to provide more liquidity support.
The four institutes - Munich-based Ifo, the Kiel Institute for the World Economy (IfW Kiel), the Halle Institute for Economic Research (IWH) and the Leibniz Institute for Economic Research (RWI) said, "The crisis on the gas markets is having a severe impact on the German economy".
"Soaring gas prices are drastically increasing energy costs, leading to a massive reduction of the purchasing power," they added in a statement.
The institutes predict that the gross domestic product (GDP) will decrease by 7.9% in 2023 and by 4.2% in 2024 under a risk scenario that includes a very harsh winter, gas shortages, and a failure to reduce energy usage.
Meanwhile, Carsten Brzeski economist at ING bank said that the high energy and commodity prices are weighing on demand and putting pressure on the profit margins of German companies.
High performance computing (HPC) has been engaged in an arms race for decades since Seymour Cray created the CDC 6600, widely regarded as the first supercomputer in history. The goal was to improve performance in any way, at any expense. Since the CDC 6600 was introduced in 1964, the performance of top systems has multiplied one trillion times thanks to advancements in computation, storage, networking, and software, going from millions of floating point operations per second (megaFLOPS) to quintillions (exaFLOPS).
According to the High Performance Linpack (HPL) benchmark, the current champion, a massive US-based supercomputer by the name of Frontier, is capable of achieving 1.102 exaFLOPS. However, it's believed that even more potent machinery is working somewhere else, behind closed doors. Exascale supercomputers are predicted to have a positive impact on almost every industry, including science, cybersecurity, healthcare, and finance. They will also pave the way for powerful new artificial intelligence models that would have otherwise taken years to develop. But such a significant improvement in speeds has a price: it uses more energy. When operating at full capacity, Frontier can use up to 40MW of electricity, which is equivalent to almost 40 million desktop PCs. The goal of supercomputing has always been to push the envelope of what is achievable. However, as the need to reduce emissions becomes increasingly evident and energy costs rise, the HPC business will need to reassess whether its initial guiding philosophy is still worthwhile adhering to.
The University of Cambridge, which has created numerous supercomputers with power efficiency at the heart of the design in collaboration with Dell Technologies, is one entity operating at the forefront of this subject. The Wilkes3, for example, is positioned only 100th in the overall performance charts, but sits in third place in the Green500, a ranking of HPC systems based on performance per watt of energy consumed. Dr. Paul Calleja, Director of Research Computing Services at the University of Cambridge, indicated that the organisation places a much greater emphasis on creating computers that are highly productive and efficient than exceedingly powerful.
“We’re not really interested in large systems, because they’re highly specific point solutions. But the technologies deployed inside them are much more widely applicable and will enable systems an order of magnitude slower to operate in a much more cost- and energy-efficient way. In doing so, you democratize access to computing for many more people. We’re interested in using technologies designed for those big epoch systems to create much more sustainable supercomputers, for a wider audience,” Dr. Paul Calleja said.
Dr. Paul Calleja also anticipates a fiercer drive for energy efficiency in the years to come in the HPC industry and wider data center community, where energy usage accounts for upwards of 90% of expenses. He says, "Performance per watt is crucial, as recent energy price variations linked
to the conflict in Ukraine will have rendered running supercomputers significantly more expensive, especially in the context of exascale computing."
The university discovered that Wilkes3 may benefit from a variety of changes that increased efficiency. For instance, the team was able to reduce energy usage by around 20–30% by reducing the clock speed at which specific components were operating, depending on the workload.
“Within a particular architectural family, clock speed has a linear relationship with performance, but a squared relationship with power consumption. That’s the killer. Reducing the clock speed reduces the power draw at a much faster rate than the performance, but also extends the time it takes to complete a job. So what we should be looking at isn’t power consumption during a run, but really energy consumed per job. There is a sweet spot.” Dr. Paul Calleja explained.
In addition to fine-tuning hardware configurations for particular workloads, there are other optimizations that may be achieved in the context of networking and storage, as well as related fields like cooling and rack architecture. When it comes to spending money, Dr. Paul Calleja said, "Software should be the top priority. The hardware is not the problem, it’s about application efficiency. This is going to be the major bottleneck moving forward."
“Today’s exascale systems are based on GPU
architectures and the number of applications that can run efficiently at scale in GPU systems is small. To really take advantage of today’s technology, we need to put a lot of focus into application development. The development lifecycle stretches over decades; software used today was developed 20-30 years ago and it’s difficult when you’ve got such long-lived code that needs to be re-architected," he added.
The problem, though, is that the HPC industry has not made a habit of thinking of software-first. Firstly, much more attention has been paid to the hardware, because, in Dr. Paul Calleja’s words, “It’s easy; you just buy a faster chip. You don’t have to think cleverly. While we had Moore’s Law, with a doubling of processor performance every eighteen months, you didn’t have to do anything (on a software level) to increase performance. But those days are gone. Now if we want advancements, we have to go back and rearchitect the software.”
In this context, Dr. Paul Calleja reserved some praise for Intel. Application compatibility has the potential to become a problem as the server hardware market grows more diverse from a vendor standpoint (in most aspects, a positive development), but Intel is working on a solution.
“One differentiation I see for Intel is that it invests an awful lot (of both funds and time) into the one API ecosystem, for developing code portability across silicon types. It’s these kinds of tool chains we need, to enable tomorrow’s applications to take advantage of emerging silicon,” he notes.
Separately, Dr. Paul Calleja demanded that "scientific need" be given more attention. A misalignment between hardware and software architectures and the real needs of the end user occurs far too frequently when things "go awry in translation." He claims that a more enthusiastic approach to cross-industry collaboration would establish a "virtuous circle" made up of users, service providers, and vendors, which would result in gains in terms of both performance and efficiency.
In typical fashion, with the fall of the symbolic exascale milestone, attention will now turn to the next one: zettascale.
Dr. Paul Calleja said that Zettascale is just the next flag in the ground. A totem that highlights the technologies needed to reach the next milestone in computing advances, which today are unobtainable. Dr. Paul Calleja said, “The world’s fastest systems are extremely expensive for what you get out of them, in terms of the scientific output. But they are important, because they demonstrate the art of the possible and they move the industry forwards.”
The ability of the industry to innovate will determine whether systems that are one zettaFLOPS of performance, thousand times more potent than the current crop, can be developed in a way that is in line with sustainability goals. Performance and power efficiency may not always go hand in hand, but each sub-discipline will need a good helping of artistry to offer the required performance improvement within a reasonable power envelope. Theoretically, the advantages to society brought about by HPC can be considered to justify the expenditure on carbon emissions. This is known as the "golden ratio" of performance to energy consumption. Of course, in practice, the exact number will remain elusive, but the idea itself is by definition a step in the right direction.
Fugaku: Fugaku, a computing platform developed by Fujitsu, is situated at the RIKEN Center for Computational Science (R-CCS) in Kobe, Japan. With its added hardware, the system was able to surpass the second-place system on the list by a factor of three and set a new world record on HPL with a result of 442 petaflops. Satoshi Matsuoka, the director of RIKEN, said the advancement came from "finally
“Today’s exascale systems are based on GPU architectures and the number of applications that can run efficiently at scale in GPU systems is small. To really take advantage of today’s technology, we need to put a lot of focus into application development"
- Dr. Paul Calleja
being able to use the complete machine rather than just a good piece of it." His team has been able to optimise the code for optimum performance since the competition. Satoshi Matsuoka stated, "I don't think we can improve much more."
Summit: Summit, which was developed by IBM, is based at the Oak Ridge National Laboratory (ORNL) in Tennessee. Summit is the fastest system in the US. It was introduced in 2018 and features 4,356 nodes, each of which houses two 22-core Power9 CPUs and six NVIDIA Tesla V100 GPUs. It has a performance of 148.8 petaflops. Recently, two Summit-related teams shared the coveted Gordon Bell Prize—often referred to as the "Nobel Prize of supercomputing"— for remarkable accomplishment in highperformance computing.
Sierra: Sierra, a supercomputer at the California-based Lawrence Livermore National Laboratory (LLNL), has an HPL score of 94.6 petaflops. Sierra has a similar design as Summit, with each of its 4,320 nodes sporting two Power9 CPUs and four NVIDIA Tesla V100 GPUs. On the Green500 List of the world's most energyefficient supercomputers, Sierra reached the fifteenth spot.
Sunway TaihuLight: Sunway TaihuLight, which is situated in China's National Supercomputing Center in Wuxi, previously held the top position for two years (2016-2017). Its standing has since dropped, though. Last year, it held the third spot, but it has since dropped to fourth. It was created by China's National Research Center of Parallel Computer Engineering & Technology (NRCPC), and on its HPL benchmark, it produced 93 petaflops. The only processors used are Sunway SW26010s.
Selene: Installed internally at NVIDIA Corp., Selene climbed from seventh to fifth place in the June rankings. Selene has received an update, increasing its HPL score from 27.6 petaflops to 63.4 petaflops.
• Cray-1 was released in 1976, and it stands six feet tall with a diameter of seven feet
• IBM Summit can perform 200 quadrillion calculations per second
• The global supercomputer market generated $6.26 billion in revenue in November 2021
• More than half of the top 500 supercomputers used Linux as of June 2021
• China had 173 of the top 500 supercomputers that were the most powerful worldwide as of November 2021
Selene, NVIDIA's AI supercomputer, was introduced in June of this year after less than a month of construction and operation. Its primary applications include chip design work, internal AI workloads, and system development and testing.
Tianhe-2A: Tianhe-2A also known as MilkyWay-2A is deployed at the National Supercomputer Center in Guangzhou and was created by China's National University of Defense Technology (NUDT). Tianhe2A is powered by Matrix-2000 DSP accelerators from NUDT and Intel Xeon CPUs. Applications in modelling, analysis, and government security will be used with it. From June 2013 to November 2015, it occupied the top spot on the chart.
JUWELS Booster Module: The most recent addition to the list is the JUWELS Booster Module from Atos. With a peak performance of 44.1 HPL petaflops, the BullSequana machine is now the most powerful system in Europe and was just deployed at the Forschungszentrum Julich (FZJ) in Germany. Similar to the Selene system, JUWELS is powered by AMD CPUs and NVIDIA GPUs and is based on a modular system design.
Africa's entrepreneurship potential is currently thriving. The continent now boasts seven unicorns, up from zero in 2015, and has the largest free-trade area in the world. Also, compared to other continents, it has the highest proportion of entrepreneurs who are adults of working age.
Entrepreneurship was thriving in Africa before the COVID-19 pandemic, with 22% of people of working age on the continent have done so by 2020. But because of the COVID-19 pandemic's effects on the economy and companies put a freeze on hiring, more people are starting their own businesses. African business owners are also very active in the digital sector, which is expected to add $300 billion to the continent's GDP by 2025.
So, the tech industry in Africa is an excellent opportunity for companies that want to
grow internationally and gain access to a motivated workforce. The continent is opening up to investment opportunities worldwide and paving the way for new company models and ideas. But for the IT industry in this area to keep growing, several sectors need more help. In this article, we go into more detail about these problems.
Every year, more and more successful tech businesses open in Africa. This shows that the continent is a good place to invest. The World Economic Forum named six African start-ups as Technology Pioneers of 2022. These include Ampersand, a Rwandan start-up that provides a leading batteryswap energy network for light vehicles,
The tech industry in Africa is an excellent opportunity for companies that want to grow internationally and gain access to a motivated workforce
and Access Afya, a Kenyan start-up that focuses on providing quality, affordable healthcare by making better use of patient data.
Eight African start-ups from Ethiopia, Kenya, Ghana, and Zimbabwe were included in last year's WEF list. They were involved in genomics technology, agritech, and fintech. Due to the region's increasing diversity and maturing tech environment, companies globally have a significant chance to use the talent and cross-sector experience of the area. Because the region is becoming more diverse and the tech environment is improving, companies worldwide have a big chance to use the talent and cross-sector experience of the area.
According to the African Tech Start-ups Funding Report, the total funding for African tech start-ups increased by 1,000% between 2015 and 2021. However, despite the high demand for capital and talent from the many entrepreneurs starting the next wave of African businesses, the continent still doesn't have enough of either.
In June 2022, a report examining key elements of African tech ecosystems,
suggested that while the extraordinary growth of venture investment since 2017 has been a great success story, it isn’t the most important narrative, as much of the continent’s untapped potential (skill-wise) is needed to be put into work to strengthen the digital economy further.
The report called "The Inflection Point", published by the entrepreneur incubator Endeavor Nigeria, offered a broad examination of the size of the African digital opportunity. It also predicted that the size of the continent’s digital economy will grow to $712 billion by 2050, and insisted that the continent “has barely scratched the surface of its potential relative to other regions.”
Endeavor’s study was based on underlying factors, such as the GDP rates and consumer spending growth in African countries, the acceleration in the use of digital services during the COVID-19 pandemic, and the growth in the digitally savvy young population, who are also showing an increased interest in tech jobs. While the continent still lags behind other
key digital parameters like basic internet usage, this is also seen as an opportunity meaning there’s plenty of room for expansion for companies in this arena.
Endeavor also had a positive outlook on the funding aspect.
“We don’t expect an economic downturn to dry up investments completely,” Tosin FaniroDada, Endeavor Nigeria’s managing director, told "Rest of World". “We believe funding would be available for good companies solving real problems,” she said further.
Despite some African countries having higher interest rates and continued recessions since 2017, the continent has continued to raise significant capital. Venture investments in this part of the world have grown some 18 times since 2016, Faniro-Dada said.
Between 2020 and 2021, fundraising rates among African startups were twice that of the global average, albeit from a lower base. New data from research firm "Africa: The Big Deal" revealed that the first half of 2022 was a record breaker, with funding for African startups topping $3 billion in the first six months of the year. The total funding figure for the entire 2021 was $4.4 billion.
Tech companies must use tech skills to keep growing and succeeding in the area. There are reports that high-growth African start-ups can't find enough skilled software developers on the continent. According to Google's estimates, there are over 716,000 of them, with almost half of them living in Egypt, Kenya, Nigeria, and South Africa. Also, the average age of these developers is 29, which is younger than the average age of developers around the world, which is 36. This shows that older workers in all fields need to learn new skills. Young people should be helped to develop and get started on digital careers as soon as possible.
The good news is that businesses like Microsoft, Google, and Oracle are
planning to expand their operations in the area significantly. Microsoft, for example, plans to build its first development centre in Africa in 2022 and hire 100 people by 2023.
Some of the talent accelerators set up are Andela, AltSchool, University, and Decagon. Their goal is to give people in the region new ways to get into tech. The latter intends to train 10,000 software engineers every six months. Sector-specific investment is also proving to be essential. For example, cybersecurity experts at Venari Security have opened a new Center of excellence in Tunisia to help grow some of the country's best talents and give cybersecurity experts new opportunities.
Tunisia has a thriving tech scene, with over 1,800 IT companies employing nearly 80,000 people and contributing 7.5% of GDP in 2018. Moreover, Tunisia is a good place. It is a good choice for cyber and other specialised tech because it ranks high for graduate skills, has good vocational training, and has a large pool of available workers.
It's impressive to think that by 2030, Africa will have received 90 billion US dollars in innovation financing. However, to prevent stagnation, African countries must make sure that these investments continue to be appealing.
The lack of regional harmonisation makes it hard for new businesses to start. This makes regulations hard to understand, which may turn away potential investors. In addition, 54 African nations have different regulatory frameworks, which could reduce the benefits of start-ups.
It's encouraging to see that the African Union and AfCFTA are working to further development in this sector, even though the problems are far from simple to solve. Collaboration between government and industry leaders will be necessary to create a clear, unified digital policy framework that will make it simpler for start-ups to enter local markets.
It's essential to make ecosystems or tech clusters that look like the tech scene in Silicon Valley or like the one made for the robotics
56
Source: www.statista.com
and automation business in Odense, Denmark. A strong Pan-African tech start-up network backed by an African government-led digital economic strategy will help connect markets and make job and investment opportunities.
The tech industry can be an essential leveller and enabler for developing economies. As a result, African entrepreneurs have shown a strong desire for a wide range of tech start-ups to grow in the area.
As we've seen, there is a place for multinational corporations to establish their local presence in African nations, emphasising training and inspiring more people to pursue careers in technology. But there are also problems that the government, industry, and investors must work together to lower the risk of investments and make it easier for start-ups to grow and spread across the region.
Digital entrepreneurship is booming on the continent of Africa, which is a big part of why the area is getting better after the pandemic. Investment and security could be improved to help the continent grow into a tech superpower, and innovation clusters could be allowed to form.
A partnership between the two continents started nine years after Google's formal inception. The company, worth more than a trillion dollars on the stock market, has created and supported programmes focusing on Africa. It runs its business in sub-Saharan Africa from South Africa, Nigeria, and Kenya. In 2018, it opened an Artificial Intelligence lab in Accra, Ghana. This is where Artificial Intelligence projects for the whole continent would be planned and done. Last year, it said it would open its first development centre in Nairobi, Kenya, where it would hire product teams and engineers from all over Africa for the first time. It recently said it would establish its first cloud centre for Africa in South Africa.
The yearly physical and online Google4Africa event, where the company announces its goals for the continent for the following fiscal year, was held in 2022. The three bases of its sub-Saharan operations— Nigeria, South Africa, and Kenya—host the event concurrently. At the event in 2021, Google CEO Sundar Pichai made the company's most ambitious commitment to Africa to date: a $1 billion investment to democratize access by ensuring affordability and relatable products, support non-profits working to improve lives throughout Africa, assist businesses in digitising and investing in entrepreneurs to fuel next-generation technologies. The majority of this year's edition consisted of feedback and progress reports.
But the company has done things on purpose for people following Google's exploration of the continent, making for a better story before the announcement last year. Google's operations in Africa follow a plan, as Nitin Gajra, the company's managing director for sub-Saharan Africa said.
Gajra didn't hide the fact that he liked Africa best. He didn't hide that he liked Africa best because of access to affordable talent. According to Gajra, entry separates the West from developing nations like Nigeria and India, where he is from.
Even after building the infrastructure, he continued, "we must figure out a method to make it accessible to everyone, and this requires a certain level of intentionality."
Google places a lot of emphasis on accessibility, evident in the level of inclusion it incorporates into all of its products— extensive language selections, accessibility features for the visually impaired, etc.
According to Gajra, there are many facets to Africa's problems, and Google is prepared to address each separately. Even for a big company like Google, this is a big job. In the past, governments have failed in similar positions. The tasks are scary even while the discourse about why they fail centres on incompetence.
Despite these, Google has experienced its fair share of scandals on the continent. In the Mocality 2012 incident, for example, the company had to admit that it had "improperly" used data from a local startup called Mocality. At the time, Mocality had a list of nearly 100,000 local businesses that could be accessed from a cell phone. Stealing Mocality customers to pay for its website was seen as stealing customers from Mocality. When Google discovered this accusation, the head of operations in Kenya and all the engineers who worked there were fired. A year later, Mocality ceased operations.
However, having a challenging funding environment means that African startups will be under immense scrutiny from their financial backers, especially in the valuation arena.
“The thing is, our valuations were getting crazy in Africa, in terms of the work some of these startups had done to deserve them,” Stone Atwine, founder of Uganda-based fintech Eversend, told the "Rest of World."
“Now investors will want to see numbers, it’s all about unit economics again, not just vibes," she said, while adding that the effect of any global slowdown will not be as huge
in Africa.
Will the ongoing global economic slowdown have an effect on Africa? If yes, then how severe it will be? Will it affect the tech sector investments?
Selam Kebede, director of the Nairobi office of Antler, a global early-stage VC, told the "Rest of World", that it’s a question of “when and not if” the African tech ecosystem will start seeing a downturn.
“We are already witnessing valuations going down and investors becoming more critical of metrics like burn rate and margins. Startups with a high burn rate relative to their growth will find it hard to fundraise,” she said.
Kenya-based veteran investor and tech policy advocate Ali Hussein Kassim told the same publication that one advantage of an economic slowdown would be a more keen awareness that the ecosystem is over-reliant on foreign venture dollars.
“This is skewing the investment space to focus mostly on Western values from a VC perspective,” he said, referring to the Silicon Valley startup growth culture of “Move fast and break things.”
“Don’t get me wrong: I’m all for foreign capital. I’m just concerned that there is very little homegrown capital going into these startups,” Ali Hussein Kassim added.
The Endeavor report has highlighted the uneven spread of investment money across the various stages of growth. As in most markets, there are more venture deals in early-stage companies in Africa, but the study indicates a sort of inequality here. The fastest-growing bracket in the continent involves deals between $1 million and $5 million, which generally take place in a pre-seed or seed funding round.
Endeavor argues that the demand for further funding rounds in the $5 million to $50 million bracket will increase in future, as more of these early-stage companies are expected to take their next steps.
“Given the significant drop in deal activity from $5 million onwards, it is likely that there will be insufficient supply to meet demand,” the report stated.
This technology is still in the research phase, and there’s no point in launching it hastily, as it would end up ruining the user experience and drive unwanted backlash. It’s pretty much understandable because we will not be able to react calmly if our computer deletes an ultra-important file, takes illegal action on the internet, or does anything worse
Micron Technology Inc., one of the biggest semiconductor companies in the world and the only computer memory and data storage manufacturer with a presence in the United States announced plans to invest roughly $15 billion through the end of the decade to construct a new fab for leading-edge memory manufacturing in Boise, Idaho, USA. This will be the first new memory manufacturing facility constructed in the United States in 20 years, ensuring the domestic supply of cutting-edge memory which is required for market segments like automotive and data centre, driven by the adoption of artificial intelligence and 5G.
This is the first of Micron's multiple planned US investments following the passage of the CHIPS and Science Act. It is also the largest private investment ever made in Idaho. The co-location of the new production facility and
Micron's R&D facility at the corporate office will boost operational effectiveness, hasten technology deployment, and shorten the time to market.
By the end of the decade, the new fab will generate over 17,000 new American jobs, including 2000 jobs in Micron itself.
Micron President and CEO Sanjay Mehrotra thanked President Biden for the bipartisan support of the CHIPS and Science Act.
Apple unveiled the second generation AirPods Pro, the most improved AirPods the company ever made. The new H2 chip's strength enables AirPods Pro to deliver groundbreaking audio performance,
including significant improvements to Active Noise Cancellation and Transparency mode. The AirPods also provide a special way to enjoy Spatial Audio which is even more immersive. Customers may now
By the end of the decade, the new fab will generate over 17,000 new American jobs
experience extended battery life, a brand-new charging case, and an additional ear tip size for a better fit, as well as touch control for music playback and volume adjustments directly from the stem.
Bob Borchers, Apple's vice president of Worldwide Product Marketing said, "AirPods revolutionized the wireless headphone category with an innovative design and incredible sound quality. With the new AirPods Pro, Apple raises the bar once again. The new AirPods Pro delivers even better sound quality, a more immersive listening experience with Personalized Spatial Audio, and transformative audio features like Adaptive Transparency."
Twitter shares dropped significantly as Elon Musk declared that he was pulling out of a bid to purchase the social media site. Musk withdrew after alleging that Twitter had not provided sufficient details regarding the quantity of spam and phoney accounts that were present on the platform. Twitter plans to take legal action to make the deal go ahead and has hired a top US law firm.
In a tweet, Musk stated that Twitter would have to "disclose bot information" in court. After that multibillionaire tweeted a photo of American actor and martial artist Chuck Norris seated at a chessboard along with the words "Chuckmate." After the news, the share price of Twitter was roughly $32.64; this is a further decline from the takeover price of $54.20 per share that Elon Musk and Twitter's board had agreed upon in April.
It is the first time investors have been able to react to Musk's announcement that he wanted to pull out of the deal.
Tesla CEO Elon Musk announced plans to purchase Twitter in April, but the deal was shelved a month later over concerns about the prevalence of bogus accounts on the platform. Elon earlier also sold Tesla shares for the acquisition.
According to a statement released by Netflix, Microsoft will be a part of its forthcoming ad-supported streaming service. After launching the less expensive alternative, the streaming service claims that Microsoft will become its global advertising technology and sales partner.
"It’s very early days and we have much to work through. But our long-term goal is clear. More choice for consumers and a premium, better-thanlinear TV brand experience for advertisers. We’re excited to work with Microsoft as we bring this new service to life," Netflix COO Greg Peters writes in the post.
The company says marketers will work with Microsoft to bring ads to the Netflix ecosystem. "Today’s announcement also endorses Microsoft’s
approach to privacy, which is built on protecting customers’ information,"
Mikhail Parakhin, Microsoft’s president of web experiences said in a blog post. Microsoft is apparently considering adding advertisements to free-to-play Xbox games in addition to Netflix.
Choosing Microsoft recalls the two of them working closely together on streaming product launches. The Xbox 360 was the first console to include HD Netflix streaming software, and the original version of Watch Instantly, which streamed largely B-movies. It was first launched in Australia, Brazil, Canada, France, Mexico, Spain, the United Kingdom, and the United States.
We are excited about the partnership with Netflix, Mikhail Parakhin said.
Amazon announced that it would buy iRobot for $1.7 billion. Colin Angle, Rodney Brooks, and Helen Greiner, members of the MIT Artificial Intelligence Lab, launched the home robotics company in 1990. This company is most known for inventing the robotic hoover. Twelve years after its founding, the company introduced the
Roomba, a brand that has since become synonymous with the category, selling more than 30 million units as of 2020.
Colin Angle has remained on board as CEO, a position he will remain postacquisition, while Brooks and Greiner have gone on to create and run a number of other businesses.
"Since we started iRobot, our
Dell technologies ceased all operations in Russia. The multinational technology company finished the promised resource withdrawal from Russia, finishing a break that started in February with the country’s invasion of Ukraine.
"In mid-August, we closed our offices and ceased all Russian operations. Back in February, we made the decision to not sell, service or support products in Russia, Belarus and the Donetsk and Luhansk regions of Ukraine, in addition to the already embargoed Crimea,” a Dell spokesperson told CNR news website.
Officials in Moscow said many of Dell’s former employees in the country have already received jobs with competitive pay from technology companies in Russia.
"We are monitoring the development of the situation. According to our data, the vast majority of Dell’s R&D centre specialists and support engineers in St
team has been on a mission to create innovative, practical products that make customers' lives easier, leading to inventions like the Roomba and iRobot OS. Amazon shares our passion for building thoughtful innovations that empower people to do more at home, and I cannot think of a better place for our team to continue our mission. I’m hugely excited to be a part of Amazon and to see what we can build together for customers in the years ahead," CEO Colin Angle said in a release.
Amazon, too, has been aggressively tackling the robotics space in the decade since it acquired Kiva Systems, though the Amazon Robotics division is focused solely on its warehouse/ fulfillment play.
Petersburg and Moscow have already received job offers with competitive pay from Russian producers," Russian Deputy Industry and Trade Minister Vasily Shpak told the Russian state TASS news agency.
Dell would fully exit Russia and would lay off all its local staff, CNews reported.
