To: Interested Parties
From: Marc Ross, Caracal
Date: January 10, 2020
TOP GLOBAL POLICY ISSUES + TRENDS FOR 2020
Tech at a tipping point:
A 2017 World Economic Forum survey predicted a series of "technological tipping points" for the 2020s. Predictions included 3D-printed cars, autonomous vehicles, and the first artificial intelligence machine on a company's board.
UBS suggests the ‘20s could also be an era of smart cities, where big data and robotics ensure better governance, health, and connectivity. The global bank expects annual spending to turn cities smart will reach $2 trillion in 2025 and internet-connected devices will multiply more than four-fold to 46 billion.
Just this week, Toyota announced an ambitious plan with Copenhagen-based Bjarke Ingels Group to turn a 70-hectare site near Mount Fuji into a testing ground for its most advanced ideas in homes, transportation, and energy.
The plan calls for the city’s wooden buildings to draw on renewable energy – solar and geothermal as well as hydrogen fuel-cell technology. Homes will use robotics and artificial intelligence, have groceries delivered, and garbage removed automatically.
To take advantage of these shifts, investors will focus on areas such as autonomous vehicles — automated forklift shipments will grow to 455,000 in 2030 from 4,000 in 2019, ABI Research said.
Breaking up and taxing up Silicon Valley giants:
Facebook, Amazon, and Google lead the pack in public affairs spending as the industry seeks to present a positive message to policymakers, regulators, and press influencers in Washington, London, Paris, Brussels, and Tokyo.
Plus breaking up Silicon Valley giants will be a popular and well-used talking point on the American campaign trail for Election 2020.
Even if Capitol Hill is in gridlock, the European Union and the UK’s Competition and Markets Authority have become more and more aggressive on the competition.
Also, France has warned the US that it will face retaliation from the EU if it tries to impose “highly disproportionate” trade tariffs in response to the EU’s digital tax on the likes of Google and Amazon.
Finally, the Japanese government is set to force the likes of Google and Facebook to disclose the terms of their contracts with customers, and also to be more transparent about their operations.
Will Silicon Valley be proactive and take steps to self-regulate and spin-off new companies or be arrogant become distracted by beating off state attorneys general and trial lawyers?
My way or the Huawei:
The United States has asked sixty-one countries to ban Huawei equipment, but only three—Australia, New Zealand, and Japan—have agreed.
Many have little desire to pick between American and Chinese companies when selecting new technology - even America's allies and companies are going there on the way when it comes to Chinese superpower technology company.
In Germany, Deutsche Telekom was in advanced talks last month to retain Huawei as its main supplier of radio equipment for new mobile networks and Huawei alongside Nokia will be a supplier to the 5G network of Telefonica Deutschland, the German arm of the Spanish telecoms giant.
US technology companies have rebuffed a Trump administration request that they pledge to stop sourcing supplies from some Chinese companies, amid concerns that such a policy could break competition laws and halt access to expanding a middle-class centric Chinese economy.
Tariffs and trade tensions worry Fortune 500 CEOs:
Tariffs and trade tensions are a huge source of worry for US companies, with nearly half of Fortune 500 companies referencing such concerns during last quarter’s earnings calls.
Globalization is back - well at least for a few days:
President Donald Trump is planning to attend this month's World Economic Forum in Davos. The January 21-24 event in Switzerland will be an opportunity for Trump to tout his economic record ahead of the 2020 election and look presidential on the global stage.
The US-China superpower split:
Don’t be fooled by the underwhelming phase-one trade deal between the United State and China, the planet’s biggest and most consequential break-up is underway.
The roots of the superpower split go back 20 years and have only been building with nationalistic tendencies growing on both sides of the Pacific.
When China joined the World Trade Organisation in 2001 reformers in Beijing and friends abroad dreamed that it would liberalize its economy and, perhaps, its politics too, smoothing its integration into a Western-led world order.
As The Economist reports, “that vision has died.”
The 2008 financial crisis forced America to turn inward and freaked out the stability at all costs Chinese Communist Party.
In recent years China views America with growing distrust and scorn.
Americans increasingly have an unfavorable view of China:
Pew reports six-in-ten US adults have a negative opinion of China, up from 47% in 2018 and the highest share since Pew Research Center began asking Americans this question in 2005.
Americans also increasingly see China as a threat.
Around a quarter of Americans (24%) name China as the country or group that poses the greatest threat to the US in the future, double the share who said this in 2007.
China is tied with Russia (24%) as the country or group most cited by Americans as a threat to the US; the only other country to measure in the double digits is North Korea (12%).
NATO recognizes China 'challenges' for the first time:
For the first time in NATO's history, the alliance is recognizing the challenges posed by China's rise. NATO sees Beijing's growing military capabilities had "implications for all allies."
Support for NATO falls in key European nations
According to YouGov, in 2017 almost three-quarters of Britons (73%) approved of NATO membership, this has since fallen to 59%. Likewise, in Germany support has fallen from 68% to 54%, and in France from 54% to 39%. Nordic nations Denmark and Norway experienced drops from 80% to 70% and 75% to 66% respectively.
Last fall, Emmanuel Macron, the French president, warned European countries that they can no longer rely on America to defend NATO allies.
“What we are currently experiencing is the brain death of NATO,” Macron declared in an undiplomatic interview with The Economist. Europe stands on “the edge of a precipice,” he said, and needs to start thinking of itself strategically as a geopolitical power; otherwise, we will “no longer be in control of our destiny.”
NATO is not ‘brain-dead’ but does face real threats to its future.
Just after he signed the founding Washington Treaty in April 1949, the British Foreign Secretary, Ernest Bevin, said in a BBC radio broadcast that it was “an endeavor to express on paper the underlying determination to preserve our way of life – freedom of the press, freedom of religion, and the rights and liberty of the individual.”
NATO has never been just a military alliance but is under growing pressure to refocus its purpose and messaging for 2020.
Scottish independence referendum:
Nicola Sturgeon, First Minister of Scotland and leader of the Scottish National Party, has thrown down the gauntlet to UK Prime Minister Boris Johnson by demanding that the Scottish parliament be given the power to call independence referendums as often as it chooses.
In a 2014 referendum, 45 percent of the voters in Scotland backed independence, and as Brexit formally approaches at the end of the month, the Scottish National Party suggests “the Scottish voice is not heard at Westminster."
The Scottish government has published a document that it says sets out the legal and democratic case for “self-determination” and has sent a formal request for the ability to hold another vote.
Dominic Cummings becomes better known across the pond:
You would think that someone who was portrayed by Benedict Cumberbatch in the 2019 drama Brexit: The Uncivil War would be better known in America's elite political circles.
But even the best connected and most cosmopolitan know little of Dominic Cummings.
Cummings has been highly vocal over what he believes is a London-centric political system that failed to accept the United Kingdom’s voting to leave the European Union.
Following last month's UK General Election, which returned an 80-seat Conservative majority, he stated:
"After the shock of the referendum, MPs and journalists should have taken a breath and had a lot of self-reflection [on] why they misunderstood what was going on in the country. Instead, a lot of people just doubled down on their own ideas and fucked it up even more. That’s why something like this happens against expectations."
With this mandate from the voters, Cummings is now focused on modernizing the institutions and people of government.
Dominic Cummings recently recommended that UK advisers read High Output Management by Andrew Grove so that “highly productive” teams can deliver “peak performance.”
In what The Times called “the most unusual job advertisement in government history,” Boris Johnson’s chief adviser used his personal blog to invite “data scientists, project managers, policy experts, and assorted weirdos” to apply for government jobs and work with him to transform the UK government.
Cummings has been mulling for years how to improve policy delivery in Whitehall, setting out his thoughts in long blogs, combining scathing assessments of parts of the civil service with an eclectic search for “best practice.”
Well read and well educated, Cummings is reportedly an admirer of Otto von Bismarck, Richard Feynman, Sun Tzu, and US fighter pilot and military strategist John Boyd.
Cummings’s desire for wild cards to join him as he works to bring his nation’s government into the 21st century will be closely watched in New York and Washington.
The city vs. the nation-state continues:
Leonid Bershidsky writes in Bloomberg: "Big cities are increasingly at odds with their nation-states. We saw yet another sign of that when the “Pact of Free Cities” was signed by the liberal mayors of Bratislava, Budapest, Prague, and Warsaw — the capital cities of four Eastern European countries run by nationalist and/or populist governments. It’s just one more example of a larger trend that defined 2019 the world over.
“More often than not, people in the cities want more freedom, are more willing to embrace every kind of diversity and care relatively less about the whole idea of national sovereignty. People in smaller towns and rural areas are more concerned about national identity and preserving local customs, even if that means following strongmen.”
Marching en:
Emmanuel Macron, the French president, has vowed to plow ahead with pension reforms that have triggered debilitating strikes in the country.
As the transport strike enters its second month, railway workers have been joined by dockworkers, teachers, lawyers, and hospital staff.
Hard-line unions reject Macron’s plans to merge the current tangle of 42 different mandatory-pension regimes into a single, points-based system, thus destroying today’s generous benefits.
The stikes are the biggest since the 1930s and show no sign of letting up.
Will Brandenburg be Germany's biggest e-mobility hub?
The eastern German state of Brandenburg is aiming to become a pivotal player in pushing e-mobility.
Not only will it be home to Tesla's first European Gigafactory, but BASF also looks set to build a large cathode factory there.
Europe gets serious about space:
The European Space Agency has seen a considerable increase in its operating budget for 2020 to 2022.
The member states pledged €12.5 billion, or the equivalent of $13.8 billion, for the agency over the next several years, 45 percent higher than the €8.6 billion allocated in 2016.
2020 will be a thrilling year for Mars buffs:
The space agencies of America, Europe, China, and the United Arab Emirates all plan launches of unmanned Martian probes. Each will have different ambitions.
NASA already drives robots on Mars, but its rover will carry a helicopter drone that could become the first extraterrestrial aircraft. It will also test a device to convert abundant carbon dioxide into scarce oxygen, which could help future astronauts breathe, or could be used to make rocket fuel.
Both the European and Chinese space agencies must prove that they have learned lessons from recent failures to reach Mars.
The Europeans plan to drill an unprecedented two meters into the planet’s surface to search for fossilized signs of life.
The UAE’s mission, developed with American help and to be launched on a Japanese rocket, will be an interplanetary first for the Arab world.
Tokyo 2020 Summer Games and brand Japan:
Nearly all of the 2020 Olympics venues are ready. The ¥157bn (€1.3bn) national stadium opened to the public in December and the ¥20.5bn (€169m) Ariake gymnastics center and ¥7bn (€57m) Ariake arena have been completed, along with the venues for archery, hockey, and canoeing.
Meanwhile, the ¥56.7bn (€467m) Tokyo aquatics center is little more than a month away from being finished.
Japan views the Olympics as a chance to upgrade its infrastructure and bask in the limelight – a rare marketing opportunity for brand Japan.
The Netherlands to drop 'Holland' nickname as part of rebranding
The Dutch government announced that it will officially drop their country's nickname, “Holland,” and only use the name The Netherlands, in an effort to rebrand their “international image.”
The change will mandate that starting in January, “companies, embassies, ministries, and universities will only be able to refer to the state using its legitimate title.”
Technically, Holland specifically refers to two of the 12 provinces found in the Netherlands, North Holland and South Holland.
The decision was made to rebrand the Netherlands’ international reputation and managing an overflow of tourists who go to the country to visit Amsterdam, but no other areas.
A spokesman for the Foreign Ministry previously commented on this rebrand.
He told news agency EFE: ‘It is a little strange to promote only a small part of the Netherlands abroad, that is, only Holland.’ Which makes perfect sense to be honest and makes us wonder why this has only really come about now. It seems the move is an attempt to help manage Dutch tourism.
Last year, the Dutch tourist board said it would stop actively promoting the Netherlands as a tourist destination – this is because many of its cities and attractions are becoming overcrowded.
It is forecasted that in 2020 inbound tourism will continue to grow to 21.2 million tourists.
Most of the individuals who traveled for holiday or business purposes to the Netherlands were from Germany, as roughly 5.24 million German tourists visited their neighboring country.
Together with the Belgians and British, they account for more than half of the total tourists visiting the Netherlands.
