The Revolution in Digital Payments
Cisco Chairman John Chambers, ranked India Prime Minister Narendra Modi as a model leader of digitization. Days after, Modi surprised everyone by removing India’s most valued and popular currencies, even though India still uses cash for 95-98% of all transactions. Designed to root out corruption and terrorism financing, demonetization has proven controversial during implementation but it may jumpstart a digital economy, according to Quartz:
Paytm, an e-wallet firm, has seen a huge surge in transactions. … The removal of the notes has also brought India’s first “digital and cashless village,” Akodara, which is 60 miles from the northern city of Ahmedabad, into the limelight. Most of the 1,200 people living in Akodara buy everything from wheat flour to potato chips through mobile banking.
Stripe, whose APIs power one-quarter of all online transactions, has quietly emerged as the dominant player in digital payments. Investors have taken note, doubling its valuation to more than $9 billion recently. This Forbes interview with Collison hints at why the company is widely recognized as the next Silicon Valley success story:
The value of making it so easy to start participating in the online economy actually has a far larger effect than one might a priori imagine.
China Rekindles a Worrisome Past
US-China relations remain at a historic crossroads, says a must-read cover story in The Atlantic. Every president since Richard Nixon based US foreign policy on the belief that increased economic prosperity in China yields mutual benefit and freedom. That assumption, says James Fallows, no longer holds true today. Why? The financial crisis, new acts of Chinese repression, and President-elect Donald Trump complicate a geopolitical calculus beyond what any territorial disputes make apparent:
“China is experiencing the most sustained domestic political crackdown since Tiananmen Square,” Carl Minzner, an expert on Chinese law who teaches at Fordham University’s law school, wrote this year. Almost everyone I spoke with agreed.
Distressing words from a longtime student of modern China. Skip to the bottom of Fallow’s report for bipartisan policy ideas designed to help the next president set new terms of engagement with China.
Should Government Help CEOs Think Longer Term?
The chorus of criticism against short-termism continues to grow, with former UK Treasury Minister Jim O’Neill calling on the US and Europe to reform tax incentives around how companies manage their balance sheets. Small changes in the tax code could nudge more companies to think about long term investing, O’Neill argues in a short Bloomberg video. The former Global Asset Management Chairman for Goldman Sachs illustrates his point with an observation about how pharmaceutical companies prioritize the allocation of capital:
You could solve global, anti-microbial resistance for a generation with less money than Merck, J&J, and Pfizer have spent this decade buying back shares.
What it Takes to Compete in the Cloud
How does Google Cloud gain an edge over the ubiquitous AWS? Find great, diverse talent outside the organization and expand machine learning services to enterprise customers, Verge reports. To lead this endeavor, Google Cloud chief Diane Greene tapped two experts in the hyper-competitive field: Jia Li, head of research at Snap, Inc., and Fei-Fei Li, former director of AI at Stanford. An excerpt:
A new machine learning-based “Jobs API” will apparently assist companies in hiring hundreds of new employees at a quick pace. It allows computers to match up job openings with potential hires and accelerates the process normally undergone by HR and recruiting. Career Builder and Dice are signed up to use it, as is FedEx.
CEOs: Think Twice Before Developing Executives
That message might see odd coming from Ben Horowitz, co-founder of Andreessen Horowitz. Reflecting on his tenure as Opsware CEO, Horowitz recalls when he learned that managerial strengths of helping people develop skills conflicted with the CEO’s role and responsibilities. Horowitz, for example, reminds CEOs to evaluate and compensate executives based on ability, not potential:
While it’s common practice and a good idea to take potential into account with regular employees, this methodology does not work well for executives. When you hire an executive, he will demand around 1 percent of the company. How do you explain to a great engineer with less than one-fifth that amount of stock that you are waiting for the executive’s potential to kick in?
What a New Model for Corporate Citizenship Demands
Leaders with courage and purpose. But recent headlines about Apple’s support of privacy and Salesforce’s opposition to discrimination drive home the new expectations for how business must improve society, says Steven Sinofsky who sees Silicon Valley as fertile ground for a new CSR model:
There is an increasing view that companies should no longer “play it safe” when it comes to being parts of a community or driving societal change. … The fact that many companies are working to build out new models for everything from transportation to food to education only amplifies the role of a social contract.