Mobile subscribers in Russia downloaded and sent more data over the first nine months of 2019 than in the whole of 2018, Izvestia writes citing data provided by the Russian Ministry of Digital Development, Communications and Mass Media.
According to the official data, internet traffic in the country reached almost 10.9 billion gigabytes from January to September 2019 compared to 10.2 billion during 2018.
The development of Long Term Evolution (LTE) networks, which make it possible to download more data, interest in “heavy” video content and low cost of services, despite growing tariffs, are the reasons for traffic growth, analysts say.
So far, mobile traffic in Russia is still smaller than fixed Internet traffic, but the former is growing slower than cellular traffic, with a data amount increase of 18.5% over the past year.
According to TelecomDaily Director General Denis Kuskov, the data provided by the Ministry of Communications is conservative, and there is every likelihood that the mobile traffic growth rate was even higher.
According to his estimates, Russian mobile users used 10-11 GB of traffic every month by the end of this year compared to 6-7 GB a year ago. One of the primary reasons for that is an increase in coverage and bandwidth of 4G networks both in Moscow and St. Petersburg, as well as in other regions.
“A user can download much more data per unit of time than in 3G, and subscribers take advantage of that, increasing traffic consumption and their payments to operators,” the expert stressed.
Through the wealth of apps available to us on smartphones and other devices, AI shows us the fastest route while driving, helps us find the lowest gas prices on the same trip, and can even point out attractions we might like along the way. Data-backed fitness devices give us important stats on our activity level and help fine-tune our daily routine for optimal health benefits.
With the rise of smart cities, AI will be an even bigger part of our lives. It can even help solve one of the trickier dilemmas most urbanites who drive face on a daily basis: where to park.
Daily Parking Issues
Not enough parking spaces in a densely populated area.
Poor use of available parking spaces.
Time and gas used to find open parking spaces.
Difficulty finding vehicles in large parking lots.
Traffic congestion centered around poorly executed parking structures.
Business parking spaces are taken by commuter parking.
Inconvenient parking spaces.
Poor parking price models.
Proper handling of handicapped spaces.
Unused private parking spaces.
Environmental impact of excessive fuel use in seeking parking.
Unclear parking policies.
What Is Smart Parking?
Combining human innovation and advanced technology, smart parking is a strategy that smart cities can use to increase parking efficiency and combat numerous issues. Smart parking will reduce fuel use because the driver won’t be circling streets looking for a place to park because they’ll have an identified space. Drivers will also save money and time with denser, easier parking.
Smart parking utilizes smartphones and other sensing devices to ascertain the occupancy of a parking structure or level. It’s accomplished through the use of cameras, counting utilities at the entrances or gates of parking structures, sensors embedded in the pavement of individual parking spaces, etc.
With traffic congestion being a substantial problem in many urban areas, smart parking offers a partial solution. Much of the traffic is caused by people searching for parking spaces as a routine activity. The daily search for parking spaces consumes one million barrels of the world’s oil supply daily. If the search for parking spaces was reduced or eliminated, some of the congestion in traffic would be diminished.
As AI continues to develop and improve, new solutions that can be used to improve our communities emerge. More cities, universities, and transportation leaders by the day are taking a closer look at parking analytics and smart parking. Smart parking is an important element in the development of smart cities.
How Can IoT-based Parking Provide Solutions?
New wireless sensor-based technologies are leading the way for efficient town planning and the development of smart cities, thanks to the Internet of Things (IoT). Innovations like facilities for viewing parking data, dynamic messaging, and parking sensors are being explored to aid in city design and town planning.
Using real-time parking data and extending it to people who can use it to quickly and easily locate parking will alleviate many problems caused by parking in urban areas. Such technology can help guide visitors to available parking spaces and more.
Smart Parking in Cities
Technology that impacts smart parking in cities isn’t about parking itself so much as distributing information to planning cities and their services. While cameras, sensors, and wireless transference of data are vital to establishing such a solution, it’s the data harvested and provided and how it’s used that makes for a solution. It really works in sending real-time information to commuters and drivers to let them know where to find available parking.
Airport Valet Parking Systems
Robot valet parking is in its early stages in the US, but the systems show a lot of promise. It may not be an easily adopted service. The systems count on travelers arriving and leaving their cars in the care of these robots, and many may be reluctant to do that at first.
These valet parking systems are really automated towing vehicles that take cars to available spaces at the airport so the traveler doesn’t have to.
New Parking Concepts
With assistant services like Siri, Cortana, and Alexa, it’s not hard to imagine having such an assistant within a vehicle’s onboard computer to help with tasks like locating parking spaces. Parking sensors that can communicate how to park with the tap of a button would be even better.
Another great convenience could be handling payments like correct change for parking at parking structures because sometimes, we don’t have cash available. Having a contactless payment system would make parking fast and convenient.
There are already many parking apps to help with daily parking assistance. More parking apps are being developed daily. These apps allow you to pay for parking in advance and update your situation if your plans change and you need to stay longer. Other features include telling you where to find on- and off-road parking and directing you to such locations.
Apps will play a vital part in smart parking moving forward, providing helpful information to drivers when they need it most.
Enhancing Multi-level Parking
Multi-level parking structures in large urban areas are often a necessity. In the future, the development of automated car parking systems may park cars for drivers and bring them around for the driver when they return. Using lifts and pallets, the systems will store vehicles in rows and columns.
Not only would less time be spent by the driver or commuter in looking for a parking space and trying to find their car, but there would also be a reduced risk of damage to the vehicle for travelers willing to take a chance.
Smart parking solutions will only make city governments more efficient and greatly help the emergence of smart cities. With the perpetual growth of urban areas, now and in the future, smart parking will be an emerging industry that’s vital to the success of smart cities.
Smart parking will offer numerous solutions to aid cities in serving their citizens in ways that save them time and money. The same solutions will also serve to reduce traffic and help the city run more efficiently.
Swarm intelligence goes far beyond what current IoT applications are offering the world in the way of futuristic improvements and gee-whiz prototypes seen in many of today’s more progressive cities and homes.
As you’re about to see, they’re perfect for certain types of business and industry applications, making the world safer, better, and easier in an exciting number of ways.
Tackling Dangerous Tasks
Swarm-bots can be used to tackle dangerous tasks to reduce or eliminate the risk for humans. Based on the level of danger, there’s potential for loss of robot individuals, necessitating a focus on fault tolerance of the swarm. Some examples include:
Search and rescue
Cleanup of toxic spills
When High Flexibility and Scalability Are Needed
There are tasks where it’s difficult or impossible to estimate at the beginning the number of resources needed to accomplish the task. For example, if you’re allocating resources for managing an oil spill or leak, you cannot foresee the oil output or temporal evolution. This makes resource allocation doubly difficult.
Flexibility and scalability should be the focus of the swarm-bots deployed to handle such tasks. You can add or remove robots as needed to give the right amount of resources according to the evolving requirements of the job. Some applications include tracking, cleaning, and specific search and rescue scenarios.
Swarm robotics may be useful when it’s necessary to accomplish tasks within very large or informal environments. In these cases, you don’t have the infrastructure to control the robots, such as a global localized system or a communication network.
Swarm-bots fit the bill because of their ability to work autonomously without any infrastructure or centralized control system. Examples include:
Extraterrestrial or underwater excursions
Search and rescue missions
Certain environments may change rapidly over time, such as after natural disasters like hurricanes or earthquakes. Buildings may collapse, altering the original layout of the environment and creating unforeseen hazards. Here, swarm robots that are customized for high levels of flexibility will be needed.
Search and rescue
Disaster recovery tasks
How Swarm Robots Get Their Power
It only makes sense to have swarm robots powered by batteries. Experts recommend lithium polymer batteries because they provide high current output and energy density. They are also lightweight, flexible in format, and safe to use, as they resist overcharging. However, these types of batteries can be dangerous if not treated properly, so they must be protected from over/under-voltage, overcurrent, and overheating.
For a large robot swarm, it’s impractical to design them to be manually recharged. Instead, a module can be written to teach the robot to find a docking station for recharging when it runs low on power.
Consider that finding and docking at a charging station is a higher-level task than the swarm-bots typically do. Therefore, apart from the module, charging stations should be designed to be as intuitive as possible. For example, the inclusion of high-speed, two-directional communication between the computer and bot during recharging would be useful.
Part of the battery includes charging and discharging management to ensure battery health and safety. The discharge management circuits must be installed in the swarm bot for apparent reasons. However, the charging management circuitry may be placed outside the bot (in the docking station’s computer system).
There are upsides to external deployments, such as more straightforward bot design, which makes them cheaper to acquire. But if the aim is to maintain a bot’s autonomy within the swarm, then it must be equipped with all necessary tools to enable proper functionality.
Charging is central to a bot’s functionality, so it makes sense to have both charging and discharging management systems within the bot.
How Swarm Robots Connect to the Cloud – Swarm Computing
For swarm robotics, you have autonomous micro-machines that need to communicate with each other and with the cloud when necessary. This evolution that brings together cloud computing with swarm robotics is called swarm computing, and it’s still in its infancy.
Swarm computing brings together cloud principles with network principles, to give rise to higher functionality and flexibility of swarms or IoT ecosystems. It focuses on increasing data sharing and mobility, as well as allowing temporary control of devices connected to the cloud.
The most visible advantage of investing in cloud robotics will be the ability to delegate more difficult tasks to higher-intelligence agents in the cloud. Cloud cooperation should enable swarm robots to, for instance, connect to the more intelligent bots in the cloud when meeting more difficult challenges. There should be real-time data processing, support, and response, whether by humans or robots, to inform the autonomous robots’ actions/responses.
Right now, we still need lots more extensive research to determine how to operate, manage, and deploy highly distributed cloud services. This will demand high levels of innovation and automation but will be essential given the proliferation of IoT and swarm intelligence.
Real-World Applications of Swarm Robotics
Even though swarm robotics and IoT is a relatively new field, only a few years old, different organizations are already diving headfirst into the field. Below are some examples of companies and organizations using swarm robotics to power various aspects of their operations.
DOD Micro-drones for Military Use
The military application of swarm robotics perhaps the most significant of all. The US Department of Defense has already demonstrated one of the largest micro-drone swarms in China Lake, California. The swarm showed advanced swarm intelligence, such as decision-making, self-healing, and adaptive formation flying.
Perdix drones, as they are called, work as a collective organism, sharing a distributed brain that enables them to adapt to each other and make decisions to benefit the entire swarm. Without a leader, the swarm adapts gracefully to drones leaving or entering the team.
Ideally, the Pentagon hopes to use these small, cost-effective, and autonomous drones to accomplish the same things they used large, expensive drones to do. However, they were keen to mention that drones will not replace humans in the future battlefield. Instead, they would equip humans with information to make better decisions faster.
Inspired by biological phenomena, Wyss Institute researchers are developing RoboBees prototypes, which can perform various disaster relief and agriculture-related tasks. A RoboBee is very small, half the size of a paper clip, and weighing 0.1 grams or less. Its flight is powered by “artificial muscles,” which are materials that contract when exposed to voltage.
Some RoboBee models can swim underwater or fly, as well as “perching” on surfaces using static electricity. Researchers wanted to create micro-aerial, autonomous vehicles that could achieve self-directed flight and work coordinately when in large groups.
RoboBees can be used to assess infrastructural damage after a natural disaster or act of terrorism, as well as locate victims for smart rescue efforts.
Cost-Effective Modular Robots
A research team at the Department of Mechanical Engineering at the University of Toronto developed a modular robot called mROBerTO. Modular robots are bots that can autonomously change shape and perform different functions.
Such abilities are essential to swarm robotics research, where thousands of small bots are needed to test out behavior algorithms and functionalities. For these miniature robots to be cost-effective, it would be necessary to make sure each unit costs as little as possible. Otherwise, the cost of research would be prohibitive, holding back the advancement of the field.
Enter mROBerTO, a modular robot that can be made from commonly available and affordable materials. mROBerTo can be used for a variety of applications calling for miniature swarm robots, although its primary purpose was to give swarm robotics researchers cheap physical tools to test out swarm behavior algorithms.
These robots are designed in such a way as to enable researchers to be able to change hardware parts to test our different algorithms, shapes, and functions using the same robot skeleton. The modular millirobots are made such that changing one section/module doesn’t affect the functionality of the other sections.
Future of Swarm Robotics Research
There are hundreds of possibilities for swarm robotics research across many different fields. Theoretically, the technology will be useful in areas where human intervention would be impossible (e.g., nanomedicine) or too dangerous (e.g., search and rescue, nuclear reactors, chemical plants, mines, etc.).
However, this will only be possible if researchers finds ways to build robot swarms cost-effectively. This is the line of thinking the makers of mROBerTO above adopted (although at $60 each, the cost of a swarm of 100 robots is $6,000, which is still high).
Similarly, most of the current robotics research has been carried out in controlled lab environments, which do not mimic real-world constraints. It will become crucial, then, to find ways to take swarm robotics out of the lab and into the real world, particularly since most applications will require high flexibility of the swarms in rapidly changing environments and without external intervention.
A joint team of researchers from the University of West England and the University of Bristol is currently working on techniques to develop autonomous discovery of suitable swarm strategies when swarms are deployed in real-life situations.
Future research in this area will involve using dynamic environments to test swarm robot responses and determine the designs that will be better suited to real-world applications.
Swarm Robots: How Much Is All This Going to Cost?
This is a complex question because the cost of a robot swarm depends on so many factors, like:
Number per swarm
Level of autonomy
Level of flexibility/adaptability needed
For example, the University of Colorado wanted to acquire swarm robots called Droplets, which were self-charging and worked in groups of 100 or 1000. The estimated cost was $10,000 for just 100 Droplets in 2014.
It’s easy to understand why, despite its value, swarm robotics research is still out of reach for many businesses. Typically, the people who make these robots are expensive – they are computer scientists, computer engineers, or electronic engineers with advanced degrees. The parts that make these robots – motors, cameras, sensors, etc. – are also expensive.
Swarm robotics is set to become one of the most significant technological advancements we’ll see this century. Its applications, particularly in disaster recovery and management, are endless and powerfully significant.
Of course, swarm robotics research is still in its infancy for many applications, subject to different challenges you’ve learned about here. In time, as better technology becomes cheaper and more accessible, we will see swarm robotics becoming part and parcel of business operations and decision making — for the greater good.
Amazon.com Inc. said its holiday season this year was “record breaking” with billions of items shipped and “tens of millions” of Amazon devices like the Echo Dot sold. To learn about the impact of technology on retail M&A, click here for Mergers & Acquisitions’ series.
The e-commerce giant said that 5 million new customers started Prime free trials or paid memberships globally, while the number of items that were delivered with one-day or same-day shipping quadrupled compared to last holiday season. Independent third-party sellers, meanwhile, sold more than a billion items, Amazon said.
Amazon didn’t release specific sales figures, but its statement backs up broader reports that shopping — particularly of the online variety — picked up this year. Web sales in the U.S. during the holiday season grew almost 19% compared to last year, according to Mastercard Spending Pulse data, which tracked sales from Nov. 1 to Dec. 24. That’s more than five times greater than overall holiday sales growth, which was 3.4%. Online sales now make up almost 15% of total retail sales during the holiday, according to Mastercard.
The holiday season generates about a fifth of retailers’ revenue each year in the U.S., according to the National Retail Federation. It can be even higher for specialized companies like toy and game stores.
Big-box chains like Target Corp. and department stores like Macy’s Inc. are broadening their digital offerings with options like buying online and picking up in store, or BOPIS. While Mastercard data showed that overall sales for department stores declined 1.8% in the holiday period, e-commerce sales grew 6.9%. Specialty apparel, jewelry and electronics also registered e-commerce growth.
The number of records (personal and payment data) that was illegally accessed by computer hackers in Russia in 2019 has grown sixfold and reached nearly 170 million records, experts at the Russian information security company InfoWatch told Izvestia.
Globally, hackers have gained access to more than 14 billion pieces of data around the world this year – double what was seen in 2018, the company said.
Analysts believe that two-thirds of leaks in 2018 were deliberate and the share of these crimes in Russia is 40%.
InfoWatch experts predict that the trend towards rising data hacks will continue in 2020, with hackers stepping up their efforts to steal state secrets and valuable commercial data.
Data breaches in Russia’s banking sector account for 1 million or less than 1% out of the total number. According to Izvestia, this confirms that Russian banks are capable of guaranteeing a high level of information security.
In 2018, nearly half of the data leaks were blamed on staff and some 40% were caused by hackers and other malefactors. However, this year these breaches were mostly the work of hackers. In Russia, the share of hacker crimes is less than 20%, while the staff was responsible for more than 70% of data leaks. That said, a significant rise in leaks of email data is among the notable changes. This is mainly attributed to the growing popularity of phishing attacks on companies.
“I think in the future perpetrators will again be widely using email phishing,” said Andrei Arsentyev, head of Analytics and Special Projects at InfoWatch. “This is a stable trend. They will continue hunting for vital information and try to transfer corporate money to their accounts through fraudulent schemes,” he added.
A Russian rocket carrying communications satellites was launched into orbit from the Baikonur Cosmodrome in Kazakhstan on Friday, marking the country’s final space launch of the decade, Space News writes.
The rocket is carrying three Gonets-M communication satellites and a Blitz-M technology satellite to orbit and marks Russia’s 25th space launch this year. The Russian military reported later that the four satellites had been successfully placed into orbit.
Russia has launched a Rokot carrier rocket with 3 Gonets-M communication satellites and one more military satellite, the Russian Defence Ministry said on Friday.
“On Friday 27 December, at 02:11 Moscow time [23:11 GMT on Thursday], a combat unit of the Space Forces of the Aerospace Forces launched the light-class Rokot carrier rocket with several communication satellites of Gonets-M and a space vehicle for the Defense Ministry from the launchpad 3 of platform 133 of the Plesetsk spaceport, Arkhangelsk region”, the Defense Ministry’s press service told reporters.
Gonets-M is the second generation of the Gonets-system and is derived from Strela-3 satellites.
The three Gonets-M communication satellites and the military satellite were successfully placed into orbit, the Russian Ministry of Defence said.
This is the 25th space launch in Russia this year and also the last one for 2019.
Mergers & Acquisitionshas named the2020 Most Influential Women in Mid-Market M&A. This marks the fifth year we have produced the list. It’s been gratifying to watch the project evolve over the years – and become more influential itself. This year, we received more nominations than ever before. As a result, we expanded the number honored to 42 in 2020, up from 36 in 2019. We’re also pleased to welcome many newcomers to the list, such as Shoshana Vernick of Avathon. “Avathon stands for bringing people together to make a lasting impact,” says Vernick. Sterling Partners’ Education Opportunity Fund recently became Avathon Capital, which focuses on the education and workforce management sectors. Avathon invests up to $50 million in equity in deals, also said it has doubled its assets to $404 million since the firm launched in 2015. Read our full coverage of all the champions of change on our list, including Q&As with each individual.
Editor’s Note: Over the holidays, Mergers & Acquisitions will publish the M&A wrap column and our Daily Briefing newsletter on Monday, Thursday and Friday during the last two weeks of the year.
DEAL NEWS DraftKings Inc. is going public in a deal with former Hollywood executive Jeff Sagansky that values the sports betting firm at about $3.3 billion. The company agreed to be sold, alongside gaming technology giant SBTech, to Diamond Eagle Acquisition Corp., a publicly traded special purpose acquisition company. The combined gro up, which will house both DraftKings and SBTech, will trade under the name DraftKings Inc. Read the full story byBloomberg News: DraftKings goes public in a deal with former Hollywood executive Jeff Sagansky
Brookfield Infrastructure (NYSE: BIP) is buying broadband services company Cincinnati Bell for $2.6 billion. White & Case is advising Brookfield. Morgan Stanley & Co., Moelis & Co., Cravath, Swaine & Moore LLP, Morgan, Lewis & Blockius LLP and BosseLaw PLLC are advising Cincinnati Bell.
Sentinel Capital Partners has purchased ECM Industries from Genstar Capital. The target produces electrical products for the construction, maintenance and utility industries. Baird and Weil, Gotshal & Manges advised Genstar.
Mastercard (NYSE: MA) is buying RiskRecon, a provider of artificial intelligence and data analytics services that helps companies protect their cyber systems and infrastructure.
Diversis Capital Partners has acquired data and workflow technology company WorldApp.
DEAL TRENDS Technology giants are increasingly designing their own semiconductors to optimize everything from artificial intelligence tasks to server performance and mobile battery life. Google has the Tensor Processing Unit, Apple Inc. has the A13 Bionic and Amazon.com Inc. has the Graviton2. What the titans all lack, however, is a factory to build the new chips they are dreaming up. Read the full story by Bloomberg News: Behind Samsung’s bid for chip supremacy.
Material adverse change, or MAC, clauses are increasingly prevalent in M&A deals, finds a recent study conducted by Nixon Peabody. Out of the 200 deals the law firm reviewed, 196, or 98 percent, contained a MAC clause in the business, operations and financial conditions of the target, up from 87 percent in 2018. More buyers are seeking protection if a target suffers from an economic or industry downturn. Dick Langan, a partner in the law firm’s corporate practice, led the study. Mergers & Acquisitions asked Langan how buyers and sellers benefit from MAC clauses.Read the full story: Why you need a MAC clause in your next deal.
PEOPLE MOVES Bond Buyer executive editor Stephen Kleege is retiring as of Dec. 31. Kleege, who has been at Bond Buyer since 2013, previously spent time at National Thrift News covering the collapse of the savings and loan industry. He also spent about 12 years at Bloomberg News, where he edited real estate, economic and political news. Kleege also worked for American Banker for 10 years as a senior editor. American Banker and Bond Buyer are published by SourceMedia, owner of Mergers & Acquisitions.
FEATURED CONTENT With the holiday shopping season in full swing, all eyes are on the retail industry, which is undergoing transformational changes. Mergers & Acquisitions examines the impact of 7 technologies on M&A in the retail sector. Read the whole series:
Albertsons, Kroger Co. (NYSE: KR), Stop & Shop and Walmart (NYSE: WMT) are building automated mini-warehouses and “dark stores” to make deliveries and prepare pickup orders. Mini-warehouses are usually attached to existing stores, and in most cases, “dark stores” are completely separate. Both formats are closed off to customers, and are mostly automated. They use the assistance of robots for speed, save on labor, and get orders out faster. Kroger bought a five percent stake in robotics firm Ocado. Read our full coverage: Smart supermarkets become popular, as Kroger, Walmart add them.
The private equity model has held up very well over the decades, continuing to outperform the public markets, even as economic cycles come and go. But the rate of growth has slowed, leading PE firms to seek adjacent areas of business to expand. As PE firms face increased pressure to produce higher returns on their investments, many of them are turning to a familiar area of business: lending. Adams Street Partners, Balance Point Capital, Carlyle and VSS are all actively engaged in lending. Read the full story: Private equity firms are becoming lenders. Here’s why.
During the holiday season, Mergers & Acquisitions is covering the philanthropic and volunteer initiatives underway in the private equity industry. At Mergers & Acquisitions, we’re covering the philanthropic and volunteer initiatives underway in the private equity industry. Last year, we published The Big Give, an in-depth look at how private equity firms are contributing. Efforts have continued to flourish, fueled by younger Millennials seeking to build a better future and by mature partners considering the legacy they will leave behind. Read our full coverage: Private equity gives back: Vista’s Robert F. Smith, Clearlake’s José E. Feliciano, Riverside employees.
EVENTS The Annual AM&AAWinter Conference is taking place in Scottsdale, Arizona Jan. 8-10.
Deal Wave is being hosted by ACG Orange Country at the Ritz-Carlton-Laguna Niguel in Dana Point, California on Jan. 9.
ACG New York is hosting the 12th annual healthcare conference and bourbon tasting at the Metropolitan Club in New York on Feb. 27.
Uber co-founder Travis Kalanick has announced his departure from the ride sharing company, The Wall Street Journal first reported. Kalanick founded the company more than a decade ago and served as the company’s CEO until 2017.
“Uber has been a part of my life for the past 10 years. At the close of the decade, and with the company now public, it seems like the right moment for me to focus on my current business and philanthropic pursuits,” Kalanick said in the statement announcing his departure. “I’m proud of all that Uber has achieved, and I will continue to cheer for its future from the sidelines. I want to thank the board, Dara and the entire Uber team for everything they have done to further the Uber mission.”
Current Uber CEO Dana current CEO Dara Khosrowshahi expressed his thanks for Kalanick’s leadership. “Very few entrepreneurs have built something as profound as Travis Kalanick did with Uber. I’m enormously grateful for Travis’ vision and tenacity while building Uber, and for his expertise as a board member. Everyone at Uber wishes him all the best.”
Uber was founded in March 2009 and Kalanick became CEO in December 2010. He served in that role until 2017 when he resigned under pressure from investors. Kalanick and several other Uber employees had been accused of sexual harassment and gender discrimination leading to an internal investigation. Khosrowshahi was named CEO in August 2017 while Kalanick retained his role on the board.
Uber went public in May 2019 and closed at $30.33 per share before news of Kalanick’s departure hit. Uber’s stock value has dipped 33 percent from its IPO price as the company faces multiple legal challenges and tries to clear a path to profitability.
Kalanick has recently embarked on new investments with his own fund, 10100. He invested in a real state startup called City Storage Systems and became that company’s CEO. City Storage Systems is working on a project called CloudKitchens that turns retail space into leasable kitchens for chefs who want to start food-delivery businesses. CloudKitchens has reportedly been valued at $5 billion by Saudi Arabia’s sovereign-wealth fund.
Global trade has been dominating the headlines all over the world recently. The tension between the US and China has resulted in 2019 seeing the slowest pace in global growth since the 2008 financial crisis.
However, there’s something else that deserves equal attention when discussing global trade these days, and that is how innovative technologies of the Fourth Industrial Revolution are transforming it, bringing efficiency and dynamics to the table. Global trade has never been more dynamic than it is today – new types of providers are emerging, banks are digitalising their internal processes, and innovative technologies are entering the arena. Roberto Azevedo, Director-General of the World Trade Organisation, noted that, “From the invention of the wheel to the railways to the advent of containerisation, technology has constantly played a key role in shaping the way we trade – and this phenomenon is accelerating like never before.”
In recent years, various innovations such as optical character recognition, radio frequency identification, QR codes and basic digitalisation of trade documents have improved the efficiency and reliability of global trade. What’s more, new, unprecedented developments such as the Internet of Things (IoT), artificial intelligence (AI), advanced robotics, 3D printing and Blockchain are unlocking many opportunities and changing the global trade system from many different angles: from reshaping consumer habits to increased product diversity, technological advances in cutting trade costs and changing the overall structure of the global trade – all of which are leading to an expansion in global value chains.
And what about the cross-border payments – an expensive, time-consuming and overall tense area for financial institutions? According to McKinsey, the elite consulting firm that advises many of the world’s largest and most powerful institutions, the global cross-border payment landscape is now at the centre of several trends that could fundamentally change competitive dynamics.
Today, everyone expects goods and services to move more quickly and across greater distances than ever before. The same goes for money: payments need to go from account to account faster – even instantaneously.
The World Trade Organisation estimates that as much as 80% of global trade relies on trade finance or credit insurance, making this sector of particular importance. As a result, the world of cross-border payments is undergoing a digital transformation, which is all about eradicating long delays, friction and eliminating high transaction costs.
Furthermore, cross-border payments are becoming a key driver of economic growth. According to McKinsey, the global payments market is expected to reach $2.9 trillion by 2022, and more than a half of this growth – $1.6 trillion – is expected to come from the Asia-Pacific region. It is estimated that the global cross-border payments market will grow by 74% by 2026.
According to Michelle Bullock, the Assistant Governor at the Reserve Bank of Australia, “Cross-border payments are widely regarded as an area in which significant efficiency gains exist. Current processes are slow and costly, involving significant compliance burden and a number of different financial institutions in different jurisdictions. New technologies and new business models could be used to address some of these frictions.”
One of the new technologies sweeping the cross-border payments system is Blockchain. It is estimated that investment in Blockchain technology will rise by 90% this year – from $1.5 billion to $2.9 billion. This impressive rise is driven by a huge interest in how Blockchain and smart contracts could facilitate cross border payments, making them faster and requiring fewer intermediaries.
Even though at first glance Blockchain technology might seem hard to understand, it’s actually not that complicated. Essentially, instead of completing several steps, Blockchain provides direct transactions between the sender and the receiver, whilst also storing all the related data in a secure distributed ledger.
Deloitte, a leading global advisory firm, estimates that business-to-business and person-to-person payments with Blockchain result in a 40–80% reduction in transaction costs and take an average of 4–6 seconds to finalise, compared to 2–3 days using the standard transfer process.
The International Data Corporation (IDC), the world’s leading market research company, noted that “Blockchain is maturing rapidly, and we have reached an inflection point where implementations are moving quickly beyond the pilot and proof of concept phase.”
Several financial institutions, including the Bank of America, HSBC, the Infocomm Development Authority of Singapore and Barclays, seem to have already figured out that Blockchain might just be the future of the cross-border payments system. And a group of European banks have also joined forces, launching a trade finance Blockchain platform in July 2018. That same year, the Hong Kong Monetary Authority announced plans to launch a trade finance Blockchain platform as well.
Trade organisations such as the Dubai Chamber of Commerce and Industry have also launched an initiative to leverage Blockchain technology to address the main global trade and cross-border payment issues – high costs, lack of transparency and security.
It turns out that Blockchain can solve all these problems, and provide significant advantages to both businesses and consumers. Blockchain-based payments are cost-effective, almost immediate, secure and transparent.Christine McDaniel, international trade economist and a former senior economist with the White House Council of Economic Advisers, commented that, “A large number of intermediaries and corresponding administrative costs in trade finance tend to fall particularly hard on SMEs and the relatively higher cost of each transaction makes SME financing less attractive to banks. If Blockchain can reduce the costs of trade finance, more small and medium-sized businesses could trade globally.”
Due to strict collateral needs and credit history checks, as many as 50% of all SME funding applications are rejected by banks today. This has resulted in a $1.5 trillion gap in trade finance.
Blockchain can change that, Not only can it help expand the pool of companies that can access trade finance, but it also has the potential to bridge the trade finance gap. Furthermore, as we already know, cross-border payments is a centuries-old business that has progressed very little throughout the years – it still follows certain procedures and processes and is heavily paper-based. Kerstin Braun, president of Stenn Group – a provider of trade finance – noted that, “On average, a cross-border transaction requires the exchange of 36 documents and 240 copies.”
But that’s about to change. Corporates, banks and financial technology companies are now endeavouring to develop a proof of concepts (POCs). These efforts are concentrated on using smart contracts to digitalise trade documents and register these new documents into the Blockchain.
According to McKinsey, Blockchain can help to reduce up to 20% of the actual physical paper costs associated with global trade. Tim Cummins, president of the International Association for Contract and Commercial Management, says that,“Many of the documentary contracts currently used in trade finance could eventually be replaced by self-executing smart contracts that run on Blockchain. This would mean contracts could be executed quicker and more simply, for instance when someone speaks into their phone to confirm shipment.”
At the end of the day, global trade is initiated by individuals connecting with one another. Up until now, it was based on a handshake. But as the future of global trade and cross-border payments is, indeed, digital, that handshake will indisputably and increasingly be taking place in a digital universe.