- Better Odds
- 🔮 Welcome to the Rodeo — #119
🔮 Welcome to the Rodeo — #119
Let's get 2024 started.
And welcome back to getting Sunday emails.
I always underestimate the impact of taking time off. I love my work. But like any relationship, I love it more when we spend time apart.
It also gave me some time to think about the upcoming year.
When I started writing these emails in 2018, finding at least three things with a potential impact to change the world every week was often challenging. I spent a lot of time researching obscure sources — learning a lot.
Today, with everything that goes on in the world, I struggle to include everything I want to share. The newsletter has been getting longer and longer, and I still make cuts every week, especially in the news section.
When I select stories, I will …
Assume you read the general news. I might decide to dive deeper into something occasionally, but I will try to avoid reporting what everyone else is reporting. (Also, you should read the news).
Bring personal reflections. I will try to give you more than just a summary; I’ll share my thoughts, insights, and the implications of the events and learnings we discuss.
Aim to highlight underreported stories. I’ll focus on significant yet disregarded topics, trying to provide insight into less commonly discussed but equally important issues.
If you have stories you think I should report on, please pass them on. Most of the time, when people share stories, they make it into the newsletter.
You can reach me by replying to any of these emails.
Let’s get this started, shall we? Enjoy the reading!
📍Five Small Things
Watch — Rewatch The West Wing.
Read — Bringing True Strategic Foresight Back to Business by Amy Webb for Harvard Business Review.
Do — Download your LinkedIn profile as a PDF, upload it to Chat-GPT, and ask for potential improvements.
Resource — Better Odds made a memo about Geopolitical Tension as a Business Risk. You can download it here.
Hack — Did you know there’s a secret character called a Soft Hyphen, or SHY, that isn’t visible to the observing eye but gives you the power to impact where your words break when you write online? Since you cannot see a SHY, they can be hard to find when needed. You can copy one from this link.
🇸🇪 — Me and my friend Elin have launched our podcast, Change or Die, interviewing leaders about how they navigate a changing world. You can listen on Spotify here.
🗞️ The News Section
Houthi Attacks in Red Sea Trigger Production Pauses for Tesla and Volvo
The continuous attacks on commercial shipping by Yemen-based, Iran-backed Houthi fighters have significantly restricted the flow of goods between Asia and Europe. This has forced Tesla and Volvo to adjust their European production strategies.
Tesla has temporarily ceased nearly all manufacturing activities at its Berlin facility for two weeks, beginning January 29, due to a shortage of essential parts. This interruption in their production line is directly linked to the ongoing situation in the Red Sea region, where Houthi rebels have been actively disrupting maritime trade routes.
Simultaneously, Volvo Cars has indicated a three-day halt in production at its Ghent plant in Belgium. This decision originates from the altered sea routes caused by the conflict, leading to a significant delay in the delivery of gearboxes, a crucial component for their vehicles.
In response to the attacks, a United States-led coalition has initiated more than a dozen strikes against Houthi targets in Yemen, aiming to limit further maritime disruptions. However, this military action has led to an unintended escalation in shipping risks, making many companies reroute their vessels around the Horn of Africa. This detour has resulted in heightened costs and substantial delays.
Tesla’s and Volvo’s production pauses indicate a broader potential wave of disruption that could sweep through European manufacturing, a sector still struggling to recover from the COVID-19 pandemic and the economic impacts of Russia’s war in Ukraine.
As these events unfold, other automotive giants like Volkswagen, Renault, and BMW closely monitor the situation, although they have not yet reported significant production issues. Volkswagen, in particular, has been proactive in coordinating with shipping companies to mitigate the impact of these delays.
The United States Approves Bitcoin ETFs, Opening Crypto Investment to Wider Audience
The United States has greenlit the inclusion of spot Bitcoin exchange-traded funds (ETFs) in mainstream investment portfolios. This pivotal decision allows a broad spectrum of investors, ranging from pension funds to the average Joe, to dive into Bitcoin investing easily.
Despite this progressive step, the US Securities and Exchange Commission (SEC) issued a word of caution, highlighting the inherent risks tied to Bitcoin. The asset’s volatile and speculative nature and notoriety in facilitating illicit activities remain a concern.
The SEC’s approval is expected to channel a significant influx of capital into the Bitcoin market, potentially impacting its value. Bitcoin’s journey has been a rollercoaster of highs and lows. From reaching nearly $70,000 per coin in 2021 to plummeting to $16,000 in 2022 and then climbing back to $44,000 in 2023, its price trajectory mirrors its volatile nature.
This decision is expected to fuel a renewed interest in cryptocurrency technology overall. However, it’s met with mixed reactions. Some view it as validating Bitcoin’s status, while others argue it strays from the original vision of a decentralised, people-powered financial system.
For potential investors, the risks are clear. Bitcoin’s price is notoriously unpredictable, cyber-crime remains a significant threat, and environmental concerns due to its high energy consumption persist. As the world of Bitcoin ETFs unfolds, these factors will undoubtedly play a crucial role in shaping its future.
Russia Suspected in Widespread GPS Interference in the Baltic Region
In recent months, the Baltic region, particularly Sweden, Poland, and parts of Finland, has been experiencing ongoing disruptions to its GPS systems. These incidents, first reported around mid-December 2023, represent some of the most extensive GPS disturbances ever recorded in the area. The disruptions peaked during Christmas, notably affecting satellite navigation crucial for air and maritime traffic.
Experts are now pointing out Russia as the probable source of these disruptions. They believe these actions respond to geopolitical tensions, specifically citing the activation of a US anti-missile system in northern Poland and Sweden’s strides towards NATO membership. In 2022, Russian President Putin openly threatened Finland and Sweden with a potential invasion if they pursued NATO membership.
The nature of these disruptions varied. Some involved jamming GPS signals to deny service, while others were more sophisticated, involving spoofing. Notably, the phenomenon of “circle spoofing” was observed. This technique manipulates GPS receivers to show incorrect locations, leading them to circular patterns. This was particularly concerning in aviation, marking this sector’s first reported instance of spoofing.
These ongoing GPS disruptions have raised significant concerns in international aviation and maritime communities. They underscore the vulnerability of critical navigation systems to external interference, posing risks to safety and operational efficiency. The International Air Transport Association and other global bodies have stressed the need for international cooperation to address and mitigate these risks.
While experts are still analysing specific details and the full extent of the disruptions, the incidents highlight the increasing frequency of GPS interference in conflict zones and the complex nature of modern geopolitical conflicts.
OpenAI Faces Legal Challenges Over Copyright and Non-Profit Status
OpenAI, the developer behind innovative AI tools like ChatGPT, is under considerable scrutiny. They’ve openly admitted that creating such advanced AI models without using copyrighted material is virtually impossible, given the extensive scope of copyright coverage. This admission comes amid rising legal challenges. Notably, the New York Times and Microsoft have sued OpenAI, accusing them of illegally using their content. Other prominent authors and companies like Getty Images have also filed lawsuits against OpenAI and related AI firms.
On another front, OpenAI’s commitment to its non-profit status is being questioned. Public Citizen, a consumer advocacy group, has called upon California’s Attorney General to investigate OpenAI. Concerns have been raised about OpenAI potentially prioritising profit-making through its for-profit subsidiary, Open AI Global, LLC, which would be contrary to the principles of a non-profit organisation under California law. This subsidiary has been valued at $86 billion, perhaps exceeding $100 billion.
The situation is complex, with OpenAI balancing the intricate demands of copyright law, their non-profit status, and the burgeoning field of AI development. This combination of legal and ethical issues presents a challenging landscape for OpenAI, reflecting the broader tensions in the rapidly evolving AI industry.
📈 The Insights Section
China vs United States Conflict Over Taiwan Could Trigger $10 Trillion Global Economic Crisis
In a recent analysis by Bloomberg Economics, the potential economic fallout from a conflict over Taiwan involving the United States and China has been estimated at a staggering $10 trillion. This figure is nearly double the impact of the COVID-19 pandemic and the 2008 Global Financial Crisis, each reducing global GDP by about 5.9%.
The study considered two scenarios: a direct invasion of Taiwan by China, leading to US involvement, and a scenario where China imposes a blockade on Taiwan. The primary economic damage would stem from disruptions in the global semiconductor supply (Taiwan being a major producer), regional shipping, trade sanctions, tariffs, and the overall impact on global financial markets.
As tensions between China and Taiwan escalate, the outcome of Taiwan's presidential election has been closely watched by Chinese President Xi Jinping. The victory of the independence-leaning Lai Ching-te is causing significant concern in Beijing.
According to the analysis, Taiwan's economy could shrink by at least 40% in the event of an invasion, exacerbated by its geographical vulnerabilities. This would likely prompt major trade partners, including the United States, to cut off most trade with China, leading to a predicted 17% decrease in China's GDP, equivalent to around $3 trillion. The United States would also suffer economically due to its reliance on Taiwanese semiconductors, with a projected 6.7% reduction in its GDP, amounting to $1.7 trillion.
Other regions like South Korea, Japan, and Southeast Asia would face substantial economic setbacks, contributing to a 10.2% decrease in global GDP.
If China instead were to take a financial, rather than military, approach, a year-long blockade of Taiwan by China would have severe consequences for Taiwan's trade-dependent economy. The Taiwanese economy is expected to contract by 12.2% in this scenario. Such a blockade would have a significant yet comparatively lesser impact on the economies of China, the United States, and globally, reminiscent of the effects of the Great Recession and the COVID-19 pandemic.
Climate Change the Main Concern in 10 Years According to The World Economic Forum’s 2024 Global Risk Report
For 19 years, the World Economic Forum has been publishing a Global Risk Report every year. You can download the 2024 edition here.
If you’ve thought the last few years have been unstable, that is, unfortunately, nothing compared to what is ahead of us. According to the report, the short-term (2 years out) and the long-term (10 years out) look increasingly turbulent.
While the short-term concern is Misinformation and Disinformation, the long-term risks are all connected to the climate.
Suppose you’ve ever considered increasing your engagement and working more actively for a better world. Now is the time.
Tech Industry Sees Major Cutbacks in Diversity and Inclusion Efforts During 2023
In 2023, the tech industry witnessed a significant reduction in its diversity, equity, and inclusion (DEI) programmes, starkly contrasting the increase in commitment these companies demonstrated following George Floyd’s murder in 2020 and the Black Lives Matter movement.
Notably, tech giants such as Google and Meta scaled back their DEI efforts, which included making redundant DEI staff and leaders of diverse employee resource groups, reducing learning and development programmes, and cutting budgets for external DEI groups by as much as 90%.
This decline in DEI initiatives coincided with a 44% drop in DEI-related job postings from the previous year and a 23% decrease in November 2023 compared to the same month in 2022. This downturn was especially notable given the nearly 30% increase in such postings from 2020 to 2021.
Experts warn that reducing DEI initiatives, particularly when AI development advances rapidly, could lead to less inclusive and potentially biased AI products. The lack of diversity in AI development teams is a concern, as it may result in technology that fails to represent or even harms underrepresented users.
The trend also affects the broader effort to create more equitable and diverse workplaces within the tech sector.
Stanford Study Finds No Rise in Cheating with ChatGPT in High Schools
Education, Artificial Intelligence
A recent study by Stanford University, surveying students across 40 high schools in the United States, has uncovered that the advent of ChatGPT, an AI chatbot tool developed by OpenAI, did not lead to an increase in cheating among high school students. Despite fears that led some high schools, including those in central districts like New York City and Seattle, to implement strict policies against using ChatGPT, the study found that cheating rates remained steady. Approximately 60% to 70% of students reported engaging in cheating, consistent with or even slightly lower than rates before ChatGPT’s introduction.
ChatGPT gained viral attention in November 2022 for its ability to quickly generate convincing essays and responses, raising concerns about its potential misuse for plagiarism and its ability to spread misinformation and perpetuate biases. Despite these concerns, the Stanford survey highlighted that students viewed ChatGPT as a tool for generating ideas or concepts for assignments rather than writing entire papers.
The study revealed that students cheat due to difficulties with subject material, time constraints, and pressure to achieve high grades. As the conversation around AI in education evolves, the study’s lead researchers, including Denise Pope, a senior lecturer at Stanford’s Graduate School of Education, emphasised the importance of how schools approach AI as a topic and a tool in education.
The initial response from schools to ChatGPT was cautious, with some districts banning the tool on their networks and devices. However, this stance is changing, with more schools encouraging AI tools in education. For example, some institutions, like Vanderbilt University, offer university-wide training and workshops on generative AI.
Study Reveals Fireworks Cause Massive Impact on Bird Behaviour on New Year’s Eve
In a significant study about the impact of fireworks on wildlife, researchers found essential details on how these events affect birds. The study focused on New Year’s Eve in the Netherlands, where fireworks are widely used. It showed that fireworks increase the number of birds flying massively, with about 1000 times more birds in the air on New Year’s Eve than on other nights. This was measured using weather radar and counting birds systematically.
The effect wasn’t the same for all birds or in all areas. Larger birds reacted more strongly than smaller ones, and birds in open places like farms were more affected than those in woods or partly open areas. The effect of the fireworks was strongest within the first five kilometres and could still be seen up to about 10 kilometres away.
The study points out how human activities like fireworks can cause significant changes in wildlife behaviour, such as making birds fly like they would to escape predators. The researchers suggest creating large areas where fireworks aren’t allowed or having fireworks in city centres to help protect birds, especially the larger ones that are more easily disturbed.
This research is crucial in understanding how human celebrations affect wildlife conservation. It stresses the importance of considering and living harmoniously with our natural surroundings.
Thank you for reading. I hope you learned something new. ✨
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