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One of the constant challenges for Boards is to ensure that the urgent things get done – while also preserving space for the important things.

Traditionally, this has been achieved by delegating what’s urgent to executives, while keeping the important (strategic) decisions for the Board – and the important strategic decisions involve taking not only the recommendations of executives but also independent advice.

However, in view of current challenges, it is just probably necessary for the Board to have a more differentiated list of the key tasks that need to be done.

Boards need to keep an eye on ensuring that company executives are doing the following (going from the urgent to the important – i.e. going from what is much more actively the responsibility of executives, to what is much more actively the responsibility of the Board):

  1. Keeping up with government schemes to support businesses – e.g. furlough arrangements for employees.  Some executives are, for whatever reasons, disinclined to look to government help, not least because government regulations are normally cumbersome and long-winded.  In the current circumstances, however, it may be essential to tackle those.
  2. Cutting costs of course – indeed, slashing costs wherever possible! – but at the same time focusing on keeping employee morale high.  Depending on the culture of the company and the country/ region concerned, this may mean (apart from bigger structural business decisions) deciding on the mix of layoffs, furloughs, and proportional or disproportional pay-cuts across the whole workforce, including executives.
  3. Demonstrating concern about the physical, mental, spiritual and emotional health of your employees (including the manner in which news of cost-cutting is conveyed first to those directly affected, and then to everyone else in the company). That means not only any direct practical steps that executives take in relation to individuals and teams, but also (importantly!) being accessible, being open, and being vulnerable about the true situation of the company and its future. Of course, communication is key to that. Not least about the following points.
  4. Reconsidering the fundamentals of the company’s business:
    • all declines or increases in demand;
    • the sudden scarcity of capital, internationally;
    • the unexpectedly increased cost of capital, at the same time as bank rates have (paradoxically) declined even further;
    • changes required in the product-portfolio/service-portfolio/ infrastructure-portfolio mix,
    • changing competitive situation, and therefore:
    • if, and to the extent necessary or useful, bringing to the Board possible changes in mission/ goals/ structure/ operations and business strategy.
  5. Finding simple ways to delight, encourage and support your clients and your suppliers – who will all be feeling the stress of the current situation.  If you look after your current clients and suppliers as well as you can at this time, they will be your best ambassadors for the future.
  6. Keeping in touch with how they’re feeling and what they’re thinking will also help you to plan and scenario your business more intelligently: how many of your current clients and suppliers will change their business behaviour in the period immediately after Lockdown ends, and how many over what succeeding time-frame?
  7. Systematically keeping a wide view of developments in the entire business landscape (and not only in your immediate business areas!), will enable you to: (a) pivot your business model in advantageous ways, (b) spot opportunities for acquiring properties and businesses, and (c) consider entering into partnerships that may not have been even conceivable only a few weeks ago.

Does the current crisis, triggered by the Coronavirus pandemic, represent a one-in-a-lifetime threat?

Perhaps so, but it is also a unique opportunity for your company.

Whenever crisis-related developments enable governments to release us all to normal business, we will find that attitudes and realities are entirely different from what they were only a few weeks ago – whether in politics, in law, in finance, in business, among clients, in society or among technologists.

That is why, as you know, you need to re-evaluate all aspects of your business.

Core competencies and competitive situation need to be re-assessed, along with the entire vision, mission, strategy, structure, business portfolio, and operations.

This is the best possible opportunity to shed what is not going to be optimal for the future, and to re-focus our resources on the new directions and goals that will help take us to a bright future.

But the time to exploit this opportunity is right now.

A few of us may still be frantically busy putting out fires, but for many of us at least the routine pressures of daily business have been lessened.

So let’s use the opportunity to prepare for what we can already see will hit us immediately after this pandemic is over.

The companies that are best trained, equipped and motivated for the future are the ones who will win.


Interested?  Get in touch!


I was asked to give this lecture twice, once in the morning at a luxury hotel, and once in the afternoon at one of the most prominent Business Clubs.

The audience was an invited one – each participant was a person of some means, there were fewer women than men, involved in fields including technology, manufacturing, real estate, financial services, accountancy, law, and so on.

To my astonishment, hardly anyone was aware of even such ground-breaking announcements (that morning!) of the first-ever Quantum Computer available to purchase for use outside a laboratory, or (many months older) the controversial announcement of Quantum Supremacy by Google, or (still older!) the very first time that a Quantum Computer had been sold.

My greatest surprise was how few people were aware that quantum technologies are already in use – in fact, either they themselves, or someone close to them, had personally experienced the benefit(s) and disadvantage(s) of at least one quantum technology, but were unaware that that was a quantum technology.

The lecture covered also current developments of quantum tech in relation to fields such as: artificial intelligence/ machine learning/ deep learning, computer science, cybersecurity, financial services, chemistry, materials science/ nanotechnology, biochemistry, and life sciences.

I was not entirely surprised, therefore, that hardly anyone had thought about the consequences of quantum technologies for the future of business in general or even for their own field of work, for society as a whole, or for their own descendants or other people in the next generation to whom they were close.

The future of work (i.e. employment) and rather more philosophical questions did come up unprompted as matters for discussion, but the surprising topics that did not come up unprompted were: the future of the middle class, the future of democracy, and the future of civilization.

However, the discussions were rich, and the comments and questions of participants provided me much food for thought.

Thank you to all who participated.

PHOTO BY Steve Jurvetson from Menlo Park, USA; CC BY 2.0,


Companies need to have an overview of the implications of the arrival of quantum technologies.

This is my attempt at summing up my work on all this so far:

1. SECURITY: The largest companies as well as governments are working on protecting themselves from quantum disruption of existing security systems – whether they are working as efficiently and effectively as they should is a different question! But it is not clear to me that less-large companies are doing much to prepare for quantum disruption of their existing security systems. Whether your company is large or not-so-large, if you need (free) help with this matter, in terms of an outline of the sorts of things your company can do, drop me an email and I will send it to you for no charge and no obligation:

2. PRODUCTS: The largest telecoms companies and other large providers would have been expected to have got into the field by now, but (so far) there are only a very few companies that are involved – for good reasons, as well as not-so-good reasons. What that means is that less-large companies (if they have the will, and a 5-10 year horizon) can get into the field for a relatively small budget.

3. SERVICES: Very few companies are offering services in the field of quantum technologies, so this is also a field which companies (large and not-so-large) can start eyeing, if they have a 3-5 year horizon.

4. INVESTORS: quantum technologies are a field about which you certainly do *NOT* need to inform yourself if you are a short-term investor. I expect those who are NOT short-term investors to include governments, large companies, pension funds, reinsurance and insurance companies, but also *individual* investment analysts if they expect to work, of if their investment horizon is, beyond the next 3 to 5 years

5. EXECUTIVE DEVELOPMENT: If quantum computing is not already part of your curriculum, then you are programming your organisation for obsolescence in something like 5 years. If you want to avoid such obsolescence, do ensure that you include at least the following: the basics of quantum physics, an update on the current state of development in quantum technologies, and a discussion of the implications for your company.

6. RECRUITMENT INTERVIEWS: Do you already establish whether ALL potential recruits (including those who are intended NOT to work in IT) are at least somewhat up to date on quantum technologies? If not, do ensure that your company trains everyone involved with recruitment for your company both in the minimum they need to know, and for the best ways of checking on the level of knowledge and awareness of potential recruits.

7. TRAINING: Are basic modules on quantum technologies (quantum physics, and an update on the current state of development in quantum technologies) included in your training programmes for every recruit? Let me emphasise that that includes not only everyone working, and expected to work, *in* IT, but also everyone working, and expected to work, *outside* IT.

8. BUSINESS PROCESSES: Though some companies have indeed worked out the security-related implications of quantum technologies for each business process, I am concerned that very few seem to have done thought through the implications for each business process itself. The least your company can do is some scenario-planning in the light of developments in quantum technologies, given that it will probably take your company at least 3-5 years to implement changes in key business processes.

9. GOVERNANCE: There is huge discussion about relatively unimportant things like diversity in Boards, when essential developments such as AI and quantum technologies are being ignored. Adequate attention at Board level means asking at least the following:

9a. Do Board members have regular briefings (at least once a year) on latest developments in what I call “horizon technologies”? These include quantum technology and AI, though of course companies in different fields need to keep other specific business-portfolio-relevant “horizon technologies” on their radar.

9b. Has the Board created a mechanism for ensuring that there is an up to date dashboard of the portfolio of technologies in the company which are fully-integrated, those which are partially-integrated, those which are experimentally-integrated, those which are being evaluated for integration, and those which are being watched on the horizon? Is the key person responsible for each of these named, with at least 3 successors in line for each? Are the budgets for each of these adequate?

9c. How does the Board currently benchmark against key competitors the company’s level as revealed by the dashboard?

9d. Is the dashboard regularly vetted (at least every 6 months) by a qualified external board of experts?

9e. Is “technology-competence” adequately defined for members of the Board, members of the top Executive Committee, other senior executives, mid-level executives, and tech professionals? Are these definitions regularly vetted (at least every 6 months) by a qualified external board of experts? Are Board members and other members of the company regularly assessed in relation to the definitions of competence required at those levels? Are proper incentives in place to encourage company executives to keep up with the increasing levels of competence required? Are appropriate training and development opportunities in place?

I’ve probably missed at least one or two things in my summary and overview above.

Happy to have corrections/ amendments/ additions/ caveats/ questions. Best via an email to me:


It is clear to every intelligent observer that, in the next 12 months, global economic growth is highly uncertain, dependent as growth always is on two factors (investment and  productivity), which can be characeterised at present in the following way:


Right now, the gap between returns-on-cash and returns-on-equity has narrowed to the point that many investors have moved to cash.

In the immediately-foreseeable future:

EUROPE faces financial tightening and raised risks because of talk of an end to quantitative easing from the ECB, along with developments in Italy, and the UK’s Brexit now utterly mindbending “non-drama”.

INDIA is a stumbling horse, mainly because it is unclear how the current ruling party (which has been extraordinarily beneficial to its friends) will fare in the 2019 national elections.

CHINA’s government does seem willing to provide further stimulus … to slow down the deceleration of the economy, but not to enable any acceleration of it – at least, that is the only conclusion one can reach given the smoke puffs that emerge occasionally from Beijing: it is impossible to tell what China will do next or even to know what is really going on in the Chinese economy.

By contrast, the situation in the USA is relatively clear: The fiscal stimulus last year effected a short-term kick in the pants whose effect will dissipate over the next few months, and the outcome of the mid-year elections makes more of that sort of stimulus unlikely in the near future: very few American leaders are likely to supprort the inevitable widening of the deficit that will result.

Sooooo … as far as I can see, a recession in earnings will presage a decline in the real economy – pending (or, rather, when that follows!) productivity growth through the widespread application of new technologies.


if the prospects of growth due to investment appear poor in 2018, what about the prospects of growth due to increased productivity by the deployment of new technologies?

This is certainly a huge potential growth-ally, given most really impressive new technologies (e.g. AI and robotics, with quantum computing further away) remain merely on the threshold in most areas of business.

How then are you and I to have any sense of how fast – and perhaps even more important, how effectively – new technologies are being adopted?!

Well, there isn’t really any way of doing so at all, at present,

All we have are substantively meaningless charts such as the one at the head of this blog.

Why is that one “substantively meaningless” in terms of any useful indication of productivity increase for the economy as a whole?

First because it doesn’t indicate anything for the globe as a whole, or even for global regions, on indeed even for nations as a whole… because its rating of countries is on the basis of the “the share of Fintech users in the digitally active population”!

The “digitally active population” is ill-defined (is a child of 5 “digitally active”? Is a grandmother of 90 who use her computer only to skype her family “digitally active?).

Not everyone who is “digitally active” is also financially active (and that can mean anything upwards from “occasionally uses a bank or other debit or credit card”!)

In any case, even if 100% of the whole population of a country used fintech, that wouldn’t amount to much if the country concerned were, say, Afghanistan or Zimbabwe.

That is why we urgently need not merely indices such as we currently have, of “fintech adoption”, but a more fully thought-through “Global Index of New Technology Economic Impact” or #IndexOfNewTechGlobalImpact

None of the existing Productivity Indexes (Divisia, Geometric, Malmquist, Solow, Tornqvist, Translog…) do a good enough job of precisely what is needed in the context I have laid out above.

What should an adequate new Index do? It should assess the full impact on the global economy of productivity increases by the adoption of the newest technologies (including but probably not limited to AI, robotics, and quantum computing).  Initially, the Index will need to sector after sector, before moving to become genuinely global.  Perhaps start with Financial Services, then go on to Logistics, then Manufacturing, and so on.

At present, I can’t find a sufficient number of people interested in creating such an Index.

All offers of collaboration are welcome.

Researchers at Cambridge University’s Judge Business School have asked the interesting question:

Has hedge fund activism done in Japan what hedge fund activism seems to have done in the US: driven enduring change in US corporate governance (management effectiveness/ managerial decisions/ labour management) as well as in market perception?

Surprisingly, analysis of financial data by J. Buchanan, D. Chai and S. Deakin, shows *no* enduring changes in the three areas of corporate governance at all … and, moreover, that market perception was consistently UNfavourable – the *opposite* of what has happened in the USA.

They conclude that the same pressures don’t produce the same results in different markets: “country-level differences in corporate governance identified in the varieties of capitalism literature are robust, at least in the short term”.

All that is in the Judge Business School’s Working Paper 494 titled “UNEXPECTED CORPORATE OUTCOMES FROM HEDGE FUND ACTIVISM IN JAPAN” out a few days ago this month, and available on the website


The Economist Intelligence Unit’s report titled “Risks and Rewards: Scenarios around the economic impact of Machine Learning” examines that impact to the year 2030 in a select group of countries: Australia, Japan, South Korea, the UK, the USA and what it calls “Developing Asia” (no explanation is provided of this term).

For these countries, the report looks at four industries, and three scenarios:

In Scenario #1, governments invest more in upskilling (the report doesn’t say how much more). If governments invest, every country or grouping covered does benefit, but some more than others: the rate of growth of GDP in Japan might rise from 1.57% to 1.96%, in South Korea from 1.79% to 2.07%, in Developing Asia from 4.34% to 5.04%, in Australia from 1.03% to 3.11%, in the UK from 0.63% to 1.29% and in the US from 1.84% to 2.04%.  In other words, there is wide spread in the impact.  Australia would gain the most.  That’s primarily because of demographics, and the shift of the economy from being at present based primarily on commodities to becoming based on services. However, for most countries, if governments were to change current policies and make massive investments in education, the economic gains would not be huge, but wouldn’t be marginal either.

Scenario #2:  What if government invested instead in access to open source data, and provided tax credits to spur private sector adoption of machine learning?  In such a case, the rate of growth of GDP in Japan would rise to 2.43%, in South Korea to 3.00%, in Developing Asia to 6.47%, in Australia to 3.74%, in the UK to 1.94% and in the US to 3.00%.  That seems to suggest that it is better for governments to invest in such things than in education.

Scenario #3: On the other hand, what if governments continue their current inaction?  The forecast then would be a drop in the Japanese economy to 0.53%, in South Korea to 0.02%, in Developing Asia to 3.20%, in Australia to MINUS 0.24%, in the UK to MINUS 1.20% and in the US to 0.84%.  If one avoids percentages and instead quantifies the cash impact, the study shows the US and Developing Asia losing about $3 trillion, UK becoming US$420bn smaller, and the Australian economy shrinking by US$50bn.

The EIU points out that “sound analysis and information of the issue (of machine learning) appears to exist on the outside of a broad core of misunderstanding and misinformation, a situation that ultimately benefits no one” and it offers the report as a contribution to “grounding the discussion in reality”.

Sadly, the grounding is in an inadequate reality:

– though the report acknowledges concerns around privacy, it doesn’t quantify the impact of hacks;

– while the report decries the “unshakeable confidence” of the tech-utopians, it doesn’t say whether the report takes into account the impact of social security payments on GDP; and

– it doesn’t examine the question of how much, over these next 12 years, will be the rise in unemployment.


A friend draws my attention to the “real belief system behind bitcoin” which becomes apparent when one asks questions such as the following:

1. Why should you allow yourself to be profiled on the basis of what you eat/ wear/ say on the internet?
A Bitcoinist believes that buying things from an encrypted wallet shields one from this kind of profiling, in a way that is impossible when one uses a credit card.

Well, that is true. But you don’t need to go to the bother of shopping in Bitcoin if that is your purpose. Simply buy in cash from real shops, preferably independents.

2. Why should anyone looking for funds be subject to banks/ VCs for loans?
Bitcoinists believe that the crowdfunding potential of bitcoin makes such “subjection” unnecessary.

Well, yes, crowdfunding can be in Bitcoin or any other cryptocurrency. But it could instead be in dollars or other fiat currencies. Or, of course, in cash.
BTW, I have come across some real shark-like behaviour on the part of Bitcoinists, while I have also come across very humanitarian behaviour on the part of non-Bitcoinists. And vice versa of course. There is no correlation between use or non-use of Bitcoin and “subjection”.

3. Should you and I face “a lifetime of servitude, taxes and depreciation of hard-earned money?”
This raises 3 separate issues, related by attitude. A Bitcoinist believes that s/he can, by using Bitcoin:
(a) escape “servitude”
(b) escape taxes, and
(c) escape the depreciation of financial value by holding Bitcoin rather than fiat currencies such as US dollars.

Are those beliefs reasonable? Not really.
(a) “servitude” arises from other factors, unrelated to whether or not one holds Bitcoin;
(b) there is no indication anywhere that Bitcoin will avoid taxation if it becomes more widely used. In fact, the contrary is the case: the more widely Bitcoin and other cryptocurrencies come to be used, the more likely they are to be banned or taxed;
(c) rather than Bitcoin and other cryptocurrencies being a store of value, the fact is that the risk involved in holding them is absolute, while the risk of holding fiat currencies such as the US dollar is relative. That is to say, the volatility in the value of Bitcoin and other cryptocurrenices is far greater than the volatility in the value of fiat currencies such as the US dollar.
That’s apart from considerations such as: cryptocurrency exchanges have been hacked; and cryptocurrencies can be banned or regulated by governments at any moment.

it is fun to gamble on Bitcoin and other cryptocurrencies.

But it is a gamble, not an investment.

If you like to gamble, and can afford to gamble, go right ahead.

But don’t fool yourself into believing that it is an investment.

It could be that believing “Bitcoin is an investment” constitutes the new religion of the 2010s.

Mainstreamed or dead?

Posted by Prabhu Guptara | Uncategorised

2018 is the critical year when Bitcoin and associated technologies, will either mainstream or die.

Last year (2017) was significant because of the mega-bubble in the financial value of Fintech and, more broadly, the continuing efforts to apply blockchain or DLT (Distributed Ledger Technology).

I do not mean that such technologies will necessarily rise or die together (though the fortunes of e.g. Bitcoin will undoubtedly have an impact on the fortunes e.g. of Ethereum). It is totally possible for Bitcoin and other currencies to take a nosedive, while blockhain/ DLT marches on unhindered.

There have been many efforts to mainstream fintech in 2017. In my view, the most significant was the decision by the Australian Stock Exchange (ASX) to ditch its existing CHESS system for recording changes in shareholdings. ASX is replacing CHESS with a blockchain technology, Digital Asset, brought in from Digital Asset Holdings (DAH).

Intriguingly, ASX invested A$14.9 million in DAH in January 2016 (presumably in order to at least partly finance the development and testing of the technology) and further subscribed US$3.5 million in convertible notes only a month ago (presumably on the technology passing the tests required to make it eligible for public deployment).

The DAH system will operate for ASX, as might be expected, on a secure private network.  Further, it will be open only to participants who are all known to each other in the network.  And even these participants will have to access the system only the basis of legal contracts which commit them to enforceable obligations.

In other words, all the costs for participation in the system are up-front and are relatively minimal to participants, while the potentially massive financial savings from the system will be shared by everyone – though of course the lion’s share of the benefit will go to ASX, primarily because it owns the system but partly through the returns it will make because of the increased credibility, marketability and profitability of DAH, in which it now has a considerable stake.

ASX’s CEO, Dominic Stevens, has therefore bet his own future, as well as the future of ASX, on this new technology, even though the technology will at present provide “only” post-trade records (technically called “clearing and settlement”) for buyers and sellers of equities or shares.

Most enthusiasts of particular technologies operate on the belief that the newest technology is going to win. Such a belief often turns out to be the case but the belief is worryingly often not borne out in reality.

Naturally, enthusiasts have to operate on the basis of their beliefs, even if those beliefs are not necessarily true, usually because such enthusiasts have committed their financial futures to the success of particular technologies or tech solutions.

This also applies to CEOs who sometimes “bet the farm” on a particular reorganisation or a particular strategic direction or even a particular product, as Dominic Stevens has done.

If the Digital Asset technology succeeds, that will indeed make ASX a technological and financial leader among Stock Exchanges. And it will make Stevens a very rich man.

However, the Achilles Heel of Stevens’s entire project is whether the DAH technology will be hacked. In theory, DLT is unhackable. In practice, DLT-based projects have often been hacked.

My best wishes to Stevens and to ASX for the success of their bet.

So Bitcoin’s been a bit of a wild ride recently.

Not surprising, you may say, since high-profile investors such as Overstock CEO Patrick Byrne and Mike Novogratz have predicted something like $1 million for the price of a single Bitcoin by the end of 2020 – and, despite the recent gyrations in the price, John McAfee tweeted on 26 December that he still stood firmly by such a prediction.

On the other hand, “Bitcoin is an implausible currency; it’s not competitive as a payment system, so maybe its value is as money, but it makes terrible money” was the view expressed on 27 December by Bloomberg View Columnist, Megan McArdle, who is also the author of “The Up Side of Down: Why Failing Well Is the Key to Success”.

So perhaps Bitcoin is simply learning to “fail well”?

Interesting question.

What might it mean for a currency to “fail well”?

I guess you could argue that it would “fail well” if it failed without a crash.

In the case of Bitcoin and related currencies, we are talking about a market cap (depending of which second of which hour of which day it is!) of something like $600 billion.

That would be a pretty major crash in itself. About the size of Lehman Brothers, which transformed the merely financial crisis which started in 2007 into the full-blown banking crisis which started in 2008 – and from which the global economy is not yet recovered.

So the question is: will any Bitcoin-sized crash then also spread to other stocks, since many players are apparently unduly exposed and will therefore become bankrupt?

Anything like that would undoubtedly impact the “animal spirits” of today’s market, spreading to commodities and currencies and perhaps even real estate. I accept that it is impossible to say which will spring how much in which direction.

However, I’m afraid I’m not with the Nobel laureates and national governments who have warned that this bubble will lead to a crash simply because nothing underpins the value of cryptocurrencies such as Bitcoin. I disagree with them because, in fact, nothing like value now underpins the WHOLE of the global financial market.

In other words, we are headed into a crash because the entire global financial market is (a) wildly over-liquid and (b) therefore driven primarily by sentiment, confidence, mood, and momentum.

Such a market is by its very nature going to swing from boom to bust as individuals and institutions rush, at any and every hint or rumour, first herd-like in one direction, and then in another.

That’s why the global financial market urgently needs reforms such as those which I and others have discussed elsewhere, with the aim of returning financial markets to at least some sort of alignment with the world of real business and real profits.

Meanwhile, the best way for Bitcoin and related currencies to “fail well” would be to decline gently. All institutions and individuals have a role to play in ensuring that happens.

If it doesn’t, then we are in for a much worse crisis than that which started in 2007.

The real worry is that global governments and other institutions were far better equipped to deal with the 2007 crisis. Today, they are hardly equipped at all to deal with a crisis the size of Bitcoin.