Institutional investors add risk: outlook more positive for 2021 – Research

LONDON (Reuters) – A rotation by sovereign wealth funds and other institutional investors to add risk since the COVID-19 pandemic, moving from cash and bonds to stocks, may have further to run as many still have large cash positions, according to research published Thursday.

Investors had a more positive outlook for 2021, having reached a risk-neutral level across asset classes after starting last year with the highest cash levels since the 2009 financial crisis, the research from State Street Corporation and the International Forum of Sovereign Wealth Funds (IFSWF) found.

Many are also adding to their exposure within private markets, with a particular focus on infrastructure and real estate, hastened by low real returns in public markets, according to the findings, based on State Street data and an IFSWF survey of seven of its largest sovereign fund members.

For example, sovereign fund investments in private markets more than doubled during 2020 to $50.3 billion, IFSWF data showed, in part due to funds helping out their portfolio companies hit by the pandemic.

“The current macroeconomic environment, anticipated fiscal stimulus and portfolio positioning of institutional investors and sovereign wealth funds present reasons to be optimistic as we move further into 2021,” said Neill Clark, head of State Street Associates, Europe, Middle East and Africa at State Street.

There was a marked uptick in interest in U.S. equities in 2020, with IFSWF data showing over $16 billion invested across 46 deals in 2020, up from $2 billion across 28 deals in 2019.

The rise was largely due to Saudi Arabia’s Public Investment Fund’s countercyclical investments in energy, consumer and financial sectors at the peak of the crisis in the second quarter.

Institutional investors also scaled back investments in emerging markets and withdrew from investments in Britain during 2020, according to the research.

Still, IFSWF data indicated an uptick in sovereign fund investments in the country to $4.4 billion in 2020 compared with $1 billion in 2019, almost two-thirds in private markets, as funds eyed deals in the battered economy.

With assets such as global stocks and bitcoin near record highs, talk of bubbles in certain sectors has increased this year.

Yet State Street said it did not see evidence of bubble behaviour and sovereign funds surveyed in the report were generally not worried either.

One IFSWF member surveyed did express concern about the number of special purpose acquisition company (SPAC) initial public offerings, the number of tech firms trading at more than 20 times revenues and multiples that private equity firms are paying for deals.

Organisers unveil safety plan for return of Mobile World Congress

The Mobile World Congress organisers unveiled a health and safety plan on Monday 8th March, 2021 that they said would enable the gathering to go ahead in Barcelona this summer after last year’s event was called off due to the coronavirus pandemic.

The biggest event on the telecoms industry circuit will feature a “check in to get in” concept limiting access to the venue to those with an up-to-date negative COVID-19 test, backed up by distancing and sanitation measures on site.

The organisers are working with local government, health authorities and tourism partners, such as restaurants and taxi firms, to minimise the risk of infection at one of the first big trade fairs to return to an “in person” format since the pandemic reached Europe a year ago.

“We think it’s time now to, with great responsibility, come back,” said Mats Granryd, director general of the GSMA, the industry association which hosts the congress.

“The industry needs to meet up physically and continue to do business,” he told Reuters in an interview, adding that close to 80 of the 100 top exhibitors had committed to taking part.

The GSMA, which counts 750 telecoms operators and 400 firms in the industry as its members, had to scratch last year’s event at the last minute after exhibitors pulled out en masse.

A SMALLER SHOW

The Mobile World Congress typically attracts more than 100,000 delegates, giving a $500 million boost to the economy in the Catalonian capital.

This year’s event, pushed back by four months from its usual slot, should be able to support around half that number of delegates after a similar “hybrid” event held in Shanghai last month that included an online programme.

“We’re taking all necessary precautions,” said Granryd, pointing to a regime that will require all attendees to provide proof of a negative test result to gain access to the Fira trade ground and to take new tests every 72 hours.

The number of entrances has been doubled to allow for one-way flow of human traffic, while admission will be “contactless” via an event app that visitors can download on their smartphones and will serve as a digital badge.

There will be no special treatment for those who have been vaccinated against COVID-19, Granryd said. The European Union has started work on a form of vaccination certificate that could ease travel but agreement is some way off.

Aston Martin expects better 2021 sales after deep losses

Carmaker Aston Martin said a turnaround plan would see it takes the first steps towards profitability and boost sales this year after a deep loss in 2020 when the firm raised fresh funding, changed boss and was hit by the pandemic.

Aston went further into the red with a 466-million pound ($660 million) loss last year, compared with 120 million pounds in 2019, as sales to dealers fell by 42% to 3,394 vehicles, also hit by the closure of showrooms and factories due to COVID-19.

In 2021, it expects “to see the first steps towards improved profitability” and on Thursday maintained an outlook of around 6,000 sales to dealers as a new management teams turns around the company’s performance.

Popular for being James Bond’s carmaker of choice, the firm has had a difficult time since it floated in 2018 as it failed to meet expectations and burnt through cash, prompting it to seek fresh investment from billionaire Executive Chairman Lawrence Stroll.

“I am extremely pleased with the progress to date despite operating in these most challenging of times,” he said.

The company said demand for its first sport utility vehicle, the DBX, which rolled off production lines in 2020, was strong as it enters a lucrative segment of the market where it hopes to widen its appeal.

($1 = 0.7065 pounds)

Capgemini sees 2021 profitability above market expectations

(Reuters) – Capgemini on Wednesday said profitability would beat market expectations in 2021, after the group reported full-year results in line with consensus, boosted by growth in its digital and cloud services.

The French consulting and IT services provider expects revenue to rise 7% to 9% in constant currency terms in 2021 from the 15.85 billion euros ($19.07 billion) reported in 2020, with an operating margin of between 12.2% and 12.4%. That would be a return to pre-COVID levels and slightly above the 12.1% consensus view.

The COVID-19 pandemic has given IT services providers, such as Capgemini, a silver lining of an increasing number of companies expediting their move to the cloud to adapt better to a new flexible or exclusively remote working model.

“This (COVID-19) health crisis has clearly accelerated the digital transformation needs of companies across all sectors,” said chief executive Aiman Ezzat in a statement.

Capgemini said its digital and cloud services, which represented 65% of its business in October-December period, grew around 15% in 2020 thanks to clients prioritising spending on digital transformation projects.

The full-year 2020 operating margin dropped by less than the company had guided, to 11.9% from 12.3% the previous year, also beating the 11.7% expected in a company-provided poll.

($1 = 0.8310 euros)

World Bank revises Ghana’s growth rate to 1.4% in 2021

The World Bank has revised Ghana’s growth rate, cutting it to a staggering 1.4% for this year, according to its latest Global Economic Prospects Report.

According to the Bretton Wood institution, the expected resilience in agriculture will not be sufficient to offset the covid-19 pandemic’s lingering adverse impact on the oil and other sectors of the economy.  

“In Ghana—the region’s fourth largest economy—the expected resilience in agriculture will not be sufficient to offset the pandemic’s lingering adverse impact on oil and other sectors. As a result, the growth forecast for 2021-22 has been downgraded”, it emphasised.

The Gross Domestic Product (GDP) growth rate will be lower than the expected 2.7% rate for Sub Saharan Africa.

Though it had earlier forecast a growth rate of more than 4.0% for this year, the staggering sharp review of Ghana’s growth rate will come as a major concern to policy makers and businesses.

It is however not too surprising because of the existence of the coronavirus pandemic, which many were expecting to have lessen drastically by this time around.

The other worry for Ghana is that all its neighboring countries will grow strongly with Ivory Coast expected to record 5.5% GDP.

The World Bank also reviewed the country’s GDP for last year to 1.1% despite the economy entering into a mild recession in the third quarter of this year.

The economy is however expected to grow at a modest rate of 2.4% next year.

Additionally, the World Bank said the coronavirus pandemic caused an estimated 6.1% fall in per capita income last year in Ghana and many Sub Saharan Africa nations, and is expected to lead to a further 0.2% decline this year, before firming somewhat next year.

The resultant decline in per capita income is expected to set average living standards back by a decade or more in a quarter of Sub-Saharan African economies.

Sub Saharan Africa growth rate

Output in Sub-Saharan Africa contracted by an estimated 3.7 percent—a per capita income decline of 6.1% and the deepest contraction on record—as the COVID-19 pandemic and associated lockdown measures disrupted activity through multiple channels.

The World Bank said “the hardest hit countries were those with large domestic outbreaks, those heavily dependent on travel and tourism—which virtually slowed to a near complete halt—as well as commodity exporters, particularly of oil. Although a few countries have managed to slow some large outbreaks (Ethiopia, Kenya, South Africa), outbreaks persisted in the second half of 2020 in several countries with little sign of abating.

Excluding Nigeria and South Africa, growth in these economies is forecast to average 2.8% in 2021-22, following 3.4% contraction last year.

“Although metals prices recovered somewhat in the second half of 2020, oil prices remain well below 2019 levels, weighing on the pace of recovery in oil-exporting economies (Angola, Chad, Republic of Congo, Equatorial Guinea, Gabon, Ghana)”, the report emphasised.

Economy contracted in Quarter 3

Ghana’s economy contracted again for the second consecutive period in the third quarter (-1.1%) of 2020, but at a lower rate than in the second quarter.

This is however compared with a Gross Domestic Product (GDP) growth rate of 5.6% the same period last year. The Agriculture sector recorded the highest growth of 8.3%, whilst Industry and Services sectors contracted by -5.1% and -1.1% respectively.

According to figures from the Ghana Statistical Service, the economy with oil contracted by 1.1%, but grew by -0.4% without oil. 

The Agriculture sector recorded the highest growth of 8.3%, whilst Industry and Services sectors contracted by 5.1% and 1.1% respectively.

Source: Charles Nixon Yeboah

Fashion lookahead: Eight major 2021 looks from tie-dye to pastels

If you clicked on this article looking for sharp, insightful, industry-leading knowledge about the fashion industry, you’ve possibly come to the wrong place.

A model at the Christian Siriano fashion show in September 2020
image captionSome fashion shows moved outdoors this year, while designers like Christian Siriano built facemasks into their collections

After all, this time last year we said the big styles for 2020 would include buttery leather, floral prints and bucket hats.

What actually transpired was a year of facemasks, slippers and jogging bottoms as the country worked from home and social events were cancelled.

Still, we’re feeling more confident about our predictions for 2021. The rollout of the coronavirus vaccine should hopefully mean we will once again see other human beings in the coming year, which means now is the time to start thinking about post-lockdown looks.

One interesting side effect of the pandemic is that some designers reined in their usual experimentation and extravagance and instead prioritised practicality, opting to showcase clothes which were “more thoughtful and realistic”, according to Vogue.

“For the first time in a long time, these looked like clothes that are meant to be worn,” added the magazine, which is always a bonus when being charged £800 for a T-shirt.

Here are seven of the major trends for 2021:

1. See-through layers

L-R: Models wearing Chicco Mao Sportmax, Dior, Fendi
image captionL-R: Models wearing Chicco Mao Sportmax, Dior, Fendi

You might think of yourself as the kind of sceptical person who can see right through the fashion industry’s latest money-grabbing trends. 

Well, now you can quite literally see through them thanks to these transparent outfits made of lace, mesh or sheer, which are going to be big in 2021.

“Shed winter’s dense layers in exchange for spring’s light peek-a-boo pieces,” suggested Marie Claire. “Designers like Dior mixed sheers with barely there underpinnings, while Sportmax paired transparent overlays with fuller coverage slip dresses.”

Fashionista advised that these designs aren’t intended to provide the X-Ray treatment. “Instead, the transparent clothes act as layering pieces to add intrigue to standard tops and bottoms,” they said.

Roughly translated, that means: for goodness sake don’t forget to wear something less see-through underneath.

2. Strong shoulders

L-R: Balmain, Christian Siriano, Balenciaga, Alexander McQueen
image captionL-R: Balmain, Christian Siriano, Balenciaga, Alexander McQueen

You grace me with your cold shoulder, sang Adele in 2008.

We grace you with our bold shoulders, say Balenciaga in 2021.

The luxury fashion house showed lots of outfits with prominent shoulders during Paris Fashion Week in March, and many others have been experimenting with the idea too.

“The peaked shoulders at Balmain and Balenciaga will cut through space with glamour and a bit of grit,” said Vogue. “Big time shoulders are not new, but they are not going away either.”

The good thing about this one is your head and shoulders are usually all anybody can see of you on Zoom, so it’s one of the few styles that can actually be appreciated virtually.

3. Fringes

L-R: Post Archive Faction (hoodie only), Palm Angels, Kristina Fidelskaya
image captionL-R: Post Archive Faction (hoodie only), Palm Angels, Kristina Fidelskaya (suit only)

Claudia Winkleman will be delighted to see that long fringes are back in style, although these are the fabric kind rather than the so-low-you-can’t-read-the-autocue hair kind.

“It’ll be hard to resist twirling all day long with this trend,” said Cosmopolitan. “With every step you take you’ll be turning heads.”

(Partly because the strands of fabric will be whipping someone in the face.)

4. Tie-dye

L-R: Aniye By, TOGA, Gabriela Hearst, Collina Strada
image captionL-R: Aniye By, TOGA, Gabriela Hearst, Collina Strada

Nothing is as stylish as looking like you’ve been sneezed on by a unicorn, and with so many people stuck at home in the past year, DIY tie-dyeing maintained its popularity.

The colourful trend has been popular for a while, but has now filtered up to the major designers, who are re-imagining tie-dyed fabric in their latest collections. Some fashion magazines are relieved the experts have taken over from the amateurs.

“While we appreciate the sentiment of creating your own colourful tees, we prefer how the experts are translating the counterculture mainstay,” said Harper’s Bazaar.

“From caftans to maxi dresses, sweat suits and denim, these shibori-inspired patterns hit every colour of the rainbow, and are decidedly bougie.”

5. Fruit pastels

L-R: De La Vali (suit only), Bernadette (jacket and shorts only), Timo Weiland, Marco Rambaldi
image captionL-R: De La Vali (suit only), Bernadette (jacket and shorts only), Timo Weiland, Marco Rambaldi

If you prefer your shades slightly softer, then candy-coloured pastels could be for you.

“These sorbet-inspired colours are the perfect option for summer and they suit a wide variety of skin tones,” noted The Trend Spotter.

“Choose from a boiler suit in cool mint green or an oversized trench coat in soft lavender – better yet, try them both simultaneously. Suits and separates in the soft and buttery hues elevate your overall aesthetic and will remain one of the chicest styles for seasons to come.”

Which is great news for us because it means we can copy and paste this entry in next year’s list.

6. Netting

L-R: Acne Studios, Noir Kei Ninomiya, Hermes, Stella McCartney
image captionL-R: Acne Studios, Noir Kei Ninomiya, Hermes, Stella McCartney

These nets are the catch of the year.

“While our actual fishing references are admittedly limited, we do know that some well-placed netting satisfies our desire for purely aesthetic pleasures,” said Harper’s Bazaar.

“These nets are not here to keep you warm; they serve no higher purpose other than that they exist as eye candy, as newness, as that something that feels perfectly right now.”

Stella McCartney gets double credit here for an outfit (pictured far right) which contains netting *and* a fringe – so you can be twice as stylish.

7. Holy Moly

L-R: Lula Laora, Burberry, Comunque Yang, Christopher Kane
image captionL-R: Lula Laora, Burberry, Comunque Yang, Christopher Kane

It is never a bad idea to expose large chunks of flesh totally at random, as Christina Aguilera taught us in 2002.

Whether society is finally waking up to her wise teachings or whether designers simply ran out of fabric, it doesn’t matter. The point is, holes are in for 2021 so get ready to feel the draught.

“Showing some skin – by any measure – feels like a necessity after wearing oversized loungewear for months on end,” pointed out Marie Claire.”From turtlenecks to bodysuits to full-on jumpsuits, designers like Prada found ways to reveal flesh in unexpected ways.”

8. Covid compliance

Models wearking Kenzo
image captionAll models wearing Kenzo at the Womenswear Spring/Summer 2021 show as part of Paris Fashion Week

We’re dedicating this last one entirely to the Kenzo showcase at Paris Fashion Week in September.

The fashion house, whose founder died shortly after this show took place, displayed a large number of outfits which covered the face, and sometimes the entire body.

This may or may not have been Covid-influenced, and we’re not confident these outfits would realistically provide much protection against the virus anyway, but it certainly felt in keeping with the theme of social distancing.

The other big coronavirus-influenced trend, of course, will continue to be stylish facemasks.

L-R: Jenny Mollen and Stacey Bendet wearing Alice and Olivia, Liu Chaoying and Yan Jin, Rebecca Minkoff
image captionL-R: Outfits by Alice and Olivia, Liu Chaoying and Yan Jin, Rebecca Minkoff

“No surprise here, the biggest accessory trend of 2021 will be masks,” said Style Caster.

“If you rushed to buy some basic masks a few months back, don’t hesitate to invest in both high-quality, breathable fabrics as well as masks you simply find attractive now that we’re in it for the long haul. The more you like the masks you’ve got, the easier they are to commit to wearing.”

By Steven McIntosh
Entertainment reporter

What changes will 2021 bring for the media world?

Well, my media predictions for 2020 were a load of rubbish, weren’t they? I didn’t see a pandemic coming. Then again, neither did you, unless you did; in which case, you must be very rich, and I’m free for lunch when restrictions have eased if you fancy it?

I suppose I could blame Covid-19 for the failure of ITV to be bought, as I said it would, or the lack of a re-balancing between trends and events in news. But the truth is that – alas! – they were dud predictions.

Why on earth you’d be interested in the contents of my crystal ball for 2021, then, I really don’t know. And yet the ball is full. And wanting to be written about. So here goes, and remember, all forecasters are frauds. Even the ones who acknowledge that fact.

1/ The year of Digital Trustbusters

The end of 2020 saw a flurry of moves by governments around the world to regulate the data giants more effectively, particularly in the economic sphere where they tend toward monopolies. 

India’s regulators said they’d look into whether the relationship between Google Pay and its Play Store for Android apps was too anti-competitive. In China, the authorities are going after Jack Ma, the country’s richest man, in a remarkable regulatory gambit that could lead to the break-up of his company. And the EU has accused Amazon of using the data it has on customers to rig the market in favour of their own-label products. nullnull

2021 is likely to see a flurry of activity to control the might of big tech
image caption2021 is likely to see a flurry of activity to control the might of big tech

In the UK, the Online Harms Bill was finally announced in parliament, though it’s a tangled affair and focuses mostly on social rather than economic harms.

In the economic arena, the Digital Markets Unit, part of the Competition and Markets Authority, will make its first, landmark rulings.

In America, the Department of Justice is suing Google for allegedly violating anti-trust laws. And Facebook has been hit with lawsuits from both the Federal Trade Commission and the attorneys general of dozens of states.

For 15 years, the data giants have had a relatively free ride from regulators; in recent years, they have spent so much on lobbying that the status quo has mostly continued, despite the astonishing growth in their power, and mounting evidence of some social and economic harms, amid countless benefits.

The above actions amount to such a flurry of activity – in which various politicians are vying to be the ones who bring Big Tech to heel, and all countries are looking closely at others to see what they can learn in this new policy arena – that 2021 feels like the year in which a new settlement between technology and democracy arrives, especially in the West.

By the way, had Joe Biden chosen Elizabeth Warren, who wanted to break up these companies, as his treasury secretary, things could have been even worse for the digital kings of California. Instead he chose Janet Yellen, a labour market specialist. Biden’s administration has immediate priorities other than breaking up complex companies, of course.

Interestingly, while Sir Nick Clegg was hired by Mark Zuckerberg to explain Europe to Facebook and Facebook to Europe, his relationship with Biden – they were deputy leaders of their countries at the same time – could prove more useful or important to the company than his knowledge of Brussels.

2/ China fights hard in the Tech Cold War

All this will happen against a backdrop of the internet itself splitting into different domains, something I’ve done a lot on this year. China’s digital infrastructure will try, through the likes of Huawei and TikTok, to grab the attention and affection of people on the other side of the world to Beijing. The battle is on to shape the internet for the nearly 3 billion people not yet online.

Biden’s administration sees technology as a geopolitical issue, so expect ever more rows over whether Chinese companies should be allowed to operate in the US, which will spill over into the UK and Europe.

3/ Gaming charges on

Gaming was one of the fastest growth sectors in media and entertainment even before the pandemic. Then, with tens of millions locked indoors with broadband as their only salvation, interest and demand exploded.

This dizzying growth in gaming, which investors are very excited about, is driven by dramatic improvement in the quality of digital distribution, as much as the creativity of the designers. Super-fast broadband has allowed multi-player international formats to become an exhilarating live experience online, powering eSports and making a lot of young people in particular really quite rich.

Just as the likes of Apple and Amazon have moved into the content business when it comes to TV, I expect them to radically accelerate their investment in gaming. (Amazon already owns Twitch, of course). Gaming will occupy a growing share of the content business of the future. Naturally, the data giants want to dominate that business. I predict Apple to make Arcade, its gaming offer, much more central to its growth. Might one of other content kings, like Disney or Netflix, also bid for one of Britain’s gaming success stories, like Rebellion Media, which I visited in 2020?

4/ Cinemas will decline, mostly into franchise and immersion specialists

You may not spend a lot of time thinking about Warner Bros or HBO Max, an American media giant and its streaming service respectively. But when Warner announced a few weeks ago that it was going to release its 2021 slate of films simultaneously on HBO Max and at cinemas, it amounted to a huge moment in the history of film.

Driven by Netflix and other streaming superpowers, top quality movies are heading homeward. In recent years, cinemas haven’t so much been in decline, as forced to focus on franchises like Marvel. These shows benefit more from giant screens and surround sound, which are expensive and inconveniently large at home, than gritty independent films.

Cinemas will increasingly have to offer a unique experience to entice audiences away from home entertainment
image captionCinemas will increasingly have to offer a unique experience to entice audiences away from home entertainment

Mega franchises are sometimes called ‘bankable blockbusters’. because they always deliver big ticket sales, and their super-hero story lines can be translated into lots of languages, not least Mandarin, Urdu and Spanish, which between them offer access to well over a billion people.

So cinemas, unless they’re in that tiny minority that celebrate small independent films to a very committed film buff audience, will have to further adapt, offering immersive experiences in which other aspects of your visit transport you to another world. This adds cost, of course.

And cinemas are already at the mercy of lockdowns. Despite optimism about a vaccine, many local picture houses have been shut for months. But doubling down on what cinemas do uniquely is the only option when I can get iPlayer, Netflix, Amazon Prime and Disney Plus at home.

5/ The inevitable Grand Re-bundling

…Talking of which, I can also get Spotify, and Audible, and Britbox and… all the rest. We live in the attention economy, and the battle for our ears and eyes is intensifying by the minute.

As night follows day, the laws of economics re-assert themselves. Consumers have finite disposable income, and for many it has fallen over the past year or will fall, given we are embarking on the worst recession for centuries.

It follows that we cannot just keep on paying for lots of different subscriptions. At some point – surely – we have to rationalise. And media giants will want to ensure their services are not the ones being ditched. Two strong ways of doing this are to reduce the price, though that reduces profit margins; or – which may have greater economies of scale – throw extras in (though that obviously trims margins, too).

Amazon Prime is a bundle. Sign up for free or cheap delivery on goods and get yourself some Premier League action and TV programmes for no added costs. Disney are now bundling aggressively, throwing theme park passes and merchandise in with its streaming platform, Disney Plus. Apple One offers ad-free search alongside the latest Mac.

In an age of over-supply of content, consolidation is inevitable. The Grand Re-bundling of content, sometimes with experiences thrown in, is a form of consolidation. It has already begun. We will see more of it in 2021.

6/ New prototype glasses point to an augmented future

A well-placed birdie in Silicon Valley told me that, over the coming year, some of the big tech giants will invest even more astronomical sums in augmented reality (AR) than they already have.

At the start of 2020, Mark Zuckerberg did a media blitz after this post, in which he said that while the mobile phone was the decisive technology platform of the 2010s, augmented reality glasses will be decisive in the 2020s.

If 2020 was the year of Zoom, I expect AR glasses to be going mainstream by 2025. Who knows, by then you might even be using one while tucking into your turkey.

Billions will be invested in augmented reality in 2021
image captionBillions will be invested in augmented reality in 2021

The idea is to wear glasses that allow you to add digital elements to the real world. Facebook is already investing massively in this arena. I predict this company alone will invest over £10bn in augmented reality in 2021.

Over the coming year, amid all the new Tesla models, smartphones, and wearable watches, expect a few demonstrations of glasses that learn the lessons from Google Glass. Just because that project was a flop, doesn’t mean others will be.

7/ Might the Substack revolution power a local renaissance?

Some people, including me, have described it as a “revolution”, but what Substack has done is rather, um, er, old-fashioned. It’s as if someone in journalism said, “I know! I’ve got a great idea! Why don’t we ask customers to PAY for our stuff?! That way we can feed our families, and keep making the stuff! Everyone’s a winner! Viva capitalism!”

In case you have no idea what I’m talking about, Substack is a user-friendly platform that allows media content creators – Oh Stop It Amol! They’re called JOURNALISTS for goodness sake! – sorry, journalists, to build their own media empires, chiefly through newsletters. It includes the radical idea of… charging customers. Substack keep 10 per cent.

Star journalists like Andrew Sullivan, Matt Yglesias and Glenn Greenwald in the US are now on Substack. In the UK, Ian Leslie’s The Ruffian and Helen Lewis’s The Bluestocking are among those with a growing band of followers and so too is James Crabtree’s newsletter, Thoughtful. Crabtree is British but based in Singapore. Many of the above don’t charge, yet. The idea is to build an audience first, then monetise later. Like I said, radical!

What is most intriguing about all this is that the Substack model of paid-for newsletters might – just might – be able to rescue the broken news model of local news in the UK. It’s already happening. Look, for instance, at Manchester Mill, set up by Joshi Hermann: it’s built a decent audience quickly.

People will pay for stuff if they want it enough. Local journalism is something people do want. Many of the bigger groups are pivoting to charging for their content online. Might the simplicity of the Substack newsletter model offers one path to salvation for a vital part of our democracy? I predict dozens of new local Substack titles, like Manchester Mill; one or two flagship newspapers moving completely to this new, digital distribution; and many more local titles charging for content.

8/ A new BBC chairman – and potential funding model

The BBC will get a new chairman this spring, to replace Sir David Clementi. There is plenty of chatter about the possibility of it being Richard Sharp, a former Goldman Sachs banker. He is clever, very wealthy, seen by No 10 as politically sound, has a strong track record in the arts, and is close to Rishi Sunak. Sharp described the chancellor to a friend as the best young financial analyst he’d seen.

Of course, the job may go to someone else, but as things stand it looks like going to a relatively conventional applicant, rather than a renowned critic of the BBC such as Charles Moore, who has ruled himself out.

One of the first tasks for this new chairman is to help Tim Davie, the director-general, come up with a funding model for the future of the BBC. In 2021, the detail of a new model will emerge. The licence fee will remain core, but as part of a mixed package in which subscriptions are offered internationally.

In No 10, Davie is respected and thought to have made a strong start. But, with a new chairman by his side, it’s in the spring that the intellectual and political heavy-lifting of his reign will really begin.

Expect to see: a subtle shift in the focus of BBC diversity targets toward socio-economic background, while still going for his 50% female, 20% BAME, 12% disabled target; a radical emphasis on non-metropolitan audiences; slick new branding and marketing for some integral parts of the BBC operation; and a public offensive to make the case for the BBC as central to the growth sector that is the UK creative industries.

9/ GB News will make no profit but a big impact

Television news is very expensive. GB News, the proposed new free-to-air TV service funded by advertising, and backed by US giant Discovery, is unlikely to make a profit for many years. But, after a launch delayed by several months because of the pandemic – and so long as its backers don’t get too nervous – I expect it to have a big effect.

And for two simple reasons above all: first, demand; second, Andrew Neil. On the first, demand for news and opinionated chat has soared in the past year; and of course through social media GB News can reach a big international market through clips. This will generate marketing and promotion rather than paying subscribers, of course.

Andrew Neil is chairman of the newly-formed GB News
image captionAndrew Neil is chairman of the newly-formed GB News

On the second, Neil is a formidable business and media figure, and will work every waking hour to ensure this last big chapter in his storied career is not a flop. He sees himself as breaking the mould for the third time in his career (after his editorship of The Sunday Times, and his chairmanship of Sky).

As long as the backers don’t pull out, GB News will make some big-name signings; inject a lot of cash into the bloodstream of British media; generate a chattier, more opinionated kind of news programming while stopping well short of Fox News deceit and conspiracy; and create countless viral moments. This, being an antidote to the stentorian BBC, will count as success aplenty for the backers, who know it will be many years before they see a financial return.

10/ PSBs will offer much more on-demand exclusivity

Spitting Image has been a hit for Britbox. It offers a model to the other public service broadcasters, who can use exclusive content to boost their digital offerings.

ITV, Channel 4 and Channel 5 have to ride two horses at once: conventional linear TV, which is ad-funded and suffering from structural decline against the streaming giants; and their own streaming platforms, which they need to build up as quickly as possible. 

I often wonder if many consumers actually realise how much free content there is on these platforms. For instance, All4, the on-demand service from the UK’s Channel 4, has thousands of hours of world-class programmes that you can watch for… free. This is remarkable. Sure, there are adverts. But if your idea of a good time is repeats of, say, Brass Eye, you can have your fill. 

At present, All4, 5OD and ITV Hub represent a small fraction of the revenues of Channel 4, Channel 5 and ITV. That needs to grow. In 2021, I suspect these platforms will start offering more exclusive content, perhaps yet more spin-offs from successful formats like I’m A Celebrity… or Gogglebox.

11/ Channel 5 will grow its share of weekday primetime viewing

By targeting older viewers – who after all are more likely to watch linear TV – with feel-good, heartland narratives, often featuring presenters that were integral to the lives of older viewers for many years – Michael Buerk, Chris Tarrant, Michael Palin, Jane McDonald – and avoiding COVID-19 while others doubled down on it, Channel 5 has had another stellar year.

Channel 5 often beats Channel 4 (and indeed BBC Two) on weekday evenings already – though not when blockbusters like Bake Off or Gogglebox are on.

Ben Frow, the Channel 5 boss, was very open about his strategy in this long interview I did with him for The Media Show. The editorial improvement in Channel 5 has been a boon for British television. By the end of next year, when the backlog from productions stalled by the pandemic has begun to clear, I expect Channel 5 to beat Channel 4 three weekdays out of five.

12/ The Guardian won’t charge, make a compulsory redundancy – or a profit

Well you need one dead cert in a batch of predictions, don’t you?

Under current editor Kath Viner, The Guardian pulled off a remarkable turnaround in three years, finally achieving profit. Then the pandemic struck, and undid years of work in just a few weeks.

The trouble is, the earlier turnaround involved a huge amount of pain: that is, job losses. At some point though, you run out of jobs to cut. And the Guardian has a proud tradition of never having made a compulsory redundancy. This obviously has moral value, but close to a dozen journalists there, including some very senior ones, have said to me in recent years that it means you just can’t create a modern digital newsroom with your best people in the right positions. 

The Guardian's editor, Kath Viner, pulled the newspaper into profit before the pandemic struck
image captionThe Guardian’s editor, Kath Viner, pulled the newspaper into profit before the pandemic struck

The senior team have looked at the idea of a paywall, and don’t rule it out. There is growing evidence that people will pay for content beyond a monthly fee for mobile or tablet apps. See the New York Times, Telegraph, Financial Times and Substack. Moreover, a once-in-a-century pandemic might be a good moment to say to readers: “Sorry, but we just have to [charge]. You used to pay for the paper. Now would you please play for the website?”. This would be a historic move. Viner has the authority to do it. 

Sadly, in the short term, like so many other publications, I predict The Guardian won’t be profitable in 2021. The fact that this is not a brave prediction is indicative, I think. 

For anyone interested in a Review of 2020 in the Media, here’s a 26-min TV programme I made with my producer colleague Elizabeth Needham-Bennett, much of it shot by the outstandingly talented cameraman Rob Taylor.

I wish all readers of this blog a very happy and healthy New Year.

Amol Rajan
Media editor

Health to be on cyber-security’s front line in 2021

Covid-19 catapulted the health sector to the forefront of cyber-security in 2020, but the next year is likely to see the dangers continue and evolve.

Threats from nation states and criminals to the health system are a growing concern.

The huge logistical challenge of rolling out vaccines faces the risk of disruption to complex supply chains.

And criminal ransomware poses a threat at a time when the pandemic has increased our reliance on technology.

Supply chain

The distribution of the various coronavirus vaccines may bring relief, but it also brings with it a major challenge: many of those involved have not had to think hard about security in the past.

The complex global supply chain for vaccines ranges from factories in one country to internet-connected fridges in another.

It will create new pressure on doctors’ surgeries, IT systems, and sometimes small providers who play a critical role.

IBM has already said it has seen suspected state-hackers target the “cold chain” used to keep supplies at the right temperature during transportation.

And in the UK, the National Cyber Security Centre, which worked quickly when the pandemic began to secure vaccine research, has since pivoted its efforts towards vaccine distribution.

At least the large pharmaceutical companies are no stranger to cyber-espionage. Their security officials say they first began thinking hard about the issue after a major espionage campaign back in Spring 2010.

But the issues around the pandemic have changed the sector’s importance.

“We are now on a grander stage,” is how one person involved puts it.

In July, the UK accused Russian intelligence of targeting research, including for the Oxford vaccine, while the US accused Chinese hackers of similar activity.

The emergence of “vaccine nationalism” led intelligence and security officials to raise questions about whether countries could try and undermine the efforts of others going forward.

“It could be trying to steal the intellectual property for financial purposes,” Tonya Ugoretz of the FBI told a recent Aspen Institute Cyber Summit.

“It could be to undermine confidence… or to advantage another country’s own development.

“We see our most determined nation-state adversaries not just relying on one method to target the supply chain, but combining cyber with using more traditional espionage and human sources.”

One much discussed tactic is the deliberate spread of misinformation online about vaccinations, or questioning a country’s safety and testing record.

The UK Army’s 77th Brigade has supported a Cabinet Office investigation into whether foreign states are driving anti-vaccine fears within the UK.

Most sentiment was domestically generated, head of Strategic Command General Sir Patrick Sanders said at a recent Chatham House event.

General Sir Patrick Sanders
image captionGeneral Sir Patrick Sanders is the head of Strategic Command, which helps manage joint force operations

And he raised the possibility of retaliation.

“Where these things are being fuelled from overseas, then we will take action, and if the NCF (National Cyber Force) has a part to play in that, it will.”

Cyber-blackmail campaigns

But despite concerns about states, experts say, criminal ransomware – the locking of people out of their computers and data until they pay – remains the more serious and persistent threat.

There was some talk at the start of pandemic from criminal gangs that they would not target health. But it did not last and attacks have multiplied.

A recent report from security firm Positive Technologies says half of all the cyber-attacks on healthcare were ransomware in the July-to-September quarter of 2020.

US hospitals have been worse hit than the UK. It is thought this is because criminals see them as richer than their NHS counterparts.

In just 24 hours in October, six American hospitals received ransom demands of at least $1m (£810,000), leading to some cancer treatments being cancelled.

Ransomware
image captionRansomware gangs often take a copy of the data they leave scrambled on their targets’ computers

“The healthcare sector has become such a big, rich, juicy target,” Greg Garcia, executive director for the US Cybersecurity of the Health Sector Co-ordinating Council, recently said.

“It’s as if they moved on from the financial services sector.”

The UK has made stride to fix weaknesses in the NHS systems exposed by 2017’s Wannacry ransomware attack. Even so, there are concerns it could be hit again.

Dr Saif Abed has long warned that such an attack could kill a patient.

He is a former NHS doctor who left clinical practice to set up the AbedGraham group, which advises on IT security risks to health.

“The thing that’s really concerning is that attackers now understand the concept of clinical urgency,” he says. 

“They understand: ‘If we create a risk that disrupts the ability to provide patient care, we’re more likely to get a payout.'”

His worry is that the pandemic has accelerated the digitisation of health.

While that has brought benefits such as consultations taking place online, he says the investment needed to keep internet-connected systems and devices secure has not kept pace.

Dr Abed says he often hears security researchers talk about hacking insulin pumps to kill someone. 

But he says a bigger risk is the fact that more devices are being connected together while remaining vulnerable, leading to the risk of a cascade effect.

He adds that his biggest worry is that criminals move from just locking organisations out of their health data to starting to tamper with it, posing risks to patient safety.

The desire to limit further Covid-19 outbreaks may also create a further drive to share data more broadly. 

And that in turn may present further opportunities to steal or subvert it.

Another sign that the cyber-security of health is likely to be on the front line in 2021.

Gordon Corera
Security correspondent, BBC News

Tech trends in 2021: Fast planes and homeworking

Next year could be uncomfortable for the bosses of the world’s biggest technology firms. Efforts are accelerating to curb the power of Facebook, Amazon, Apple and Google owner Alphabet.

Authorities, particularly in the US and Europe, are already getting tougher over competition issues and that is likely to be a key battleground in 2021.

However, if your technology concerns are a bit closer to home, next year might also have developments for you. Get ready for more technology and services to make homeworking easier and more secure.

For more on that, and tech trends in aerospace and retail for 2021, read on.

Big Tech crackdown

In the final weeks of 2020 large clouds rolled into view for Google, Facebook, Amazon and Apple, which could make 2021 an uncomfortable year.

Earlier this month, US federal regulators and more than 45 state prosecutors sued Facebook, accusing the social media company of taking illegal actions to buy up rivals and stifle competition.

Also in December, the European Commission revealed its Digital Services Act and Digital Markets Act – draft legislation that would completely overhaul the way Big Tech is regulated.

In the UK, the Competition and Markets Authority proposed a legally binding code of conduct and recommended that a new Digital Markets Unit be given the power to impose significant penalties.

Amazon fulfilment centre in Sosnowiec, Poland
image captionAmazon has been charged with abusing its dominant position by EU authorities

The tech sector will be very keen to see how the administration of President-elect Joe Biden handles Big Tech.

In the past Mr Biden has been extremely critical of big tech firms, in particular Facebook.

In a New York Times interview in January he said that a key piece of legislation that protects social media firms, Section 230, should be revoked. Section 230 says that social media platforms are not generally responsible for illegal or offensive things users post on them.

In addition, some would also like to see the big tech firms broken up, in particular Amazon, Google and Facebook. Google is already under pressure. In October the US government filed charges accusing it of violating competition law to preserve its monopoly over internet searches and online advertising.

In their defence the firms say they operate in competitive industries and supply services that are only possible from very big firms.

As well as competition, the US could see action on data privacy. California already has a data privacy act, but there is pressure to have a national policy.

Electric innovation

Rolls-Royce Spirit of Innovation
image captionThe Spirit of Innovation will attempt to break the world speed record for an electric plane

It has been a horrible year for the aerospace industry. One of the industry’s biggest customers, the airline sector, is cancelling or delaying orders as carriers cope with a collapse in air travel.

Despite that horror show, both companies say they are committed to research and development, in particular developing planes that have a much smaller impact on the environment. In September, Airbus unveiled three concept hydrogen-powered designs.

Next year should see Airbus sign an important deal with Germany, France, Spain and Italy to develop a large drone – the Medium Altitude Long Endurance unmanned aerial system.

The so-called Eurodrone is due to start flight testing in 2025.

Also in 2021, watch out for an electric aircraft from Rolls-Royce called the Spirit of Innovation. The company hopes the sleek machine will break the world speed record for an electric aircraft by flying at more than 300mph.

Retail evolution

A shopper exits Amazon Go Grocery on February 26, 2020 in Seattle, Washington.
image captionShops without checkouts could become a more common sight

It’s also been a disastrous year for many retailers. The trend towards online shopping went into overdrive, as customers were stranded at home during lockdowns. 

Retailers that survive may face a new technology in 2021.

It’s been reported that Amazon will expand its Go store chain – shops that don’t have a checkout.

For customers it would speed up shopping as they can pick up the products they want and just leave the store. A clever combination of cameras and artificial intelligence tracks what they have taken and bills them when they leave. 

More than 20 stores are running in the US and the company is expected to start opening Go stores in the UK in 2021, although the online giant has not announced those plans yet.

As well as saving money on the space needed for checkouts and the staff to run them, Go-style shopping also minimises contact with surfaces, which could be an attraction in a post-Covid world.

According to Max Hammond, a senior director and analyst at Gartner, UK grocery chains are going to be monitoring how customers respond to the technology and considering whether to take it up themselves.

“Does the customer experience warrant the expense for these retailers? At the moment, I think that’s a tricky business case for them to come up with even though we’re seeing a lot of proofs of concept,” he says.

Working from home technology

Mural software
image captionDigital whiteboards like Mural have become popular as more people work from home

It looks like working from home is here to stay. According to a survey conducted for CCS Insights, 60% of business leaders in Western Europe and North America expect at least 25% of their workforce, and in some cases all of their staff, to work at least partly from home – even when the pandemic is over.

Many big firms have already committed to homeworking. In October, Dropbox said all of its staff could work from home and Twitter has the same policy. Microsoft and Facebook have also said a significant number of their staff can permanently work from home.

That is a juicy new market for tech firms to exploit. You can expect more special work from home packages to be offered by internet service providers and other tech firms.

“Security is definitely part of our predictions when it comes to working from home activity, and that could be a package. Not just an extra line, but maybe a separate router, maybe a router with security, maybe some other services on top, even things like IT support because a smaller company might not have a remote IT support person,” says Marina Koytcheva, vice-president of forecasting at CCS Insights.

Watch out as well for extra features when it comes to software to help people collaborate while working from home. So-called digital whiteboards like Miro and Mural have seen a surge in popularity – Mural has added more than a million active users this year. 

Its technology gives staff a visual representation of a project that everyone can add to. 

Autonomous cars

Waymo depot, Chandler, Arizon
image captionWaymo has more than 300 cars operating without drivers in Phoenix

On the streets of Phoenix, Arizona more than 300 cars are operating by themselves, collecting and dropping off passengers with no human driver at the wheel. 

It is part of the Waymo One service which, in a first for such an autonomous service, was opened up to the public in October.

With the backing of Google’s parent company Alphabet, Waymo is leading the way in autonomous cars in the US and in 2021 it plans to extend the service in Phoenix and beyond.

“As we continue to gradually scale up our capacity, we will open up our service to more riders through a fully public app. We look forward to making Waymo One available to more people in more places too,” a Waymo spokesperson said.

Rivals are not too far behind. Cruise, which is owned by General Motors, is testing its service in San Francisco, a city where the weather and street layout is more challenging than sunny Phoenix.

In October Cruise received permission to test its autonomous cars without a human driver as backup and the plan is to launch an autonomous service like Waymo’s, but the company has not said when that might be.

Lyft is also testing its autonomous cars in San Francisco. It is thought to be further behind Waymo and Cruise.

Meanwhile, in December Uber ditched its attempt to develop its own self-driving cars. The firm sold its autonomous vehicle division to Aurora Technologies, which is backed by Amazon, as it focuses on its taxi and food delivery services.

By Ben Morris
Technology of Business

Government to issue $5bn sovereign bonds in 2021; GH$7.7bn to be spent on salaries

The government says it will continue to raise funds from the international capital market to fund the 2021 budget.

This will comprise the issuance of sovereign bonds of $3 billion with the option to increase it to U$5 billion should market conditions prove favourable, Finance Minister, Ken Ofori-Atta disclosed.

He is therefore requesting an approval from parliament for the issuance of the sovereign bonds of US$3 billion with the option to increase it to US$5 billion should market conditions prove favourable.

Out of the amount to be raised, U$1.5 billion will be used to support the 2021 budget and US$3.5 billion for liability management.

Ghana first went into the international capital market in 2007 to raise funds to support the budget. It has since been going to the market to borrow to support the budget and liability management.

Meanwhile, government will spend GHS7.7 billion of the GHS27 billion it is seeking approval from parliament on salaries for the first quarter on next year.

A little over GHS7 billion will also be used to settle interest payments, whilst GHS1.9 billion will go into capital project.

Mr. Ofori-Atta said the Controller and Accountant-General will ensure that all Ministries, Departments and Agencies operate strictly within the levels set in the Expenditure in Advance of Appropriation to be approved by this August House.