Notations From the Grid (Special Thursday Edition): A Window Into the Future

We hereby present the following on the future:

Investment Outlook 2020 As the bull market closes in on a record 11 years this March, investors in US equities might think there’s little upside left in their portfolios. But Sharmin Mossavar-Rahmani, chief investment officer of Goldman Sachs Wealth Management, counsels otherwise. In the latest episode of Exchanges at Goldman Sachs, she talks about her 2020 Investment Outlook and why she and her team are taking a “stay invested” position. “There’s still a lot of upside left if we are still a ways away from a recession,” Mossavar-Rahmani says, and “the probability of a recession [in 2020] in our view is actually quite low. We’re at about 20 to 25 percent probability, maybe a little bit closer to 20.” The Investment Outlook cites data showing a high likelihood (87%) of positive returns when an economy is in an expansion. Even when a recession is lurking around the corner, there’s still time for the market to do well—historically, there have been attractive S&P returns (8-9%) in the six to 18 months prior to a contraction. “That suggests we should stay invested,” Mossavar-Rahmani says, “because the likelihood of positive returns—and strong positive returns—is quite high.” Listen to podcast

Investing in Climate Change Climate change is such a complex, global problem that meaningful action can seem daunting. But the experts Allison Nathan interviews in the latest episode of our Top of Mind at Goldman Sachs podcast agree on a place to start: setting a price on carbon. “A lot of the current rules and regulations focus on the source of the carbon—the utility, the car, or the oil,” Goldman Sachs’ head of research Steve Strongin said. “With a carbon price, other people can make the investment and solve the problem, so that you get specialization by who’s best at solving the problem, as opposed to specialization based on who’s causing the problem.” But there’s debate about the best way to establish a carbon price–via carbon taxes, which effectively assign a price for carbon; or via cap-and-trade programs, which set a limit on emissions and enable participants to trade emissions allowances under the cap. The Environmental Defense Fund’s Nat Keohane told Nathan he favors the latter because it ensures progress towards the ultimate goal of reducing emissions: “I always say we need a limit and a price on greenhouse gas emissions. The advantage of cap and trade is that it integrates the limit and the price directly into the policy design. The cap provides a limit on emissions and the trading gives rise to the price.” Michael Greenstone, director of the Energy Policy Institute at the University of Chicago, is relatively agnostic between the two approaches, recognizing the trade-offs inherent in both: “The primary advantage of a cap-and-trade program is that you have certainty on emissions and the primary advantage of a carbon tax is that you have certainty on price. You can't have both—that's the problem.” Listen to podcast

Talks at GS: David Katz, Founder and CEO of The Plastic Bank Above (L to R): Dermot McDonogh of Goldman Sachs and David Katz of The Plastic Bank When he established the Plastic Bank in 2013, David Katz wanted to combat two issues he sees as going hand-in-hand: poverty and plastic pollution in the world’s oceans. To do that, Katz created a novel way of aiding the poor while cleaning up the planet: “We’ve created a monetary system that uses plastic as an input,” he said during a recent episode of Talks at GS. The bank offers school tuition, medical insurance, pharmaceuticals and other goods and services in exchange for plastic waste that people collect around the world. “The Plastic Bank is best exemplified as a chain of stores for the world’s poor where everything can be purchased using plastic garbage,” Katz said. The Plastic Bank’s first operation was in Haiti, the poorest country in the Western Hemisphere. “Within Haiti, having schools as collection locations [for plastic waste] allows a family to return the household material to the school to pay for the tuition, because now the plastic is not just plastic. It’s $20 a month that pays for the tuition,” Katz said. “But for the family, it’s the end of poverty -- and that’s priceless.” Click here for the latest round of highlights from Talks at GS, and be sure to stream new episodes on Hulu, Amazon Prime Video, YouTube, Apple Podcasts, Spotify, iHeartRadio, and Soundcloud. Watch video

February 18, 2020

San Francisco, a real place, is the cultural and commercial heart of Silicon Valley, a made-up place. The former is a mess, even as the latter churns out unprecedented profits and scares the world with its concentration of power. Their ills are inextricably linked: Vast tech wealth has collided with political dysfunction to produce a horrifying state of affairs on the streets of a great American city.

I spent the last couple months stepping outside my lane as a business and technology journalist to investigate how things got so bad and what might be done about it. My article, “ Can San Francisco be saved?” appears in the current issue of Fortune, alongside other looks at cities around the world.

It’s tough to summarize what’s wrong, but a few things are obvious. San Francisco hasn’t built enough homes to house the people who’ve come to fill all the jobs it has created. Because there isn’t enough housing, prices have skyrocketed, which is fine for most tech-industry workers and not so good for everyone else. Because it’s tough for working people to find a place to live, it’s really difficult for the working poor, the non-working poor, and those afflicted with mental health and other ailments.

There are solutions to these problems, such as building more housing and spending even more money on the least fortunate among us. But these solutions need political leadership and compromise, two things historically in short supply in San Francisco. Political factions squabble in this city dominated by what elsewhere in the country would be called left-wing liberals as much as Democrats and Republicans do on the national stage.

Since I finished this article, the mayor of San Francisco, London Breed, said she took a gift from the powerful former head of public works, a longtime bureaucrat who has been charged with corruption by the U.S. Attorney in San Francisco. (He paid more than $5,000 for the repair of her 18-year-old car.) Breed is a pro-business centrist by San Francisco standards, and her left-of-the-left, anti-development opponents already have pounced.

Also since my story went to press, I picked up, with serendipitous timing, a new book, “Golden Gates: Fighting for Housing in America,” by the New York Times economics reporter Conor Dougherty. I interviewed several of the people he writes about in this outstanding book. It is highly readable (a true feat for a book about housing policy). I’m a slow reader, and I read this book in a few days. I recommend it to anyone who wants to go deeper on this important topic.

Notations On Our World (Weekly Edition): "The Future is Faster Than You Think"

Our team had the pleasure to join the Irvine Ranch Water District here in Irvine California as they provided a tour of their facility on how they work to create a sustainable strategy for the clients they serve--as part of our Community Engagement Efforts.  It is a window into a future that is truly possible.

We also wanted to note this from Peter Diamandis as he gears up for his new book that comes online next year--we look forward to building up and engaging here in the themes in spite of the profound challenges we face in our World as we look forward to live up to our mission to help change the conversation about our World and to help to create the future:

Over the next three months, I am beyond excited to give you a sneak peek into my new upcoming book, The Future is Faster Than You Think! Co-authored with Steven Kotler, The Future is Faster Than You Think examines the revolutionary changes brought about by convergence: What happens as AI, robotics, virtual reality, digital biology, and sensors crash into 3D printing, blockchain, quantum computing, and global gigabit networks? How will these convergences transform today’s legacy industries? What will happen to the way we raise our kids, govern our nations, and care for our planet?  We have now found clear evidence to believe that the rate at which technology is accelerating, is itself accelerating.  In just the past year, we’ve seen a dramatic rise of the deepfakes, and AIs that surge in capacity week by week. Today’s connected devices market is skyrocketing to a projected US$14.2 trillion economy by 2030. Stanford researchers predict 50 billion connected devices by 2020, and 500 billion just a decade later. Riding massive advancements in hardware, the AR/VR market could feasibly hit a US$767.67 billion valuation by 2025 (CAGR of >73 percent from 2018-2025). Meanwhile, 3D printing is expected to grow at a CAGR of over 29 percent in the next 5 years, surpassing a US$49 billion market by 2024. And in the next half-dozen years, we will begin connecting the globe—all soon-to-be 8 billion of us—at gigabit connection speeds. But these are just to name a few….  (Note: If you like this blog, share it! | LinkedIn | Facebook | Twitter | Read Online | Or send your friends and family to this link to subscribe!) What to anticipate in the book….  A follow-up to Abundance and BOLD, The Future is Faster delves into a host of converging technologies and how they will disrupt businesses, industries, and our lives in the decades ahead. And given the sheer pace of development across these exponentials, it has been a difficult book to write. Everyt ime we think it’s finished, we need to reopen a chapter to update it with what has just occurred.  Yet the bottom line remains the same: today’s emerging technologies are already building upon (and accelerating) each other’s growth. Whether in transportation, retail, advertising, education, health, entertainment, food, or finance, their convergence will have a profound—and irreversible—impact on every aspect of our lives. Offering technical insights from insider sources, The Future is Faster is broken into three parts. To start us off, Part 1 is a deep dive into each of the exponential technologies, what has been going on in the lab, and what is coming to market in the next 2-10 years. Tracking implications, the second part of the book examines all of today’s major industries and how they will transform over the next decade. In particular, we explore transportation, entertainment, education, healthcare, insurance, finance, real estate, energy, advertising, and retail, to name a few. One of the primary trends we address (applicable to everything from insurance to asset management) is removal of the middleman, which not only accelerates benefits to the consumer but newly grants them decision-making power.  Beyond benefits, however, the above exponentials have driven a tremendous amount of anxiety—from technological unemployment to loss of consumer privacy. Touching upon today’s most pressing concerns, The Future is Faster not only assesses risk but explores a range of feasible solutions, applicable in the near future. Finally, Part 3 of the book takes a look at the 5 Great Migrations that humanity will face over the next century.  While today’s greatest population shift involves migrations to inner cities (mainly due to climate change), we will soon witness mass migrations into space, into the virtual world, and finally, into a meta-intelligence, where we are all connected through the cloud.. Brain to brain and to each other.  Final Thoughts  Facing a brave new world, The Future is Faster offers a practical blueprint for the decade ahead, and a visionary’s guide for the coming century.  Our publisher, Simon & Schuster, is calling Abundance, BOLD, and The Future is Faster Than You Think, the “exponential mindset” series all put together.  As we approach the book’s public release on January 28, 2020, we’re excited to share with you a range of snippets in the form of bi-weekly blogs…. and can’t wait for your feedback! Join us in predicting the future… and creating it in the process!

Notations From the Grid (Weekly Edition): On The Future

Please enjoy this perspective on Artificial Intelligence as a new week dawns:

Briefly...on Artificial Intelligence's t on the ace

Above (L to R): Joe LeRoy of Goldman Sachs, Jeffrey Howell of Panasonic Industrial Devices, Richard Hughes of UnitedHealth and Brian Marcotte of the National Business Group on Health How is artificial intelligence shaping the workplace of the future? At the Ayco InnerCircle conference, which brings together practitioners and thought leaders in the human resources industry, Goldman Sachs' Joe LeRoy of Ayco's Institutional Business Solutions spoke with Richard Hughes of UnitedHealth Group, Jeffrey Howell of Panasonic Industrial Devices Sales Company of America and Brian Marcotte of the National Business Group on Health about the role of AI in their businesses. Joe LeRoy: AI is having an outsized impact on companies' human resources departments. According to PwC, about 63% of companies are rethinking the role of their HR department in light of AI's impact. Just how pervasive is it? Jeffrey Howell: From a standpoint of AI, I think the best word that comes to mind would probably be “inevitability.” It is coming whether we like it or not. In 2019, according to one industry stat, an estimated $30 billion to $40 billion will be spent on AI technology in 2019 – that's up about 40% from last year. Richard Hughes: In its current state, AI would be better described as “augmented” intelligence where human engagement is still needed in order for AI to reach its potential. AI is not currently capable of the creative, imaginative thinking we associate with the human mind. Rather, we see it as a system for ingesting human engagement and driving outcomes based on observations. Brian Marcotte: When I think about AI, it's more of an umbrella term that encompasses machine learning, deep learning, natural language processing and other methods to reach smart decisions. It's behind a lot more of what we do and see. In healthcare, for example, it's everywhere. AI is being used in back-end administration, wearables and are helping to steer people to the right physicians. It will revolutionize how healthcare is delivered. But having said that, the level of change in health care is far outpacing the localized and fragmented delivery system's ability to keep up. While there are emerging remedies to integrate these fragmented services, including better data integration and more predictive analytics and actionable messaging to patients, we are in the early stages and they are far from mature solutions. Joe LeRoy: Given AI's ubiquity, can you talk about how it's affecting your recruiting and people strategies? Richard Hughes: AI is already helping our HR professionals at UnitedHealth with employee selection and advancement. We've been using AI for more than three years in our recruiting practice to help connect an applicant's profile with job openings. But we're seeing more potential in applying AI to understand our own workforce. For example, we're applying AI algorithms and leveraging the science of our leadership database to identify the characteristics and profiles that make a great leader. This will allow us to identify and groom future potential leaders earlier in their careers. We've also developed methods for assessing flight risk potential through the data points that trigger turnover, giving us time to introduce proactive solutions to help mitigate attrition. Joe LeRoy: Jeff, as head of Panasonic's industrial sales business, how is AI impacting the business side? Jeffrey Howell: The amount of data that we're getting is permeating every aspect of our business relationships. And data is what's driving the core of AI by giving us the ability to project, interpret and predict. We've been using AI with some of our business partners to obtain more cost transparency and fine-tune our pricing models. We're also using similar predictive analytics to enhance our ability to introduce new products to the market. Historically, we've introduced about 20 new products a year. Next year, we'll launch 140 new products because of AI. Joe LeRoy: And we can't talk about AI without addressing its potential to replace jobs. How are you viewing the impact of AI on the future workforce? Brian Marcotte: In the future, AI will significantly transform many job functions, particularly in the administrative space. Some people are going to lose their jobs in the short term, but over the long term, AI has the potential to create more jobs. We need to reskill and redeploy those people who will be negatively impacted by AI and focus on ways to upskill and develop future workers in the necessary skill sets. Jeffrey Howell: AI is not only automating many of the manual processes, but it's also reducing operational efficiencies. If you want to look at ways to take advantage of AI, my advice is to put someone in place to take advantage of your data, such as a chief data officer. Download conference recap eBook SHARE: