Beijing city targets raising $1.5 billion fund in tech push – sources

HONG KONG (Reuters) – An investment firm backed by the Beijing city government is in talks with prospective investors to raise over 10 billion yuan ($1.5 billion) in its first fund aimed mainly at cutting-edge tech investments, said two people with direct knowledge.

Beijing Innovation Industry Investment Co’s fundraising move underscores the Chinese capital city’s push to catch up with other cities in the country, most notably Shenzhen, in pursuing innovative technology and industrial upgrading projects.

It comes as China aims to speed up development of its technology sector, including segments such as semiconductors and artificial intelligence, amid a fierce trade stand-off with the United States that has demonstrated the country’s reliance on imported technology.

China’s State Council in 2016 approved a 200 billion yuan venture capital fund https://www.reuters.com/article/china-funds-idUSL3N1AZ1SX, financed by state controlled entities, to invest in new technologies.

Beijing Innovation could not be immediately reached for comment.

It was set up by Beijing’s municipal State-owned Assets Supervision and Administration Commission (SASAC), which oversees the city’s state-owned enterprises, and has been tasked with making investments in new-economy sectors on behalf of the local government.

Beijing Innovation has attracted the local SASAC and several local government-backed companies such as Shenzhen Capital Group, the venture investment vehicle of the Shenzhen government, as investors, according to domestic media reports and public corporate registry filings.

It will look for direct-equity investment opportunities in sectors ranging from information technology and integrated circuits to electric vehicles and new materials, according to domestic media reports.

As a major tech hub in China, Beijing, where ByteDance Technology, one of the world’s most valuable startups, online food delivery-to-ticketing services firm Meituan Dianping and e-commerce firm JD.com are headquartered, has for years lacked a consolidated investment arm under the local government for tech deals.

In contrast, Shenzhen which has bred companies such as online gaming-to-social media giant Tencent Holdings, telecoms equipment maker Huawei Technologies and drone maker DJI, has Shenzhen Capital Group investing in the tech sector for 20 years.

Shenzhen Capital Group has over 333 billion yuan of assets under management, its website shows, and holds a 15 percent stake in Beijing Innovation, according to public disclosures.

Meet The Taiwanese Tech Giant That’s Due To Make The Next iPad Mini

If you follow Apple’s supply chain, you would already be aware that contract assemblers Foxconn Technology and Pegatron put together a lot of mobile devices at their considerable factories in China. But a third contractor, Compal Electronics, has also made iPads since at least 2017. Now, the 35-year-old company that usually churns out PCs, monitors and the occasional robot should expect a surge in business from Apple as the contractor for a new series of small iPads.

 

The tablet tentatively called the iPad mini 5, according to tech media outlets such as this one, updates a series that Apple last augmented in 2015 with the mini 4. Its production would give Compal a break by bringing it closer to the Silicon Valley giant’s mobile supply chain, and helping it diversify away from PCs. The device itself is expected to sell well despite an overall slowdown in the world tablet market.

“By accepting iPad assembly contracts, Compal would mainly benefit from the expanded product reach as well as the redistribution of its current PC-notebook business risks,” says Eric Chiou, an analyst with Taipei-based market research firm TrendForce. “It is worth observing whether Compal will, through iPad collaboration, become another one of Apple’s long-term business partners in mobile devices.”

iPad Mini 5 fanfare

Whatever label Apple gives it, the new smallish iPad is forecast to outsell peers in a world where tablet sales have been declining overall since 2015 because the market has been saturated and existing users aren’t upgrading their gadgets as frequently.

The global tablet market has declined 10% on average every year since 2015, the Market Intelligence & Consulting Institute in Taipei says for this report, and shipments from world hardware hub Taiwan have lost about the same percentage over the same period. Compal, Foxconn and Pegatron all call Taiwan their home base.

Quarterly sales of iPads have come off after peaking at 26 million units in the first quarter of 2014. Apple shipped 9.67 million in the fourth quarter of 2018, still down 6% from a year earlier.

More on Forbes: How Taiwan Will Vie With China And Asia To Develop Startups

“Nevertheless, compared to other small brands and white-label brands, the Apple iPad series seem to be less affected, with an increased share,” institute analyst Sagitta Pan says for this post. “In the future, Apple is seeking to continue cannibalizing the notebook PC market with upgraded specs products such as iPad Pro series.”

The iPad mini 4 stood out for its 7.9-inch screen, small and lightweight enough for one-hand operations. But consumers hungry for hardware upgrades since the mini 4’s release in 2015 could be waiting for a new model.

“There might be some pent-up demand for iPad mini 5, as the iPad mini has not been upgraded for a long time from the previous generation,” says Ethan Qi, analyst with the tech market research firm Counterpoint Mobile and Semiconductors. “We expect Compal to rake in higher margins than current business, which generates very low single-digit margins.”

Compal, once cramped, is seen expanding production

Compal is expanding factory production capacity in Taiwan, China and Vietnam in anticipation of a surge in orders for the iPad mini 5, Apple-related news website Appleinsider.com reports. A lot of production is in China already.

The company posted a 29% declined in net profit to $185 million even as revenue climbed $28.8 billion in 2017 amid sagging demand for computers. Compal was once the world’s second-largest maker of laptops. It had produced the machines for Dell and Hewlett-Packard, but like others got squeezed due to dwindling PC and notebook prices in recent years. Compal has been building its non-PC business, even launching its own-brand efforts such as the Robin projector-equipped robot designed to interact with children, to boost earnings. Compal declined to comment for this post.

With Apple diversifying its contractor roster, Qi says the iPad mini deal could help revive Compal’s earnings. “For Compal, this is a foot-in-the-door that they could use get more profitable business from Apple, such as assembling the Apple Watch or iPhones.”

GCHQ: Chinese tech ‘threats’ must be understood

In a rare speech, GCHQ director Jeremy Fleming emphasised the need for better cyber-security practices in the telecoms industry.

“It’s a hugely complex strategic challenge,” he said.

The US is pressuring its allies to not use Chinese firm Huawei’s technology to build new 5G networks.

Its officials are concerned that China could be using Huawei products to spy on other countries.

 


‘Naive’

Most of the UK’s mobile companies – Vodafone, EE and Three – have been working with Huawei on 5G, but they are awaiting the results of a government review, due in March or April, that will decide whether or not they’ll be allowed to go ahead.

In December, MI6 chief Alex Younger raised questions over China’s role in the UK tech sector, while a recent report from the Royal United Services Institute said it would be “naive” and “irresponsible” to allow Huawei access.

However, the National Cyber Security Centre – part of GCHQ – said last week said any risk posed by the company could be managed.

Should we worry about Huawei?
Why Huawei matters in five charts
What is 5G?

In his speech at an event in Singapore, Mr Fleming emphasised that the government was concerned about balancing the supply chain and ensuring that there was diversity in the telecommunications equipment supplier market.

“We have to understand the opportunities and threats from China’s technological offer – understand the global nature of supply chains and service provision, irrespective of the flag of the supplier,” he said.

“Take a clear view on the implications of China’s technological acquisition strategy in the West, and help our governments decide which parts of this expansion can be embraced, which need risk management, and which will always need a sovereign, or allied, solution.”

Could Huawei threaten the Five Eyes?

He added: “How we deal with it will be crucial for prosperity and security way beyond 5G contracts.”

Stressing the need for stronger cyber-security across the telecoms sector, Mr Fleming said: “Vulnerabilities can and will be exploited. But networks should be designed in a way that cauterises the damage.”

According to Gartner senior research director Sylvain Fabre, 5G is important to the UK government in order to ensure that Britain remains competitive as a country.

“They are reviewing the situation, in a way that hasn’t been done in the past, but it sounds like all options are still on the table,” he told the BBC.

Looking historically at the way that mobile operators tender contracts for new network infrastructure, Mr Fabre said that typically telcos selected at least three large vendors, as well as a few smaller suppliers, rather than just one vendor.

This strategy ensures that the mobile operator is able to get a range of innovative technologies at competitive prices, which is also good for the market.
National interests

The US is pursuing criminal charges against Huawei and its chief financial officer, Meng Wanzhou.

The company’s founder, Ren Zhengfei, told the BBC in an exclusive interview last week that the US made up only a fraction of its overall business and could not “crush” it.

He said Huawei would “continue to invest in the UK”, adding: “We still trust in the UK, and we hope that the UK will trust us even more.”

Speaking at a round table at Mobile World Congress in Barcelona on Sunday, Huawei’s rotating chairman, Guo Ping, once again strongly denied allegations that the company’s equipment was being used for spying.

“Huawei needs to abide by Chinese laws and also by the laws outside China if we operate in those countries. Huawei will never, and dare not, and cannot violate any rules and regulations in the countries where we operate,” Mr Guo said, according to AFP.

He said he hoped countries would make 5G decisions based on national interests, and not just listen to “someone else’s order”.

Bright young scientists uncovered in science and tech fair

For the Department of Education (DepEd), the future looks bright for the country’s young scientists and researchers.
Education Secretary Leonor Briones said that DepEd “continuously advocates the cultivation of curiosity, creativity, critical thinking, and innovation among our youth—to enable and nurture the country’s generation of globally competitive innovators.” Among the initiatives undertaken by the department in this aspect is the conduct of the National Science and Technology Fair (NSTF).

Considered as the foremost program that inculcates critical thinking, creativity, and innovation among the youth, the recently-concluded 2019 NSTF showcased research projects that were all geared towards community development and sustainable solutions.

Notable works

Overall, the 2019 NSTF unveiled a total of 66 researches and innovations by 126 student-researchers on Life Science, Physical Science, and Robotics and Intelligent Machines.

One of the most notable works is that of a Special Education (SPED) student-researcher Romel Angelo Picazo which aims to improve air quality for Filipinos. For the Grade 10 learner of General Santos City SPED Integrated School, it is his battle against pollution that has affected his health since age 10.

Picazo’s research entitled “Simulation and Pilot-Testing of O3 in Chappuis Band Region and NO2 Detector using LED as Sensor in Selected Areas in General Santos City,” was developed out of his struggle against pneumonia. Using light-emitting diodes, or LED, as sensors, his prototype is able to identify the concentration of ozone and nitrogen dioxide in the Chappuis Band Region of the ozone layer.

As his innovation is able to determine the difference in the concentration of the said gases in selected areas, Picazo said he aims to “push his research toward the detection of other pollutants in more places in the country.”

“The detection of ozone and nitrogen dioxide is vital since the presence of the latter in the atmosphere would be a strong indicator of a possible formation of higher nitrogen oxide pollutants,” Picazo said. “Ozone, a vital component in our atmosphere, may also cause various lung diseases when inhaled in large volume,” the 16-year-old gifted and talented learner stated in his paper.

A first-time participant in the NSTF, Romel already set his project to help enhance Republic Act No. 8749, otherwise known as the Clean Air Act, by providing an analysis of air quality at the local level and a baseline on the improvement of traffic patterns and green initiatives.

“I have made some research on the air quality index in the Philippines, although we have air quality monitoring, it requires update and real-time access to the public. An existing system also costs our government more compared to this LED-sensor,” Picazo said. As an aspiring doctor, he envisions that his innovation may also help physicians to “readily advise their patients with pulmonary conditions to avoid places with high concentration of atmospheric pollutants.”

Meanwhile, the work of Grade 10 student Maryjoise Karla Buan hopes to save Mother Earth one tree at a time. She created a device that aims to detect signs of activities which lead to deforestation entitled, “Solar Powered Anti-Illegal Logging and Kaingin Alerting Device Through Global System for Mobile (GSM) Communication.” Her entry to the 2019 NSTF does not only “determine the capability of a solar-powered alerting device for detecting signs of deforestation activities” but will “also help reduce, albeit gradually, the effects of the continuously worsening climate change and global warming.”

“When the sound sensor detects a sound of chainsaw, or when the flame sensor and smoke sensor detect flame and fire, the GSM will send a text message to, for example, a forest ranger,” Buan explained. This Pangasinan National High School student plans to take up the Science, Technology, Engineering, and Mathematics (STEM) strand under the academic track for Senior High School. She dreams of becoming a pilot.

Wanting to maximize social media to minimize lives lost in quakes, Jireh Emmanuel Gumaro, a student-researcher from Valenzuela City School of Mathematics and Science came up with the “Real-Time Twitter Data Mining Tracker During Ground Shakings in Batangas” which “maximizes the potential of the social media site and the ‘FOMO’ [fear of missing out] of many Filipinos by studying the spatial and temporal distribution of the tweets made during a ground shaking.”

Gumaro, a self-professed avid Twitter user, said his observations are first-hand and his “innovation is a light-bulb moment as he was constantly refreshing his Twitter feed by the minute.” The deluge of tweets, which could have been a nuisance to a regular reader, served as the Grade 12 learner’s low-cost solution to identifying earthquake-affected areas instantaneously.

Using the frequency, length, and geolocation of tweets with the keywords “lindol” and “lumindol,” data on large spikes correlated with the time of the quake will be generated with an average of a mere 1.5-minute delay. “Since seismographs take time to generate records of the ground shaking—causing delays in locating the epicenter—the thesis could help the community in terms of awareness of a ground shaking at the local level, ”Gumaro said in his paper. “The study may aid in apprising members of a household who possibly lack access to information from the national and the local government, and may give seismologists an idea for new equipment that uses the volume of tweets to locate an ongoing earthquake,” he added.

Meanwhile, DepEd Undersecretary for Curriculum and Instruction Lorna Dig Dino underscored that “any creation, any learning and innovation output should be a solution–a response to a community concern.” She added that in innovation, “anything that you do should always have a purpose so if you want to innovate a process, a system, or anything to create something new and original, it should always be for a reason.”

Spearheaded by DepEd Bureau of Curriculum Development-Curriculum Standards Development Division (BCD-CSDD), in cooperation with the Gokongwei Brothers Foundation (GBF), the 2019 NSTF aimed to promote Science and Technology consciousness among the youth by enabling them to produce and present Science researches and projects.

Silicon Valley tech boom continues, but residents are exiting costly region

SAN JOSE — The technology boom still fuels the Silicon Valley economy, and at a pace that tops or equals all of the innovation region’s rivals — but more people continue to exit the costly and traffic-choked region every month than arrive, according to an economic report released Monday.

“It’s really remarkable that the tech job market is so strong in this area,” said Brian Brennan, a senior vice president with the Silicon Valley Leadership Group.

Silicon Valley’s technology industries during 2017 set the pace for employment growth nationwide and outpaced Seattle, Southern California, Boston and New York City, and was equaled only by the Texas city of Austin, the report from the Silicon Valley Competitiveness and Innovation Project showed.

However, amid traffic jams and soaring home prices, a growing number of people appear to have defected, according to the report.

“A net average of 165 residents left Silicon Valley each month in 2017, an increase from the net average of 42 per month who departed in 2016,” the report stated. “The last two years are a sharp reversal from 2015.”

During 2015, Silicon Valley gained 1,962 net new residents each month, the report for that year determined.

“The last two years we speculated that our region’s ability to sustain its post-recession growth may be eroding,” the report’s authors wrote. “This year’s update does not settle the speculation.”

Why? Silicon Valley’s tech sector added jobs during 2017 at a robust annual pace of 5 percent, a tech job growth matched only by Austin, which also grew at 5 percent.

Silicon Valley raced well ahead of the tech job growth of 2 percent in Seattle, 1 percent in Southern California, 3 percent in Boston and a nearly invisible 0.5 percent in New York City, the report found. The report is a joint effort of the Silicon Valley Leadership Group and Silicon Valley Community Foundation.

Tech growth slowed in Seattle, Southern California and New York, stayed the same in Boston.

“Silicon Valley’s innovation industries continued to grow at the same rate in 2017 as in 2016, though at a slower pace than in 2015,” the report stated.

Based on hiring plans by local tech companies, the innovation economy doesn’t seen likely to wither any time soon in Silicon Valley.

About 50 percent of the tech companies surveyed in connection with the study said they intend to increase their employee presence in Silicon Valley between now and 2025, according to Brennan.

Just 9 percent of the tech companies that responded to the survey plan to reduce staffing levels in the coming years.

“This absolutely surprised us. We did not expect this outcome,” Brennan said. “The tech employers we surveyed are still bullish on Silicon Valley. That says a lot about the strengths of this region.”

Despite the rosy findings in the report, the leadership group is alarmed by the implications of the outward migration to other areas of the country from Silicon Valley, which lost a net average of 3,051 residents per month during 2017.

“We are bleeding people to other states,” Brennan said.

That was nearly offset by a huge net flow into Silicon Valley each month of 2,887 residents from other countries. The result was a net out-migration from Silicon Valley of 162 people a month.

The trends mean the pressure has intensified on Silicon Valley in particular, and California in general, to tackle the housing crunch and traffic woes that hound the Bay Area and Golden State.

How Washington Will Tame Tech’s Behemoths

William Barr, in his January confirmation hearings to become the U.S. attorney general, entered into the lexicon a valuable, if redundant, expression to describe the biggest technology companies in the land. “I think a lot of people wonder how such huge behemoths that now exist in Silicon Valley have taken shape under the nose of the antitrust enforcers,” said Barr, an establishment Republican lawyer from central casting—and therefore an unlikely antagonist for Big Business. His locution stuck, heightening the sense that the “behemoths”—Facebook, Google, Amazon, Microsoft, Apple, and a hand­ful of less-gigantic competitors—now face a greater regulatory threat than at any other time in their relatively brief existence.

The companies are fighting the onslaught in various ways. Microsoft, the industry’s journeyman of governmental warfare, is cleverly advocating regulation of a narrow slice of potentially creepy technology: facial recognition. Apple is pointing fingers, suggesting its data-privacy stance is holier than Facebook’s and Google’s. Facebook, in a preview of how the industry will battle its adversaries, has simultaneously called for some form of regulation while darkly warning of the unintended consequences of the wrong kind. (One argument certain to get Donald Trump’s attention: Regulate us too severely, and you’ll only empower our Chinese competitors.)

The situation is fluid, but it’s clear that legislators, regulators, and consumer advocates are fed up with big tech companies and that some form of stricter control almost certainly is coming. What’s more, in the U.S., regulating Big Tech might be the one subject that bridges the ever-widening political divide. Says a top policy executive for a major tech player: “This is where the libertarian right meets the populist left.”

At the highest level, the industry faces the once unthinkable notion that it needs an overarching regulator. In the U.K., the opposition Labour Party has proposed creating a single digital regulator. The idea is gaining traction in the U.S. too. “This is like mortgages: In the right hands, they’re a tremendous benefit,” says Fiona Scott Morton, an economics professor at Yale. “But I can sell an exploding mortgage to a lower-income person and ruin their financial life. Most people would say they like mortgage regulation.”

The area most likely to see fast action is privacy. Last year the European Union began implementing its General Data Protection Regulation, a broad measure that gives individuals rights over their data. California then added a ­hastily crafted Consumer Privacy Act, due to take effect in 2020. The business community so thoroughly dislikes the California law that there’s broad agreement on passing federal legislation in Washington to preempt that and other potential local directives, possibly this year. “This is one area where it doesn’t make sense to have a patchwork of laws,” says Michael Beckerman, CEO of the Internet Association, a 45-member trade group that counts all the major non-hardware digital players as members. “It’s almost like having different electricity standards between states.”

If privacy legislation is most likely to happen soon, a bevy of more complicated issues will be addressed more slowly. A rethinking of decades of antitrust law could have the most impact on the biggest tech players, particularly Amazon, Facebook, and Google. Breaking up these giants would require a new approach, widely known as “hipster antitrust” theory, which focuses on the harm the companies cause to competitors rather than on higher consumer prices, as traditional antitrust law does. (After all, big tech players usually lower prices for consumers—or charge them nothing at all.) “We’ve got to stop using the word ‘monopoly’ and start using the word ‘anticompetitive,’ ” says Roger McNamee, a longtime Silicon Valley investor who has become an adversary of big tech, particularly Facebook.

The behemoths won’t go down without a fight, of course. Their massive balance sheets can fund endless lobbying, the public tends to love their (often free) products, and the fractious political climate works to their advantage. Yet there’s an air of inevitability about regulation. It is becoming a question of when, not if.

The US government just made clear it’s going after more types of Chinese tech than we thought

A letter from top U.S. officials and senators calling for a ban on Huawei-made solar equipment inject yet another complicated wrinkle in an ongoing and fierce series of tech disputes between the U.S. and China.
Technology issues surrounding everything from alleged violations of Iran sanctions to trade-secrets theft and tech-transfer laws have hampered trade talks between the two countries.
The issue will likely heighten the debate between U.S. officials, who say China’s tech companies work with the Chinese government to create tech that can be used against the U.S., and Chinese officials and business leaders, who have said these accusations are mere protectionisms by the U.S.

The brewing technology battle between the U.S. and China isn’t just about 5G telecom equipment Chinese companies want to bring to the U.S. It’s already starting to bleed into other tech categories, as shown in a new letter posted Monday from 11 senators and top officials from the departments of Energy and Homeland Security that called for a ban of Huawei-made solar technology.

The letter sets the U.S. up to not only block smartphones and telecom equipment from Chinese companies such as Huawei but nearly all tech it sees as a potential security threat.

The authors of the letter, including DHS Secretary Kirstjen Nielsen and Energy Secretary Rick Perry, say Huawei’s “smart” solar grid products, which include control systems called “inverters” that are capable of connecting to the wider electrical grid, present a danger to “critical U.S. electrical systems and infrastructure.”

The energy-grid worries are a new strand in the increasingly tangled web of technology disputes between China and the U.S., and one that will only further complicate trade talks. In just the past few months, the two countries have sparred over technology theft, knowledge-transfer laws in China, purported violations of U.S. sanctions against Iran, trade-secrets theft of tech from companies such as T-Mobile, allegations of Chinese spying using exported equipment in U.S. networks and more.

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The US government just made clear it’s going after more types of Chinese tech than we thought

Cybersecurity
The US government just made clear it’s going after more types of Chinese tech than we thought
Published Mon, Feb 25 2019 • 3:56 PM EST | Updated Mon, Feb 25 2019 • 7:35 PM EST
Kate Fazzini

Key Points

A letter from top U.S. officials and senators calling for a ban on Huawei-made solar equipment inject yet another complicated wrinkle in an ongoing and fierce series of tech disputes between the U.S. and China.
Technology issues surrounding everything from alleged violations of Iran sanctions to trade-secrets theft and tech-transfer laws have hampered trade talks between the two countries.
The issue will likely heighten the debate between U.S. officials, who say China’s tech companies work with the Chinese government to create tech that can be used against the U.S., and Chinese officials and business leaders, who have said these accusations are mere protectionisms by the U.S.

GP: Ren Zhengfei, founder and chief executive officer of Huawei Technologies
Ren Zhengfei, founder and chief executive officer of Huawei Technologies Co., left, speaks during an interview at the company’s headquarters in Shenzhen, China, on Tuesday, Jan. 15, 2019.
Qilai Shen | Bloomberg | Getty Images

The brewing technology battle between the U.S. and China isn’t just about 5G telecom equipment Chinese companies want to bring to the U.S. It’s already starting to bleed into other tech categories, as shown in a new letter posted Monday from 11 senators and top officials from the departments of Energy and Homeland Security that called for a ban of Huawei-made solar technology.

The letter sets the U.S. up to not only block smartphones and telecom equipment from Chinese companies such as Huawei but nearly all tech it sees as a potential security threat.
watch now
VIDEO02:44
Excluding Huawei from 5G networks could slow innovation, EE CEO says

The authors of the letter, including DHS Secretary Kirstjen Nielsen and Energy Secretary Rick Perry, say Huawei’s “smart” solar grid products, which include control systems called “inverters” that are capable of connecting to the wider electrical grid, present a danger to “critical U.S. electrical systems and infrastructure.”

The energy-grid worries are a new strand in the increasingly tangled web of technology disputes between China and the U.S., and one that will only further complicate trade talks. In just the past few months, the two countries have sparred over technology theft, knowledge-transfer laws in China, purported violations of U.S. sanctions against Iran, trade-secrets theft of tech from companies such as T-Mobile, allegations of Chinese spying using exported equipment in U.S. networks and more.
watch now
VIDEO05:18
Trade deal or no deal, the U.S. and China are still fighting for global power

The letter shows that U.S. officials will continue to fight against a full range of China-manufactured equipment, not just network equipment that would enable 5G connectivity.

The issue will likely heighten the debate between U.S. officials, who say China’s tech companies work hand-in-hand with the Chinese government to create tech equipment that can be used offensively against the U.S., and Chinese officials and business leaders, who have said these accusations are mere protectionism by the U.S.

Huawei’s inverters are used by residential, commercial and public utility customers. Huawei offers a full range of solar panel products in addition to the control systems, including the control systems and software to run and monitor power plants that process solar energy. Huawei’s equipment has been adopted on a large scale by installations across Europe and, most recently, in Saudi Arabia.

In the U.S., there are a handful of industries that top DHS’ list of “critical infrastructure” companies, and prime among those are energy and electrical corporations and utilities. They are already earmarked for extra attention from intelligence officials, regulators, and legislators through this designation.

Huawei has vehemently denied these claims, with CEO Ren Zhengfei saying last week the company did not create so-called “backdoors” that would allow access to China’s intelligence services.

“Not possible. And also, we never participate in espionage, and we do not allow any of our employees to do any act like that. And we never install backdoors. Even if we were required by Chinese law, we would firmly reject that,” Ren told CBS News.

Ren’s daughter, Meng Wanzhou, was arrested in Vancouver in December on fraud charges involving alleged violations of Iran sanctions. The U.S. is seeking to extradite Meng, a request that will be heard in an Ottawa court in March.

A Computer Scientist’s Guide To Dumping the Needless Tech In Your Life

CN: The way we think about new technology like social media or smartphones is different from any other tool. Those technologies are presented as, “It might be of some use, so why not try it?” But if you’re a woodworker, you don’t go to Home Depot and think, “Look at this shiny new thing! I’m not quite sure what I’m going to do with this, but if I have it, it will help.” Woodworkers care about what they’re trying to produce, and the tools are subordinated to what they’re accomplishing.

Minimalism is thinking of what you’re trying to do, personally and professionally, and asking, “What’s the best tool? What’s going to give me the biggest return?” Once you get into a sort of craftsman mindset, you’re going to say, “I don’t need a new iPad.”

PM: But we, generally, choose the opposite of that.

CN: It makes me think of this commercial for the Microsoft Surface with a roboticist, where this tablet is enabling him to create robots by dragging his finger across the screen. I don’t want to get too into this, but that’s an incredibly physical job. Roboticists spend years learning how to build material actuated things, using real tools and huge workshops. They’re usually master electrical engineers and structural engineers. But this tablet enables them to figure out how to do responsive locomotion? That idea epitomizes what’s going on now. It’s this vague sense of, “Just turn on Slack, and your office will improve.”

PM: And it’s not just that we’re being oversold on utility. New tech, if you don’t use it deliberately, can be harmful.

When the internet is consolidated into big private companies like Facebook, those companies think, “We gotta get users at all costs; we’ll figure it out later.” That’s when you get maximalism, and engineered addictiveness. Things like the Apple Watch or Amazon Echo represent this mindset, of not thinking of what problem the product solves. It severely underestimates the value of our time. For example, I’ve been a skeptic of voice assistants like Alexa. Tapping my weather app wasn’t holding me back from something important.

PM: There’s a section about solitude, defined as the time where you’re not experiencing ideas from other minds. What do you gain from turning off notifications, or leaving your phone at home on a walk?

CN: The way our brains work is, when bringing in information, you also have to do a lot of processing. I have had the privilege to spend time with the very top theoretical minds in the world, and they spend tons of time just thinking. That also applies to self-realization, to understanding your life better. But even if you’re in a remote cabin, if you’re listening to a podcast, you’re not in solitude. You’re reacting. You’re thinking, What does this person mean? Do I agree with them? Phones activate expensive parts of your brain. Running them all the time is exhausting.

PM: You’re a computer scientist. Isn’t talking like this bad for business?

I see technology through this lens where there are this beautiful theory and computation. You can use logic and math to determine what you can and can’t solve with computing systems. But then, I look around and think, “I’m at the beginning of a long pipeline that eventually leads to big systems.”

Technologies have huge impacts, a lot of them unintentional. That’s why I write about this stuff. I figure it’s probably good to have someone who’s deep inside this world doing some self-reflection.

Five Tech Trends That Will Redefine Commerce The Most In 2019

Technology continues to play a critical role in the evolution of society, including the upheaval of consumer-facing industries. The internet, in particular, has been one of the modern era’s most transformative innovations. Connectivity is now the new normal.

In 2009, only 24% of the global population had access to the internet, according to Euromonitor International. Since then, the percentage of the global population that is connected has doubled, boosted in large part by mobile internet.

For the first time in history, most of the global population will be connected this year, which equates to 4 billion internet users. The highest levels of connectivity are found in the developed world, including regions like North America and Western Europe, who first started to come online through connectivity in the home.

While computers first brought internet into the home, mobile connectivity ushered in borderless internet, giving consumers instant access to anything from anywhere. More importantly, it helped bring emerging market consumers online, giving access to the masses.

Technology drives constant innovation, inspiring several trends that continue to reshape the world. Below is a look at the five digital trends that will redefine commerce the most in 2019.

Consumers seek digital balance

The internet ushered in greater connectivity and convenience across all aspects of consumer life to the point of becoming an addiction for some. More than half of connected consumers globally indicated they would be lost without said internet access, according to Euromonitor International’s annual Lifestyles Survey. Consumers have come to realize that they need to exercise more self-control over their gluttonous ways. At first, consumers tried to fast from the internet for periods of time before realizing it might require a more balanced and sustainable approach to manage one’s tech usage, much like one’s diet.

Even some of the biggest purveyors of the digital addiction – Facebook, Alphabet and Apple – have put initiatives in place that will limit usage. Apple, which is the second-largest global smartphones manufacturer based on retail volume behind Samsung, introduced new tools to limit screen time, or at least create digital self-awareness, as part of its new operating system in mid-2018. Facebook, which dominates the social media landscape globally, has also taken a more active role in helping its users maintain their digital wellness across its social properties including the likes of its core Facebook platform as well as Instagram.

Outlets get autonomous

Over the last two years, employee-less stores have gained dramatic interest worldwide, prompting increased buzz around sophisticated vending machines, kiosk-based ordering in restaurants, cashierless checkout and fully unattended stores. Driven by start-ups and enormous tech companies alike, these technologies have the potential to usher in new business models, lower operating costs and save customers time. Finding ways to manage implementation costs, maintain a strong customer experience and navigate changing labor market dynamics are key questions for companies to consider.

One of the most important developments that will propel this unmanned commerce trend forward in 2019 is the emergence of options that can be used to retrofit stores. Thus far, unattended commerce formats from the likes of JD.com and Amazon depend on heavy camera surveillance and technologies like facial recognition and artificial intelligence. Several companies, such as Grabango, Caper and MishiPay, are behind approaches that that are more cost-effective and well-suited to retrofitting existing outlets. Grabango, for example, uses sensors and algorithms to track each item in the store as a consumer adds it to their order. Retrofitting technologies will accelerate the development of autonomous stores in 2019.

Brands search for their voice

Though still in its early days, rising ownership levels of voice-enabled hardware and growing sophistication of voice assistants, particularly in North America and Asia Pacific, are creating potential for brands to engage with consumers via voice. Since voice is expected to function differently from click- and tap- based e-commerce, companies should begin to give serious thought to their voice approach in 2019. In the intermediate term, many of the best opportunities likely lay around pre- and post-purchase, as well as content marketing.

Many companies made their first forays into voice commerce and voice marketing in 2018 and did so through adding voice capabilities in the pre-purchase phase of a consumer’s path to purchase. Making it easy to access product recommendations and checking store hours are a couple examples. Looking ahead, the next step for companies in developing a voice strategy will be to add post-purchase activities. Companies could make it possible for customers to add reviews, start returns and access customer service resources through voice activities. Purchase execution is a longer-term goal best suited for purchases with a limited number of options. In new research, Euromonitor International projects that 5% of all consumer purchases in the US will be executed on a voice platform in 2023.

Consumers take the CX wheel

Companies today can amass data on their consumers and use machines to calculate optimal consumer journeys. In one sense, commerce of today only requires passive consumer participation. Shifts are under way, though, that could change these dynamics and put consumers in more control of their experiences, which is important because businesses will compete primarily on this element in the future.

As digital identities become more transportable, and privacy regulations such as the European Union’s General Data Protection Regulation put more power with regard to data sharing in the hands of consumers, the next era may enable or even require consumers to sign in to experience. This is powerful as it is not only the ultimate form of personalization, but also gives consumers more control.

Super apps go global

A super app is a do-everything mobile app, with the best ones combining all aspects of a consumer’s world into a single platform. Consumers, especially those in Asia Pacific, were the first to embrace this concept, because it offered a contextualized and cohesive experience. WeChat is the classic, but others like Go-Jek, Grab, Kakao Talk and Line have emerged in recent years. Now these all-in-one apps are gaining traction in other parts of the world with these first movers and other companies embracing the power of the platform to reach consumers and connect them to more services, all to increase engagement and ultimately stickiness.

Among the Western tech titans, Facebook might be the closest to mimicking the WeChat super app model. The social behemoth has integrated more functionality that speaks to financial and retail needs across its platforms. In early 2019, Facebook made one of its most overt moves toward becoming a super app when it announced that it would combine Messenger, WhatsApp and Instagram messaging services into a single, unified platform. While CEO Mark Zuckerberg says the move is to enable end-to-end encryption, he did add that it could improve the user experience by removing the need to jump between platforms.

A look ahead to 2019

2019 will mark a turning point in the digital era as more than half of the population will finally be connected. This connectivity will undoubtedly continue to change how consumers live, work, play and shop. The digital trends that we see most impacting commerce in 2019 fall into one of two classifications. On the one hand, some of these trends are about how companies can better leverage technology to drive engagement, create more personalized experiences or reduce operating costs. On the other side of the equation, though, are the consumers who are demanding more of a voice in such conversations and actively unplugging if they do not like what they hear. The key challenge for companies in this era is being viewed as providing value in this relationship.

Tech industry titans suddenly love internet privacy rules. Wanna know why? We’ll tell you

Analysis After years of fighting to prevent any form of legislation that would safeguard Americans’ online privacy, this week Congress will have two hearings on the topic during which the tech industry will outline its newfound love for laws covering its business.

But, experts warn, there is one big goal behind the sudden willingness to engage: a set of nation-wide federal laws, strongly influenced by the industry itself, which override individual state laws, and in particular a California law that was passed last year in an extraordinary last-minute compromise.

“Here’s a quiet fight that’s brewing in Washington that you should pay attention to,” the newly appointed FTC Commissioner Rohit Chopra tweeted on Monday. “It’s called preemption – that’s the ability of Congress to hit delete on all state data protection laws.”

The issue of federal versus states’ rights is one of the United States’ most enduring battles, and in the past year, the rules surrounding telecoms and the internet have been pulled firmly into its orbit, not least thanks to the FCC’s controversial decision to tear up its own rules on net neutrality.

Sen. Jeff Flake, R-Ariz., arrives before Secretary of State John Kerry, Secretary of Energy Ernest Moniz, and Secretary of Treasury Jack Lew, arrive to testify at a Senate Foreign Relations Committee hearing on Capitol Hill, in Washington, Thursday, July 23, 2015, to review the Iran nuclear agreement. (AP Photo/Andrew Harnik)

While Congress has failed miserably to deal with key issues in the digital era, and federal regulators have adopted a hands-off (or should that be hands-free?) approach to regulation, state legislators have stepped in and started making laws to protect their constituents from harm. But now Big Tech has realized that federal laws are all but inevitable, it has decided to see if it can use the process to get rid of the current laws it doesn’t like.

As Chopra put it, “if Congress includes preemption in federal law, this might erase the biometric privacy law in Illinois, the data broker law in Vermont, and the new consumer privacy law in California. Members of Congress are starting to push back.”

In fact, there is an entire raft of state laws that been developed to deal with internet privacy, all of which could be effectively struck from the law books if an overreaching federal law is introduced – you can view a list on the National Conference of State Legislatures’ dedicated internet privacy page.
All eyes on the West Coast

But the foremost target is California’s law that appeared out of nowhere, and was passed in record time last July.

The California Consumer Privacy Act of 2018 was the first such data privacy law passed in the US, despite years of legislative efforts in Washington DC, and while it didn’t completely extend European-style GDPR protections, it did give the state’s 40 million inhabitants the ability to view the data that companies hold on them and, critically, request that it be deleted and not sold to third parties.

Tech giants absolutely loathe the law, which threatens to undermine their fundamental business model of gathering, packaging, and selling user data while doing as much as possible to keep people as uninformed as possible about what information they actually have on them. Under the California law, any company with data on more than 50,000 people is covered, and each violation carries a hefty $7,500 fine.

How did online giants like Google and Facebook, which are based in Cali, ever allow such a law to pass? Why didn’t they use their full lobbying might in Sacramento to kill it? Well, the fascinating answer behind that one is that they feared a worse alternative: a ballot measure. A chance for voters to directly give a thumbs up to new safeguards for their information.

In early 2016, a number of dedicated individuals with the funds and legislative know-how to make data privacy a reality worked together on a ballot initiative in order to give Californians the opportunity to give themselves their own privacy rights after every other effort in Sacramento and Washington DC has been shot down by lobbyists of Big Tech and Big Cable.

Such a law is enormously popular with voters and after real estate developer Alastair Mactaggart put about $2m of his own money into the initiative, it made its way through the somewhat complex procedure, and was just about to be placed onto the official ballot to voters.

It was almost certainly going to pass, and that meant that not only would Big Tech be forced to deal with a data privacy law but it would be far harder for it to change the legislation after the fact through Sacramento lobbying.

It came down to the wire: Mactaggart said that if California’s governor signed into law a new privacy act before the ballot deadline, he would pull it. And so California’s Congress scrambled, Governor Brown signed it, and literally the evening of the deadline, the ballot measure was pulled.
Some changes I think

But, this being a legal sausage-making machine, legislators included an 18-month window to make “technical, clean-up amendments” before the law comes into effect in January 2020. And Big Tech has been furiously trying to undermine the rules every since, with limited impact since there is now a large spotlight on the process.

Not so in Washington DC where a data privacy law is still in its early stages, and so subject to all manner of behind-the-scenes lobbying. Which is how we get to this week’s Congressional hearings.

As we mentioned last week, industry has already sewn up the Senate hearing, to be held on Wednesday, with most of the witnesses representing the industry view. Just for good measure, the tech giants’ representatives are rubbing privacy advocates’ faces in it by holding a reelection fundraiser literally the night before the hearing for the committee chairman, Senate Roger Whicker (R-MS).

Meanwhile, the House hearing’s witness list was released on Monday, and strikes more of a balance, listing a senior director of the US’ “largest online civil rights organization” Color of Change as well as the CEO of the Center for Democracy & Technology (CDT), both of which are strongly in favor of giving netizens the right to decide what is done with their data.

On the other side sit the VP of public policy for the Interactive Advertising Bureau (IAB) who will promote the idea of industry self-regulation, as well as Roslyn Layton from “non-partisan” think-tank the American Enterprise Institute (AEI), which pushes Big Cable’s lines on everything from net neutrality to 5G to data privacy.
In a nutshell

Most crucial, though, is the vice president for technology and innovation at Business Roundtable, which closely reflect the careful line that business will take when it comes to a data privacy law: saying everything that people want to hear while focusing obsessively on the fine detail to ensure that the US does not get GDPR-style protections.

“At the heart of the Business Roundtable proposal is a set of core individual rights that we believe consumers should have over their data,” reads its testimony [PDF] before listing what sounds like a privacy advocates’ dream:

The right to transparency regarding a company’s data practices, including the types of personal data that a company collects, the purposes for which these data are used, and whether and for what purposes personal data are disclosed to third parties
The right to exert control over their data based upon the sensitivity of the information, including the ability to control whether their data are sold to third parties
The right to access and correct inaccuracies in personal data about them, and
The right to delete personal data

Except, of course, all the data remains in the hands and control of the companies, and they are the ones that get to decide how it is disclosed, how it is amended, what constitutes inaccuracies, and what kind of “rights” individual users will actually get.

And as for fines for failing to adhere to the new law – something which pretty much everyone agrees is the only thing that has given Europe’s GDPR law any teeth – well, there’s no need for that. In fact, there is not even a mention of that stick in any of the pro-industry remarks.

What the testimony does mention repeatedly however is the need for a “consistent, uniform framework.” One that works across the United States. One that provides a “stable policy environment”; that prevents “inconsistent approaches to privacy both domestically and abroad” and stops “inconsistent protections for consumers.”