Covid19 could lead us to a cleaner more innovative world – if we rethink what we do

About seven million people are killed by air pollution every year. The current model of modern society is unsustainable.

Two leading Professors say that looking through a COVID-19 lens provides us an amazing picture outside and shows some innovative pathways on living in harmony with nature, i.e. new-modern society.

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They are Professor Suresh Bhargava, RMIT University, Australia (pictured above) and Professor Seeram Ramakrishnan, National University of Singapore (below).

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Here are some points from their recent paper on the topic:

Contrary to devastating effects, the COVID19 had positive outcomes in terms of air pollution and greenhouse gas emissions, depletion of natural resources, and climate change.  Satellite imageries confirm the reduction of NOx, SOx and other pollutants in all cities of the world.

COVID19 provides an opportunity to rethink everything humans do. The current model of modern society is unsustainable. Reversing the clock and going back to pre-modern society built on fulfilling just the needs of humans is not realistic.

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Sustaining the modern society built on fulfilling the needs and wants of humans requires out of the box thinking. In the current climate of COVID, companies are struggling to survive on top of challenges in industry 4.0 or digitalization of products and services. How will they be able to think about sustainability while their worry is about resilience, and make the necessary adjustments to their business for the long term?

Sustainability has tended to be a secondary priority for many industries and especially SME businesses. Now faced with business survival and viability concerns, what is the status of existing sustainability initiatives in companies and across industries? How has the pandemic affected existing initiatives and longer-term targets, plans and ambitions on the sustainability front?  How can organisations get back on track with regard to their sustainability ambitions e.g. are there synergistic business-led propositions that can serve these aims? What countries can do in terms of sustainability, circular economy and Paris agreement to decarbonize while growing shrink economies and rising employment opportunities?

Using a COVID19 lens, there are opportunities for decarbonisation while not compromising the modern ways of living and economic growth.

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Countries and companies will shorten the supply chains and value chains.  Globalization will take newer form relying more on digital technologies and internet.  This will be facilitated by yet to emerge innovations in finance and commerce.

COVID19 has unexpected effect on food industry. Clean meat is touted as a solution to zoonotic diseases associated with current methods of producing meat from the animals.  Clean meat is made from plant based, cultivated cells.  Hence the carbon footprint is lower than animal sourced meat.

Critics will argue for slow and careful introduction of clean meat to the mass population.  Therein lies huge opportunities for innovations, technologies, new jobs and new pathways of economic growth while caring for the Earth.

Importance of safe water and its adequate supply is highlighted by the COVID19.  Sustainable future lies in the zero-waste water innovations and technologies.

The single use plastic wastes have been identified for their pollution of the marine ecology and subsequent negative effects on the food chain and human health.  Science, business, standards, and policy innovations are needed to replace the petrochemical derived plastics with degradable bioplastics derived from the renewable sources.  Designing products with end-of-life considerations and life cycle engineering opens up opportunities for economy growth and new jobs creation while improving the quality of environment.

The Energy sector is also affected by the COVID19.  Oil futures went into negative. It is an opportune time for the governments to eliminate the fossil fuel subsidies and invest in renewable energy infrastructure as long-term nation building.

Perhaps, governments and companies should together accelerate the electrification of transportation.  New jobs and new economic growth to happen in vehicle design and manufacturing, digitization, as well as charging infrastructure.

COVID19 transformed shopping and brought almost the whole of humanity to on-line shopping.  The on-line shopping for groceries and food deliveries are on par with electronic goods and accessories.

Similarly, work has moved to telework, and the Education moved to on-line learning and assessment.

Digital services for virtual meetings, online learning, telemedical diagnostics, government services, ecommerce, grocery delivery, e-banking, and entertainment all experienced unprecedented growth in demand. The hyper scale data centres with their 24x7x365 resilient operation, are the heart of digital transformation.

Looking to the coming decade, the introduction of 5G will further accelerate the digital transformation era with its clear alignment with Industrial 4.0, in which real time data and automation will power more of the industrial world.

Clear messages emerged from the COVID19 pandemic include, the digital transformation is a necessity to keep society running; mental health is important for the general well-being and productivity of a person; and a healthy living environment is a basic human right.

The circular economy vision, decarbonisation and sustainability efforts mitigate climate change thus create opportunities for sustained economic growth and new jobs creation. 

Amazing research work by the two and continues the innovative and collaborative approaches of my friend Professor Suresh Bhargava – well done!

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How India is different from China – insights from Asialink Business

Asialink Business has a wonderful Asian Market Update Series and a recent one focused on India.

One of the speakers was Mary Manning – Portfolio Manager at Ellerston Capital.

Dr Manning manages the Ellerston India Fund among other Asian investments.

She detailed why India is unique and not the next China. For example, the structures of the two economies are very different and beyond coal, exporting bulk commodities is not going to be the bedrock of Australia’s relationship with India.

India is also at a very different stage of economic development to China, with different consumer preferences, price points and distribution channels. These factors give rise to a completely different set of sectoral opportunities, that will most likely require capital investment on the ground – but one size does not fit all when it comes allocating capital in India.

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Dr Manning cited several examples of successful investment in India by multi-national corporations that cut across geographies, sectors, time frames and business models, such as majority stakes in listed companies, through to unlisted joint ventures and distribution agreements. These companies include household names in Unilever, Suzuki, Prudential, Macquarie, Facebook, Alibaba, McDonalds, Walmart, and QBE.

Dr Manning said the higher returns on equity that could be achieved in India were a major reason why Australian companies should be considering investment opportunities there.

She said there was currently an investor scramble for ‘new economy’ assets in India in key areas such as healthcare and infrastructure and while good buying opportunities could present over the next six to 12 months for equity investors – with the Indian economy weakened by COVID-19 – a long-term view was needed.

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India – how Australia’s trade will change and how we should communicate

In the 1990’s, Australia sold India coal and LNG. We also sent over copper, lead and gold, along with unprocessed foods such as chickpeas, lentils, almonds and oils.

According to India veteran Michael Moignard (pictured) of East West Advisers, it was the beginning of our trade relationship with India – so that makes it very recent.

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In the 2000’s our trade has shifted – uranium is in there but taking the prize has been education in the form of fee-paying students in Australia. Along with this has been IT and processed foods, with wine and packaged goods finding a market. Finally, Indians discovered Australia as a tourist destination.

So, what will the 2020’s look like?

Michael Moignard was our Senior Trade Commissioner in Delhi for 7 years, so it was good that he gazed into the crystal ball at a recent India seminar at BDO. This is what he saw:

“Sustainability” will become a big theme, covering services and products around water, waste, renewables and smart cities. That’s a big shift.

Education will continue to dominate but with a move to skilling India’s workforce – in India. And IT will blossom into IoT, Ai and more.

Continuing strong will be wine, packaged goods and tourism.

In short – it’s a good picture for Australia. Hope you are ready to participate!

Mike’s advice on how to approach India:

  • Don’t just think about selling your product and services to India (just sales and profits should not be the only motive)
  • Work together to create relationships, trust and mutual value (Indians value trust and personal relationships)
  • Ensure Indian counterparts understand you are there for the long haul…and not just for short-term profits
  • Don’t give the impression that your India strategy is just a diversification from China (and India is definitely not the next China)

Oh, and his final tip, use the phone much more and the emails much less.

 

Melbourne seminar on India has best expert panel

BDO has assembled Melbourne’s best India panel to speak on Tuesday 3 March – book now – free event. Email michaelm@eastwestadvisers.net

They have a great line-up of speakers:
Michelle Wade, Victorian Trade Commissioner for India, Bengaluru
Susan Coles, Deputy State Director, Victoria, Department of Foreign Affairs and Trade
Bill Cole, Partner International, BDO
Sandeep Khurana, Director, EastWest Advisers
Michael Moignard, Director, EastWest Advisers

I am proud to be the MC of this one.

Venue: BDO, 727 Collins Street Melbourne
Date: Tuesday 3 March 2020
Time: 12 noon start (lunch will be provided)
Email michaelm@eastwestadvisers.net

Pictured below: Bill Cole, Partner International, BDO

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Anil Wadhwa could be reviving Australia-India trade relations – Lowy Institute – but health, agri and sport could be the key

So good to read on the Lowy Institute daily publication “The Interpreter” that India is doing something unusual in response to Australia’s Peter Varghese report – it is responding with an Australian Economic Strategy (AES). By the way, well done Lowy Institute for powering this and other national discussions.

The AES is led by former Ambassador and Secretary (East) in the Ministry of External Affairs in India, Anil Wadhwa (pictured).

Let’s not get bogged down on the failed Free Trade Agreement with India – let’s not wait forever, and, by the way, trade is progressing without it. We would prefer to have one, but we can make mutual gains without it.

The key is that the AES from India means for the first time we will have a blueprint for economic engagement with another nation – this is the view of Mukund Narayanamurthy and Danielle Rajendram writing for Lowy Institute. Well done to you both!

They point out that unlike India’s engagement with the US, Canada, UK, and Japan, our relative size means that it is highly unlikely that Australia will have a similar scale of engagement with India. So, they say the crux of the relationship, certainly from a materiality perspective for both sides, will lie in mining, energy, infrastructure, education, and tourism.

This where I differ. They see healthcare, agribusiness, and sport having relevance but “may not be as material in absolute dollar terms” – my view is that these could be the areas that unlock the “India code” and get Australia into the big game with India.

Solar is getting really interesting as Australia to build world’s biggest solar farm – energy for Asian neighbours

Plans to build a giant solar power and battery facility in central Australia to supply electricity to Singapore will go ahead thanks to backing from tech and mining billionaires Mike Cannon-Brookes and Andrew ‘Twiggy’ Forrest.

The duo are co-leads on an investment round for Singapore-based Sun Cable‘s $22 billion proposal for a 10-gigawatt (GW) solar farm and 22GWh battery storage near Tennant Creek, in the Northern Territory.

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Solar is stepping up while the Australian Government continues to step back – locked into an ideological stance of opposing any alternative to coal and denying any impact on the climate. Sad to see this continue.

Singapore gets 95% of its electricity from imported LNG and Sun Cable hopes running a 4500km high voltage direct current cable from the 15,000 hectare site – around a quarter of the size of Singapore itself – via Darwin to the island state will supply up to one-fifth of the city’s power needs. It will be the world’s largest solar farm and also supply the NT capital.

The 10GW plant is nearly double the 5,500 megawatts Snowy Hydro scheme, which generates around 4500GWh anually. The Australia-Singapore Power Link (APSL) plant’s generation capacity is four times more than Australia’s largest coal-fired power station.

Central to the project is Sydney solar energy startup 5B, founded by Chris McGrath and Eden Tehan in 2013.

The business developed new technology for portable, prefabricated solar arrays, re-engineering the supply chain and simplifying how solar projects are delivered, using fewer materials, rapid deployment and streamlined logistics.

If Australia makes this happen, we can become the biggest energy supplier to the Asian region – Indonesia, Malaysia and more.

The project is expected to take six to seven years to complete.

Big Battery gets bigger too

News of Sun Cable’s progress comes in the same week that South Australia’s Hornsdale Power Reserve, dubbed the Tesla Big Battery, announced plans to expand the world’s largest battery by 50% by mid 2020.

The 50 MW/64.5 MWh expansion, supported by Tesla, will be the first grid-scale battery in Australia to provide inertia benefits to the National Electricity Market (NEM), which is critical to grid stability and the future integration of renewable energy.

Solar looks set to change history – for the better.

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India trade with USA given a boost while Australia is doing OK

This week USA-India trade grew to US$87 billion, as the demand from India for USA crude oil, LNG and coal took a big leap – energy imports from the USA have been around US$7 billion but this year will reach $10 billion.

Australia-India trade sits at around A$30 billion with Aussie exports of goods and services reaching $21 billion. While it could do better, compared to global data perhaps Australia is OK.

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India’s top imports continue to be Crude Petroleum, gold, diamonds coal briquettes.

India’s main exports include rice, mica, orthopaedic devices, spices, jewellery and garments.

Both USA and Australia attract thousands of Indian university students and education has become a key segment of two-way trade – perhaps the future for it is “more two way”?

The changing mindset of India

The mindset of India has split into two camps – one, the traditional, opposes spending and innovation – the other, entrepreneurial, chases innovation and adventure. It can be tough to navigate.

I was talking to an Indian colleague the other day about collaboration around Hydroponics – growing vegetables and some fruits in a liquid solution combined with various forms of protection such as glasshouses.

This is ideal for India – does not need good land, uses less water, produces the same quality 365 days per year and so on. Plus it grows crops that India’s growing urban populations demand – fresh capsicums, lettuce, broccoli, cucumber and strawberries.

But the early India response is an insight into the competing mindsets.

From one quarter of traditional banking, no thanks, it would cost money to install. Forget the benefits. Forget the competitive advantage. If it costs money, NO.

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From another side of the India mindset comes an enthusiastic response – an entrepreneurial and CSR view. This can make money plus help poor rural farmers and poor rural women. So, YES.

As an optimist, I am guessing the YES side will win on this one.

The Australian Government is probably facing this varying mindset as it seeks to heavily promote Australian coal exports to India.

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Yes, our coal can provide India with uninterrupted power, increasing efficiency and quality of life (and add to the already overwhelming pollution).

No, it would cost money and we put up with interrupted supply anyway. And, No, because we do not have the distribution network so alternatives such as solar are attractive for rural villages (even if interrupted, “it’s better than nothing”).

I am guessing that the NO side might win on the coal issue. But let’s wait and see.

India’s renewable energy reaches new highs

We often look at India from outside and just see pollution – but look closer and you will see major change is taking place.

Solar and wind energy are taking off – “An aggregate of 80.46 GW of renewable energy limit has been introduced in the country as on June 30, 2019 which includes 29.55 GW from Solar and 36.37 GW from Wind control,” according to Power and New and Renewable Energy Minister Mr R K Singh.

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The government has set a focus of 175 GW of clean energy capacity by 2022, including 100 GW solar and 60 GW of wind energy.

According to India’s submission to the United Nations Framework Convention on Climate Change on Intended Nationally Determined Contribution (INDC), a combined electric power limit of 40 per cent from non-fossil fuel-based energy resources is to be introduced by 2030.

The Ministry also told the House that a sum of 42 solar power parks with a total limit of around 23.40 GW have been approved by the government so far to encourage accomplishment of 100 GW target by March 2022.

Well done India – keep it going.

India Government to open state-owned firms to investors

The Modi Government plans to raise as much as US$ 47.4 billion in the next five years – by reducing the stakes in large state owned firms. It will include those in the oil, gas and power sectors.

I think this must be the country’s biggest privatisation move in more than two decades.

Finance Minister Ms Nirmala Sitharaman, in her maiden budget announced that there will be reduction in direct controlling of stakes in some state- run firms.

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In its previous term, the government sold stakes in a host of companies to raise US$ 40.92 billion which was three times that of the previous government.

The government has identified several state-owned firms, including explorer Oil and Natural Gas Corp, oil refiner Indian Oil Corp, gas transmitter GAIL (India) Ltd, power producers NHPC Ltd and NTPC, miners NMDC Ltd and Coal India, and Bharat Heavy Electricals Ltd.

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