Author: Awareness News

The national and international consequences of Donald Trump winning the US elections

November 13, 2024by Awareness NewsLeave a comment

Reading time:8 minutes

As you might have read, Donald Trump has been elected President of the U.S. for the second time. This was a very impactful decision not only in the country but also around the world. What are exactly the changes expected to happen once he is in charge and how are they going to affect us?

At a national level, these are the main affected sectors:

Economic and Financial Policies

Trump is expected to push for additional tax cuts, including reducing corporate taxes from the current 21% to possibly 15%, and lowering individual income tax rates for high earners. This could lead to larger deficits, impacting long-term funding for social programs like Medicare and Social Security.

Likely areas of deregulation include banking, where Trump could roll back Dodd-Frank reforms, allowing banks to take on more risk. In agriculture and industry, Trump might also remove environmental or labor regulations, potentially lowering costs for businesses but at the risk of worker protections and environmental quality.

His strategy might involve tariffs on Chinese goods, impacting electronics, textiles, and machinery imported from China. This could increase prices for American consumers and lead to retaliatory tariffs on U.S. exports, affecting farmers and manufacturers reliant on Chinese markets.

Domestic Governance and Judicial Appointments

Conservative judges would be appointed to the Supreme Court and there would be lower federal courts, creating a judiciary inclined to uphold conservative stances on abortion restrictions, gun rights, and states’ rights.

More agency staff would possibly be under direct presidential control, a move that could result in the firing or replacement of career civil servants in agencies like the DOJ, FBI, and EPA. This restructuring would likely favor agency heads and employees loyal to his administration’s goals, reducing independence within federal agencies.

Lastly, stricter voting regulations might lead to new laws requiring voter IDs and limiting mail-in ballots. These changes could affect voter turnout, particularly among minority and low-income communities, impacting election outcomes at state and federal levels.

Social Issues and Civil Rights

Trump suggested supporting a national abortion ban after 15 weeks, which would limit access to reproductive healthcare for millions, particularly in conservative states. Also, his administration previously used family separation as a deterrent. His re-election could see a return to this policy, potentially leading to increased numbers of families and children held in detention centers. Moreover, he consistently opposed Deferred Action for Childhood Arrivals (DACA) and may seek to end protections for “Dreamers,” potentially impacting the legal status of around 600,000 young immigrants.

Past policies included banning transgender people from military service. A return could see attempts to allow businesses to deny services to LGBTQ+ individuals based on religious beliefs, affecting areas like employment, housing, and healthcare access.

Environmental and Energy Policies

As previously, the US might be withdrawn from the Paris Agreement, weakening international climate commitments. His administration could also cut funding for renewable energy programs, including solar and wind, in favor of expanding oil drilling and fracking.

“Energy dominance” might be achieved by expanding drilling in federal lands and waters, including the Arctic. This could result in rising carbon emissions, negatively impacting U.S. air and water quality, and exacerbating climate change effects.

Healthcare and Public Health

Trump has called for replacing the Affordable Care Act but has not provided a specific replacement plan. If he succeeds in dismantling it, around 20 million Americans could lose health insurance, leading to higher rates of uninsured individuals and increased pressure on emergency services and hospitals.

Trump’s criticism of agencies like the CDC could lead to reduced funding and influence for public health experts, impacting future responses to health crises and making the U.S. less prepared for pandemics.

Technology, Media, and Cybersecurity

Section 230 of the Communications Decency Act protects tech platforms from liability for user content. Changes to this law may perhaps force social media companies to alter how they moderate content, leading to more limited or more regulated user expression online.

Furthermore, his support for conservative media outlets can shift public reliance away from traditional news sources. This would increase the influence of platforms like Truth Social or OANN, impacting how Americans access and interpret news and information.

National Unity and Social Polarization

Trump’s rhetoric often appeals to a specific base, which may lead to heightened polarization among urban vs. rural, conservative vs. liberal, and racial or ethnic groups; more protests, counter-protests, and confrontations between political factions, possibly heading to public safety challenges.

Claims about “fake news” and “election fraud” have reduced trust in the electoral system and media. A second term could deepen this mistrust, with Americans increasingly questioning the legitimacy of elections, judiciary decisions, and federal agencies, which could destabilize democratic norms.

Education and Curriculum Standards

Trump has been vocal about removing what he calls “woke” ideologies from schools. His administration could push for more conservative curriculum standards, potentially restricting lessons on systemic racism, gender identity, and LGBTQ+ history. This could lead to lawsuits and increased politicization of educational content.

School choice initiatives might be expanded, pushing for vouchers that allow students to attend private or charter schools with public funding. While this could provide more educational options, it may divert resources from public schools, impacting their quality and equity, especially in low-income areas.

What are the possible consequences for international politics and economics?

Turning to the consequences of Trump’s second term for international politics and economics, some drastic changes can be anticipated based on Trump’s announcements and promises during his election campaign.

Tariffs and a return to protectionism

During his campaign, Donald Trump promised to increase U. S. tariffs on all goods imported from China to 60% and from all other countries to 10%. Once, he even threatened Mexico with 100% tariffs. These protectionist measures are aimed at domestic companies outsourcing parts of their business to other countries or foreign firms with a key market in the United States, in hopes of “bringing back” manufacturing to the country and growing the economy through a strong industrial landscape. International companies such as car manufacturers from other countries now worry about losing the U. S. as a crucial market in their segment and might need to fundamentally adjust their strategic plans for the future. Trump tariffs could spark trade wars with other industrial nations and raise consumer prices around the world, lowering the living standard for the middle and lower class in industrial market economies.

NATO-Skepticism and “stop the wars”

Governments and citizens around the globe are watching with chattering teeth what Trump’s exact plans are for NATO and its members. Some are even worried the United States will exit NATO altogether. Trump has previously stated he wouldn’t protect a NATO member against a Russian invasion if they don’t pay at least 2% of their GDP on defense, which jeopardizes the fundamental purpose and integrity of the alliance. Also, he has pledged to negotiate and settle the conflicts in Ukraine and Israel to stop the wars and achieve peace. Many fear this strategy will lead to advantageous outcomes for Russia and a detrimental result for Gaza and the Muslim population in and around Israel. Conversely, Trump has vowed to establish a military defense shield around the U. S. to protect it, should a third world war begin to escalate. This blatant approach to foreign policy could strengthen Russia in its imperialist undertakings, essentially showing how an invasion in contravention of international law can be pursued without punishment.

Immigrants facing discrimination and deportations

President-elect Trump has said he will pursue mass deportation during his presidency to counteract President Biden’s alleged laissez-faire immigration policy, that has led to millions of criminals from insane asylums storming the country, according to Donald Trump. Despite the refutation of these claims, a surge in deportations is projected to impact the construction, housing and agriculture industry negatively, which all depend on migrant workforce. Trump has also stated he would reinstate a travel ban that used to ban people from mostly Muslim countries from visiting the U. S. and extend it by refugees from Gaza. This could foster the global conflict between religions and islamophobia.

Conclusion

It has become evident how Donald Trump seeks to fundamentally reshape U. S. politics to provide more influence on himself and his allies, while embedding republican values and beliefs into law and everyday life. With his economic policy, Trump wants to reinstate the United States as the manufacturing powerhouse it once was, and abolish all factors inhibiting that dream, including social benefits or climate protection efforts. The same holds for foreign economic policy, where he resorts to pre-war mercantilism by applying heavy tariffs on foreign goods and exporting as much as possible. Regarding diplomacy, he outlines short-term resolutions to ongoing battles, likely to the delight of his voters, but might risk destabilizing global international politics altogether along the way. It is ultimately left to the individual to decide on whether the changes in tone in U. S. politics will have positive or negative consequences for one’s personal life, but it is safe to assume the second Trump presidency will test core democratic values and shake up the current global political agenda.

Disclaimer: It is important to note that Donald Trump has previously not delivered or changed his stance on numerous election campaign promises, signaling that the implications stated in this article might not come into effect in the very form Trump sketched them out during his rallies.

Sources: Brookings, Reuters, Cato Institute, The Heritage Foundation, Pew Research Center, The Atlantic, Council on Foreign Relations, The New York Times, The Washington Post, The Verge, Forbes, The Economist

Teresa Catita

Bent N. Eisheuer

EC 25th of October – Morning sessions

November 8, 2024November 8, 2024by Awareness NewsLeave a comment

Reading time: 10 minutes

The second day of the Conferences was dedicated mainly to the themes of environment and health, with opening remarks given by Helena Canhão, the Dean at Nova Medical School, who introduced the day highlighting the need of reshaping the essence of medical education: students need to be not only skilled but also open to diversity, compassionate and equipped with a leadership capacity. Furthermore, Helena brought up the relevant issue of longevity as a challenge and opportunity for future doctors, recognizing the urgency of this issue, which is currently being explored by the Nova Longevity Institute. This collaboration between Nova Medical School, Nova School of Business and Economics and Sir Richard Roberts is a pioneering center of research and implementation of measures for longevity accessible to all.

Fernando Alexandre, Minister of Education, Science and Innovation, also took part in this first segment, focusing the increasing complexity of the world and challenges it poses to democracies. As many shocks, such as epidemics, wars and climate change, have made the world progressively volatile, education and innovation have become instrumental pillars to foster trust in democracies and fight populist ideas, which simplify solutions for complex problems. Thus, to find the best suited policies and make informed decisions about a country’s future, everyone should be guaranteed equal opportunities to access education.

Innovation, as result of human capital and science investment, naturally leads to solutions for global problems.

Peace Talk

The first panel debate delved into the peace thematic, and was between former Presidents, Dalia Grybauskaite (Lithuania) and Elbegdorj Tsakhia (Mongolia), accompanied by former Prime Minister, Mehdi Jomaa (Tunisia), and moderated by Rebecca Abecassis, Editor, Expert, Author & Producer of European News Programs with RTP Portugal. The debate was centred around multilateralism and whether it could still be a powerful peace promoting tool.

Dalia Grybauskaite introduced the proposed theme tracing back to 2014, when she warned world leaders that Russia was a terrorist state with a dangerous President. After meeting with Putin in 2010, she realized that Lithuania could not depend on Russia for energy, as the latter was using it to make countries dependent on it for a future expansion. This prompted the ultimate decision for Lithuania to become energetically independent from Russia. Grybauskaite concluded her statement further inferring that negative leadership and dictatorship is growing and promoting its brutal power, mentioning that Putin has already presented himself as an “Informal leader of the World”. This argument was supported by Mongolia’s former President, who adds that change starts now:

“It always seems impossible until it’s done.”

As the debate progressed, Mehdi Jomaa advanced a different perspective, as he is not in the first line of fire of the discussed conflict between Russia and Ukraine. Accordingly, society is leaving a world order (post WW2), in favour of arising disturbance and conflict, with injustice feeding the current global issues. He then mentions that Tunisia is a part of the Non-Aligned movement, so it has neutral position. But it is a part of the new global south: There is an emergence of new powers, the global south is an expression of the will to reorganize the world and be connected to what is happening but also the need for negotiation around the tables and not with weapons.

He further expanded on the conflict and political instability in Palestine, emphasizing that it should be given equivalent support as Ukraine but is not.

We are living a double standard. When it’s about global powers we show interest, but otherwise we don’t. Where is the UN and its Security Council? Palestinians have the right to be self-determined and peace needs to emerge through respect of international law.

The recent death of Hamas leaders is not enough, the support of the US and EU is crucial to assure Palestinians right to live and kick start peace talks. Medhi concludes by highlighting the need to work towards justice and the respect of international law.

The debate ends with Tsakhia’s last statement, noting that there is still a good global trend in a want for a better future, with more than 140 countries having voted for the Pact for the Future. He believes in a brighter and more prosperous future for the world.

Health & Longevity

The conferences then moved on to Health & Longevity, with a Nobel Talk given by Sir Richard Roberts, Chief Scientific Officer at New England Biolabs. The 1993 Nobel Prize in Physiology or Medicine Laureate argued that bacteria are not always the villain, as it titles the speech “Why we should love bacteria”.

Sir Richard contextualizes the audience by stating that every human has 10 to 14 bacterial cells in their body keeping them alive: help with digestion and keep the skin in good condition, for instance. Despite its visible strengths, bacteria still have a bad name to them due to the perceived notion that these are at the root of most diseases.

“There is so much we don’t know about them and yet they are essential.”

The concept of Genetically Modified Organisms (GMOs) is then introduced, as more than 700 million people face hunger, and 60 million children’s growth is stunted because they do not have access to the proper nutrients and food. Thanks to the biotech revolution, scientists know how to breed plants in better ways, make them more nutrient dense.

However, Greenpeace has been advertising against GMOs without evidence of their danger, leading the European parliament to ban them. To reverse such decision 172 Nobel Laureates have supported an open letter to Greenpeace and every UN Ambassador urging an acknowledgement that GMO technology is safe and should be supported for the sake of the developing world, who desperately need improved yielding crops with added nutritional value.

Moreover, climate change is devastating life as we know it and greenhouse gas emissions are a major problem. Bioengineered crops can help the food supply, to mitigate climate change, by making crops consume more CO2 out of the atmosphere.

The next talk explores the theme of longevity, introduced in the beginning of morning, as the two guest speakers answer the question: Is the obsession with health turning ageing into a medical condition?

For the past decades, the growing aging population has been perceived as a burden, due to more need of assistance, which has led to the concepts of successful ageing versus bad ageing. Thus, people are turning common experiences of ageing into diseases and starting to diagnose too early, which is the issue tackled by speakers Alexandra Brandt Jonsson, medical anthropologist and associate professor of health and society at Roskilde University in Denmark, and John Brandt Brodersen, general practitioner and professor at the Centre of General Practice University of Copenhagen and the Research Unit for General Practice.

Overdiagnosis can have three types: Over-detection, over-definition and disease mongering, which regards the widening of diagnostic boundaries to expand treatment market. Moreover, experiencing a decrease in physical and cognitive abilities is seen as a danger, not part of the idea of “successful ageing”, contributing to an overdiagnosis of natural challenges that come along with age.

To further explore the matter and its impact on the environment, the guest speakers brought empirical data: 80% of carbon footprint of healthcare comes from clinical activity, with 60% of which being evidence-based care, 30% being of low value, and 10% being harmful care, directly aligned with overdiagnosis. By reducing the 40%, the carbon footprint can be reduced by 1/3, and resources allocation improves in efficiency. However, the growing tendency to progressively medicalize foments the need for macro action.

Planet Talks

The Planet Talks of the morning are introduced by Elizabeth Kite’s inspirational talk on what could be learnt from the world’s most vulnerable nations in order to lead better. Kite dedicated the talk to sharing her insights on how resilience and leadership in Tonga, the world’s third most vulnerable nation to natural disasters and rising sea levels, can guide society toward creating a more sustainable and inclusive future. This line of thought is further explored in the next talk, with guest speaker Rui Diogo, Multi-awarded researcher and writer, who debated how critical global issues can be addressed through the convergence of ancient wisdom and modern science.

Food systems and biodiversity are also focal points when addressing the climate and environmental sustainability. Professor Carlos Gonçalo das Neves and Meghan Sapp discuss how regenerative agriculture and practices are essential for a successful systemic transformation, in an insightful conversation moderated by Gabriela Ribeiro.

The former talks paved the way for the next panel debate about energy and climate change management, powered by EDP. Guest speakers Jorge Moreira da Silva, executive Director of UNOPS (United Nations Office for Project Services), and Michael Liebreich, chairman and CEO of Liebreich Associates and Co-Managing Partner of EcoPragma Capital, join moderator Vera Pinto Pereira, to address inclusive strategies to drive energy transitions in today’s world. The audience is given context on the shared goal of the Paris Agreement to limit warming to 1.5ºC above pre-industrial levels, implying a net zero CO2 emissions globally by 2050, and Jorge Moreira da Silva opens the debate by arguing that the issue has trespassed climate, including now inequality and an overall sustainability crisis.

Both speakers agree that there is a need for generosity and solidarity, from developed countries, towards the countries who don’t have the means for an energetic transition.

The energy transition is about more than going green and the climate, it is about social impact.

Policies and investments play, thereby, a crucial role, however, these need to be backed by an actual capacity of implementation, especially in the less developed countries. It was also noted that innovation plays a vital role, even more so if it is present in all the intertwined sectors mentioned: not just science, but also political and financial. Engineers and scientists are essential, but would need the support of business professionals, to help scaling up and take the technologies forward, as well as that of politicians, to raise ambition and implement the policies needed to spread the technologies

The speakers did have diverging opinions in terms of optimism of reaching the 1.5ºC goal: Jorge Moreira da Silva takes an optimist stand, arguing that the developed countries can surely reach this goal but need to help the rest of the world to do so as well, whereas Liebreich was more pessimistic about the threshold being reached in time.

Policy Talk

Before the lunch break, the audience is presented a brief talk with Sarah Aswhin, head of department at LSE, and Francisco Veloso, dean at INSEAD, moderated by Graham Miller, about education’s role in the turbulent global landscape.

The past years have marked a substantially turbulent time for education, relating to challenges of sustainability, the emergence of AI, and an instable political climate. Historically, Universities have the delicate role of creating safe and respectful spaces that foster debate, experimentation, freedom of speech and access to facts while existing within a political framework.

Within this talk, speakers agree that it is crucial to create and uphold a space where students feel safe to express themselves and learn in whichever way adapts best to them which is still immensely complex to accomplish. There is still a lot of work to be done.

Closing Remarks

As this enriching morning comes to an end, the audience is reminded of the pivotal insights shared across the various domains, from health and longevity to peace and climate action. These discussions have underscored not only the complexity of today’s challenges, but also the collective strengths required to address and combat them.

NAC thanks all the speakers for all the invaluable contributions as we look forward to building upon this momentum in the days to come.

Marta Nascimento

Madalena Martinho do Rosário

EC 25th of October – Afternoon Talks

November 8, 2024November 8, 2024by Awareness NewsLeave a comment

Reading time: 7 minutes

AI & Tech

After the lunch break, the afternoon began with a talk on AI’s potential in augmenting one’s everyday life, given by Ethan Mollick, Associate Professor at the Wharton School of the University of Pennsylvania & Author of “Co-Intelligence”. Mollick focused his speech on the practical aspects of how new technological tools can transform the world and explores the many strengths around collaboration between businesses and AI.

Health and Longevity

Health and Longevity is once more the star of the day, with the many talks around health beginning with Dr. Andre Kalil, Professor in the University of Nebraska Medical Center Division of Infectious Diseases, discussing how global health security can be strengthened by through innovative strategies and collaborative approaches.

Daniel Solomon, a Rheumatologist, Epidemiologist, and Professor of Medicine at Harvard Medical School also provides some insight on the alliance between health and technology, introducing the audience to the most recent developments in digital health technology, particularly shedding some light on personalized health medicine and population health management.

He brings forward the idea that a tool with patient and provider input may be able to improve health administration. For example, with an app in which patients introduce daily information regarding the evolution of their condition, doctors may be able to follow the development of the patients’ condition and accordingly establish the next appointments, ultimately potentiating reduced waiting periods. The app that Doctor Solomon described included features such as reminders for taking medicine or reliable information regarding the condition so that patients do not use other sources, such as the well-known “Doctor Google”.

This kind of idea not only can be tested for more specializations, as it also can help to broaden societies’ horizon regarding the potential of developing technologies appliance in health management issues.

Still on the topic of health, we move for the type of health that has been gaining more and more momentum: mental health, and particularly mental illness. Jacqueline De Montaigne, a contemporary painter and muralist delves into the deconstruction of the stigma surrounding mental illness through art. The artist starts by opening up on her own problems with mental illness, followed by some statistics: Did you know that it is estimated that than one in five U.S. adults live with a mental illness? Obviously, this is a common issue, so why isn’t it talked about more often?

De Montaigne explains the importance that canalizing her feelings towards painting and drawing had on her condition. Small things such as the movement of the brush when drawing a feather filled her with increased ease. And there are many celebrities that talked publicly about other ways of processing mental conditions: Lewis Hamilton meditated, for example. In this sense, not only art can create a trigger for discussion of these issues in society, but it can also be used as a tool to deal with them. Before, she too could not believe she was to be where she is now. So, on a final note, the artist reminds the public that anything is possible.

The next talk also takes part in the mental health space, more specifically dealing with the issue of coercion in dealing with mental healthcare.

Deborah Aluh, a Global Mental Health Researcher at Lisbon Institute of Global Mental Health invites us to question the use of coercive or restrictive measures (for example, mechanical restraint or isolation) to deal with certain mental conditions, and instead proposes a community-based care approach. To reduce coercion, she proposes a mental health system reform, a proper training of mental health professionals and the revising of mental health laws. Aluh cited a study that advances that stigma is related to the approval of coercive measures, and, in that sense, challenging stigma also could pose as a way to fight coercion.

Andreas Heddini, Vice President Medical Affairs of AstraZeneca, then proceeds to deliver a speech on the ability that improved healthcare delivery may have on decarbonization of health systems.

“Healthcare is responsible for approximately 5% of carbon dioxide emissions.”

From this premise, the vice president of medical affairs of AstraZeneca proceeds to explain the commitment that the company has been carrying out with healthcare systems in order to drive action in climate, equity and resilience.

Heddini highlights some ways of achieving decarbonization, such as decarbonizing facilities, preventing disease onset, promoting early diagnosis, optimizing disease management, guaranteeing remote care when appropriate and using lower emission treatments.

Afterwhile, it was time for the announcement of the NOVA Hackathon 2024, in partnership with AstraZeneca, Nova Medical School and Nowace. This prize aims to address the necessity to lower CO₂ emissions without compromising patient care. The first price was attributed to Team Number 3, to a project that was based on “personalized ecofriendly medication packaging with AI support, to improve patient understanding, adherence and to reduce waste and carbon emissions.”

In a break from the health thematic, we are presented to the NGO developed by the musician Dino D’Santiago: Mundu Nôbo. The singer and songwriter explain how he prepared a speech in English, but decided to deliver it in Portuguese, the language of his heart.

According to their website, Mundu Nôbo aims to empower and inspire children from less represented communities, such that they´re able to achieve their full potential through education, civic participation and cultural celebration. They do so by establishing contact with artists, athletes and successful professionals, organizing visits to colleges and companies, trying to provide internships and shows, as well as having monitors 24/7 hours available.

In the end, Dino D’Santiago leaves the audience with a song.

Returning to the topic of health, we are introduced to a panel discussion between Leonardo Lotto and Lorraine Ansell, both CEMS alumni. Additionally, Lorraine published a book in which she narrates her pain and respective coping mechanisms. Moderated by Miguel Viana Batista, they enter in a discussion on how chronic pain affected their lives and professional ambitions.

The panel discusses the differences between their conditions, specifically addressing the fact that Lorraine endures an invisible and dynamic condition. Being a woman in such a position also comes with challenges: Particularly often feeling overlooked and having her pain ignored. Lorraine confesses the difficulty in trying to convince doctors of her pain. They then address the importance of accessibility and technology in society.

Close to the end, there is the attribution of the awards for the 6th Patient Innovation Awards Ceremony.

The concept behind the ceremony is introduced by Nova SBE’s Dean, Pedro Oliveira.

In the category of “Patient – Caregiver Innovator”, there is an award attributed by Sir Richard Roberts, 1993 Nobel Prize in Physiology or Medicine Laureate to the alumna Beatriz Batista and her caregiver Adília Oliveira. Beatriz shares an impactful speech in which she explains the development of her disease and how she was able to adapt through difficulty.

The award for the category “Caregiver Innovator” was attributed by Maria Antónia Almeida Santos, President of the Faculty Council at NOVA Medical School to Reality Telling.

For the category “Collaborator Innovator”, João Sáagua, Rector of the Nova University of Lisbon delivered the award to the CEO & Founder of Janitri Innovations.

Lastly, Hans Jørgen Wiberg, the founder of Be My Eyes won in the category for “Patient Innovator”. He developed an app in which people with visual disabilities can request assistance from volunteers, such that, for a few seconds, they become their eyes. For example, if one needs accessing whether the milk as expired or not, they had the possibility to ask a volunteer to read the date through the app.

The session ended with the closing remarks of Nuno Piteira Lopes, Vice-President of the Municipality of Cascais and Ana Paula Martins, the Minister of Health. To say goodbye to this 9^th edition of the Estoril Conferences, the fado singer Teresinha Landeiro, a Nova SBE alumna, performed.

M Francisca Pereira

Estoril Conferences 24th of October – Afternoon Sessions

November 2, 2024by Awareness NewsLeave a comment

Reading time: 9 minutes

Policies Talks

What if businesses can be part of the solution?

Introduced by Nova SBE’s own Miguel Ferreira, LSE’s professor Alex Edmans delivers a speech in which he explores the bewitching idea that companies that incorporate in their objectives both purpose and profits perform better in the long run. The alure of this keynote goes beyond our desire for that premise to be truth, as the academic work of Professor Edmans greatly focuses on this relationship between profit and purpose. In this sense, companies may now have the chance not only to achieve financial success, but to contribute directly to improve society. This debate is particularly interesting in the context of our university, that every year certifies thousands of students that will come to take part in the next most successful businesses.

Artificial Intelligence and Technology Talks

Soon after, the audience had the delight of following the launch of the newest Digital Data and Design Institute, founded by Nova SBE in partnership with Nova Medical School and Harvard Digital Data Design Institute (D^3). The presentation included an amusing theatre in which Nova SBE’s dean Pedro Oliveira participated and a video message from the Chair and Co-Founder of Digital, Data, & Design Institute at Harvard, Karim Lakhani.

This institute aims at helping companies navigate this environment in which new technologies are promptly emerging, while integrating them in their business practices, by integrating both academic research and practical applications.

And in case you are wondering where the facilities of this institute will be located, they will encompass the previous televisions and sofa’s area near Pingo Doce and the space right above them, in the KMPG galleries.

So, what can we expect of this brand-new AI driven world?

To enter this discussion, we were presented with the pop star entrance of Derek Ali, a mixing engineer that worked with Kendrick Lamar, Childish Gambino, Cardi B, SZA, Brockhampton, amongst many others. Ali discussed with Jen Stave the inevitable question of what the place of AI in the landscape of creative work will be. Should creatives be worried about losing their job? Should parents impose the learning of the craft before the use of AI? How will the industry change in 5 years?

As a means to showcase the key role that AI may be able to play in music production, Derek Ali created 100% AI generated music demos using prompts. The audience ended up enjoying a fado song about Portugal’s President Marcelo Rebelo de Sousa “Canto ao Nosso Presidente” and a catchy pop song about Nova SBE’s dean, Pedro Oliveira. AI might be able to unveil new realms of creation by allowing artists to access inspiration more easily.

The late afternoon’s panel discussion “AI and the Future of Talent” moderated by Nikolaj Malchow-Moller, focused on the implications of artificial intelligence for the future of talent, labor markets, and industry and society organizational structures. Panelists included Francisco Veloso, Rembrand M. Koning, and Matthew Prince. The key issue highlighted was the displacement and possible unemployment for experienced workers. As such, it was highlighted how, historically, technological advancements did not eliminate jobs, but rather created them. For example, contrary to fears, the introduction of ATMs did not reduce employment. In fact, the number of workers in banks increased, as bank workers simply transitioned to higher-level, more specialized roles. This suggests that although AI, like previous emerging past technologies, may make certain jobs obsolete, it will create new, more specialized and perhaps higher paying jobs. Matthew Prince further sought to deconstruct the fear surrounding AI, highlighting how it is often fabricated and introduced by the very people who are developing and implementing the technology in the hope of dissuading new entrants into the industry, and possibly encourage regulatory barriers, so as to keep their competitive advantage.

Gender differences in AI adoption was also explored, as women, in general, are less likely to engage with AI. Some argued that this might allow women to continue developing valuable skills like rational and logical thinking, while others worried that men may gain a competitive edge due to their greater familiarity with AI. Furthermore, AI can assist with the education sector, by facilitating roles traditionally filled by teaching assistants (TAs), such as class notes and assignments. This could reshape the structure of academic institutions, particularly the responsibilities of faculty and support staff. Rather than replacing human workers entirely, AI may enable them to focus on other areas, such as developing soft skills. In fact, AI should be viewed as a tool to complement human labor, not as a replacement for critical thinking or decision-making. While AI can streamline technical analysis, it cannot substitute for judgment. The growing presence of AI will put more pressure on managers to develop skills in critical thinking, judgment, and interpretation—capabilities that cannot yet be automated. Business schools and organizations need to focus on developing these skillsets to ensure that workers can effectively navigate AI-integrated environments.

The debate also touched on other topics: Will AI accelerate inequality? How is global competition on AI development being handled? It was largely emphasized how allowing the USA or China to create AI monopolies might erode diverse cultural perspectives, creating a more homogenized global landscape, as the American or Chinese way of thinking prevails. The panel further called for the development of European AI, which encompassed “European sensitivity”, so as to adapt these tools to the European reality and way of thinking.

The nest guest on the theme of AI was Robert Seamans, professor at NYU, who discussed the expected transformative impact of Artificial Intelligence, emphasizing how technological advancements drive economic growth. He drew parallels between these emerging innovations and earlier technologies such as railways, steel production, telephones, and motor vehicles, all of which played a significant role in economic expansion. However, Seamans was careful to note that new technologies are not simply “plug and play.” They require time to become productive and for widespread adoption to occur. The importance of complementary assets—those additional resources and capabilities needed to fully leverage new technologies—was highlighted as a critical factor in this process.

Seamans provided an example from Cleveland, Ohio, where robots are used to manufacture and sell metal parts to larger firms. He pointed out that the effectiveness of these robots depends heavily on specific complementary assets. For instance, the grip at the end of a robotic arm must be precisely designed for the task at hand. Seamans explained that while a robotic arm might cost $30,000, the necessary complementary assets, like specialized grips, can require an additional investment of $60,000. Furthermore, achieving maximum productivity involves trial and error, as it takes time to determine the best combination of complementary assets. He argued that this investment in time and resources is also true for artificial intelligence technologies. In this sense, human capital also plays a particularly crucial role when it comes to AI adoption: workers who understand both their industry and the technical aspects of AI are best positioned to leverage AI effectively. The speaker referenced research on AI occupational exposure scores, which measure how different jobs are impacted by AI. These scores showed clear correlations with demographic factors such as salary, education, and creativity. Higher salaries tend to be associated with greater exposure to generative AI, as do higher levels of education and creativity. So, he also strongly encouraged firms to invest in their workers: the long-term success of AI and other big innovations will depend not just on the technologies themselves, but on the people who understand how to apply them.

Next, Michael Sheldrick, author of Ideas to Impact, delivered a thought-provoking speech on how to foster active citizenship and drive social change in the age of AI. He began by discussing ways to build engaged global citizenship, highlighting initiatives he took part in like the Global Citizen app: the app encourages users to take meaningful actions to support communities, fostering projects in Africa and a notable 2021 initiative in inland Brazil. Sheldrick drew an interesting comparison between social media’s role in the past and the influence of generative AI today. Just as social media transformed communication and engagement, AI is expected to revolutionize industries and reshape societal structures.

Shifting his focus to the music industry, Sheldrick noted its rapid growth, particularly in Africa, where a flowering music scene is creating numerous job opportunities. One practical example of such is Kendrick Lamar’s possible first tour in Africa, emphasizing the broader cultural and economic impact of such events. He then pushed forth the belief that everyone can do something, that everyone has a role to play, that we need to work together to achieve meaningful results. This approach is referred to as “policy entrepreneurship,” where leaders across sectors must collaborate to create policies that harness AI’s potential while addressing its challenges.

Pedro Gardete, President of the Scientific Council of Nova SBE, closed the AI section of the event, expressing gratitude to everyone involved. He shared a story about a strategic vision exercise he conducted with students in a focus group, where he asked them what they wanted most from university. Many replied they wanted to learn about what companies wanted from them, that is, a real-world application of the academic knowledge they acquire at university. Pedro Gardete highlighted how discussing and introducing AI in the academic environment sets NOVA apart, as a leading pioneer in new technology application. The speaker proposed an exercise to the audience, who were asked to share a story with their neighbors about a time they felt supported. He then asked the audience to ask themselves whether AI could have replaced that same support, sparking reflection on the irreplaceable nature of empathy and human connection, even in an increasingly automated world.

Closing session

In the closing section of the event, renowned football player Pepe took center stage to discuss his life and career. While originally planned as a traditional panel session with Executive Director of Estoril Conferences Laurinda Alves, the format shifted into something more spontaneous: Pepe and the moderator invited the children attending the conference onto the stage, giving them the opportunity to ask their idol questions directly.

The children’s questions covered key moments in Pepe’s career and personal life, asking about his early years, including his arrival in Portugal and his experiences playing for top clubs, such as his triumph in the Champions League, which the athlete recalled with pride and joy. Throughout the unconventional interview, Pepe also opened up about his mistakes and lessons learned throughout his career, sharing with the children that success is not just about winning, but also about resilience, personal growth, and learning from failure.On a final note, the star was asked what he plans for his future, now that he is retiring from the football playing field. While he did not give specific details, Pepe spoke about his desire to stay connected to football in some capacity, whether through coaching, mentoring young players, or other endeavors. His message to the young audience was clear: no matter what comes next, it’s important to stay passionate, keep learning, and remain humble in the pursuit of one’s goals.

M Francisca Pereira

Mafalda Carvalho

Estoril Conference – 24th of October

October 31, 2024October 31, 2024by Awareness NewsLeave a comment

Reading time: 7 minutes

Introduction

With this collection of articles, we aim be for the Estoril Conferences (EC) what Blitz is for Vodafone Paredes de Coura, by translating approximately ten hours of talks per day into four pieces, so that those that missed out on the event can also engage in the reflections that were brought to the fore in these couple of days.

This edition of the EC is “Time to Rethink”: Piece, Policies, AI, Climate, Longevity. So, specialists were invited to address issues for each area of action. In one of the more important years when it comes to elections, these talks invite us to rethink our beliefs so that we can more confidently engage in the societal debate that will translate into policy action.

Morning sessions

The first day of the Estoril Conferences at Nova SBE, Carcavelos, began with some words from the hosts and organization, as well as a Solemn Moment provided by Portugal’s President Marcelo Rebelo de Sousa, setting the scene for a day dedicated to the debate and discussion about the future of innovation, talent and global politics.

As people found their seats, the first theme of the conferences was introduced, Peace, with guest speaker José Ramos-Horta and CNN Portugal News Anchor João Marinho, sharing a brief yet significant moment where the President of Timor-Leste and 1996 Nobel Peace Prize Laureate shared his insight on peacebuilding and the fundamental lessons learned from the fight for Timor-Leste’s independence, which now marks its 25^th anniversary.

Peace Talks

The morning progressed, with guest speakers Olena Zelenska, Ukraine’s First Lady, and Oleksandra Matviichuk, 2022 Nobel Peace Prize Laureate, exploring Ukraine’s current situation and how war times compels people to rethink what truly matters.

The nature of security in Ukraine has been redefined, no longer reflecting physical safety but about protecting dignity – a key word across the morning’s sessions.

Olena Zelenska further established that everyday actions, such as calling a taxi or boarding a plane, have, since the conflict’s triggering, become monumental decisions that highlight the gravity of living in a war zone. In response to the war, new strategies for civil defense were developed, including widespread training in tactical medicine to equip civilians with life-saving skills, as part of a broader resilience-building effort. Moreover, the systematic deportation of 19.000 Ukrainians to Russia is a painful and ongoing issue. As many children were displaced and deprived of normalcy, on account of Ukraine’s political turmoil, protecting their future was established as a critical priority, with about one third of Ukrainian students now receiving education online to provide education and a temporary sense of stability.

Both talks highlighted the global threat of violence: war is not just about Ukraine.

But what can peace be built around?

The next “fireside chat”, moderated by CNN Portugal News Anchor, Rita Rodrigues, brought Yulia Svyrydenko, First Deputy Prime Minister of Ukraine, and Senida Mesi, Former Deputy Prime Minister of Albania, to the Estoril Conferences. This engaging conversation delves into the crucial role played by women in conflict resolution, peacebuilding and, most importantly, post-conflict recovery of society. Sustainability is an instrumental attribute for policies and conflict solutions to be long-lasting and inclusive.

In the next programmed session, Zaynab Abdi, leader and advocate for social justice, discusses how global conflict and political turmoil have hindered society’s empathy and understanding regarding the large scale of events, such as the refugee crisis. Despite being widely tackled, with over 120 million refugees worldwide, the audience showed, by raise of hand, that only about 25% have ever spoken to a refugee or engaged with their stories. This indicates a profound lack of understanding and awareness about the scale of the crisis, even among highly educated individuals. By sharing her experience, Zaynab Abdi called for proactivity and unity, since, without it, we are merely creating another history lesson.

After a heartfelt message from UN Secretary-General António Guterres about the importance of peace, unity, and proactivity among citizens and countries around the world, Martaz Lorenzo, Director of the UNRWA Representative Office for Europe, reflects the current situation in the Middle East, more specifically Gaza and Lebanon, where overcrowding, deprivation, and conflict have created dire humanitarian crises. Lorenzo paints a stark picture by asking the audience to imagine 2 million people living in one-third of the space of Lisbon. The silence in the audience enhanced the gravity of the real scenario prompted.

As sheer density and lack of resources make life unbearable for many, Lorenzo further stresses the need to protect the multilateral system that governs international relations. Without these, coupled with international laws, humanity loses its moral compass, and conflicts spiral out of control.

Policies

After such insightful and inspirational messages from the “Peace” sessions, the next segment “Policies” was introduced, with first speaker Monica Ferro, Director of the London Office of the United Nations Population Fund, prompting the question: How long until women’s rights are fully respected?

“Women’s right are still a mirage for a majority of us”

Ferro reflects on how far society has come since the 1990’s, women’s rights were already fully outlined economically and socially 30 years ago but are still not reached today when regarding positions of power and career development.

“Women need a seat at the table and if there are not enough chairs, they will bring their own chairs.”

In this session, Monica Ferro addresses crucial role of data, highlighting that what doesn’t get counted doesn’t get thought about, and, according to the World economic Forum, women are being left behind and are absent from decision making, as power structures do not allow for fair shares of seats at the table. Moreover, in a world of innovation and progress, full gender parity is expected to take 144 years, meaning five generations of women will still live with inequality. Other important issues, such as women’s health and the stigma around it, were also debated, since, despite clear efforts are being made to improve, genital mutilation, gendered violence, and child marriage are still prevalent in some areas of world, fostering a culture of imparity.

This session’s message lies within the importance of human capital investment and early education around gender parity to accelerate the progress toward true equality.

Upon the many talks addressing international instability, the mood at the precinct is lightened by the performance of Portuguese singer Luísa Sobral, who inspired the audience by singing about the need for world peace and womanhood.

After Sobral’s performance, UNRIC’s (UN Information Centers) Director Sherri Aldis takes the stage and debates how the UN is shaping the future of multilateralism.

Today, 2.6 billion people are not connected to the internet (1/3 of the global population). Furthermore, there is also significant evidence of increased online violence and misinformation. Some examples outlined include young individuals being driven to despair or suicide due to online bullying, female leaders receiving threats of rape and death, and climate activists being attacked. With misinformation’s escalation and science’s erosion by “fake news”, the UN has conducted recent efforts to reform the multilateral system and striving towards a world where everyone has access to a secure digital world. The UN’s “Pact for the Future” sets out a new roadmap for global cooperation over the coming decades, including breakthrough commitments in areas such as Security Council reform, outer space governance, international financing, and securing the rights of youth and future generations.

As the morning sessions come to an end, Tomás Magalhães, Founder of Despolariza & The Kolkata Relief Project, prompts the question: How to disagree constructively?

Surface solutions include listening to understand, talking in questions rather than statements, and assuming good intentions from the messenger. Magalhães then dives into more rooted solutions, calling for people to put everything into perspective before reacting and establishing the political spectrum as multidimensional.

Closing Remarks

Attending the Estoril Conferences provided audiences, and more specifically Nova Awareness members, with new perspectives and insights about UN’s initiatives, the life-long work of some of the most distinguished figures in today’s society, and organizations which strive to inspire action.

Overall, the reflections from influential figures emphasize the importance of resilience, the critical role of women in peacebuilding and societal development, and the urgent need to protect human rights amid global conflicts. The call to action across these voices is clear: without proactive and inclusive approaches that prioritize human dignity, equality, and collective action, lasting peace and justice will remain elusive.

Madalena Martinho do Rosário

Marta Nascimento

Mara Blanz

Understanding Mental Health: A Comprehensive Guide

October 29, 2024by Awareness NewsLeave a comment

Reading time: 7 minutes

Mental health is an essential aspect of our overall well-being, encompassing our emotional, psychological, and social functioning. It influences how we think, feel, and behave, and affects our ability to handle stress, relate to others, and make decisions. In this article, we’ll explore key concepts related to mental health, its significance, and ways to promote it.

The Importance of Mental Health

Mental health is not merely the absence of mental illness. It involves a state of well-being where individuals can realize their potential, cope with the stresses of life, work productively, and contribute to their communities. According to the World Health Organization (WHO), good mental health enhances the quality of life, improves productivity, and promotes better physical health.

Common Mental Health Conditions

Anxiety Disorders: These include generalized anxiety disorder, panic disorder, and social anxiety disorder. Symptoms may include excessive worry, restlessness, and physical symptoms like increased heart rate.

Depression: Characterized by persistent sadness, loss of interest in activities, and feelings of hopelessness. It can impact one’s ability to function daily.

Bipolar Disorder: This condition involves extreme mood swings, including emotional highs (mania) and lows (depression).

Schizophrenia: A severe mental disorder that affects how a person thinks, feels, and behaves. It can lead to hallucinations, delusions, and disorganized thinking.

Post-Traumatic Stress Disorder (PTSD): This condition may develop after experiencing or witnessing a traumatic event, leading to flashbacks, severe anxiety, and uncontrollable thoughts about the event.

The Stigma Surrounding Mental Health

Despite the prevalence of mental health issues, stigma remains a significant barrier to seeking help. Many individuals fear judgment or discrimination, which can prevent them from accessing support. It’s essential to foster an environment where mental health can be openly discussed and treated with the same seriousness as physical health.

Men’s Mental Health

The stigma surrounding men’s mental health is not just a cultural issue; it’s a silent killer. From childhood, boys are often taught to “man up,” to bury their feelings deep inside where no one can see them. Emotions are viewed as a threat to their masculinity, and crying or admitting vulnerability is seen as a failure. This toxic mindset grows with them into adulthood, creating a cycle where men feel that expressing pain or seeking help is somehow a betrayal of their identity. But what we don’t talk about enough is the heavy cost of this silence. Behind every forced smile, there are men living with unbearable pain, convinced they have to carry it alone.

The consequences are brutal. Suicide rates among men are shockingly high, yet society remains disturbingly quiet about the invisible pressures that drive them to such desperate ends. These men aren’t weak—many of them are silently battling demons while appearing “strong” on the outside. They continue to function, perform, and meet expectations while their mental health deteriorates, believing that breaking the silence would bring shame or judgment. We’ve created a world where men feel more comfortable contemplating their own death than speaking openly about their emotional suffering.

By not addressing this, we aren’t just ignoring a problem—we’re allowing it to thrive. The societal notion that “real men don’t cry” or seek help is killing them, driving them into deeper isolation. We need to shatter this narrative and send a shockwave through our collective consciousness: men, just like everyone else, need space to express pain, fear, and doubt without fear of ridicule or rejection. If we don’t act now, the silence around men’s mental health will continue to take lives, and those lives could be our fathers, brothers, sons, and friends.

Mental Health Dichotomy in Organizations

The mental health dichotomy in organizations is a stark and often overlooked reality. On the surface, many workplaces champion wellness initiatives, host mental health awareness days, and post motivational slogans about the importance of “self-care.” Yet, beneath this facade, a far more troubling truth lingers. Many organizations still operate in ways that directly contradict these efforts, perpetuating environments where high pressure, unmanageable workloads, and a culture of relentless productivity leave employees too burned out to take advantage of the very mental health support being offered. This dichotomy isn’t just hypocritical—it’s dangerous.

In many corporate settings, the unspoken rule remains clear: your value is measured by your output, not your well-being. Employees are expected to push through exhaustion, stress, and even mental health crises in the name of deadlines and performance. If someone dares to show vulnerability or admit they’re struggling, the response is often a quiet judgment, a subtle shift in how they’re perceived by peers and leadership. In some cases, it might even be career suicide. The organization’s message of “mental health matters” becomes hollow when, in reality, employees are often punished for needing time to recover or for setting boundaries to protect their well-being.

The starkest irony is that these toxic work environments, driven by profit and performance metrics, are the very breeding grounds for the mental health issues they claim to combat. Stress disorders, anxiety, and burnout are skyrocketing, and yet organizations continue to wear their wellness programs like badges of honor without addressing the root cause: the toxic culture itself. Until companies stop viewing mental health as a checkbox on an HR form and start addressing the fundamental ways they dehumanize their workforce, this divide will only grow wider. The real shock comes when we realize that this isn’t just a failing of corporate responsibility—it’s a systemic betrayal of the people who keep these organizations running. If mental health truly mattered in these environments, we wouldn’t just be talking about it, we would be radically changing the way we work.

Promoting Mental Health

Promoting mental health is a collective responsibility. Here are several strategies that individuals and communities can adopt:

1. Education and Awareness

Understanding mental health is the first step toward destigmatization. Schools, workplaces, and communities can offer workshops and training sessions to raise awareness about mental health issues.

2. Encourage Open Dialogue

Creating safe spaces for open conversations about mental health can help individuals feel less isolated. Encourage discussions among friends, family, and colleagues.

3. Promote Self-Care Practices

Self-care is crucial for maintaining mental health. Here are some effective practices:

Physical Activity: Regular exercise can significantly improve mood and reduce anxiety.

Mindfulness and Meditation: These practices can help in managing stress and enhancing emotional regulation.

Healthy Eating: Nutrition plays a key role in mental well-being. A balanced diet can positively affect mood and energy levels.

Adequate Sleep: Quality sleep is vital for cognitive functioning and emotional health.

4. Seek Professional Help

Encouraging individuals to seek help from mental health professionals when needed is essential. Therapy, counseling, and medication can provide support for those struggling with mental health issues.

Resources in Portugal

In Portugal, several resources are available for mental health support:

Mental Health Helpline (Samu): Offers confidential support and guidance for individuals in crisis.

APAV (Associação Portuguesa de Apoio à Vítima): Provides assistance for victims of crime, including those dealing with trauma and mental health issues.

Public Health Services: The Portuguese health system provides various mental health services through the National Health Service (SNS).

Conclusion

Mental health is a critical component of overall well-being. By fostering an understanding of mental health issues, promoting open discussions, and encouraging self-care practices, we can create a supportive environment for those struggling with mental health challenges. Remember, seeking help is a sign of strength, and everyone deserves access to the resources they need to thrive.

Sources: World Health Organization: WHO, APAV PT., Women’s Health., Well.

Afonso Nunes Freitas

Mara Blanz

Is Colonialism the Cause of Inequalities in the World or are there any other deep-rooted causes?

October 23, 2024October 23, 2024by Awareness NewsLeave a comment

Reading time: 8 minutes

It is well known countries diverge in levels of development which lead us to a world full of inequalities, but did you ever wonder how we ended up in this situation?

Oded Galor argues that, even though there are factors that perpetuate inequalities, the deep-rooted factors that triggered (or not) development were related to population diversity and the geographical profile of each region. Let’s dive into his theory.

Geographical traits

Evidence of geographical differences in the world dates as far back as to when civilizations chose places like the Fertile Crescent, Mesoamerica, and the Yangtze River Valley to settle. These offered rich soils and favorable climates for the domestication of plants and animals, leading to stable food supplies and population growth. The unequal availability of domesticable species across regions meant some societies could develop agriculture more rapidly than others, creating early disparities in wealth and social organization.

Eurasia’s east-west orientation was another key factor, as it facilitated the spread of crops, technologies, and ideas across similar latitudes and climates, resulting in a more rapid and widespread agricultural advancements compared to the north-south axis of Africa and the Americas, where climate varied significantly. Furthermore, areas prone to diseases like malaria (especially in sub-Saharan Africa) which increased infant mortality rates and the sleeping disease which killed or weakened livestock and population, negatively impacted their economic trajectories compared to healthier regions. Later on, large civilizations would also choose not to settle in these regions due to the high mortality rates.

It was due to a lot of geographical traits that the European Miracle happened around the 18-19^th century. Europe had proximity to the sea and navigable rivers which was advantageous for trade and many states with different languages which promoted competition and fostered economic growth while China was unified and had a uniform writing system, single language and central control. According to the hydraulic hypothesis by Karl Wittfogel, the fact that Europe depended largely on rainfall compared to China having a network of dams and canals with political centralization also fostered innovation and competition inside Europe. Other advantages of Europe were the Pyrenees, alps and Carpathian Mountains – hurdles that were natural buffers to invasion and the fractal shoreline which made it easy to defend from invaders and encouraged maritime trade. Comparably, China had mountain ranges that offered little protection from centralized imperial rule and no peninsulas apart from Korea which was independent.

Geographical roots of cultural traits

There are some cultural traits with geographical roots responsible for differences in development. For example, regions with higher return on crop cultivation would tend to be more long-term oriented and therefore invest in innovative agriculture or alternative methods even if that meant sacrificing present consumption. Also, in regions where the plough (which required massive upper body strength) was the main tool of agriculture, there was a division of labor (men would work on the fields and women would take care of the house) and a less egalitarian view on women would be passed along generations. Last but not least, areas with uniform climates would generally be more loss-averse and prepare their crops for possible harsh weather while areas with volatile climates between different regions and throughout the year would be more loss-neutral and risk a bit more while cultivating as they could just escape harsh weather by moving to a different region (they did not need to prepare their crops for hypothetical losses).

Population Diversity

Population size and composition were considered wheels of change. Larger populations were more likely to generate greater demand for new goods, tools and practices, as well as exceptional individuals capable of inventing them, and benefited from more extensive specialization, expertise and exchange of ideas through trade. Moreover, as stated in Darwin’s natural selection, any intergenerationally transmitted trait which makes an organism better adapted to their environment, generating more resources, would survive longer, setting human capital formation as a pertinent element of growth.

Social diversity can also explain some of today’s divergences. According to the Serial Founder Effect, the further a region is from Africa the less diverse it is. This happens because populations started settling in Africa 300k years ago and, as they migrated farther away, the less they would mingle with diverse species reducing variety in civilizations. Since social diversity has a contradictory effect, as it spurs cultural cross-pollination of ideas and enhances creativity, fostering tech progress but also provokes conflict and erodes the kind of social coherence necessary for investment in public goods, an intermediate level of diversity is the sweet spot conducive for economic development. That is why Latin America with lower level of diversity and Africa with higher levels of diversity are less developed than Europe which has intermediate levels of diversity.

Institutions

Institutions and cultural traits were not what triggered development, but rather what determined the speed of it. North and South Korea are a perfect example. They were both dictatorships, but while NK had massive nationalization of private property and centralized decision-making, SK had private property protections and decentralized political and economic power, making inclusive institutions promotive of development and extractive institutions a hindrance to it.

Other example is former British colonies which had common law systems compared to Portuguese and Spanish colonies with civil law systems. Or even South Italy with a feudal order and mafia, characterized by lower prosperity, strong family ties and less trust outside family environments which issued reduced cooperation, opposite to North Italy which was a democracy with higher social mobility.

How are the inequalities Deepened?

We have stated the possible deep-rooted foundations for the inequalities we face nowadays, but what about the causes that emphasise those already existing disparities in qualities of life?

We can adopt a different outlook on this topic, by saying that inequality deepens because of a rapidly changing world. By interacting with a range of factors, including economic systems, political factors, cultural influences, rapid technological change, but also the climate crisis, urbanization and migration, as well as gender, age, origin, ethnicity, disability, sexual orientation, class and religion. Addressing these facts requires a comprehensive understanding of both historical and contemporary factors.

By delving a little bit deeper on some of these topics, we gain a better understanding of how they are undeniably associated with an inevitable distinction between people and their lifestyles.

Technological progress came about as a revolution that became shocking because of its quickness to spread and develop. The unequal access to it can lead to disparities in access to information, skills and economic opportunities. Because of the previously stated deep-rooted causes, some nations are wealthier, disproportionally benefiting new technologies, while poorer communities may lack the resources to adopt them. This may lead to a whole new range of problems, as automatic and digital technologies can displace low-skilled workers, exacerbating unemployment and wage inequality, affecting those vulnerable populations who may, once again, not have the means to transition to these new jobs. Thus, a much larger bridge to connect these nations is imperative.

When we focus on Globalization, we can easily conclude that it has facilitated the flow of goods, services, and capital across borders, undisputably benefiting some economies. That does not exempt the fact that it ultimately marginalized developing countries who may struggle to compete on equal footing with those established markets, leading to uneven economic growth. Also, global supply chain often exploits labour in developing countries, where workers may face low wages accompanied with poor working conditions, which is the case of India, Bangladesh or Kenya, where there is an increasing population of “working poor”. Both poverty and a global workforce at risk of exploitation are socially created circumstances that drive the demand for inexpensive labour, which in turn sustains the profitability of labour-intensive industries. This will perpetuate cycles of poverty and inequality within those regions, as well as wealth concentration in the hands of multinational corporations and affluent individuals, often at the expense of local economies and communities.

Many developing countries rely heavily on the export of a few commodities, leaving them volatile and dependent of commodity price cycles. Price fluctuations can lead to economic instability. When the prices are risen, the benefits often accrue to a small elite or foreign investors rather than being distributed to the broader population. This can exacerbate existing inequalities and impose limits on economic mobility for local communities. Also, some countries that are considered resource-rich experience a so called “resource curse”, that believes that these countries rely exuberantly on those resources, neglecting the other sectors, hindering sustainable and equitable growth.

Conclusion

In alignment with all that it was tackled, understanding global inequalities requires a comprehensive view that considers both historical contexts and current dynamics, revealing how deep-rooted factors continue to influence disparities in quality of life across the world, and what other factors carry on deepening it.

Sources: “ECCHR: Forced Labor in Global Supply Chains.”; “Causes of Inequality – Equality Trust.”; “Psychological Characteristics and Colonialism: Where the Deep Roots of International Inequalities Were Shaped – the Sustainable Development Watch.”; “The Resource Curse: The Political and Economic Challenges of Natural Resource Wealth”.

Laura Casanova

Teresa Catita

THE DIARY OF A FRANCHISEE: THE ROLLERCOASTER OF OWNING A FRANCHISE

October 16, 2024October 17, 2024by Awareness NewsLeave a comment

Reading time: 8 minutes

Owning your own business is often portrayed as the ultimate dream—the idea of being your own boss, setting your hours, and building something from the ground up. But ask any entrepreneur, and they will tell you the truth: starting a business is a nerve-wracking, all-consuming roller coaster. There’s excitement, sure, but also sleepless nights, long hours, and the constant pressure of wondering, “Will this succeed?”.

Now imagine doing all of that with a blueprint already handed to you—a business model that is proven, with marketing plans, a recognized brand, and a support system in place. It sounds easier, right? This is the appeal of opening a franchise.

THE STRUCTURE OF A FRANCHISE: A FRAMEWORK FOR SUCCESS

Franchising has a long history, and its model has revolutionized the way businesses grow and expand. One of the earliest examples of franchising can be traced back to the mid-19th century with the Singer Sewing Machine Company. Isaac Singer, needing a way to distribute his sewing machines across a vast and varied geography, developed a model that allowed local agents to sell and service machines under the Singer name. This early form of franchising set the stage for what we see today—an agreement where a franchisor (the company) licenses its brand, systems, and processes to a franchisee (the local business owner) in exchange for fees, usually including an initial investment and ongoing royalties.

Today’s franchise model is a powerful engine for business expansion. According to the International Franchise Association (IFA), there are over 792,000 franchise establishments in the U.S. alone as of 2023, contributing nearly $825 billion to the U.S. economy. The franchise industry employs approximately 8.5 million people in the U.S., demonstrating its vast economic impact. For someone looking to get into business ownership, it offers a way to mitigate some of the risks involved in starting a business from scratch.

THE COSTS AND COMMITMENT

Just like any business venture the first step (and perhaps the scariest one) is the investment, these vary with the brand. For example, opening a fast-food franchise like McDonald’s can require an initial investment ranging from $1 million to $2.2 million, including franchise fees, real estate costs, and equipment. On the other hand, a lower-cost franchise like Subway may require a starting investment of $100,000 to $300,000.

However, the financial commitment does not stop at the initial investment. Franchisees must also factor in ongoing expenses, such as royalty fees, which typically range from 4% to 12% of gross revenue, depending on the franchise. For example, Subway charges an 8% royalty fee on sales, while McDonald’s charges a 4% fee. These fees, while providing brand support, can feel like an ongoing burden, especially during the early months when cash flow is tight.

The responsibilities of the franchisee do not end here. In fact, the real work begins, that is: recruiting employees. Even when franchisors provide training materials and operational guidelines, it is more challenging than expected. The U.S. Bureau of Labor Statistics estimates that the average employee turnover rate in the restaurant franchise industry can be as high as 150%, meaning that, on average, a franchisee will replace their entire staff more than once per year.

REALITY CHECK FOR FRANCHISEES

One of the hardest parts of being a franchisee is balancing the autonomy of owning your own business with the restrictions imposed by the franchisor. You are not fully in control. If a corporate decision impacts your business negatively, whether it is a new product that does not resonate with your local market or a pricing structure that customers do not favor — you have little recourse. A 2021 Franchise Business Review survey found that 33% of franchisees felt their franchisor did not give them enough flexibility to adapt to their local market conditions.

THE REALITY OF PROFIT MARGINS

To better understand the economic realities of franchising, it is important to look at profit margins. In many franchise models, especially within the food industry, profit margins are typically low, sometimes ranging between 5% and 10% after all expenses are paid. That means if your franchise generates $500,000 in annual revenue, your net profit could be as low as $25,000 to $50,000 after deducting expenses like royalties, rent, labor, and supplies.

Many franchisees often assume that the support and brand recognition will automatically lead to strong profit margins, but the reality is more nuanced. Franchise Business Review reports that while 51% of franchisees earn more than $100,000 annually, nearly 25% of franchisees report that they earn less than $50,000 per year. This gap highlights that not all franchises are equally profitable, and success depends heavily on a variety of factors such as location, industry, and management.

One of the key reasons franchises can be attractive is the lower failure rate compared to independent businesses. According to FranData, franchises tend to have a 90% success rate after five years, compared to a 50% success rate for independent businesses. However, while franchisees benefit from the franchisor’s support, they still need to navigate significant financial and operational challenges.

WHY SOME FRANCHISES FAIL

Despite the established brand, business model, and support from franchisors, some franchises still fail. While a franchise system provides a proven blueprint, there are various reasons why a franchise might not succeed, both from an economic standpoint and operational missteps.

Having interviewed former franchisees of the fast-food industry, I was able to get first-hand information on their experience, where the struggles of owning a franchise came with full force. Some of the factors that helped fast-track the steady decline of the fast-food restaurant can be summarized into 4 factors: location, COVID-19, inflation and perhaps the naivety in inexperience of working with franchisors.

Location is one of the most critical factors in the success of a franchise. According to Franchise Direct, 30% of franchise failures can be attributed to poor location choice. Even if the brand is strong, if the franchisee opens in an area with low foot traffic or poor demographics, it can struggle to generate enough revenue to cover fixed costs. Most of the time, franchisors assign the franchisee with a set location that was chosen by realtors and the franchisors to better ensure success. However, the guides are not exempt from making mistakes, thus the franchisees must pay that price. In addition, rent, labor, and supply costs can quickly eat into profits, and some franchisees find it difficult to stay afloat, particularly in competitive markets. The COVID-19 pandemic illustrated this starkly, with many franchisees facing unprecedented drops in revenue while still needing to pay royalties and maintain costly leases. Many franchisees struggled with expensive ingredients and the franchisor’s mandatory promotions, which didn’t always lead to increased profits. Moreover, economic downturns, like the 2008 financial crisis, can severely impact franchises. Even if the overall brand is strong, reduced demand makes profitability harder to achieve.

It is crucial for Franchisee-franchisor’s relationship be at least cordial. Disagreements over decisions like marketing, product introductions, or pricing can cause tension, especially when franchisees feel the franchisor’s strategic outlook does not fit their local market. A 2021 survey found that 33% of franchisees felt they lacked the flexibility needed to adapt locally, leading to frustration and legal disputes.

Finally, some of these franchisees end up suffering from success. Franchisors may push for more units without providing adequate support, leading to underperforming stores. Quiznos is an example, expanding to 5,000 locations, but collapsing due to poorly performing stores, leaving only about 200 locations by 2023 as franchisees battle with high costs.

MANAGING EXPECTATIONS AND FINDING SUCCESS

Despite the struggles, there is a reason so many people still choose the franchise route. According to FranData, franchises tend to have a success rate of 90% after five years, compared to a 50% success rate for independent businesses. The support system, while sometimes restrictive, can provide stability, especially if the franchisor is strong and responsive to franchisee feedback.

CONCLUSION: THE FRANCHISE LIFE

Franchising is not a version of stress-free entrepreneurship, it is the real deal and must not be underestimated. In the end, the life of a franchisee is about balance, as these should have to balance the support of the franchisor with the challenges of day-to-day operations. Most importantly aspiring franchisees must balance their vision for the business with the limitations of the franchise model.

Sources: International Franchise Association (IFA), McDonald’s Franchise Information, Subway Franchise Information, Franchise Business Review, FranData, Franchise Times, Franchise Direct, Franchise Business Review

Alegra Maza

Survivorship bias: the omnipresent skewer of decisions

October 9, 2024October 9, 2024by Awareness NewsLeave a comment

Reading time: 7 minutes

Survivorship bias is a cognitive shortcut that takes place when the successful or surviving part of a group is mistaken for the whole group, due to the invisibility of the group’s failures. A common example of survivorship bias is the assumption that older buildings and architecture were much more durable and stable as suggested by the common saying “they don´t make them like they used to”. This assumption fails to acknowledge that only the sturdier buildings have survived into the present while the rest, the majority, have been destroyed or replaced. A contributing factor to this erroneous belief is the fact that we haven’t experienced the durability or, in this case, the survivability of modern buildings: presently, we are surrounded by both good and bad quality construction; the former will be preserved in time while the latter might not, just like with the older ones.

When we “miss what we’re missing” is how author David McRaney describes the survivorship bias. Indeed, if failures are invisible, successes are in the spotlight, and we not only fail to acknowledge that the failures might have held useful information, but we fail to acknowledge their existence altogether.

This bias is harmful due to how common it is and how easily it affects decision making. Furthermore, it affects a myriad of sectors ranging from business and finance to science, and even medicine. During the Covid 19 pandemic for instance, healthcare systems struggled to keep up with testing which might have skewed survival and death rates. Medical studies are also more often performed on stronger and younger patients who survive initial diagnoses, as weaker patients are less likely to survive long enough to participate in them, leading to overestimations of successful outcomes.

When thinking about research, it is obvious how error-inducing this bias is. Indeed, to be effective, research must be thorough and take into account as many variables as possible. More specifically, statistics rely on surveys and analysis of populations and, to be accurate, they have to put together groups that fully represent them. The survivorship bias skews researchers into only looking at a subset of those populations, leading to incomplete research. Similarly, when making decisions without analyzing all the available data, individuals will automatically not be making the best choices for themselves.

Background

A study that took place during WW2 has become the prototype of survivorship bias.

For context, Abraham Wald was born in 1902 in what was then the city of Klausenburg in the Austro-Hungarian Empire, today’s Cluj-Napoca in Romania. He developed an interest and talent for mathematics and went on to study the subject at the University of Vienna. He later moved to the United States to work at the Austrian Institute for Economic Research. Then, during World War II, Wald joined a classified program that assembled statisticians to focus on military research and strategy to help in the war, the Statistical Research Group (SRG).

At the time, the military came to the SRG with data on the placement of enemy bullet holes on planes that had come back from battle, represented by the red dots in the image below. The first conclusion reached was to install more armor in the areas where the planes were getting hit the most. However, Wald pushed the group to do the opposite: since the planes being analyzed were the ones that had come back from battle, the areas in more need of protection were the ones without apparent bullet holes, the ones where the planes that did crash must have been shot. Thus, the missing bullet holes were on the missing planes. This is where the notion of survivorship bias was first coined. In fact, the decision to reinforce the areas of the planes ridden with bullets failed to consider that the planes being looked at were the ones that made it back safely, the ones that survived. While the others’ perceptions had been distorted by the survivorship bias, Wald overlooked it and was instrumental in the reinforcement of the aircraft.

Had it not been for him, the group would have made a major mistake despite the stakes being so high, which illustrates how much bias affects decision making.

*Diagram used to represent the bullet holes on the aircrafts that came back from battle*

Survivorship bias in the business world

Survivorship bias has also crept into the business and finance environment and is apparent in various situations.

The first instance is the glorification of successful businesses and people. Every now and then, we hear an inspiring story about how some college dropouts became millionaires. Concrete examples are Steve Jobs, Mark Zuckerberg, Bill Gates, all of whom quit university and went on to become part of the richest people on the planet. Their fame has made them into inspirations and examples to follow. However, chances of becoming a millionaire after dropping out of college are rare. In fact, according to Ramsey Solutions’ National Study of (American) millionaires in 2024, 88% of millionaires graduated from college. Furthermore, the success of the examples above tends to be attributed solely to hard work, when in reality, for every successful college dropout, there are thousands who are not as lucky despite equivalent ambition. Moreover, variables such as luck, timing, networks and socioeconomic background also play a significant part in the path to success.

A similar example involves what are called “unicorn start-ups”. This term, coined by venture capitalist Aileen Lee in 2013, refers to a private startup company valued at over one billion dollars. Examples of unicorn start-ups are Uber Technologies Inc, Airbnb and Space X. People venturing into the business world often strive to one day find or create start-ups as the latter, in particular unicorns like the ones above, are viewed as the archetypes of success and entrepreneurship. At the same time, according to Forbes, 8 in 10 startups will fail within the first year of operation and unicorn start-ups got their name from their statistical rarity.

Looking up to and trying to emulate success stories is an example of survivorship bias and its consequences. Firstly, it drastically limits the knowledge and awareness needed to have a chance of actually succeeding by leaving out important voices, the voices of failures which are vital in understanding successes. To quote author David McRaney again, “The advice business is a monopoly run by survivors”, only their advice and stories are deemed relevant. Secondly, it leads to overly high degrees of optimism which can influence risk-prone decisions. Finally, it suggests causation from correlation by creating the illusion of certain patterns: dropping out of college does not necessarily put you on the path to becoming a millionaire even though a few millionaires did so.

Studies on mutual funds are perhaps the most famous example of survivorship bias in the business world. A mutual fund is an investment fund that pools money from investors to purchase stocks, bonds, and other assets and securities. When looking at mutual funds, studies tend to only include ones that currently exist and fail to show data on funds that no longer do. Funds cease to exist in the case of mergers and acquisitions but also during restructuring and poor performance. This failure to count lost funds leads to misleading positively biased results that do not actually depict the returns realized by all mutual funds, since funds that close cause a negative return that is not considered.

Finally, marketing campaigns can also transmit biased information. Indeed, many rely on attractive figures in terms of client satisfaction and durability of the product: “90% of people loved the product!”. These figures are not necessarily biased or false, but it is important to look at their sources and the factors they consider: these include the sample size and composition and for how long the product was used. For instance, the study might have been set up for success by only using the testimonies of regular and loyal customers.

How to avoid the bias

Knowing about its existence and understanding how it can influence and impact our judgement is already a huge step in trying to avoid bias. Being selective of data sources, always striving to see the bigger picture and practicing critical thinking are other ways of fighting against it. Since it is present in so many different situations, awareness of the bias can already lead to better and more informed decisions, from financial investments and ventures to medical and scientific conclusions, but also common opinions and values.

Conclusion

Survivorship bias is omnipresent in our everyday life, impacting our decisions and opinions.

However, it is not the only bias and many others like the anchoring, availability and confirmation biases also guide our conduct every day. Although it is impossible to be immune to them altogether as they are unavoidable cognitive occurrences, being aware of them and their significance is enough for a more informed point of view in a variety of subjects and, in particular, decisions as an economic agent.

Marta Nascimento

Sources:

“Survivorship Bias – the Decision Lab.” n.d. The Decision Lab. https://thedecisionlab.com/biases/survivorship-bias.

Team, Cfi. 2024. “Survivorship Bias.” Corporate Finance Institute. May 24, 2024. https://corporatefinanceinstitute.com/resources/career-map/sell-side/capital-markets/survivorship-bias/.

Penguin Press. 2018. “Abraham Wald and the Missing Bullet Holes – Penguin Press – Medium.” Medium, June 17, 2018. https://medium.com/@penguinpress/an-excerpt-from-how-not-to-be-wrong-by-jordan-ellenberg-664e708cfc3d.

Solutions, Ramsey. 2024. “The National Study of Millionaires.” Ramsey Solutions. October 3, 2024. https://www.ramseysolutions.com/retirement/the-national-study-of-millionaires-research#:~:text=Eighty%2Deight%20percent%20of%20millionaires,38%25%20of%20the%20general%20population.&text=And%20over%20half%20(52%25),13%25%20of%20the%20general%20population.

TEDx Talks. 2015. “Missing What’s Missing: How Survivorship Bias Skews Our Perception | David McRaney | TEDxJackson.” https://www.youtube.com/watch?v=NtUCxKsK4xg.

Gratton, Peter. 2024. “Survivor Bias Risk: What It Is, How It Works.” Investopedia. September 18, 2024. https://www.investopedia.com/terms/s/survivorship-bias-risk.asp.

Peachman, Rachel Rabkin. 2024. “America’s Best Startup Employers 2024 Methodology.” Forbes, March 8, 2024. https://www.forbes.com/sites/rachelpeachman/2024/02/21/americas-best-startup-employers-2024-methodology/#:~:text=Anyone%20who%20has%20worked%20at,fail%20in%20the%20long%20run.

“Whatever it takes” to bring Europe back from the dead?

October 3, 2024October 3, 2024by Awareness NewsLeave a comment

Reading time: 8 minutes

A look into the integration and competition concerns of the Draghi Report

“Europe faces a choice between exit, paralysis, or integration” – Mario Draghi

Unlike many of us perceive, European integration is far from figured out.

In practical terms, integration is all-around. From the euro to the European Court of Justice, touching on more simplistic aspects such as the citizen’s identification as Europeans. On the other hand, macro shocks like the Sovereign Debt Crisis might be able unveil more sensitive aspects of this fragile social, economic and political commitment, for example, by leading us to question whether European countries should pay for each other’s debt.

So, how much integration is too much integration? Mario Draghi, former Italian prime minister and president of the European Central Bank (ECB) brings this issue back to the fore with the release of his 400-page report on European competitiveness. There, Draghi identifies a rather plain and apparently sensible solution for its stagnation: cooperation and coordination. The former president of the ECB calls for an additional annual €800bn in investment, paired with a profound policy redesign to foster the European’s assertiveness in global competition. For many, a courageous punch full of truth, while for others, a political disaster.

This article will further delve into the specific intricacies of the mediatic Draghi’s Report, while dissecting the competition dilemma that Europe faces and intertwining them with the pervasive message of integration throughout report. Thus, alluding to the question of whether it exists a trade-off between resilience in global position and the core of current European values.

Background

The idea that the European Union is falling behind the United States, China and other advanced economies, when it comes to competitive edge, has been abiding for a while now.

The report dedicates a fair number of pages exploring the evolution of these dynamics. For instance, the gap in GDP level at constant prices is said to be widening, from 15% in 2002 to 30% in 2023. When measured in Purchasing Power Parity (PPP), it amounts to 12%. The gap growth is more sluggish when translated into per capita terms, but the authors claim is still significant, rising from 31% in 2002 to 34% today. The catalyzers for these disparities are precisely differentials in productivity: About 70% of the gap in per capita GDP with US at PPP is explained by lower productivity levels in the EU.

*2024, The future of European competitiveness – Part A*

On the other hand, the European Union is the proud face of some of the lowest levels of inequality, reportedly disclosing rates of income inequality around 10 percentage points below the ones evidenced in the United States (US) and China. It also surpasses these countries when it comes to life expectancy at birth, low levels of infant mortality, and education. In fact, its education systems allow a third of adults to have completed higher education. The EU is also the world leader in sustainability, environmental standards and progress towards the circular economy. (2024, The future of European competitiveness – Part A).

Plans had already been forged to deal with this issue of modest competition efforts across the European landscape. In November 2023, Ursula von der Leyen delivered her annual State of the Union speech, where she presented the main lines of action for the European Commission for the next year. Von der Leyen dedicated around a third of her speech to reshaping the EU’s economy, but the headline announcement was, precisely, Draghi’s Report. (2023 Foy)

Proposals

The report identified three main areas of action: The first is closing the innovation gap with America. According to the report, emerging technologies are still underdeveloped in the EU, not by lack of ideas or competence, but because of structural blocks, in the form of said inconsistent and restrictive regulations. Europe must focus on easier access for researchers when it comes to the commercialization of ideas, joint public investment in breakthrough technology or even investment in infrastructure to lower the cost of developing AI. Furthermore, training and adult learning should be at the core of the agenda.

The second area for action is combining decarbonization with competitiveness, by reforming Europe’s energy market, so that end-users can benefit from a competitive clean energy price, supporting industries that allow for decarbonization (e.g. clean tech and electric vehicles), while jointly promoting green industries.

The third area is increasing security and reducing dependencies. This vector of action is a result of the political turmoil instituted by the geopolitical instability. The EU is called to build a true “foreign economic policy”, by establishing coordination mechanisms in trade agreements and direct investment, ensuring stock of specific critical goods and devising industrial partnerships to establish robust supply chains.

To add on to this, the article takes a more thorough look at some more specific recommendations that have been particularly featured within the mediatic space, as the ones where it may be more difficult to achieve political consensus towards.

Competition Policy

“There is a question about whether vigorous competition policy conflicts with European companies’ need for sufficient scale to compete with Chinese and American superstar companies” – Draghi’s Report

A controversial point of discussion encompasses the question of competition policy enforcement, particularly mergers. EU antitrust policy has long been praised for protecting against abuses of dominant position. However, the report claims that this might be compromising the forging of European world-beaters, instead of only preserving competition within the EU (2024, Financial Times). In practical terms, this can be translated into the concern that European firms won’t be able to compete with significant global firms.

To achieve this, the report suggests an increased weight of the innovation factor in the assessment of mergers, by allowing higher market share concentration if this were to produce the development of new technologies by the merging firms. Of course, this might raise concerns regarding the misuse of this type of defense on a merger deal, allowing for a situation in which firms might commit to innovation only for the possibility of acquiring increased market power. So, Draghi suggests making companies showcase measurable levels of investment that can be tracked in the years following merger approval. The commission might, for instance, require companies to provide data on pricing or investment.

What is more, it is proposed a less stiff approach towards collaboration between rival corporate executives, with the argument that coordination might be necessary to maximize investment in research, or technological standardization (2024, Foy & Espinoza).

The report also recommends defining telecoms markets at the EU level – as opposed to the Member State level. To exemplify, a merged telecoms group could function in an almost monopolistic setting in individual countries, if their market share across the entire single market was less than 40 percent, which serves as a threshold for merger policy (2024, Foy and Espinoza).

These last measures have been subject to much mediatic scrutiny. On a paper published in Vox EU, the professors Tomaso Duso, Massimo Motta, Martin Peitz and Tommaso Valletti expressed their concerns regarding the telecom policy recommendations provided by the report. They claim that “They propose a broader, EU-wide market definition, which would artificially de-concentrate the relevant market, thereby making intra-national mergers appear no longer problematic on paper”, which ultimately creates the possibility to accept mergers that would be detrimental to European businesses and consumers.

Integration

Draghi claimed that the new “industrial strategy for Europe” would cost approximately €750- €800bn, which corresponds to 4.4-4.7 percent of EU GDP. Large amounts of money should be placed on joint funding key projects, such as innovation, as well as other European “public goods” —such as defense procurement, cross-border grids or common energy infrastructure.

Another concern expressed in the report points to the levels of financial fragmentation of the capital markets of the EU. Its integration is seen as an essential procedure towards the introduction of economic momentum that would allow for the development of the investments needs. 

With the case of banking fragmentation, the report reminds us of the incomplete implementation of the Banking Union. While the unified supervision aspect is solidified, Europe has failed to implement a common debt insurance scheme, and the single resolution authority lacks a financial backstop. One of the proposed actions to facilitate this process is the creation of a common safe asset, particularly, the report appeals to “issue common debt instruments to finance joint investment projects that will increase the EU’s competitiveness and security.” However, it also established that a necessary condition for this to happen would be that “the political and institutional conditions are in place”, which can signify an impediment.  

Moreover, the report asks for the extension of qualified majority voting (QMV) in the Council of The European Union, such that voting subject to QMV would be elongated to more areas, or even generalized, implying the end, or at least, reduction of the veto power under unanimity voting.  

The difficulty here lies exactly in gaining political momentum to implement such reforms. In fact, the German finance minister Christian Lindner has already spoken on the matter, dismissing the Draghi’s suggestion to raise additional common debt to fund breakthrough innovation: “Each individual EU member state must continue to bear responsibility for its own public finances”. (2024 Hall). Eelco Heinen, finance minister of the Netherlands, said that “Europe has to grow, and I totally agree with that. An economy will grow if you reform (…) more money is not always the solution.”.  

Conclusion

To conclude, the Draghi Report could represent either a turning point for Europe or just another document to be archived and forgotten about in the years to come. And although it may not be translated into policy action, at least for the time being, it has the power to ignite the public discussion back to “After all, what is the Europe that we want?”

References: Dragui, Mario. 2024. “Mario Draghi outlines his plan to make Europe more competitive”. The Economist. https://www.economist.com/by-invitation/2024/09/09/mario-draghi-outlines-his-plan-to-make-europe-more-competitive

Draghi, Mario. 2024. The future of European competitiveness: Part B | In-depth analysis and recommendations. European Comission. https://commission.europa.eu/document/download/ec1409c1-d4b4-4882-8bdd-3519f86bbb92_en?filename=The%20future%20of%20European%20competitiveness_%20In-depth%20analysis%20and%20recommendations_0.pdf

Draghi, Mario. 2024. The future of European competitiveness: Part A | A competitiveness strategy for Europe. European Comission. https://commission.europa.eu/document/download/97e481fd-2dc3-412d-be4c-f152a8232961_enfilename=The%20future%20of%20European%20competitiveness%20_%20A%20competitiveness%20strategy%20for%20Europe.pdf

Foy, Henry. 2024. “Why Draghi went for broke in calling for €800bn of new EU spending”. Financial Times. https://www.ft.com/content/76e8458d-3eb7-46d3-8d9c-42d524d60800

The Editorial Board. 2024. Whatever it takes to boost European competitiveness”. Financial Times. https://www.ft.com/content/a87af4c4-5e5f-44a8-88a5-9a4037a16d19

Foy, Henry and Ian Johnston. 2023. “The EU’s plan to regain its competitive edge”. Financial Times. https://www.ft.com/content/124b4cdb-deb9-49a0-b28d-d97838606661

Foy, Henry, Javier Espinoza, and Paola Tamma. 2024. “Mario Draghi confronts the EU’s merger police”. Financial Times. https://www.ft.com/content/515d5a42-a760-42f1-9afa-89d4dcdc2a99

Duso, Tomaso, Massimo Motta, Martin Peitz , and Tommaso Valletti. 2024. “Draghi is right on many issues, but he is wrong on telecoms”. Vox EU. https://cepr.org/voxeu/columns/draghi-right-many-issues-he-wrong-telecoms

Hall, Ben. 2024. “Will Mario Draghi’s masterplan get the momentum it needs?”. Financial Times. https://www.ft.com/content/a5e1264c-4004-440e-b3d9-2e130a68853