Arvind's Newsletter

1. World Bank downgrades developing East Asia growth forecast, weighed by a slowing China, reported Financial Times.

Developing countries in Asia will grow at among their lowest rates since the 1960s, thanks in large part to a sharp slowdown in China, the World Bank forecast. 

The Washington-based lender cut its projections for both this year and next, voicing concern over high levels of debt across the region as well as increasing trade restrictions. The new report is the latest that points to the fallout from economic struggles in China, which is grappling with record-high youth unemployment, a sprawling property-sector crisis, and reduced inbound investment. Citing a string of weak indicators for the world’s second-biggest economy, the World Bank said it now expected China’s economic output would grow 4.4 per cent in 2024, down from the 4.8 per cent it expected in April.

It also downgraded its 2024 forecast for gross domestic product growth for developing economies in east Asia and the Pacific, which includes China, to 4.5 per cent, from a prediction in April of 4.8 per cent and trailing the 5 per cent rate expected this year.

2.Oxford-Serum Institute of India malaria vax gets WHO recommendation

The malaria vaccine developed by the University of Oxford and the Serum Institute of India, leveraging Novavax's adjuvant, has now been recommended for use by the World Health Organisation's Strategic Advisory Group of Experts and the Malaria Policy Advisory Group, paving the way for a global roll-out soon.

Hundreds of millions of doses of this vaccine, R21/Matrix-M, are to be supplied to countries that are suffering a significant malaria burden, the University of Oxford website said. The Serum Institute of India has already established a production capacity for 100 million doses per annum, which will be doubled over the next two years, it added.

At this point, it’s not known when the vaccine will be available in India.

3.The 2023 Nobel Prize in Physiology or Medicine was awarded to two scientists who helped pave the way for mRNA vaccines. 

Hungarian scientist Katalin Kariko and U.S. colleague Drew Weissman, who met in line for a photocopier before making mRNA molecule discoveries that paved the way for COVID-19 vaccines, won the 2023 Nobel Prize for Medicine on Monday. The technology was crucial in developing COVID-19 vaccines and is credited with saving millions of lives. The prize, created by Alfred Nobel in 1901 to honor great achievements in science, also comes with a $1 million award. The Swedish king will present the prizes on December 10 in Stockholm.

4.Apple may be quiet on AI, but it’s also the biggest buyer of AI companies, reports Quartz.

If there’s one thing that has been constant in the artificial intelligence frenzy it’s that Big Tech companies Google, Microsoft, Meta, and Amazon can’t stop talking about their AI investments, whether that’s in earnings calls or new product announcements. But one industry leader tends to be absent from such chatter: Apple.

But, there’s a gap between Apple’s public disclosures and its internal efforts. Since 2017, Apple has been the top buyer of AI and machine learning companies, according to market research firm PitchBook. Apple’s AI shopping spree shows that the technology is indeed core to the future of the company’s consumer products, from the iPhone to the MacBook.

Apple has purchased 21 AI startups since 2017, nearly double the number that Microsoft and Meta have bought. Accenture, a global consulting firm, bought 19—good for second-most behind Apple.

5.The rise of surge pricing: ‘It will eventually be everywhere’

Powered by algorithms and AI, a growing number of consumer industries are adjusting prices in response to supply and demand, reports the Financial Times.

For drinkers at the Coach House in central London on a busy work night this week, there was an uncomfortable piece of news to digest: the price of Britain’s favourite alcoholic beverage had just gone up — again. Stonegate, Britain’s biggest pub company which runs the Coach House, has announced it will charge pubgoers 20p extra for a pint of beer on busy evenings and weekends. It is part of what it called a new “dynamic pricing” policy in some of its venues.

“Dynamic” pricing, as many in industry call it, or “surge” pricing as is more widely known by consumers, whereby businesses flex prices at particular times in response to shifts in supply and demand, is not a new phenomenon. It has been used by airlines in the US, for instance, since 1983 when the US government relinquished the power to set domestic airfares. When booking flights and hotel rooms, consumers have become accustomed to the rhythms of the dynamic pricing model: book early or during the shoulder season and get a good deal; book last-minute or during the busy holiday periods and get penalised.

However, powered by algorithms and artificial intelligence, it is being introduced at a rapid pace by a growing number of consumer industries. Amazon changes the price of its products on average every 10 minutes, using millions of real-time data points to benchmark against competitors and track demand surges.

As high inflation erodes margins and improvements in technology make dynamic pricing cheaper and more practical for businesses to implement, the temptation to deploy the pricing strategy is growing in industries that have so far remained largely untouched by the method. Bars, restaurants and bricks-and-mortar retailers have historically only adopted dynamic pricing for basic discount offers, but that could change.

A 2018 study by researchers at Massachusetts Institute of Technology found that dynamic pricing boosted airline revenues by between 1 and 4 per cent, compared with traditional pricing.

However, the furore this week about the rollout of surge pricing in a beloved British boozer has reignited debates around the ethics of the pricing strategy and whether it is rigged against the consumer. In some industries, dynamic pricing has proved less palatable.

Ride-sharing app Uber refunded users in central London after its pricing engine briefly surged fares in the aftermath of the London Bridge terror attack in June 2017. Fans trying to bag tickets for arena tours by Beyoncé, Coldplay and Harry Styles in the past year have expressed frustration over the wild fluctuations in Ticketmaster’s dynamic pricing model, which resulted in some paying more than double the face value. Ticketmaster’s parent company Live Nation Entertainment is being investigated by the US justice department as part of an antitrust probe.

Read on.