Arvind's Newsletter-Weekend edition

1.India gives over $1 bln incentives to private firms under its manufacturing scheme

To boost domestic manufacturing, India has paid $1.02 billion in incentives, in response to more than $13 billion in investments made by private companies under the PLI scheme launched in 2020, according to the Department for Promotion of Industry and Internal Trade.

Under the scheme, which aims to boost local manufacturing for 14 sectors, including electronics, pharma, and textiles, India has exported Rs 3 lakh crore worth of goods as well. While textiles and steel specialty sectors are seeing a lag, production in mobile phones, electronics, and other sectors has moved fast.

2.How AI is used in War

Two recent reports spotlighted the increasing role of artificial intelligence in war. Chinese planners are exploring using AI for missile guidance, target detection, and maintenance, and the country’s forces are developing AI-guided autonomous vehicles, though for now officials see the technology as augmenting rather than supplanting human capabilities, an analyst wrote for the Center for European Policy Analysis.

 On the battlefield, the Israeli outlet 972 reported, citing a half-dozen Israeli intelligence officers, that the country’s armed forces have used an AI-based program called Lavender to identify individuals for targeting during the war in Gaza. According to 972, Lavender sits alongside another platform, Gospel, that focuses on buildings and structures. The Israeli military denied the allegations.

3.When do you know you are living in an ageing country? When adult diapers represents a bigger market than baby diapers

Oji Nepia, currently manufactures 400 million infant nappies annually. Production has been falling since 2001, when the company hit its peak - 700 million nappies.Sales of adult nappies outpaced those for infants in the country for more than a decade.
Now, Oji, has announced that it will stop producing diapers for babies in the country and, instead, focus on the market for adults only. Oji is the latest firm to make such a shift in a rapidly ageing Japan, where birth rates are at a record low.

4.Slow living and fast broadband have made Mallorca a hot property for remote workers, reports Financial Times

The Spanish island in the Mediterranean has long attracted foreigners — Robert Graves wrote I, Claudius in Deia — but the post-pandemic WFH culture has made the real estate market take off in the last three years, driven by Mallorca’s excellent infrastructure. “Prime” properties in the Central region sell for an average of $1.8 million, up 7% from last year. Buyers are looking for smart luxury homes, but also rustic comforts such as olive groves.

“Stuck in a Mumbai flat when Covid hit, documentary maker Shaana Levy and her husband fled with their new baby to her parents finca on the Spanish island of Mallorca. While life was on pause, they spent their days wandering around olive groves, digging up carrots or picking figs around the farmhouse. We fell in love with the rural paradise and decided to stay. Life is simple and a complete juxtaposition to the crazy busy life of Mumbai,says Levy, whose Swiss passport facilitated residency, and who now has another son. We bought a country house in 2022 and I planted almond trees to flavour the honey we make. I work remotely and the good airport connections make trips away for filming practical.”

5.Stephen King, King of Horror

Today marks 50 years since Stephen King’s debut novel, “Carrie.” Its 1974 release launched King’s decades long influential literary career in horror and beyond. 

King was born in 1947 in Maine, where many of his stories are based. He was an English teacher before “Carrie” and its 1976 film adaptation about a high school outcast propelled him to fame. While the horror genre dates back to the 1700s, King is in large part credited with its revitalisation in the 1970s and 1980s, with his novels praised for their empathetic characters and realistic world building. He has written more than 60 novels, more than 30 of which were bestsellers. Those include classic horrors like “The Shining” and “It,” as well as others beyond the genre, including the novella behind “The Shawshank Redemption.”  

King has also been credited with inspiring a generation of story tellers, including JJ Abrams and the Duffer brothers. His latest novel, “Holly,” was released last year.

6.What Boeing, Disney and others can learn from General Electric, The Economist

Only rarely are chief executives appointed with a mandate for dismemberment. Yet when Larry Culp assumed the top job at General Electric (GE) in October 2018, he was expected to sell parts of the 130-year-old conglomerate at a pace even faster than his empire-building predecessors had assembled them.

In November 2021 he announced a radical finale: splitting the firm in three. GE’s health-care business became a separate company last year. On April 2nd its power division went the same way, leaving behind GE Aerospace the firm’s engine-making operation.

Investors are reaping the rewards. After dithering during the first four years of Mr Culp’s tenure, GE’s shares have been on a jet-fuelled tear. The cumulative stockmarket value of GE’s three successor firms is $237bn. Although that is well below the firm’s peak of $594bn in 2000, it is more than double what Mr Culp inherited. Business-school students have spent decades dissecting the hubristic acquisitions that defined GE’s life. Now they must heed the lessons from its final act.

The fact that the wind is at GE’s back has undoubtedly helped. Demand for jet engines has picked up since the covid-19 pandemic ended and clean-energy projects are benefiting from government handouts in America. The bullish mood of America’s stockmarket has surely eased the separation process, too. But Mr Culp also deserves praise. His tenure reflects not just a victory of focus over sprawl, but also of operational excellence at a firm that long suffered the effects of excessive financial engineering.

One advantage was that Mr Culp was an outsider—the first ever to take the helm at GE. The turnaround probably could not have been pulled off by a lifer. GE insiders had ossified. Nothing had replaced Six Sigma, a system used to reduce manufacturing errors that was championed by Jack Welch, the firm’s acquisitive boss who retired as long ago as 2001. Mr Culp brought his own Japanese-style management philosophy. The fresh but fanatical approach to continuous operational improvement helped usher in cultural change. So did getting executives onto the factory floor.

The new thinking meant that GE’s assets did not languish on the chopping block, but improved on Mr Culp’s watch and stopped the break-up becoming a fire sale. The programme has a familiar taste for fanciful names—the power business has been christened GE Vernova. But the markets are cheering on GE’s heirs, which is striking given that spin-offs often disappoint investors. IBM’s infrastructure-services business (Kyndryl) and Johnson & Johnson’s consumer health-care operation (Kenvue) have both failed to shine in the public markets.

Mr Culp’s success, then, is vindication for smooth operators, not firms looking to ditch problem assets or activist hedge funds in search of conglomerate discounts. Bosses preparing to lop off divisions of their own firms, including those at Unilever, will study him closely. But there are broader lessons, too. Disney, which recently prevailed in a proxy fight against Nelson Peltz, a noisy shareholder who once lobbied for change at GE, is just one American blue-chip firm that might benefit from fresh thinking.

The lessons may be most apt for Boeing, a case study for rotten corporate culture. In March its boss resigned, two months after the blowout of a fuselage panel from one of its 737 max planes. Some have suggested Mr Culp for the job, which would be a severe test of his operational prowess. In March Boeing confirmed that it was in discussions to acquire Spirit AeroSystems, an unsatisfactory supplier it had previously spun off. Mr Culp says he is happy running GE Aerospace, one of Boeing’s suppliers. But if he can manage a business well while pulling it apart, perhaps he could also thrive at putting one back together again.