Philippa Kaur

A FAVOURITE PASTIME in Silicon Valley, second only to inventing the next new thing, is bubble-spotting. Even industry insiders tend to get these things spectacularly wrong. “You’ll see some dead unicorns this year,” Bill Gurley, a noted venture capitalist, predicted in 2015, the year that incubation of these startups worth more than $1bn really got going.Listen to this story. Enjoy more audio and podcasts on More

COUPANG’S OFFICES in Seoul afford a view of the South Korean e-merchant’s promise. Every dawn the forest of high-rise apartment blocks teems with its vans dropping off orders made the night before. This self-styled “rocket delivery”, and Koreans’ love of it, fuelled Coupang’s stratospheric rise. When it debuted on the New York Stock Exchange in March 2021, its shares nearly doubled in value in an instant. It closed its first trading day with a market capitalisation of $80bn. It was the biggest non-American initial public offering (IPO) since Alibaba, a Chinese e-commerce behemoth which listed in 2014.Listen to this story. Enjoy more audio and podcasts on More

FIRE-FIGHTING FOAM starves the flames of oxygen. A handful of overused words have the same deadening effect on people’s ability to think. These are words like “innovation”, “collaboration”, “flexibility”, “purpose” and “sustainability”. They coat consultants’ websites, blanket candidates’ CVs and spray from managers’ mouths. They are anodyne to the point of being useless.Listen to this story. Enjoy more audio and podcasts on More

“WHEN WE GO at ’em,” Carl Icahn growls, proudly, “we go at ’em.” After decades as chief executives’ number-one tormentor, the 86-year-old’s disdain for them has softened only a tad. “I wouldn’t call them buffoons,” he told Schumpeter recently, “but, with many exceptions, they are in way over their heads.” Mr Icahn continues to browbeat managers for poor performance. As The Economist went to press he was in the final throes of a fight with Southwest Gas, a utility. His gripes are broadening, too. This month and next he will seek to oust directors at McDonald’s and Kroger over the treatment of sows. Yet Mr Icahn also considers himself a vanishing breed. “Activism is dying,” he laments.Listen to this story. Enjoy more audio and podcasts on More

BOSSES HAVE always kept tabs on their workers. After all, part of any manager’s job is to ensure that underlings are earning their keep, not shirking and definitely not pilfering. Workplaces have long been monitored, by inspectors, CCTV cameras and more recently all manner of sensors, to check how many widgets individual workers are assembling or whether anyone is dipping too liberally into the petty-cash box. In the past few years, however, and especially as the pandemic has forced work from the controlled enclosure of the corporate office to the wilderness of the kitchen table, both the scope and scale of corporate surveillance have ballooned.A study by the European Commission found that global demand for employee-spying software more than doubled between April 2019 and April 2020. Within weeks of lockdowns starting in March 2020, search queries for monitoring tools rose more than 18-fold. Surveillance-software makers reported huge increases in sales. At Time Doctor, which records videos of users’ screens or periodically snaps photos to ensure they are at their computer, sales suddenly trebled in April 2020 compared with the previous year. Those at DeskTime, which tracks time spent on tasks, quadrupled over the period. A survey of more than 1,000 firms in America in 2021 found that 60% of them used monitoring software of some type. A further 17% were considering it.In an acknowledgement that corporate surveillance is on the rise—and raising eyebrows—on May 7th a New York state law kicked in requiring companies to inform employees about any electronic monitoring of their telephone, email and internet activity. Corporate scofflaws can be fined between $500 and $3,000 per violation. New York joins Connecticut and Delaware, which have required similar disclosures since the late 1990s and the early 2000s, respectively, and Europe, where companies have had to prove that monitoring policies have legitimate business interests—such as preventing intellectual-property theft or improving employee productivity—since 1995. More such rules are almost certain to emerge. They are unlikely to deter more offices from embracing Big Brotherliness.Firms have lots of valid reasons to monitor their workers. Safety is one: tracking the whereabouts of staff in a building can help employers locate them in case of an emergency. Another is to keep money and data safe. To ensure their employees are not sharing sensitive information, banks such as JPMorgan Chase not only trawl through calls, chat records and emails, but also track how long staff are in the building and how many hours they have worked. In 2021 Credit Suisse began requesting access to personal devices used for work.Startups are offering increasingly sophisticated threat assessment. One, Awareness Technologies, offers software called Veriato, which gives workers a risk score to determine their security risk to an employer, such as being responsible for data leaks or intellectual-property theft. Another, Deepscore, even claims its face and voice-screening tools are able to establish how trustworthy an employee is.Another big reason for companies to surveil workers is to gauge—and enhance—productivity. The past couple of years have seen an explosion in tools available to managers that claim not just to tell whether Bob from marketing is working, but how hard. Employers can follow every keystroke or mouse movement, access webcams and microphones, scan emails for gossip or take screenshots of devices, often without alerting employees—often, as with products such as FlexiSPY, leaving the surveilled workers none the wiser. Some monitoring features are even available on widely used software such as Google Workspace, Microsoft Teams or Slack.Many of the surveillance products are powered by articifical intelligence (AI), which has made strides in the past few years. Enaible claims its AI algorithms can measure how quickly employees complete different tasks as a way of weeding out slackers. Last year Fujitsu, a Japanese technology group, unveiled AI software which promises to gauge employees’ concentration based on their facial expression. RemoteDesk alert managers if workers eat or drink on the job.Collected responsibly, such data can boost firms’ overall performance while benefiting individuals. Greater oversight of workers’ calendars can help prevent burnout. Technology can also empower some employees in the face of bias or discrimination. Parents and other staff with caring responsibilities can show they are just as productive as their office-dwelling colleagues. Employees tend to tolerate bag checks and CCTV cameras, which are regarded as legitimate ways to improve security. Likewise, many even accept that their work calls and email are fair game.Smile, you’re on candid webcamCritics of surveillance nevertheless fear that companies cannot be trusted with this sort of information. In 2020 Barclays, one of Britain’s biggest banks, was forced to scrap software that tracked the time employees spent at their desks, nudging those who spent too long on breaks, after facing a backlash from staff. That same year Microsoft came under scrutiny for a feature it rolled out to rate workers’ productivity using measures including how often staff attended video meetings or sent emails. Microsoft apologised for the feature and made changes to avoid individuals being identified. On paper, the goal was to provide detailed insight into how organisations work. In practice, it pitted employees against each other.That points to another problem: many surveillance products aimed at boosting productivity are not well tested. Some risk being counterproductive. Research has associated monitoring with declines in trust and higher levels of stress, neither of which is obviously conducive to high performance. In one study of call centres, which were early adopters of surveillance tech, intensive monitoring of performance contributed to higher levels of strain, emotional exhaustion, depression and employee turnover. In a separate survey of 2,000 remote and hybrid workers in America by ExpressVPN, a virtual private network, over a third faced pressure to appear more productive or to work longer hours as a result of being monitored; a fifth felt dehumanised as a result. Nearly half of respondents pretended to be online and almost a third employed anti-surveillance software, specifically designed to dodge online monitoring.Add concerns about privacy—especially as the snooping shifts from the office to the home—and it is small wonder that workers appear sceptical about the value of surveillance. According to a survey in 2018 by Britain’s Trades Union Congress, which represents 48 unions, only one in four surveyed workers think monitoring has more benefits than downsides. Around three-quarters find facial recognition software inappropriate, along with monitoring social media use outside work hours or using webcams to spy on staff. Research by Gartner, a consultancy, last year found that employees in nine large economies consistently favoured non-digital monitoring, such as in-person check-ins by managers, to the digital sort. Only 16% of French workers thought that any form of digital surveillance was acceptable.With laws like New York’s coming into force, plenty of employees are about to learn that their employers’ views on the appropriateness of such products may be quite distinct from their own. Employers, for their part, may need to temper their enthusiasm for snooping on staff. Most companies will probably arrive at a sensible compromise. Those that don’t may find that too much knowledge is a dangerous thing. For more expert analysis of the biggest stories in economics, business and markets, sign up to Money Talks, our weekly newsletter. More

FORTO SEEMS an unlikely tech darling. It does not make gadgets, build the metaverse, forge cryptocurrencies or launch rockets. The six-year-old startup from Berlin, whose main business is arranging the transport of cargo from one place to an other, has nevertheless managed to raise nearly $600m from venture capitalists. Its backers reckon the firm can shake up the archaic freight-forwarding industry. It has tripled its business in each of the past four years, boasts Michael Wax, its boss, and is now one of the top ten forwarders in the busy trade lane between China and Germany. In March it announced $250m in new funding at a valuation of $2.1bn.Forto is not the only freight tech startup attracting investors’ attention. With the world’s supply chains gummed up by bottlenecks, lockdowns and other disruptions, venture-capital (VC) firms are pouring billions into companies offering ways to make freight transport more efficient. In 2021 supply-chain-technology firms raised more than $62bn, according to PitchBook, a data provider, more than twice the figure in pre-pandemic 2019 (see chart). Of that, nearly $9bn went to freight-tech startups. PitchBook counts more than a dozen private freight-tech “unicorns”, valued at more than $1bn. Viki Keckarovska of Transport Intelligence, a firm of consultants, expects more funding rounds this year.Part of the appeal lies in the industry’s size and potential for disruption. The freight-forwarding business alone is worth $475bn in annual revenues, reckons Armstrong & Associates, a supply-chain research and consulting firm. The broader “third-party logistics” market, which includes transport management and warehousing, generates sales of $1.4trn. At the same time, freight remains technologically backward, especially the cross-border sort. “This industry is completely offline,” marvels Zvi Schreiber, boss of Freightos, a digital-freight marketplace. “You would expect that shipping a container would be just as digital as booking a flight,” he says, “but it is not at all.” Just getting a quote can be a headache. “For 90% of the freight-forwarders today it still takes one or two days to come back with a price,” says Mr Wax.This is starting to change thanks in part to whizzy new software platforms designed to streamline the process of shipping freight overseas. Flexport, a digital freight-forwarder based in San Francisco, automates many of the supply-chain processes that were traditionally done manually, including getting quotes, filling out documents and co-ordinating with shippers and carriers along the supply chain. The nine-year-old startup, which earned $3.2bn in revenues in 2021, was recently valued at more than $8bn. Project44, a supply-chain visibility platform from Chicago, lets retailers and brands monitor milestones in their cargo’s journey, such as when it is loaded onto a ship, leaves the port or arrives at its final destination—all in real time. They can also make adjustments or reroute shipments if needed.One common feature of such platforms is the ability to glean insights from data. Big shippers and logistics providers typically manage their shipments in software known as a transport-management system (TMS), which tracks shipments as they make their way along logistics networks, from the factory to the port and finally to the customer. Such systems, which have been around since the late 1980s, are useful databases of information, says Evan Armstrong, president of Armstrong & Associates. But they are not clever. “The first step was getting everything onto a TMS. Now the next step is taking those TMSs and making them intelligent.”Although recent supply-chain snarl-ups have played a part in boosting demand for logistics software, they are not the main force behind the boom. That, industry-watchers agree, would be Amazon. The e-emporium “is the absolute number-one catalyst for supply-chain transformation, no question”, says Julian Counihan of Schematic Ventures, a VC firm. Whereas the supply chain has historically been seen as a cost centre, Amazon has turned it into a money-maker. With the rise of next-day and same-day delivery, consumers’ expectations have changed dramatically. As shipping times plummet, logistics requires “way, way more supply-chain technology”, says Mr Counihan.Some scepticism is in order. Many of the startups look little different from the incumbents they are seeking to disrupt. Kuehne + Nagel, a big Swiss freight-forwarder, has invested heavily in digitisation even if it doesn’t “sing and dance that they are a ‘digital’ freight forwarder”, as Mr Schreiber of Freightos freely admits. C.H. Robinson, a big American logistics firm, is “really a digital freight broker”, says Mr Armstrong. And although some of the big incumbents rely on antiquated technology, he adds, they have much more scale than any of the newcomers. That lets them secure lower prices from ocean liners, air freighters and other carriers.Still, as Ms Keckarovska points out, the upstarts have a shot. The freight-forwarding market remains highly fragmented, so they need not take on a huge incumbent. DHL and Kuehne + Nagel, the two biggest brokers, have a combined global market share of just 6%. And despite their digital aspirations, the incumbents’ tech nous leaves plenty of room for improvement. Of the 20 biggest established freight-forwarders, 15 apparently use the same off-the-shelf TMS to manage their shipments. ■For more expert analysis of the biggest stories in economics, business and markets, sign up to Money Talks, our weekly newsletter. More

WHEN VLADIMIR PUTIN’S tanks rolled into Ukraine in late February, crude-oil markets reacted instantly to the uncertainty and, in short order, to the sanctions imposed on Russia, the world’s second-biggest exporter of the black stuff. The war’s impact on another set of crucial oils—the edible vegetable fats such as sunflower oil, of which Ukraine and Russia are the world’s two biggest exporters—has taken longer to digest. It is now causing heartburn for the consumer-goods giants that use them by the tonne to make everything from snacks to lipstick.Exports from war-torn Ukraine have all but stopped. Russia has placed an export quota on its sunflower oil. Worries about scarce supplies have led countries including Egypt and Turkey to ban exports of edible oils. And from April 28th Indonesia has banned exports of palm oil, another widely traded variety.The archipelagic country sold $18bn-worth of the stuff abroad in 2020, accounting for half of all palm-oil exports. So the move sent prices, which had dipped after the initial war-induced spike, soaring again (see chart). A tonne of palm oil for delivery in May is trading at over $1,700, 70% higher than the average spot price in 2021. This is piling more inflationary pressure on global producers of consumer goods—and sabotaging their environmental bona fides.Unilever, a soap-to-soup group, spent $2.7bn on palm oil last year, around 15% of its total spending on commodities. Procter & Gamble, a similarly sprawling giant, and big packaged-goods firms like Mondelez and Nestlé are in a similar pickle. Everyone is paying more for soyabean and other alternative oils, too, so substituting one kind for another would bring little financial relief. Investors typically view the big consumer firms as being resilient to economic shocks. But as input prices rise some may be beginning to doubt the companies’ ability to pass on the extra costs to shoppers, who are becoming fed up with rising bills.The ban, which does not have a specified end date, will also complicate the companies’ efforts to present themselves as environmentally responsible. Palm-oil production has historically often come at the expense of rainforests, which were razed in places like Indonesia to make room for plantations. Today Nestlé says that 90% of the palm oil it purchased in 2021 was certified as deforestation-free, thanks to close monitoring of supply chains, from the plantation to the port. Such capacity has taken years to develop in Indonesia and will be hard to replicate elsewhere at short notice. If the Swiss giant and its rivals have to resort to buying oils from more opaque places, that could leave a greasy stain on their carefully manicured green reputations. ■For more expert analysis of the biggest stories in economics, business and markets, sign up to Money Talks, our weekly newsletter. More

SELIM BORA has had quite a run. In March his company, Summa, won a contract to rebuild and run Guinea Bissau’s new international airport. Months earlier it had completed a 50,000-seat national stadium in Senegal, after less than 18 months of work—a sprint-like pace for such projects. The company’s résumé also includes convention centres in the Democratic Republic of Congo and Equatorial Guinea, a sports arena in Rwanda, and airports in Niger, Senegal and Sierra Leone. “Ten years ago we had no projects in Africa outside of Libya,” recalls Mr Bora, taking in the view from his office in Istanbul. “Today 99% of our work is in Africa.”Turkey’s construction industry is an international heavyweight. Of the world’s 250 biggest contractors, 40 are Turkish, behind only China and America. Many have long had a big footprint in north Africa. Of late they have begun making inroads in the continent’s south. Last year alone the value of projects undertaken by Turkish builders in sub-Saharan Africa was $5bn, or 17% of all Turkish building projects abroad, up from a paltry 0.3% before 2008. The region has overtaken Europe (10%) and the Middle East (13%), and is second only to countries of the former Soviet Union. In parts of Africa Turks are even giving Chinese builders, which continue to dominate construction in Africa, a run for their money.Many of the Turkish construction firms got their African start in Libya in the 2000s, where they locked up billions of dollars in contracts. The toppling of the country’s dictator, Muammar Qaddafi, in 2011 and the ensuing civil war forced them to flee. They found new opportunities south of the Sahara, where their reputation regularly preceded them: many African leaders who had visited Libya and admired Turkish projects there were eager to work with the companies responsible for them.Some assistance for Turkish projects comes from Turkey’s export-credit bank and public lenders from Japan. Both countries are, for their own strategic reasons, keen to check Chinese interests in Africa. Still, the Turks concede that they can rarely compete with Chinese rivals on price. “We cannot match the Chinese, because they come in with their own financing and we have to go to the markets,” says Basar Arioglu, chairman of Yapi Merkezi, another big construction firm.The Turkish firms are therefore stressing other selling points instead. They tend to work faster than Chinese rivals and to offer superior quality. Having completed a big railway project in Ethiopia a few years ago, Yapi Merkezi more recently beat Chinese rivals to build the first section of a Tanzanian railway connecting Dar es Salaam and Lake Victoria. In December it signed a $1.9bn deal to build the third section.The Turks are also happy to comply with African governments’ demands to hire local subcontractors and workers, which the Chinese have been more reluctant to do. This is in large part making a virtue out of necessity: whereas Chinese firms can afford to bring their own skilled workers, including engineers, to Africa, Turkish ones often cannot. Since Turkey lacks China’s resources to be in all places at once, Mr Arioglu observes, “the only way we can survive in the long run is to become local in all the countries we work in.” When Summa began working in Senegal in the 2010s, its workforce was 70% Turkish, remembers Mr Bora. That figure is now down to 30%.Some Africans still grouse about the Turkish presence in their countries. Like the Chinese, “they come and go,” grumbles one official, creating only fleeting jobs. Another complains that the Turks (and other newcomers) invest in construction, mining and ports rather than higher up the value chain, which would do more for Africa’s broader economic development. And they could launch more joint ventures with African companies.Such gripes are, however, outweighed by one last consideration increasingly prized by African governments. “We came at a lucky time,” recalls Mr Arioglu, “when both Ethiopia and Tanzania were looking for alternatives to Chinese companies.” As more sub-Saharan countries follow suit, being non-Chinese is a Turkish trait that China’s builders cannot match. ■ More