Philippa Kaur

THERE IS AN old joke that the key to success in life is sincerity. If you can fake that, the saying goes, then you have got it made. On reflection, however, the essential quality for surviving at work is not sincerity, but flexibility.When Bartleby started his career in 1980, personal computers were the preserve of hobbyists and sending a letter required the passing of a handwritten draft to the typing pool. Phone calls came through the switchboard. Office life was so dependent on shuffling paper that staplers, paper clips and Tipp-Ex were essential. No one had a mobile phone so swift contact was impossible; this correspondent once sat for 45 minutes in a restaurant waiting for a guest who had been shown to another table and was miffed about his non-appearance.Now office workers must grapple with a host of technologies. They need to know how to raise their hand (and mute themselves) on Zoom, track changes in a Google doc and make financial calculations on a spreadsheet. They must switch between applications, and back again, several times an hour. They must learn to use (or at least understand) new jargon even when it seems fatuous or irritating.The need to adapt to change has not been confined to office work, of course. Those employed in manufacturing have had to cope with new techniques and new machines. Many of them have had to change sectors in order to find work. Manufacturing employment has fallen from 30.2% of the workforce in 1991 to 22.6% in 2019 across the OECD, a club of mostly rich countries. Retail workers have grappled with bar codes, automated checkouts, contactless payments and click-and-collect. But office workers have also had to adjust to one hugely significant change: a breakdown of the barriers between work and home life. The advent of email and the smartphone means that workers can be contacted at any time of the day or night. If the phone rings at 10pm, it’s probably not your mother, it’s your boss.Employees have to adjust to many corporate cultures over the course of their careers. Only a minority of workers ever spend their working lives at a single organisation. The median job tenure for workers aged 25 and over in America is around five years and has changed little in recent decades. Public-sector workers stay longer in their jobs than those in the private sector, who last around four years. In a 40-year career, that implies the average private-sector employee might work for ten different firms. On top of that, globalisation has meant that workers have had to get used to dealing with foreign customers and suppliers, colleagues working across different time zones, and sometimes foreign owners.Over the years, employees—particularly men—have had to adapt to new social norms. What used to be known as “laddish humour” is now rightly deemed to be demeaning to female colleagues. Boozy lunchtimes were once common, but are now frowned upon. Some middle-aged workers have been slow to accept this shift but employers have become steadily less tolerant of such behaviour.During the pandemic, workers have had to show even more flexibility, keeping in touch with their colleagues and maintaining their productivity while juggling child care and the need to avoid infection. Not everyone has enjoyed it, but the ability to conquer the tyranny of the 9-to-5 routine is a very positive development. Monday mornings no longer seem quite such a dreadful prospect if they don’t involve a stressful commute.It is actually a great tribute to modern workers that they have adjusted splendidly to all these changes. But it gets more difficult as you grow older. Attitudes harden; habits become ingrained. There are many things which Bartleby finds puzzling about modern life. Once, talking loudly on the street was a sign of madness; now people are happy to disclose intimate details of their personal lives while bellowing on their mobile phones. Electric scooters seem to offer all of the dangers of bicycling (and a lot more risk for pedestrians sharing the pavement) without any of the health benefits. And most perplexing of all is that a man with the character and record of Boris Johnson has become his country’s prime minister.This puzzlement is a hint that this columnist is insufficiently flexible to cover the modern world and needs to retire. The danger is that one becomes a caricature of a grumpy old man and, like his fictional namesake, Bartleby would “prefer not to”. Many thanks for reading the column over the past three years.This article appeared in the Business section of the print edition under the headline “Get flexible or get going” More

IN 1908 ASHTON VALVE COMPANY built a factory on the corner of Binney Street and First Street in Cambridge, Massachusetts. In what was a high-tech industry of the day, it made gauges, valves, whistles, clocks and other gadgets that helped make steam boilers less susceptible to blowing up and killing people. Just over 100 years later, in 2010, another purveyor of a life-saving technology moved into Ashton’s long-abandoned premises: Moderna.In the past year the biotech darling has become synonymous with the fight against covid-19. Its ingenious mRNA vaccine has, like a similar one developed by Pfizer, an American drug giant, and BioNTech, a German startup, saved millions of lives. Moderna’s success has also brought attention to America’s biotechnology industry, a lot of it centred around Cambridge. Home to Harvard University and the Massachusetts Institute of Technology, it is the closest that the biotech business currently has to a Silicon Valley.And the industry is booming. Since 2010 an index of biotech firms listed on the Nasdaq has quintupled in value (see chart), and the number of companies in it has more than doubled, to 269. Between 2011 and 2020 the money that biotech startups raised in American initial public offerings (IPOs) ballooned from $4bn to $65bn. So far this year venture capitalists have poured more than $20bn into pharmaceutical and biotech firms, not far from last year’s record tally of $27bn.Cambridge is filled with cranes and new buildings, dull on the outside but bursting with exciting science within. In next-door Boston new laboratories are going up around the revamped Seaport. Prices for lab space reportedly reach $160 a square foot, perhaps the costliest commercial real estate in America not at street level.The pace of the industry’s expansion would have been inconceivable 10-15 years ago, marvels Jean-François Formela of Atlas Venture, a venture-capital (VC) firm. Businesses are popping up everywhere, including down the hall from Mr Formela’s office. Flagship Pioneering, a VC firm which guides entrepreneurs from a promising idea to a business that can attract outside investors, has spun out 26 companies since 2013. Its founder, Noubar Afeyan (who is also Moderna’s chairman), hopes to spin out up to ten a year from now on.The boom has several causes. Tim Haines, chairman of Abingworth, a London-based asset manager focused on life sciences, notes that many investors have been swept up in the notion of “philanthropic capitalism”: making money from products that could benefit society. Other reasons are more hard-headed. According to Mr Haines’s estimates, 64% of drugs in late-stage development are being concocted by youngish biotech companies built around a novel technology rather than by big pharma firms such as Pfizer (which often team up with smaller biotechs like BioNTech, or acquire them, to juice up development pipelines).Many of these technologies are themselves the result of recent advances in cell and gene therapies, and ways of delivering them and of identifying which patients are likely to benefit from them. New money is flowing into firms developing treatments for cancer, illnesses of the immune system or the brain, and even infectious diseases. Everyone is vying to be the next Moderna, whose market capitalisation has jumped from $5bn when it went public in late 2018 to $187bn. Many are hoping to emulate it by expanding from developing therapies to manufacturing them.Walking past Moderna’s headquarters just off bustling Binney Street it is easy to overlook the risks. People with both a PhD in life sciences and managerial nous are a rare breed. Unlike brainstorming the next app, life science cannot be done on Zoom. Many clever ideas never come to fruition. Those that do become therapies often cost a lot, which increasingly angers both Democrats and Republicans in Congress and has led to calls for price controls.The greatest danger is a common one for many startups: uncertain profitability. Only one in six companies in the Nasdaq biotech index made money in 2020. The remaining five-sixths lost a combined $33bn. Vertex, a star graduate of Binney Street that has relocated to Seaport, lost money from its founding in 1989 until 2017. Moderna turned a profit last quarter for the first time in a decade. Its wannabe imitators can at least rest assured that biotech investors are a patient bunch. More

AMONG THE records broken at the Tokyo Olympics, one went uncelebrated: the games were the least-watched in decades. In America just 15.5m people tuned in each night, the fewest since NBCUniversal, now part of Comcast’s cable empire, began covering the event in 1988. Viewership was 42% lower than at the Rio games in 2016. Broadcasters in Europe recorded similar falls. Brands that had paid to advertise alongside the jamboree complained. NBC scrambled to offer them free spots to make up for the ratings shortfall. Yet the Olympics illustrated a puzzle of advertising. Even as audiences desert TV, brands are paying as much as ever for commercials. Tokyo was an uneven playing field. Many events took place while Americans and Europeans were asleep. Stars such as Simone Biles and Naomi Osaka left early. Worst of all, covid-19 meant no spectators and face-masks all round. But the collapse in viewership wasn’t a one-off. Tokyo’s opening ceremony was watched by 36% fewer Americans on the day than watched Rio get under way in 2016. Rio’s audience in turn was 35% lower than London’s in 2012.While viewers have disappeared, advertisers have stuck around. NBC sold more than $1.2bn in ads for Tokyo, about the same as in Rio. Even after dishing out the compensatory ads, it expects to make a profit on the $1bn or so it paid for the rights to televise the games. It has also managed, in the words of Jeff Shell, its boss, to use them “as a firehose to promote everything else that we’re doing at the company”—above all its streaming service, Peacock, which zoomed up the app-store charts.The games exemplify a broader trend. This year the average American will watch 172 minutes of broadcast and cable television a day, 100 minutes less than ten years ago, estimates eMarketer, a research firm. Among the so-called “money demographic” of 18- to 49-year-olds, viewership has fallen by half as audiences have gone online. Even so, spending on TV ads is remarkably stable. In 2021 brands will blow $66bn on American commercials, about the same as every year for the past decade.TV remains “the worst form of advertising, except for all the others”, says Brian Wieser of GroupM, the world’s biggest ad-buyer. The big streamers, such as Netflix and Disney+, are ad-free zones. Brands are wary of YouTube’s user-generated content. And ad-supported streamers like Peacock and Disney’s Hulu still lack enough ad space to move big marketing budgets. As a result, advertisers keep ploughing money into TV, even as returns diminish.Perhaps not for long. YouTube is making inroads into brand advertising as its content mix becomes more professional. Amazon is expected to run ads in its National Football League coverage next year. By combining premium content with targeted commercials, the e-empire is going to unlock “huge buckets” of ad dollars, predicts Andrew Lipsman of eMarketer. In 2019 advertising on streaming services in America was worth only 9% as much as adverts on cable and broadcast TV, eMarketer says. In 2023 that figure will be 32%.Where will this leave events like the Olympics? Probably still on the podium. Ad money will drain out of daytime and some primetime TV, expects Mr Lipsman. But big, live spectacles will be as desirable as ever. “There is nothing more powerful in media than the 17 straight days of Olympics dominance,” summed up NBC’s sports chief, Pete Bevacqua. As in sport, it doesn’t matter that you aren’t as good as you used to be, as long as you beat the competition. ■ More

THE VISION is becoming clear. In a decade or so China will, if the Communist Party has its way, become a techno-utopia with Chinese characteristics, replete with “deep tech” such as cloud-computing, artificial-intelligence (AI), self-driving cars and home-made cutting-edge chips. Incumbent technology giants such as Alibaba in e-commerce or Tencent in payments and entertainment will be around but less overweening—and less lucrative. Policies to curb their market power will redistribute some of their profits to smaller merchants and app developers, and to their workers. Second-tier cities will boast their own tech industries with localised services that, when linked up with national data resources, compete with the less-mighty titans. Data will pulse through the system, available to firms of all sizes, under the watchful eye of the government in Beijing. China’s internet will strengthen its authoritarian design.Clearer, too, is the way in which President Xi Jinping wants to make this vision a reality. Besides talking up deep tech, this involves taking the shallower sort down a peg. In the past nine months China’s regulators have cracked down on the county’s effervescent tech scene, which, though it has generated world-beating innovations and astounding shareholder value, is no longer seen as fit for purpose. As a result, the country’s hottest tech groups have lost at least $1trn in combined market capitalisation since February (see chart 1). Foreign investors who have backed Chinese online firms are retreating. Domestic Chinese investors are anxious. Indices tracking Chinese tech stocks in Hong Kong and Chinese groups more broadly in New York are down by 40-45% since mid-February. No matter. Indeed, it may be part of the plan. Consumer-internet companies make up at least 40% of big Chinese stocks in the MSCI China Index. Like their American peers—Apple, Alphabet, Amazon, Facebook, Netflix—these firms have made tonnes of money for their shareholders. But, the party seems to think, at the expense of abusing their market power, exploiting workers and polluting minds. The list of casualties is a Who’s Who of Chinese tech: Ant Group, an Alibaba affiliate whose $37bn initial public offering (IPO) was suspended days before the listing; Didi Global, whose ride-hailing app was expelled from Chinese app stores days after its own $4.4bn IPO in New York; Tencent, fined by regulators for sexually explicit content and unfair practices, and told to end exclusive music-licensing deals; the online-tutoring industry, swathes of which were barred last month from making a profit. And the list is getting longer. Trustbusters are reportedly getting ready to slap a $1bn fine on Meituan, a super-app that delivers meals. On August 9th the Financial Times reported that NetEase, an online-entertainment group, decided to shelve the planned IPO in Hong Kong of its music-streaming business owing to investors’ worries about the regulatory crackdown.The ranks of potential winners are less well-defined. As a guiding principle, the vice-premier, Liu He, recently stated that China is moving into a new phase of development that prioritises social fairness and national security, not the growth-at-all-costs mentality of the past 30 years. He noted how the government will guide the “orderly development of capital”, the better to suit the “construction of a new development pattern”. Barry Naughton of the University of California, San Diego, calls this the “grand steerage”. Dexter Roberts of the Atlantic Council, a think-tank in Washington, DC, discerns an echo of Mao Zedong’s “politics-in-command” economy. Either way, it is a break with the old pro-growth model and the beginning of “real state capitalism”, as one investment banker puts it.Start with data. Europe and some American states, such as California, have devised laws that seek to protect consumers from the misuse of their personal information by large companies. China has put similar rules in place; in some cases they are more severe than in the West. But Chinese regulators are going further. In a largely ignored, jargon-filled policy paper from the State Council, China’s cabinet, in April last year, data were named as a “factor of production” alongside capital, labour, land and technology. This hinted at the importance assigned to information by the Chinese state, notes Kendra Schaefer of Trivium, a consultancy.China’s new data policy remains a work in progress. The Data Security Law will come into force on September 1st and the Personal Information Protection Law is due to be adopted by China’s rubber-stamp parliament soon. It is unclear how they will be enforced, though data specialists intuit that many types of data currently held by internet giants could eventually be traded on government-backed and private exchanges. Ant, for example, is already being prodded by authorities to open up its vast stores of personal financial data to state-owned companies and smaller tech rivals. No specific rules for financial-technology firms have been issued but everyone is waiting for them, says Deng Zhisong of Dentons, a law firm.Another prong of the state’s strategy is to redistribute the wealth and power large tech platforms have accrued over the past decade. E-commerce groups such as Alibaba, JD.com and Pinduoduo have been targeted by the State Administration for Market Regulation (SAMR), China’s newish antitrust regulator, which accuses them of monopolistic behaviour. Merchants on these platforms often indeed pay high fees and must choose between selling on one or the other. Payment systems run by Tencent and Alibaba have prevented exchange of information between them, which led to a bifurcation of the market.The giants are now being forced to shift to more open models where payments and shopping activity are no longer exclusive to one platform, allowing merchants to regain some control over the prices of their wares. Analysts believe that the changes will lead to higher margins for sellers and lower prices for consumers but slower growth for the tech titans. Alibaba warned investors in early August that long-running tax benefits could soon come to an end, adding billions of dollars in costs.Workers will benefit from the wealth transfer, too. Companies like Didi and Meituan, which use armies of low-paid drivers or warehouse staff, are on the hook. The authorities are already going after Meituan for not providing adequate care to such employees. It will be forced to raise wages and give drivers better insurance. Meituan’s market value has fallen by a fifth, or $42bn, since the measures were announced in late July.The final facet of China’s campaign is a transfer of resources from internet companies to firms that can create tangible advances in technologies that the party deems less frivolous. This would represent a striking shift in Chinese economic governance, which since the 1990s has put rapid development and attracting foreign direct investment over all else. Under-regulated internet firms have been the prime example. Local officials lowered taxes and gave away land in order to attract the online giants to their cities and provinces. Now the government wants to use such carrots, as well as its anti-tech sticks, to create a less unruly and more hardware-focused technology sector that will help it surpass America and the rest of the West in economic might, writes Rush Doshi, an adviser to President Joe Biden, in his new book, “The Long Game: China’s Grand Strategy to Displace American Order”. Mr Xi has referred to “great changes unseen in a century” in areas such as AI and quantum computing (which would harness the weirdness of subatomic physics to drastically speed up certain types of calculations). These, he has suggested, will usher in a new global economic order that revolves around China. Senior officials believe that if China can get a first-mover advantage on the cutting edge of technology, it will become not just an economic superpower but a geopolitical and military one, too, writes Mr Roberts of the Atlantic Council. Move fast and regulate things Many politicians in America and Europe would love to fashion their technology sectors into something like Mr Xi’s vision: less social media and other “spiritual opium”, as Chinese state press recently dubbed video-gaming, and more strategic development of the technological infrastructure of the 21st century. This includes computer chips, clean energy and much besides, partly to counteract an effort by America and its allies to restrict exports to China of some critical technologies such as semiconductors. When launching a new business, entrepreneurs and investors must therefore ask, “How does this solve China’s problems?” sums up Liu Jing of Cheung Kong Graduate School of Business in Beijing. Yet the way China’s regime is going about its desired transition is far from guaranteed to work. One problem stems from who is doing the regulating. The Communist Party presents an image of a unified force with a single set of objectives. In fact, like any large bureaucracy, Chinese authorities are fragmented, and can act at cross-purposes. The policies behind the techlash are born of sweeping goals for society from the highest reaches of central government, an echelon of engineers and economists who lack speciality in most of the sectors in the firing line. But it is up to specialists in bodies such as SAMR and the Cyberspace Administration of China (CAC) to enact these objectives. And as regulators’ remits expand, the odds of a clash shorten. Some run-ins have already happened. A recent policy from the central bank aimed at breaking up powerful fintech groups spilled into antitrust territory covered by SAMR, notes Angela Zhang of the University of Hong Kong. Following Didi’s post-IPO app ban and online tutors’ profit-prohibition, in both of which the CAC played a part, the China Securities Regulatory Commission (CSRC), which has spent years trying to convince global investors that Chinese markets are stable, had to contact bankers and investment funds to assure them that other industries would not be treated so harshly. The CSRC’s move was interpreted by some as a sign that regulators were rethinking their scorched-earth tactic. Instead, the situation highlights how poorly co-ordinated the campaign has been at times. Another worry is that the crackdown has spooked entrepreneurs and venture capitalists. It is true that some smaller firms view the tech giants as bullies that have strong-armed rivals and snuffed out competition. China’s most innovative startups have had the choice of selling out to big tech or facing a quick and brutal demise, says Mr Liu. The recent dismantling of online monopolies has been a godsend for many promising, young executives who have long struggled under the thumb of big tech, he observes. And entrepreneurs have flocked to the approved deep-tech fields: last year alone Chinese founded 22,000 chip firms, 35,000 cloud-computing companies and 172,000 ai startups.But the tech giants’ founders, such as Jack Ma of Alibaba, are still held in high regard by other technology bosses. Many industry executives now feel that years of hard work and sacrifice have gone unnoticed by their new regulatory overlords. The Communist Party has communicated its intentions and goals poorly to a generation of talented businesspeople, says an executive at a small startup. If the current turmoil persists, China may end up with an open field for free and fair competition “but no one to run the companies”, says another executive.Investors face similar considerations. A prominent private-equity financier says that he fully agrees with the goals of the regulation campaign. If carried out correctly China could reduce inequality while becoming a model for regulating big tech. But, he adds, the tactics have not been thought out. Pointing to China’s world-beating fintech sector, he warns that “harming China tech is harming China as a nation.” A more level playing field could let smaller tech companies flourish. But “who would invest in these right now?” asks Chen Long of Plenum, a Beijing-based research group. A big test of investor sentiment will come with the rumoured IPO of ByteDance, a $180bn unlisted giant which owns TikTok and its Chinese sister short-video app. But venture capitalists are already getting cold feet. Fundraising for privately held tech firms peaked at $28bn in the last quarter of 2020, when the techlash began, according to CB Insights, a data provider. In the second quarter of this year Chinese startups raised just $23bn, even as those in America raked in ever more capital (see chart 2). The bulk of last year’s litter of new deep-tech companies probably predates the clampdown. Their prospects and easy access to capital are far from assured.Apparently without irony, Chinese media have likened the government’s push to spur the domestic semiconductor industry to China’s Great Leap Forward. In 1958 Mao decreed that farmers set up furnaces in their backyards in order to help China surpass Britain in steelmaking. What the media have omitted to mention is that the resulting steel was mostly unusable pig-iron. Meanwhile, millions of Chinese starved as fields went unploughed. Mr Xi’s technological leap towards cutting-edge chips and other deep tech will not be as calamitous—China is too prosperous for that. But it is not immune to the law of unintended consequences. ■ More

SINCE THE EU launched its emissions trading system in 2005, industries have followed divergent greenhouse-gas trajectories. The power sector has cut them by half. Among cement- and steelmakers, which got free allowances for four-fifths of their exhausts to stop the shift of production abroad, they have barely budged.Listen to this storyYour browser does not support the element.Enjoy more audio and podcasts on More

IN THE EARLY 15th century many of the Portuguese voyages of discovery around Africa and into Asia were financed by Prince Henry of Portugal, whom historians dubbed “Henry the Navigator”. When Christopher Columbus sought finance for his planned westward voyage to the “Indies”, he first turned to the king of Portugal before achieving success with Ferdinand and Isabella of Spain. Monarchs financed explorations because they believed such trips would boost their power and their treasuries.In the 21st century corporate executives have become deeply involved in adventure and exploration. Sir Richard Branson of Virgin and Jeff Bezos of Amazon have just travelled to the edge of space. Elon Musk of Tesla has developed the SpaceX programme and is talking of the eventual colonisation of Mars. Messrs Musk and Bezos competed for the contract to operate future Moon landings. Mr Bezos even offered to part-finance the project.In itself, this is a remarkable development. Sixty years ago, when the space race was between America and the Soviet Union, few could have imagined that individual businessmen would ever have the resources to enter the fray. The shift says something about the extremes of wealth in the 21st century.The resemblance to absolute monarchs does not stop with exploration. Like past rulers, modern tycoons build their own monuments in the form of corporate headquarters, not just skyscrapers in London and New York but the vast, low-rise campuses in Silicon Valley. Whereas the ancient dynasts travelled in horse-driven coaches, modern CEOS separate themselves from the public in chauffeur-driven limos and private jets.Like monarchs of old, executives have to deal with rival sources of power. They face the equivalent of feudal barons, in the form of boards of directors who may try to unseat them. And they need to contend with ambitious princelings, who in the modern era are younger executives who would like their job. The good news is that whereas an unseated monarch was likely to be executed, a dethroned boss can enjoy a generous pay-off.Then there is their ability to control time. At the court of Louis XIV, France’s “Sun King”, the rhythm of the day was entirely devoted to the monarch’s habits, with the luckiest courtiers watching him get dressed, have lunch and go to bed. Modern CEOs also have the ability to change the schedules of those around them. If he or she gets up at 5am to send messages, someone on the staff will feel obliged to rise early and answer them. Similarly, if the CEO likes to hold Zoom conferences on weekends, or have working dinners on a Friday night, the family life of subordinates will suffer.Another parallel with monarchs is a tendency towards arrogance. In his book “Fall”, John Preston recounts that when Robert Maxwell, the publishing tycoon, was dissatisfied with his food, he would sometimes sweep the plate on to the floor and leave others to clear it up. Maxwell also bugged the phones of his staff and listened to their conversations, which also recalls Louis XIV, who intercepted the mail of his courtiers.Lavish entertainment is a further common denominator. Monarchs held elaborate balls and competed to show off their wealth. Modern tycoons pay rock stars to perform at their birthdays. Carlos Ghosn, the boss of Nissan, even held an extravagant party at the Sun King’s former digs in Versailles.Royal dynasties added to their empires through both military conquest and strategic marriages. Modern executives achieve the same effect through mergers and acquisitions, using their financial clout to buy smaller rivals and reduce the threat of disruptive competition. In effect, ancient monarchs were monopoly providers of security services, who received payment in the form of taxation and conscription. Their abiding sin was too much ambition; Philip II of Spain’s military overreach in battling England and the Netherlands was followed by the country’s steady decline as a global power, for example.The same trap awaits modern tycoons. Often they make the mistake of taking on too much debt by acquiring businesses that do not mesh with the rest of the enterprise. Or, like many an ancient ruler, they make the mistake of fighting on two fronts. Space-obsessed Mr Bezos is still executive chairman of Amazon. Mr Musk is trying to make both rockets and Tesla cars. The greatest danger to monarchs may come when they seem at the height of their powers.This article appeared in the Business section of the print edition under the headline “The new monarchs” More

ONCE UPON a time, long before the hoodie was invented, pioneers of business preferred to call themselves self-made men rather than entrepreneurs. They built hard assets like ports, railways and oil terminals. They cajoled—and canoodled with—governments. They built vast conglomerates. In America, such men made history in the Gilded Age. In India, one of their modern-day avatars is Gautam Adani, a trader who started his career haggling for diamonds, and now controls more ports, power stations, solar farms and airports than almost any other private tycoon. A thickset 59-year-old of few words, a strong political antenna and a stomach for debt, he could not be further removed from the elfin founder-CEOs of the digital age. And yet as recently as June, the value of his companies had more than quintupled in 12 months, to $133bn. That is tech-like growth from what is normally one of the stodgiest parts of the old economy—infrastructure.In India’s “Billionaire Raj”, Mr Adani is usually overshadowed by the other “A”, Mukesh Ambani, India’s richest man, who controls Reliance Industries, a petrochemicals-to-phones conglomerate. Yet Mr Adani, whose personal net worth almost caught up with Mr Ambani’s in June, is just as intriguing—not least for some of the contradictions he embodies. In a country whose banks have lost fortunes lending to infrastructure projects, his debt-fuelled acquisition spree has gone from strength to strength. He is a champion of Prime Minister Narendra Modi’s drive for self-reliance, yet relatively few of his firms’ shares are owned by Indian institutional investors. And he courts environmental, social and governance (ESG) funds from around the world, yet parts of his empire are knee-deep in coal. Anyone who can sustain such a precarious juggling act probably deserves to make history, too.The Adani Group’s interests have dovetailed with the economic ambitions of Mr Modi’s government. For instance, since listing in 2018, the share price of Adani Green Energy (AGEL), its renewables company, has soared by over 2,700%. As well as building what it reckons is the world’s biggest solar-power company, it is helping Mr Modi achieve his clean-energy ambitions. And Mr Adani is not afraid of bold bets to win government contracts. Take Adani Enterprises (AEL), another listed entity, for instance. In 2018-19 it scooped up six privatised Indian airports, despite no previous experience in the industry. Since then (and despite the blight on air travel caused by the covid-19 pandemic) its stockmarket value has eclipsed that of Adani Ports, historically the group’s crown jewel.This expansion is not as reckless as it seems. Adani Group touts an “adjacency model” in which it moves into complementary areas: from ports to power to logistics to data storage, for example. Its debts are backed by rising cashflows. It has stepped up reliance on bond markets, rather than India’s ropy banks. And it has brought foreign groups, such as TotalEnergies, the French supermajor, and Qatar’s sovereign-wealth fund, into joint ventures. The government, not overly keen on foreign competition in India, welcomes these sorts of capital inflows as much as Mr Adani does.Its financing creates a paradox, though. While the group attracts foreign funding for businesses that are focused squarely on India, ordinary Indian investors barely get a look-in. Besides the flagship ports business, domestic mutual funds hold minuscule amounts of its other listed entities, including those whose share prices have shot up of late, such as AGEL and AEL. The group says such shareholdings should widen “in the near future”, explaining that the small free floats are a result of relatively recent listings.But in the meantime, questions about the group’s arcane shareholding structure have helped wipe tens of billions of dollars off the combined value of its six listed entities since mid-June. Besides Mr Adani, who has huge stakes in all his listed companies, most of the remaining large investors are offshore funds, including some based in Mauritius. Some have almost all of their investments in Adani Group companies, and questions about their ownership have been raised in parliament. In response, a government minister said last month that the Securities and Exchange Board of India, the capital-markets regulator, was investigating some of the group’s companies. Adani Group said it had always been transparent with its regulators, and had received no information requests recently.The group’s hunger for capital creates a further conundrum. Increasingly it is peddling its clean-energy businesses to ESG fund managers. Yet AEL owns Carmichael, an Australian thermal-coal mine that has been the target of a grassroots “Stop Adani” campaign, and has been shunned by banks and insurers worried about the climate implications of funding coal projects. Tim Buckley of the Institute for Energy Economics and Financial Analysis, a pro-renewables think-tank, reckons that the coal exposure could cause an ESG backlash hurting other parts of the Adani empire. He argues that to bolster its ESG reputation, the conglomerate should commit to phasing out coal power.Nice present, bleak futureMr Adani appears to have no plans for that yet. He believes a developing country like India cannot give up coal overnight. The group still intends to produce 30% of the gross operating profit of its utility businesses from thermal power generation in 2025 (it was 52% last year). When Carmichael produced its first lump of coal in time for Mr Adani’s birthday on June 24th, he tweeted: “There couldn’t be a better birthday gift.”Perhaps he recognises that foreigners, sustainable pretensions notwithstanding, find India irresistible, especially with investment in China in the doldrums. Perhaps he hopes that they will flock to giants like Adani, not least because of its knack for coping with India’s bureaucracy. Yet if they do, the group faces a problem. The stronger it becomes, the more unsavoury it will seem that few ordinary Indian shareholders are sharing in the upside. More

THE SUDDEN unavailability a decade ago of cars in “tuxedo black”, “rugged brown” or “royal red” highlighted the vulnerability of the industry’s global supply chain. The abrupt closure of the only factory making a vital pigment because of its proximity to the tsunami-hit Fukushima nuclear plant in Japan affected most of the world’s big carmakers. A side-effect of a global pandemic has denied carmakers a more vital component. A shortage of semiconductors has left car firms unable to install the complex electronics that control entertainment systems, safety features and advanced driving aids. Many have cut assembly-line shifts. Some have temporarily closed factories. Ferdinand Dudenhöffer of the Centre Automotive Research, a German think-tank, estimates that the bottlenecks will dent worldwide production in 2021 by 5.2m cars, to 74.8m. Ford’s net profit fell by half in the second quarter, year on year, mainly owing to the chip crunch. Jaguar Land Rover expects sales in the three months to September to be 50% lower than planned. On August 3rd Stellantis, created by the merger of Fiat Chrysler and PSA, which owns Peugeot and Citroën, said it would make 1.4m fewer cars in 2021 than expected. (A big Stellantis shareholder is a part-owner of The Economist’s parent company.) Though car bosses agree the worst is over, shortages are likely to dent output in 2022.The dearth of chips is a consequence of the pandemic, which boosted demand from makers of electronic devices for those stuck at home during lockdowns. Car firms also underestimated the rapid pace of recovery this year. Expecting weak sales, in 2020 they pared back orders. Although carmakers spent $40bn or so on chips in 2019, that accounted for only a tenth of global demand, which puts them low in the semiconductor pecking order. This makes orders hard to reinstate. Established car firms also long ago outsourced development of most technology, including electronic subunits, to big suppliers. These “tier 1” suppliers, such as Germany’s Bosch or Denso of Japan, buy circuit boards and microcontrollers to make components from suppliers in the next tier down, which in turn buy semiconductors from chipmakers. This has kept chip firms and car firms at arm’s length. Deloitte, a consultancy, talks of a “lack of visibility up and down the value chain”. Carmakers’ initial response has been to make more vehicles that require fewer chips, or to use the scarce resources to build their most profitable models. In the long run, the changing nature of the car will force them to think more creatively. Fully electric cars are packed with twice as many chips by value than fossil-fuelled ones, says KPMG, another consultancy. As Pedro Pacheco of Gartner, yet another firm of consultants, points out, software will become a significant source of profits as cars move from a disparate collection of chips to a centralised “brain” connected to the internet that can be updated remotely. In 2019 Tesla made an average of nearly $1,200 per vehicle from selling software updates, Mr Pacheco notes. To ensure that the hardware woes don’t stymie this ambition, carmakers may need to take another leaf from Tesla’s book. The Californian firm has been designing its own chips since 2016, which lets it launch new software-enabled features quickly. Volkswagen’s boss, Herbert Diess, has said that the German giant will develop its own chips and software for autonomous driving: “Software and hardware have to come out of one hand.” For now Volkswagen would like closer relations with chipmakers. So would its rivals. Few have the resources—or inclination—to design chips. Some will still need help developing their own software. Big suppliers, fearful of losing out as carmakers cosy up to chip firms, are being forced to up their game. Bosch, the world’s biggest car-parts maker, has invested €1bn ($1.2bn) in a factory that will start to produce advanced chips for cars later this year. A hiccup over paintwork is one thing. As the industry braces for a more electric and electronic future, it can ill afford to leave its fate in someone else’s hands. More