Industry – International World Of Business

Industry Leaders Join Forces to Accelerate Renewables Infrastructure Deployment Worldwide

Press Room Team — Sun, 06 Oct 2024 23:13:23 +0000

The World Economic Forum launches the Responsible Renewables Infrastructure Coalition to drive a sustainable, equitable global expansion of the infrastructure needed for the green transition.
Corporate leaders from the energy industry and notable environmental organizations joined the new initiative during Climate Week NYC.
With demand for renewable energy surging globally, the coalition will focus on responsibly managing the impact of large-scale infrastructure projects on communities and biodiversity worldwide.
Learn more about the coalition here.

Geneva, Switzerland, 3 October 2024 – The World Economic Forum, in partnership with leaders from the renewable energy infrastructure sector, launched today the Responsible Renewables Infrastructure Coalition, a global alliance aimed at accelerating renewable energy infrastructure in a way that benefits communities and nature.

The coalition, consisting of stakeholders from the private sector and environmental organizations, seeks to promote equitable outcomes and protect biodiversity through actions such as community engagement, benefit sharing, job creation, and conservation of key species and ecosystems.

AES, Copenhagen Infrastructure Partners, Enel, Iberdrola, Lightsource bp, Ørsted, RWE and Vestas, as well as Birdlife International and The Nature Conservancy have come together to support the initiative. Accenture provides support as a knowledge partner. The initiative will leverage philanthropic-public-private partnerships to foster collective commitment and large-scale action.

“As the global economy transitions to more renewable energy, we must ensure that this shift benefits both people and the planet,” said Kristen Panerali, Head, Clean Power, Grids and Electrification, World Economic Forum. “Many stakeholders recognize the need to deploy renewable energy infrastructure differently. By bringing them together, the coalition will create alignment on actions and policies that result in better outcomes for people and biodiversity while accelerating the energy transition.”

With renewable energy capacity needing to triple by 2030 to keep global temperature increases below 1.5°C, the development of large infrastructure, such as wind farms, solar power plants and grid networks, both on land and in the ocean, will be crucial. Increasingly, these will intersect with local people, wildlife and natural ecological systems. Responsibly managing the impact of this significant infrastructure growth will be central to ensuring a rapid, sustainable and equitable energy transition for all.

“A responsible approach to deployment of renewable infrastructure has the potential to add value to both businesses and communities, accelerating the pace towards a clean energy system,” said Miguel Torreira, Global Utilities Strategy Lead, Accenture. “As such, it is important to develop a common understanding of what constitutes a successful, responsible project, looking holistically at economic, environmental and social outcomes.”

Building on the action already taken to identify challenges and opportunities around the renewable energy transition, coalition members will work together to:

– Build global consensus on a unified approach to measuring the impact of renewable power infrastructure on people and nature, incorporating ongoing global and regional initiatives.

– Drive corporate commitment towards adopting responsible infrastructure development practices.

– Support governments in designing actionable processes and standards.

“Our vision is to create a world that runs entirely on green energy, where our company takes action and makes a measurable impact for communities and nature,” said Ingrid Reumert, Senior Vice-President of Global Stakeholder Relations, Ørsted. “We’re looking forward to exchanging learnings with our peers to accelerate and harmonize our actions for nature and people. We need integration, institutionalization and implementation to have industry impact – and industry can show what’s possible.”

About the Responsible Renewables Infrastructure Coalition

The Responsible Renewables Infrastructure Initiative mobilises leaders from business, government, non-profit organizations and academia who are committed to accelerating the deployment of renewable power infrastructure in a manner which creates more equitable outcomes for people and positive impacts on biodiversity. The initiative is a collaboration between the World Economic Forum’s Centre for Energy and Materials and the Centre for Nature and Climate, with Accenture as a knowledge partner.

The CFPB Is Making it Harder to Hire and Train Employees

Press Room Team — Sun, 21 Aug 2022 17:17:05 +0000

The U.S. economy has lost millions of workers since the start of the COVID-19 pandemic in 2020. According to the U.S. Chamber’s America Works Data Center, there are upwards of 3.25 million missing workers in the economy today. As U.S. Chamber Chief Economist Curtis Dubay explains, this worker shortage is a crisis for both businesses and consumers as unfilled labor needs are driving inflation.

Given that, it’s all the more concerning that federal regulators at the Consumer Financial Protection Bureau (CFPB) are making it more difficult for businesses to hire employees.

Targeting employee skill development

On June 9, 2022, the CFPB published a request for information (RFI) regarding what the agency refers to as “employer-driven debt.”

While it sounds innocuous, the RFI is targeted at common business practices that expand hiring opportunities and provide employees with in-demand skills. Frequently, when companies hire new employees, they provide them with the opportunity to undertake training or certification courses. In return, employees will often agree to stay with the company for a limited amount of time or otherwise assume the burden for their repayment.

For example, a warehousing company short on truckers may offer employees commercial drivers licensing certification courses in exchange for a contractual obligation from the employee to remain with the company for one year. It’s advantageous for both parties. The employee receives training that typically costs between $3,000 and $10,000 dollars to obtain an in-demand transferable skill, while the employer benefits from investing in their employee and advancing the company. If the employee leaves before a predetermined period of time, however, he or she may be responsible for paying the employer for at least part of the training.

By targeting these business practices, the CFPB could make it more difficult for companies to attract, train, and retain employees. Companies should not have to jump through new regulatory hoops to have reasonable safeguards that protect the investments they are making in human capital, including the risks they are taking when hiring new employees and providing training.

In addition, if the CFPB regulates these types of employer-employee relationships, companies that were previously not within the purview of this federal agency could be subject to a host of new consumer financial protection laws such as the Truth in Lending Act and the Fair Debt Collection Practices Act.

We encourage employers to learn more about the unintended consequences for their company if the CFPB attempts to expand its interpretation of consumer financial protection laws. If employers decide these actions will have a negative impact on their business, they can file comments with the CFPB online until September 7, 2022.

South Florida Becomes a Bustling Metropolis with the Advent of AC

Press Room Team — Thu, 21 Jul 2022 22:57:32 +0000

MIAMI, FL July 20, 2022 – Before the advent of air conditioning, Miami was strictly a seasonal town. Most Miami Beach hotels closed for the summer and the owners of some restaurants and other service businesses decided that since it was too hot and humid for their customers, they may as well go on vacation too.

Although Willis Carrier, who is known as the father of modern air conditioning, designed the first electrical AC system in 1902, it wasn’t until after World War II that Miami Beach’s Art Deco hotels began to install window units in any quantity.

“In the 1950s, they went to central air conditioning and that made all the difference in the world. They could now promote themselves as a summer as well as a winter destination,” said Paul George, resident historian at the HistoryMiami Museum. “South Florida really became a major place with the advent of AC,” he said. “It made it a year-around place.”

So, it’s fitting that Miami will be the location for the July 20-21 RefriAmericas conference, which will bring together some 1,000 professionals from around the Americas and the Caribbean with one thing on their minds: cool, clean air.

Experts in climatization, refrigeration and solar energy will network and discuss topics ranging from energy efficiency, current industry standards, and the implications of climate change and the rising cost of fossil fuels for the HVAC (heating, ventilation, and air conditioning) industry to healthy buildings and hospital ventilation and refrigeration issues in the context of COVID 19.

They’ll also explore new products and technology on display from 74 exhibitors at the Miami Airport Convention Center where the conference and exhibition will be held.

For a region like South Florida, air conditioning and industrial refrigeration has made all the difference. Miami with its massive commercial refrigeration facilities has become the flower import capital of the Americas and an important center for the import of perishable produce from around the Americas.

By the 1950s, window AC units for homes came into vogue in South Florida, said George, and in the 1960s, central air became more prevalent in residences. Developers began advertising new tract homes as “air conditioned” and the presence of AC has helped spur subsequent Florida housing booms.

Without air conditioning, George said, the Miami area would be a “much smaller place without a lot happening. It changed things dramatically, allowing this area to be a more animated, more comfortable place. It made it more attractive to more people.”

When: July 20-21; 11 a.m. to 6 p.m. on Day 1, and 11 a.m. to 5 p.m. on Day 2.

Where: Miami Airport Convention Center, 711 NW 72^nd Ave., Miami.

Registration: The exhibition is free. Conference fee is $350. All sessions are in Spanish.

To register: https://www.refriamericas.com/landing-pages/rfa-registration.php

Sponsors: Everwell Parts, Full Gauge, FB Refrigeracion. The conference is organized by Latin Press Inc.

Plastic recycler faces $88K in fines for exposing workers to combustible dust hazards

Press Room Team — Thu, 17 Mar 2022 23:27:43 +0000

Date inspections initiated: The U.S. Department of Labor’s Occupational Safety and Health Administration initiated two inspections on Sept. 2, 2021, after receiving a referral from the Freeland Borough’s Office of Code Enforcement alleging employees at PGA Inc. were exposed to combustible dust and other workplace safety and health hazards.

Inspection findings: OSHA cited PGA Inc. for one willful, seven serious and one other-than-serious safety and health violations for both inspections. The agency found the workplace hazards included the company permitting dangerous amounts of combustible dust to build up on surfaces that possibly could ignite due to open electrical equipment in the area. OSHA previously cited the company for some of the same violations in 2014, 2016, 2017, 2018 and 2020.

Total proposed penalties: $88,423

Quote: “Combustible dust can burn rapidly and explode with little warning, putting workers at risk for severe injury or death,” said OSHA Area Director Mary Reynolds in Wilkes-Barre, Pennsylvania. “PGA Inc.’s continued failure to implement effective controls to prevent the accumulation of combustible dust will not be tolerated.”

Link to citations: https://www.dol.gov/sites/dolgov/files/OPA/newsreleases/2022/03/OSHA2022324-1.pdf and https://www.dol.gov/sites/dolgov/files/OPA/newsreleases/2022/03/OSHA2022324-2.pdf

Company description: PGA Inc. provides plastic recycling services in Northeast Pennsylvania and surrounding states.

For information on combustible dust safety, visit https://www.osha.gov/combustible-dust

Latin America and the Caribbean: development options in the new context

Press Room Team — Thu, 06 Jan 2022 23:13:41 +0000

If in 2020 the focus was on dealing with the direct effects of Covid-19, during 2021 the focus was on the recovery of economic activity. It is not that the pandemic has been overcome. Far from it: as anticipated, countries have been exposed to continuous outbreaks, and the emergence of more contagious variants continually jeopardizes progress towards “normality” and the relaxation of controls and sanitary measures.

However, either due to the increase in the vaccination levels of the population (which, however, are far from being optimal), due to fatigue with the restrictions imposed on personal interactions and mobility, due to the economic impossibility of maintaining These restrictions, or by a combination of all those factors, the truth is that in 2021 the economic reactivation acquired priority and this became key for the development of Latin America and the Caribbean in this new context.

The development of the countries in Latin America and the Caribbean

The countries of Latin America and the Caribbean were among the most severely affected in the world by the health crisis. Proof of this is that during 2020 the region’s economy contracted by about 6.7%. The good news is that projections indicate that 2021 has seen a significant rebound in economic activity. But the estimated growth (about 6.3%) will not be enough to bring the region to pre-pandemic levels. Going forward, the outlook does not look very encouraging. On the one hand, there are not enough resources available to sustain the growth in fiscal spending that drove the reactivation. And, on the other hand, inflation, that old acquaintance of the region, is already beginning to show its face. In this context, current forecasts point to growth of no more than 3% on average for the next two years.

How to promote greater dynamism in the economies of the region?

One way to address this question is to identify the trends that are defining the current situation and define the actions that the countries of the region should take in order to take advantage of these currents of change. Along these lines, three areas emerge as particularly relevant: nearshoring, business digital transformation, and a green and blue region.

Conditions to take advantage of the nearshoring process
Both for geopolitical reasons and for environmental and efficiency considerations, already before the pandemic there were attempts to reverse the process of moving industries to East Asia, particularly by the United States. The disruptions in the supply of key inputs that have occurred due to the health emergency (and that have also helped fuel the rise in prices) have given new life to this trend. For Latin America and the Caribbean this represents an enormous opportunity, since it is estimated that increasing its participation in global value chains by only 10% would generate an increase of 11% in GDP per capita [1].

Obviously, relocation processes take time, and are not automatic. The countries of the region need to be active in promotion, but above all they must create the appropriate conditions to attract companies. In particular, if the objective is not to compete on the basis of low costs, then national innovation systems need to be strengthened so that opportunities for continued productivity growth can be offered to firms. But, above all, it is necessary to have qualified human resources in sufficient quantity. Having talent is a key condition for attracting high-value companies that generate quality jobs.

Costa Rica is one of the countries that has understood this well, and the training of qualified personnel has been a priority of its public policy. Thus, in the framework of the Innovation and Human Capital for Competitiveness Program (PINN) of that country, supported with IDB resources, more than US $ 7 million were allocated to finance both specialized certifications and accelerated training of digital talent through of international Bootcamps. This allowed in the last two years to specialize more than 1,800 people, the bulk of which has been absorbed by the companies that produce medical supplies and equipment, a sector that today represents more than 30 percent of exports and continues to attract firms international to the country.

Support business digital transformation
The pandemic has prompted the forced digitization of numerous activities. One of the risks facing the region is that this process will continue to deepen the already huge differences in productivity and income that exist between large and small companies. The latter find serious limitations to adapt to the digital age. To be clear, the problem is not simply one of financing, but above all a lack of information, ignorance of the most appropriate options for your business, and weak internal capacities to drive a successful digital transformation. Left to their own devices, the prospects for a successful digital transformation are bleak for the vast majority of SMEs.

Given the above, several governments in the region have begun to implement programs to assist the digital transformation of smaller firms. An interesting case is that of a program that the Uruguayan National Development Agency (ANDE) is beginning to implement with IDB support. Using a comprehensive approach, this initiative proposes to accompany companies in their digital transit starting from an online self-diagnosis that uses a tool specially designed to assess the state of digital maturity of companies, and then support with training and technical assistance the strategies of change. The focus of the interventions is not digitization per se, but the way in which digital technologies can contribute to the business model of companies. Another distinctive element is that the program will also help develop the offer of assistance services to companies, as well as the generation of adequate digital tools to respond to the particular needs of this segment of companies.

A green and blue region
No less urgent and important than fighting and overcoming the effects of the pandemic is increasing efforts to curb global warming. Within the framework of the Climate Change Conference (COP 26), which took place in Glasgow last November, much more ambitious goals for reducing greenhouse gas emissions were proposed than those previously in force. Although it is debatable whether these new commitments will make it possible to achieve the goal of not increasing the planet’s temperature by 2 degrees Celsius, it is clear that COP 26 gave new impetus to the fight against global warming and that countries will have to redouble their efforts to comply with your commitments.

Latin America and the Caribbean is in a paradoxical situation, as it is one of the regions most affected by climate change, but at the same time it has great opportunities to help counteract it and boost its economic growth in the process. Indeed, its abundance of natural resources and its wide biodiversity represent enormous potential for development through pathways that contribute not only to reducing greenhouse gas emissions, but also to sequestering carbon from the environment. The use of its numerous sources of renewable energy (solar, wind, hydro) to advance the production of green hydrogen; the possibilities that open up in the bio-economy space (such as the production of vegetable protein that catapulted the NotCo company from Chile to world markets, for example); or the sustainable use of marine flora and fauna in protected maritime territories are good examples of the mentioned potential.

Obviously, being able to take advantage of these opportunities requires, among other things, a greater effort in scientific research and in the development of innovations. The good news is that the life sciences area is where most of the relevant research capacity in Latin America and the Caribbean is concentrated. So there is at least a good starting point for achieving sustainable development in this new context.

The Covid-19 pandemic, therefore, has not only been a gigantic challenge in the short term for the economies of Latin America and the Caribbean. It has also been a catalyst for change. The health crisis has accelerated economic transformation in areas such as nearshoring and business digital transformation, while at the same time tackling climate change has remained a priority. Innovation, thus, takes on an even more transcendental role in this new economic context that has marked 2021.

Industry 4.0 Market worth $165.5 billion by 2026 – Exclusive Report by MarketsandMarkets™

Press Room Team — Wed, 23 Jun 2021 16:10:00 +0000

CHICAGO, June 23, 2021 /PRNewswire/ — According to the new market research report “Industry 4.0 Market by Technology (Industrial Robots, Blockchain, Industrial Sensors, Industrial 3D Printing, Machine Vision, HMI, AI in Manufacturing, Digital Twin, AGVs, Machine Condition Monitoring) and Geography – Global Forecast to 2026”, published by MarketsandMarkets, the Industry 4.0 market is projected to grow from USD 64.9 billion in 2021 to USD 165.5 billion by 2026; it is expected to grow at a CAGR of 20.6%from 2021 to 2026.

Ask for PDF Brochure: https://www.marketsandmarkets.com/pdfdownloadNew.asp?id=102536746

Increasing adoption of the industrial internet worldwide in manufacturing units and growing focus on enhanced efficiency of machinery and systems and reduced production costs play a significant role in the growth of the market worldwide. Also, the growing demand for industrial robotics is expected to fuel the growth of the Industry 4.0 market

5G Market is expected to commercialize in late 2019 and is expected to grow at highest CAGR during forecasted period.

The speed and reliability of 5G are expected to have a massive impact on M2M and IoT. Key reasons for the increased adoption of new M2M technologies are better connectivity for smooth communication and low power requirement. To achieve effective machine-to-machine communication, the existing capacity of mobile networks must be able to handle billions of nodes that are expected to ascend in the next couple of years. Currently, the network capacity is inefficient to handle M2M and human-based communications, as well as their different communication patterns such as latency time.

IoT is expected to hold largest market share of industry 4.0 market during forecasted period

Internet of Things (IoT) in the industrial sector, has given rise to a new concept known as the Industrial Internet of Things (IIoT), also known as Industrial Internet or Industry 4.0. IoT in the industrial sector brings together advancements of two transformative revolutions, namely, the countless machines, facilities, fleets, and networks that emerged from the industrial revolution and the more recent powerful advancements in computing, information, and communication systems brought about by the internet revolution.

Browse in-depth TOC on “Industry 4.0 Market“88 – Tables
63 – Figures
204 – Pages

Inquiry Before Buying: https://www.marketsandmarkets.com/Enquiry_Before_BuyingNew.asp?id=102536746

APAC is expected to hold largest market share of Industry 4.0 market during forecasted period

An increase in the adoption of robotics in countries such as China, Japan, and South Korea is among the major factors leading to the growth of the Industry 4.0 market in APAC. Also, low production cost in APAC countries enables manufacturers to set up manufacturing facilities in this region. APAC is projected to grow at the fastest rate, considering continuous technological advancements and financial support from the governments in the region, as well as extensive industrial base, with Japan and China being the major contributors. China has been working on an innovative industrial practice by implementing automation technologies in manufacturing companies.

The major players in the Industry 4.0 market are ABB (Switzerland), Mitsubishi (Japan), Yaskawa (Japan), KUKA (Germany), FANUC (Japan), General Electric (US), IBM (US), Cisco (US), Microsoft (US), Stratasys (US), Google (US), Intel (US), HP (US), Siemens (Germany), Ansys (US), AIBrain (US), SAP (US), Amazon Web Services (US), and General Vision (US).

Related Reports:

Extended Reality Market with COVID-19 Impact Analysis by Technology (AR, VR, MR), Application (Consumer, Commercial, Enterprises, Healthcare, Aerospace and Defense), Offering, Device Type, and Region(North America, Europe, APAC) – Global Forecast to 2026

Process Automation & Instrumentation Market by Instrument (Field Instrument, Control Valve, Analytical Instrument), Solution (APC, DCS, HMI, MES, PLC, Functional Safety, SCADA), Industry, and Geography – Global Forecast to 2025

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How We Measure the Productivity and Efficiency Gains of Improving Infrastructure Services

Press Room Team — Mon, 28 Sep 2020 06:00:00 +0000

When we think about infrastructure’s contribution to the region’s economies, we look at the direct effects’ investment in bridges, airports, and power grids have on growth. A new highway can drive economic growth by increasing demand for construction materials, stimulating demand for vehicles to use it, and reducing travel times.

But infrastructure’s contribution to growth can also come from other channels. One of them is greater efficiency in the provision of water, power, and transportation services. In addition to the impact on growth, changes in the efficiency of the provision of services can also impact other economic outcomes, for example, income distribution. This is because consumption of these services is a significant component of family budgets, especially for the poorest households.

How can we quantify the potential economic gains of greater infrastructure efficiency? In the book From Structures to Services: The Path to Better Infrastructure in Latin America and the Caribbean, we use a computable general equilibrium (CGE) model. It’s like a map that replicates an economy at a scale that is manageable for researchers seeking to model reality as closely as possible. The structure we use consists of approximately 30 productive sectors on the supply side, including four infrastructure sectors: power, water and sanitation, transportation, and telecommunications.

On the demand side, there are five representative households (with different income levels), and the government. In each market, production and utility functions govern the behavior of producers and consumers, respectively, and determine how they interact. Producers and consumers exchange goods and factors of production. For example, companies purchase intermediary inputs from other sectors, receive revenue from their sales, compensate factors of production, and pay taxes. On the demand side, workers receive salaries—an important component of household income—and consume and invest. The government collects taxes and also consumes and invests. The model estimates the changes in relative prices needed to match supply with demand in the markets. These changes in prices then influence the trajectory of economic growth by redistributing resources among economic sectors. They also produce changes to the structure of the economy and the distribution of income.

The first step in calibrating the model in a country is to set up a social accounting matrix (SAM). The SAM shows the flow of all economic transactions taking place in an economy over the course of one year. It is basically a matrix representation of the national accounts—that is, a narrow description of how different productive sectors, households, and the government interact to generate the goods and services that the country produces. SAMs show a single year and provide a statistical snapshot of the economy..

The SAM for each country is used to obtain a starting point (or equilibrium) for the variables, providing a growth baseline with a time horizon of 10 years. In this solution for the model, the calibrated parameters governing the sectors’ productive functions (that is, the “efficiency” with which goods and services are produced) are determined by the corresponding SAM. In other words, the initial equilibrium is the “business as usual” scenario. This provides a baseline against which contrafactual scenarios can be compared. In the contrafactual scenarios, different equilibriums are simulated based on a variety of productive and technological shocks that alter the baseline scenario.

The advantage of CGE models is that they offer a general equilibrium framework that makes it possible to track the impact that simulated changes have while taking into account the interconnectedness of the different parts of the economy. With this tool in hand, we are able to study the potential impact of small improvements to the productivity and efficiency of services on economic growth and on the distribution of income, compared to what would have been the outcomes without the improvements.

For example, an efficiency improvement in the energy sector could be a thermal power plant that uses a more efficient technology that, as a result, uses less gas to produce the same amount of electricity. An improvement to productivity could be a redesigned plant that can produce the same amount of electricity using fewer factors of production—that is, less labor and/or capital. From a conceptual point of view, we capture improvements to productivity and efficiency assuming increases of 5% in the technical coefficients of the productive functions of infrastructure sectors as of the first year of the simulation.

The results indicate that relatively small increases to productivity and efficiency with which infrastructure services are supplied can have significant benefits (see Figure 1). On average, the selected countries see their growth rates increase by a cumulative 3.5 percentage points over a period of 10 years. Extrapolating across Latin America and the Caribbean, this would represent an increase in GDP of close to US$200 billion over a decade.

Figure 1. Impact of Infrastructure Productivity and Efficiency Gains on GDP Growth

Source: From Structures to Services: The Path to Better Infrastructure in Latin America and the Caribbean
Note: The figure shows the cumulative change—in GDP percentage points—of the contrafactual scenario (that is, the scenario with efficiency improvements) minus the baseline scenario (that is, without changes to the parameters) over the course of 10 years.

The results also show that improvements to the productivity and efficiency of infrastructure services increase real incomes across the income distribution. At the country level, income increases range from 2.8 percentage points for the average citizen in Jamaica, to 5.4 percentage points in Bolivia (see Figure 2). But improvements to infrastructure productivity and efficiency benefit low-income households more than high-income households. For all the countries in the sample, except Jamaica and Ecuador, the incomes of the two poorest quintiles increase proportionally more than that of the two richest quintiles. The difference in relative growth is an average of about 28% in favor of the poorer quintiles. The effect is particularly noteworthy in Chile (where the increase in income for the bottom 40% of the population is 70% higher than that of the top 40%) and in Peru (40%).

Figure 2. Impact of efficiency gains on household income

Source: From Structures to Services: The Path to Better Infrastructure in Latin America and the Caribbean.

Note: The figure shows the cumulative change—in real income percentage points—of the contrafactual scenario (that is, the scenario with efficiency improvements) minus the baseline scenario (that is, without changes to the parameters) over the course of 10 years.

Like all economic models, ours is not perfect. But the results are consistent and tell us that improvements to infrastructure productivity and efficiency would increase economic growth and reduce income inequality. Finding the public policies to encourage these improvements is therefore crucial for ensuring the region experiences sustained and inclusive economic development, especially considering the urgency of finding ways out of the crisis brought on by the COVID-19 pandemic. The opportunities are available, and they must be grasped without delay.

Global Carbon Emissions Are on the Rise Again

Press Room Team — Thu, 05 Dec 2019 20:46:11 +0000

After good progress in the beginning of the decade, global carbon emissions have started to pick up again. This recent trend sets the world on a dangerous path: to slow the pace of climate change, carbon emissions need to be reduced.

Our chart of the week from the IMF’s latest World Economic Outlook shows that emissions have increased by 1 percent in 2017 and another 2 percent in 2018. China has been a key driver of emission growth since the turn of the century, but its impact has diminished in recent years as investments in renewable energy have increased and economic growth has become more rooted in the service sector rather than manufacturing. India and other emerging markets, instead, are partially filling the gap. In 2018, emissions decreased in all Group of Seven economies besides the United States, whose emissions increased because of a resurgence of industrial production and, possibly, bad weather.

To shed light on the factors behind the recent growth in emissions, it is possible to decompose total carbon emissions growth as the sum of the growth in carbon intensity (carbon emissions per unit of energy), energy intensity (energy use per unit of GDP), GDP per capita, and population.

Declines in energy intensity and carbon intensity have consistently helped reduce the growth of carbon emissions over the past 5 years. But in 2018, the contribution of energy intensity to that reduction was lower, possibly because of a cyclical pickup in global industrial production. As a result, these forces could not offset the increase in carbon emissions stemming from population and, especially, global per capita income growth—which picked up in 2017 and 2018.

The good news is that the decline in carbon intensity in 2018 was larger than in previous years, as wind, solar, and natural gas continued to slowly replace coal as the energy source of choice in the power sectors of all major emitters.

Nevertheless, policymakers should continue to adopt policies aimed at curbing the appetite for coal and other polluting fossil fuels. For example, increasing the price of carbon emissions would accelerate the ongoing energy transition toward low-carbon energy sources, while subsidies for research and development would improve energy efficiency.

All the Way to the Top: Industrial Policy, Innovation, and Sustained Growth

Press Room Team — Mon, 18 Nov 2019 04:02:35 +0000

The odds of poor or middle-income countries achieving the stardom of the “Asian Miracles” within a generation or two, or even three, are small. Between 1960 and 2014, only 16 developing economies worldwide were able to vault into high-income status, and many of those were fortunate enough to have discovered oil or join the European Union.

The “miracles”—such as Hong Kong SAR, Korea, and Singapore—as well as Japan, Germany, and the United States before them, veered from the standard growth recipes and instead aimed high. What they had in common was ambition, accountability, and adaptability. They strove to develop sophisticated industries that were far beyond their prior technological abilities and experience. They focused on building robust export-powered economies. And, they created fiercely competitive businesses.

The wild successes of these economies were a result of unique public-private partnerships that they forged. The state intervened to remove market obstacles. Businesses, in turn, innovated, invented, and vowed accountability for the support they received. The process was a “true” industrial policy, or more specifically a Technology and Innovation Policy or “TIP”, which we describe in our recent paper as one that succeeded in building sophisticated sectors that fueled high and sustainable economic growth and that ultimately benefited the whole of their societies.

Each of these countries built their economic reputations by being daring. They entered industries—computers, electronics, pharmaceuticals, transport, and machinery—where they had no previous experience and no reasonable expectation that they would succeed. But they did succeed beyond anyone’s dreams.

Not easy to replicate

But the “miracles” were indeed anomalies. For most of the rest of the world, the development experience of the past half century was largely a record of mixed ambitions and missed opportunities in trying to implement the principles of TIP. For the most part, the majority of countries around the world adopted the first two of the following three categories, and they fell far short of the “Asian Miracle” economies.

Snail Crawl: This approach adapts a standard growth recipe that includes improving the business environment, restructuring institutions and infrastructure, preserving macro-stability, investing in general education and minimizing government interventions. To a large extent, this approach is the lowest gear of TIP. Generally, it does not generate high sustained growth, and more commonly it results in relatively low growth. Barely any economies following this path catch up with advanced countries. Instead, these policies mostly fix “government failures” but fail to fix “market failures,” especially in the development of sophisticated sectors beyond comparative advantage.

Leapfrog: The middle gear is mostly focused on attracting foreign direct investment in sophisticated industries and/or climbing the quality ladder around existing industries such as commodities (e.g. Malaysia and Chile). This approach may provide relatively high growth leading to middle-income status, but it is unlikely to catapult an economy to high-income status within a couple of generations, that is, within the lifetime of a new entrant to the workforce. In addition to the standard growth recipe, active policies to attract foreign direct investment in manufacturing and other industries and develop industries around comparative advantage sectors may result in leapfrogging.

Moonshot: The Asian miracles are the outcome of this approach to TIP. It consists of the state intervening to fix market failures so that competitive domestic firms in sophisticated industries with frontier technologies can develop. Market failures could stem from firms not fully incorporating productivity gains from entering a sector, or not getting compensated for investment that also benefits other firms. These preclude firms from entering sophisticated sectors. The state’s role transcends the standard provision of general infrastructure development, facilitating education and encouraging a favorable business environment. By being proactive, the state could increase the odds of success and create conditions ripe for firms to enter sophisticated sectors, compete domestically and internationally, and cultivate an environment where high growth can be sustained well into the future.

Synchronized approach

The success of TIP lies in the actions of both the state and the private sector. To paraphrase Min Zhu, the former Deputy Managing Director of the IMF, an economy needs both wings to fly, the state and the market, to create sustained growth.

Making a miracle depends critically on a technological leap early on toward sophisticated industries—mostly in manufacturing—led by domestic firms. The example of the “Asian miracles” in identifying and implementing the three key principles of TIP, offers a promising roadmap for other countries to emulate on their journeys to economic success.

Fuel for Thought: Ditch the Subsidies

Press Room Team — Fri, 23 Aug 2019 00:18:17 +0000

Pensions, education, healthcare, better infrastructure, technology, and climate change: fiscal policymakers have their work cut out for them on many fronts. Whether you live in a rapidly aging advanced economy, or a low-income or emerging market economy with a young, booming population, all these issues matter for you.

As the Fiscal Monitor in April 2019 shows, government policies on taxes and spending have to adapt and should shift to growth-enhancing investment. This means, for example, more money to build classrooms, hospitals and roads, while cutting wasteful spending, such as inefficient energy subsidies.

Our chart of the week shows that removing fossil fuel subsidies, which typically benefit the rich more than the poor, could gain up to 4 percent of global GDP in additional resources over the medium term to invest in people, growth, and help protect the most vulnerable.

We define the subsidies—which amount to 6.5 percent of GDP globally—broadly. The IMF’s calculations include both the government funding to artificially reduce the price of energy below cost (0.4 percent of global GDP) and the under taxation of fuel consumption (6.1 percent of global GDP), because energy consumption contributes to global warming, local pollution, increased traffic congestion and more accidents.

This money spent on other priorities can help raise long-term economic growth, which is a key ingredient to reduce the burden of high public debt. It can also spread economic benefits more widely within and across countries and help restore the public trust in institutions necessary for economic stability.