May 31, 2022
I hope you had a meaningful Memorial Day. I shared a few thoughts on the day here.
Today's newsletter is 1,171 words, a 4-minute read.
1 big thing: CEOs fret over frayed supply chains
Long global supply chains once helped cut tech firms' costs and build capacity, but now, tech executives in Davos, Switzerland, for the World Economic Forum last week agreed, manufacturing is likely to start moving closer to key markets.
Why it matters: Nearly every tech company is dealing with the one-two punch of a global semiconductor shortage combined with COVID-related disruptions in China and elsewhere.
Long supply chains have always been vulnerable to disruptions, but the pandemic caused multiple failures, changing the calculus for many in tech.
- China-U.S. tensions also appear likely to permanently change the equation.
- "There's now a recognition that long supply chains aren't resilient enough," the University of Cambridge's Jagjit Singh Srai, who previously spent 17 years running manufacturing and supply chain operations for Unilever, told Axios during a shuttle ride in Davos.
The big picture: All companies are feeling the heat, to greater and lesser degrees. Even Apple, which has been able to better withstand past shocks, says the constraints will dent revenue this quarter on the order of $4 billion to $8 billion.
- There are countries that one can't obtain goods from and routes that are now blocked. "That's driving the change," said Singh Srai.
- Apple, for example, is considering shifting additional manufacturing out of China to other locations, including India and Vietnam, per Barron's.
- Justin Hotard, who runs the unit that builds supercomputers at Hewlett Packard Enterprise, said his unit is affected just like other segments of the tech industry. "Ultimately, the parts are all the same," he told Axios in an interview in Davos.
- Still unclear is just how significantly the tech industry will change to address the current capacity issues combined with U.S.-China tensions. The big question, Hotard said, is whether it will move to "a segregated, more localized supply chain."
Yes, but: Fixing the problem is more complicated than just setting up more local factories.
- "You might regionalize, but if your company's suppliers are still global, you really haven't changed," Singh Srai said.
Between the lines: The notion of economies of scale, which have long dictated companies' manufacturing strategies, appears to be changing. In the past, bigger was always better.
- That often meant locating factories where there was cheap labor, which often produced marginal cost benefit. The gains were linked to currencies and lower wages, not to performance, but the human cost could be huge when those factors shifted.
- Factories are often located not in urban centers but in modest towns where the manufacturer is the major employer and driver of the rest of the economy.
- "The factory is the heart of the town. If you take the factory out, there is a lot of devastation," said Singh Srai.
2. Exclusive: Tech workers bristle over surveillance
Roughly half of tech employees who today say they are not monitored at work indicated they would resign rather than be subject to facial recognition or having their employer record audio or video of them, according to results of a new Morning Consult poll, shared exclusively with Axios.
Why it matters: Employers are experimenting with new methods of keeping tabs on an increasingly remote workforce, including the use of video recording and facial recognition technology.
By the numbers: The survey also found that more than half of tech workers would not take a new job in their field if the company used a surveillance technique.
- Roughly seven in 10 tech workers said they believe their company does not surveil them at work.
Be smart: Employers have the right to do quite a bit of monitoring in the workplace, especially of what is happening with company gear.
- But in a tight labor market, employees can also vote with their feet on what they are willing to put up with.
- And the equation changes a lot when an employee's office is their home.
What they're saying: Speaking to reporters at the World Economic Forum last week, Tim Noonan of the International Trade Union Confederation called out the increased surveillance of workers ranging from Amazon delivery drivers to those working from home.
- "It is running out of control," Noonan said.
3. Right-wing misinfo revs up after shootings
In the wake of mass shootings in Uvalde, Texas, and Buffalo, New York, right-wing conspiracy theories moved faster than ever from fringe to the mainstream, thanks to a misinformation infrastructure that's grown stronger over time, Axios' Sara Fischer and Alison Snyder report.
Why it matters: The pipeline of misinformation moving from obscure internet platforms to the mouths of sitting members of Congress "seems to be going a lot faster now," said Bryce Webster-Jacobsen, director of intelligence operations at GroupSense, a threat intelligence firm.
- "The misinformation narratives that start on places like 4chan or Reddit make it to the public consciousness really quickly," he added.
- They're "getting picked up by individuals with more power and louder voices," said Jared Holt, resident fellow at Atlantic Council's Digital Forensic Research Lab.
Details: In the wake of the Buffalo and Uvalde shootings, several big conspiracy theories quickly took hold, with many falsely characterizing the shooter or victims to match fringe political narratives.
- In Uvalde, misinformation falsely claiming the shooter was transgender appears to have quickly spread from 4chan, an anonymous message board, to the mainstream. The pictures used to support the falsehood were pulled from a user on Reddit. Rep. Paul Gosar (R-Ariz.) tweeted that the shooter was a "transsexual leftist illegal alien," but later deleted the post.
- In Buffalo, misinformation falsely claiming that the shooting was a "false flag" operation — an attack disguised to look like it was made by the opposite side in a conflict — spread quickly in the aftermath of the massacre. A conservative Arizona state lawmaker is under investigation by the Arizona Senate for her Telegram post endorsing the theory.
The big picture: "Shootings are particularly rife for misinformation," said Holt. Bad actors will capitalize on situations where "there's a big window of gaps and unknowns" to promote their own political ideology.
What to watch: A lack of consistent information from law enforcement agencies can also give conspiracy theory mongers an information void to fill.
- "People want answers, and if they're not getting them from authorities, they'll get them somewhere else," said Caroline Orr Bueno, a behavioral scientist who focuses on social media manipulation.
5. Take note
- Amazon veteran Elizabeth Scallon has left the company for a new role at HP, per a LinkedIn post.
- The latest Top 500 supercomputer list is out, with the new AMD chip-powered Frontier system at Oak Ridge National Laboratory both topping the list and becoming the first to break into exascale territory — meaning it can do more than a quintillion floating point operations per second.
6. After you Login
Capping off my Swiss experience last week, I got to see the town of Klosters celebrate its 800th anniversary with a kids' concert and light show on Friday. And, just when I thought things couldn't get any more adorably Swiss, I was greeted on my way to the train station the next morning by a runaway cow.