Tech adoption skyrockets among older adults - Axios
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Tech adoption skyrockets among older adults

Over 40% of American adults ages 65+ own a smartphone, more than double the amount since 2013, according to the latest survey from Pew Research Center. At the same time, more than two-thirds of seniors use the internet — a 55% increase from 2000. And for the first time, half of seniors have broadband at home.

Reproduced from 'Tech Adoption Climbs Among Older Adults' Pew Report

Why it matters: Despite these milestones, seniors still report feeling disconnected from the internet and digital culture. The study also found that roughly one-third of older internet users say they have little to no confidence in their ability to use electronic devices to perform online tasks, and roughly half of seniors say they usually need someone else to set up a new electronic device for them or show them how to use it. As more aspects of daily life become dependent on technology, particularly health care, senior adoption of new technologies will become increasingly important.

Other takeaways: The study also found that broadband access was dependent on household income and education levels. It's important to note that tech adoption among seniors is happening as the average population of seniors is on the rise in the U.S. Today, people ages 65+ account for 15% of the overall U.S. population and that number is expected to jump to 22% by 2050, according to U.S. Census Bureau projections.

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Charming Charlie becomes 20th major retailer to file for bankruptcy this year

Charming Charlie, the Houston-based jewelry and accessories retailer, announced Tuesday that it reached an agreement with lenders and equity sponsors to clear the way for its filing of Chapter 11 bankruptcy.

What went wrong: Charming Charlie's bread-and-butter, affordable jewlery, is an ideal product for online sellers, given that it can be warehoused and shipped cheaply. What's more, even as business migrated online, Charming Charlie overextended itself, opening 79 stores between 2013 and 2015.

Why it matters: It's the twentieth major retailer to have filed for bankruptcy protection in 2017.

Charming Charlie burst onto the retail scene in 2004, with stores uniquely organized by color, and offering products at prices between high-end jewlery stores and discount shops like Claire's, which is aimed at the teenage market.

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Mall owner Westfield being bought for $16 billion

Photo by Cameron Spencer/Getty

Unibail-Rodamco of France has agreed to acquire Westfield Corp., an Australia-based shopping mall company with several large U.S. properties, for $15.8 billion.

Why it matters: Because this comes just one day after GGP rejected a $14.8 billion takeover offer from Brookfield Property Partners, and could double as revised pricing guidance for that transaction. Let alone whatever someone might bid for Macerich, which is under pressure from activist Dan Loeb.

Plus, if malls are dying, no one bothered to tell the M&A market.

Bottom line: "If I am an anchor store such as Sears and Macy's that do business in a Westfield-owned mall, this deal is petrifying. Department stores don't fit in this new mall as a community world, and an eager property owner may try to push them out via higher rents in order to redevelop the space for 2040." — Brian Sozzi, TheStreet

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Comparison shopping is bogging down the Fed

Shoppers roam through an Amazon Go store. Photo: Elaine Thompson / AP

Holiday shoppers are increasingly using their smartphones to get instant price comparisons to find the best deals, but the feature is making it more difficult for the Federal Reserve to manipulate interest rates, reports the WSJ.

Why it matters: The rise of consumer knowledge and price-checking is muddying the Fed's clarity on how much and how fast to implement interest rate hikes, as it restricts retailers' ability to charge different prices online and in stores. The result is bogged down inflation in advanced economies, like the U.S. and China.

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The "Uberization" of the Fortune 500

General Electric is one of the companies adopting this new approach to management. Photo: Richard Drew / AP

More companies are using software to assign tasks to full-time workers similar to the on-demand economy, Sam Schechner writes for the Wall Street Journal. GE and Shell are trying out the approach. Both told the paper they're going to expand those projects in the new year.

Our thought bubble: Axios' Steve LeVine joins me in saying that after decades of shearing off layers of workers at the bottom of the pyramid, automation is bubbling up into management, threatening middle-ranking jobs and, eventually, officers on top of the corporate ladder.

  • The C-suite — CEOs, CTOs and so on — seems highly unlikely to be at risk. But below that, look out.
  • In Washington, the conversation about the implications of algorithms and big data is still in the "policy makers asking lots of questions" phase.

For your calendar: On Tuesday, the Senate Commerce Committee holds a hearing on artificial intelligence.

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How Amazon took over the apparel market with no-name clothes

Amazon CEO Jeff Bezos. Photo: Ted S. Warren / AP

Amazon has quietly become the second-largest seller of apparel in the United States, investing heavily in its own private-label offerings, which customers have flocked to for their value. As designer Jackie Wilson tells Bloomberg:

They are not concerned at all about how many units they sell, and they’re not focused on margins. They’re concerned about customer satisfaction. They want five-star reviews.

Why it matters: Younger shoppers have become much less loyal to name brands, and retailers like Amazon, Walmart, and Kohls have capitalized by recruting designers and Asian manufacturers to create their own lines of apparel. Amazon's clothes are so popular that 40% of all e-commerce clothing sales go through the platform.

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A quarter trillion dollars is at risk when bitcoin crashes — and that’s just for starters

Illustration: Lazaro Gamio / Axios

One day, it's assumed, the technology underlying bitcoin will trigger serious financial disruption. But as of now, that tech — called blockchain — is hindered by stubborn shortcomings. And one of the biggest potential bombshells — a shakeup of the $8 trillion-a-year credit card industry — may be a decade away, if it happens at all, experts tell Axios.
Driving the news: Like tulips and dotcom shares before them, crypto-currencies—the only blockchain technology currently operating at large scale — have gripped the wise and reckless alike. Investors won't lose all the $250 billion in bitcoin that they currently hold when the fever inevitably breaks, but many will forgo paper profits, plus much of their original investment.

Meanwhile, fraud, theft and other mischief threatens the first bitcoin futures trading, which began last night, per the Wall Street Journal. The futures price for January bitcoin surged to $18,850 at one point early today and twice triggered a halt to trading.

How it works: Invented in 2008, blockchain is a secure ledger where users can record transactions like payments, a chain of supply, a contract, and the origin of commodities like pork or diamonds.
  • The main blockchain technology — crypto-currencies, digital cash with no central organizer like the Fed — took off this year, with people pouring money into launch events called Initial Coin Offerings (ICOs) by dozens of the new currencies.
  • Most of the money has gone into bitcoin, the most popular crypto-currency, whose face value has surged by 15X this year. From about $960 at the start of January, bitcoins were selling for more than $15,000 as of last evening.
  • A way to abandon the dollar: The central banks of some nations are studying the creation of their own digital currencies: Earlier this month, Venezuela said it will create the oil-backed "petro." Russia is launching its own as well, reportedly to be called the CryptoRuble.
But that craze is only the most visible part of a powerful blockchain fever. Deloitte Consulting found that 23 industries — effectively every one that the firm studies — are working on blockchain strategies. "Blockchain is coming. The question is how fast," Deloitte's Eric Piscini tells Axios. "Ten or 20 years from now, we'll use blockchain without knowing it."
Here are the sectors that are the furthest along in blockchain pilot projects, according to Courtney Rickert-McCaffrey, a manager at AT Kearney, a management consulting firm.
  • Cross-border payments: Investment banks and tech companies like IBM, Citi and JP Morgan are running blockchain projects that would take over the transfer, clearing and settlement of international payments currently handled mostly by SWIFT. The SWIFT system can take days to clear a payment and charge about $50, but Piscini said blockchain can accomplish the whole thing in seconds and cost 20 cents.
  • Consumer product verification: Walmart has carried out pilot projects with IBM, using blockchain to track Chinese pork, with the idea of lessening the chance that it comes from infected farms, and Mexican mangoes. Now it has expanded its pilot to include Kroger, Tyson's Foods and other companies.
  • Supply chain management: Roche and Pfizer are among the major pharmaceutical companies working with a pilot project that uses blockchain to track the trace components of drugs and prevent counterfeiting and contamination. Generally speaking, blockchain is seen as simplifying supply chain management, the movement of stuff to and from ports and all the way to consumers.
  • Data storage: Northern Trust, a Chicago asset management company, is using blockchain to record investment transactions.
"Blockchain is part of the C-suite zeitgeist," Rickert-McCaffrey said.
The problem: All of these, save crypto-currencies, are pilot projects. No one knows how and when they can be scaled up to broad use. There are two main reasons:
  • Blockchain is super-slow when compared with what's already available. Bitcoin can handle just seven transactions per second. Some startups report technological fast lanes — side roads operating out of the main blockchain — that process 10,000 transactions a second. But that is still slow — current systems can do them five times faster.
  • The second obstacle is the very boom in blockchain, which has sprouted hundreds of platforms, none of which can interact with the other. That hinders the communication that is crucial to blockchain being useful. Neither are there agreed-upon blockchain standards for specific uses, like the global transfer of money.
In addition, a substantial part of the economy is largely left out in all this talk, and that is the consumer. While buyers can be surer about the source of the fish they buy, there is no indication as of now that the ordinary global citizen will derive much value, or save any money.
Campbell Harvey, a professor of finance at Duke University, thinks one sector ripe for a shakeup is credit cards. Visa, Mastercard and American Express charge merchants 2% to 3% of a purchase, a cost of doing business that merchants work into their product prices. The presumption is that blockchain can substantially reduce that cost.
Startups such as Coinbase have launched "digital wallets." Almost all of them still rely on the major credit card systems, but Harvey thinks entrepreneurs will devise a blockchain card.
"They are angling for a product that is so simple that the average consumer doesn't need to know what is happening," he said in an email exchange. "You will have a credit/debit card and pay in USD. However, in the background, there is a switch to a cryptocurrency from the consumer to the retailer and then the retailer switches back into USD."
But other blockchain experts think the credit card companies are safe from disruption. In a report last year, Credit Suisse said that transactions are so smooth for consumers that few will demand the invention of a better system.
And even if entrepreneurs create one, it will be hard to scale up to the size of the major credit card companies, with a half-century lead time and trust relationships with more than 20,000 retailers across the globe. Moreover, the cost of blockchain may not be much cheaper than the credit card companies currently charge, many experts say. Just in case they do end up threatened, VISA and MasterCard have themselves invested in blockchain technologies — in October, Mastercard began allowing payments by blockchain, and, in a collaboration with Chain, a San Francisco startup, VISA says it will offer up its own system next year.
  • Blockchain is "not really optimized for retail payments," Joseph Bonneau, a researcher at Stanford University's Applied Crypto Group, told Axios. "Perhaps in the long term, but they have a ways to go. Maybe 10 years or more." Deloitte's Piscini said blockchain credit cards may never be created.
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An industry-level look at the U.S. economy

This interactive chart shows a sector-by-sector look at the U.S. economy, tracking employment and wages since 2006, just before the crash.

How to read it: The circles indicate industries, sized by their average number of employees over time. From there, the chart is doing two things — tracking jobs and earnings from 2006 to 2017 (the up and down movement of the circles shows the change in number of jobs; left to right is the change in earnings), and projecting forward from 2014 to 2024 (signified by the intensity of the colors of the circles).

Data: Bureau of Labor Statistics; Note: Most growth projections are made at the same level of industry detail shown here. In cases where no growth projection exists, the number shown represents one detail level up; Chart: Chris Canipe / Axios

Go deeper: A snapshot of the jobs malaise

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The next big U.S.-China competition: artificial intelligence

Illustration: Lazaro Gamio / Axios

China is in the midst of an artificial intelligence frenzy, spurred in part by the "Next Generation Artificial Intelligence Development Plan" Beijing released in July that promises huge policy and financial support in pursuit of expansive goals between now and 2030.

The big question: Will AI sharpen competition between the US and China? Right now, the most likely outcome is that it will.

A white paper by Kai-Fu Lee, founder of Sinovation Ventures and a world-renowned AI researcher, and Paul Triolo, head of Eurasia Group's Geo-technology practice, argues that China and the US are already in a global AI duopoly because China has several structural advantages for AI development:

  • Huge data sets generated by nearly a billion Internet users and few privacy restrictions.
  • A rapidly growing pool of talented Chinese AI engineers.
  • Some of the best and most aggressive entrepreneurs in the world.
  • A very supportive government policy, including significant financial support.

The big picture: China's AI plan is part of the Chinese government's blueprint for becoming a superpower and achieving "the great rejuvenation of the Chinese nation," while maintaining Communist Party control.

  • As Elsa B. Kania, a fellow at the Center for a New American Security, recently wrote: "China plans to pursue cutting-edge advances in a category of critical next-generation AI technologies in order to "occupy the commanding heights" of AI science and technology."
  • Kania also wrote that the Chinese government "plans to leverage its rise in AI to enhance national competitiveness, while bolstering its capacity to ensure state security and national defense." It plans to "leverage AI to create systems for intelligent monitoring and early warning and control of potential (or perceived) threats."

The bottom line: China has the data, the talent, the money, the regulatory environment and the government vision to become an artificial intelligence superpower. As in an increasing number of other areas, US-China AI competition is far more likely than cooperation.

Go deeper: Battlefield Singularity: Artificial Intelligence, Military Revolution, and China's Future Military Power by Elsa B. Kania

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Wall Street can't wait to short bitcoin

Illustration: Rebecca Zisser / Axios

The price of bitcoin is up more than 1,500% percent this year. Next week traders will get a way to bet the price goes down.
Why it matters: The average holder of bitcoin now are millennials, counter-culture folks and "other amateurs who are interested in the technology," said Ihor Dusaniwsky of financial analytics firm S3 Partners. New futures trading in bitcoin will open the market to professional traders.
"Current bitcoin holders are the gazelles in the plain, and the tigers and lions are about to get released."
The CBOE will begin issuing Bitcoin futures contracts on Dec. 10 that will let sophisticated investors bet against the asset more easily than ever before. This new instrument, along with similar upcoming offerings from the CME and others, could pave the way for a serious bitcoin correction.
  • Before now, the only way to short bitcoin was through Grayscale Investment's Bitcoin Investment Trust, which Dusaniwsky called "extraordinarily expensive" and hard to trade because of the limited number of shares.
Trading futures will be different because traders won't have to ever own actual bitcoin, which are by design very limited in supply. These contracts will allow more people than ever before to cheaply and to easily buy and in particular, sell large quantities of bitcoin.
But short selling bitcoin can be even riskier than owning it because when you buy an asset, the most you can lose is your initial investment. When you sell an asset short, your losses are potentially infinite, limited only by how high the price goes.


Data: CoinDesk; Chart: Axios Visuals

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Demand for electric vehicles rising in 2017

"Demand for EVs has continued to rise in 2017, setting new records for purchases and vehicle model availability," according to a new report on the electric vehicle market by Securing America's Future Energy. The chart below shows the year-over-year growth of EVs and plug-in hybrids in the U.S.

Reproduced from Securing America's Future Energy analysis; Chart: Axios Visuals

Between the lines: "Although six models currently account for nearly two-thirds of sales, consumers have a fuller range of choices with 37 models available, thanks to marked declines in battery technology costs and enhanced range," per the market snapshot.