fortune--2020-11-11--A.I. recruiting startup wins competition to help military veterans find jobs

Charles Law found the prospect of looking for a job daunting. After more than 38 years in the U.S. Air Force Reserve and then on active duty, Law, now a master sergeant, was retiring and looking for work in the civilian world. But it had been 19 years since he’d last searched for a job outside the military.
“It was kind of scary,” Law says of his employment search. “First trying to decide what it is that I wanted to do next and then having to deal with the civilian sector after having been attached to the military for so long.”
Law says he found the jargon used by corporate employers confusing. “The terminology and lingo is just not the same,” he says. “And trying to get an understanding of what they are looking for and trying to help them understand what skills I had and how that relates to a civilian job, that is a bit challenging.”
Each year, about 200,000 members of the armed forces leave the military and transition to civilian life. And many of them face the same struggles Law did. But starting next year, a new software system based on artificial intelligence will help many of these veterans find work.
Eightfold AI, a four-year-old company based in Mountain View, Calif., that makes A.I.-enabled recruiting and “talent management” software, won a U.S. Department of Labor competition to build a software system to help improve its existing Transition Assistance Program (TAP), which helps those leaving the military prepare for civilian life, including finding employment. The startup beat out 50 other companies, including more established players in recruitment technology such as LinkedIn, Vantage Point Consulting, and even JobPath Partners, a company that specializes in helping companies hire veterans.
To win the competition, Eightfold created a website for military members that takes a U.S. military job code and translates that job into its component skills—but also any related skills the job seeker might have, says Dan Hopkins, senior director of Eightfold’s public sector business. “If I am in artillery, what is the equivalent in civilian life?” he says. “But that person will have a lot of training and leadership skills.”
Eightfold is among dozens of startups—including Pymetrics, Mya Systems, and HireVue—that are applying A.I. to recruitment. The company’s software can predict what skills the job seeker might be able to learn based on what that person already knows. “If you know skill A, might you also know skill B or could you learn skill C, and how quickly could you learn it,” Hopkins says.
The system Eightfold built can also assess what rank and grade a person holds and how quickly they were promoted to that rank—which can be a good proxy for the ability to learn new skills and leadership abilities. “If a candidate is an E-6 and they made that in five years—that is actually very good and means they advanced quickly. All that information is lost in a conventional résumé; it isn’t conveyed,” he says.
Kamal Ahluwalia, Eightfold’s president, says veterans have many soft skills that aren’t picked up on a normal résumé, such as the ability to work in ambiguous environments. “They have this in spades, and they can work under pressure,” he says.
The problem with the government’s existing TAP program is that it is largely based on a self-assessment questionnaire about skills that the job seeker completes, combined with keyword searches for open positions, Hopkins says. But many veterans sell themselves short in terms of the skills they actually have, he says, and keyword searches can return an overwhelming number of potential jobs, with no good way to screen them to find the best opportunities. For instance, a combat engineer who did a search of the TAP’s job database for open engineering roles just in the Washington, D.C., area in October would have to weed through more than 22,000 possible roles.
By contrast, Eightfold’s software curates a list of specific job openings for a candidate. It also curates job candidates for employers. And, for servicemen and -women leaving the military, it curates a network of veterans in similar roles or closely related ones that job seekers can tap.
“For transitioning service members it is really important to have a relevant network—with an emphasis on quality and context,” Hopkins says. “In this case we are surfacing other veterans in the role that I’m a strong match for.”
Eightfold’s victory in the competition came with $720,000 in prize money and was also supported by the Defense and Veterans Affairs departments.
Law, the retiring master sergeant who helped Eightfold test its software, says having that connection with another veteran at prospective employers is often a decisive factor. “I think when I find that person in the company, there is a sense of comfort,” he says. “We as a military, we feel we are all a family whether we have known that person one day or several years. I do find that they have a better understanding of where you are coming from.”
Eightfold’s A.I. has been trained on more than a billion employee profiles that the company harvested from various public and proprietary data sets, which include public announcements of new hires in trade journals and posts from sources such as alumni magazines, along with information on how those people were promoted over time, Ahluwalia says. It used this data to teach its A.I. algorithm about more than 500,000 different job titles and what the 1.4 million underlying skills inherent in those jobs are. The algorithm then uses this information to try to forecast the likely career progression of any given job seeker.
The company has been backed by more than $180 million in venture capital funding since its founding, including a $125 million financing round announced last month that was led by venture capital firm General Catalyst, based in Cambridge, Mass., which valued the startup at $1 billion.
This story has been corrected. A previous version incorrectly stated Dan Hopkins, senior director of Eightfold’s public sector business, was a veteran.


fortune--2020-11-11--Beijing’s new antitrust rules have cost Chinese tech giants $260 billion in two days

Parler is the new Twitter for conservatives .
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Global investors pummeled shares of China’s tech giants for a second day Wednesday following signs of a crackdown by Beijing regulators.
On Tuesday, the Chinese government released sweeping new draft rules aimed at curbing monopolistic behavior among China’s largest Internet firms by imposing tighter restrictions on online payment systems, e-commerce platforms, and user data.
China’s State Administration for Market Regulation said it issued the draft rules to block anticompetitive behavior and create a more balanced playing field in China’s booming tech market.
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Investors saw the proposed rules as a direct threat to China’s tech giants, and by Wednesday Internet firms such as Tencent, Alibaba, JD.com, and food delivery company Meituan had lost a combined $260 billion in market value over a two-day period. Hong Kong’s Hang Seng tech index dipped nearly 8% on Wednesday, the biggest single-day drop since the 2008 Global Financial Crisis.
The proposed regulations are worrying for tech giants because the rules target practices that fueled their growth.
Perhaps most concerning is the rule that threatens Chinese tech’s biggest weapon: massive troves of data. Chinese tech companies like Tencent and Alibaba collect mountains of consumer data that they use to target consumers with personalized ads and purchase suggestions. The new rules may limit how platforms collect and deploy user data. The legislation also may prevent companies from employing price discrimination practices, in which the same products are sold at different prices based on the user.
For major e-commerce platforms like Alibaba and JD.com, the proposed regulations may eliminate their ability to enter into exclusive brand relationships with their retailers.
That Beijing proposed the new rules on the eve of Alibaba’s Singles Day, the biggest shopping event in the world, seems to underscore the message that the government is no longer interested in business as usual.
The new rules also came just one week after Beijing pulled the plug on Ant Group’s highly anticipated dual listing in Shanghai and Hong Kong. The fintech giant’s debut was set to be the world’s largest-ever IPO, but now appears to be delayed by at least six months after the company failed to meet new, separate legislation aimed at leveling the playing field in China’s fintech industry.


fortune--2020-11-12--When Kamala Harris assumes the role of VP, there will be zero Black women in the Senate

Will another $ 1,200 stimulus check ever come ?
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Sen. Kamala Harris’s victory in the U.S. presidential election alongside Joe Biden was cause for celebration among those eager to see the first woman in the nation’s second-highest office. But her ascension comes with a side effect: There will now be zero Black women in the U.S. Senate.
Elected to the Senate in 2016, Harris was the sole Black woman to serve in the body—and only the second in the institution’s history. (The first was Sen. Carol Moseley Braun, elected in 1992.)
“It’s enormously consequential that she will be VP, and I don’t want to make it sound like bad news,” says Debbie Walsh, director of the Center for American Women and Politics at Rutgers University’s Eagleton Institute of Politics, “but it’s disappointing that the bench of Black women is so shallow that if one rises up to another office there’s no one there at all.”
While the House of Representatives has made progress in electing women of color—22 Black women are serving in the House in the 2019–21 Congress—the Senate continues to lag behind. That discrepancy is largely due to the specific challenges that come with running for statewide office. Case in point: While there have been two Black female senators, there has never been a Black female governor.
“There’s been an assumption that the only place Black women can run and succeed is majority-minority districts,” says Walsh. “States aren’t that.”
That assumption, whether by party leaders or donors, hurts the prospects of Black women who would be qualified to pursue these seats, Walsh says. (In her own election to the Senate, Harris held an advantage as a former attorney general and previous statewide officeholder.) But that line of thinking has the potential to change; races like Rep. Lauren Underwood’s fight for reelection in Illinois’s 14th District show that Black women can win in locations that are not majority Black, even if those races still aren’t statewide. And Harris’s own viability as a VP candidate helps make the case for Black women’s electability in statewide offices too, Walsh says.
Still, there are significant hurdles. Senate candidates often receive party support based on their fundraising potential—and candidates of color are less likely than their white counterparts to have wealthy networks to tap into, says Kimberly Peeler-Allen, cofounder of Higher Heights for America, an organization that includes a PAC working to elect Black women to office.
The vast majority of Black female politicians are Democrats (only one Black Republican woman, Utah Rep. Mia Love, has ever served in the House). That further limits the number of seats where there would be a chance of electing a Black woman to the institution.
“It’s going to take a concerted effort by the parties. It’s going to take rethinking what’s possible and who’s electable,” Walsh says of how to ensure representation of Black women in the Senate never again gets to zero.
The makeup of the incoming Senate could still change; California Gov. Gavin Newsom will appoint a politician to Harris’s former seat in the state. And if Biden selects any sitting senators for his cabinet, those seats will, in most cases, be filled by an appointee.
Unless an open Senate seat is filled by a Black woman appointee, the prospects of the Senate having another Black female lawmaker anytime soon are low. (The Senate does include three other women of color: Democratic Senators Catherine Cortez Masto of Nevada, Tammy Duckworth of Illinois, and Mazie Hirono of Hawaii.)
“Looking at the map, it’s a tough road unless in one or more of the Democratic states someone retires,” says Peeler-Allen. “It’s going to be a challenging environment in 2022 and 2024.”
In the 2020 primaries, 13 Black women filed to run for the Senate, according to the Center for American Women and Politics. Only one—Tennessee Democrat Marquita Bradshaw—advanced to the general election. She lost with 35% of the vote last week.
As VP, Harris will serve as the Senate’s tiebreaker—but won’t be part of the group of 100. During her time as the Senate’s sole Black female member, she brought a unique perspective, including her work on issues like anti-lynching legislation.
Between Moseley Braun’s departure from the Senate and Harris’s arrival, there was a gap of 18 years. Organizers and donors working to elect women of color hope the lag this time won’t be as long.
Says Walsh: “Unfortunately, folks who have power don’t relinquish it easily.”


fortune--2020-11-12--The pandemic may be the greatest environment for business fraud in decades

Trying to defraud the president of the Association of Certified Fraud Examiners was probably never going to work, and it didn’t. When Bruce Dorris got an email saying, “Your antivirus software is not up to date!” he knew it was a scam. But he was still impressed. “I’m looking at it like, wow, that looks really, really good,” he says. “I know what to look for, so I didn’t bite, but I can think of someone who may look at it and think, ‘I wonder if it’s true?’”
Brace for plenty more scams—many of them far more sophisticated. The pandemic has been great for Amazon, Netflix, Peloton, and Zoom and also for a group of entrepreneurs seeking far less attention: corporate fraudsters. We may not know their names yet—except for a few—but we can be certain they’re hard at work, because the pandemic may be the greatest environment for business fraud in decades.
We’re not talking about defrauding individuals, though that business is booming also as bad guys prey upon fearful consumers with scams involving bogus COVID-19 treatments, worthless PPE, and nonexistent charities. Rather, we’re talking about defrauding businesses, investors, and governments. For that line of work, the pandemic is uniquely wonderful, creating a rare conjunction of factors that produce an especially fraud-friendly climate.
Tough times. Fraud experts say every corporate fraud grows from a combination of three elements: pressure, opportunity, and rationalization. A bad economy creates pressure. Companies may run short of cash or may be unable to meet Wall Street’s expectations, so they resort to trickery. For example, when WorldCom was desperate to hide its faltering performance in the dotcom bust, CEO Bernie Ebbers capitalized expenses, intending to spread them over years of financial statements rather than report them properly in the quarter when they were incurred. Convicted of fraud, he had served 13 years of a 25-year sentence when he was released from prison last December, shortly before he died.
Where is the financial pressure heaviest in the pandemic? The worst-performing sectors of the S&P 500 have been energy, financial, and industrial, but glamorous companies can also be strong candidates for fraud if managers fear next quarter’s financial results won’t support the high-flying stock.
Less oversight. The second element of fraud—opportunity—widens when people know they’re not being watched. Dorris’s organization, the ACFE, reports that some financially stressed companies have cut anti-fraud staff and budgets. More broadly, with millions of employees working from home, especially if they work entirely with numbers, oversight and security may not be what they are in an office building. Large majorities of the ACFE’s members say reporting, detecting, and investigating fraud have become more challenging in the pandemic.
One reason committing fraud is easier in the pandemic—in fact the main reason cited by ACFE members—has nothing to do with technology. The problem is that it’s now harder for examiners to travel and interview people in person. “Our fraud examiners want to see whether [interviewees] are closing their arms, for instance. Are their legs doing something? What about micro-expressions in the face and how muscles in the face contort?” says Dorris. “Zoom is good, but it’s not the best.”
This is part of what makes the pandemic environment so unusual. Oversight usually intensifies in tough times, as managers scrutinize every deal and every dime. But this time, opportunity to misbehave has expanded along with pressure to do so.
Fast, free money. The Paycheck Protection Program—necessary and effective though it was—transformed 2020 from a merely rich environment for scamming into a true festival of fraud. Over a half-trillion dollars was loaned to small businesses last spring and summer with little or no verification of applicant information. Vetting wasn’t possible; on May 3, the Small Business Administration’s busiest day, it approved 514,000 loans. Massive fraud was inevitable—the Justice Department set up a PPP team the day the program was established—and is increasingly coming to light.
We may never know how much money was given to fraudsters, but the early cases are suggestive. For example, a Miami man has been charged with borrowing $3.9 million in PPP funds by filing a fraudulent application, then buying himself a Lamborghini Huracán Evo for $318,497; the feds took the man and the car into custody. The FBI has opened hundreds of PPP fraud investigations, likely a small fraction of the frauds included in the SBA’s 5.2 million PPP loans.
The year 2020 will be remembered for many things, mostly awful. Fraudsters are among the few who will look back wistfully, thinking: “Those were the days.”


fortune--2020-11-12--Jack Ma’s stalled IPO is about more than Beijing saving face

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When regulators squished Ant Group’s $37 billion initial public offering last week, many analysts interpreted the move as an effort by China’s thin-skinned Communist rulers to remind the nation’s best-known Internet billionaire who’s really boss.
Conventional wisdom had it that Jack Ma, Ant’s co-founder and largest shareholder, doomed the listing by shooting from the lip in an Oct. 24 speech to the Bund Financial Summit in Shanghai. Reuters reported that people close to Ma tried to get him to tone down the speech, and that “senior financial regulatory officials were furious at Ma’s criticism.”
Other accounts have suggested regulators scotched the listing, which would have been the largest IPO ever, in a fit of pique. In pulling the plug at the last minute, concluded the New York Times, China’s leaders were sending a clear message: “No private business gets to swagger unless the government is on board with it.”
Bloomberg‘s Shuli Ren argues the surprise suspension of Ant’s blockbuster offering proves China’s bureaucrats are “capricious” and “don’t know what they’re doing.”
Call this the “about face” thesis. It feels way too pat to me.
San Francisco-based Rui Ma, writing in the Tech Buzz Extra newsletter, makes the case that the cancelation of Ant’s IPO is part of a much broader regulatory campaign to curb the power of China’s tech giants—one that is long overdue, enjoys considerable support among financial professionals and China’s public, and has been in the works for many months.
That argument was bolstered Tuesday by an announcement that a Beijing regulator is drafting rules to prevent monopolistic behavior by Internet platforms including e-commerce giants Alibaba Group and JD.com, gaming and social media leader Tencent Holdings, and food delivery courier Meituan Dianping. The implications of that announcement, as they dawned on global investors, sent shares of China’s tech behemoths into a two-day tailspin—wiping out nearly $300 billion in market capital. (Tech stocks bounced back Thursday.)
As John Dong, a securities attorney at Joint-Win Partners in Shanghai told Bloomberg: “The Wild West era of policy arbitrage—taking advantage of weak regulations over the sector—has come to an end.”
At the Shanghai event, Ma, known for his love of mixing colorful metaphors, decried China’s banks for their “pawnshop mentality” and assailed the nation’s financial regulators as risk-averse fuddy-duddies who stifle innovation and slavishly emulate the Basel Accords—which Ma deemed overly complex rules designed for aging Western societies and unfit for developing nations like China.
“We cannot use the way to manage a railway station to manage an airport,” Ma declared. “We cannot use yesterday’s way to manage the future.”
Ma’s comments, to mix another metaphor, went over like a lead balloon. His audience included China’s most powerful bankers and regulators. The speech provoked outrage on social media. “It seems like Ma has become so egotistical that he thinks he’s above the laws now,” wrote one Weibo user.
Days later, representatives from China’s central bank and financial regulatory agencies summoned Ma, Ant’s executive chairman Eric Jing and chief executive Simon Hu to Beijing for a rare, unscheduled meeting.
The South China Morning Post (owned by Alibaba) reports that bureaucrats told Ant executives that they viewed financial stability as a higher priority than expanding credit, and were about to introduce a raft of new rules that would completely transform the business landscape for financial technology companies.
Authorities advised Ant executives they would need months to assess and figure out how to comply with the new rules. The Shanghai Stock Exchange canceled Ant’s IPO in Shanghai the next day.
Ant dominates China’s fintech sector. The 16-year-old company’s Alipay app is used by more than 730 million people every month and offers personal credit, loans, investments and insurance. Ant has become China’s largest online credit services provider to consumers and small business owners, and connects borrowers and about 100 banks. But it has had numerous run-ins with regulators over the years, and banks complain Ant has been exempt from the rules that constrain traditional lenders.
One of the key provisions in the draft rules requires micro-lenders to fund at least 30% of any loan they fund jointly with banks. Only 2% of the loans Ant currently facilitates show up on its balance sheet.
Tech Buzz China‘s Rui Ma argues that Jack Ma and other senior executives at Ant are too savvy and too well-connected politically not to have known that Beijing was readying stricter fintech regulations that would complicate Ant’s IPO. She wonders whether his Shanghai speech was “made out of desperation, a last ditch attempt to sway public opinion which failed.”
Instead, he may have accelerated the inevitable.
Hong Kong and Singapore announced this week that they have agreed on a “travel bubble” allowing up to 200 passengers a day to travel between the two financial hubs without being subject to strict quarantine rules. How long before the rest of Asia opens to cross-border travel? And will it be safe? Join Grady and me Thursday, Dec. 3 at 9 p.m. Beijing time for “On the Road Again,” a virtual conversation to ponder “The Future of Post-Pandemic Travel.” We’ll talk with special guests Trip.com CEO Jane Sun, Singapore Tourism Board Chief Executive Keith Tan, and McKinsey & Co. Partner Steve Saxon, who’ll take your questions. You can register for the call and find out more here.
More Eastworld news below!
Clay Chandler
clay.chandler@fortune.com
This edition of Eastworld was curated and produced by Grady McGregor. Reach him at grady.mcgregor@fortune.com.
Eastworld news
Trials and tribulations
Chinese vaccine maker Sinovac has resumed phase III clinical trials for its CoronaVac vaccine in Brazil. Anvisa, Brazil’s health regulator, announced the suspension of Sinovac’s testing earlier this week due to a "serious adverse event." Sinovac’s Brazilian partner, the Butantan Institute, criticized Anvisa, claiming that the "event" was a volunteer death that was unrelated to Sinovac’s trials. The trial delay is the latest instance of Sinovac getting caught up in domestic politics: Brazil’s president and most powerful governor have traded barbs over whether Brazil should purchase Sinovac’s vaccine. Fortune
Hong Kong crackdown
Hong Kong’s legislature no longer has opposition lawmakers. On Wednesday, Hong Kong’s government disqualified four pro-democracy lawmakers under provisions of Beijing’s new national security law. Hours later, the remaining 15 pro-democracy lawmakers resigned in protest, leaving only pro-Beijing lawmakers in the body. U.S. National Security Advisor Robert O’Brien condemned the initial ousting of the four lawmakers. The pro-democracy lawmakers said the disqualifications would essentially turn Hong Kong's government into a rubber stamp for Beijing's policies. On Wednesday, Beijing condemned the mass resignations as a blatant challenge to Beijing's authority over Hong Kong. Hong Kong Free Press
Speeding ahead
China is beating the U.S. in 5G technology; the contest is not particularly close. The U.S. has rolled out 5G-enabled smartphones and 5G networks in some urban areas, but China’s 5G infrastructure is far more advanced. By the end of 2020, China may have close to 700,000 5G base stations compared to 50,000 in the U.S. Right now, China’s 5G advantage may only amount to faster phone speeds, but in the future China may have the upper hand in a wide range of 5G-enabled applications like self-driving cars, remote surgeries, and automated factory floors. Wall Street Journal
Broken tooth
In the 1990s, Wan Kuok-Koi, also known as Broken Tooth, was one of Macau’s most powerful and ruthless mob bosses. Now he has recast himself into an international businessman, leading investment projects outside of China as part of Beijing’s Belt and Road Initiative (BRI). The BRI is President Xi Jinping's signature foreign policy initiative and has sparked numerous investment and development projects around the world. Kuok-Koi has now launched a number of questionable new BRI investment projects, showcasing that the initiative has created opportunities for shadier business interests to grab a piece of the pie. The Wire China
Forgotten but not gone
TikTok, the video-streaming app owned by China's ByteDance, applied to delay the U.S.'s TikTok ban by another 30 days after the app claimed that the Trump administration hadn't engaged with TikTok's lawyers in weeks. The TikTok ban, which would require TikTok to divest from its American operations, is set to go into effect on Thursday. In September, TikTok made a tentative agreement with U.S. companies Oracle and Walmart to sell a portion of its U.S. operations in order to remain viable in the U.S. The Trump administration has not indicated whether it would approve the deal. CNN
Coronavirus by country
Australia
Australia has been largely successful in stamping out COVID-19 by sealing off its borders to most travelers and deploying restrictive lockdown measures. Australia still has some social distancing restrictions in place, but the country’s economy has reopened as new cases have slowed to just a handful per day. One containment tactic is a limit on returning citizens; Australia allows just 6,000 citizens to return from abroad each week and caps the number of passengers on each international flight at 30. Australia says the restrictions are necessary to not overwhelm quarantine facilities, but critics argue that the measures violate United Nations’ human rights principles for the 36,000 Australians who are currently stranded overseas. The UN human rights treaty says that countries should guarantee the rights of citizens to return home. Sydney Morning Herald
Markets and movers
Apple – The U.S. smartphone maker has suspended Taiwanese iPhone assembler Pegatron after Apple discovered that Pegatron concealed labor violations among student laborers at its factories in China. New York Times
Huawei – The Chinese telecoms manufacturer plans to sell its budget-brand smartphone business Honor for roughly $15 billion to a consortium led by the Chinese tech company Digital China and the government of Shenzhen. Reuters
Serum Institute – India's largest vaccine maker announced this week that it has produced 40 million doses of AstraZeneca's vaccine candidate. Developed in partnership with Oxford University, AstraZeneca is currently testing its vaccine in phase III clinical trials. Reuters
Piramal Glass — The U.S. private equity giant Blackstone is set to acquire the glass unit of Indian Conglomerate Piramal Enterprises for $1 billion. Bloomberg
Woodside Petroleum — Australian largest natural gas producer has shelved talks to sell stakes in a natural gas project to Chinese investors amid rising tensions between China and Australia, Woodside's CEO Peter Coleman said on Thursday. Reuters
Final figure
40 million
Southeast Asia’s six largest economies have added 40 million Internet users amid the pandemic, according to a new report from Google, Bain & Company, and Temasek. The figure marks a rapid rise in online users; the region added roughly 25 million new Internet users each year between 2015 and 2019. The e-Conomy SEA report says that 70% of people in Vietnam, Thailand, the Philippines, Malaysia, Singapore, and Indonesia are now online. The region’s Internet economy is now valued at roughly $100 billion, and, based on current growth models, the report estimates that number may triple to $300 billion by 2025. The Diplomat


fortune--2020-11-12--How the pandemic has expedited innovation within the film industry

Alongside his team at Industrial Light & Magic, Rob Bredow is helping change the way television shows and movies are shot.
Using an immersive, massive, and cavernous LED video wall that stretches 270 degrees around the film set, reaches 75 feet in diameter, and can display digital environments that rival reality, Bredow and his crew at ILM—a division of Lucasfilm—have developed a way to bring the filming location to the cast, rather than the cast to the filming location. This LED stage is the latest innovation of Lucasfilm’s virtual production platform called StageCraft, and it’s ultimately making the filmmaking process much more efficient.
“One of the things that StageCraft brings to the table is the ability to shoot many locations on just one soundstage,” Bredow, SVP and chief creative officer of ILM, says. “For season one of The Mandalorian, we shot over 60 sets on just one soundstage because with the digital environment, it only takes us a couple minutes—you hit a button, it loads up, and now you’re in a different planet.”
On this episode of Fortune Brainstorm, a podcast about how technology is changing our lives, Bredow speaks with Fortune’s Michal Lev-Ram and Brian O’Keefe about the inception of the StageCraft LED wall, how the technology has changed film production, and why it has been particularly useful throughout the pandemic.
An idea several years in the making, the LED walls were originally designed out of frustration with the traditional way of lighting scenes: Directors of photography wanted innovation with regards to visual effects. Now COVID-19 has made the technology all but essential.
“One of the nice things that StageCraft LED stage opens up for folks is some of those things that used to have to be done with large teams of people standing by just in case you had to make that change…can now be made digitally,” Bredow says. “People are working on their scenes from their respective houses, getting everything prepped, so that the day you’re ready to shoot, you can walk on that stage and you already have your set virtually built, you have your lighting well underway or almost done, and you just have to make your final adjustments before you’re ready to shoot.”
Andy Forssell, EVP and GM of WarnerMedia’s direct-to-consumer arm HBO Max, joins the podcast to discuss the content side of filmmaking and how the pandemic has caused the intensity of the so-called streaming wars to heat up. The closing of theaters has increased the importance of streaming services like HBO Max, and that’s a trend that may continue long after the world gets the virus under control, according to Forssell.
“The feature film studio has probably gone through more COVID-related impact than anybody else,” Forssell says. “You’re seeing all film studios, not just ours, have to suddenly look with pretty open eyes and be willing to think about any option there…You may see smaller/medium films head more to streaming services right away. Consumers are going to tell us what they want.”
Earlier in the episode, Lev-Ram and O’Keefe bring on Fortune entertainment reporter Aric Jenkins to hypothesize what factors will separate some streaming services from others. As it turns out, content is still king, and organic social media promotion is as important as ever.
To hear more about the new ways television shows and movies are being made and distributed, how viewing habits and preferences have been shaped by the pandemic, and how scenes with Baby Yoda are filmed, listen to the episode above.


Purpose, or purpose-washing?

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Good morning.
Over the past six months, Fortune and McKinsey & Co. have convened a series of roundtables with leading CEOs who have worked to pursue a corporate purpose beyond profits. Our goal was to devise a playbook for others trying to follow this stakeholder-centered approach. We published the results in a report available this morning. There are seven major takeaways, but I will share the top two here:
—In the long run, there is no tradeoff between profit and purpose. To a person, the CEOs we convened insisted that over time, as IBM CEO Arvind Krishna put it, “Purpose and profit go together, reinforcing each other.” PayPal CEO Dan Schulman took it one step further: “I’d actually argue if you don’t have a purpose as a company, you will be less successful from a results perspective.”
—Purpose begins with your employees. In an economy where human capital increasingly drives business value, an employee-first approach has become essential. “Purpose starts with supporting your own teams and front lines. They in turn support our customers, which takes care of business,” said Best Buy CEO Corie Barry. You can find the full report here.
Separately, I met virtually yesterday with several dozen senior executives on our new leadership platform, Fortune CONNECT, for an interesting exercise led by Thomas Kolditz, founding director of the Doerr Institute for New Leaders at Rice University. Kolditz had the CONNECT fellows work together to identify their own gifts, their passions and their values, and then use those to define their personal purpose. (Gifts + Passion + Values = Purpose). The real magic happens when your personal purpose aligns with the purpose of the company you work for.
Sound like an interesting exercise? Maybe you should join Fortune CONNECT—more information here. Other news below. And in honor of Veterans Day, a look at how veterans may hold the key to curing what ails America here.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
European crest?
There are signs that Europe's latest wave of COVID infections may have crested in countries such as the U.K., Germany, France, Belgium, the Netherlands and the Czech Republic. If the trend holds, that's a testament to the restrictions of varying strictness that countries imposed over recent weeks, in an attempt to slow down the pandemic. But sensible observers will wait for more data over the next week or two before making any calls. Bloomberg
Moderna update
Moderna expects to reveal the efficacy of its vaccine by the end of this month. The company is using the same "messenger RNA" approach as Pfizer/BioNTech, whose candidate vaccine appears to be over 90% effective. Moderna's large-scale clinical trial crossed the necessary threshold to allow its vaccine to be considered for FDA approval—now it just needs the trial's independent Data and Safety Monitoring Board to evaluate the data. The markets are optimistic; Moderna's share price rose 8.4% yesterday. Fortune
IPO block
It's not just Ant Group—another Chinese tech firm, software developer Jiangsu Netin, has also had its IPO denied. This time it was by the Shenzhen, rather than Shanghai, stock exchange. Shenzhen's ChiNext board said Jiangsu Netin didn't disclose enough information about tax payments, and stake transfers among shareholders. Fortune
Tencent profit
Tencent's quarterly profit is up 89% to $5.8 billion, thanks to strength in the firm's core gaming (see: Honor of Kings) and advertising businesses. Revenue was up 29%. The world's biggest gaming firm by revenue said Chinese ad activity seems to have recovered from COVID-19, but its cloud division is still suffering from project deployment delays and companies holding off on signing new contracts. Reuters
AROUND THE WATER COOLER
Kodak options
Eastman Kodak has made a rather startling admission: five of its former execs sold stock options they didn't own, allowing them to rake in millions of dollars. CFO David Bullwinkle said on an earnings call yesterday that the firm had discovered deficiencies in its controls "with regard to the timely input and verification of master data updates for equity grants." Wall Street Journal
Social bias
Boris Johnson's office has reportedly asked his culture department to consider imposing a "duty of impartiality" on social-media platforms, as part of the upcoming Online Harms Bill. A Financial Times source said: "There is a discussion paper circulating looking at content moderation and algorithmic bias which appears to take the position that online platforms are censoring conservative content." FT
Big Oil
Big Oil thinks it can get President-elect Joe Biden's administration on board with its approach to decarbonization. Former BP CEO Bob Dudley: "If you look at the campaign rhetoric around it, I think you have a spectrum in his party. I think he understands it, it can’t be as fast." Occidental CEO Vicki Hollub: "I’m not as worried as some people are. It is going to take some work to share that knowledge and to get his staff on board." CNBC
Big Crypto
Joe Biden's election is good news for the cryptocurrency sector, according to Kristin Smith, executive director of the Blockchain Association. "I think what we see with a Biden administration is an opportunity to get some fresh faces into the key regulatory agencies that might be more willing than some of the other regulators that we have today to move forward on policies that would be good for crypto," she said on the latest episode of Fortune's Balancing the Ledger. Fortune
This edition of CEO Daily was edited by David Meyer.


fortune--2020-11-12--Moderna shares soar as markets bet its COVID vaccine trial is on the same track as Pfizer’s

Now it’s Moderna Inc.’s time to be in the spotlight.
The same U.S. explosion of Covid-19 cases that helped Pfizer Inc. get results for its vaccine trial earlier this week is helping speed along Moderna’s trial. Moderna said Wednesday its study has accumulated more than 53 infections, allowing a preliminary analysis of the shot’s effectiveness to begin. The shares jumped.
Moderna didn’t predict how long it could take an independent monitoring committee to analyze the data, but said the company could get the data to the committee within days. The company said it is still blinded to the data.
“Moderna has seen a significant increase in the rate of case identification across sites in the last week,” the company said in a statement. “As a result, the company expects the first interim analysis will include substantially more than 53 cases, the targeted trigger point for the analysis.”
The preliminary data on Moderna’s study is being prepared for submission to the monitoring board, Moderna said. The board will say whether the vaccine is effective, doesn’t work, or that the trial should continue because the results are inconclusive.
The bet among top experts in the field is that Moderna’s therapy, which uses a similar mRNA technology to Pfizer’s, will likely prove to be highly effective, perhaps mirroring Pfizer’s announcement earlier this week that its shot appears to be more than 90% effective.
“Overall I would expect similar results” in Moderna’s trial, said Drew Weissman, an immunologist and mRNA expert at the University of Pennsylvania who helped develop key modifications used in mRNA vaccines.
“It is hard to imagine how it would be much different,” according to Weissman, whose lab receives research funding from BioNTech SE, the company partnering with Pfizer on its vaccine.
Certain Numbers
In vaccine trials, a certain number of volunteers—a percentage of which get a placebo—have to get infected in order to determine if the vaccine works. That’s easier to accomplish with the pandemic in the U.S. hitting record infections on a daily basis.
Pfizer got a burst of results in recent weeks that pushed that trial over the line to take a first look. Now Moderna’s interim analysis could come within days.
Whatever happens in the trial—and there are no guarantees until it is done—the results are certain to have a big impact on Moderna shares, which are up more than 300% this year in a wild roller-coaster ride. The stock closed up 8.4% in New York trading at $82.44.


fortune--2020-11-12--The vaccine jolt fades, sinking global stocks—except for this one surprising sector

This is the web version of the Bull Sheet, Fortune’s no-BS daily newsletter on the markets. Sign up to receive it in your inbox here.
Good morning. That didn’t last long. The vaccine rally is on pause this morning. Even Nasdaq futures, Wednesday’s big winner, are down as a decidedly risk-off mood hangs over global markets.
There is one big exception: Chinese tech stocks are off multi-day lows, bouncing back nicely.
Meanwhile, the latest COVID data shows new records from Tokyo to Texas.
Let’s check in on the action.
Markets update
Asia
The major Asia indexes are mixed in afternoon trading with Japan’s Nikkei up 0.7% .
are mixed in afternoon trading with up . Alibaba raked in $75 billion in sales from its Singles Day promotion this year, nearly doubling last year’s haul. Its shares are up 2% in Hong Kong, after it and the entire Chinese tech sector took a pummeling in recent days. Alibaba rival JD.com is up 7.7% .
in sales from its promotion this year, nearly doubling last year’s haul. Its shares are up in Hong Kong, after it and the entire Chinese tech sector took a pummeling in recent days. Alibaba rival is up . Who says global trade is in trouble? China and 14 other Asia Pacific countries are close to signing a free-trade pact, the world’s biggest.
Europe
The European bourses were a blur of red out of the gates with the Stoxx Europe 600 down 0.8% .
were a blur of red out of the gates with the down . We finally have a pandemic price tag for Europe’s banks. According to the ECB , the continent’s lenders face a €1.4 trillion fiscal cliff in the coming months as bad loans pile up, and the eurozone economies struggle to climb out of recession .
, the continent’s lenders face a in the coming months as pile up, and the eurozone economies struggle to climb out of . We’ll be debating the logic of lockdowns for years to come, but there’s an interesting development happening in Europe: a number of countries are seeing a drop in the number of new COVID cases since imposing partial shutdown orders. Could it be a sign they’re flattening the curve? (Ahem, I’d like to see more progress here in Italy before waving the “Mission Accomplished” flag… É un pó presto qua nel bel paese.)
U.S.
U.S. futures point to a weak open after Wednesday’s impressive tech bounce-back.
point to a weak open after Wednesday’s impressive tech bounce-back. Shares in Moderna spiked more than 8% on Wednesday—and again this morning in pre-market trading—after the biotech firm announced promising data on its COVID vaccine trial . The concoction is similar enough to Pfizer’s, stoking plenty of optimism.
on Wednesday—and again this morning in pre-market trading—after the biotech firm announced promising data on its . The concoction is similar enough to Pfizer’s, stoking plenty of optimism. Goldman Sachs revised upwards its year-end S&P 500 price target following Monday’s blockbuster Pfizer/BioNTech COVID vaccine trial announcement.
Elsewhere
Gold is up, but it’s been a week to forget for the shiny yellow stuff. It’s trading below $1,870/ounce .
is up, but it’s been a week to forget for the shiny yellow stuff. It’s trading below . The dollar is flat.
is flat. Crude too has traded in wild swings this week. Brent futures are down, trading below $44/barrel this morning.
too has traded in wild swings this week. futures are down, trading below this morning. Will Bitcoin top $16,000 today? Crypto bulls are running up the price… A reminder: for the latest on all things crypto, check out Fortune‘s fabulous newsletter, The Ledger.
***
Buzzworthy
Next stop: 3,700
Goldman Sachs tore up its year-end stocks projection now that we have more visibility on a vaccine, and that we now know it will be a Biden presidency (with a likely split Congress). With that in mind, Goldman says the benchmark S&P will climb another 3.5% this year to close at 3,700. It will keep climbing from there in 2021 and 2022.
The bottom line: growth
Goldman Sachs sees a tradeoff in the scenario where we have a Democrat in the White House and a Republican-led Senate. That would likely mean a tax hike is a non-starter as would be a generous stimulus package. Even still, earnings should rebound impressively next year for S&P 500 companies under such a power-sharing scenario, up 29%, Goldman forecasts.
Big Bets, Loonie edition
A vaccine should give a boost to commodities in the year to come. And, higher crude and copper prices should benefit the Aussie dollar and the Canadian buck, Goldman says. Here’s GS’s best FX bets for the year to come:
***
Have a nice day, everyone. I’ll see you here tomorrow… But first, there’s more news below.
Bernhard Warner
@BernhardWarner
Bernhard.Warner@Fortune.com
As always, you can write to bullsheet@fortune.com or reply to this email with suggestions and feedback.
Today's reads
Vaccine Pfrontrunner. Shares in Pfizer jumped to a 52-week high on Monday, before sliding backwards in recent sessions. That kind of volatility is to be expected, but does that mean investors should stay away, or buy on the dip? Fortune's Brett Haensel examines the pros and cons of investing in vaccine frontrunners.
Say, cheese! Eastman Kodak told investors on Tuesday that five former execs made a killing selling company shares they did not own, a revelation that's sure to add further legal scrutiny to the beleaguered camera maker. Not exactly a Kodak moment.
Some of these stories require a subscription to access. There is a discount offer for our loyal readers if you use this link to sign up. Thank you for supporting our journalism.
Market candy
$20.5 trillion
The pool of U.S. Treasurys will soon surge to $20.5 trillion, equal to 100% of U.S. GDP. That's not such a worry as long as global demand for U.S. sovereign debt remains robust. But with the dollar in free fall, national debt soaring and yields on the 10-year note well below inflation (at <1%), there are plenty of reasons to sweat the future of the fixed-income market. The Economist has an excellent take on it. "Usually a haven, the Treasury market convulsed," the newspaper writes.


fortune--2020-11-12--A leading Chinese COVID vaccine resumes trials after brief pause

Brazil reversed its decision to suspend trials of a coronavirus vaccine from Chinese developer Sinovac Biotech Ltd., allowing tests to resume less than 48 hours after being halted amid criticism the initial pause was politically motivated.
In a statement posted on its website Wednesday, health agency Anvisa said it initially got “precarious data” on a “grave” event, which led it to suspend the study late Monday. The agency added that it reversed its previous ruling after receiving new information, and that it will keep monitoring the case.
On Tuesday, Sao Paulo’s Instituto Butantan, which partnered with Sinovac to produce the vaccine locally, criticized the suspension, saying it was not warned of the move and that the reported death of a volunteer was not related to the shot.
Sinovac’s vaccine has become the focus of an escalating feud in Brazil. President Jair Bolsonaro stepped up criticism of CoronaVac last month, saying China lacks credibility to come up with solutions for the coronavirus crisis and that people wouldn’t feel safe with the shot “due to its origin.”
Chinese vaccine developers have been compelled to find countries where the coronavirus is still spreading to host their final-stage trials, since the Asian nation’s domestic outbreak has been largely contained. Geopolitical tensions have affected the development process due to growing hostility toward Beijing from some countries over a range of issues like trade and the pandemic’s origins.
After the trial was paused, Bolsonaro on his Facebook account responded to a supporter and appeared to celebrate the decision, writing, “another win for Bolsonaro.” He has not commented on the resumption of the trial.
The Butantan researchers have suggested the participant could have died in a traffic accident, while Anvisa said earlier it had no information about the potential cause of death being suicide as reported by local media.
“The decision to interrupt without having all the details seems premature,” said Juarez Cunha, head of the Brazilian Immunization Society. “Given Butantan’s credibility, I am sure if there was any suspicion of a related grave adverse event, the researchers themselves would have called attention to it and suggested the suspension.”
Sinovac said in a statement on its website earlier this week that it’s confident in the safety of its vaccine.
Halts to investigate serious adverse events are not uncommon in large-scale drug trials and two western developers — AstraZeneca Plc and Johnson & Johnson — paused their vaccine trials in recent months due to such incidents, only to re-start them after investigation.
Chinese vaccine developers have been at the forefront of the global race to create an effective immunization against the virus. The push has taken on vital importance as countries look to move beyond COVID-19 and more definitively re-open their economies.
Unlike American pharmaceutical firm Pfizer Inc., which this week revealed “extraordinary” positive preliminary data from final-stage trials of its candidate developed with BioNTech, no Chinese developer has yet publicized data on the efficacy of their shots.


fortune--2020-11-12--It’s not just Ant: Chinese stock exchange turns down another IPO

Just over a week since the Shanghai Stock Exchange’s stunning suspension of Ant Group Co.’s blockbuster listing, its rival in Shenzhen turned down another hopeful for the first time since new rules were adopted to quicken the share sale process.
Jiangsu Netin Technologies Co. Ltd., a software developer, had its initial public offering request denied on Wednesday, according to a filing from the Shenzhen Stock Exchange. It’s the first ChiNext application to be rejected since the bourse introduced new rules in June to give firms an easier path under so-called registration-based initial public offerings.
Coming days after Ant Group had its IPO abruptly halted, the move has “sounded the alarm” for other prospects looking to list their companies on ChiNext, said Manran Ma, general manager at Beijing Mamanran Asset Management Ltd. “The listing suspension of Ant Group could also be seen as a signal that the recent regulatory environment may [be] relatively tougher than the past,” he said.
Shenzhen’s ChiNext board said that it rejected Jiangsu Netin’s application because it failed to meet all requirements, citing inadequate information disclosure regarding stake transfers among shareholders and tax payments. The company can ask for a review of the rejection within five working days, it added. According to its IPO application dated June 29, the firm had planned to raise 460 million yuan ($69 million).
Shenzhen’s ChiNext board implemented new IPO rules over the summer, which lowered the financial requirements for companies to list and accelerated review periods. The new registration system has accepted a total of 433 IPO applications so far, according to the exchange’s website.
China’s ambitions to clamp down on its powerful private-sector were on full display this week after Beijing issued its broadest attempt yet to rein in firms by issuing new guidelines on anti-monopoly regulations. On Tuesday, the China Securities Regulatory Commission also pledged to improve corporate governance and enhance scrutiny of initial public offerings, according to a statement on its website.
The stock exchanges in Shanghai and Shenzhen rank among the world’s top 10 operators and have for years rivaled to claim the top spot. Together they make up the world’s second-most valuable national equity market globally after the U.S.


fortune--2020-11-13--In defense of pollsters

In defense of pollsters

Online media is ablaze with criticism—even denunciation—of the polling industry, with Trump having more success in the 2020 election than most pollsters predicted. By some accounts, it’s the second consecutive presidential election flubbed by election forecasters who used polling data, which has sowed frustration and distrust among the general public, journalists, and politicians alike.
In many respects, the limits of polling are shining through. But what is often overlooked is why. By not taking a healthy look at the limits of polling and the reasons behind them, and discussing ways to address the issue, critics risk delegitimizing an entire field that provides immense value to our country and world at large.
Survey research across the board has been plagued by declining response rates over the past two decades. This means that researchers trying to get accurate and important data on health, economic conditions, and, yes, political views too often encounter important groups of individuals unwilling to participate in the survey process, which cannot always be fixed with statistical modeling.
One explanation for polls underestimating support for Donald Trump in 2016 is that state-level polls did not include enough white voters without college degrees, who overwhelmingly supported Trump. Some survey experts suggest that state-level polls in 2020 might have suffered from similar nonresponse bias, again leading to forecasts that underestimated the likelihood of a Republican victory.
This can become a vicious cycle of inaccuracy and distrust. Nonresponse bias makes it harder for survey researchers to get accurate data, and when researchers—or pollsters—fail, the trust in the process dwindles, exacerbating levels of nonresponse.
When trust in survey research wavers, it can have detrimental impacts on society that go far beyond election forecasts.
When most people think of surveys, they think of political polls that ask respondents which candidate they will vote for. But survey research spans a wide range of topics and generates useful applications that can’t afford to lose public confidence. The General Social Survey, ongoing since 1972, has helped generate over 27,000 scholarly publications. The monthly Current Population Survey, conducted by the Bureau of Labor Statistics, has measured unemployment and earnings since 1940. Policy-makers use these statistics when they decide on stimulus packages to help people and businesses during a recession and interest rates that affect how much interest we pay on our credit cards and mortgages.
The U.S. Census could be viewed as a large-scale survey of every person in the country to determine their basic demographic information. Census data is used to apportion congressional seats and allocate government spending on schools, hospitals, roads, and other public works and programs.
Unfortunately, these surveys are also facing declining response rates. Survey data quality suffers when people are systematically undercounted.
The Pew Research Center found that typical telephone survey response rates fell to 7% and 6% in 2017 and 2018, respectively. Low response rates are not necessarily a problem if nonresponse is uncorrelated to the data that surveys are trying to measure. But in many cases, such as in the 2016 election polls, nonresponse matters. Weighting surveys to be representative of the target population could improve accuracy, but picking which weights depends on assumptions that don’t always hold.
If it’s not properly addressed, systemic nonresponse could have harmful policy implications. For instance, consider how undercounting in the 2020 U.S. Census can disproportionately impact marginalized communities. Underfunding of the Census Bureau, the controversy around a proposed question about citizenship, and the early end to the Census—combined with the difficulty of conducting a census during a pandemic—will likely result in undercounting of Black, Latinx, and Asian people. This would mean less political representation and fewer government resources going to communities of color.
Collapsing trust in survey research and researchers certainly does not improve response rates. The polling industry, election forecasters, and the media should reflect on their contribution in driving the distrust. Research has shown that election forecasts that show the probability of a candidate winning increase certainty about an election’s outcome, confuse many voters, and decrease turnout. When these forecasts turn out to be inaccurate, many turn against survey researchers, as we’ve recently seen.
Given the harms that election forecasts can cause, the media should stop emphasizing these forecasts in their election coverage and giving outsize influence to the data scientists making these predictions. Meanwhile, those measuring outcomes that help guide policy-making should communicate how their work benefits the general public. At the same time, pollsters should recognize the limitations of their method and recognize the usefulness of other research methods.
In the 1948 U.S. presidential election, the Chicago Daily Tribune printed the incorrect headline “Dewey Defeats Truman” thanks to a nonrepresentative poll. Indeed, the failure of election forecasts in 2020 may seem like another “Dewey Defeats Truman” moment.
But polling did not die off after that spectacular failure in 1948. Instead, researchers improved polling methods by introducing random sampling. Likewise, in 2020, survey research shouldn’t be “canceled” given its importance in guiding evidence-based decision-making. Instead, researchers should work to rebuild trust in the public and improve response rates.
Baobao Zhang is a political scientist at Cornell University.


fortune--2020-11-13--Ford adds a van to its lineup of electric vehicles

Ford, playing catch-up to Tesla in electric cars, is rolling out a battery-powered cargo van to lay claim to a new segment of the commercial fleet market that its gas-powered vehicles dominate.
CEO Jim Farley on Thursday unveiled an electric version of its Transit model, the ubiquitous airport shuttle, delivery and service van that is the top seller of its kind in the U.S. and Europe. It will face off against Daimler’s Mercedes-Benz EQV battery-powered van sold in Europe and electric vans made by startups such Amazon.com-backed Rivian Automotive, in which Ford also is an investor.
Ford is aiming for commercial-vehicle leadership in EVs with the combination of the E-Transit coming late next year and a battery-powered F-150 pickup debuting in 2022. Farley, the former Toyota Motor executive who became CEO last month, sees a vast profit opportunity in boosting sales of mundane models that haul people, packages and payloads. The company said it expects industrywide electric-van sales to reach 1.1 million units globally by the end of the decade.
“We think there will be a boom in electric over many locations because we see so much inbound demand and interest in buying,” Ted Cannis, general manager of Ford’s North American commercial business, said in an interview. “Growth is definitely in the plan.”
With regulators worldwide mandating zero-emission vehicles — especially in polluted urban centers — Ford sees big potential for electrified versions of its trucks and vans. Ford also views the election of Joe Biden — who has pledged to expand a nationwide network of charging stations — as another possible boost for plug-in vehicles.
“We are looking forward to working with President-elect Biden and his transition team,” Kumar Galhotra, Ford’s president of the Americas and international markets, said in an interview with Bloomberg Televison. “I expect there will be more emphasis on electrification.”
Driverless delivery also is viewed as a logical first use of EV technology. Ford last year formed an alliance with Volkswagen to develop commercial, electric and self-driving vehicles, though the E-Transit isn’t part of that deal.
With a driving range of about 126 miles and a price starting around $45,000 — roughly $10,000 more than a gasoline version — Ford is pitching fleet buyers on a lower “total cost of ownership” because fuel and maintenance costs are about 40% less than traditional vans, Cannis said. The E-Transit will come in eight variations, including three heights and three lengths, and the automaker will work with modification companies to customize vehicles for each buyer.
Ford also is offering an array of services to monitor and maintain the van, using data coming from built-in modems, which help maximize hours in service, Cannis said. It represents “a big new revenue stream that we didn’t have before.”
More expensive
This will help offset the cost of the electric drivetrain, which is more expensive than traditional internal-combustion engines because of the battery and electric motors, Galhotra said.
“That cost of the battery electric is higher,” he said. “But we believe by offering a more holistic solution to our customers with these vehicles we can make a very substantial business case, especially in commercial.”
Farley is trying to shift Ford’s focus from the single transaction of selling a car to providing continuous transportation services.
“Our growth as a company will come from not the four walls of the product,” Farley said in an September interview. “It will come from services.”


fortune--2020-11-12--Backlash against Jones Day, the law firm aiding Trump’s election challenge, begins to escalate

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In the days after Joe Biden won the election, many in legal circles were appalled to see a high-profile law firm assisting President Trump’s far-fetched attempts to challenge the results: Jones Day, a venerable 127-year-old firm that boasts the likes of Walmart and General Motors among its clients.
As criticism mounted in the press and social media, Jones Day shot back with a fiery blog post defending its actions. But that appears to have done little to quell the anger and mockery directed at the firm from inside and outside the legal community. On Thursday, constitutional lawyer and Democratic Party supporter John Bonifaz shared details of a planned Friday protest outside Jones Day’s offices in Manhattan.
The source of critics’ frustration is that President Trump’s legal challenges are not expected to produce any meaningful legal victories, but instead appear to be part of a strategy on the part of the President to undermine public confidence in the electoral process—according to several of Jones Day’s own lawyers who spoke anonymously to the New York Times. Meanwhile, judges across the country have been tossing out cases on the grounds that the Trump campaign’s claims of fraud or voter intimidation are hearsay or simply baseless.
Jones Day, which has made more than $20 million in fees from Trump-affiliated groups since 2015, has responded to criticism over its role in the election litigation by saying it is not representing the President or his campaign. Instead, the firm says, its client is the Pennsylvania Republican Party—which may be a distinction without a difference if the allegations about the collective lawsuits being part of a coordinated strategy to sow doubt about the electoral process are true.
Jones Day’s claim not to represent the President came in a blog post on its website, which briefly crashed after a flood of visits on Tuesday. And in a seeming echo of President Trump’s favored tactic of decrying “fake news,” the post concluded by saying, “Jones Day expects that the media will correct the numerous false reports.”
Jones Day’s statement also pushed back against the notion that the litigation it has filed is frivolous—noting that four Justices of the Supreme Court have expressed support for the Pennsylvania GOP’s position that the state’s decision to count ballots received after Election Day is unconstitutional.
Indeed, the firm’s defenders may cite the legal weight given to the case (which is still being decided) by a faction of the Supreme Court, along with the core principle that litigants have the right to a lawyer, in arguing that Jones Day is behaving in a perfectly professional and ethical fashion. But not everyone is buying it.
Randall Eliason, a law professor at George Washington University who specializes in white-collar criminal law, says the constitutional principle of everyone having a right to a lawyer isn’t at play in this case.
“The distinction here is this is not a criminal defendant who is being prosecuted by the government,” he said. “[The Trump campaign] is playing offense by affirmatively bringing these cases, and the firm is not obligated to represent them.” Eliason, who explored the issue in a Washington Post column, added that Jones Day is not a small civil rights firm but a corporate behemoth that should not expect to be exempt from public criticism over the clients it represents.
Other lawyers share this view. A New York City attorney, who has spent more than 15 years at two white-shoe firms, acknowledged the Pennsylvania case involved a genuine legal dispute but questioned why Jones Day had chosen to press the claims.
“No self-respecting, dignified lawyers should be representing them,” said the lawyer, who spoke on condition of anonymity because he feared antagonizing Jones Day. He then suggested that it would be more appropriate for a prominent personal injury law firm: “Let Jacoby & Meyers do it,” he said.
Andrew Finkelstein, the firm’s managing partner, refuted the lawyer’s suggestion, saying “I adamantly reject the notion that my firm would ever consider representing President Trump, his campaign, or the Pennsylvania Republican Party in their transparent efforts to undermine the integrity of our country’s electoral process.”
There appears to be little urgency for Jones Day’s client to pursue the Pennsylvania case given that the number of ballots subject to the deadline dispute—about 10,000—would not affect the election outcome. President-elect Biden’s margin of victory in the state currently stands at over 50,000 votes. Congressman Ted Lieu (D-Calif.) made this point on Twitter on Wednesday, noting other law firms have walked away from apparently fruitless legal challenges.
Pleased some lawyers for @realDonaldTrump are dropping him.
When is @JonesDay going to stop their frivolous lawsuit? It affects a small fraction of PA ballots & has zero effect on the outcome. What’s galling is their obnoxious statement trying to defend the frivolous filing. https://t.co/UUcegvEyPs — Ted Lieu (@tedlieu) November 12, 2020
The futility of the legal challenges has also become more apparent as the week has gone on, with GOP party heavyweight Karl Rove stating plainly in a Wall Street Journal editorial that the election results will stand.
Meanwhile, the anti-Trump group The Lincoln Project has pledged to spend $500,000 in an effort to shame the law firm and pressure its corporate clients like Walmart and Amazon to cut their ties.
The Lincoln Project has also encouraged people to write to their Jones Day contacts on LinkedIn and share their missives on social media, which some people have done.
The controversy over Jones Day and a second big law firm, Porter Wright, helping Trump challenge the election results has also produced a flurry of coverage in the legal press, with one veteran reporter saying he has never seen a firm receive this level of scrutiny in the past.
Nonetheless, it’s unclear if the flap over the firms’ role in undercutting faith in the electoral process will produce lasting reputational harm—or if, like so many contretemps on social media, it will quickly be forgotten.
According to the veteran New York City lawyer, it’s unlikely Jones Day lawyers will quit over the controversy—especially as it would mean giving up a big salary in a shaky economy—but that working at the firm might lead to them being shunned in Manhattan’s clubby and overwhelmingly Democratic legal community. He added that Jones Day’s actions may hurt the firm’s ability to hire prominent attorneys and top law students.
Eliason, the law professor, also predicted that some students from elite law schools might refuse offers from the firm, recalling how students in the past balked at working for firms that represented Big Tobacco.
A spokesperson for Jones Day declined to comment on whether the controversy would impair the firm’s ability to recruit. Porter Wright, after initially defending its works on what it described as “controversial cases” filed a court brief late Thursday saying the Trump campaign “would be best served if Porter Wright withdraws.”
This story has been updated to reflect the withdrawal of Porter Wright, and to include comment Mr. Finkelstein of Jacoby & Meyers.


fortune--2020-11-12--The scientific link between Pfizer’s and Moderna’s COVID vaccines

Good afternoon, readers.
Has it really only been a week? The four-day wait for the presidential election results (and the aftermath) certainly made it seem much longer.
And as if the tumultuous political news weren’t enough to keep us occupied, we were treated to news of major advances for Pfizer and BioNTech’s COVID vaccine, which the companies announced is 90% effective against coronavirus.
There’s still some data parsing to do on that claim, including whether or not different subgroups across demographics respond to the vaccine candidate differently than others. But with Wednesday’s news that another company, the biotech Moderna, is also close to releasing its own positive COVID vaccine data, it’s worth exploring the technologies which unite these two therapies: messenger RNA (mRNA).
The science behind these vaccine is just, well, cool. There has never been an mRNA-based therapeutic approved by the Food and Drug Administration (FDA), and as little as a year ago, many in the biotech sphere were skeptical it would ever work.
“RNA vaccines work by introducing an mRNA sequence (the molecule which tells cells what to build) which is coded for a disease specific antigen, once produced within the body, the antigen is recognized by the immune system, preparing it to fight the real thing,” according to the University of Cambridge.
In plainer English: mRNA has the ability to turn your own cells into a therapy-building machine. (For more on the science behind the leading COVID vaccine candidates, you can check out my explainer from last week.)
This comes with its own set of problems. For instance, these vaccines made of precious biological material require refrigeration at ultra-cool temperatures, which could present a major logistical nightmare for Pfizer and Moderna when it comes to distribution.
And then there’s the fact that both of these vaccines require two doses spaced several weeks apart, which could make present its own logistical challenges.
Still, the progress for this new type of science is more than welcome after months of false starts for various COVID therapies.
None other than Dr. Anthony Fauci himself expects the Moderna data to come in strong in the coming weeks, saying he would “be surprised if we didn’t see a similar degree of efficacy” to Pfizer’s candidate during an event with the Financial Times on Monday.
Read on for the day’s news, and see you next week.
Sy Mukherjee
sayak.mukherjee@fortune.com
@the_sy_guy
DIGITAL HEALTH
Amazon Alexa's latest feature: monitoring the elderly. In its latest update, Amazon's Alexa comes with a new feature called CareHub which makes it easier for families to check in on their aging relatives, who are choosing in increasing numbers to live independently. Two Alexa accounts can now be linked between the elderly and their caregivers (with permission) and caregivers can check in on Alexa activity feeds on a very basic level to see if, say, the aging party's lights are on or off. (CNBC)
Medtronic launches smart insulin pen. Medical device giant Medtronic has launched a new smart insulin pen for diabetes patients. This specific pen is tailored towards individuals who have to take multiple insulin shots per day and comes loaded with a calculator that makes it easier for the patients to make decisions about how much insulin should go into a given dose.
INDICATIONS
FDA advisory committee slams Biogen's Alzheimer's drug. Drug giant Biogen's controversial experimental Alzheimer's drug aducanumab isn't exactly feeling the love from a group of experts who advise the FDA on drug approvals. Ten of the 11 members of the advisory committee voted against considering it reasonable to consider a single trial's positive results as proof of efficacy given that a different trial showed lower efficacy. The FDA doesn't always have to listen to such panels' advice but usually does. Aducanumab would be the first-ever drug approved to treat the actual underlying Alzheimer's disease rather than just its symptoms. (TIME)
THE BIG PICTURE
Obamacare may escape unscathed again. The Affordable Care Act, for a third time, is heading to the Supreme Court. A lawsuit supported by both the GOP and the Trump administration alleges that the entire law should be tossed following the effective nixing of the individual mandate. But conservative Justices John Roberts and Brett Kavanaugh don't seem to buy that logic, asserting that the rest of the statute is perfectly severable from the individual mandate during oral arguments for the case this week. "This is a very straight forward case for severability under our precedents, meaning that we would excise the mandate and leave the rest of the act in place," Kavanaugh said, echoing Roberts. (CBS News)
Biden appoints all-star COVID task force. President-elect Joe Biden has named an all-star team to lead a task force on coronavirus. It includes a prominent slew of physicians, medical academic experts, epidemiologists, and former government officials including: former FDA commissioner David Kessler; former Surgeon General Vivek Murthy; professor of surgery Atul Gawande; NYU School of Medicine's Celine Gounder; and a host of others. One member of the task force has already said that a four to six week lockdown would effectively control the pandemic.
REQUIRED READING
The pandemic may be the greatest environment for business fraud in decades, by Geoff Colvin
Goldman Sachs raises its S&P 500 target on vaccine hopes, by Anne Sraders
If we don't vaccinate the world quickly, all our COVID efforts will be a waste, by Andrey Zarur


fortune--2020-11-12--There’s little reason to expect Georgia’s election recount to change anything

With tight margins between President Donald Trump and President-elect Joe Biden, the state of Georgia on Wednesday officially announced a hand recount of all the votes cast in the presidential election. If history is anything to go by, the result will likely stay the same: a Democrat winning Georgia for the first time in 28 years.
About 14,000 votes currently separate Biden and Trump, just 0.3% of the roughly 5 million ballots counted. The difference was slim enough for Georgia secretary of state Brad Raffensperger, a Republican, to order a “risk-limiting audit” to verify the results of a close race. “This will help build confidence,” Raffensperger said. “It will be an audit, a recount, and a recanvass all at once.”
In the context of millions of votes, 14,000 may not sound like much, but in practically every state election in modern U.S. history, such an amount has proved insurmountable. In Wisconsin, in the 2016 presidential election, Trump beat Hillary Clinton by roughly 20,000 votes. A recount ended up netting Trump just 131 additional votes. In 2011, a 7,300-vote difference in the Wisconsin state Supreme Court election swung just 312 votes following a recount.
For the 2020 election, Trump’s campaign said it would request a recount in Wisconsin once again with a margin in favor of Biden of about 20,000 votes. Former Wisconsin Gov. Scott Walker, a Republican, said that while Trump has every legal right to push forward with recounts, 20,000 votes would be a “high hurdle” to overcome.
Rick Hasen, a professor of law and political science at the University of California at Irvine, echoed that sentiment, tweeting, “So far none of the legal suits have even potential to change election outcome, given what we know about the outstanding vote and how [the] election was run.
“Nor has there ever been statewide recount to pick up something like the 20K votes in [Wisconsin],” he added. “[Georgia] could be different but not decisive.”
Since 2000, there have been at least 31 statewide recounts, according to the Associated Press. Only three changed the outcome of the election, and the initial margins in those races were all under 300 votes.
The most famous recent example of a recount came after the 2000 presidential election when George W. Bush led Al Gore in Florida by fewer than 2,000 votes. A machine recount narrowed Bush’s margin of victory to 327 votes. Gore then requested a hand recount in Florida’s heavily Democratic counties, but Bush sued to stop the recount, with the Supreme Court ultimately ruling to end the recount and declare Bush the winner.
There’s one more issue when it comes to the possibility of altering the results of the 2020 election: Biden doesn’t need to win Georgia. After winning Pennsylvania, he secured enough electoral votes to take him over the 270 mark.
And as of Wednesday, Pennsylvania doesn’t look like it will fall under the threshold of 50,000 votes required to trigger an automatic recount. In fact, the lead in the state looks likely to only grow further, leaving little chance for Trump’s legal team to bring any legitimate challenge to court.


fortune--2020-11-12--TikTok sale deadline pushed back

TikTok sale deadline pushed back

The Trump administration pulled back from its threat to ban the viral video-sharing app TikTok in the U.S., as the dispute winds its way through the court system and a proposed sale hangs in limbo.
For months, the app’s Chinese owner, ByteDance, has faced the prospect of a U.S. ban starting Thursday. But judges have blocked those prohibitions from going into effect. The Commerce Department said on Thursday that it would comply with those court rulings for the time being, even as the government appeals.
The TikTok prohibition “HAS BEEN ENJOINED, and WILL NOT GO INTO EFFECT, pending further legal developments,” the Commerce Department said in a document published in the federal register.
Separately, ByteDance has challenged an order from the Treasury Department to sell TikTok or face unspecified penalties. The U.S. Court of Appeals in Washington on Thursday gave ByteDance and the Trump administration Dec. 14 and Dec. 28 deadlines to file documents in the case.
When it filed the petition Tuesday, TikTok said the government had not responded to its latest efforts to strike a compromise and prevent an enforced sale. It’s not clear if anything has developed since to extend the deadline, but the court order didn’t allude to any new arrangement.
ByteDance had sought U.S. approval for a deal to sell a stake in the app to Oracle Corp. and Walmart Inc. before the Nov. 12 deadline. But the agreement appears to be in limbo. Before filing its petition in Washington this week, ByteDance requested a 30-day extension from the Committee on Foreign Investment in the U.S., or Cfius, that is overseen by the Treasury Department, to keep working toward a solution. That request went unanswered, according to court papers.
Lawyers for TikTok and officials at the Treasury Department didn’t respond to requests for comment.
Trump has made the fight over TikTok a central front in his broader efforts to crack down on the influence of China’s technology industry in the U.S. Trump first ordered a TikTok sale in August, and threatened to ban the app if ByteDance couldn’t reach an agreement with an American company.
He hasn’t said anything about TikTok since the election, having focused on trying to discredit the results that show he lost. But on Thursday Trump issued an executive order prohibiting U.S. investments in Chinese firms determined to be owned or controlled by the country’s military.
In September, a judge in Washington blocked a portion of the ban that would have prevented new downloads of the app. And on Oct. 30, a Pennsylvania judge issued a temporary injunction on rules that would have prevented third-party companies from providing online infrastructure that allows TikTok to function smoothly. The U.S. appealed the Washington ruling in October, and said on Thursday it would appeal the Pennsylvania ruling.
The status of the Cfius process for a sale is less clear. If the government reaches an accord with the company, it could exercise discretion around enforcement timing, said Aimen Mir, a partner at Freshfields Bruckhaus Deringer and a former deputy assistant secretary for investment security at Treasury, where he ran reviews for Cfius.
“Usually when there is extended silence from Cfius, it suggests there’s no clear consensus within government on what the next step would be, but this has been an atypical case for awhile,” Mir said.
If an extension hasn’t already been granted, Mir said the Justice Department would have to go to court and seek enforcement of the divestiture order. Trump’s executive order from August doesn’t stipulate a clear punishment for failure to divest, but says that “the Attorney General is authorized to take any steps necessary to enforce this order.” The Justice Department declined to comment.
TikTok is one of the most popular apps in the world — with more than 100 million U.S. users — and ByteDance’s most important service outside of China. The company and its investors are desperate to finish a deal to avoid a ban in what has been a valuable market for other social media apps, like Facebook Inc.’s Instagram and Snap Inc.’s Snapchat.
Trump threatened to ban TikTok and order its sale to a U.S. company as a result of national security concerns. The U.S. is worried that the Chinese government could use the app to gain access to the personal data of American citizens.
Cfius, the Treasury Department panel that reviews foreign acquisitions of American businesses, said in a July 30 letter included in ByteDance’s court filing in Washington this week that its security concerns were based on both classified and unclassified information. The letter cited the move by a Chinese affiliate of ByteDance in 2017 to establish a Communist Party Committee in its governance structure, and pointed out that ByteDance also collaborates with public security bureaus across China.


fortune--2020-11-12--FTC Chair issues antitrust warning as Facebook awaits decision

The chairman of the U.S. Federal Trade Commission said antitrust enforcers need to be worried about dominant companies buying startups that are emerging competitive threats — highlighting one of the main issues in the agency’s investigation of Facebook.
Joe Simons said in a speech Thursday that takeovers of nascent competitors can be harmful to consumers and said that enforcers need to be ready to step in to stop such deals.
“A monopolist can squash a nascent competitor by buying it, not just by targeting it with anti-competitive actions,” Simons said at an American Bar Association conference. “It may be easier and more effective to buy the nascent threat, only if to keep it out of the hands of others.”
Simons’s remarks come as the FTC is nearing the end of an antitrust investigation of Facebook that began last year. The agency is preparing a lawsuit against the social media giant and could file the case in a matter of weeks, Bloomberg News has reported. A coalition of state attorneys general is also investigating the company.
Ohio Attorney General David Yost, a Republican who is part of that group and another one investigating Alphabet Inc.’s Google, said Thursday during a separate event hosted by the Ohio State Bar Association, that both companies have a track record of co-opting internet challengers.
“When a new app or internet service begins to generate buzz and subscribers — say Instagram or Whatsapp — it gets bought up by Facebook and Google,” Yost said. That acquisition strategy “prevents any competitor from growing big enough to challenge Facebook and Google’s market dominance.”
Both the federal and state officials have been probing whether past acquisitions by Facebook violated antitrust laws. Although the FTC investigated and approved two of Facebook’s biggest deals — the acquisitions of Instagram and WhatsApp — it has the authority to revisit past transactions and go to court to unwind them if it determines they were anticompetitive.
Facebook says both Instagram and WhatsApp faced other competitors at the time of the acquisitions and that it was Facebook’s subsequent investments that have made them successful.
When Facebook Chief Executive Mark Zuckerberg testified in Congress in July, House Judiciary Chairman Jerrold Nadler of New York accused Facebook of buying Instagram because it saw the company as a threat and bought it instead of competing.
“We must be willing and able to recognize that harm to competition might not be as obvious from a look at the marketplace as it stands currently,” said Simons. If officials only consider a “static picture” of a market, “then we risk forfeiting the benefits of competition that could arise in the future.”


fortune--2020-11-12--Why the counties Joe Biden won represent 70% of U.S. GDP

Republicans and Democrats make vastly different contributions to the U.S. economy, according to a new Brookings Institution study.
In the 2020 election, Brookings found that the 2,497 counties across the country that voted for President Donald Trump generate 29% of the U.S. GDP. Meanwhile, the 477 counties won by President-elect Joe Biden contribute 70% of the American economy.
According to the study’s lead author, Mark Muro, a reorientation of the economy, in addition to a relocation of a portion of the American population over the past 20 years, accounts for the growing division between the two parties’ economic interests.
“Clearly, the ascendance of an education-driven, urban-oriented, professional services economy over the last 20 years is a huge driver,” Muro said. “So, if nothing else were happening, we would see the rising importance in terms of GDP of these big urban counties…But also people weren’t staying in the same place. The last 20 years have also seen a steady out-migration from an anemic, small town, rural economy.”
At the same time as densely populated urban areas such as New York City or Silicon Valley have become home to the nation’s biggest drivers of economic growth—the financial services, tech, and professional services industries—major trends in the global commodities markets, the growing recognition of the impact of global warming, and automation have taken a hit on the large swaths of rural America that rely on agriculture, fossil fuel production, and manufacturing, respectively, as the bases of their economy, according to Muro.
Add in the “brain drain” that has seen many educated people flock to the cities away from outlying counties, and you have a pretty clear picture as to why urban areas have prospered at the expense of rural communities over the past two decades.
And, of course, any electoral map will tell you that the nation’s geographic division has mirrored its political division: Whereas a diverse set of college-educated people tend to both reside in metropolitan counties and vote blue, less-educated, white workforces that back Republican policies largely represent the country’s small town, rural communities.
Muro did acknowledge that some Republicans may work in metropolitan counties themselves—and thus contribute to their GDP—but live full-time in outlying counties, which could make the GDP statistic appear more lopsided than it is in reality. Still, Muro remains extremely concerned with the increasing divide between the economic interests of Republicans and Democrats. For context, in the 2000 presidential election, the winner carried counties that represented just 54% of the U.S. GDP.
“So we now have this extreme political gridlock that aligns with this very deep economic divide,” Muro said. “That’s what’s so worrisome. It used to be that the manufacturing economy, for instance, was both urban and rural. It’s now mostly rural, and you’re hard-pressed to find a manufacturing city. By the same token, it’s pretty hard to find early-stage software development in rural America. The alignments here have made the problem more difficult.”
Muro believes the key to realigning interests between urban and rural America is to “make sure that more heartland states are anchored by dynamic, middle-size metros.” Investing in technological infrastructure, job training, and education in heartland America will be essential to both reinvigorating rural economies and preventing future brain drain, Muro said.
As it currently stands, the counties Trump carried in the 2020 election are not just worse off with regards to GDP contribution, they also suffer from lower employment growth and lower average household income levels than their urban counterparts. If we can’t develop a solution that closes the gap between the interests of urban and rural, Democrat and Republican, then Muro worries the country will face an existential crisis.
“On the one hand, we can see a fading of U.S. preeminence because this is no way to manage and advance a globally competitive national economy,” Muro said. “So that’s the most encouraging thing anyone could say. The worst you could say is that you do actually have backlash, some kind of actual violent rejection or divide—some kind of secession.”


fortune--2020-11-12--If we don’t vaccinate the world quickly, all our COVID efforts will be a waste

The promising results announced by Pfizer and BioNTech in their coronavirus vaccine candidate mark a significant step toward overcoming COVID-19. Even a modest deployment in the next few months could protect millions of people and save tens of thousands.
To beat back this pandemic, however, we need herd immunity. And there’s only one sure way to get that: We must inoculate at least 75% of the world’s 7.7 billion people with an effective vaccine.
Achieving this requires a sharp shift from our current ad hoc approach to production, delivery, and policies on who will get the vaccine. With the current plans, there is no way that three-quarters of the world will ever be vaccinated—which means none of us will truly be safe.
Reaching herd immunity via infection has been rejected by scientists and many world leaders because it raises the risk of creating a vicious cycle of seasonal mutation as the virus bounces between the world’s northern and southern hemispheres, similar to influenza’s annual evolution.
But that doesn’t mean that the discovery of a potent vaccine is the whole answer, either.
According to a new global partnership of health organizations called COVAX, authorities should prioritize giving a COVID vaccine to those most vulnerable to the virus—health care workers, the elderly, and those with underlying health conditions. This will reduce deaths and alleviate stress on health care systems.
Yet, if we vaccinate only the most vulnerable, the virus will continue to sweep through large swaths of often asymptomatic young people in some of the world’s most populous nations.
Evidence for the importance of a successful vaccination program came in September, when a study was published in Science about rates of infection in young people in India. They are getting COVID at a much higher rate than are young people in the U.S. That translates into widespread infection, because India’s median age is 28, with only 6% of the population defined as elderly. In the U.S., however, the median age is 38, and 17% of the population is 65 or older.
Infections without symptoms have consequences. With wide asymptomatic spread, there will be more mutations and more risk that the virus will become permanent. Coronaviruses mutate far more slowly than influenza viruses do, but the opportunity increases with each new person infected.
By failing to swiftly vaccinate the world’s billions of young people, and allowing them to become infected, we could inadvertently nurture a new pandemic. A mutated virus could become an entirely new disease that sidesteps the vaccines now under development and whatever progress we have made toward herd immunity.
Global vaccination must be done in a brief time frame to make sure the virus doesn’t significantly mutate and thus evade our grasp. We will all get lifetime immunity not by having a perfect vaccine, but by vaccinating so many of us that the virus has no hosts and fades away.
As impressive as vaccine development and production efforts have been to date, they will fall well short of achieving herd immunity through inoculation because of a shortcoming on the most basic level: production.
To understand the scale of the challenge, consider that production of the annual influenza vaccine tops out at 1.5 billion doses each year. From their public statements, it looks like the main companies in Phase III clinical trials—Moderna, AstraZeneca, Johnson & Johnson, and Pfizer/BioNTech—could together make only enough to inoculate 2 billion people by the end of 2021, less than a third of what is needed.
Even these projections are highly optimistic. In the unlikely event that all the vaccines currently in clinical trials are approved, supply chain constraints will hamper output. Manufacturers will be competing for the limited supply of critical components, including biological raw materials like nucleotides and enzymes as well as more mundane supplies such as vials and caps.
Once produced, delivery presents its own set of challenges. Pfizer/BioNTech’s vaccine, assuming that it passes the final regulatory hurdles, requires extreme-cold storage at minus 80 degrees Celsius. An extreme-cold chain may be feasible for the U.S. and other countries that can afford to pay thousands of dollars per dose, but this is not a viable solution for China, Mexico, Brazil, Nigeria, India, or Indonesia. Of the leading vaccine contenders, only the one from Johnson & Johnson doesn’t require special treatment during transportation.
To overcome this cold chain challenge, we need vaccines that can be manufactured locally, delivered with minimal refrigeration, and administered with basic health care infrastructure. And to do that, we have to think more broadly about vaccine production and investment.
The large initial investments were made in the U.S. and the U.K. Now we must invest in companies around the world that can use technology that can easily manufacture a virus—and cheaply. We have the capability to do that with messenger RNA, which translates DNA into proteins that mimic the proteins found on the coronavirus and help the body build immunity.
Once we can assure local production, we can figure out creative delivery solutions. We could put small refrigerators in Coca-Cola and other delivery trucks. As they resupply corner stores in remote villages, they could deliver vaccines. Teachers and religious leaders could be trained to administer it.
Getting down that last dusty mile to achieve vaccine-led herd immunity requires rethinking our approach and harnessing the combined intelligence, skills, and creativity of private companies, health authorities, and nongovernmental organizations around the world. Unless we do that, quickly, all this pain and effort will be wasted.
Andrey Zarur is CEO of GreenLight Biosciences, a Boston-based RNA research, development, and manufacturing company.