Hi, I’m Azeem Azhar. I convene Exponential View to help you understand how our societies and political economy are changing under the force of rapidly accelerating technologies.

🎙This week on the podcast

This week I take a look at Putin’s war in Ukraine through the prism of cybersecurity. I discuss how cyberwar is evolving with the former head of GCHQ, UK’s equivalent of the NSA, Robert Hannigan. Listen to our discussion here.

Today’s edition has been supported by our knowledge partner, McKinsey & Company.

Want to keep your employees? Redesign the office. As many contemplate a return to physical offices, get perspective on people-centered design and what comes next in a new interview with Diane Hoskins, co-CEO of Gensler, a global design and architecture firm.

The near future

🚥 Tails of the city
In 2020, as people were fleeing cities for the countryside to avoid Covid, I argued it was too early to call time on the city. Advanced economies need the specialisation, interaction and serendipity that only cities can provide. Mark Muro of the Brookings Institution presents new research which shows that “employment growth slowed in some of the biggest tech “superstars” and increased in other midsized and smaller markets, including smaller quality-of-life meccas and college towns.” I can personally attribute this – last year, I made my first investment in a startup in Ohio.

A large part of this has been driven by the remote work experiment, which has shown that

cloud-based tools for workers, firms, and entrepreneurs can open up hopeful prospects for tech activity anywhere. In that vein, urban theorist Richard Florida and economist Adam Ozimek are right in saying that local communities, especially smaller or more remote ones, have an opportunity to “develop their economies based on remote workers so as to try to compete”.

My own take is that universities are the oases around which these communities can grow. This needs to be matched with measures that can deliver an improved quality of life over long periods of time. A startup might take ten years to get going – in that time, a founder might move from single to partnered to mother- or father-hood as the company grows. The right kind of capital (venture, that is) needs to be easily accessible. And capital, at least in the US, remains concentrated in the Bay Area, New York and Boston (for now). Remote working will be hard to shift back, as two-thirds of remote workers are reluctant to return to office life. The tide has turned as we settle into this norm, while more possibilities for quality of life are shifting in tandem.

🇺🇦 The run up to war
One way that Ukraine is staying ahead of senseless battle is by creating resilience to Russian cyber attacks. Specifically, the mission has been to locate and minimise hidden malware, the idea being to bypass the double whammy of a ground and network attack. US Cyber Command and private sector employees worked hell for leather to secure key aspects of Ukraine’s digital infrastructure. One win was by innoculating Ukrainian Railways against a particular wiper worm. It has real benefits: “In just the first 10 days of the Russian invasion, nearly 1mn Ukrainian civilians escaped to safety on the rail network.” (The New York Times has some scant additional details on current “persistent engagement” by Cybercommand against the adversary’s targets.)

Alongside cyber-militaries and company employees, the open-source intelligence community is playing a crucial role. The posterboy of this - Eliot Higgins of BellingCat - explains how open-source intelligence works in this on-point interview.

The battle is being fought in grim style, from widespread bombings of civilians to tank battles and ambushes. The Exponential Age brings with it additional dimensions. For example, cyberspace domains are spaces which can be effective on the edges of battle. By smashing telecom’s infrastructure, invading troops destroyed their own secure communications infrastructure. This is forcing them to use unencrypted civilian channels. And, of course, keeping Ukraine’s rail system has possibly saved millions of lives as civilians are able to flee the violence of occupation. It is the presence of contractors and private firms (like Microsoft or Cloudflare), as well as open source groups like Bellingcat, that demonstrate the rich and complex ecosystem of players at work. To go even deeper, listen to my discussion with Robert Hannigan.

Elsewhere: Two further pieces of analysis reflect on the extent of China’s role. Bruegel Group asks whether China can bail Putin out. The answer is unlikely, as “China’s financial infrastructure is not developed enough: CIPs still depend on SWIFT and are not yet liquid enough. The Chinese digital currency does not yet offer cross-border transactions of any relevance.” The Financial Times looks at the rising costs of China’s friendship with Russia: the calculus is really complicated.

🧭 American crypto
Joe Biden finally issued an executive order on crypto assets. It’s pretty reasonable, expectedly short of details, but my reading is that it’s broadly supportive of institutional and regulatory frameworks for continued innovation in digital assets.

Bigger news is that Stripe, the payment process provider, has announced its support for crypto. This is a massive boost for the crypto ecosystem. Stripe will support fiat to crypto onramps in 180 countries and dozens of local payment methods, as well as allowing fiat payouts in more than 40 currencies. It will also support crypto wallets and NFTs.

A long (two-coffee) read on how Facebook’s Libra went askew. The answer is simple: “the very fact Facebook had conceived the idea, doomed it.”

Sunday commentary: networks vs hierarchies

I will look at the Russian invasion of Ukraine through the lens of hierarchies and networks in this week’s commentary. The essay will be published to members of Exponential View on Monday. To receive the full essay, become a member in the next 24 hours.

My previous commentary on the invasion:

• The Exponential Age’s Maidan Moment [Feb 27, 2022]
• When the Pieces Land [Mar 4, 2022]
• Charts of the Week #66: Ramifications of the Russian War [Mar 9, 2022]

Dept of our climate future

In every Sunday edition, we track key metrics that tell us a little about our shared climate future. We’re experimenting with different formats, so they may vary from one week to the next.

We have invited EV member Marshall Kirkpatrick to curate stories about our climate future in this section every week: “Octavia Butler famously wrote, ‘All successful life is adaptable, opportunistic, tenacious, interconnected, and fecund.’ (via amb) It’s best to read this week’s highlighted climate news with that in mind.”

• Heat Pumps for Peace: Oil and gas companies aren’t the only ones looking at the Russian invasion of Ukraine as an opportunity to advance their international agenda; more aligned with humanity’s long term interests are the efforts to leverage the crisis as a catalyst for economic decarbonisation. “Heat Pumps for Peace” is a slogan introduced to popular discourse by Bill McKibben. It’s now the subject of a nation-wide multi-organization lobbying effort, a strategy advocated for by the LA Times, and according to a short update deep inside a long Washington Post article, something the Biden administration is actively considering. Advocates call for Biden to invoke the Defense Production Act, as has been done in response to COVID and the rise of large-scale wildfires, to fund the rapid production of heat pumps and other sustainable energy technologies for use in freeing Europeans and others from dependence on Russian fossil fuels.
• Synthetic biology solutions: Researchers at Northwestern University and the carbon capture firm LanzaTech have reportedly used synthetic biology to turn the CO2 output of processes like steel milling into the chemicals acetone and isopropanol, which are common industrial solvents. They’re used to make plastics which traditionally require fossil fuels, resulting in significant emissions. By reprogramming the genetics of a carbon-fixing bacterium, this process reduces both some of the emissions of the high emission industrial process and of the production of the two chemicals. LanzaTech is best known for turning carbon emissions into ethanol and fashionable apparel; the company was valued at $2.2B in a SPAC last week. See also, last summer more than 500 organisations issued a scathing call on policymakers to reject the carbon capture, utilisation and storage (CCUS) paradigm. With certain questionable CCUS methods currently in practice, it’s a boondoggle lifeline being thrown to the oil industry and a distraction from decarbonisation, at the expense of the same communities whose homes have been turned into toxic sacrifice zones for generations of oil production.
• These trucks are driving decarbonisation: An international team of scientists has published a study in the journal Energy that says renewable energy from hydroelectric dams could be delivered at half the cost and with fewer externalities for river ecosystems by utilising electric trucks. The trucks, including cargo vehicles on return trips after deliveries, would be loaded with water at the top of mountain ranges and would use the elevated water’s potential energy to charge the truck’s battery with a regenerative braking system on the way down the mountain. Relatedly, the electric version of the most popular pickup truck in the US, the Ford F-150, as well as trucks from General Motors, will be used in a bidirectional charging experiment by California utility PG&E, allowing the trucks to serve as backup batteries for home power consumption.
• The People Part: Closing the exponential gap means upleveling the people and process parts of the people/process/technology triad for transformation. We regularly share best practice documents here in that spirit, and the latest is a report from the influential Rocky Mountain Institute on the skills and structures needed by public utilities in their effort to decarbonise.  When organisations like RMI, or the World Resources Institute as we highlighted last week, gather, synthesise, and share success stories, the whole human network gets smarter.

Short morsels to appear smart while reading romance novels

🧠 Living in more walkable neighbourhoods could increase cognitive function.

🤩 Jakarta’s incredible urban mobility transformation has led to a 500% increase in cycling.

🤨 Big oil’s clean energy promises versus what it actually delivers.

🐷 Neural networks are bringing us closer to predicting gene expression from a DNA sequence. AI is also helping us translate pig grunts into emotions.

🌫️ The limits of deep learning are becoming increasingly visible.

😢 Modelling shows that the true death toll of COVID could be 3 times higher than official figures.

🌐 Immigration can enhance collective intelligence and increase innovation. See also, lead exposure from gasoline has reduced the IQ of over half of Americans.

💥 Quantum theory has run aground.

💌 Economic development goes hand in hand with literature about love.

End note

Back in EV#360, I quoted an idea that the Deepmind’s milestone in developing a software-based control system for plasma fusion had solved the control problem, and this was not just a materials problem. An insider to the fusion industry, who wants to remain anonymous, took me to task arguing:

For a crude analogy, I’d compare this achievement in fusion control to that of using AI for self-driving cars cruising down the highway under nominal conditions. Maybe they have to change the lane, slow down, or pass another car, which are impressive feats. But not what you need for a fully-operating system. What happens when it hits black ice or a deer jumps out? Not only does fusion have material science challenges, we still have control challenges and this work is just a small step forward to tackling part of it.

I’ll yield to much greater expertise with this qualification! Please update your assumptions :)

Cheers,
Azeem

P.S. We’re hiring a growth marketer in the UK or elsewhere. Read here what we’re looking for and apply if it’s you!

What you’re up to – notes from EV readers

Sergio Caredda has created the HR for Ukraine site, a collaborative platform sharing resources for HR professionals.

Rafael Kaufmann co-founded Digital Gaia, aiming to build a decentralised brain for the regenerative economy through natural intelligence. Congrats!

Economist Carl Frey and his co-author examined how GDPR has shaped firm performance globally.

Kenneth Pucker co-authored an article arguing that ESG funds will neither benefit the planet, nor provide investors with higher returns. Instead, they delay important regulatory action.

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