Always great to join the CBC News Network Weekend Business Panel to discuss “the week that was”, alongside Mark Warner and John Northcott.
Here’s an overview of the topics we discussed.
- January’s big job losses. Although economists predicted rising unemployment for this past month, the actual job losses were about five times the expected level. What happened?
- GameStop trading lessons learned. As the week ends with market value declines in the billions, what can be learned from this social media induced trading frenzy?
- Australia’s plan to require big tech to pay for news content. As new rules may require Google and Facebook to pay local media for content, Microsoft has a play of its own.
- Amazon’s Bezos to step down. Vacating the CEO role may have come as a surprise, but is there more to consider in terms of this story?
As Canada is in the midst of its coldest months and a number of provinces have put enhanced COVID19 restrictions in place, is it really that surprising that a significant number of jobs continue to be lost? With job losses in January reaching 213,000, industries that have been impacted include hospitality, retail, tourism, and other services. Although it is a reasonable expectation that the recovery from COVID19 will not be a straight line, what also comes to mind is how many companies might have simply closed up shop after Christmas or at the end of 2020, resulting in permanent job losses. This situation relates to a range of factors, including the abundance of small businesses that have delayed the succession process, companies that are no longer competitive, and those who have simply had enough, in terms of trying to operate in a COVID19 world. Keep in mind, these will be permanent job losses, and consider this important question: what does it take to “grow” a job? The simple answer is a lot of time, effort, and money; ask anyone who has built a business from scratch, starting with their own job.
Anyone who has been following the GameStop trading saga should keep some basic lessons in mind: speculative trading is risky and can result in significant losses, as was seen this week. For those who only see the upside, remember that for many investors, it is something that occurs only in theory, as timing the market is next to impossible (don’t confuse hindsight with real time). Perhaps, more importantly, is the need for regulators to catch up to scenarios where social media plays such a significant role, given that financial services is such a highly regulated industry (ask anyone who has ever worked in it, as the penalties can be significant).
Developing content is something that takes far more time, effort, and expertise than most would appreciate (for example, ever written a book?), and one of the biggest venues is the credible news media. Australia plans to take a bold step in requiring companies such as Google and Facebook to pay local media companies for content, given the significant imbalance between these two sectors. While these companies have claimed this arrangement is unworkable, the unimpacted Microsoft has indicated support for the plan, as well as a willingness to step up its Bing search capability, in the event that Google follows through with a reduced presence in the area. A bit of the clash of the titans, perhaps, but it will be interesting to see where other countries go with this train of thought.
And, finally, as Jeff Bezos plans to step down from the CEO role, it is disappointing to see Amazon miss an opportunity to bring diversity to this position, particularly from a gender perspective. The vast majority of large tech companies are led by men, representing significant wealth at both a corporate and leadership level. There are qualified women to lead companies, including at a CEO and Board Chair level, and in 2021, we should not be having this same conversation over and over again, in terms of how underrepresented female leadership is. Customers and employees are watching, and a lack of diversity is noticed more than many would expect; obvious oversights have long memories.
Thank you for watching, and see you again soon, CBC!