Horizons Newsletter – week 24 // 2021
Horizons is a bi-monthly Dasym Research initiative to show you how the Dasym themes have been in the news. We publish the Horizons on our website and as an email newsletter. If you wish to receive the email, please contact Investor Relations.
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American geo-economics behind the G7 tax deal
This month, the G7 reached an historic agreement for a global corporate tax rate of a minimum of 15% in which corporations must also pay taxes where they produce their income (instead of where they’re headquartered). At face value, this deal indicates that power is shifting from corporations to states. Since the 1980s, the global corporate tax rate has been dropping from 50% to 24%, as developing countries built growth models by attracting foreign investors with lower taxes. Some developed countries also took part in that ‘race to the bottom’ (e.g. Ireland, the Netherlands, Singapore). More forces are at play, however. Although it is a multilateral deal, hailed by many as the return of responsible U.S. leadership, the U.S. will be the main beneficiary. For one, the U.S. big tech companies will pay the biggest share of taxes to the U.S. Government. Second, in exchange for its concessions in the deal, the U.S. has demanded the removal of the European Digital Services Tax. It shows that the return of U.S. multilateralism remains a ‘geo-economic’ instrument of American power.
Broaden your horizon?
In this section we share content that may be of interest to you:
- An interesting report on the ‘Virtual Economy‘ argues that gaming, social media, blockchain and fintech will converge and produce virtual worlds with new economic patterns, like virtual market places, real estate and ownership of virtual items.
- In an attempt to provide more transparency in a world governed by algorithms, a ‘transparant charging station‘ shows users how its algorithm decides which car is charged fastest.
- In this transcript of a McKinsey Podcast, two venture capitalists, one from Europe, the other from the States, take a look at the startup investing landscape.
Emerging big tech mesh networks
Last April Apple introduced Airtags. These coin-size Bluetooth trackers can help locate lost items (e.g. keys, wallet) almost anywhere, because they combine available iPhones in an emergent network to spot lost items attached to an Airtag. This month, Amazon followed with the introduction of Sidewalk, a wireless mesh network that uses Amazon’s internet-connected devices to strengthen connectivity of their consumer hardware and offer new services such as the finding of lost items. Such tracking services, however, are not new. Their true potential lies in the ability to use mesh networks for nearly any kind of short, two-way communication. As device density and bandwidth of wireless technology increases, mesh networks will become more functional and reliable and consequently more common. Moreover, these ad hoc infrastructures show that selling consumer hardware can be both a product and an infrastructure play. Nevertheless, this practice raises questions around privacy, digital sovereignty and shared value in which consumers’ hardware and part of their bandwidth are being used to perform valuable functions at an aggregate level.