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360安全卫士：2022年年度中国手机安全状况报告（54页）.pdf

2022 年度中国手机安全状况报告 0 2022 年度 中国手机安全状况报告 2023 年 02 月 2022 年度中国手机安全状况报告 前言 当前，电信网络诈骗犯罪已成为发案最多、上升最快、涉及面最广、人民群众反映最强烈的犯罪类型。诈骗手法紧跟社会热点持续演变升级，与当下流行的网络购物、物流递送、直播打赏等相结合，多环节包装实施连环诈骗。于此同时，催生了大量为不法分子实施诈骗提供帮助并从中获利的黑灰产业，此类黑灰产业又反向作用，成为电信网络诈骗犯罪多发高发的重要推手。从 2022 年 360 安全大脑捕获到的黑产情报来看，在电销引流产业上，诈骗电话从“多卡宝”转向简易组网 GOIP，同时一些不法固话业务代理商、民众受利益驱使，将其开办的固话线路转接给境外电信网络诈骗分子，号码伪装性、迷惑性、欺骗性更强，群众难以辨别，极易上当受骗；在身份伪装产业上，从传统固网 IP 秒拨、服务器 IP 转向基站 IP、软路由等具备“反侦察”功能的 IP 类产品；在洗钱手法上，黑产一方面通过伪界面增加洗钱类应用的识别难度，一方面开发出高仿网银、“尾号跟随”等应用进行“黑吃黑”；在黑产链条上，盘踞在境内外的黑产供应商、团伙为占据更多的市场份额，获得更高的价值利润，增强了攻防能力，提高了攻击范围，如传统短信 ETC 钓鱼团伙，将攻击目标从普通群众增加至互联网企业业务系统及员工，影响更加恶劣。为坚决遏制电信网络诈骗犯罪快速上升势头，公安部部署全国公安机关始终保持严打高压态势，全链条打击电信网络诈骗及关联犯罪，深入开展“斩链”“清源”“利剑”三大战役，抓获了一大批违法犯罪人员，破获了一大批诈骗案件；会同最高法、最高检等相关部门联合部署开展“拔钉”行动，成功将 240 名电信网络诈骗犯罪集团重大头目和骨干缉捕归案；针对华东、华南、京津冀等 3 个片区重点城市，组织开展区域会战，共捣毁诈骗窝点 1800 余个，实现规模打击效能最大化；针对涉诈黑灰产链条，组织发起打击涉诈固话语音专线、简易组网 GOIP、跑分洗钱等各类集群战役 80 余起，取得显著战果。2022 年度中国手机安全状况报告基于 360 海量的安全大数据和 360 手机卫士黑灰产研判、分析、溯源能力，对 2022 年出现的电信网络诈骗及关联的重点黑灰产业链进行深度剖析，对相关反制手段、思路予以探讨，望能起到抛砖引玉的目的，集思广益。打击“黑灰产”是一项长期且艰巨的任务，需要政府、企业和个人一同努力，让“黑灰产”无缝可钻。360 也将积极发挥自身技术优势，综合运用人工智能、大数据、云计算等技术手段有效打击涉诈产业链，保障用户网络安全。2022 年度中国手机安全状况报告 I 目录 第一篇 电信网络诈骗-黑灰产攻防技术.1 第一章、电话引流技术，人机分离、远程操控.1 一、诈骗电话从“多卡宝”转向简易组网 GOIP.1 二、涉诈的“境外来电”穿上“本地来电”的外衣.2 第二章、基站 IP、软路由成诈骗团伙热门网络环境隐藏手段.3 一、移动网络 IP 秒拨技术.3 二、固网代理 IP 软路由技术.5 第三章、中文域名 自研客服系统成为征信类诈骗关键手段.6 第四章、计算器成“跑分”产业新工具.7 第二篇 电信网络诈骗-黑灰产业链现状.10 第一章、利用靓号生成器进行虚拟货币盗刷.10 第二章、利用定制化银行 APP，进行洗钱产业“黑吃黑”.10 第三篇 电信网络诈骗-黑产技术供应商、团伙.12 第一章、以 B*N 集团为攻防技术核心的东南亚博彩产业链.12 一、黑灰产攻防浏览器背后的开发者 B*N.12 二、B*N 开发应用关联产业.13 第二章、钓鱼邮件攻击背后的“缅北魔方 G”组织.14 一、“缅北魔方 G”攻防特点.14 二、钓鱼邮件攻击路径分析.15 第四篇 电信网络诈骗案例.17 第一章、最新消息！暴雷 P2P 可以退款了？.17 第二章、小心！网络代买“冰墩墩”骗局：有人花上百元收到的竟是“耳环”.17 第三章、那一晚我们赤诚相见，你却用我的照片敲诈我.18 第四章、注销贷款变成“申请贷款”.19 第五章、“杀猪盘”里没有爱情，只有诈骗.21 第五篇 反电信网络诈骗行业动态.22 第一章、政策法规颁布.22 一、中共中央办公厅 国务院办公厅印发关于加强打击治理电信网络诈骗违法犯罪工作的意见.22 二、反电信网络诈骗法表决通过.23 第二章、政府重拳出击.24 一、公安机关打击治理电信网络诈骗违法犯罪取得显著成效.24 二、公安部深入推进打击电信网络诈骗“拔钉”行动.25 第三章、行业服务建设.26 2022 年度中国手机安全状况报告 II 一、工业和信息化部再出反诈利器 正式推出“反诈名片”服务.26 第六篇 电信网络诈骗趋势预测与反制建议.27 第一章、新型网络犯罪趋势预测.27 一、引流、身份伪造等电诈产业出现全链条技术升级.27 二、洗钱手法更加隐秘，同时其产业内部出现大量“黑吃黑”现象.27 第二章、黑产攻防对抗应对手段.28 一、开拓挖掘思路，提升黑产识别能力.28 二、构建电信网络诈骗防范和打击治理体系.28 参考文献.29 附录-2022 中国手机安全数据报告.30 2022 年度中国手机安全状况报告 1 第一篇 电信网络诈骗-黑灰产攻防技术 第一章、电话引流技术，人机分离、远程操控 近年来，大量藏匿在境外的电信网络诈骗团伙通过远程操控的方式，使用搭建在境内的“GOIP 设备”向受害人拨打电话，从而实施诈骗，危害十分严重。随着全国“断卡”行动不断深入，公安机关持续加大对“GOIP 设备”打击力度，打掉了一批违法犯罪团伙，收缴了一批作案工具，有效挤压了相关犯罪生存空间。为逃避侦查打击，一些犯罪分子研发升级出成本更低、隐蔽性更强、操作更简单的新型“电销”设备，迅速成为各类电信网络诈骗团伙拨打诈骗电话的作案工具。一、诈骗电话从“多卡宝”转向简易组网 GOIP 诈骗产业早期，盘踞在境外的诈骗分子，通过境外电话线路直接向境内拨打诈骗电话。由于呼叫过程涉及到国际网关，易被运营商发现，因此诈骗分子开始将号码及呼叫行为迁移至国内。简单来说就是骗子在 A 地（境外），雇佣他人在 B 地（境内）架设猫池、卡池，插入大量的手机卡后，组成 GOIP 设备。骗子在 A 地通过 SIP 类软件，远程调用 B 地架设的GOIP 设备进行呼叫及短信行为。由于电话的实际呼叫行为从 B 地产生，使用的是 B 地的基站服务，避免了直接从境外向境内呼叫。此种 GOIP 设备特点是通过 sip 协议进行交互，可支持插入大量手机卡，但体积比较庞大，搭建好后移动困难，导致号码在基站下过于积聚容易暴露自身的位置。虽后期诈骗分子将 GOIP 设备使用便携式电源搬运至汽车上，全城移动躲避监管，但由于 sip 协议的存在，仍存在暴露的风险，一种通过远程协助 IM 语音的组合式 GOIP 开始出现。为避免从境外直接向国内拨打电话触发国际网关风控限制，使用境内猫池、多卡宝搭建的 GOIP 触发 SIP 协议及聚集风控，诈骗分子将呼叫行为及通话行为分开。境外手机 A 安装远控 APP，控制境内的手机 C 拨打诈骗电话，境外手机 B 安装具有语音聊天的 APP，与境内手机 D 进行语音通话，境内手机 C 与境内手机 D 通过声卡连接线串联，实现 C 与 D 实时共享音频，从而实现手机 B 代替手机 C，与手机 C 所电话呼叫的人员进行实时通话。2022 年度中国手机安全状况报告 2 图 1 简易组网 GOIP 原理 随着生活水平的提高、生活节奏的加快，现如今双持手机成为越来越多追求生活品质的选择，而从简易组网 GOIP 整个环节来看，其本质上也是成对出现的手机，只是语音音频进行了共享，很难将此种形式作为某些风控特征，及时发现潜在的 GOIP。同时，由于通话语音使用音频线进行了共享，国内 GOIP 的搭建人员无法获悉远程诈骗话务员与受害人的通话内容，保证了 GOIP 运行的稳定性，攻防对抗将是一场持久战。二、涉诈的“境外来电”穿上“本地来电”的外衣 2022 年第二季度，我们发现诈骗使用的号码中，固定电话开始“冒头”，同期在黑产交易市场，我们也发现了大量的固话渠道商的踪影。由于诈骗分子来电号码显示为本地企业固定电话，极具伪装性、迷惑性和欺骗性，群众难以辨别，极易上当受骗。2022 年度中国手机安全状况报告 3 图 2 黑产群售卖固话线路 从掌握到的情报来看，一些不法固话业务代理商、民众受利益驱使，将其开办的固话线路转接给境外电信网络诈骗分子，从而使诈骗分子能够通过远程操控的方式拨打电话进行诈骗。境内固话线路人员，办理固定线路后，上线黑产提供或自费购买语音网关设备，将设备对接固定电话线路，上线黑产通过远程软件进行语音网关调试，对接相应的 SIP 服务器，实现固话线路的远程语音功能，诈骗人员使用具有 SIP 协议的语音类应用，远程调用固话线路拨打诈骗电话。第二章、基站 IP、软路由成诈骗团伙热门网络环境隐藏手段 在我们看不到的网络世界，诈骗、群控、挂机、“羊毛党”、刷量等黑灰产行为时刻发生着，这些行为从悄然滋生到发展为成熟的产业链，始终绕不开最底层的 IP 支撑。360 手机卫士在长期对黑灰产的溯源分析时，发现一些黑灰产使用的 IP 呈现出“境外设备偏爱使用境内固网或 IDC 机房 IP，境内设备偏爱使用境内移动流量 IP 的特点”。推测此种偏好方式，境外的黑灰产可能是为了防止其使用的社交账号、支付账号被冻结或满足一定的上网娱乐需求；境内的黑灰产可能是为了防止具体位置信息暴露、提高追溯难度。而这两种身份伪装的方式，代表了目前主流的两种 IP 代理手段，移动网络 IP 秒拨技术和固网代理 IP 软路由技术。一、移动网络 IP 秒拨技术 移动网络秒拨指的是利用移动网络提供的 IP，向外提供代理 IP。随着攻防对抗的升级，传统固网式的 IP 多已被标记识别，目前产将视线转移到更为隐蔽的移动网络 IP 上。从已2022 年度中国手机安全状况报告 4 掌握的情报来看，其实现方式有 4 种：手机热点、USB 上网卡、IP 魔盒、移动 IP 代理软件。其中手机热点、USB 上网卡需要手动断网才能获得新的 IP，存在不足，而 IP 魔盒和移动 IP代理属于自动化类产物，弥补了手机热点和 USB 上网卡的不足，已渐渐成为主流。图 3 代理 IP 方式 USB 上网卡即便携式网络热点，插入手机卡，供电即可共享网络。这些 USB 上网卡使用的流量业务，主要是一些第三方公司在运营，向运营商采买流量后，分包卖给下线用户。IP魔盒为一款硬件盒子，支持多种类型的手机卡，接入电脑后可以使电脑拥有移动网络 IP，通过其自带的脚本可实现 IP 自动切换。USB 上网卡、IP 魔盒本质上是同一类产品，两者都可以通过断网再联网实现切换 IP，只是 IP 魔盒增加了自动化秒拨的功能。除了利用硬件产品实现移动网络秒拨外，目前一些代理软件也提供移动网络 IP，安装此类应用后，可根据其提供的移动网络线路 IP 进行 IP 伪装。利用移动网络秒拨 IP，黑产分子能实现快速变换 IP 或指定 IP 归属地，绕过时间、地域、次数的限制。同时随着 5G 网络的普及，在 5G 高带宽的背景下，黑灰产可能会以此衍生出其他的攻击手段。但从目前已知的风控手段来看，针对移动网络类秒拨 IP 并未迭代出良好的反制手段，IP 伪装攻防对抗将是一场持久战。2022 年度中国手机安全状况报告 5 图 4 移动网络秒拨 APP 二、固网代理 IP 软路由技术 传统的 VPN 代理软件，针对的是使用该代理软件的设备，该设备的数据流量通过 VPN 软件进行转发，即设备需要先联网（内网/互联网），再连接进入 VPN 网络，当设备自身网络出现问题时，VPN 网络会中断，此时本机的 IP 便会暴露，于是一类针对全局网络，防止本机IP 暴露的全局软路由器产品在黑产中出现。此类软路由主要包含国内 IP 代理池、wifi 分发(一个路由器可分发出多个 wifi 信号，实现机机独立 ip，一键换 ip，断网保护，数据分流不串线)功能。目前黑产售卖的产品包括以下 2 类：提供路由器固件及 IP 池，将市面上已发售的路由器进行刷机进而修改成可控的 VPN 类路由器。集成 VPN 功能，支持多 IP 线路定制，多 wifi 分发（单设备可发出 1-100 个 WiFi，且机机 IP 独立）、IP 线路断网保护、wifi 伪装，修改 mac、ssid 于一身的路由器。2022 年度中国手机安全状况报告 6 图 5 黑产渠道售卖的软路由产品效果展示 第三章、中文域名 自研客服系统成为征信类诈骗关键手段 冒充电商平台以用户账号征信存在问题需要注销为由，实施金融诈骗的手段是近年来高发的诈骗类型。随着反诈宣称力度和攻防对抗的加强，此类诈骗发生了一些攻防变化，诈骗人员伪造用于“身份认证”、“话术洗脑”的网站，从原先英文域名 第三方在线客服 API 搭建虚假的客服认证网站，转向使用中文域名 二次开发第三方在线客服系统搭建，效果更加逼真，用户及反制识别难度均增加。此类冒充电商平台客服类诈骗，首先通过境内外号码联系受害人，引导受害者访问高仿的网站（电商平台、征信查询），增加信任感后，再引导受害人与该仿冒网站内的在线客服人员进行沟通，在客服的引导下安装会议、投屏类应用。在诈骗人员的远程协助下，进行“征信”处理，将自有资金或网贷资金转向指定账户。因此，在整个诈骗环节，仿冒的诈骗网站是诈骗成功的关键因素。为了提高迷惑性，诈骗团伙使用中文域名，且域名中使用了含特点电商平台、银监会相关的关键词，如*在线对接.com、*认证中心.me、银监会*中心.me 等。由于 com、cn 等传统域名注册人群较多，可用于注册的资源较少，诈骗团伙转而使用比较小众的域名，如 shop、me、lol、art、co、life、pics、club 等。从发现的部分黑产域名时间来看，最早时间为 2022 年 8 月，说明已有多个团伙使用中文域名进行攻防对抗。2022 年度中国手机安全状况报告 7 图 6 虚假征信网站客服界面 以往发现的诈骗网站中，我们发现诈骗人员会通过第三方在线客服接口的方式实现网站的在线客服功能，近期发现的征信类诈骗网站使用的客服系统均非已知的客服接口，推测其“二次开发”了客服系统。从该客服页面中，我们发现了系统的备注说明（独立开发者）、相应的接口字段参数，根据这些参数我们发现该系统与市面上一款商业化客服系统界面、参数相似。该公司售卖的产品为源码授权模式，以此猜测黑产购买此套源码后进行二次修改，增加自有系统标识，在互联网出售给诈骗团伙。第四章、计算器成“跑分”产业新工具 早前，我们发现博彩产业为方便博彩代理人员管理下线人员，为其定制开发博彩代理APP，该应用伪装成一个可正常使用的计算器应用，当在该计算器中输入特定指令时，页面会展示真正的博彩代理登录界面。此类伪界面手段近期也在一款跑分应用中出现，通过同源追溯，发现该应用衍生产业链存活至今已达 2 年，且应用仍在不断进行版本迭代。以跑分客的视角，来看看这个跑分应用到底是怎么“跑起来”的。首先，跑分客需要访2022 年度中国手机安全状况报告 8 问指定的网址，获得本地 ip，并将 ip 提供给上线进行加白。紧接着登录指定的卡商网站，将跑分客的银行信息（银行卡号、所属省市、所属支行、取款密码、U 盾密码、登录密码、身份证号码）录入至平台，选择类型（U 盾、跑分-银行卡、手机短信-纯收款等）。完成账户信息录入后，手机安装界面伪装成计算器的应用，并授予短信权限，后期应用将实时将手机收到的短信同步给跑分云端服务器。图 7 跑分客录入信息界面 图 8 跑分客录入信息界面 根据其使用的样本特征，我们发现该应用运营者的运作模式主要包含使用多台境内外服务器做 APP 分发节点以及为不同的用户群控定制不同的子域名 不同的端口，例如子域名shanghu（商户人员使用）、子域名 kashang（卡商人员使用）、sys（支付回调使用），故该产业涉及跑分客、支付通道运营商、黑灰产平台三个部分。支付通道运营商引导跑分客登录指定的卡商网站录入自己的银行卡信息，并在插入银行卡绑定手机号的卡的手机中安装指定的2022 年度中国手机安全状况报告 9 计算器 APP，用于监控手机的银行卡短信，并转发至支付通道终端服务器。支付通道用户（博彩、诈骗等）开通该支付通道的 API 接入对应的诈骗平台，当用户在诈骗/博彩平台充值时，显示对应的充值入口（银行卡），用户在页面刷新后，重新调用接口。图 9 跑分产业流程 2022 年度中国手机安全状况报告 10 第二篇 电信网络诈骗-黑灰产业链现状 第一章、利用靓号生成器进行虚拟货币盗刷 相较于通过虚假虚拟货币网站、APP 此种高投入、低产出的资金盗刷方式，黑产开始针对有着大额流转的“洗钱”产业进行定向攻击，快速进行资产“掠夺”，其攻击方式是仿造出与“洗钱”产业中用于资金流转的相似账户，误导对方向伪装的账户转账。在日常使用网银转账的过程中，部分网银会将过往交易记录中的账号展示出来，方便快速转账，例如 A 经常给 A1 频繁转账，A1 的账号就会频繁出现在最近转账的名单中。同样的道理，虚拟货币钱包也有类似的功能，此时若 B 生成了一个和 A1 账号尾号相同的账号，且出现在 A 的经常交易名单中，A 给 A1 转账的时候，就有可能误转给 B。但想要实现这种骗局，涉及到两个重要的环节，需知道谁频繁转账，且知道收款人的账号信息，同时伪造出与收款人相同尾号的账号。这两个环节在传统的网银交易上基本上很难实现，但由于“虚拟货币网络”类似一个“记账本”，通过区块链浏览器即可查询虚拟货币网络中的交易情况，同时结合靓号生成器的地址伪造功能即可实现上述的过程。靓号生成器其主要作用是批量生成指定规则的虚拟币收款地址，目前多个主流的虚拟货币网络均发现相关的靓号生成器，包括网页版、软件版。部分根据软件使用周期收费、部分根据号码规则（指定尾数 4 位，5 位，6 位）收费。其原理是随机生成一个私钥，然后由该私钥通过加密算法计算出地址，然后再根据靓号的规则去判断这个地址是不是符合要求，然后重复执行以上过程，根据机器的硬件性能不同，生成周期不同，约每秒可生成 1000 个地址，每天可生成 8000 万个地址。第二章、利用定制化银行 APP，进行洗钱产业“黑吃黑”在日常生活中，常见到“微商”们“晒的”各种收款截图，营造一种轻轻松松赚大钱的迷惑氛围，但熟悉微商套路的我们，深知那只是用于收割下线制作的“一眼假”收款截图。相较于微商通过转账生成器或图片生成网站生成银行转账截图，洗钱黑产们使用的工具则高深了很多。通过 360 黑产识别平台，捕获到黑产针对农业、平安、交通、浦发、招商、邮政、工商等银行制作的银行仿冒类应用，其作用原理是通过云端配置 仿冒银行 APP 上下游配合，实现定制化的虚假转账过程，再录制转账视频，其效果远比转账生成器或图片生成网站更加逼真。如下图黑产售卖的演示视频截图，在管理后台，针对账号的余额、信息、转账结果进行设置，如转账成功、转账失败、账户已冻结，在对应的高仿 APP 进行任意账号转账操作时，2022 年度中国手机安全状况报告 11 页面即会显示已设置的内容。图 10 黑产售卖的“银行仿冒类应用管理后台生成网银余额界面”教程截图 图 11 黑产售卖的“银行仿冒类应用转账效果界面”教程截图 针对此批高仿银行 APP 进行溯源分析，发现其从 2022 年 3 月开始上线，开发者通过多台境内外服务器充当存储及云控节点，使用不同的域名、不同的服务器进行应用迭代，约每2 个月进行一次服务器替换。从该 APP 用户画像来看，其主要用户群体涉及博彩、诈骗、洗钱等。APP 在投放的过程中，我们发现其捆绑了 PC 远控木马，病毒名称包括*接码用户端平台.rar、代付流程.rar、吊大思路.txz 等，为接码、洗钱、诈骗产业相关的话术，即向黑产“投毒”，与此类 APP 的目标用户类型相同，据此推测此类样本为黑产人员用户资金诱骗，并以此进行黑产间黑吃黑。2022 年度中国手机安全状况报告 12 第三篇 电信网络诈骗-黑产技术供应商、团伙 第一章、以 B*N 集团为攻防技术核心的东南亚博彩产业链 反诈力度的加强，大量涉诈、涉赌网址遭到拦截、封停，诈骗网站的生存空间得以压制，但在 2022 年 6 月，我们监测到部分涉诈、涉赌网站通过专属浏览器的方式跳过域名的拦截策略。深入分析后，发现该攻防浏览器背后产业可能是以中国某地区的 B*N 集团为技术核心，该集团为东南亚博彩集团、“杀猪盘”提供应用定制开发，躲避网络安全厂商、执法机构的识别拦截，东南亚博彩集团、诈骗团伙进行平台运营，最终面向中国境内开展博彩、杀猪盘等活动。图 12 诈骗网站提供的网址不能访问解决方案 一、黑灰产攻防浏览器背后的开发者 B*N 在一些博彩网站和杀猪盘网站中，我们发现平台会引导用户下载指定浏览器，以“帮助”用户解决无法访问网址的问题，这些浏览器多宣称“使用了独家线路加速技术，解决无法访问、被劫持、跳转非法网页问题”。推荐的浏览器中，以*宇浏览器以主，也存在部分与博彩平台同名的专属浏览器。相较于传统通过布置多条服务器节点、多个域名，用户手动选择最新未拦截博彩网址的方式，专属浏览器的方式更加的“智能化”，降低了域名被拦截的风险，由于其无痕模式，又增加了取证研判的难度。*宇浏览器包名为 b*n.mobile.browser，签名证书为 CN=*,OU=b*n,O=b*n,L=t*,ST=t*,C=t*，根据包名、签名关键词，推测该应用开发者是位于中国某地区的 B*N 集团。2022 年度中国手机安全状况报告 13 通过 360 安全大脑，发现其证书信息涉及过万个应用，其名称类型大致分为博彩、直播、浏览器，其中博彩类应用名称包含巴黎人、金沙、万博、永利国际等关键词，浏览器名称包含太阳城、金沙、永信，其中还包括专用字样，可以看出均为博彩行业关键词，说明这些浏览器都是为博彩平台定制开发的。图 13 博彩网站推荐使用专属浏览器引流页面 二、B*N 开发应用关联产业 B*N 集团开发的过万个应用中，部分包名含 demo、test，例如应用名 B*Games，包名为*.game.*.test1，应用名为*ball，包名为*.b*.*.demo，推测为测试包。应用逆向分析后，发现作者来源于中国某地区，与签名中城市信息相吻合。同时发现疑似该作者开发的博彩代理应用 demo，包名为*bet.agent.*，应用指向*，但页面展示内容不全，推测为早期测试版本，目前已失效。根据*bet 关键词，在搜索引擎中，我们发现该关键词指向多个博彩网站，说明该应用是一个博彩代理 APP。通过这批应用流转地址及关联节点来看，境外节点中以菲律宾、缅甸、柬埔寨数量最多，其中菲律宾、柬埔寨的节点中还发现了其他的博彩信息，说明该批应用的实际运营者位于菲律宾、缅甸、柬埔寨。该产业是 B*N 集团为核心，其为东南亚博彩集团、杀猪盘提供应用定制开发，躲避境内网络安全厂商、执法机构的拦截，东南亚博彩集团、诈骗团伙进行平台运营，最终面向中国开展博彩、杀猪盘等活动。2022 年度中国手机安全状况报告 14 第二章、钓鱼邮件攻击背后的“缅北魔方 G”组织 2021 年 9 月，互联网开始频繁出现冒充公司给员工发工资补贴邮件进行诈骗的新闻，但由于“过于”小众，没有引起广泛的重视。随着此类手法的爆发，2022 年又再次出现在公众视野中。2022 年 5 月 360 手机卫士收到用户反馈，其收到“关于发布最新工资补贴通知，请打开附件查收！”的邮件，扫码访问邮件中的二维码，并按照提示填写姓名、电话号码、银行卡号、验证码后，资金被盗刷。这些邮件使用的钓鱼页面与虚假 ETC 短信钓鱼网站在界面、功能上相似，推测为同一个团伙或供应商。随着研究的深入，我们发现这些钓鱼网站背后是位于缅北的黑灰产团伙，其开发了冒充工资补贴、ETC、社保、医保等钓鱼网站，并通过短信群发、邮箱群发等方式进行引流。鉴于此种引流方式大多使用*魔方工具进行数据清洗，我们将此类攻击行为统称为“缅北魔方”。同时本次发现的组织在钓鱼中使用的中转域名均为 site*.g*.r*，基于此将其命名为“缅北魔方 G”组织。一、“缅北魔方 G”攻防特点 通过邮件中涉及的钓鱼域名来看，其主要是通过 Cname 的方式解析至 site01.g*.r*。根据域名的上线时间，我们发现诈骗团伙十分谨慎，域名在传播前才上线，从而降低域名过早外露导致被拦截。site01.g*.r*共解析至 18 个中国某地区服务器，最早解析时间为 2021年 12 月，最近解析时间为 2022 年 5 月，说明该黑产团伙从 2021 年 12 月已开始实施攻击行为，随后在引起广泛关注后下线域名。Cname 至 site01.g*.r*的域名达 500 ，其域名后缀主要为 xyz、uno、fun、love、ws、loan 等，其中 xyz、uho 的域名使用的最多达 400 ，并生成不同的钓鱼子域名，如冒充 ETC、冒充国家医疗保障局。2022 年度中国手机安全状况报告 15 图 14 冒充国家医疗保障局钓鱼网站界面 通过 g*.r*域名解析记录来看，其 2022 年使用的子域名过百个，使用的服务器 IP 超过10 个，域名服务器分布在阿根廷、美国等地。其中可能用于做域名解析跳转的子域名共 9个，其特点是子域名为 site*，IP 均指向中国某地区。从攻防手段来看，“缅北魔方”组织，使用了多级域名轮换进行域名防护和隐藏自身，但相较于缅北其他的诈骗组织使用的攻防手段，缺少了使用 CDN 对服务器 IP 的保护。从目前掌握的情报来看，推测“缅北魔方”组织通过搜索引擎、商业信息服务平台批量检索并爬取了大量的企业邮箱。由于这些企业邮箱的特点是公网可以访问，其盗取到财务的邮箱密码后，冒充财务向企业内部发送钓鱼邮件。目前被攻击的企业类型可能涉及通讯、保险、餐饮、纺织、可再生能源、大学、住宅物业等多个行业。二、二、钓鱼邮件攻击路径分析钓鱼邮件攻击路径分析 从目前钓鱼邮件的攻击手法来看，其主要是先向某些员工（特别是财务人员）发送含钓鱼网址的钓鱼邮件，通过伪装的网站页面，引导该员工在页面中填写邮箱账号和密码，进而利用该员工的邮箱向企业内部群发钓鱼邮件。但这里会存在一种情况，如果企业限制内部邮2022 年度中国手机安全状况报告 16 箱非公网访问，仅仅掌握到邮箱密码，可能连邮箱的登录页面都进不去，故黑产会优先选择公网类邮箱进行攻击。从钓鱼邮件的攻防手段来看，网址是以二维码形式展示的，意味着大部分受害人会使用社交 APP、手机浏览器进行扫描访问，而目前除了主打浏览器安全防护拦截的厂商外，大多数厂商手机侧网址拦截能力均较弱。同时该二维码中的域名进行了 UA 检测，如果是非手机端访问，将不显示内容，并提示使用手机访问，增加了网址的识别及收录难度。若事前收录了某钓鱼页面，但由于其使用了多级跳转、子域名轮换、框架嵌套等技术，很难及时识别并拦截。2022 年度中国手机安全状况报告 17 第四篇 电信网络诈骗案例 第一章、最新消息！暴雷 P2P 可以退款了？近日，有不法网站假冒银保监会等金融监管部门，发布带有“银保监会认证”“中国银保监会”等不实信息内容，并以“官方回款”“清退回款”等名义实施诈骗。用户是某信贷平台的出借人员，但平台 3 年没回款。于是网上搜素“xx 信贷最新消息”的过程中，看到了相关公告类页面，该公告表示，鉴于用户是对方忠实的投资用户，邀请用户加群进行本息补偿服务。用户添加指定的 QQ 群后，向群管理员提供了“本息截图”、“平台注册手机号”，随后对方向用户介绍了回款方案，即在指定的 APP 内进行充值操作。用户在指定的 APP 内充值 3772 元后，对方引导其联系“规划师”进行回款操作。随即“规划师”表示，回款需要用户在回款周期内，在该款指定的 APP 内购买虚拟货币，用户购买首笔亏损 10 元后，申请退出被拒，发觉被骗。专家解读专家解读 此类诈骗中，不法分子常常以“官方回款”“清退回款”名义欺骗群众，如 P2P 清退、教育清退，编造“成功案例”，利用消费者急于回款、挽回损失等心理，以达到骗取资金的最终目的。在 P2P 清退诈骗场景中，诈骗人员事前伪装了大量的 P2P 清退网页或信息，引导受害人主动关注，快速筛选目标用户。在自媒体时代，普通用户可以在媒体平台注册发帖，即诈骗分子可以在大量的媒体平台发布文章，由于平台的权威性，极易让用户误以为消息的真实性。安全提示安全提示 针对 P2P 网贷机构出借人的“回款”诈骗、“官方回款”诈骗以及“虚假投资理财”“虚假网络贷款”“解债上岸”“代理退保”“白条代偿”“银行直存”等，均是利用消费者急于解困、急于挽回损失等心理特点，侵害消费者信息安全、财产安全，造成消费者财产损失，消费者要谨防“回款”类诈骗侵害。第二章、小心！网络代买“冰墩墩”骗局：有人花上百元收到的竟是“耳环”被北京冬奥会带火的吉祥物“冰墩墩”，集万千宠爱于一身，成为“一墩难求”的爆款，线下店买不到，线上也售罄，这时有人告诉你，他手里有“冰墩墩”，想要吗？2022 年度中国手机安全状况报告 18 2022 年 2 月，用户在短视频平台发现有用户售卖冰墩墩，与对方沟通后便添加对方的某信。双方确认商品价格、商品数量后，用户通过某信扫码的方式向对方支付商品费。对方收款后对方向用户提供了快递单号，但用户收到货后，发现商品并不是冰墩墩，而是一对耳环，准备询问对方原因时，发现已无法联系上对方，得知受骗。图 15 引导用户转账界面 专家解读专家解读 “冰墩墩”的火热，吸引了大量买家的关注，但由于购买人数多，造成货源不足。不法分子便利用此种现状，以掌握货源为由，向用户兜售“冰墩墩”，但官方都缺货的商品，他却“有货”，这本身就是自相矛盾的事情。安全提示安全提示 切勿从陌生人处购买“冰墩墩”谨防诈骗；此外，也不要从“黄牛”手中高价购买特许商品，不要相信价格炒作跟风盲目购买，要理性消费，不让骗子有机可乘。第三章、那一晚我们赤诚相见，你却用我的照片敲诈我 2022 年 3 月，用户在境外某聊天软件中认识了好友，以为其是性情中人，在与其聊天的过程中，被对方诱导进行裸聊，裸聊之前对方要求用户安装名为“爱*”的 APP 进行远程操作。用户根据对方提供的网址下载安装了“爱*”，输入指定的邀请码完成了应用注册。双方裸2022 年度中国手机安全状况报告 19 聊后，对方以掌握用户的裸聊画面、手机通讯录为由，对用户进行敲诈勒索，用户按照对方的要求向对方转账 1.2 万元后，对方仍要求用户转账 11 万元，用户发觉即使转账也无法解决事情后，便不再向对方转账。图 16 引导用户安装裸聊敲诈 APP 专家解读专家解读 用户被引导安装的“爱*”应用，其本质是一个窃取用户通讯录信息的恶意程序，不法分子通过色情诱惑的方式引导受害人安装，在双方裸聊后，以将受害人的裸照群发给通讯录好友为由进行敲诈勒索。安全提示安全提示 网络交易需谨慎，主动提供色情视频聊天的，多半为诈骗分子的套路，不要随意点开陌生人发来的链接，更不要下载来源不明的 APP。第四章、注销贷款变成“申请贷款”用户收到冒充某电商平台人员的固定电话，对方描述“用户的电商平台账户涉嫌绑定多2022 年度中国手机安全状况报告 20 个网贷信息，违反国家的政策，需要解除相关贷款信息，恢复用户的征信”，随后引导用户使用指定的账号、密码登录指定的会议类应用进行解除操作，用户通过会议应用的屏幕共享功能，按照对方的要求，在多个贷款平台申请贷款，将所贷资金依次转入转账描述的“回款”账号，对方描述该账户收到资金后，进行校验后会自动返还原付款账户完成征信恢复，用户累计转账达 8 万余元，后发现受骗。图 17 云会议界面截图 专家解读专家解读 在诈骗场景中，诈骗分子首先通过固话与受害人沟通，相较于传统的国际来电，固定电话的迷惑性较高，不易引起警觉，随后报出用户的信息取得初步信任。取得用户信任后，通过影响征信等话术，“恐吓”用户，进而引导用户在紧张的情绪下进入对方设定的陷进，同时通过会议类、远程协助类应用观察用户的手机屏幕，引导用户一步一步进行转账操纵，若用户不进行转账操作，则通过共享的屏幕窃取用户的转账交易密钥，实现资金盗刷。安全提示安全提示 诈骗分子通常冒充电商客服人员，以“影响征信”“注销账户”“调整利率”为由，威胁与诱导并举，引导受害人进行操作，最终以套取受害者网贷和现金为目的。凡遇到此类来电，务必通过官方渠道核实，如对方要求视频通话或共享屏幕，应提高警惕。2022 年度中国手机安全状况报告 21 第五章、“杀猪盘”里没有爱情，只有诈骗 用户通过某聊天软件认识对方，随后对方以婚恋为由骗取用户信任，并称对方的亲戚在某头部互联网公司上班，有内部名额，可以投资赚钱。起初用户未参与该项目，但收到对方责怪“用户不为对方考虑”，随后用户安装对方指定的投资应用，并在该应用中购买理财项目，投资后却发现无法提现，联系该投资平台的客服，客服以“用户不是开发区域用户，被关闭取款通道和房间收益”为由，要求用户继续充值投资，用户发觉受骗。图 18 诈骗人员诱导受害人继续转账话术 专家解读专家解读 在诈骗场景中，诈骗分子通过交友的方式，以掌握快速赚钱秘籍为由，引导用户在指定的平台的进行投注，前期为增加用户信任度，给予小额返现，随着投注金额的增大，拒绝用户提现，并持续要求用户继续投注。安全提示安全提示 网络世界虚虚实实、真真假假，网络交友一定要有戒心，不要过度透漏自己信息，以免给对方留有可乘之机，落入对方圈套。在网聊交友中一旦触及投资、购物、借钱、转账等关键词就要立即进行自我警示，在没有真正确定对方身份及用意时，切勿进行钱款操作。2022 年度中国手机安全状况报告 22 第五篇 反电信网络诈骗行业动态 第一章、政策法规颁布 一、中共中央办公厅 国务院办公厅印发关于加强打击治理电信网络诈骗违法犯罪工作的意见 近日，中共中央办公厅、国务院办公厅印发了关于加强打击治理电信网络诈骗违法犯罪工作的意见（以下简称意见），对加强打击治理电信网络诈骗违法犯罪工作作出安排部署。意见强调，要坚持以习近平新时代中国特色社会主义思想为指导，深入贯彻党的十九大和十九届历次全会精神，坚持以人民为中心，统筹发展和安全，强化系统观念、法治思维，坚持严厉打击、依法办案，实现法律效果与社会效果有机统一，坚持打防结合、防范为先，强化预警劝阻，加强宣传教育，坚持科技支撑、强化反制，运用科技信息化手段提升技术反制能力，坚持源头治理、综合治理，加强行业监管，强化属地管控，坚持广泛动员、群防群治，发动群众力量，汇聚群众智慧，坚决遏制电信网络诈骗违法犯罪多发高发态势，提升社会治理水平，使人民获得感、幸福感、安全感更加充实、更有保障、更可持续，为建设更高水平的平安中国、法治中国作出贡献。意见要求，要依法严厉打击电信网络诈骗违法犯罪。坚持依法从严惩处，形成打击合力，提升打击效能；坚持全链条纵深打击，依法打击电信网络诈骗以及上下游关联违法犯罪；健全涉诈资金查处机制，最大限度追赃挽损；进一步强化法律支撑，为实现全链条打击、一体化治理提供法治保障；加强国际执法司法合作，积极推动涉诈在逃人员通缉、引渡、遣返工作。意见要求，要构建严密防范体系。强化技术反制，建立对涉诈网站、APP 及诈骗电话、诈骗短消息处置机制；强化预警劝阻，不断提升预警信息监测发现能力，及时发现潜在受害群众，采取劝阻措施；强化宣传教育，建立全方位、广覆盖的反诈宣传教育体系，开展防范电信网络诈骗违法犯罪知识进社区、进农村、进家庭、进学校、进企业活动，形成全社会反诈的浓厚氛围。意见要求，要加强行业监管源头治理。建立健全行业安全评估和准入制度；加强金融行业监管，及时发现、管控新型洗钱通道；加强电信行业监管，严格落实电话用户实名制；2022 年度中国手机安全状况报告 23 加强互联网行业监管；完善责任追究制度，建立健全行业主管部门、企业、用户三级责任制；建立健全信用惩戒制度，将电信网络诈骗及关联违法犯罪人员纳入严重失信主体名单。意见还要求，要强化属地管控综合治理，加强犯罪源头地综合整治。意见 强调，各级党委和政府要加强对打击治理电信网络诈骗违法犯罪工作的组织领导，统筹力量资源，建立职责清晰、协同联动、衔接紧密、运转高效的打击治理体系。金融、电信、互联网等行业主管部门要全面落实行业监管主体责任，各地要强化落实属地责任，全面提升打击治理电信网络诈骗违法犯罪的能力水平1。二、反电信网络诈骗法表决通过 十三届全国人大常委会第三十六次会议 9 月 2 日表决通过中华人民共和国反电信网络诈骗法。专家普遍认为，反电信网络诈骗法坚持以人民为中心，统筹发展和安全，立足各环节、全链条防范治理电信网络诈骗，精准发力，为反电信网络诈骗工作提供有力法律支撑。反电信网络诈骗法共七章 50 条，包括总则、电信治理、金融治理、互联网治理、综合措施、法律责任、附则等。这部法律自 2022 年 12 月 1 日起施行。作为一部“小切口”的专门立法，反电信网络诈骗法在总结反诈工作经验基础上，着力加强预防性法律制度构建，加强协同联动工作机制建设，加大对违法犯罪人员的处罚，推动形成全链条反诈、全行业阻诈、全社会防诈的打防管控格局。加强部门协同，是反诈工作的重要经验。反电信网络诈骗法规定了各部门职责、企业职责和地方政府职责，明确有关部门、单位在反电信网络诈骗工作中应当密切协作，实现跨行业、跨地域协同配合、快速联动，加强专业队伍建设，有效打击治理电信网络诈骗活动。一段时期以来，手机卡、银行卡大量非法开办、随意买卖，成为电诈犯罪分子的重要工具。反电信网络诈骗法明确，电信业务经营者应当依法全面落实电话用户真实身份信息登记制度。银行业金融机构、非银行支付机构为客户开立银行账户、支付账户及提供支付结算服务，和与客户业务关系存续期间，应当建立客户尽职调查制度，依法识别受益所有人，采取相应风险管理措施，防范银行账户、支付账户等被用于电信网络诈骗活动。反电信网络诈骗法还规定，办理电话卡不得超出国家有关规定限制的数量。对经识别存在异常办卡情形的，电信业务经营者有权加强核查或者拒绝办卡。开立银行账户、支付账户，不得超出国家有关规定限制的数量。对经识别存在异常开户情形的，银行业金融机构、非银行支付机构有权加强核查或者拒绝开户2。2022 年度中国手机安全状况报告 24 第二章、政府重拳出击 一、公安机关打击治理电信网络诈骗违法犯罪取得显著成效 2022 年，全国公安机关认真贯彻落实习近平总书记关于打击治理电信网络诈骗犯罪工作的重要指示精神，落实中共中央办公厅、国务院办公厅关于加强打击治理电信网络诈骗违法犯罪工作的意见部署要求，按照“四专两合力”总体工作思路，持续向电信网络诈骗犯罪发起凌厉攻势，截至 11 月底，全国共破获电信网络诈骗案件 39.1 万起，同比上升 5.7%，抓获犯罪嫌疑人数同比上升64.4%，立案数同比下降17.3%，造成财产损失数额同比下降1.3%，实现了“两升两降”工作目标，打击治理电信网络诈骗犯罪取得显著成效。为坚决遏制电信网络诈骗犯罪快速上升势头，公安部部署全国公安机关始终保持严打高压态势，全链条打击电信网络诈骗及关联犯罪，深入开展“斩链”“清源”“利剑”三大战役，抓获了一大批违法犯罪人员，破获了一大批诈骗案件；会同最高法、最高检等相关部门联合部署开展“拔钉”行动，成功将 240 名电信网络诈骗犯罪集团重大头目和骨干缉捕归案；针对华东、华南、京津冀等 3 个片区重点城市，组织开展区域会战，共捣毁诈骗窝点 1800 余个，实现规模打击效能最大化；针对涉诈黑灰产链条，组织发起打击涉诈固话语音专线、简易组网 GOIP、跑分洗钱等各类集群战役 80 余起，取得显著战果。在依法严厉打击的同时，结合中华人民共和国反电信网络诈骗法于 12 月 1 日正式施行有利契机，公安部部署全国公安机关统筹抓好反电信网络诈骗法的贯彻实施工作，联合最高法、最高检进一步完善“两卡”犯罪法律适用标准，用足用好法律武器，持续加大打击力度，全面提升打击质效，形成有力震慑。为纵深推进打击治理电信网络诈骗犯罪工作，依托国务院部际联席会议机制，公安部积极会同相关成员单位加强科技支撑、强化预警防范，坚持系统观念、深入推进行业监管源头治理，努力构建更加严密的防范治理体系。公安部指导各地公安机关建立分级分类预警劝阻机制，推动“厦门经验”在全国落地生效，截至 11 月底，累计向各地推送预警指令 2 亿条，各地自主产出预警信息 1 亿条；会同工信部建成 12381 涉诈预警劝阻短信系统，累计发送预警提示短信、闪信 4.7 亿条；会同中央网信办建设推广国家反诈中心 APP，预警提示 2.4 亿次。人民银行深入推进“资金链”治理，支付行业常态化治理格局持续完善，组织商业银行、支付机构、清算机构协助公安机关阻断大量涉诈资金转移，挽回大量人民群众损失。工信部持续推进“断卡行动 2.0”，开展“不良 APP 安全治理”，严格落实实名制，全力整治虚商卡，对短信端口、语音专线、云服务等重点业务加大清理整治力度，不断提升全流程及时反制能力，累计处置涉诈高风险电话卡 1.1 亿张，拦截诈骗电话 18.2 亿次、短信 21.5 亿条。中央网信办集中整治互联网接入、域名注册、服务器托管、APP 制作开发、网络直播、引流2022 年度中国手机安全状况报告 25 推广等涉诈重点领域，约谈曝光问题突出企业，网络生态环境不断净化。坚持广泛宣传和精准宣传相结合，加强对易受骗群体、案件高发行业和重点地区的精准宣传，联合中央宣传部组织开展“全民反诈在行动”集中宣传月活动，组织各类反诈宣传“进社区、进农村、进家庭、进学校、进企业”活动 2 万余场次，发送反诈宣传短信 30.7 亿条，国家反诈中心官方政务号发布短视频 9330 余条、播放量超 50 亿次，形成全社会反诈的浓厚氛围。公安机关将全面贯彻落实党的二十大精神，认真贯彻落实反电信网络诈骗法，按照“四专两合力”部署安排，始终保持对电信网络诈骗犯罪的严打高压态势，深入开展“云剑”“断卡”“拔钉”等专项行动，持续强化区域会战、专案攻坚、集群战役，密切与各部门协作配合，坚决遏制电信网络诈骗犯罪高发态势，切实维护人民群众财产安全和合法权益3。二、公安部深入推进打击电信网络诈骗“拔钉”行动 2022 年 6 月以来，最高法、最高检、公安部等有关部门联合部署开展“拔钉”行动，严厉打击惩处电信网络诈骗集团重大头目和骨干。近日，中国公安机关与柬埔寨警方积极开展警务合作，成功抓获 9 名电信网络诈骗犯罪集团幕后组织者，查明涉案金额上亿元，“拔钉”行动取得重要成果。近年来，电信网络诈骗犯罪多发高发，电信网络诈骗分子在境外搭建窝点，大肆对我国内民众实施诈骗。公安机关侦查发现，多起被骗损失超过千万元案件的诈骗窝点设在柬埔寨，公安部将其幕后组织者列为“拔钉”行动缉捕对象，牵头成立专案组，组织河北、山西、福建、河南、贵州等地公安机关加大侦查力度。在中柬执法合作协调办公室和驻柬使馆警务联络官的指导下，积极发挥国际刑警组织优势作用，我公安机关与柬埔寨警方通力合作，掌握了该诈骗犯罪集团的大量犯罪证据，柬警方先后将 9 名目标对象成功抓获，并于近日移交我方。另有 10 余名犯罪嫌疑人主动回国投案自首，目前已成功到案 24 名犯罪嫌疑人。据悉，自“拔钉”行动部署以来，公安部先后将 490 余名电信网络诈骗集团重大头目和骨干列为“拔钉”缉捕对象。全国公安机关持续强化侦查研判，积极开展国际警务合作，已成功到案 240 余名缉捕对象，取得显著战果。部分犯罪嫌疑人已被提起公诉，等待他们的将是严厉的法律制裁。全国公安机关将深入贯彻反电信网络诈骗法，继续严厉打击电信网络诈骗犯罪，深入推进“云剑”“拔钉”“断流”“断卡”等专项行动，依法高效开展国际警务合作，坚决遏制此类犯罪高发态势，切实维护人民群众的财产安全和合法权益4。2022 年度中国手机安全状况报告 26 第三章、行业服务建设 一、工业和信息化部再出反诈利器 正式推出“反诈名片”服务 为深入贯彻落实习近平总书记关于打击治理电信网络诈骗犯罪工作的重要指示精神，持续提升对电信网络诈骗的预警预防能力，继“12381 涉诈预警劝阻短信”和全国移动电话卡“一证通查”等服务之后，工业和信息化部再出反诈利器，面向公众推出了“反诈名片”服务。近年来，各级公安机关投入大量警力，利用电话对正在遭受电信网络诈骗的群众进行预警劝阻，取得了显著成效。但在实际工作中，常常发生群众把公安机关的预警电话误认为诈骗或骚扰电话而拒接的情况，影响了预警劝阻成功率。为有效解决上述问题，工业和信息化部指导部反诈中心联合国家反诈中心，组织中国电信、中国移动、中国联通推出了“反诈名片”，对各级公安机关的反诈预警劝阻电话号码进行标记和来电提醒，帮助群众有效甄别电话来源，进一步提升预警电话的权威性和及时性。下一步，工业和信息化部将始终践行以人民为中心的发展思想，进一步加强与公安机关的协同配合，全力推进反诈各项工作，切实为群众办实事、做好事、解难事。温馨提示，如果您收到带有“反诈名片”标记的预警劝阻电话，可以放心接听，如有疑问，请拨打 96110 进行咨询5。2022 年度中国手机安全状况报告 27 第六篇 电信网络诈骗趋势预测与反制建议 第一章、新型网络犯罪趋势预测 一、引流、身份伪造等电诈产业出现全链条技术升级 在引流手段上，为逃避侦查打击，一些犯罪分子研发升级出成本更低、隐蔽性更强、操作更简单的新型“电销”设备，迅速成为各类电信网络诈骗团伙拨打诈骗电话的作案工具。在手机号码层面，从“多卡宝”类硬件转向简易组网 GOIP 设备，该设备本质上是成对出现的手机，只是语音音频进行了共享，很难将此种形式作为某些风控特征，及时发现潜在的GOIP。在固话层面上，诱导他人将自有电话线索通过语音网关进行转接，实现远程操控固话线路拨打诈骗电话，由于诈骗分子来电号码显示为本地固定电话，极具伪装性、迷惑性和欺骗性，群众难以辨别，极易上当受骗。在隐匿身份手段上，早期使用各类秒拨 IP 躲避风控的识别，为解决 IP 代理稳定性差产生的真实信息暴露，针对现有线路、设备进行全局改造，产出了包含全局代理、多 wifi 分发、专机专网、IP 伪造、设备伪造等功能的产品。二、洗钱手法更加隐秘，同时其产业内部出现大量“黑吃黑”现象 洗钱黑产与上游犯罪呈链条式发展，存在明显的相互依存关系，伴随着网络更新迭代，给传统的侦查理念、经验带来巨大冲击。在手段上，一方面洗钱团伙对于新会员的发展有着严格的审核制度，包括熟人介绍、邀请码机制，试图打造自有封闭生态；一方面使用反侦察手段进行攻防，包括带口令的伪界面应用，不断更替的 APP 存储、云控服务器、分发链接；同时与黑产平台紧密合作，在黑灰产平台投放广告，吸引跑分客入场，并为黑灰产平台提供源源不断的支付通道流转渠道，双方互利共生。传统的洗钱方式，其本质是将资金通过银行卡、支付宝、微信等渠道进行多渠道流转，增加追溯的难度，但随着风控手段以及经侦建模能力的增强，传统洗钱方式易被快速冻结，而虚拟货币去中心化的特点，导致无法对全量交易进行风控及监管，而盗刷来源的虚拟货币相较于新生成的虚拟货币又增加了很多的干扰因素，进一步增加了监管难度，从历年来虚拟货币相关的资金盗刷情况来看，盗刷的金额越来越高，“受害人群”也从普通虚拟货币用户向大型虚拟货币交易所、职业洗钱团伙转移。大多数虚拟货币需通过传统的资金手段交易变2022 年度中国手机安全状况报告 28 现，但由于不同国家对于虚拟货币有着不同的政策，传统金融行业与虚拟货币交易之间仍存在隔离屏障，无法通过传统的经侦手段关联现实资金与虚拟货币，虚拟货币。随着黑产资金的大量聚合，各类针对洗钱产业黑吃黑手法涌现，例如通过高仿网银类APP 伪造网银转账、利用靓号生成器进行虚拟货币资金盗刷。第二章、黑产攻防对抗应对手段 一、开拓挖掘思路，提升黑产识别能力 黑产的攻防对抗有个天然的不利条件，防守方需要针对所有的可能攻击行为制定风控模型，但过多的防守策略，间接的增加了业务的对接成本，防守策略是一个动态调节的过程，而攻击者仅需针对薄弱的环节进攻即可获得“胜利”，会持久的处于一种被动“挨打”的局面。以 360 手机卫士在日常的黑产治理中所积累的经验来看，从“感知风险”和“控制风险”两个角度来对抗黑产，成功率相对较高。即谁、在什么时候、通过什么方式、对什么对象、做了什么，以及通过攻击者的思维来思考业务场景，攻击者关注的内容，能够获得的利益。以上文中的提及的各类黑产 APP 为例，这些 APP 并不是突然出现的，而是依托于相应的产业链出现的。通过对黑产产业链的分析，梳理其上下游，即可及时发现相应的攻防手段、关联工具，当拿到线报信息后，对线报进行拓线关联，识别对攻防手段的全链条封锁。此种场景下攻防对抗手段从单一的黑产环节识别转向监控黑产动向，实现全局封堵的难度降低。二、构建电信网络诈骗防范和打击治理体系 电信网络诈骗犯罪在世界各地遍地开花，成为全球性的打击治理难题。一是诈骗手法不断演变，逐渐使用的白 黑的手段导致风控识别模型出现误判，发现和识别难度增加；二是黑产使用的技术手段更加专业复杂化，通过新兴技术生成新的对抗工具；三是境内外团伙勾结，取证环节存在客观挑战。面对严峻的电信网络诈骗现象，需构建电信网络诈骗防范和打击治理体系，实现全链条电信网络诈骗惩治。一方面加大对黑灰产各黑产链条的打击力度，通过联合社会力量，对引流、技术支撑、信息买卖环节进行打击严惩，提升黑产环节的投入成本，；另一方面通过预警反制手段，发现潜在受害群众及时进行诈骗劝阻，降低案发率。2022 年度中国手机安全状况报告 29 参考文献 1 中华人民共和国中央人民政府.中共中央办公厅 国务院办公厅印发关于加强打击治理电信网络诈骗违法犯罪工作的意见EB/OL.http:/ 2 新华网.反电信网络诈骗法表决通过 EB/OL http:/ 3 中华人民共和国公安部.公安机关打击治理电信网络诈骗违法犯罪取得显著成效 EB/OL.https:/ 4 中华人民共和国公安部.公安部深入推进打击电信网络诈骗“拔钉”行动 EB/OL.https:/ 5 中华人民共和国工业和信息化部.工业和信息化部再出反诈利器 正式推出“反诈名片”服务 EB/OL.https:/ 2022 年度中国手机安全状况报告 30 附录-2022 中国手机安全数据报告 一、2022 年手机诈骗概况 1.报案数量与类型 2022 年全年，360 反诈赔付保（原手机先赔）共接到 11 类手机诈骗举报，涉案总金额高达 2665.0 万元，人均损失 43761 元。在所有诈骗类型中，虚假兼职占比最高达 28.7%；其次是交友（26.1%）和身份冒充（13.0%）。从涉案总金额来看，交友类诈骗总金额最高，高达 908.1 万元，占比 34.1%；其次是虚假兼职诈骗，涉案总金额 610.0 万元，占比 22.9%；身份冒充排第三，涉案总金额为 588.0 万元，占比 22.1%。下图为 2022 年度手机诈骗的举报类型与涉案金额分布情况：图 19 2022 年手机诈骗举报类型分布 2022 年度，手机诈骗中虚假兼职、交友、身份冒充属于高危诈骗类型，其中，金融理财人均损失最高，约 7.8 万元；其次为身份冒充类，人均损失约为 7.4 万元。交友类诈骗由于其手法属于“敲诈勒索”，一旦受害人前期妥协向对方转账，后续诈骗人员会编造各种话术，逼迫受害人缴纳更多“保护费”，故此类诈骗的人均损失普遍较高。虚假兼职类诈骗在手法上，逐渐采用自研 IM 内嵌云控链接的应用，识别难度较原先的网页直接封装类应用有所提升。2.受害者性别与年龄 2022 年度，从举报用户的性别差异来看，男性受害者占 66.3%，女性占 33.7%，男性受害者占比高于女性。从人均损失来看，男性为 47100 元，女性为 37180 元，男性人均损失低2022 年度中国手机安全状况报告 31 于女性。下图为 2022 年度手机诈骗受害者性别差异：图 20 2022 年手机诈骗受害者性别差异 从被骗网民的年龄段看，90 后的手机诈骗受害者占所有受害者总数的 37.8%，是不法分子从事网络诈骗的主要受众人群；其次是 80 后，占比为 27.4%；00 后占比为 24.0%；70 后占比为 8.0%、60 后占比 2.1%、50 后占比为 0.5%、40 后占比为 0.2%。下图为 2022 年度手机诈骗受害者年龄段分布：图 21 2022 年手机诈骗受害者年龄段分布 作为互联网原住民的“Z 世代”青年，已逐渐成为最容易被网络诈骗套路的一大群体，诈骗分子正逐步把目标转向熟悉互联网但风险防范意识较差的年轻学生群体。00 后接触网络时间长、深度深，但由于缺少社会经验，对各类网络信息的甄别能力较弱，更容易掉入专2022 年度中国手机安全状况报告 32 业诈骗团伙设置的圈套。虚假兼职类诈骗是他们受骗最多的类型，诈骗分子正是瞄准其初入社会、没有稳定经济来源、想赚钱的心理，诱惑他们步步落入陷阱。图 22 2022 年 00 后手机诈骗举报类型分布 从被骗网民的年龄段人数来看，2022 年度 90 后、80 后、00 后均为诈骗高发人群，90后纷纷进入中年，成为家庭的顶梁柱，受到疫情、收入等客观影响，以及各类成功学、一夜暴富等信息洗脑，生活压力猛增，互联网成为其寻找感情寄托、增加额外收入的重要渠道。从数据上看，90 后中，男性为裸聊交友类的主要人群，女性为虚假兼职类的主要人群。图 23 2022 年手机诈骗受害者各年龄段人数与人均损失对比 3.受害者地域分布 2022 年度，从各地区手机诈骗的举报情况来看，山东（8.7%）、广东（8.5%）、河南（7.2%）、2022 年度中国手机安全状况报告 33 江苏（6.6%）、河北（5.7%）这 5 个地区的被骗用户最多，举报数量约占到了全国用户举报总量的 36.8%。下图给出了 2022 年度手机诈骗举报数量最多的 10 个省份：图 24 2022 年 手机诈骗举报数量 TOP10 省级分布 从各城市手机诈骗的举报情况来看，北京（4.9%）、西安（3.0%）、郑州（1.6%）、昆明（1.6%）、温州（1.5%）这 5 个城市的被骗用户最多，举报数量约占到了全国用户举报总量的 12.6%。下图给出了 2022 年度手机诈骗举报数量最多的 10 个城市：图 25 2022 年 手机诈骗举报数量 TOP10 城市分布 二、场景识别 1.移动端诈骗场景感染量与类型分布 2022 年全年，360 安全大脑针对移动端涉诈应用进行分析研究，通过其共识别出主流诈2022 年度中国手机安全状况报告 34 骗场景感染量约 2245.4 万，下图为 2022 年度移动端各月诈骗场景感染量统计：图 26 2022 年 移动端各月诈骗场景感染量 2022 年全年，移动端诈骗场景类型主要为刷单返利，占比 53.1%；其次为网络贷款（31.8%）、虚假投资理财（10.4%）、“杀猪盘”（2.6%）、裸聊敲诈（1.8%）和虚假招嫖（0.1%）等。360 手机卫士安全攻防团队通过对黑灰产近年来的持续研究，发现通联类应用（使用聊天SDK框架生成的内嵌诈骗网页的APP）为刷单返利场景中的主流应用，此类应用具有云控、自有生态、监管难度大等特点，Q2 通联应用增加了混淆、加固等攻防对抗手段，下半年在身份冒充类诈骗场景上，黑产逐渐采用电话引流 屏幕共享应用远程“操控”受害人进行转账或直接盗刷资金，360 安全大脑目前对此类场景、应用可以实现独家识别，下图为 2022 年度移动端诈骗场景类型分布：2022 年度中国手机安全状况报告 35 图 27 2022 年 移动端各月诈骗场景类型分布 2.移动端诈骗场景感染量地域分布 2022 年全年，从省级分布来看，诈骗场景感染量最多的地区为广东，占全国感染量的9.3%；其次为山东（6.8%）、河南（6.3%）、江苏（6.2%）、四川（6.1%），此外浙江、河北、湖南、云南、安徽的诈骗场景感染量也排在前列。图 28 2022 年 移动端各月诈骗场景感染量 TOP10 省级分布 从城市分布来看，诈骗场景感染量最多的地区为成都，占全国感染量的 2.5%；其次为深圳（2.0%）、重庆（2.0%）、广州（1.9%）、西安（1.6%），此外郑州、苏州、武汉、昆明、杭州的诈骗场景感染量也排在前列。图 29 2022 年 移动端各月诈骗场景感染量 TOP10 市级分布 2022 年度中国手机安全状况报告 36 三、恶意程序 1.恶意程序新增样本量与类型分布 2022 年度，360 安全大脑共截获移动端新增恶意程序样本约 2407.9 万个，同比 2021 年度（943.1 个）上升了 155.3%，平均每天截获新增手机恶意程序样本约 6.6 万个。下图给出了 2013 年-2022 年移动端新增恶意程序样本量统计：图 30 2013-2022 年 移动端新增恶意程序样本量 2022 年全年，从第三季度开始，新增样本量开始逐步增加，11 月达到峰值，具体分布如下图所示：图 31 2022 年 移动端各月新增恶意程序样本量 2022 年度，移动端新增恶意程序类型主要为资费消耗，占比 97.2%；其次为隐私窃取2022 年度中国手机安全状况报告 37 （1.4%）、违法违规（1.1%）、流氓行为（0.1%）、欺诈软件（0.1%）等。下图为 2022 年度移动端新增恶意程序类型分布：图 32 2022 年 移动端新增恶意程序类型分布 2.恶意程序拦截量 2022 年度，在 360 安全大脑的支撑下，360 手机卫士累计为全国手机用户拦截恶意程序攻击约 132.2 亿次，平均每天拦截手机恶意程序攻击约 3623.3 万次。下图为 2022 年度移动端各月恶意程序拦截量统计：图 33 2022 年 移动端各月恶意程序拦截量 3.恶意程序拦截量地域分布 2022 年度，从省级分布来看，遭受手机恶意程序攻击最多的地区为广东省，占全国拦2022 年度中国手机安全状况报告 38 截量的 10.4%；其次为山东（7.7%）、河南（7.5%）、江苏（7.1%）、河北（5.6%），此外四川、浙江、安徽、湖南、广西的恶意程序拦截量也排在前列。图 34 2022 年 恶意程序拦截量 TOP10 省级分布 从城市分布来看，遭受手机恶意程序攻击最多的城市为广州市，占全国拦截量的 2.3%；其次为重庆（2.1%）、成都（2.0%）、北京（1.9%）、上海（1.8%），此外深圳、郑州、杭州、南京、苏州的恶意程序拦截量也排在前列。图 35 2022 年 恶意程序拦截量 TOP10 市级分布 四、钓鱼网站 1.移动端钓鱼网站拦截占比 2022 年度，360 安全大脑在 PC 端与移动端共为全国用户拦截钓鱼网站攻击约 799.5 亿2022 年度中国手机安全状况报告 39 次，同比 2021 年度（933.4 亿次）下降了 14.3%。其中，PC 端拦截量约为 795.2 亿次，占总拦截量的 99.5%，平均每日拦截量约 2.2 亿次；移动端拦截量约为 4.3 亿次，占总拦截量的 0.5%，平均每日拦截量约 117.4 万次。下图为 2022 年度钓鱼网站拦截占比分布：图 36 2022 年 钓鱼网站拦截占比分布 2.移动端钓鱼网站各月拦截量分布 2022 年度，360 安全大脑在移动端拦截钓鱼网站攻击约为 4.3 亿次，同比 2021 年度（5.6 亿次）下降 23.9%。下图为 2022 年度钓鱼网站各月拦截量分布：图 37 2022 年 移动端钓鱼网站各月拦截量分布 3.移动端钓鱼网站类型分布 2022 年度，移动端拦截钓鱼网站类型主要为境外彩票，占比高达 65.1%；其次为色情2022 年度中国手机安全状况报告 40 （26.7%）、金融证券（3.1%）、虚假购物（2.6%）、赌博（2.2%）等。下图为 2022 年度移动端拦截钓鱼网站类型分布：图 38 2022 年 移动端拦截钓鱼网站类型分布 4.移动端钓鱼网站新增量 2022 年全年，360 安全大脑共截获各类新增钓鱼网站 1.9 亿个，同比 2021 年（1.6 亿个）上升了 23.0%，平均每天新增 52.7 万个。图 39 2022 年 钓鱼网站各月新增量分布 在钓鱼网站新增类型中，色情类占据首位，占比 54.5%；其次为赌博类，占比 39.7%。2022 年度中国手机安全状况报告 41 图 40 2022 年 钓鱼网站新增类型分布 5.移动端钓鱼网站拦截量地域分布 2022 年全年，从省级分布来看，移动端拦截钓鱼网站最多的地区为广东省，占全国拦截量的 22.3%；其次为福建（8.6%）、广西（8.5%）、山东（5.0%）、湖南（4.8%），此外浙江、江苏、河南、河北、四川的钓鱼网站拦截量也排在前列。图 41 2022 年 移动端钓鱼网站拦截量 TOP10 省级分布 从城市分布来看，移动端拦截钓鱼网站最多的城市为广州市，占全国拦截量的 5.3%；其次为深圳（3.3%）、南宁（2.7%）、北京（2.5%）、上海（2.3%），此外东莞、福州、佛山、泉州、重庆的钓鱼网站拦截量也排在前列。2022 年度中国手机安全状况报告 42 图 42 2022 年 移动端钓鱼网站拦截量 TOP10 市级分布 五、骚扰电话 1.骚扰电话拦截量 2022 年全年，结合 360 安全大脑骚扰电话基础数据，360 手机卫士共为全国用户识别和拦截各类骚扰电话约 233.9 亿次，平均每天识别和拦截骚扰电话约 0.6 亿次。环比 2021 年（228.0 亿次）上涨了 2.6%。下图给出了 2014 年-2022 年用户标记骚扰电话拦截号码次数统计：图 43 2014-2022 年 骚扰电话拦截号码次数 下图为 2022 年骚扰电话各月拦截号码次数分布：2022 年度中国手机安全状况报告 43 图 44 2022 年 骚扰电话各月拦截号码次数分布 下图为 2022 年识别与拦截骚扰电话趋势统计：图 45 2022 年 识别和拦截骚扰电话趋势统计 2.骚扰电话拦截类型分布 2022 年全年，综合 360 安全大脑的拦截监测情况及用户调研分析，从骚扰电话拦截类型来看，骚扰电话以 89.6%的比例位高居首位；其次为广告推销（6.2%）、房产中介（2.7%）、疑似欺诈（1.0%）、保险理财（0.3%）、招聘猎头（0.1%）与响一声（0.1%）。下图为 2022 年骚扰电话拦截类型分布：2022 年度中国手机安全状况报告 44 图 46 2022 年 骚扰电话拦截类型分布 3.骚扰电话拦截号码号源分布 2022 年全年，从骚扰电话拦截号码个数分布来看，被拦截号码为固话最多，占比高达41.3%；其次为运营商为中国联通的个人手机号（21.0%）、运营商为中国移动的个人手机号（19.1%）、虚拟运营商（10.1%）、运营商为中国电信的个人手机号（7.9%）与 95/96 开头号段（0.4%）等。下图为 2022 年骚扰电话拦截号码号源分布：图 47 2022 年 骚扰电话拦截号码号源分布 观察95/96号段与虚拟运营商骚扰电话拦截号码类型，95/96号段骚扰电话类占据首位，占比 88.3%；虚拟运营商也是骚扰电话类占据首位，占比 76.6%。95/96 号段与虚拟运营商号码遭不法分子利用，仍是不法分子从事非法行径的主要“工具”之一。2022 年度中国手机安全状况报告 45 图 48 2022 年 95/96 号段与虚拟运营商骚扰电话拦截号码类型统计 4.骚扰电话归属地分布 2022 年全年，从各地骚扰电话拦截量上分析，广东省用户标记骚扰电话拦截量最多，占全国骚扰电话拦截量的 13.6%；其次是山东（7.8%）、江苏（7.0%）、河南（5.6%）、浙江（4.9%），此外四川、河北、北京、湖南、湖北的骚扰电话拦截量也排在前列。图 49 2022 年 骚扰电话拦截量 TOP10 省级分布 从城市分布来看，北京市用户接到的骚扰电话最多，占全国骚扰电话拦截量的 4.0%；其次是广州（3.9%）、上海（3.3%）、深圳（2.9%）、成都（2.7%），此外重庆、杭州、西安、郑州、武汉的骚扰电话拦截量也排在前列。2022 年度中国手机安全状况报告 46 图 50 2022 年 骚扰电话拦截量 TOP10 城市分布 六、垃圾短信 1.垃圾短信拦截量 2022 年全年，在 360 安全大脑的支撑下，360 手机卫士共为全国用户拦截各类垃圾短信约 91.6 亿条，同比 2021 年（167.2 亿条）下降了 45.2%，平均每日拦截垃圾短信约 2510.6万条。图 51 2022 年 360 手机卫士垃圾短信各月拦截量分布 2022 年度中国手机安全状况报告 47 图 52 2014-2022 年 360 手机卫士垃圾短信拦截量分布 2.垃圾短信类型分析 2022 年全年，垃圾短信的类型分布中广告推销短信最多，占比为 95.8%；诈骗短信占比4.1%；违法短信占比 0.1%。图 53 2022 年 垃圾短信类型分布 从诈骗短信拦截类型来看，诈骗短信以 69.1%的比例位居首位；其次为疑似伪装诈骗（19.0%）、赌博诈骗（9.9%）、兼职诈骗（0.9%）、股票诈骗（0.9%）等。下图为 2022 年诈骗短信子类型分布：2022 年度中国手机安全状况报告 48 图 54 2022 年 诈骗短信子类型分布 从违法短信拦截类型来看，违法金融信贷短信以 85.2%的比例位居首位；其次为其他违法短信（11.8%）、疑似伪基站发送（1.3%）、售卖信息（0.9%）与色情短信（0.8%）。下图为2022 年违法短信子类型分布：图 55 2022 年 违法短信子类型分布 3.垃圾短信发送者运营商号源分布 2022年全年，短信平台106开头号段依然是传播垃圾短信的主要号源，占比高达96.1%；利用其他号段传播垃圾短信占比约 3.9%。下图为 2022 年短信平台发送垃圾短信占比分布：2022 年度中国手机安全状况报告 49 图 56 2022 年 短信平台发送垃圾短信占比分布 2022 年全年，除短信平台 106 开头号段发送垃圾短信外，从其他发送者号码个数分布看，利用虚拟运营商发送垃圾短信的最多，占比 33.3%；其次是 95/96 号段（28.9%）、固话（12.9%）、运营商为中国移动的个人手机号（11.5%）、运营商为中国电信的个人手机号（4.7%）、运营商为中国联通的个人手机号（4.3%）与 14 物联网卡（1.4%）等。图 57 2022 年 垃圾短信发送者号源分布（除 106 渠道号段）4.垃圾短信拦截量地域分析 2022 年全年，从各地垃圾短信的拦截量上分析，广东省用户收到的垃圾短信最多，占全国垃圾短信拦截量的 19.3%；其次是北京（10.0%）、江苏（8.2%）、山东（6.5%）、浙江（6.3%），此外河南、四川、河北、湖北、湖南的垃圾短信拦截量也排在前列。2022 年度中国手机安全状况报告 50 图 58 2022 年 垃圾短信拦截量 TOP10 省级分布 从城市分布来看，北京市用户收到的垃圾短信最多，占全国垃圾短信拦截量的 11.3%；其次是广州（9.1%）、深圳（4.4%）、南京（4.3%）、上海（3.5%），此外重庆、成都、杭州、郑州、武汉的垃圾短信拦截量也排在前列。图 59 2022 年 垃圾短信拦截量 TOP10 城市分布

17人已浏览 2023-03-20 54页 5星级

供销云仓：零售圈交流-本土化供应链新思维十二问（14页）.pdf

顾春国20年民营、外资、国资及多行业端到端的供应链管理经验过往经历历任苏宁集团、南京医药、顺丰控股、百安居中国、得力集团等企业物流、供应链板块主要负责人曾任多家供应链、物流企业顾问参与多家行业龙头企业供应链体系变革项目现为供销云仓科技有限公司总经理第一问：我们究竟为啥要研究供应链？供 应 链 强 则 国 家 经 济 强，供 应 链 战 略 是 国 家 战 略。供 应 链 强 则 国 家 经 济 强，供 应 链 战 略 是 国 家 战 略。“市场上只有供应链而没有企业，21世纪的竞争不是企业与企业之间的竞争，而是供应链与供应链之间的竞争”。产业链是大家的，供应产业链是大家的，供应链才是自己的。不一定链才是自己的。不一定每一个公司都有供应链每一个公司都有供应链部门，但每个企业管理部门，但每个企业管理者都应该是一名优秀的者都应该是一名优秀的“供应链经理供应链经理”！第二问：到底什么是供应链？供应链管理跨度大，庞杂如巨象，很难摸清全局，是由采购、运营和物流管理发展延伸而来。刘宝红一条龙穿梭于云间，神出鬼没、变化多端，迎之不见其首、随之不见其后，很难一睹全貌，要想驾驭它就更难了。施 云 供应链供应链是以客户需求为导向，以提高质量和效率为目标，以整合资源为手段，实现产品设计、采购、生产、销售、服务等全过程高效协同的组织形态。标题：标题：国务院办公厅关于积极推进供应链创新与应用的指导意见发文字号：发文字号：国办发201784号第三问：供应链的使命是什么？自有工厂 分销总仓 OEM工厂 分销总仓 OEM工厂 分销总仓 OEM工厂 分销省区仓 分销总仓 分销省区仓 分销省区仓 分销分公司仓 分销总仓 经销商仓/店 分销分公司仓 经销商仓/店 分销分公司仓 政企客户 分销分公司仓 电商渠道仓 分销总仓 B2B总仓 OEM工厂 B2B总仓 B2B总仓 B2B区域仓 B2B区域仓 B2B分公司仓 B2B总仓 政企客户 B2B区域仓 政企客户 B2B分公司仓 政企客户分销总仓分销省区仓分销分公司仓B2B总仓B2B区域仓B2B分公司仓自有工厂OEM工厂外采供应商外贸客户经销商仓/店政企客户个人客户电商渠道仓自营电商仓 分销总仓 外贸客户 分销总仓 自营电商仓 自营电商仓 政企客户 自营电商仓 个人客户规划、筹建、运营供应链体系，支撑和促进各项业务发展！第四问：商业模式和供应链有什么关系？企 业 -连 锁 企 业 -平 台 企 业 -商 业 生 态第五问：什么是供应链底盘？供应链网络组织资源系统流程大家要说一样的话，包括术语、理念、理论等。把人组织起来，形成决策层、管理层、作业层。内外部资源及合作伙伴，包括工厂、仓库、车辆、设备，各种材料商、服务商等。建立供应链一体化的IT系统，包括IM、WMS、TMS、OMS、MDM、SRM、CRM、ASP、IBP等。组织架构组织架构现有人员情况汇总现有人员情况汇总供应商清单、工厂清单、供应商清单、工厂清单、仓库清单、承运商清单、仓库清单、承运商清单、客户清单客户清单主数据、业务主数据、业务数据数据流程、操作手册、制度流程、操作手册、制度第六问：一个完整的供应链体系包括哪些要素？第七问：供应链是资源、服务还是产品？成本中心-利润中心-投资中心仓储仓储原材料原材料供应链数字化技术供应链数字化技术采购、加工采购、加工生产、包装生产、包装分销分销零售零售消费、回收消费、回收物流物流信息流信息流资金流资金流金融金融加工加工报关报关运输运输仓储仓储包装包装配送配送质检质检产地仓产地仓配送仓配送仓区域仓区域仓加工加工配送配送生产厂生产厂内内供应链组织体系供应链组织体系资源整合资源整合生产生产供应供应流通商流通商客户客户消费者消费者生产商生产商品牌商品牌商外外原料商原料商行行业业伙伙伴伴业业务务伙伙伴伴仓储服务：仓储服务：提供产地采收仓存转服务；提供产地采收仓存转服务；提供中转仓存转服务；提供中转仓存转服务；提供配送仓存配服务；提供配送仓存配服务；提供不良品管理服务。提供不良品管理服务。配送服务配送服务:提供干线运输服务；提供干线运输服务；提供库存分销服务；提供库存分销服务；提供仓店配服务；提供仓店配服务；提供团配、宅配服务；提供团配、宅配服务；提供取送货服务；提供取送货服务；提供逆向物流服务；提供逆向物流服务；提供可视化定位服务。提供可视化定位服务。生产服务生产服务:提供专业包装服务；提供专业包装服务；提供专业加工服务；提供专业加工服务；提供消费者个性需求定制服务；提供消费者个性需求定制服务；提供质检、测试等品控服务；提供质检、测试等品控服务；增值服务：增值服务：提供网络规划、节点设计服务；提供网络规划、节点设计服务；提供供应链运作解决方案；提供供应链运作解决方案；提供运营平台支持服务；提供运营平台支持服务；提供广告投递等品牌宣传服务；提供广告投递等品牌宣传服务；提供客服售后一体化服务；提供客服售后一体化服务；供应链投融资服务。供应链投融资服务。第八问：如何搭建供应链信息系统？供应供应链技术图谱链技术图谱：从执行到计划到规划从执行到计划到规划作业层作业层自动化自动化管理层管理层数字化数字化仓储管理软件仓储管理软件运输管理软件运输管理软件车辆管理系统车辆管理系统预测与计划预测与计划供应链协同供应链协同控制塔控制塔决策层决策层智慧化智慧化 算法与优化算法与优化大数据大数据供应链中台供应链中台产地仓产地仓共同配送共同配送B2B运输运输销售协同仓销售协同仓门店仓门店仓消费者消费者即时配送即时配送第九问：如何提升供应链的运营能力？全流域 三级仓网 省区域 二流分离 大物流 能力建设 事业部 需求驱动 供应链 供应保障 省区域 库存协同第十问：如何提升供应链规划能力？第十一问：如何做好供应链协同？流程流程衔接衔接业务业务协同协同一体一体集成集成共融共融共生共生业务活动之间业务活动之间业务功能之间业务功能之间合作伙伴之间合作伙伴之间联盟伙伴之间联盟伙伴之间基 础 能力建设一体化集成供应链传统的整合的协同的集成的第一步：通过流程，加强内外部供应链资源整合第二步：建立供应链组织，实现资源转化为供应链服务第三步：运用数字化集成技术，提供一体化供应链服务产品与细分行业企业共研、共建、共推与细分行业企业共研、共建、共推从产业数字化到数字产业化从产业数字化到数字产业化共同努力打造能力最强、效率最高、成本最优、服务最好的新垂直行业供应链服务平台！数字化物流与供应链规划设计经验和能力数字化物流与供应链规划设计经验和能力物流平台的先行先试对模式和路径的把握能力物流平台的先行先试对模式和路径的把握能力物流一体化设计和运营经验和规划能力物流一体化设计和运营经验和规划能力智慧物流的认知和规划能力智慧物流的认知和规划能力集团下辖物流公司运营和服务经验和规划能力集团下辖物流公司运营和服务经验和规划能力政策利用的经验和策划能力政策利用的经验和策划能力大型物流企业的管控经验和能力大型物流企业的管控经验和能力 全网推广能力，中立第三方身份优势全网推广能力，中立第三方身份优势第十二问：如何利用供应链促进产业升级？

23人已浏览 2023-03-20 14页 5星级

安永：国际财务报告准则应用-能源转型：碳捕集与封存的会计考虑事项（13页）.pdf

国际财务报告准则应用中文版2023年2月能源转型：碳捕集与封存的会计考虑事项安永系列刊物简介.03概述.04研发成本05不动产、厂场和设备（PP&E）支出.08政府补助10目录您需要了解：尽管目前运行的碳捕集与封存（CCS）设施数量有限，但要实现净零目标，碳捕集与封存设施的数量和规模将大幅增长。随着碳捕集与封存设施数量增长，规模扩大，将出现新的更加重要的会计考虑事项和复杂问题。可能需要非财务专业人员（例如，运营和商业方面的专业人员）参与新商业安排会计影响的评估。2|2023年2月国际财务报告准则应用：能源转型：碳捕集与封存的会计考虑事项（中文版）保护地球，造福子孙后代，必须改变能源的生产消费方式，关于这一点几乎没有争议。尽管没有统一的定义，但“能源转型”一词通常指能源行业从使用石油、天然气、煤等化石燃料转向风能、太阳能等可再生能源。随着能源供应商和全球政策制定机构迈出和加快能源转型步伐，将形成新的商业模式，产生需要考虑的新的会计难题。我们的国际财务报告准则应用：能源转型系列刊物力求探讨与能源转型相关的新商业模式和安排的会计影响。每份刊物将专注于一个主题，探讨潜在的会计影响。安永系列刊物简介3|2023年2月国际财务报告准则应用：能源转型：碳捕集与封存的会计考虑事项（中文版）本刊物是国际财务报告准则应用：能源转型系列刊物的一部分，重点讨论与碳捕集与封存项目相关的特定会计考虑事项。鉴于目前全球范围内有很大一部分碳捕集与封存项目处于设计或开发阶段，本刊物侧重于与碳捕集与封存项目初期阶段相关的会计考虑事项。碳捕集与封存是指从源头捕集二氧化碳，经压缩后运至封存点的过程。最常用的封存点是枯竭的石油或天然气储层。目前，碳捕集与封存项目数量和规模有限，不同国家和地区的相关商业框架（包括政府政策）成熟度也各不相同。全球碳捕集与封存研究院在其2020年现状报告1中指出，在全球范围内，共有65处商业碳捕集与封存设施，其中36处处于施工或设计阶段。但许多行业顾问预计，碳捕集与封存的使用将大幅增长。国际能源署（IEA）的 可持续发展情景（SDS）2“为全面实现可持续能源目标指明了道路”。目前，使用碳捕集与封存技术捕集二氧化碳的量约为每年4000万吨，而在该情景下，预计到2050年将增至约56亿吨，增幅超过一百倍。很大一部分碳捕集与封存项目涉及在油气行业开展业务的公司。这并不令人意外，因为它们的业务会产生二氧化碳，因此它们能够使用与设计和建造碳捕集与封存设施相关的基础设施。本刊物主要围绕以下三个主题展开：对碳捕集与封存项目发生的研发支出应用国际会计准则第38号无形资产（IAS 38）在建造商业碳捕集与封存设施的情况下，按照国际会计准则第16号不动产、厂场和设备（IAS 16）要求与开发支出以及后续折旧相关的考虑事项与碳捕集与封存项目相关的政府补助的会计处理概述4|2023年2月国际财务报告准则应用：能源转型：碳捕集与封存的会计考虑事项（中文版）1.全球碳捕集与封存研究院，2020年，全球碳捕集与封存现状报告。2.国际能源署，2020年能源技术展望，关于碳捕集、利用和封存的专项报告。碳捕集与封存项目涉及使用较新和/或不断进步的技术，因此需要考虑初期阶段研发成本的适当会计处理。根据IAS 38，研究是指“为获取并理解新的科学或技术知识而进行的独创性的有计划调查。”3。IAS 38中提供的研究活动示例包括以下几项：为获取新知识而进行的活动对应用研究成果或者其他知识的搜索、评价和最终选择4而根据IAS 38，开发是指“在开始商业性生产或使用前，将研究成果或者其他知识应用于某项计划或设计，以生产新的或具有实质性改进的材料、装置、产品、工序、系统或服务”5。IAS 38中提供的开发活动示例包括以下几项：设计、建造和测试预生产或预使用的原型和模型设计、建造和运营规模不具备商业性生产经济规模的试生产厂房设计、建造和测试新的或改进的材料、装置、产品、工序、系统或服务的选定替代品6IAS 38规定，研究活动或内部项目研究阶段发生的任何支出应在发生时确认为费用，因为主体无法证明存在某个未来可能产生经济利益的无形资产。当且仅当主体能够证明同时满足下列条件时，方可确认开发活动或内部项目开发阶段产生的无形资产：完成该无形资产以使其能够使用或出售在技术上具有可行性具有完成该无形资产并使用或出售的意图有能力使用或出售该无形资产能够证明该无形资产未来可能产生经济利益的方式。主体能够证明运用该无形资产生产的产品存在市场或该无形资产本身有市场，或者该无形资产在内部使用的，能够证明其有用性有足够的技术、财务资源和其他资源支持，以完成该无形资产的开发、使用或出售研发成本5|2023年2月国际财务报告准则应用：能源转型：碳捕集与封存的会计考虑事项（中文版）3.IAS 38.84.IAS 38.565.IAS 38.86.IAS 38.59在判断是否将开发成本资本化时，需应用IAS 38中的标准。要满足证明“未来可能产生经济利益”的要求可能具有一定挑战性，除非项目在技术和商业方面都进展顺利。归属于该无形资产开发阶段的支出能够可靠地计量7尽管管理层完成开发所需活动的意图以及使用现有或成熟技术能够满足一部分上述的规定条件，但评估其他条件是否满足将涉及很多判断，且需要商业、工程和运营团队等不同业务部门参与进来。具体而言，满足未来可能产生经济利益相关的条件实质上非常受限，因为IAS 38要求主体使用国际会计准则第36号资产减值（IAS 36）中的原则评估未来是否可能产生经济利益，即，使用现金流量折现法评估项目未来经济利益的净现值8。如果项目设计在商业或技术方面未能取得重大进展，则很难利用现金流量折现法进行可靠地评估以及很难证明未来可能产生经济利益。初期阶段的项目成本的处理可能与传统做法不同，需要视哪些主体参与了碳捕集与封存项目而定。具体而言，从事采掘行业的主体习惯于应用国际财务报告准则第6号矿产资源的勘探和评价（IFRS 6）对勘探和评价活动发生的成本进行会计处理。IFRS 6允许主体确定会计政策，规定哪些支出作为勘探和评价资产确认，哪些成本作为费用确认。但是，碳捕集与封存项目不涉及勘探或评估矿产资源。因此，在确定如何处理与碳捕集与封存项目相关的研发成本时，IFRS 6不适用，IAS 38才适用，因为IAS 38的适用范围更广，涵盖其他会计准则未明确涵盖的各个行业的研发活动。6|2023年2月国际财务报告准则应用：能源转型：碳捕集与封存的会计考虑事项（中文版）7.IAS 38.578.IAS 38.607|2023年2月国际财务报告准则应用：能源转型：碳捕集与封存的会计考虑事项（中文版）示例研发支出情景一家公司致力于开发碳捕集与封存设施，目前项目处于开发阶段，正在进行某些初期阶段的活动，包括开发不具有商业性生产经济规模的试生产厂房。尽管采用的技术较为先进，且该公司有能力并有意图完成开发，但该公司的碳捕集与封存项目所在地区目前没有正式立法规定政府支持的程度和性质。在这个管辖区的这个行业，碳捕集与封存项目若要取得商业成功，监管审批必不可少，未经监管审批意味着未来是否可能产生经济利益存在重大不确定性。因此，现在，该公司没有足够依据使用现金流量折现法评估项目的净现值。会计分析尽管项目处于开发阶段，但在未经监管审批的情况下，该公司无法证明项目未来是否可能产生经济利益。因此，发生的开发成本应按照IAS 38作为费用确认。监管审批并不是IAS 38规定的确认条件之一，IAS 38不禁止主体在获批前将其开发成本资本化。但是，在某些行业，监管审批是取得商业成功的必要条件，未经监管审批意味着未来是否可能产生经济利益存在重大不确定性。我们的看法IAS 38适用于确定与碳捕集与封存项目相关的初期阶段研发成本的适当处理方式。尽管根据管理层完成开发所需活动的意图，使用现有或成熟技术能够满足将开发成本资本化的多个条件，但满足其他条件仍可能颇具挑战性。在某些行业，未经监管审批意味着项目未来是否可能产生经济利益存在重大不确定性。因此，在这些行业，在获批之前将成本作为费用确认是惯例。碳捕集与封存项目也需要考虑对于特定项目的政府政策的重视度和成熟度。如果商业碳捕集与封存项目通过研发阶段，则项目的施工建设将涉及不动产、厂场和设备的使用，具体可能包括可重新利用的现有资产（例如，与枯竭储层相关的管网和资产）和新的固定资产（例如，新的天然气处理和压缩设施及再注入设备）。现有碳捕集与封存项目的商业动机和相关商业模式各不相同，包括：旨在独立产生经济效益的项目，通过处理和封存外部客户运营中排放的碳，向外部客户收取相应费用。由排放产生者设计的，作为更广泛的现金产生单元（CGU）的一部分运行，以减少相关生产设施排放的项目。例如，可以将碳捕集与封存基础设施添加到油气生产设施中，以遵守与上游油气活动排放相关的某些法定或推定义务。如果建造与独立运营的碳捕集与封存项目相关的不动产、厂场和设备产生了成本，并且未来经济利益很可能流入主体，则应将已发生的金额资本化并按成本确认。如果建造与独立运营的碳捕集与封存项目相关的不动产、厂场和设备产生了成本，并且未来经济利益很可能流入主体，则应将已发生的金额资本化并按成本确认。如果碳捕集与封存基础设施并不旨在作为独立资产产生经济利益，而是为遵守与相关资产产生的排放有关的某些法定或推定义务，则IAS 16的某些规定可能适用。即，IAS 16 认定可能存在立法要求主体购买不符合资产确认标准的“资产”，因为该支出并不会直接增加该资产在未来预期产生的经济利益。该准则9认为此类支出符合资产确认条件，因为它们使主体未来可以从相关资产中获得经济利益，其价值超过了未发生此类支出时将产生的经济利益。资产在可供使用时开始计提折旧，根据该准则，可供使用是指资产被运抵指定的地点并达到预定状态，能够按管理层预期的方式运行。与资产相关的成本通常在这一时点停止资本化，因为此时实物资产已可投入运行或达到其预定可使用状态。除非资产已提足折旧，否则主体不会仅仅因为资产处于闲置状态或已退出活跃的使用状态而停止计提折旧。但是，如果主体使用按使用程度计提折旧的方法（例如，工作量法），则在没有进行生产的情况下，计提可以为零。长时间没有投入生产可能表明该资产已经闲置，这是IAS 36中列举的减值迹象之一。不动产、厂场和设备（PP&E）支出8|2023年2月国际财务报告准则应用：能源转型：碳捕集与封存的会计考虑事项（中文版）随着碳捕集与封存设施进入开发阶段，需要通过判断来确定适合资本化的成本，以及后续对此类金额进行折旧的时间和方法。9.IAS 16.11主体在对不动产、厂场和设备计提折旧时，必须采用能够反映其预期消耗资产未来经济利益的模式的折旧方法。在确定不同资产或资产组成部分的适当折旧方法时需要进行考虑。碳捕集与封存项目将涉及不同性质的资产和资产组成部分，因此可能需要采用不同的折旧方法或基础。某些资产（即与向特定储层或地下结构注入碳相关的资产）可能适合采用按油气田封存容量的比例计提折旧的方法（即，类似于上游油气行业采用的产量法）。其他情况（即，在将碳封存在多个不同的储层（包括尚未开始注入）之前，旨在用于处理和压缩碳的处理设施）则可能适合采用年限平均法。在某些情况，碳捕集与封存项目可能使用部分或全部已经计提折旧的现有基础设施（即，与生产或停止运作的油气田相关的管道或海上设施）。在此情况下，随着碳捕集与封存项目的推进和此类资产的未来使用变得更加确定，主体应评估是否需要改变对现有设施计提折旧的方法和/或期限。即，碳捕集与封存项目可以延长现有基础设施的使用寿命。9|2023年2月国际财务报告准则应用：能源转型：碳捕集与封存的会计考虑事项（中文版）示例不动产、厂场和设备情景某油气生产商为使政府批准其开发油气资产，开发了碳捕集与封存设施来管理上游油气资产产生的排放。会计分析IAS 16 认定可能存在立法要求主体购买不符合资产确认标准的“资产”，因为该支出并不会直接增加该资产在未来预期产生的经济利益。该准则认为此类支出符合资产确认条件，因为它们使主体未来能够从相关资产中获得经济利益，其价值超过了未发生此类支出时将产生的经济利益。在此情景中，相关碳捕集与封存支出被确认为一项资产，因为如果没有此类成本，主体则无法生产和销售相关石油产品。政府越来越重视管理和减少碳排放，碳捕集与封存项目可能会以某种形式获得政府支持。迄今为止，在不同管辖区和项目上，政府对碳捕集与封存项目的支持的性质和程度存在很大差异。国际会计准则第20号政府补助的会计和政府援助的披露（IAS 20）适用于政府补助的会计和披露，也适用于其他形式的政府援助的披露。区分好政府补助和其他形式的政府援助很重要，因为IAS 20的要求仅适用于前者。根据IAS 20，政府援助是指“政府意在专门对符合特定标准的某个或某些主体提供经济利益的行动”。政府补助是指“政府转移资源以帮助主体在过去或未来按特定条件开展经营活动”。10该准则确定了以下类型的政府补助：11与资产相关的补助，指满足以下前提条件的政府补助：有资格取得补助的主体，通过购买、建造或以其他方式取得长期资产。还可能有附加条件，如限制资产的类型或位置，或者限制取得或持有这些资产的期间。与收益相关的补助，是指除与资产相关的补助之外的其他政府补助。具体而言，政府拨款不包括以下各项：无法合理作价的补助与主体正常交易无法分清的与政府间的交易，例如主体受到政府采购政策的青睐不适用IAS 20的政府补助包括：在确定应税利润或亏损时提供的利益形式的政府补助，或在所得税负债基础上确定或限制的利益（例如所得税免税期、投资税款减免、加速折旧和降低所得税率）。此外，IAS 41涵盖了与农业活动有关的政府补助。政府补助10|2023年2月国际财务报告准则应用：能源转型：碳捕集与封存的会计考虑事项（中文版）10.IAS 20.311.IAS 20.312.IAS 20.3示例政府补助情景某政府最近颁布了一项对排放者征收高额碳税的法令，目的是为碳封存的未来需求和价格提供充分的保障，使特定碳捕集与封存项目开发商能够获得继续开发所需的资金。会计分析虽然颁布的法令间接支持了碳捕集与封存项目的开发，但这种支持将不适用IAS 20，因为IAS 20规定“本准则中，政府援助不包括仅通过影响主体的一般经营环境的行动间接提供的援助，如在开发区提供基础设施，或者对竞争对手施加贸易限制”。12如果政府支持被视为政府补助，且存在两点合理保证，即（1）主体将遵守附加条件；（2）主体能够收到补助金，则可对此类政府支持予以确认。13由于该准则没有对“合理保证”进行定义，因此存在一个问题，即，它的含义是否与其他准则中的“很可能（probable）”或“多半会发生（more likely than not）”相同。14“合理保证”一词通常被解释为一个较高的临界值，我们认为，此概率比“多半会发生”更高。因此，我们不希望主体在极有可能将遵守政府补助附加条件并能够收到补助之前确认政府补助。补助应系统地计入利润表，使其与预期补偿的相关成本相匹配。与可折旧资产相关的补助按这些资产计提折旧的期间和比例确认为收益。IAS 20认定，补助可以作为附有若干条件的一揽子财务或财政援助的一部分接收。在此情况下，该准则指出，需要注意识别产生成本和费用的条件，这些条件决定了将补助确认为收益的期间。将补助分成两份，按不同的基础进行分配也可能是适当的。与资产相关的补助（即，满足以下主要条件的补助：有资格取得补助的主体，通过购买、建造或以其他方式取得长期资产）应在财务状况表中列报：通过将补助设置为递延收入，在资产的使用寿命内系统地确认为收入或者通过在确定资产账面价值时扣除补助，在这种情况下，补助作为折旧的减少计入损益与收入相关的补助应列报为：利润表中的贷项，单独列报或在计入“其他收入”或者在报告相关费用时的扣除虽然主体可以选择列报补助的方式，但必须对类似补助一致应用此选择。在某些情况下，政府补助可能需要偿还。根据该准则，如果政府补助在确认后需要偿还，应按对会计估计的修订处理。1511|2023年2月国际财务报告准则应用：能源转型：碳捕集与封存的会计考虑事项（中文版）13.IAS 20.714.包括国际会计准则第37号准备、或有负债和或有资产。15.IAS 20.32主体确认政府补助后，任何相关或有负债或或有资产应根据国际会计准则第 37号准备、或有负债和或有资产（IAS 37）进行会计处理。12|2023年2月国际财务报告准则应用：能源转型：碳捕集与封存的会计考虑事项（中文版）我们的看法由于政府对碳捕集与封存项目的支持性质千差万别，因此需要进行详细分析来确定任何支持的性质以及适用的会计准则和适当的会计处理。政府补助在能够合理保证（1）主体将遵守附加条件，且（2）能够收到补助的情况下予以确认。由于该准则没有给出“合理保证”的定义，因此需要运用判断来确定是否满足该临界值。 Ernst&Young Global Limited 的全球组织，加盟该全球组织的各成员机构均为独立的法律实体，各成员机构可单独简称为“安永”。Ernst&Young Global Limited 是注册于英国的一家保证（责任）有限公司，不对外提供任何服务，不拥有其成员机构的任何股权或控制权，亦不担任任何成员机构的总部。请登录 。关于安永国际财务报告准则团队全球化的会计准则为全球经济提供了评估和比较公司业绩的方法。对于正在采用或正在转为采用国际财务报告准则（IFRS）的公司，由于准则持续地发生变化，专业与及时的指引十分必要。其影响已远远超出会计和报告领域，进而影响您所作的关键商业决策。我们整合了广泛的全球资源人才及知识以支持我们采用IFRS的客户并帮助我们的客户服务团队。因为认识到您需要量身定制的服务以及始终如一的工作方法，所以我们把对专题的深入了解、广泛的行业经验以及全球最新的发展情况传递给您。2023安永，中国。版权所有。APAC no.03016416ED None本材料是为提供一般信息的用途编制，并非旨在成为可依赖的会计、税务、法律或其他专业意见。请向您的顾问获取具体意见。

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思略特：2023数字汽车报告（第1卷）（英文版）（40页）.pdf

Digital Auto Report 2023What consumers really wantVOLUME 1Strategy&2Eleventh annual Digital Auto Report,developed by Strategy&and PwCGlobal consumer survey with a focus on the US,EU and China(n=3,000)Quantitative market outlook up to 2035,based on regional structural analysisInterviews with industry executives at OEMs and suppliers,and with leading academics and industry analystsDigital Auto Report 2023Digital Auto Report 2023 Volume 1Coming up next:Volume 2Assessing global mobility market dynamicsMarket outlook penetration of technologies and mobility typesTechnology shifting gears in connected,electric,automatedRegulation slowdown or acceleration of key policies?This report:Volume 1Understanding consumer preferences and implicationsConsumer view changing mobility preferencesImplications for auto players interface,subscription and chargingStrategy&Addressing changing consumer preferences requires auto players to gear up their user interfaces and business modelsNote:Please refer to respective section for detailed assumptions and sources behind stated propositionsExecutive summary Volume 1Digital Auto Report 20233Our consumer survey(n=3,000 in Germany,US,China)captures current preferences in auto&mobility and is contrasted with expert opinionsIn respect of connected services,consumers first want to get the basics right the highest priority is safety navigation,phone mirroring is gaining importance,on-demand car functions as well;experts rate the importance of infotainment and lifestyle higher than consumers do;willingness to pay for full set of connected services stands at 20/months in GER and the US,and at 40 in China experts give more conservative estimatesGermans still hesitant about BEV cars only 35%would consider getting one;more openness in the US 50%;China very open to BEVs with 90%Low trust towards L4 automated vehicles in GER and US with 60-70eling uncomfortable vs.15%in China;but on the other hand,Germans who want to use L4 have a higher willingness to pay to use robo-taxis than to use driver-driven taxis;in the US and China willingness to pay is lowerPurchasing a new/used car preferred;subscription models gain traction;online car purchase scores highest in China(36%vs.10%in Germany)Consumers intend to use public transport more often than last year,but show similar intentions for own car;less interest in sharing/hailing1.Consumer preferences2.Automotive implicationsAuto players face strategic challenges with regard to connected,electric,automated&smart mobility.Volume 1 focuses on three key aspects:A Getting the user interface rightAs software-defined vehicles open the door to many new markets,OEMs need to be clear in which consumer life areas they want to play,which experience differentiators to focus on(luxury vs.convenience),and how to build a corresponding service portfolio.Investment decisions should be based on value creation beyond direct user revenues,with a balanced view on build vs.buddy vs.buy for tech componentsB Rethinking vehicle salesOEMs benefit from a rising demand for car subscriptions-expected to grow from 0.3m to 2-4m units by 2035 in Europe.To reach profitability.OEMs need to balance consumer needs(model flexibility,transparent pricing)with smart asset lifecycle management for maximum residual valueC Going beyond the vehicleNew business models emerge around batteries and bi-directional charging.With 5m bi-di cars in Germany by 2035,market potential is 160-220m for vehicle-to-home/microgrid and 470-550m for vehicle-to-grid solutions assuming successful orchestration of ecosystem playersStrategy&Contents2.Implications for auto players interface,subscription and charging1.Consumer preferences connected,electric,automated and smartDigital Auto Report 20234Strategy&Latest consumer attitudes within CASE are reflected in a survey of 3,000 respondents in Germany,US and China*Age brackets harmonized;*Low income(1,6T EUR,2T USD,8,3T EUR,10T USD,64T YUAN)Overview of consumer surveyDigital Auto Report 20235Consumer OverviewKey resultsn=1,000Gender(%)n=1,000n=1,0005149Age*(%)Household income*(%,gross monthly)9 743248Medium incomeLow incomeRather low incomeRather high incomeHigh income33353235-5418-3455 3regions15questions3,000respondents50504456273736184339243018910213127138Employer type of experts(%)211663OEMSupplierOperator18384433531450expertsPurchasing a new or used car still preferred option,but car subscription models are gaining tractionConsumers want to reduce CO2 mainly through more walking/cycling,switching to electric car,and using more public transport Safety navigation remain the most important connected services features on-demand functions gaining popularityWillingness to pay at 20 per month in Germany and the US,while at 40 in China experts more cautiousGermans still sceptical about BEV cars only 35%would consider getting one,but more openness in the US 50%In China,overwhelming preference for BEV with 90%considering such option vs.only 80%considering ICEGerman/US respondents sceptical about L4 automated cars 60-70%uncomfortable vs.15%in ChinaWillingness to pay for robo-taxis vs.driver-driven taxis is lower in the US and China than in GermanyStrategy&Safety and navigation remain as most important connected services features on-demand car functions on the riseSource:PwC Strategy&consumer researchSafety and navigation still mostimportant feature for respondents across all regions.Significant increase in the number of participants in Germany who rate smartphone mirroring as important”Mirror smart-phone in car27%NavigationSafetyInfotainment/EntertainmentVehiclemanagementOn-demandcar functionsLifestyle and comfort80 xiE9xqaUbYv%Question:“Which connected service categories are particularly important to you?”Consumer Connected202320212020Infotainment/entertainment more important for younger consumersDigital Auto Report 20236Connected services Share of participants rating feature as important Infotainment/entertainment more important for younger consumersStrategy&Experts rate infotainment higher than consumers do in China,they underestimate relevance of on-demand functionsSource:PwC Strategy&expert surveyConnected services Share of experts rating feature as importantSafety,navigation and entertainment are considered the most important byexperts.Experts in Germany are rather less enthusiastic when assessing the importance of mirroring smart-phonesExperts in China are comparatively less upbeat when assessing the importance of on-demand functions and lifestyle&comfort services.”94898931736863VehiclemanagementNavigationSafetyLifestyle and comfortOn-demandcar functionsMirror smart-phone in carInfotainment/Entertainment-48% 63% 130i946969758175 35% 28936780877367-27% 14%-25%Question:“Which connected service categories are particularly important to you?”Expert Connected2023 Experts 2023 ConsumerDigital Auto Report 20237Strategy&Smartphone mirroring to the car has highest rating;Auto OEM apps for service access are less popularSource:PwC Strategy&consumer research;Difference to 100%:no/low likelihoodConnected services and media/entertainment in the car53iE2%On a screen mirroringfrom a smartphoneinto the vehicleHighest preference across all countries is for smartphone mirroring.Media/entertainment via an auto OEM application is less popular.”Question:“How would you prefer to enjoy connected services and media/entertainment in your car?”Consumer Connected59i75YcE3%1stand 2ndrankOn an appof content providerinstalled in your carOn my smartphonedirectlyAuto OEM appaccessing contentDigital Auto Report 20238Strategy&010203040506070Notes:1)Calculation of price points based on van-Westendorp-methodologySource:PwC Strategy&consumer research;Exchange rates:USD/EUR 0.93,YUAN/EUR 0.14(15.02.2023);PwC Strategy&expert survey research 2023;n=50Connected services Median willingness to pay1)High spread of willingness to pay in China indicates strong polarisation of luxury vs.budget customers differentiated service packaging neededHigher optimal price in China indicates that consumers envision more benefits from the“perfect connected service bundle”than in the US/GER expert view more conservative on prices.”Consumer Connectedfor a full set of connected services in the vehicle that“perfectly fit your needs”Willingness to pay1)(monthly in)Question:“At what price would you consider a full set of relevant connected services Too cheap?”A good value for money?”Starting to get expensive?”Too expensive?”By nationalityXXXMaximum priceMinimum priceOptimal priceExpert estimateWillingness to pay for connected services around 20/month in Germany and the US but twice as much in China(40)Digital Auto Report 20239Strategy&Among on-demand functions,automated driving features such as traffic jam pilot/parking pilot are attracting more interestSource:PwC Strategy&consumer researchOn-demand car functions Share of participants rating function as importantConsumer ConnectedAutomated driving functions traffic jam pilot or parking pilot attract considerably more interest vs.previous year.Air condition activation is still viewed as the most importanton-demand car function.”Question:“How important would be on-demand car function.to you?”69ccSHID%Traffic jam pilotAdvanced headlightfunctions/performanceAir conditionactivationExtension of batteryrange(e.g. 80 km)Seat heatingactivationParking pilotIncrease of enginepower(e.g. 50 hp)60RSwebAx 232021Digital Auto Report 202310 Traffic jam pilot more important for older consumersStrategy&Experts in Germany/US attach even more importance than consumers to automated driving function attractivenessSource:PwC Strategy&expert surveyOn-demand car functions Share of experts rating function as importantExpert ConnectedExtension of battery range and traffic jam pilot are considered the most important functions among experts When compared with consumers,experts are particularly bullish about on-demand engine power.”Question:“How important would be on-demand car function.to you?”84tX0%Increase of enginepower(e.g. 50 hp)Air conditionactivationExtension of batteryrange(e.g. 80 km)Advanced headlightfunctions/performanceSeat heatingactivationTraffic jam pilotParking pilot 94% 129ci% 81% 108sss 23 Experts2023 ConsumerDigital Auto Report 202311 Experts in US&China are more conservative in assessing the importance of air conditioning activationStrategy&H2O2 77%Source:PwC Strategy&consumer researchShare of participants rating engine types as likely for next purchase(%)Question:“Assuming you wanted to buy/lease/subscribe to a passenger car,how likely are you to consider the following types of engines?”Consumer Electric53RyWQABD%GasolineBEV69%PHEV73D9555-34yo55 yo35-54yoAge bracketLooking at powertrain preferences,German and US consumers stick with gasoline,while Chinese prefer BEVDigital Auto Report 202312 Gasoline engine surprisingly more attractive for younger consumersGasoline is most popular engine type in USA and Germany,followed by PHEV engines,which are slightly more popular than BEVs.Chinese consumers exhibit opposite preferences with BEVs being most popular,ahead of hybrid and ICE engines.”Strategy&Question:“How comfortable would you feel using an autonomous vehicle(Level 41)”1)There is still a steering wheel and pedals,but no human action or supervision is required,except in more complex cases such as inclement weather or an unusual environment2)Can operate fully automatically on any road and under any conditions that a human could negotiate.There is no steering wheel or pedals.All you have to do is specify a destination to the vehicleSource:PwC Strategy&consumer researchAutomated driving Consumer attitudesConsumer AutomatedQuestion:“How comfortable would you feel using a fully autonomous vehicle(Level 52)”50C$#8%9G%40%Very comfortableNot comfortable at allRather not comfortableRather comfortable66S0%6Q0%6%Vs.14%in 2021Vs.18%in 2021Vs.39%in 2021In general,willingness to use automated cars has recovered in comparison with relatively low 2020 figures,which resulted from negative headlines at the time e.g.following accidents and cybersecurity threats.Scepticism towards“fully automated”vehicles(Level 5)still stronger than for Level 4.Consumer acceptance of automated driving remains low in Germany and the US more openness in ChinaDigital Auto Report 202313Level 5Level 4Strategy&Source:PwC Strategy&consumer researchAutomated driving Top 3 preferences for usage of time gainedThe intention to use time gained from not driving went down compared to 2021 the reduction was significant in Germany and the US.Media&Entertainment as well as relaxation are still the main intended activities.”Consumer Automated414533525139Relaxation and recovery(e.g.sleep)Media and entertainment(e.g.video streaming)Work and productivity(e.g.email)414030455539Work and productivity(e.g.email)Media and entertainment(e.g.video streaming)Relaxation and recovery(e.g.sleep)20222021575349626257Relaxation and recovery(e.g.sleep)Media and entertainment(e.g.video streaming)Social exchange(e.g.video-conferencing)Question:“For which activities would you use the time gained while driving in a fully autonomous vehicle?”On an robo-ride,people want to be entertained or relax in GER/US they also want to work,but in China prefer to socializeDigital Auto Report 202314Strategy&60%of US citizens want to pay less for a robo-taxi vs.a driver-driven taxi;only 5%want to pay more vs.30%in GermanySource:PwC Strategy&consumer researchAutomated driving Willingness to payQuestion:“When considering an average taxi ride and its price,what would be your willingness to pay for an autonomous ride compared to this taxi ride?”Consumer Automated28$EVdg67WD9D700SS77%7%9%6U y35-54y18-34y35-54y18-34y55 y3-34y35-54y6U y100%Im willing to pay moreIm willing to pay the sameIm willing to pay lessDigital Auto Report 202315While younger German respondents are willing to pay more for an autonomous ride,older Germans are less inclined to do so.US and Chinese respondents overwhelmingly intend to pay less for an automated ride among those who want to pay less,a 40-50%price cut from driver-driven taxis is the norm.”Strategy&Majority of respondents prefer to purchase a new or used car;but car subscription models are attracting interestSource:PwC Strategy&consumer research|Difference to 100%:no/low likelihoodRanking of buying/leasing/subscribing to a car70G3%Purchase of a new carLeasingof a new carPurchase ofa used carSubscriptionof a carThe intention to purchase a used car is growing,especially in Germany and the US.Subscription is gaining in popularity especially in China.The preference for subscription increased strongly in Germany and the US in 2023(27%vs.14%in Germany and 19%vs.15%in US).”Question:“How would you rank the following ways of acquiring a car if you needed to purchase,lease,or subscribe to a passenger car in the next one to two years?”Consumer Smart Mobility76x1)V%7C%1stand 2ndrankLeasing ofa used carDigital Auto Report 202316Strategy&Readiness for online car purchases very high in China,while rather low in Germany the US falls in betweenSource:PwC Strategy&consumer researchWillingness to make car purchases onlineQuestion:“Would you buy your next car online?The willingness to buy a car onlinevaries significantly across countries.In China,people are particularly open to completing certain steps or even the entire buying process online.In contrast,the majority in Germany feel more comfortable with store processes.”2023417%I would rather do everything at the storeYes,I feel comfortable configuring and signing online,but I would prefer to do a test drive at the storeI would configure it online,but sign and test drive it at the storeYes,I feel comfortable with doing all steps online18 2332 23361%Consumer Smart MobilityHighHighHighLowLowLowWillingnessWillingnessWillingnessDigital Auto Report 202317Strategy&20212023Even as immediate COVID-19 risks decline,using ones own car remains popular;increasing use of shared modes in ChinaSource:PwC Strategy&consumer research Mobility pattern after COVID-19 restrictions(%)Consumer Smart MobilityQuestion:“COVID-19 has temporarily changed our mobility behavior in many aspects.How do you plan to use modes of transport once we have left the pandemic behind us?”MoreSameLess/not at allUsing ones own car is still seen as the most convenient means of transportation with highest increase in demand in Germany and the US.In China,consumers plan to use shared modes more.Across all regions,the number of people planning to use public transport more has increased.”202320212021202320212023202120232021202320212023Own bikeBy footOwn carPublic transportShared micro-mobilityCar-sharingRide-hailingDigital Auto Report 202318Strategy&45) 2136 2354( 23202125%Source:PwC Strategy&consumer researchFactors encouraging sustainable transportation modesIn Germany,there has been a sharp increase in the number of consumers who say that better availability is an important factor in persuading them to use sustainable transport.US respondents focus strongly on cheaper prices,whereas user-friendly access is most likely to encourage respondents to use sustainable transport in China.”59# 21202324mily offers(e.g.4 bikes for the price of 2,.)Cheaper priceBetter availability(e.g.more bikes)User-friendly access(e.g.cashless payment via app,.)Incentives by the employer(e.g.job bike,car sharing benefit package,.)Consumer Smart MobilityQuestion:“What would encourage you to use sustainable transportation(e.g.bike sharing,car sharing,public transportation)more frequently?”Price and availability are by far the top drivers for encouraging consumers to use sustainable transportDigital Auto Report 202319Strategy&25u%Source:PwC Strategy&consumer research Top-3 contributions to CO2reduction High willingness to contribute to CO2reduction,especially in China(98%)strong increase in the US(79%vs.52%last year)Main contributions will be completing short-distance journeys more often on foot/by bicycle,switching to an electric car,or using public transport more frequently.”Question:“What major personal changes would you like to do to contribute to a reduction in CO2emissions?”51)%Completely cut out short-haul flightsShort distances more often on foot/by bicycleUse public transport more frequently Short distances more often on foot/by bicycle43$7%Switch to an electric carUse public transport more frequently Use public transport more frequently 49HT%Switch to an electric carShort distances more often on foot/by bicycle21y%DonothingChange behavior98%2%Consumer Smart MobilityEvery country has different priorities to reduce CO2:In GERmore walking,in the US switch to BEV,in CN public transportDigital Auto Report 202320Strategy&2.Implications for auto players interface,subscription and charging1.Consumer preferences connected,electric,automated and smartDigital Auto Report 202321ContentsStrategy&Digital Auto Report 202322Getting the user interface rightStrategy&The relevant market for automotive players is expanding beyond the car itself maintaining user access is crucialSource:Strategy&,PwC EcosystemizerRealiserEnablerMobility demandMobility demand is influenced by long-term economic,political and social trends as well as generational changes The individual user is located at the center of the ecosystem approach(business to human)Consumer needs can be grouped into ten distinct Life AreasWithin these Life Areas,ecosystems emerge in the form of business-to-business and business-to-consumer relationships around specific customer needsMobility solutionsHuman needs in mobility Life Areas determine customer requirementsSuccessful mobility ecosystem players are clear on four key topics:Digital portfolio scopeE.g.life area coverage,niche positioning,Experience differentiatorsE.g.luxury,convenience,Value chain integrationE.g.vertical/horizontal integration,partnering,Value leversE.g.top-line,bottom-line optimization,Digital Auto Report 202323Redefining business models to meet human-centric mobility needs RecreationOrchestratorE.g.AggregatorE.g.OEME.g.SupplierStrategy&Getting the digital interface right means creating a differentiated experience for diverse customer needsSource:Strategy&analysis Experience differentiators ExamplesAt your fingertipsFINN manages to provide customers with their vehicle of choice around seven days after booking7Hassle-free serviceGenesis picks up and returns the car for aftersales services at a place of choice,managed through a personal assistant Seamlessly integrated offeringsUber integrates multi-modal mobility options with related services such as food delivery,health or transit on one platformFull flexibilitySixt offers various vehicle ownership models(renting,subscription,sharing)with flexible run times and payment schemes in one appProactive offeringsBMW 7 Series actively welcomes riders into the car by extending a carpet made of lightTrading scarcity Lamborghini has created only 5 digital NFTs based on physical keys made from carbon fiber from the international space stationDifferentiated experience:LuxuryDifferentiated experience:ConvenienceDigital Auto Report 202324Efficient interactionsMercedes me app lets users manage their vehicles on the go,from scheduling service,to making payments,to getting assistance at the push of a buttonBespoke services Bentley allows their buyers to customize every part of the car,including paint,finishes,materials and even light-projected logosDigital opulence Rolls Royce cements the credentials of its bold new brand identity for its website with mood videos similar to perfume adsCrafted touchpoint NIO broadens their services with the EP House,a space where owners can come together and celebrate the brandStrategy&A value-creating digital service portfolio requires automotive players to balance multiple trade-offsSource:Strategy&analysisDigital portfolio scope ExamplesVehicle Function-as-a-ServiceConsumer onboard servicesConsumer offboardservicesB2B/data servicesPortfolio Trade-offsDifferentiation vs.revenue potentialReach vs.profitabilitySynergy focus vs.risk hedgingTouchpoint controlvs.open partnersDigital first vs.BEV/AD availabilityMobilityEntertainmentWorkHealthSound BMW e-engine sound packAutonomous driving Tesla autopilot upgradeLight BMW high beam assistCamera Tesla sentry modeAccess Tesla virtual bluetooth keysParking search and pay VW we parkP2P car/ride sharing Sono motors appFleet mgmt./diagnostics Daimler connect businessCar data marketplace Caruso,Otonomo,High M.Car data based insurance BMW CarDataDrivers log/GPS tracking Daimler connect businessPredictive maintenance BOSCH,CarmenIntelligent car assistant Alibaba,Volvo/DaimlerGaming Tesla arcade,RacingEntertainment Tesla caraokeAdvanced navigation MB live trafficMusic streaming BMW Spotify,NIO RadioPassenger safety NIO fatigue warningSmart Office Connection BMW IFTTT Last Mile Logistics NIO delivery in trunkEmergency assistant GM OnStar guardianPlug and charge VW/IonityMood-based lightening Mercedes-Benz ambientIn-car Office Mercedes me connectMeditation Porsche Feel-Good-CoachNFT Collections Roll Royce PhantomAI Avatar Fetch.ai autonomous agentsCrypto Car Wallet Various pilotsIn-car AR gaming Audi/holoride partnershipRoadside assistant support Urgently/OtonomoAutomated park and charge Bosch Autom.Valet ParkingSafer traffic planning Mercedes Data/LondonWeb3 Loyalty Program BMW/CoinwebDigital Auto Report 202325Strategy&30-40ditional revenue potential based on customer insights 30-40%of incidents can partly/fully be prevented by OTA 20-30%cost reduction potential through variant reduction 20-30%inventory decrease due to demand forecasting50-60%of companies indicate that they do sell data to third parties 30-40%switch to paid subscription after free trial45-55%are more loyal to brandsto which they have a subscription35-50%are interested in post-purchase activations 60-70%are willing to pay 180$/year for connectivity service setAlong the value chain and vehicle life cycle,digital services unlock value beyond direct user monetizationValue levers of digital services ExamplesImplicationsBottom-line:OpEx/CapExOptimizationTop-line:Direct revenue and customerlifetime valueServices monetizationBrand loyaltyPost-purchase activationsPlatform access/data salesConnected services activation fees and/or recurring revenues related to monthly subscriptionsHigher satisfaction with on-board experience and creation of stickiness through subscription servicesUpselling effect during the ownership cycle by unlocking personalization features or activating built-in hardwareDirect revenues from granting third parties access to own platform or monetizing(anonymized)data/insightsLeverage of real time data on customer preferences/behaviorsfor timely adjustment of vehicle specifications and features Reduction of the number of model-specific variants by activating on-demand vehicle features Optimized inventory management through advanced planning of upcoming repairs enabled by predictive maintenanceAfter-sales LoyaltyHigher revenues for dealers from original parts sale and workshops traffic triggered by predictive maintenance R&D optimizationRecall campaignsVariant managementParts inventory managementPrevention of recall campaigns by leveraging OTA updates to fix potential technical issues within the circulating fleetSource:Strategy&analysis expert discussion Digital Auto Report 202326Ecosystem business cases should extend beyond vehicle-centric business casesDirect and indirect revenue potential,and opportunities beyond vehicle offerings,should be considered along the customer life cycle B2B offerings offer significant direct monetization potentialIn addition to external opportunities,a significant amount of internal opportunities exist,e.g.to increase efficiency in processes&portfolioStrategy&IIIIIIIVVOEMs are forced to partner with technology players to deliver compelling digital services risking a loss of controlSource:Strategy&analysisValue chain integration Range of partnership optionsNo tech player involvementOperating system and all applications are developed by the OEMFull control for OEM,no standardization,slower development,reduced offering compared to market leadersOperating systemsupplyStandardized tech stack is provided by supplier,e.g.Android Automotive OSFaster development,easier integration of external applications(e.g.Spotify),standardized setting cannot be adjusted by OEMContent mirroringApple/Google content is displayed by using apps within the vehicle,e.g.Android AutoCommon mobile apps(e.g.Google Maps)are immediately available in-vehicle;less use of OEM native apps/content Tech player involvementOEM ControlNext?A winning digital experience requires customer proximity,tech capabilities and effective data governanceDigital Auto Report 202327Tech player content using vehicle dataUsage of car data to enrich 3rdparty in-vehicle apps,e.g.for usage based insurance or location based commerceCompelling user experience on par with mobile app UX,but OEM apps loose advantage of specific driver/vehicle insightsExternal development of the digital experienceEntire automotive softwareis developed by tech supplierData governance between involved stakeholders crucial to avoid downgrading of OEM to pure hardware provisioningStrategy&Digital Auto Report 202328Rethinking vehicle salesStrategy&Duration(average figures for Germany)Included services Relative price per month Leasing2 years5-9years2)3 years1)Low,due to fewer services and longer durationtrend1 month2-6yearsSubscription1 year1)High,due to high convenienceRental 1 day1 yearHigh,due to high amount of included mileage7 days1)Sharing10 min.1 week30 min1)Highest,due to highest convenience and most services includedtrendExact model selection/some configurationUp-front down paymentInsurance,tax and registration Flexible cancellationDelivery and collectionSwitching models Residual value coverage Additional driver allowedRisk-dependent fee(driver history)Scheduled service,repairs/wear and tear Fully digitized customer journey /=Usually included /Depends on provider /Usually not included Subscription fills the gap between leasing and rental offerings resulting overall in four major vehicle ownership archetypes1)Based Strategy&analysis;2)Depending on specific regulatory environment allowing“prolonged lease”Source:Strategy&analysisVehicle ownership archetypesDigital Auto Report 202329Strategy&2.Lifecycle:Used car leasing(different customer(s)As alternative ownership models such as subscription emerge,OEMs need to sharpen their vehicle lifecycle mgmt.skillsSubscription customer and asset journey Example4.Used car leasingCustomer journeyVehicle journey012345789Car handoverScheduled maintenanceSubscription model suggested to customerFor their vacation,the customer temporarily adds a second driverCustomer occasionally uses car sharingCar enters used leasing contract with a new customerScheduled maintenanceRepairs followingaccidentScheduled maintenanceAfter the lease,the car is returnedYearRefurbish battery and ADAS in preparation for next lifecycleInteriorrefurbish1.New car leasing2.Subscription3.New subscription5.Car sharing and rentalMaintenance and minor fixesFamily plans:subscription renewal with bigger carDue to increased price consciousness,customer decides to lease a used carMove into city:end of lease and switch to sporadic sharing and rental carsCustomer signs contract to lease new carNew car is in-fleetedIn the last lifecycle,the car moves into the sharing fleetAt the end of its useful life,the car is recycled or sold B2BAfter the lease,the car is returnedCar rentalduring vacationResidual value optimal:customer offered to trade carsCustomer increases the annual km6Scheduled maintenance1.Lifecycle:New car leasing3.Lifecycle:Car sharing(different customers)Source:Strategy&analysisDigital Auto Report 202330Strategy&Suitable ownership modelsHolistic vehicle lifecycle management aims to increase revenue and utilization,especially during 2ndand 3rdphaseSubscription“3x3”asset lifecycle1stLifecycle phase(years 1-3)2ndLifecycle phase(years 4-6)3rdLifecycle phase(years 7-9)Residual valueRevenue and utilization potentialMaintenance and refurbishment1)In accordance with residual valueAdditional revenue from e.g.,contract extras or repair chargesAsset potentialRegular maintenance costs Sporadic refurbishment costsPotential repair costsDepending on vehicle utilization in respective ownership modelContract add-onRecycleLeasingSubscriptionRentalCar sharing2)3)()Repurpose vehicleRefurbish vehicleMaintain/repair vehicleRecycle componentsAdd contract extrasSequence of ownership modelsas well as external market conditions have influence on most suitable selection for each lifecycle phaseFor certain ownership models,assets that are viewed as too old may not be favoredThe younger the asset,the shorter the duration-especially if utilization is high 1)Annual OEM-prescribed maintenance/service intervals and use-based repairs sporadic refurbishment;2)Depending on specific regulatory environment allowing“prolonged lease”;3)As low-budget optionSource:Strategy&analysis Digital Auto Report 202331Strategy&Alternative ownership models are on the rise and offer profit potential for OEMs if the asset life cycle is managed well1)Estimate of share development for ownership model depends on shares of competing models;LCP:Life cycle phase;2)Profitability estimate based on individual consideration of ownership model for average middle class passenger EV(price 53.5k EUR)Source:Strategy&analysis Vehicle ownership model split and profitability IndicativeSharing420%Leasing2%SubscriptionPurchase45%Rental1%6.05.60.31.40.213.4Ownership model split 2023 m unitsRegion Europe,40 countriesProfitability of ownership models2)Ownership modelsTraditional car ownershipAlternative ownershipPurchaseLeasingSubscriptionRentalSharingLCP 1 year 1-3LCP 2year 4-6LCP 3 year 7-97%9%-115v%-91xq-15%5%5%5%Total5-7-15-15-15%5%Subscriptionhas potential to growto 2-4m unitsby 2035 in Europe1)Leasinghas potential to growto 7-8m units by 2035 in Europe1)Digital Auto Report 202332Overall profitability potential higher for leasing,subscription and rental than for purchaseProfitability across LCPs varies from relatively constant to a sharp increase.With rental,there is only one LCP.It is not individual consideration but a merged portfolio view that is crucial for OEMsStrategy&More flexible ownership models offer benefits and risks for OEMs and customers a win-win solution is requiredVehicle subscription benefit and risk perspectiveAlternative ownership models need to create a win-win situation for customers and OEMsCurrently,they mostly play into the strategic agenda of OEMsStrong customer centricityand efficient asset management of used cars are needed to reach profitabilityOEMs may leverage their existing retail network and preferential vehicle acquisition conditions to differentiate themselves from start-up competitorsProduct piloting and learning from data insights into longer-term car usageKeeping track of battery lifecycle/recycling requirements according to regulations Customers willingness to pay and price pressure for alt.ownership offeringOEMCustomerFlexibility of car ownership in case of changing life circumstance Residual value and admin process(insurance,maintenance,etc.)peace of mindResidual value risk at end of lifetime and need for strong operational excellenceSource:Strategy&analysisDigital Auto Report 202333Key takeawaysOpaque pricing and difficulty of comparing offeringsPerception of ownership is absentStrategy&Digital Auto Report 202334Going beyond the vehicleStrategy&Rise of e-mobility provides ample opportunities to capture value beyond the vehicle e.g.with batteries and chargingSource:Strategy&analysisValue pools beyond the vehicle Focus e-mobilityDigital Auto Report 202335Battery value chainCharging value chainAdjacent ecosystem serviceseMSP1)Last mileservicesLocation-basedcommerceFleet mgmt.servicesOnboardentertainmentCharge point operationEnergy provisioningSite and asset ownershipCharging equipment manufacturingEnergy system integrationBi-directional ChargingBattery exchangeCar/battery usageBatteryproductionBattery incar assemblyBatteryrecyclingBatterysecond lifeInstallation and maintenanceStrategy&Infrastructure and vehicle penetration are key requirements for successful realization of bi-directional charging use cases Bi-directional charging Market simulation GermanyParkingHome and apartment buildingsCharging hubs1.8m0.16m0.03m0.7mBi-directional sockets by 2030Bi-directional charging-capable vehicle fleet(#)OfficePrivate2.5mPublic0.19mTotal 2030:2.7 million bi-directional socketsTotal 2030:5 million bi-directional vehiclesBi-directional charging capable vehicle fleet in Germany(as share of total EV fleet)Source:PwC Strategy&Study(2022):“Der E-Mobility-Check:Wie bereit ist Deutschland?”;Strategy&analysisDigital Auto Report 202336202820232026202420252031202720322029203020332034203536%6)TBHXabc%Strategy&Enablers&LimitationsFront-of-meter prosumer use cases depend on a multitude of external factors that limit mainstream adoption in short term V2L:Vehicle-to-load(e.g.e-bike,another EV,etc.)V2H/B:Vehicle-to-home/building V2G/VGI:Vehicle-to-grid/vehicle-grid-integrationPV:Photovoltaic 1)Includes software for grid optimization of households(V2H)and public charge point operators only;2)Includes software for power market trading for households and public charge point operators onlySource:Strategy&analysisProsumer charging business model comparison GermanyPower market tradingLoad shiftingSelf-supply optimizationV2H/BV2G/VGIV2LMid-term:EV user demand driven by incentive to earn/save money,but depending on available solutions&attractive pricingShort-term:Growing EV user demand to use vehicle e.g.as additional storage for home PV or emergency power bank(in the US)Customer DemandNeed for penetration of bi-directional capable vehicles and infrastructure(i.e.EV charger)to reach“critical mass”Need for development of standard protocols(interconnection,communication,vehicle and charging station safety&functionality)Energy TechFully supportive regulation not expected before 2028 at EU level due to high stakeholder complexity(smart meter as reference)Fully supportive behind-the-meter regulation expected by 2024 due to limited complexity of“closed”micro-ecosystemRegulationNeed for flexible V2G tariffs:Time-of-Use or Time-of-Day pricingMinimum number of kwh must be available at a certain point in time for utility providers to rely upon when managing the gridTech cost reduction(vehicle/infrastructure)required for scale upAvailability of comprehensive ancillary services as important enablerEconomicsUse CasesApplication AreaEnabler RevenuesPotential for software enablers:160-220m1)in 2030While front of meter still requires more regulatory alignment at European level,behind the meter already has a high market readiness in the short term Potential for software enablers:470-550m2)in 2030Digital Auto Report 202337Behind the meterFront of meter Consumption optimizationStrategy&Bi-directional energy provisionCharge and dischargeConnect to chargerRealization and scale-up of prosumer use cases require efficient charging and battery stakeholder coordinationSource:Strategy&analysisDigital Auto Report 202338ServicesWhite label SoftwareCharging dataCharging dataIntegrationChargingdataServicesEV dataCharging dataCharging dataEV/BatteryService providerSoftware supplierBattery manufacturerVehicle manufacturerParkingproviderUtilitysectorCPOEnd userV2HMain scale-up challengesStakeholder fear of losing control points to a central,dominant player(e.g.OEMs see USP in unique charging experience)Enabling ecosystem partnersCharging stakeholdersCharging&battery ecosystem stakeholder activationCan a decentralized coordination approach help to solve these challenges?Relatively high transactions costsfor clearing and billing(given comparatively low value of single transactions)Different interests and priorities across parties(e.g.CPOs want to maximize utilization,whereas OEMs want to maximize charging availability)Data exchangeStrategy&Implication for automotive players:Holistic ecosystem approach beyond core business is key to future successSource:Strategy&,PwC Ecosystemizer Be clear about own ecosystem role whether orchestrator,realizer or enabler Build offering portfolio and allocate resources accordingly Maintain a holistic and iterative approach in the selection of suitable offerings Actively manage the portfolio and prioritize clearly according to a coherent,consistent and multi-layered ecosystem logicOn the one hand Ecosystems can create lock-in effects based on differentiated offerings Customer lifetime value can be increased through holistic journey coverageFaster growth and higher earning potential can be achieved when compared with traditional approaches to value creationOn the other hand Building&managing ecosystems is complexTheoretically,unlimited number of potential offerings complicates the selection processProduct-centric view carries risk of missing market/customer needs(particularly for more advanced topics)Success factorsEcosystemsDigital Auto Report 202339RecreationNew WorkPersonalized pleasureHolistic wellbeingSmart environ-mentRest and relaxationBelieve and mindfulnessRelation-shipsGreen and seamless mobilityCustomized and fast demand fulfillmentPersonal wealth and legalStrategy&Network contactsDigital Auto Report 202340Jrg K Automotive EuropeDr.Jrn N Alternative PowertrainsJonas SConnected and Smart MobilityContributors 2023 PwC.All rights reserved.PwC refers to the PwC network and/or one or more of its member firms,each of which is a separate legal entity.Please see for further details.Mentions of Strategy&refer to the global team of practical strategists that is integrated within the PwC network of firms.For more about Strategy&,see .No reproduction is permitted in whole or part without written permission of PwC.Disclaimer:This content is for general purposes only,and should not be used as a substitute for consultation with professional advisors.Dr.Andreas GDigital TransformationKentaro AAutomotive JapanAkshay SAutomotive USSteven JAutomotive ChinaSteven van ArsdaleSebastian Hauk Carl HeselschwerdtTobias KarlTobias KillmeierTobias Seemann Patrick SchwenkeMalien ZehnpfenningMilos B Infrastructure DealsThilo Bhnenthilo.buehnenpwc.chMobility VenturingHartmut GAutomated Driving

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Monster：Z世代员工雇佣指南（英文版）（16页）.pdf

HIRINGTHENEWESTWORKERSBRING ONGEN Z Right now in the U.S.,Gen Z represents a fifth of the population and is the most diverse generation in the nations history.1 he convergence of a talent shortage,skills gap and demographics shift is looming.As older generations retire,and Gen Z,(those born between 1995 and 2010)enter the job market,employers are counting on them.Thats because by 2030,the youngest of the Boomers will turn 65,and older Gen Xers will have retirement on the horizon.The bulk of workers left will be Gen Z,along with a smaller millennial cohort.In other words,its not hyperbole to say that Gen Z is the group that is tasked with saving the workforce.But are they up for the job?A profile of Gen Z Pg.4 The COVID-19 impact on the future workforce Pg.5 Industry pain points:Tech,Manufacturing,and Healthcare Pg.7 What Gen Z wants Pg.10 How employers can enable Gen Z to save the workforce Pg.11 4 takeaways to reach todays youngest workers Pg.15PG.2This Ebook will explore:T1.Source:Pew ResearchThe mismatch of talent to jobs is approaching critical mass:A recent report from Korn Ferry estimates that by 2030,more than 85 million jobs could stand empty because there arent enough skilled people to fill the roles.But even with a widening skills gap and Gen Z worrying about what they bring to the table its more of a job seekers game than ever.More than half of employers(57%)say job seekers have the upper hand in the entry-level job market,according to a recent Monster survey.And nearly three-quarters(72%)say theyve boosted salary on entry-level jobs in the last year to attract candidates.Despite being in the drivers seat,60%of college graduates dont feel they can be more selective in their job search,because there are more people vying for jobs.But 4 in 10 Gen Zers admit theyve ghosted recruiters,many because they were no longer interested in the position(32%)or because theyd already accepted another job(30%).Another quarter said they had“a lot going on and forgot to respond,”but 34%said the recruiter or hiring manager was rude or lied about the position.On the employer side,3 in 5 organizations report difficulty in filling middle-skills jobs that is,positions that require more education than a high-school diploma,but less than a four-year college degree,according to researchers at Harvard Business School.2 And 69%of HR execs say the inability to attract and retain middle-skills talent often affects their firms performance.So what needs to change?How can employers help this workforce of tomorrow develop the skills needed to succeed and adapt to emerging jobs?And are we doing enough as a society to tap into the millions of talented workers who are ready to fill skilled roles,but dont have a degree listed on their resumes?PG.37 in 10 HR execsBy 2030,more than 85 million jobs could go unfilled because there arent enough skilled people tofill the roles.say the inability to attract and retain middle-skills talentoften affects their firms performance A profile of Gen ZWhile Gen Zers have lived through shared experiences,its important to remember that theres still a wide spectrum of people in that generation,notes Karen Jones,director,workforce strategies and employment solutions for Adecco Group Foundation US,a nonprofit thats helping addressthe skills gap in the United States through upskilling,reskilling,and apprenticeship programs.“I always get cautious about painting any generation with a broad brush,”she says.There are some data points worth considering,however,when trying to reach this youngest cohort of workers.Other facts:Gen Z is also the first truly digitally native generation.They also grew up during the Great Recession,watching older millennial siblings move back home because of sky-high student loan debt.And now,theyve had to finish out their school years and/or enter into the job market during a pandemic.“Instability has very much been the Gen Z norm.Over the course of the pandemic,things have been ever-changing,and they dont have the same foundation or reference point,because this represents their whole lived experience,”says Emily Schaffer,managing director,Year Up,a nonprofit career training program for young adults 18-24,the majority of whom identify as people of color.“Instability has very much been the Gen Z norm.”Emily Schaffer“Our social contract of the 90s through 2010 was that a college degree was the greatest insurance policy you can have against poverty.This is the path.”Unfortunately,that contract was broken for many,she adds.The trend that emerged was leaving college with debt,but not the degree.And even among those who graduate,the promise of a high-earning job doesnt always pan out.Graduates in the class of 2021 with degrees in engineering or business saw salaries just 1.6%higher than their 2020 counterparts,according to the National Association of Colleges and Employers(NACE).Chemistry majors and math majors saw a 3%to 4.5%drop.About 1 in 5 college grads arent confident in finding the right job fit,and almost half say thats because they lack experience.For non-grads,the prospects are worse.Projected job growth for the period of 2019-2029 is just 1.5%for those with a high school level education(and close to zero once the pandemic impact is factored in),according to the BLS.“Non-grads need a point of entry into a job with a wage that can sustain them,”says Schaffer,which is what her organization,Year Up,is trying to provide.Gen Z is college-bound Raised by more educated parents,more Gen Zers are pursuing higher education,according to the Pew Research center,with 57%enrolled in a two-or four-year college.Because theyre so education focused,fewer teens are working.However,4 in 10 enter the workforce as soon as they leave high school.PG.4 The COVID-19impact on thefuture workforceThe introduction of vaccines and boosters and the return(for many)of in-person work has led to a boost of energy for the job market.Employers this spring are projecting to hire 26.6%more college graduates from the Class of 2022 than they hired from the Class of 2021,according to the latest report from the National Association of Colleges and Employers(NACE).And the Staffing Industry Association(SIA)projects 12%growth in U.S.industrial temporary staffing in 2022 as the economy recovers.Meanwhile,the work landscape has changed.More workers expect flexibility,the ability to work remotely,the opportunity to work from anywhere.Three in 10 job seekers(32%)would need to see opportunities for remote or hybrid work options to entice them to apply for a job.And 59%of employers hiring for remote or hybrid entry-level positions focus on candidate quality and their ability to join the company quickly versus a local candidate who could work in-person if needed.“Theres an expectation from Gen Z that if they perform,they should be allowed to work from wherever they want,”says Ryan Craig,managing director of Achieve Partners,an investment firm focused at the intersection of education and employment.“Their organizations should be able to accommodate that,and those that cant will be more limited in their ability to attract talent.”“Theres an expectation from Gen Z that if they perform,they should be allowed to work from wherever they want,”Craig saysWhile candidates expect to be able to work autonomously,however,not all employers are fully on board.Only about half of employers say they have“complete”or“a great deal”of trust in the ability of their entry-level hires to excel in a remote working environment.“It obviously means different and additional sets of skills,”Craig says.“Gen Z is going to need to be more autonomous and professional.”Job candidates will be doing some judging of their own,too,says Sarah Ikhianosen,vice president of business development and strategic operations at The Fountain Group,a professional staffing firm specializing in contingent workforce solutions.“How employers handled COVID will be something people will discuss,”she says.“If employees did not feel supported,that will be a reason for turnover.Well start to see that now that more jobs are happening,and that will become the reputation of the company.”This is particularly true as companies lift restrictions and many workplaces return to something that feels more“normal.”“Theres definitely a question of,Is there a mask policy?and Is there a vaccine requirement,and if there is,is a booster required?”says Bill Nichols,practice director for Robert Half.“It does affect their decision making.”On the positive side,the pandemic might have afforded Gen Z some credibility within multigenerational workplaces.Until COVID shut down offices in 2020,a huge amount of communication was oral and in-person,says Steven Rothberg,president and founder of College Recruiter,a job and internship site for students and recent grads.Now,he says,“managers seem to be less frustrated with their youngest co-workers,probably because those youngest co-workers have or were able to quickly develop the digital communication skills necessary to succeed in a remote work environment.”PG.5 Along those lines,Gen Z may also benefit from the surge in video interviewing and other digital hiring platforms that are remaining in many workplaces since they have an inherent comfort level with those types of platforms.“Theyre used to more video chatting and talking to people.They want to see people that theyre interacting with,and they can sniff out an AI bot quickly.They want to feel like their time is respected by knowing a real person is behind the scenes,”says Jones.One other dynamic to emerge is that some young people may be rethinking their future aspirations.“The pandemic presented a lot of options for Gen Z folks.There are more online options at many colleges,and youve got greater geographic flexibility,”Schaffer says.“I think young people continue to question what is going to get them where they want to go,and with more options available,I think more young people are looking to professional certifications and different pathways of learning,not just college alone.”It could partially explain why undergraduate enrollments declined another 3.1%this fall,and the countrys freshman class was 9.2%smaller than the freshman class of fall 2019,according to the National Student Clearinghouse Research Center.With the younger half of this generation potentially less interested in a four-year degree,what might that do to the workforce in the next five years?There was already a looming skills gap in everything from technology to trades to soft skills.So who will take on that training burden if fewer young people decide to enroll in college?PG.6 Industry pain points:Tech,Manufacturing,and HealthcareIn case you havent heard,95%of business leaders say its very or somewhat challenging for their company to find skilled professionals,according to a Robert Half survey.This is an issue across the board,but here,we take a closer look at the technology,manufacturing/light industrial,and healthcare sectors.Tech/ITKorn Ferry research estimates that by 2030,the U.S.technology sector could lose out on$162 billion worth of revenues each year if it doesnt find a way to fill roles with high-tech skilled employees.And the top in-demand roles listed in World Economic Forum Future of Jobs Report are tech-loaded:Data Analysts,AI and Machine Learning Specialists,Robotics Engineers,and Software and Application developers.And on the horizon are emerging roles like Process Automation Specialists,Information Security Analysts and Internet of Things Specialists.Add to that the fact that even non-techie jobs are requiring more and more digitally-driven skills,and you can see why recruiting professionals are worried about a tech talent shortage.Four in 10 college graduates say the hardest part of looking for a job is that ads call for multiple years of experience.“The digital skills that employers are seeking,particularly in entry level jobs,are becoming more numerous and much more specific,”says Ryan Craig,managing director of Achieve Partners,an investment firm focused at the intersection of education and employment.So much so that he says the concept of an entry-level position has become an oxymoron,where many job postings actually require around three years experience.Think about an entry-level sales position,”Craig says.“Anyone with a college degree would be considered,but today there are software and SAS platforms and experience youre expected to have for those roles,so entry-level has become an oxymoron for millions of employers.”Entry-level has become an oxymoron for millions of employers.Ryan Craig,manager director,Achieve PartnersPG.7By 2030,the U.S.technology sectorcould lose out on$162 billion worth of revenueseach year if it doesnt find a way to fill roleswith high-tech skilled employees Craig predicts that in the next decade,millions of young people will start their careers through apprenticeship-like pathways that are providing them with these specific digital skills and business experience that employers arent willing to provide and educational institutions cannot provide.Manufacturing/Light Industrial“With the rise of Amazon mega-centers popping up,there are more people interested in manufacturing type positions,”says Baksh.But the perception of the industry is still evolving,and it requires new messaging to attract the next generation of skilled workers.“We have to say,if you want the ability to turn a job into a career,this is a pathway for you,”she says.Her company is actively making improvements to its leadership development program,which serves as a pipeline for plant managers,for that very reason.“When I took ownership of that program,the average turnover was three years,”says Baksh.In the past,because a lot of engineers may not go to school with the intention of becoming plant managers,some who wound up in the program discovered it wasnt what they wanted to do.Baksh and team are now putting more focus on making sure they are“fishing in the right pond,”and reaching a level down in the process,including revamping their internships.“We want to make sure participants figure out if this is what they want to do early on,and so we have created a tiered approach so a good mix of people are coming in to try things out,”she says.Though these initiatives are in their infancy stages,theyve seen some promising early results.PG.8“The manufacturing industry requires new messaging to attract skilled workers.We have to say,if you want to turn a job into a career,theres a pathway for you,”Lauren Baksh,senior manager of talent acquisition for Graphic Packaging Healthcare“Due to the nationwide shortage of RNs occurring pre-pandemic,we are experiencing even greater shortages of RNs,nursing support roles,and other critical healthcare roles such as Respiratory Therapists,”says Robert Shaw,manager of talent strategy and digital analytics at AdventHealth Corporate,a non-profit health care system that operates over 130 facilities across nine states.To help meet the demand,AdventHealth created a nurse residency program to support recent nursing graduates as they transition into their first RN role.“We are also piloting a transition nursing program dedicated to nurses that are interested in working in an acute care setting with little to no experience in this area,”he says.They are challenged when it comes to sourcing talent for select facilities in rural or non-metropolitan areas,he says,but are using various talent and digital strategies to increase awareness of these opportunities.PG.9 What Gen Z wantsGen Z is not unlike other generations in wanting a competitive salary and benefits package.But they also crave the opportunity for advancement and job security.This generation is future-minded,and therefore more willing to stay loyal to companies that invest in them.The Monster survey data supports that notion,with 37%of job seekers saying they want to see career advancement expectations for the position in thejob posting,and another 30%looking for verbiage on career or leadership development programs.“This is a generation that is risk averse,”says Craig.“Theyve experienced a high cost college,student loan debt,theyve seen their big brothers,sisters,older friends suffer through under employment andunemployment now with COVID,and they want a pathway with some guarantees.”For employers,that means realizing that entry-level hires are not necessarily looking for the highest offer,but rather a secure pathway.Thats not to say that you can get away with not offering a living wage.Salary range still topped the list of what Gen Z needs to see in a job ad before they apply.“Employers who hire someone for$15 an hour and then provide no opportunities to advance shouldnt be surprised when those people jump ship for another$1 or$2 from the employer across the street,”says Rothberg.of job seekers want to see career advancement expectations for the position in the job postingPG.10 37%How employerscan enable Gen Z to save the workforce33%of college grads say they wouldntaccept a job at a company that doesnt havea diverse workforce PG.11As your workforce turns over and new roles emerge,Gen Z is ready to take the wheel.But just like new drivers,theyll need some training and practice before they can confidently hit the road.Employers who find creative ways to identify and invest in candidates who have the potential to go the extra mile will be better off for it in the long run.Here are some strategies for attracting and retaining Gen Z candidates:Prioritize diversity and healthFully a third of college grads say they wouldnt accept a job at a company that doesnt have a diverse workforce.Another quarter say they wouldnt work for an organization without women(26%)or diversity(25%)in leadership roles.Job seekers are also keenly interested in their health mental and otherwise.Nearly half(48%)of candidates said healthcare is the benefit theyre most interested in,even above flexible schedule options.And 1 in 10 workers named free access to mental health services as another important perk.Get back to the human sideof recruiting More than a quarter of job seekers(27%)say one of the most difficult parts of the job search is tailoring their resume to the unique keywords in the job ads.Translation:Getting around the bots.Companies need to get away from candidate screenings that only scan for keywords,says Jones.“Gen Z can bridge the talent gap,but companies need to change.They need to look for potential.Instead,its been very prescriptive were not going to consider people unless they have this,this and this.Humans are not even reviewing applications.”But while the human touch is important,its also essential that companies are using the online tools at their disposal.More job seekers are using job boards and career networking platforms to look for positions than career services provided by their college,Monster found.And 11%to 16%of candidates are also looking to social media platforms like YouTube and TikTok.Theyre also looking to social media for job advice:46%of college graduates are going to YouTube or TikTok with their job search questions.Rethink the four-yeardegree requirementEspecially this past year with remote schooling,this generation has realized that they can learn things on their own.“They have an entrepreneurial spirit,”says Jones.Theyre also not afraid to go on YouTube to learn a software program or how to complete a DIY project.“Theyre saying,dont discount me because I dont have it on my resume.I can learn it.”Relying on campus recruiting alone is 20th century thinking says Craig.But nearly nine in 10 employers admit that they are rejecting qualified high-skill candidates if they dont match the exact criteria in the job posting,such as a college degree,according to a Harvard Business School study.Just relying on campus recruiting alone is 20th century thinking,says Craig.On the other hand,the acceptance of skills-based hiring provides an entryway to young people who dont choose the college route.“In the State of the Union address,Joe Biden talked about the work-based learning experience and skills-based hiring,”Schaffer says.“I think that was a big moment for people who look for skills-based hiring and creating pathways based on someones ability to do their job,rather than a degree that may or may not position them well to do a job.”says Schaffer.Though some roles at Graphic Packaging require a four-year degree,Baksh is really hoping for an influx of community college applicants to meet some of the talent demands.“Some of our skilled tradespeople make more with an associate degree than those coming out with a four-year degree,”she says.“Its more important for companies to get in early with technical schools so they know who the immediate employers are,and develop a solid bridge.”Invest in training and upskilling solutions to close the skills gapTheres a whole group entering the workforce that dont have a degree,says Jones,and they are primed to be trained for some key trade skills.“Lots of companies are looking for CNC operators,powered forklift drivers,or maintenance technician positions,and theyre having a difficult time filling those jobs,”she says.The problem is organizations feel they dont have the time and bandwidth to do the training themselves.I see more and more work-based learning experience programs and I think more companies are seeing them as an important pathway to strategic hiring,says Schaffer.PG.12“Work-based learning experiences and work partners within organizations who are helping to build talent pipelines continue to be a really robust way to get to know an employee,to have the try-before-you-buy experience,”Schaffer says.“Both for the talent,who gets the opportunity to experience a company culture and working with a team firsthand,and for the company who gets to see how quickly they learn.I see more and more work-based learning experience programs and I think more companies are seeing them as an important pathway to strategic hiring.”Craig believes that what he calls“last mile training”can help make those connections between entry-level hopefuls and organizations facing skills gaps.He predicts that“Talent as a Service”providers will emerge to deliver purpose-trained,entry-level talent at scale on a“try before you buy”basis.In addition,expect to see a resurgence of apprenticeships.“There are these third parties who essentially come in and operate turnkey apprenticeship programs for you,and they run the training,and they help with the recruiting,and the onboarding of it,”says Craig.Until such solutions are mainstream,however,companies may need to take on at least some of the responsibility of training their future workforce.“Non-college workers are the population we think needs the most help in upskilling,”says Jones.“Companies want someone who has experience,but if youre not going to give them a shot,they cant get there.Companies need to be more willing to train people.”As far as what that training should look like,consider leaving behind the boring,recorded training sessions that Gen X and some Millennials tolerated,says Jones.“Gen Z is different in that theyre avid multitaskers.Theyre used to stimulation from multiple sources and would benefit from training that involves multiple platforms.They need different types of interaction to keep them engaged,”she says.Talent as a Service providers will emerge to deliver purpose-trained,entry-level talent at scale on a“try before you buy”basis,predicts Craig.PG.13 Invest in long-term retentionBringing on entry-level talent is challenging enough,which is why it can be frustrating to invest the time and money to train them just to have them leave in a couple of years.“Id love for companies to really think about this as a career-exploration phase,”Schaffer says.“For people who are just starting out,theyre going to need to get their feet wet in a variety of different kinds of roles in order to understand what theyre great at and what they love to do.So I think Gen Zs early career talent needs to be in a position where they can try things where they can get into a role,learn it and also have some mobility into other roles.”One program at Hyster-Yale Group having success is called Raise Your Hand,in which employees can volunteer to work on projects outside of their core job or functional area.“It provides additional resources to a given project,but its also an opportunity for that employee to work with different people,be exposed to different perspectives,and build different skills as well as contributing their own strengths to that project,”says Brown.“For people who are just starting out,theyre going to need to get their feet wet in a variety of different kinds of roles in order to understand what theyre great at and what they love to do”,Schaffer says.Give them opportunities to network“We see networking and building ones network as something that is really important for early career talent,and its challenging to do that in the pandemic environment,”Schaffer says.“The pandemic put a damper on a lot of the loose-tie relationships the folks you connect with and know but who arent your closest friends.Thats often who we think of as part of our professional network.”Creating opportunities for informal networking will take creativity,and companies will have to think about strategies to help employees branch out.“When folks arent running into each other at the water cooler in the way they once did,there needs to be alternative means of doing this.”Luckily,much of Gen Z is still willing to be in the office at least part of the time.Half of college grads and 7 out of 10 non-graduates want an in-person job,according to Monsters data.While they appreciate the ability to work remotely,this is a generation that hasnt worked much on site,and they still want to meet people and be in an office environment.“If someone is looking at a company based out of Boston,they still want that interaction with people their age and that social aspect,”Nichols says.“Coupled with that now is the expectation that they can work from home a couple of days a week.Young professionals are looking for something hybrid.”To connect with this audience,be authentic and transparent As previously noted,Gen Z will do their research and theyre not easily fooled.They want security,and that means they want to work for a company they can rely on.These candidates may wantto know salary details that older seekers wont(even when it comes to the C-suite).They may want to understand the racial makeup of your executive leadership team,and if its not diverse,theyll want to know that youre working on improving things.They want to know what youre going to give them for their loyalty and their talent,and they may not wait for an interview to hear if first-hand.Thats where having a truly transparent,dynamic employer brand is key.You want to establish your employer value proposition and create a strategy to communicate your values and offerings to candidates before they even apply.PG.14PG.15 alent shortages,skills gaps,and post-pandemic uncertainty do make for a challenging hiring environment.But by recognizing the potential and passion of Gen Z and approaching them with career pathways and opportunities to grow and learn even if theyre initially lacking each of the skills you deem essential you can fuel your talent pipeline for years to come.Be transparent Demonstrate that theyve got a futureat your companyHelp them connectShow themthe moneyTGen Z wants to know about salary,benefits,work/life balance and how your companyhandled COVID-19.Todays entry-level workers want to see a tangible career pathway,so present them with specific plans to train them,and show them a promotion path ahead.A thriving network is just as important as growth opportunities,so its up to you to provide ways for young workers to interact with colleagues and mentors.They know the pandemic may have impacted their salary potential,but if youve got challenging roles to fill,know that you might have to bump their salary.takeaways4to reach todays youngest workers1-800-MonsterWere ready to partner with you.See Monsters Gen Z Hiring Solutions

4人已浏览 2023-03-20 16页 5星级

群邑（GroupM）：2023年中国广告市场洞察报告（英文版）（16页）.pdf

FEBRUARY 2023A Report From GroupM,WPPs Media Investment GroupCHINA SPOTLIGHTFEBRUARY 2023 CHINA SPOTLIGHT I TABLE OF CONTENTS2MARKET PERSPECTIVEAN ECONOMIC REBOUNDLOOKING AHEAD0405MEDIA&ENTERTAINMENTAUTOMOTIVE SALESLUXURY SALES13TABLE OFCONTENTSMARKETER TAKEAWAYS14070911CONTACT15YEAROF THERABBIT2023FEBRUARY 2023 CHINA SPOTLIGHT I MARKET PERSPECTIVEMARKET PERSPECTIVEGROUPM GREATER CHINA CEO&WPP GREATER CHINA CEOPATRICK XUThe last three years have been some of the most challenging andinspiring of my career.Throughout the successive pandemic-relatedlockdowns and resulting shifts in economic activity and human behavior,GroupM and its clients have adapted and invested to come out strongerand better prepared for the years ahead.This agility and vibrancy have been amazing to watch as our GroupMpeople have rebounded from a very difficult December when manypeople personally experienced the impacts of a large wave of COVID-19infections.In January,I,along with my colleagues and hundreds ofmillions of other Chinese,traveled to celebrate the Chinese New Year(CNY),ushering in a new year of prosperity and revitalization.In a signof how quickly China is returning to life beyond the zero-COVID policy,the Ministry of Culture and Tourism reported that the number of tripsduring 2023 CNY increased by 23.1%over 2022 and revenue fromdomestic tourism increased by 30%.Now back in our offices,we are looking forward to a year of growth.GroupMs advertising forecast for China calls for 6.3%growth in 2023with further 6.4%growth in 2024.Those increases will be especially feltin performance marketing,e-commerce and social,including socialcommerce where we continue to invest in strengthening our talent andcapabilities in service of our clients.Last year we added more than 3,000certificates from partner platforms such as ByteDance,Baidu,Alibabaand Tencent,an increase of 56%over 2021.Expertise in these platformsis pivotal as all four rank among the top 10 global sellers of advertising.More than ever,our work with these partners and our clients revolvesaround data and technology,a capability GroupM has strengthenedthrough the launch of Choreograph in China.The talent and bestpractices available to clients through Choreograph are being put to workfor local and international clients in China,including as part of recentlyrenewed relationships with Nike,Xiaomi,Dyson and Pernod Ricard.I look forward to continuing our work to make advertising better forpeople in 2023.Thank you,Patrick Xu4AN ECONOMIC REBOUNDEmerging from significant uncertainty during the tail end of 2022,the UN and IMFraised expectations for Chinas economy in January.The IMF now predicts Chinas economy will growFEBRUARY 2023 CHINA SPOTLIGHT I AN ECONOMIC REBOUNDSome large international financial institutions have also lifted their estimates on Chinas economic growth in 2023.Morgan Stanley increased its China rating from 5%to 5.7%,while Goldman Sachs Group increased its rating from 4.5%to 5.5%.According to the Securities Times,January achieved a record-breaking$20.8 billion USD net inflowof foreign capital into Chinas A shares,making it both the greatest net inflow month since 2014 and the first monthly net inflow to exceed$14.7 billion USD.In contrast with most markets,consumer expenditure makes up a smaller percentage of total economic activity in China;however,after lower consumption in 2022(0.2cline from 2021)and a solid build-up of household savings(up 80%over 2021 according to the Peoples Bank of China),consumer expenditure will be a key factor in Chinas recovery.5.2%in 2023,reboundingfrom moremuted2.9%growth in 2022.Source:China National Bureau Of StatisticsChina GDP Growth5FEBRUARY 2023 CHINA SPOTLIGHT I AN ECONOMIC REBOUNDBelow we look at the recent and expected performance of a number of product and service categories to parse what 2023 is likely to bring.MEDIA&ENTERTAINMENTAUTOMOTIVESALESLUXURY SALESSource:National Bureau of Statistics,GroupM Includes Automotive sales,Excludes CateringChina Retail and E-commerce Sales6MEDIA&ENTERTAINMENTFEBRUARY 2023 CHINA SPOTLIGHT I AN ECONOMIC REBOUND While successive years of pandemic-related interruptions to film production have yet to play out fully,there are positive signs in the recent performance of the Chinese box office as people return to activities outside the home.The National Film Bureau reported a 2023 CNY box office increase of 11.4%over last years figures.The 2023 performance ranked second only to 2021s holiday performance in terms of box office revenue.For the monthof January,box office receipts exceeded10 billion($1.5 billion)according to the China Film Administration.China 2022 Per CapitaExpenditureSource:National Bureau of StatisticsOther Goods and Services2.4%Food,Tobacco and Liquor30.5%Residence24%Transportation and Telecommunication13%Health Care and Medical Services8.6%Clothing5.6%Household Facilities,Articles and Services5.8ucation,Culture&Recreation10.1%Per capita,Chinese consumers spent 10.1%of total expenditure on education,culture and recreationin 2022,down from 11.7%in 2019 per the National Bureau of Statistics,suggesting there is room for continued recovery.10.1%of total expenditure on education,culture and recreationin 2022,down from Chineseconsumersspent11.7%in 2019.The CNY box office included international hits such as Avatar:The Way of Water,which has surpassed1.4billion($200 million)in total revenue,and the long-awaited Chinese prequel The Wandering Earth II,which has earned more than 3.5billion($500 million)since its launch,including releases in the U.K.and U.S.China Box OfficeSource:Maoyan Piaofang7FEBRUARY 2023 CHINA SPOTLIGHT I AN ECONOMIC REBOUND The Chinese box office is back.Only two months into 2023,IMAX has delivered record-breaking results with its Chinese New Year slate and a strong performance inChina for Avatar:The Way of Water”RICH GELFONDCEO IMAX8AUTOMOTIVE SALESFEBRUARY 2023 CHINA SPOTLIGHT I AN ECONOMIC REBOUNDAuto sales(as well as sales of other big-ticket purchases like property)were hindered by COVID-19 lockdowns during 2020 and 2022.Data for auto sales in December of 2022(as measured in total Yuan)show that sales reached their highest point of the last four years totaling 5.1 billion($762 million),up 8.1%over the 2019 December figure.However,some sales may have been pulled forward into December ahead of expiring tax cuts for combustion vehicles and subsidies for electric vehicle(EV)purchases(which lapsed on the first of January 2023).EV sales in China,which had grown 90%in 2022 according to the China Passenger Car Association(CPCA),fell 6.3%in January of 2023.China Auto SalesSource:National Bureau of StatisticsWhile Tesla is perhaps the best-known maker of EVs outside of China,it faces considerable competition from Chinese EV manufacturers,such as BYD,no doubt a factor in its price discounting strategy in recent months.In 2022,less than a quarter of Teslas 573 billion($81.4 billion)in revenue came from China and fewer than 56,000 vehicles were sold in China in December,according to the CPCA.BYD sold nearly twice that number of pure electric vehicles,111,900,as well as 122,700 plug-in hybrid vehicles.Ford,for whom China is the second largest market after the U.S.,saw a decline in sales in 2022.Total retail sales in China(includingall vehicle types)fell to 0.5 million units from 0.6 million in 2021,representing a 2.1%share of the total Chinese market(per Fords estimates).Ford spoke in a recent earnings call about taking a focused approach to the Chinese market,focusing on the Lincoln brand,and prioritizing a transition to EVs.8.1%over the December 2019 figureDecember auto sales up910FEBRUARY 2023 CHINA SPOTLIGHT I AN ECONOMIC REBOUND10We see Asia as the region with the greatest growth prospects in the medium term.Particularly in China where we will open a new chapter with our Mercedes-Benz heavy-duty truck,made in China for China.”KARL DEPPENPresident&CEO,Daimler TruckChinese domestic brands such as BYD,Geely,Changan and SAIC make up more than 40%of the market according to CPCA,while German and Japanese brands each make up roughly a fifth of the market.BMW sold 199,112 vehicles in China in the fourth quarter of 2022,a 12.7%increase over the previous year.Toyota units sold,across its Toyota and Lexus brands,were down 8.8%in the fourth quarter of 2023,but up modestly at 1.7%for the April to December period.As supply chain issues and chip shortages ease amid the pandemic recovery,automotive sales(and advertising)are widely expected to pick back up throughout 2023.For Chinese auto buyers,who have been shifting to purchase more SUVs rather than sedans,EVs are expected to maintain their appeal.Across all city tiers,households have shown a willingness to spend on automobiles according to recent research from GroupM Knowledge,with households in Tier 7-10 cities spending an average of 16.5 months income on an auto versus an average of 14.7 months those in Tier 4-6 cities and 13.1 months for Tier 1-3 cities.The research also showed a greater willingness among the young to choose more expensive automobiles than middle-aged buyers.LUXURY SALESFEBRUARY 2023 CHINA SPOTLIGHT I AN ECONOMIC REBOUNDChina has long been a source of luxury sales;however,pre-pandemic,many of those sales occurred in France and Europe more broadly as Chinese travelers visited retail stores there.With travel curbed both in China and across many international destinations for luxury shoppers,brands shifted to supplying demand domestically,with many maisons opening retail outlets in Tier 1 cities or local shopping destinations such as Hainan,where Chinese consumers have flocked since the end of the governments zero-COVID policy.Going forward,luxury brands are anticipating a return to European travel(recently buoyed by American buyers taking advantage of a strong U.S.dollar),albeit with an expectation that the Chinese domestic market will remain a larger source of revenue versus pre-pandemic.We have every reason to be optimistic on the Chinese market.”BERNARD ARNAULT,LVMH Chairman&CEOIts an encouraging start of the year in China.”JEAN-MARC DUPLAIX,Kering CFOLVMH spoke in its end of year earnings call about the sharp decline in China in December leading to a surplus of inventory,but also said it saw“green shoots”inChina for the year ahead and would continue investing.Bernard Arnault,LVMHs Chairman and CEO,noted that stores in Macau were quite full and that the company was prepared for the return of customers to stores worldwide,including in France.And while it will take some time for international revenue from Chinese tourists to reach 2019 levels again,the domestic demand is helping bridge the gap with Arnault sayingits Chinese market is bigger now than in 2019.11FEBRUARY 2023 CHINA SPOTLIGHT I AN ECONOMIC REBOUNDHermes,which opened or renovated stores in Zhengzhou,Shanghai Qiantan and Hong Kong in 2022,noted strong second quarter and fourth quarter sales(the latter despite lockdowns across China in November).Part of the experienced and expected growth,according to Hermes CEO Axel Dumas,is the ascendancy of a younger and more affluent Chinese middle class.Finally,Richemont commented in their recent earnings note on a considerable fourth quarter impact(-24%)on sales in Chinaas a result of COVID-19 cases and staff unavailability leading to the temporary closures of some boutiquesat the end of 2022.Richemont,like its peers,has said they are seeing a strong retail rebound early in 2023.Kering noted that lockdowns in China during the fourth quarter contributed to Guccis sales decline of 14%in directly operated stores.Sales for all brands in Asia Pacific were down 30%in the quarter.The company also noted that 2023 fourth quarter tourism in Western Europe was still 20low pre-pandemic levels.However,the company struck a positive note on an earnings call regarding trends emerging from the beginning of 2023,saying that performance has been“better than expected initially,and we clearly observed.a strong rebound of purchases in Greater China”as well as from local destinations open to Chinese tourists.While it is difficult to extrapolate from one month to the rest of the year,the readiness of consumers and government authorities to return to greater levels of luxury consumption is being touted by luxury companies as a reason to be optimistic.Asia Pacific Luxury SalesSource:Company Filings,GroupM1213FEBRUARY 2023 CHINA SPOTLIGHT I LOOKING AHEADThe pandemic has changed the work,personal lives and media behaviors of consumers,as well as the strategic priorities and ways of working for companies.Now,it is crucial that all these changes are incorporated into corporate branding and marketing strategies.Those strategies are shifting from last years mindset of protecting the bottom line to an embrace ofthe economys rejuvenation and an opportunity to take market share.GroupM Knowledge recently conducted a Marketing Confidence survey,the result of which found that over 80%of brands in China will maintainor increase their marketing budget for 2023.LOOKING AHEADBusiness sentiment is taking its cues from a government focused on growth and economic dynamism.China has taken several measures to improve the liquidity of property developers,a sector weighing on consumer confidence over the last year.In addition,the government has signaled an easing of regulatory scrutiny and fines for its homegrown tech giants and a return to granting video game licenses,all signs of increasing economic boosterism.It is important to note that the global economic stage is not unimpacted by ongoing tensions due to the war in Ukraine and U.S./China relations.There are a number of product categories,including semiconductors,telecommunications and aerospace,among others,that will remain challenged.That said,the current environment appears set to foster business growth.China Ad Revenue GrowthSource:GroupM6.3%is expectedin 2023,a sharp acceleration from adecline of Chinese ad revenue growth of-0.6%in 202214Publishers have seen an influxof investment from local brands lookingto reconnect with their local audiences.International brands should be equally proactive if they dont want to besqueezed out.INTRODUCTION THE STATE OF RETAIL MARKET GROWTH GEOGRAPHIC TRENDSOOH media is still recovering to pre-pandemic levels,and the increased digitization of the medium means new opportunities forcross-channel measurement and engagement.Opportunities are presenting themselves to execute innovative OOH campaigns in areas where eager consumers are set tospend.1234Clients should work closely with their agency partners to understand how consumer sentiment is changing as life moves forward.Consumer demands are evolving and priorities are shifting,so the assumptions that underlie current media plans may need to be rethought.Retail media exploded during the pandemic and is here to stay.Now is the time to evaluate how emerging channels fit into your media mix and find the right balance between brand and performance goals.DECEMBER 2022 THIS YEAR NEXT YEAR IGLOBAL END-OF-YEAR FORECASTChinese consumers are emerging out of the countrys zero-COVID policy with new media habits anda changed outlook on how they experience the world around them,including how they engage with brands.Given the physical and mental strain brought on by the pandemic and the subsequent excitement that re-openings can inspire,its essential for marketers to present positivity and optimism at each consumer touchpoint.MARKETERTAKEAWAYSFEBRUARY 2023CHINA SPOTLIGHTIMARKETER TAKEAWAYSin USD millions20192020202120222023E2024E2025E2026E2027ETV$11,686.8$6,357.7$6,764.7$6,400.4$6,213.1$6,443.2$6,491.8$6,561.1$6,681.7 Growth-4.7%-45.6%6.4%-5.4%-2.9%3.7%0.8%1.1%1.8%Share10.6%5.5%4.9%4.6%4.2%4.1%3.9%3.8%3.6%Audio1,831.4715.2732.9709.7682.8688.5693689.2685.2 Growth-8.2%-61.0%2.5%-3.2%-3.8%0.8%0.7%-0.6%-0.6%Share1.7%0.6%0.5%0.5%0.5%0.4%0.4%0.4%0.4%Newspapers796.5585.8532.1484.5446.3443.5414384.4354.9 Growth-10.4%-26.5%-9.2%-8.9%-7.9%-0.6%-6.7%-7.1%-7.7%Share0.7%0.5%0.4%0.4%0.3%0.3%0.3%0.2%0.2%Magazines432.3325.2315.3303.2296.3289.7287.7285.7283.8 Growth-5.9%-24.8%-3.1%-3.8%-2.3%-2.3%-0.7%-0.7%-0.7%Share0.4%0.3%0.2%0.2%0.2%0.2%0.2%0.2%0.2%Outdoor Cinema9,067.97,484.09,490.76,238.66,238.06,858.57,467.28,075.48,714.4 Growth-11.4%-17.5&.8%-34.3%0.0%9.9%8.9%8.1%7.9%Share8.2%6.4%6.8%4.5%4.3%4.4%4.5%4.6%4.7%Digital86,938.6101,043.1120,871.5123,706.8132,607.5141,129.5149,753.5158,619.7167,940.1 Growth34.8.2.6%2.3%7.2%6.4%6.1%5.9%5.9%Share78.5.7.1.7.5.6.7.8.9%Total$110,753.6$116,511.0$138,707.2$137,843.3$146,484.0$155,852.8$165,107.2$174,615.6$184,660.0 Growth22.6%5.2.1%-0.6%6.3%6.4%5.9%5.8%5.8%GroupM China Ad Revenue ForecastGLOBAL PRESIDENT,BUSINESS INTELLIGENCEKATE SCOTT-DAWKINSCONTACTHEAD OF GROUPM KNOWLEDGE AND DATA CENTER,GROUPM CHINAZOD FANGGROUPM GREATER CHINA CEO&WPP GREATER CHINA CEOPATRICK XUFOR DATA INQUIRIESplease write:153 World Trade Center175 Greenwich StreetNew York,NY 10007A WPP CompanyGroupM is the worlds leading media investment company with a mission to create a new era of media where advertising works better for people.Responsible for more than$60 billion in annual media investment,according to COMvergence,the company innovates,differentiates,and generates sustained value for clients wherever they do business.GroupMs portfolio includes agencies Mindshare,Wavemaker,EssenceMediacom and mSix&Partners,as well as Choreograph(Data&Technology),GroupM Nexus(Cross-Channel Performance&Activation),and GroupM Investment.All rights reserved.This publication is protected by copyright.No part of it may be reproduced,stored in a retrieval system or transmitted in any form,or by any means,electronic,mechanical,photocopying or otherwise,without written permission from the copyright owners.Every effort has been made to ensure the accuracy of the contents,but the publishers and copyright owners cannot accept liability in respect of errors or omissions.Readers will appreciate that the data is as up-to-date only to the extent that their availability,compilation and printed schedules will allow and are subject to change.Photos on Unsplash,Pexels,&Pixabay16

17人已浏览 2023-03-20 16页 5星级

麦肯锡：2023年全球保险业报告-增强商业财产保险的市场关联性（英文版）（28页）.pdf

February 2023Global Insurance Report 2023:Expanding commercial P&Cs market relevance The nature of risk is evolving faster than ever.Commercial carriers must step up to fulfill the societal desire for resilience in a volatile world by closing protection gapsor risk losing relevance.This article is a collaborative effort by Susanne Ebert,Robin Huettemann,Kia Javanmardian,James Polyblank,Sirus Ramezani,Shannon Varney,and Leda Zaharieva,representing views from McKinseys Insurance Practice.ContentsiiIntroduction 01Define a clear source of distinctiveness to compete beyond rates07Expand relevance in the face of the structurally changing nature of risk13Access capacity through alternative capital and publicprivate partnerships to compete in a tight capital cycle19Build the capabilities and talent to manage the shift from art to science iGlobal Insurance Report 2023:Expanding commercial P&Cs market relevanceIntroductionGlobal commercial property and casualty(P&C)lines have delivered strong financial performance in recent years following the soft market of 2013 to 2018,despite widespread disruption in the wake of the COVID-19 pandemic,the war in Ukraine,and the resulting supply chain disruptions.Premiums have been propelled by extensive year-on-year risk-adjusted rate hardening:the annual premium growth rate for commercial P&C lines has hovered at 6 to 8 percent since 2018,and combined ratios have been improving(Exhibit 1).However,commercial carriers find themselves at an inflection point as they face a continuing cycle of economic uncertainties,including inflation,geopolitical headwinds,environmental challenges,and capital constraints.This gradual acceleration of macroeconomic trends across multiple events that are pressuring the insurance industry is different from previous shocks.In combination with the structural changes in the nature of risks,commercial carriers today need to address four critical challenges.First,in the current environment,rates in some lines are starting to soften as capacity returns,while hardening continues in other linesin some cases further supported by maintaining limits,despite inflation.Rising claims inflation and growing competition from distributors are squeezing profits.But opportunities exist as well.Some commercial carriers are expecting meaningful investment returns due to the increase in interest rates.The race to decarbonize underwriting portfolioswith nuances depending on geographiesis challenging and calls for new capabilities but also offers opportunities for growth.Second,the nature of risks is evolving faster than ever,especially when it comes to natural catastrophes(NatCats),the net-zero transition,and supply chain and cyber risks.Rather than stepping back and reducing their exposure,Commercial carriers find themselves at an inflection point as they face a continuing cycle of economic uncertainties.iiGlobal Insurance Report 2023:Expanding commercial P&Cs market relevanceExhibit 1Web Exhibit of Global commercial property and casualty(P&C)insurance premiums,$billions1 Note:2022 fgures are estimates;2012 net combined ratio(CoR)is based on McKinsey Global Insurance Pools;fgures may not sum,because of rounding.1Based on 2021 average fxed exchange rate.2Includes all other lines,such as credit and surety;agriculture;marine,aviation,and transportation;etc.3Casualty includes commercial liability and commercial accident policies.4Per annum.5Global commercial P&C net CoR is the gross written premium weighted average of 36 primary and reinsurance commercial carriers.Source:A.M.Best;McKinsey Global Insurance Pools;McKinsey analysisDespite recent macroeconomic turbulence,global premiums for commercial lines continue to be propelled by rate hardening.McKinsey&CompanyNet combined ratio,5%Soft cycleHard cycle201210210210010495553968414822520186941301231632792019750139137177297202078414114019231120218591521522103462022922155166224376 4%p.a.4 6%p.a. 8%p.a.MotorOthers2PropertyCasualty3commercial carriers have a significant opportunity to step forward to address the growing protection gapsor risk losing relevance in a changing world.Third,these challenges are exacerbated by tightening capacity in both traditional reinsurance capital and alternative capital markets,and the full extent and duration of the capacity squeeze are still uncertain given the strong hardening observed in January 2023 renewals.Fourth,to navigate the new nature of risks,commercial carriers must prepare to transform their capabilities and talent as underwriting and claims shift from an art to a science.Commercial carriers will need to invest and take decisive action in response to each of these four challenges.First,commercial carriers must define a clear source of distinctiveness to protect their margins by competing beyond rates.Second,they can expand relevance by closing protection gaps through product innovation,more sophisticated pricing,and risk prevention and mitigation solutions.Third,commercial carriers will need to secure capacity by innovating the use of alternative capital and addressing investor concerns about long-term profitability.Finally,commercial carriers must reinvent their employee value proposition and develop the capabilities to shift from art to science to address the risks of the future.iiiGlobal Insurance Report 2023:Expanding commercial P&Cs market relevanceThe most successful commercial carriers have defined a clear source of distinctiveness that allows them to compete beyond prices.ivGlobal Insurance Report 2023:Expanding commercial P&Cs market relevanceCommercial carriers are facing four competing pressures:rate volatility;rising inflation and price adequacy uncertainty;the expansion of distributors up the value chain;and pressure to decarbonize underwriting portfolios.Deceleration in rate growth.Global rate growth has slowed for the past seven consecutive quartersfrom 20 percent in the third quarter of 2020 to 6 percent in the third quarter of 2022.In real terms(adjusting for inflation),rates declined(softened)in the third quarter of 2022 for the first time since 2019.1 However,this trend varies across lines.For example,financial and professional liability lines experienced the most significant rate deceleration,from 40 percent in the third quarter of 2020 to 1 percent in the third quarter of 2022.By contrast,rate increases in NatCat and reinsurance lines are accelerating across both loss-and non-loss-affected policies.1 Based on data from the Marsh Global Insurance Market Index;McKinsey Global Institute analysis of data from IHS Markit.1Define a clear source of distinctiveness to compete beyond rates1Global Insurance Report 2023:Expanding commercial P&Cs market relevanceGlobal property catastrophe reinsurance rates increased by 37 percent in January 2023 renewalsrepresenting the largest increase since 1992,2 with implications for primary rates to follow.Inflation(measured by the consumer price index,or CPI)may have peaked in 2022,but for certain lines,the market is continuing to harden in 20233 with both rate increases and flat limits even as asset values increase.Rising inflation and price adequacy uncertainty.Most major economies are experiencing decades-high inflation.In the fourth quarter of 2022,year-on-year inflation was 12 percent in Europe,7 percent in the United States,and 4 percent in Asia.4 Inflation adds pressure to the top line as clients review their coverages and retain more risks to reduce costs.At the same time,loss costs and reserve requirements grow,negatively affecting the bottom line,which resulted in$8 billion in estimated incremental inflation across US commercial lines loss costs in 2021.5 On the positive side,as interest rates rise for the first time in years,commercial carriers may see an increase in investment returnswith effects varying across commercial carriers depending on investment portfolio exposure.Thus,long-tail lines in particular experience price adequacy uncertainty in the current cycle,given that their pricing economics are especially sensitive to inflation and interest rates,as well as to the challenges of modeling the evolving frequency and severity of catastrophe events and cyber risks.Pressure from distributors.Distribution partners are faring well in the race for talent and capital,with stronger returns,greater proximity to customers,and more capital-light business models than commercial carriers.Thus,brokers delivered an average annual TSR of 20 percent in 201922 versus 9 percent delivered by commercial carriers.6 Furthermore,emerging managing general agents(MGAs)have successfully recruited respected underwriting veterans to join them.Based on this position,they are even moving up the value chain;the rise 2 The great realignment,Howden,January 1,2023.3 McKinsey Global Institute analysis of data from IHS Markit.4 Ibid.5 Kia Javanmardian,Sebastian Kohls,Gavin McPhail,and Fritz Nauck,“Countering inflation:How US P&C insurers can build resilience,”McKinsey,August 25,2022.6 S&P Capital IQ;based on five global brokers and 16 commercial(re)insurance carriers and weighted by shareholder equity.7“2021:Managing general agentsRising to the challenge,”Conning,2021;“2022:Managing general agentsFiring on all cylinders,”Conning,2022;McKinsey analysis of Conning commercial lines premiums data.8 Twenty-nine members accumulating more than 14 percent of global insurance premiums(including retail).9 Including the emission-reduction target category,engagement target category,or reinsuring the transition targets.10 Based on the NZIA target-setting protocol and against the 2019 baseline,in accordance with the sixth Intergovernmental Panel on Climate Change(IPCC)Assessment Report by the United Nations and for pathways that limit warming to 1.5C(likelihood of more than 50 percent)with no or limited overshoot.11 The financial services industry,related to the Task Force for Nature-related Financial Disclosures(TFND),is working to steer financial flows from nature-negative outcomes toward nature-positive outcomes,such as biodiversity.of MGAs reflects this trend.In the United States,MGAs grew at 10 percent per annum between 2012 and 2021more than twice the rate of industry premiums.7 However,these channels can bring significant benefits for commercial carriers if they are leveraged effectively.Scrutiny of underwriting portfolio emissions.Commercial carriers play a major role in decarbonizing the“real economy”by 2050 because economic activities are driven,in part by,the availability of insurance coverages.With the goal of increasing accountability,the Net Zero Insurance Alliance(NZIA)8 has committed to disclosing underwriting portfolioenabled CO2 emissions and defining near-term reduction targets for 20309 by July 2023,in addition to annual progress reporting.Initial estimates show that to achieve net-zero emissions by 2050,underwriting portfolioenabled emissions need to be reduced by 43 percent by 2030.10 Over time,commercial carriers will likely move capacity toward industries with a lower emissions intensity,faster decarbonization pathways,and net-zero supporting technologies.This trend will affect rates in these evolving industries and in those with a higher emissions intensity.To successfully compete,commercial carriers will need to develop new capabilities in underlying portfolio management and underwriting functions.11 Progress in decarbonizing underwritten emissions still varies across geographies,with European commercial carriers and NZIA members leading the way.Compete on distinctive proposition rather than price The most successful commercial carriers have defined a clear source of distinctiveness that allows them to compete beyond pricesand have doubled down their investment in these areas.By focusing on certain lines of business,specialist commercial carriers have almost consistently outperformed their more diversified peers(as measured by premium growth and profitability)2Global Insurance Report 2023:Expanding commercial P&Cs market relevancein both hard and soft markets between 2016 and 2021(Exhibit 2).During the same period,the more specialized US excess and surplus(E&S)market grew at 16 percent annuallymore than three times the rate of the US admitted market.Their historical resilience suggests that specialist commercial carriers are better equipped to thrive amid ongoing economic uncertainty.Exhibit 2Web Exhibit of Comparison of growth vs underwriting proftability for commercial carriers,by archetype1Insurance carriers that are more focused on certain commercial lines of businesses.2Insurance carriers ofering a diversifed set of commercial lines,including both standard and specialty lines,potentially across small to large commercial segments.3Globally diversifed players that provide insurance for large risks.4For certain insurers,GWP is estimated using GWP/NWP(gross written premium/net written premium)or GWP/NEP(gross written premium/net earned premium)industry average ratios.5Average net CoR for each category;excludes certain large-risk-focused insurers,given reporting available is only for gross CoR.6Per annum.7Commercial GWP and net CoR for certain players have been estimated for 2016 and 2017 because dedicated commercial business units were formed after 2017.Source:A.M.Best;company annual reports;McKinsey analysisSpecialists have displayed improved underwriting proftability and premium growth versus diversifed commercial and large-risk-focused carriers.McKinsey&CompanySpecialists1Diversifed2Large-risk-focused320167201772018201920202021Gross written premium(GWP),4$billions3237424753638389971041081217066718596109 14%p.a.6 12%p.a. 20%p.a.Net combined ratio(CoR),5105101939988Net CoR,5102989910195Net CoR,5108109107117105 9%p.a.6 5%p.a. 12%p.a. 1%p.a.6 16%p.a. 14%p.a.3Global Insurance Report 2023:Expanding commercial P&Cs market relevanceNonetheless,all commercial carriersincluding diversified and large-risk-focused commercial carrierscan act on four imperatives to compete on proposition rather than price.Be clear on where to competeOffering distinctive expertise,products,and services that are connected not only to risk transfer but also risk prevention and mitigation deepens carriers value proposition to clients.This allows commercial carriers to avoid competing on price alone and becoming commoditized capacity providers.More-specialized commercial carriers have been able to focus their investment to create these propositions,but even diversified and large-risk commercial carriers can prioritize their resources with a clear view of where they want to be distinctive(across specific lines and value chain steps).Focus on technical excellence to address inflationCommercial carriers will need to double down on technical excellence to manage rates effectively by keeping them ahead of loss cost trends in response to inflation.Pricing models and renewal underwriting will need to reflect a forward-looking view of inflation across various components(such as goods,wages,and social inflation),combined with strong underwriting risk discipline for softening lines.The most sophisticated commercial carriers leverage inflation scenario models to frequently rebalance their portfolio mix exposures across lines with larger and smaller gaps between the market price and technical price once accounting for inflation.Implement targeted distribution strategyCommercial carriers should develop a targeted distribution strategy across lines of business,regions,industry verticals,and client segments,depending on their own source of distinctiveness and the areas in which they develop underwriting excellence.For example,some commercial carriers can go directly to clients with a digital proposition in an area where they are clearly distinct;this is especially true for small and medium-size enterprises(SMEs)with more-standard risks.In other areas,commercial carriers may instead choose to underwrite more opportunistically or operate as a pure capacity provider alongside a lead insurer or through MGAs.Being targeted and transparent about their distribution strategy allows commercial carriers to avoid channel conflict,understand what it takes to be brokers preferred commercial carrier,and build strategic distribution relationships.Capture the underwriting portfolio decarbonization opportunityAs commercial carriers think about their source of distinctiveness,they should reflect on how this relates to decarbonization targets.To build a proposition related to the decarbonization of the“real economy,”carriers could follow four steps:First,create transparency for underwriting portfolioenabled emissions,which may require identifying and closing existing data gaps.Second,develop a forward-looking view on sector-level emission intensity and revenue implications to define individual underwriting portfolio decarbonization pathways,targeting a portfolio mix that reflects the growth opportunities in sectors that support the net-zero transition.Third,integrate the emissions perspective across business processesespecially underwriting,pricing,and portfolio management.Finally,act when the underwriting portfolio deviates from the defined decarbonization pathway(for example,by rebalancing the portfolio within and across sectors or by engaging clients).4Global Insurance Report 2023:Expanding commercial P&Cs market relevance5Global Insurance Report 2023:Expanding commercial P&Cs market relevanceThe declining relevance of commercial lines is the most critical challenge that the insurance industry is facing today.6Global Insurance Report 2023:Expanding commercial P&Cs market relevance2Expand relevance in the face of the structurally changing nature of riskCommercial carriers have not always kept pace with structural changes in the nature of risk,which are accelerating more rapidly than ever.While premiums for commercial lines have been growing over the past three years at approximately 7 percent per year,rate hardening has driven most of this growth.After adjusting for rate growth,global premiums lagged significantly behind real global GDP growth during this same period,indicating a decline in the relevance of commercial lines(Exhibit 3).7Global Insurance Report 2023:Expanding commercial P&Cs market relevanceThis is the most critical challenge that the insurance industry is facing today.Commercial carriers must take action to expand their relevance by reducing protection gaps to fulfill the societal desire for resilience in a changing environment.Three trends in particular are driving increased protection gaps:the increasing frequency and severity of NatCat risks,the transition toward a net-zero economy,and the evolution of cyber risks.These demonstrate the most pressing coverage gaps for commercial carriers.In addition,evolving supply chains and the evolution of trade and commerce will affect lines such as marine and business interruption.NatCats.Extreme weather events,sometimes very localized,have increased in frequency and severity,leading to ever-higher levels of loss 12 Sustainability Blog,“IPCCs report on climate change impacts,adaptation,and vulnerability:What business leaders should know,”blog entry by Mekala Krishnan,Carter Powis,Kasia Tokarska,and Alexis Trittipo,McKinsey,April 6,2022.13 Reinsurance:A tipping point,Howden,September 14,2022.14 McKinsey analysis based on Swiss Reinsurance Company,excluding supply chain distribution and net-zero transition investment opportunities.Most of the gap is attributable to commercial lines.and damages and affecting a growing number of geographies.12 Executives frequently use the phrase,“1-in-200 events are no longer 1-in-200,”and the facts support it.Since 2017,the United States has experienced an average of 15 NatCats per year with damages exceeding$1 billionup from fewer than ten per year in the previous decade and fewer than six in the decade prior to 2007(Exhibit 4)due to the increased frequency and severity of NatCats.For the same reason,year-on-year NatCat prices went up in 2022.For example,Florida property catastrophe reinsurance rate-on-line increased by 25 percent in midyear 2022 renewals.13 Meanwhile,the global NatCat protection gap was estimated at$130 billion to$140 billion in 2021,with more than 60 percent of that concentrated in North America and Europe.14Exhibit 3Web Exhibit of Note:Displayed values are rounded;bar heights are representative of actual values.1Only includes 66 countries covered by McKinseys Global Insurance Pools,representing 90%of 2021 global real GDP.2Defned as commercial lines market GWP,corrected by rate change and divided by real GDP.3Adjusted by rate changes since 2015.4Asia data based on twelve leading economies;Pacifc data based on Australia.Source:Marsh;McKinsey Global Institute;McKinsey Global Insurance PoolsCommercial-lines carriers are losing relevance in both existing and evolving risks.McKinsey&CompanyGlobal1 commercial property and casualty(P&C)insurance penetration,2 gross written premiums(GWP)adjusted by rate change,3 GWP as%of real GDPChange in insurance penetration during the hard market,201821,%NorthAmericaEuropeAsia4Pacifc4LatinAmericaGlobal11251232 8201.81.60.90.70.50.50.80.50.70.81.00.8201820218Global Insurance Report 2023:Expanding commercial P&Cs market relevanceNet-zero transition.According to our previous analysis,15 the transition to a net-zero economy could account for more than$800 billion in annual global capital expenditures in renewable energies and decarbonization technologies by 2030.These new technologies will create new forms of risk requiring protection,and the resulting insurance value pool could be worth up to$15 billion,concentrated in property as well as energy and construction specialty lines.However,the renewable energy line of business has not been particularly profitable for carriers in recent years,resulting in their reduced appetite to provide capacity.But as commercial carriers analyze past claims patterns and collect additional third-party data,they can innovate on insurance coverage and underwriting practicesand enable 15“Capturing the climate opportunity in insurance,”McKinsey,September 14,2022.better risk-engineering practices to accompany clients on their way to net-zero emissions.Cyber.Cyberthreats pose a significant accumulation riskfor example,when targeted at critical infrastructures,such as water or energywith potential implications across the entire insurance and reinsurance portfolio.The occurrence is unpredictable,and the risk characteristic is constantly evolving.As a result,commercial carriers are struggling to properly quantify risk exposure and adjust terms and conditions,as well as wordingsalso,to consequently win the conviction of reinsurance capacity.This is rapidly evolving,however,as new frameworks to define cyber catastrophes are emerging from multiple commercial carriers.For instance,2023 saw the placement of the first Exhibit 4Web Exhibit of 1Per annum.2Names are representative of major hurricanes that occurred in the given year.Source:National Centers for Environmental Information(NCEI);Wall Street Journal;“Climate risk and response:Physical hazards and socioeconomic impacts,”McKinsey Global Institute,January 2020Annual disaster costs for catastrophe events have been rising over the long term.McKinsey&CompanyVolume of disasters in the US with$1 billion in damages since 1991(adjusted for infation),number of disastersDisaster costs,$billions199120002010202154Andrew247Midwest fooding180Katrina239Ike280Sandy225Laura2Harvey2 143Maria2 104Irma2 5825201510504.5 p.a.13.9 p.a.5.1 p.a.8.3 p.a.9.8 p.a.15.2 p.a.5-year average,%6-year average,%9Global Insurance Report 2023:Expanding commercial P&Cs market relevancecyber catastrophe(Cat)bond.16 As widespread technological shifts have permeated nearly every aspect of work,17 especially with the rise of remote work environments,cyber risk has become ubiquitous.As a result,commercial carriers have recently enacted rate increases,reduced coverages,and added exclusions,such as on state-sponsored acts.Already,cyber economic losses in 2020 totaled$945 billion18more than one hundred times the total premium market($9 billion in 2021)19indicating a massive protection gap.Even if only a fraction of these losses is insurable,it could translate to a more than$100 billion growth opportunity for the global commercial-insurance industry.Commercial carriers can take four actions to expand their relevance by turning the evolving risk nature into new growth opportunities while closing protection gaps and helping individual clients and whole economies become more resilient.Upgrade and innovate on product and policy design for risk transfer solutionsTo provide coverage for net-zero transition riskswhich are not sufficiently covered by existing insurance todaycommercial carriers must build 16“Beazley launches markets first cyber catastrophe bond,”Beazley,January 9,2023.17 Neil Assur and Kayvaun Rowshankish,“The data-driven enterprise of 2025,”McKinsey,January 28,2022.18 Eugenia Lostri and Zhanna Malekos Smith,The hidden costs of cybercrime,McAfee,December 2020;most of the gap is attributable to commercial lines.19“Cyber insurance:Risks and trends 2022,”Munich Re,May 16,2022.the capabilities to underwrite prototype-like risks,such as for decarbonization technologies,including carbon capture and energy storage.While initial insurance products exist,they are not widely available due to the lack of historical data when underwriting these risks for the first time.Commercial carriers can also support the adoption of carbon markets by offering alternative risk-transfer solutions,including coverages for buyers(for example,to insure a carbon offset becoming invalid)and sellers(for example,to cover nature-based loss from a pest infestation).Parametric(or index-based)solutionsin which payouts are linked to defined and objective indexes or trigger points,such as flood levels or the strength of an earthquakecan improve the efficiency of NatCat coverages for both clients and commercial carriers.Risks become more transparent,while payouts are instantaneous and are less exposed to long litigations,reducing the tail of the risk.Products can also be tailored to certain segments.For example,SMEs within a specific industry often face similar types of risks and share the desire to be protected against them but would prefer to take a more hands-off approach to their insurance coverages.Here,commercial carriers can Commercial carriers can support the adoption of carbon markets by offering alternative risk-transfer solutions,including coverages for buyers and sellers.10Global Insurance Report 2023:Expanding commercial P&Cs market relevanceinnovate by structuring product bundles across lines of business for traditional SME industries(for example bakeries and carpentries)as“tailor made”coverages to address their respective risk exposures while applying simplified wordings.Adjust pricing to reflect the true cost of riskCommercial carriers need to evolve their pricing models to be more nuanced in relation to changing risks and leverage more advanced modeling techniques and internal and external data.For example,the industry tends to react to individual weather events,which can make coverage unaffordable the following year.Pricing models should take a longer-term view of changing weather patterns with a through-cycle approach to risks.This shift requires that commercial carriers apply advanced modeling to catastrophic events to determine whether a one-off weather event is a true anomaly or indicative of an emerging pattern.Data and advanced analytics will be critical for commercial carriers to overcome the challenge of limited loss data history,especially for emerging risks.Commercial carriers may need to partner with asset owners or other third parties,for example,to gain access to data and knowledge of new trends.In the short term,commercial carriers can leverage the underwriting expertise of the most advanced MGAs while they build out their own talent and capabilities over the long term.Invest in risk prevention and mitigation services Commercial carriers must expand their offerings beyond risk transfer to services that mitigate or prevent risks.For example,in cyber,the most engaged commercial carriers help clients reduce cyberthreats and improve risk selection by providing threat intelligence,data center diversification,consulting,and employee training.Many commercial carriers also partner with cybersecurity firms to offer end-point protection or multifactor authentication.Insurtechs,in particular,can leverage this opportunity to offer 20 Insurance Blog,“Five takeaways from InsureTech Connect 2022,”blog entry by Deniz Cultu,Grier Tumas Dienstag,Katka Smolarova,and Leda Zaharieva,McKinsey,October 12,2022.21“New McAfee report estimates global cybercrime losses to exceed$1 trillion,”McAfee,December 7,2020.cyber protection products as a“vaccine”against risksin other words,the more that individual companies protect against cyber risks,the lower the risk exposure for the industry as a whole.20 For example,commercial carriers can encourage customers to include cyber-monitoring services as part of their policy by offering premium discounts for preventative cyber risk actions.This will require commercial carriers to maneuver within the ecosystem of pre-and post-breach service providers.Similar mitigation and prevention solutions can help clients become more resilient to NatCat risks.For example,leading commercial carriers have been working with governments and regulators to ensure that building codes are fit for purpose and adequately address local catastrophe risks.In addition,commercial carriers can help manage clients exposure by providing extreme weather warnings(such as for floods or hail)or by advising large fleet owners(such as marine and aviation clients)to relocate their fleets based on upcoming extreme weather events.Commercial carriers can also leverage their expertise to help clients develop supply chain resilience or navigate the jungle of environmental,social,and governance(ESG)and enterprise risk management(ERM)frameworks,as well as supplier certificates.Educate stakeholders,and raise awareness of risksIn many cases,clients are not fully aware of the severity of risks or the availability of coverages.For example,a McKinsey survey of more than 400 SMEs without cyber insurance coverage found that 80 percent were either unaware of available insurance products or unaware of their exposure to cyber risks in the first place.However,a McAfee survey suggests that two-thirds of companies reported some kind of cyberincident in 2019.21 As part of the solution for cyber and beyond,carriers can proactively engage clients,distributors,regulators,and governments to educate stakeholders and support their risk prevention and mitigation efforts to increase institutional resilience with a proactive approach toward risks.11Global Insurance Report 2023:Expanding commercial P&Cs market relevanceCommercial carriers need to evolve their pricing models to be more nuanced in relation to changing risks and leverage more advanced modeling techniques and internal and external data.12Global Insurance Report 2023:Expanding commercial P&Cs market relevance3Access capacity through alternative capital and publicprivate partnerships to compete in a tight capital cycleClosing even a portion of the protection gaps highlighted above would require hundreds of billions of dollars of capital.22 At the same time,dedicated reinsurance balance sheet capital dropped by 16 percent in 202223;reinsurance renewals have been one of the hardest in January 2023,especially for NatCat coverage;and reinsurers have announced plans to tighten 22 Based on a current premium-to-surplus ratio of about 100 percent(including reinsurance).23 The great realignment,January 1,2023.13Global Insurance Report 2023:Expanding commercial P&Cs market relevancecapacity even further.These developments are driven by increasing NatCat activity since 2017(which was mainly absorbed by reinsurers),decades-high inflation requiring higher limits,mark-to-market losses of financial instruments(devaluation on books due to higher interest rates),and the strengthening of the dollar(for non-US commercial carriers because capital is mainly traded in dollars).As a result,the commercial industrys premium-to-surplus ratio has surpassed its ten-year average.24 This combination of increasing demand and decreasing supply of reinsurance capital needs to be solved in the current cycle.The alternative capital marketincluding insurance-linked securities(ILS),collateralized reinsurance,and sidecarsfollowed a similar arc to reinsurance capacity in the current cycle.For example,the public ILS market has underperformed since 2018 because nearly 85 percent of it is tied to catastrophe Cat bonds.25 Investors suffered the brunt of losses linked to the increased frequency of NatCat events.Furthermore,for bonds without parametric payout triggers,investors have been discouraged by cedents trapping capital,which increases the duration of the risk exposure.As a result,public ILS Cat bond issuance fell by 81 percent in the third quarter of 2022 to the lowest third-quarter level in the last decade.2624 Ratio of nonlife gross written premiums to shareholders equity for 15 pure-play reinsurer and primary commercial carriers.Based on data from A.M.Best and on McKinsey analysis.25 Based on 2021 data;the remaining 15 percent are linked to industry loss warranties(ILWs).26 Q3 2022 catastrophe bond&ILS market report,Artemis,October 2022.27 Steve Evans,“Reinsurance passes hurricane Ian test,but must demonstrate profits,”Artemis,November 25,2022.It appears the industry has tried to address some of these investor frustrations.Already in 2022 renewalsbut even more predominately in 2023terms and conditions tightened and prices went up,in line and driven by the increased attachment points for reinsurance.This supported the performance of the 2022 public ILS market,in which even the impact of Hurricane Ian was mitigateda major event for the industry.27 However,this is because public ILS bonds tend to focus on higher risk tranches.Other forms of reinsurance capital have seen worse performance because they are in lower tranches,closer to the risk itself.They are likely to see continued rate correction.Some commercial carriers are successfully raising additional capital already.Nevertheless,to accelerate and make significant headway in closing protection gaps,alternative sources of capital will be critical.Innovate on the use of alternative capital and prove long-term profitabilityDespite recent headwinds,alternative capital markets and private investors continue to be an important source of capital for both reinsurers and primary commercial carriers.As commercial carriers themselves hit risk and capacity limits and traditional reinsurance capital is constrained,To close protection gaps,alternative sources of capital will be critical for commercial carriers.14Global Insurance Report 2023:Expanding commercial P&Cs market relevancealternative capital is especially relevant in the current cycle.Although alternative reinsurance capital grew to account for 15 percent of the total reinsurance capital allocation in 2021up from 6 percent in 201128it remains a largely untapped pool of capital,with alternative reinsurance capital representing less than 1 percent of the global 28 ILS annual report 2021,alternative capital:Continuing growth momentum,Aon,2021.29 McKinsey Performance Lens Global Growth Cube database:alternative AUM,including commodity funds,hedge funds,infrastructure funds,private debt funds,private equity funds,real estate funds,and structured products.alternative assets under management(AUM).29 Especially in recent years,total alternative AUM grew by 12 percent per year between 2018 and 2021 while total alternative reinsurance capital stayed flat.This represents an opportunity to increase the allocation toward alternative reinsurance capital by demonstrating its value in an alternative portfolio(Exhibit 5).Exhibit 5Web Exhibit of 1Assets under management.Includes commodity funds,hedge funds,infrastructure funds,real estate funds,structured product,private debt funds,and private equity funds.2Includes collateralized reinsurance,insurance-linked securities(ILS),industry loss warranties,ILS catastrophe bonds,and sidecars;private market is excluded given limited transparency;2021 value based on the frst half of 2021.Source:ILS annual report 2021,alternative capital:Continuing growth momentum,Aon,2021;McKinsey Performance Lens Global Growth Cube databaseTotal alternative asset-under-management(AUM)growth has signifcantly outpaced alternative reinsurance capital since 2018.McKinsey&CompanyGlobal alternative markets AUM,1$billionsAlternative reinsurance capital,2$billionsShare of total reinsurance capital,2,000201620152014201320122011201720182019202020215101520201620152014201320122011201720182019202020218172645044288997959497CAGR,%X01912102016201520142013201220112017201820192020202115Global Insurance Report 2023:Expanding commercial P&Cs market relevanceTo capitalize on this opportunity,however,and to win back investors on a broader scale,commercial carriers need to prove their ability to price and model catastrophe events and to deliver consistent returns above cost of capital over the long term.Therefore,reinsurers and primary commercial carriers should actively engage alternative capital markets and can appeal to investors by focusing on three themes.Tailor proposition to different types of investor appetite.To cater to the risk appetites of different private investors,commercial carriers can consider pooling risks across multiple lines to diversify and tailor the overall risk profile of funds.This is a departure from the current model,in which risk transfer is focused on NatCat coverages,leading to a higher risk concentration.Other mechanisms to attract a broader range of investors include the use of parametric triggered payouts,which can reduce the duration or tail of the risk exposure for investors and thereby address one of their major concerns.Additionally,parametric trigger points objectivize the loss payout and facilitate accurate modeling.Furthermore,alternative capital,especially when linked to NatCats,can contribute to investors broader ESG agendas,given that tranches can be structured to align with specific ESG themes.Rethink alternative capital products.The complexity of alternative capital vehicles may discourage some potential investors.To attract these investors,commercial carriers can innovate by simplifying alternative capital products through the standardization of structures and contract language to evolve alternative capital into a more widely suitable product.In addition,to regain investors confidence,commercial carriers need to improve their modeling of catastrophe events,particularly by embedding climate change factors.Last,primary commercial-lines carriers can increase their participation in the alternative capital market by issuing bonds directly rather than relying on reinsurers or third-party providers.Venture into new markets.Closing the protection gaps in markets beyond the core NatCat market 30 Swiss Influenza Pandemic Plan,Swiss Federal Department of Finance,2018.31“Cyber insurance:Action needed to assess potential federal response to catastrophic attacks,”US Government Accountability Office(GAO),June 21,2022.32 Matthew Dalton,Stacy Meichtry,and Summer Said,“COP27 strikes deal on fund for poorer countries vulnerable to climate change,”Wall Street Journal,November 19,2022.requires commercial carriers to increase their capacity.However,investors are still cautious about the limited historical data,untested models,and high volatility associated with cyber risks.Commercial carriers must therefore improve their ability to price and model the impact of catastrophic events.Recent developments that enable carriers to monitor exposures in their cyber portfolio are a sign that the industry is improving its transparency.Thus,we have seen progress(albeit still small)in ILS being deployed to cybersuch as the first launch of a cyber Cat bond.Reestablish publicprivate partnershipsIn addition to the ILS markets,commercial carriers can leverage publicprivate partnerships to access capacity for risks that the private sector cannot absorb alone.While such partnerships are well established,commercial carriers can significantly expand their use of them to close the protection gaps associated with systemic or societal risksfor instance,those related to critical infrastructure.Recent examples suggest that public institutions are ready to embrace such partnerships:the Swiss Influenza Pandemic Plan is in place to address commercial risks stemming from company-wide lockdowns,30 and the US government is currently considering a publicprivate partnership to address growing cyber risks.31 Even on a global scale,governments are willing to take on some of the risks:multiple nations agreed at COP27 to establish a loss and damage fund,an arrangement in which wealthier countries pay out to poorer countries when they are hit by climate-related disasters.32However,as commercial carriers shape their partnerships with public institutions,it is key to agree on which risks should be borne by corporations or by commercial-lines carriers in private markets,which should be pooled across the industry,and which should be borne by the public sector.16Global Insurance Report 2023:Expanding commercial P&Cs market relevance17Global Insurance Report 2023:Expanding commercial P&Cs market relevanceSuccessful underwriting requires a comprehensive set of quantitative capabilities and qualitative skills.18Global Insurance Report 2023:Expanding commercial P&Cs market relevance4Build the capabilities and talent to manage the shift from art to scienceMany commercial carriers are investing heavily in advanced analytics,workbenches,and external data sources to help put data at the fingertips of underwriters and claims handlers to address the changing nature of risks.To keep up with the speed of change,commercial carriers must attract and retain the necessary talent,as well as develop the capabilities of experienced employees.This will necessitate a cultural shift because many underwriters and claims handlers still prefer to rely solely on their extensive experience rather than data-driven approaches and advanced technologies.At the same time,commercial carriers must contend with the aging of the experienced workforce as the baby boomer generation reaches retirement age.For example,in 202021,roughly one in four employees of carriers in the United States was 54 years or older,33 and one in four 33“Labor force statistics from the current population survey,”US Bureau of Labor Statistics,January 20,2022.19Global Insurance Report 2023:Expanding commercial P&Cs market relevancein the United Kingdom was 50 years or older.34 An average effective labor market exit age is between 64 and 65.35 This means that 25 percent of commercial carriers workforce will retire in the next ten years.Meanwhile,the lack of in-office interactions in the aftermath of the COVID-19 pandemic has limited the space for knowledge sharing,and a tight labor market threatens commercial carriers ability to attract and retain the talent they need.Indeed,the demand for expert underwriters,claims handlers,and data and analytics talent is fast outpacing supply.MGAs,insurtechs,and other industries(such as consumer and tech)are all competing for a limited pool of talentand commercial carriers are not consistently the top employer of choice.Leverage the commercial-lines business model to build a unique talent value propositionCommercial carriers can attract the necessary talent by refining their employee value proposition.Given their often global and cross-industry underwriting portfolios,commercial carriers can emphasize their ability to offer a unique opportunity to gain exposure to a diverse set of roles,industries,geographies,and functional areas by allowing for cross-functional career paths.This is especially relevant as commercial carriers are shifting toward cross-functional teams(including claims,risk engineering,sales,and portfolio managers)to address the evolving risk landscape.Commercial carriers also need to expand their talent pools beyond the insurance industry to target nontraditional profiles,such as those with deep technology expertise or a cyberscience background.34“Fact base 2022,”London Market Group,2022.35“Pensions at a glance 2021Ages and years,”OECD,accessed January 5,2023.With the move toward more analytics-driven,semiautonomous underwriting,commercial carriers can further empower underwriters to shift from pure risk underwriting toward data-driven portfolio management.Doing so will require strong change management and capability-building initiativessuch as the codification of knowledge,mentorship and coaching from senior underwriters,and skills training on new tools and capabilities.As insurance companies seek to modernize their underwriting function,they must carefully balance the productive tensions between art and science,automation,and judgment-based experience,as well as autonomy and workflow-based approaches.Successful underwriting has evolved beyond risk selection and pricing;it requires a comprehensive set of quantitative capabilities and qualitative skills across coverage lines and technologies.Commercial P&C carriers are at a crossroads.Persistent challenges lie ahead,including high inflation,rate volatility,the net-zero transition,the changing nature of risks,tightening capacity,and a shrinking labor market.Yet there is significant opportunity open to those who can carve out a distinctive value proposition for their clients,investors,and talent and innovate risk transfer and prevention solutions to stay ahead of the evolving risk landscape.By taking bold and decisive action,commercial commercial carriers can expand their relevance and advance their purpose to create a safer and more resilient society.Copyright 2023 McKinsey&Company.All rights reserved.Susanne Ebert is a partner in McKinseys Frankfurt office,Robin Huettemann is a consultant in the Munich office,Kia Javanmardian is a senior partner in the Chicago office,James Polyblank and Leda Zaharieva are partners in the London office,Sirus Ramezani is a senior partner in the Zurich office,and Shannon Varney is a partner in the Boston office.The authors wish to thank Mahima Agarwal,Selma Belghiti,Chien-Teng Chia,Jonas Chinczewski,Emmanuel Clarke,Deniz Cultu,Philipp Horsch,Varun John Jacob,Sylvain Johansson,Philipp Klais,Bernhard Kotanko,Christie McNeill,Jrg Muhoff,and Fritz Nauck for their contributions to this article.20Global Insurance Report 2023:Expanding commercial P&Cs market relevanceContactsUmar BagusPartner,JohannesburgUmar_BagusMcKJoo BuenoSenior partner,So PauloJoao_BuenoMcKDeniz Cultu Partner,MinneapolisDeniz_CultuMcKSusanne Ebert Partner,FrankfurtSusanne_EbertMcKKia Javanmardian Senior partner,ChicagoKia_JavanmardianMcKSylvain JohanssonSenior partner,GenevaSylvain_JohanssonMcKAlex KimuraPartner,SingaporeAlex_KimuraMcKBernhard Kotanko Senior partner,SingaporeBernhard_KotankoMcKChristie McNeillPartner,BostonChristie_McNeillMcKBasab MitraPartner,LondonBasab_MitraMcKJrg MuhoffSenior partner,BerlinJoerg_MusshoffMcKFritz NauckSenior partner,CharlotteFritz_NauckMcKJames PolyblankPartner,LondonJames_PolyblankMcKSirus RamezaniSenior partner,ZurichSirus_RamezaniMcKAngat SandhuPartner,SydneyAngat_SandhuMcKSalomon SpakPartner,LimaSalomon_SpakMcKCameron TalischiPartner,ChicagoCameron_TalischiMcKShannon VarneyPartner,BostonShannon_VarneyMcKLeda ZaharievaPartner,LondonLeda_ZaharievaMcK21Global Insurance Report 2023:Expanding commercial P&Cs market relevanceMcKinsey&Company February 2023 Copyright McKinsey&Company Cover image:matdesign24/Getty Images All interior images Getty ImagesMcK McKinsey McKinsey McKinsey

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Technological Transformation for JobsTania BegazoMoussa P.Blimpo Mark A.DutzBegazo Blimpo DutzTechnological Transformation for JobsDIGITAL AFRICADIGITALAFRICADIGITALAFRICADIGITALAFRICATechnological Transformation for JobsTania BegazoMoussa P.BlimpoMark A.Dutz 2023 International Bank for Reconstruction and Development/The World Bank1818 H Street NW,Washington,DC 20433Telephone:202-473-1000;Internet:www.worldbank.orgSome rights reserved1 2 3 4 26 25 24 23This work is a product of the staff of The World Bank with external contributions.The findings,interpreta-tions,and conclusions expressed in this work do not necessarily reflect the views of The World Bank,its Board of Executive Directors,or the governments they represent.The World Bank does not guarantee the accuracy,completeness,or currency of the data included in this work and does not assume responsibility for any errors,omissions,or discrepancies in the information,or liability with respect to the use of or failure to use the information,methods,processes,or conclusions set forth.The boundaries,colors,denominations,and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries.Nothing herein shall constitute or be construed or considered to be a limitation upon or waiver of the privileges and immunities of The World Bank,all of which are specifically reserved.Rights and PermissionsThis work is available under the Creative Commons Attribution 3.0 IGO license(CC BY 3.0 IGO)http:/creativecommons.org/licenses/by/3.0/igo.Under the Creative Commons Attribution license,you are free to copy,distribute,transmit,and adapt this work,including for commercial purposes,under the following conditions:AttributionPlease cite the work as follows:Begazo,Tania,Moussa P.Blimpo,and Mark A.Dutz.2023.Digital Africa:Technological Transformation for Jobs.Washington,DC:World Bank.doi:978-1-4648-1737-3.License:Creative Commons Attribution CC BY 3.0 IGOTranslationsIf you create a translation of this work,please add the following disclaimer along with the attribution:This translation was not created by The World Bank and should not be considered an official World Bank translation.The World Bank shall not be liable for any content or error in this translation.AdaptationsIf you create an adaptation of this work,please add the following disclaimer along with the attribution:This is an adaptation of an original work by The World Bank.Views and opinions expressed in the adaptation are the sole responsibility of the author or authors of the adaptation and are not endorsed by The World Bank.Third-party contentThe World Bank does not necessarily own each component of the content contained within the work.The World Bank therefore does not warrant that the use of any third-party-owned individual component or part contained in the work will not infringe on the rights of those third parties.The risk of claims resulting from such infringement rests solely with you.If you wish to re-use a component of the work,it is your responsibility to determine whether permission is needed for that re-use and to obtain permission from the copyright owner.Examples of components can include,but are not limited to,tables,figures,or images.All queries on rights and licenses should be addressed to World Bank Publications,The World Bank Group,1818 H Street NW,Washington,DC 20433,USA;e-mail:pubrightsworldbank.org.ISBN(paper):978-1-4648-1737-3ISBN(electronic):978-1-4648-1837-0DOI:10.1596/978-1-4648-1737-3Cover design:Bill Pragluski,Critical Stages,LLC.Library of Congress Control Number:2023900708 vContentsForeword.xiAcknowledgments.xiiiAbout the Authors .xvMain Messages.xviiOverview.xxiAbbreviations.xliCHAPTER 1Digital Technologies:Enablers ofTechnological Transformation for Jobs .1What are digital technologies?1Africas jobs and technology challenges 2Impacts of digital technology use on jobs and poverty 12Africas large internet uptake gap 21Data and knowledge gaps for future work 30Notes 35References 43CHAPTER 2Enterprises:Creating Better Jobs for More People through Innovation.49Digital technology use by African enterprises 49COVID-19 and digital divides 66Drivers of enterprise use 72Technology policies for more and better firms 81Notes 95References 99CHAPTER 3Households:Supporting Productive Use of DTs for Inclusive Economic Impact.103Household internet use is low,uneven,but growing 103The COVID-19 paradox:Increased internet usage but widened digital divides 110Understanding constraints to household internet use 112A policy framework to transform use into inclusive impact 127Conclusion 132Notes 132References 133CHAPTER 4Digital and Data Infrastructure:Stimulating Greater Availability and Use through Policy and Regulatory Reforms .137Market challenges of internet connectivity:Affordability,use,and quality 137vi ContentsAffordability to increase use 147Availability to reduce digital divides 166Data infrastructure and regulation for affordability and willingness to use 177Looking ahead:Regional integration and climate transition 185Summary of key findings for more inclusive use 189Annex 4A Supplemental data 192Notes 193References 196BOXES1.1 What are“good jobs”?21.2 The World Banks“economic transformation for jobs”framework 62.1 Rapid diffusion of website technology during COVID-19 672.2 Impact of the COVID-19 pandemic on mobile app use in Africa 702.3 Public inputs to strengthen value chains in Senegal,Kenya,and Peru 912.4 A job creation program in Senegal:Effective design for technological transformation 933.1 E-commerce for economic inclusion in Chinas Taobao Villages 1223.2 Reliable electricity and the digital economy 1253.3 Smart Villages in Niger for inclusive availability and productive use 1314.1 Regressive broadband pricing constrains use by the poor 1424.2 High broadband prices and limited offerings constrain data use by SMEs 1434.3 Creating digital institutions in situations of fragility,conflict,and violence:Transforming the sector in Somalia 1574.4 Senegals digital acceleration journey:The role of infrastructure regulatory reforms 1604.5 The evolving taxation of digital services 1644.6 Alternative technologies for covering rural and remote areas 169FIGURESO.1 Conceptual framework for policy analysis of DTs impacts on job and income growth xxiiiO.2 Effects of mobile internet availability on job creation and household welfare,Nigeria and Tanzania xxvO.3 Gap between mobile internet coverage and usage,Sub-Saharan Africa and other regions,201021 xxviiO.4 Association between firms use of more sophisticated DTs and productivity and job growth,selected countries,201921 xxviiiO.5 Association between microenterprises use of technologies and higher productivity,sales,andjobs,201718 xxixO.6 Smartphone and computer use,by firm size,selected countries,201921 xxxO.7 Correlates of smartphone and computer adoption by African firms,201721 xxxiO.8 Policy routes for increasing households inclusive uptake and productive use of DTs xxxiiiO.9 Extent of competitive constraints in market structures across the digital value chain in Africa,2021 xxxv1.1 Projected share of the global workforce,by region,in 2025,2050,and 2100 3Contents vii1.2 Use of selected agricultural technologies,by region,2015 51.3 Conceptual framework for policy analysis of DTs impacts on job and income growth 91.4 Expanded conceptual framework for policy analysis of DTs job and income impacts through the lens of digital divides 111.5 Impacts of mobile internet availability on job creation and household welfare,Nigeria and Tanzania 141.6 Impact of decision support tool on Nigerian rice farmers yields and profits 211.7 Availability of internet-enabled(3G and 4G)networks,by region,201021 221.8 Unique 3G mobile internet usage,by region,201021 231.9 Gap between mobile internet coverage and usage,Sub-Saharan Africa,201021 241.10 Internet usage and gaps,by region 241.11 Average mobile internet availability and usage,by technology type,Sub-Saharan Africa versus other regions,2010and 2021 251.12 Mobile internet uptake gaps,by country,Sub-Saharan Africa,2021 262.1 Association of higher technological sophistication with higher enterprise productivity,selected African countries,201921 502.2 Association between firms use of sophisticated technologies and growth of productivity and jobs,selected African and comparator countries,201921 512.3 Unconditional performance improvements among microenterprises using DTs relative to nonusers,selected African countries,201718 532.4 Association between microenterprises use of technologies and higher productivity,sales,and jobs,selected African countries,201718 542.5 Technological sophistication of enterprises,by broad sector,selected African and comparator countries,201921 562.6 Technological sophistication of enterprises,by firm size,selected African and comparator countries,201921 582.7 Use of DTs by enterprises,by firm size and general business function,selected African and comparator countries,201921 592.8 Use of smartphones and computers by enterprises,by firm size,selected African and comparator countries,201921 602.9 Use of more sophisticated DTs by enterprises,selected African and comparator countries,201921 612.10 Average microenterprise uptake and use of DTs,by owner age and gender subgroup,selected African countries,201718 622.11 Top Sub-Saharan African countries in digital-solution business density and totalinvestment,2020 632.12 Local and regional shares,and top regional subsectors,of digital-solution providers,Sub-Saharan Africa,2020 652.13 Major hubs of regional digital-solution businesses,Sub-Saharan Africa,2020 66B2.1.1 Growth of e-payment use in websites,Sub-Saharan African countries versus other regions,201920 672.14 Increases in enterprise uptake,use,and investment in digital solutions afterCOVID-19 outbreak,by firm size,Sub-Saharan African versus comparator countries,202021 692.15 Increases in enterprise use of and investment in DTs after COVID-19 outbreak,by firm size,selected African countries,202021 70B2.2.1 Change in number of monthly average users of digital apps,selected African and comparator countries,April 2020 to March 2021 71viii Contents2.16 Effects of higher pre-COVID-19 technological readiness on enterprises post-COVID-19 sales,by technology sophistication quintile,2021 722.17 Reported barriers to enterprise use of technology,by firm size,selected African countries,201921 742.18 Correlates of smartphone and computer adoption by African firms,201721 762.19 African enterprises perceptions of own technology use relative to other firms within country,201921 792.20 Correlation of worker and manager skills with use of better technologies,selected African countries,201921 802.21 Correlation of better management capabilities and organizational practices withenterprise use of better technologies,selected African countries,201921 812.22 Instruments to support generation and adoption of DTs for GBFs and SBFs 83B2.4.1 Coordination of complementary support mechanisms tailored to specific value chains 943.1 Internet usage,by subregion,Sub-Saharan Africa,200020 1043.2 Wireless broadband and internet coverage,usage gaps,and coverage gaps,bysubregion,Sub-Saharan Africa,2020 1043.3 Internet usage in 10 Sub-Saharan African countries,2008,2012,and 2018 1053.4 Correlation of household income with uptake of mobile services and mobile broadband internet,by income decile,selected Sub-Saharan African countries,201718 1063.5 Gender gap in mobile internet usage,by region,all low-and middle-income countries,201720 1073.6 Mobile data consumption per capita,by region,2018 1083.7 Correlation between internet usage and GNI per capita,Sub-Saharan Africa and the rest of the world,2019 1093.8 Probability of employment adjustments during COVID-19 pandemic by firms,byincome group,Sub-Saharan Africa and the rest of the world,2020/21 1113.9 Changes in household expenditures during or after the COVID-19 outbreak,Kenya and Sierra Leone 1123.10 Association of factors with internet use,selected West African countries,2018/19 1143.11 Correlates of internet adoption across nine Sub-Saharan Africancountries,201718 1153.12 Constraints to internet usage in selected Sub-Saharan African countries,201718 1163.13 Correlates of global mobile internet usage,2018 1183.14 Smartphone versus feature phone adoption and affordability of data-only broadband internet prices,Africa and the rest of the world 1203.15 Share of informal employment workers employed in the informal sector,formal sector,and households,excluding and including agriculture,by gender and subregion,Africa 1263.16 A framework for closing the DT uptake gap and boosting DT users welfare 1284.1 Mobile data traffic per capita,by subregion and country income group,Africa,2020 1384.2 Correlation between mobile data traffic per capita,2020,and GDP,2018 1394.3 Average data and smartphone prices,by region,African subregion,and global country income group 140B4.1.1 Comparison of absolute and implied prices of data plans,by vendor,selected African countries,2021 1424.4 Internet speed,service quality,and average cost-speed ratio,by region 144Contents ix4.5 Correlation between availability and use of mobile broadband-capable networks,by country,Africa,2022 1474.6 Effects of market concentration on affordability and 3G 4G 5G penetration 1484.7 Reduction in the poverty headcount rate from simulated policies to increase telecommunications competition,selected Sub-Saharan African countries,201518 1504.8 Extent of competitive constraints in market structures across the digital value chain,2021 1514.9 Vertical integration of large telecommunications firms active in more than one segment of the digital value chain,2021 1524.10 Operators shares of mobile subscribers and telecommunications fiber networks,by extent of state ownership and subregion,Africa,2020 1534.11 International internet capacity,proxied by submarine cables and landing stations,Sub-Saharan Africa,2021 1544.12 Alignment of digital infrastructure regulation with good international practice,selected African countries,2020 1554.13 Average spectrum concentration in 700/800 MHz bands,by region and Africansubregion,2020 1564.14 Alignment of telecommunications regulation with good international practice,selected African countries,2020 1584.15 Projected mobile phone and internet adoption,by policy scenario,Ghana,2030 1594.16 Spectrum holdings and spectrum management quality,Africa,2020 1614.17 Projected impact of sector-specific tax reductions on mobile and internet adoption,Benin and the Democratic Republic of Congo,2030 1634.18 Costs of universal mobile broadband and potential rural coverage,Africa and selected countries 1674.19 Cost of universal broadband with infrastructure sharing,selected Sub-Saharan African countries 1684.20 Projected broadband internet coverage,coverage gaps,and usage under baseline and policy reform scenarios,selected African countries,by 2030 1714.21 Polices to increase internet usage,by extent of user groups ability to pay and willingness touse 1754.22 Summary of proposed policy reforms for affordable internet availability 1764.23 Characteristics of data infrastructure,2020 1784.24 Attainment of good practice in enablers and safeguards of data use and reuse,selected African countries,2020 1814.25 Distance from good practice in data regulation across country income groups,Sub-Saharan Africa relative to global income groups,2020 1824.26 Perceived threats to financial markets,2021 1844.27 Regional digital market layers and target outcomes 1864.28 National-level actions to facilitate deeper regional integration of digital connectivity,data,and markets 1874.29 Contributions to green outcomes from digital and data infrastructure 188MAPS3.1 Shares of population with electricity and internet access,by country,Africa,2017 1234.1 Cost of a 2 GB data-only mobile broadband plan as a share of GNI per capita,by country,Africa,2021 141x Contents4.2 Shares of population with internet coverage(3G versus 4G),Democratic Republic of Congo,Nigeria,and Tanzania,2021 1454.3 Mobile broadband download speeds,selected urban areas,Africa,2020 1464.4 Estimated government cost per user for 4G(wireless)universal broadband,Africa,net present value for 202030 1724.5 Stage on Africas data infrastructure ladder,by country,2020 179TABLESO.1 Main policy recommendations for advancing the use of digital technologies to support inclusive job growth xxxvii1.1 Coverage,usage,and uptake gaps,by user characteristic,Nigeria and Senegal,2018/19 271.2 Comparison of key drivers of mobile internet uptake,by selected region 292.1 Comparison of enterprises average technological sophistication,by business function type,selected African and comparator countries,201921 552.2 Top five digital business subsectors,ranked by share of total investment in B2B productivity solutions,by region,2020 634.1 Summary policy recommendations and simulated effects of selected measures 1904A.1 Simplified digital value chain and market characteristics,by subregion,Africa,2020 192 xiForewordAs Africas population grows,creating more and better jobs for youth will be essential for poverty reduction and shared prosperity.This report,Digital Africa:Technological Transformation for Jobs,makes the case for putting digital technologies at the center of a good-jobs strategy for the continent.The reports overview of current challenges establishes that,although Africas mobile internet availability has increased in recent years,its internet infrastructure and the quality of available services still lag behind other regions.Divides in the availability of quality digital services remain an issue in all countries,especially in remote and poorer subregions.Additionally,Africa lags behind other regions in the use of internet services.Although 84 percent of people in Sub-Saharan Africa live in areas where a minimal quality level of 3G or 4G mobile internet services is available,only 22 percent were actually using these services by the end of 2021.A lack of affordable coverage partly explains this significant usage gap.Forty percent of Africans fall below the global extreme poverty line,and even basic mobile data plansalone can represent about one-third of their incomes.African small and medium businesses also face more expensive data plans than their counterparts in other regions.Addressing these constraints will yield major dividends for development.The report offers robust evidence that internet availability can increase jobs and reduce poverty.Furthermore,new empirical data presented on Nigeria and Tanzania add to the rapidly growing literature about the direct impact of mobile internet availability(3G or 4G cov-erage)on jobs and welfare outcomes.The new conceptual framework in this report focuses on policies that prioritize digital tools for productive use to generate inclusive,jobs-related spillover effects while expand-ing coverage of higher-quality broadband internet.These digital tools can create greater demand that,in turn,allows for increased investments in higher-quality digital and com-plementary technologies.Innovations are essential to attract people with fewer skills and boost their potential to generate higher earnings.Strategic policies are critical to encourage the use of digital technologies.Interventions can include curbing excessive market power in order to drive down costs,undertaking complementary public investments,and supporting credit and demand-support pro-grams to overcome affordability barriers and enable quality internet connectivity in underserved or remote areas.Specific data policies are also required to enable wider availability of relevant apps and to enhance trust in digital services.This report also rec-ommends a new focus on developing more appropriate and accessible apps that support managers and lower-skilled workers so that they can learn as they work.xii ForewordDigital technology is a necessary ingredient of economic transformation,and it plays a role in addressing multiple challenges from education to energy.As this report shows,it is imperative that policy makers scale up the availability and use of quality digital services across Africa to improve the lives of its citizens and unlock the potential of the continent to achieve inclusive development.Guangzhe ChenVice President for InfrastructureThe World BankOusmane DiaganaRegional Vice President for Western and Central AfricaThe World BankVictoria KwakwaRegional Vice President for Eastern and Southern AfricaThe World Bank xiiiAcknowledgmentsDigital Africa:Technological Transformation for Jobs is dedicated to Princeton University Professor Emeritus Robert(Bobby)Willig,in memory of his passion and excellence in developing and teaching microeconomics for improved public policies addressing social welfare.This books focus on innovation-led productivity as a driver of inclusive jobs growth,supported by market competition in the provision of infrastructure services and grass-roots entrepreneurship,was deeply influenced by his work.This report was prepared in support of the World Banks Digital Economy for Africa Initiative(DE4A).It is the product of a collaboration across the World Banks teams in the Africa;Infrastructure;and Equitable Growth,Finance and Institutions Vice Presidencies under the oversight of the Office of the Chief Economist of the Africa Region and the Office of the Chief Economist of the Infrastructure Vice Presidency.The prepa-ration of this report was co-led by Tania Begazo,Moussa P.Blimpo,and Mark A.Dutz.The main authors are as follows:Chapters 1 and 2:Mark Dutz,with contributions of original research for Africa from Carlos Rodrguez-Casteln and Takaaki Masaki on the effects of digital connectivity on household welfare;Xavier Cirera and Marcio Cruz on digital technology adoption by firms;İzak Atiyas on mobile internet availability and use as well as digital technol-ogy adoption by microenterprises;Csar Caldern and Catalina Cant on the effects of digitalization on growth and poverty reduction;Georges Houngbonon,Justice Mensah,and Nouhoum Traor on the effects of digital infrastructure availability on entrepre-neurship and investment;Juni Zhu on digital business analysis;and Clara Stinshoff on Apptopia data analysis;Chapter 3:Moussa Blimpo,with contributions from Ramaele Moshoeshoe and support from Henry Aviomoh and Tchapo Gbandi;and Chapter 4:Tania Begazo,with contributions from Clara Stinshoff,Estefania Vergara-Cobos,Xavier Decoster,and Tim Kelly,and original research by Edward Oughton,Genaro Cruz,and Kalvin Bahia on geospatial data and broadband internet in Africa.The authors are especially appreciative of the various background research papers prepared for this report and cited throughout it.The work commenced with an internal workshop on regional digital infrastructure regulation in Africa held at the World Bank on March 28,2019,that benefited from the participation of Penny Goldberg,Paul Klemperer,and the late Robert Willig.The book benefited from useful guidance and advice from Simon Andrews,Haroon Bhorat,Pablo Fajnzylber,Mary Hallward-Driemeier,Daniel Lederman,Aliou Maiga,andDeepak Mishra,among others present at the books inception and decision meetings.The team also incorporated feedback from members of the research program advisory xiv Acknowledgmentscommittee including Daniel Bjrkegren,Ibrahim Elbadawi,Avi Goldfarb,Jonas Hjort,Ayhan Kose,Njuguna Ndungu,Yaw Nyarko,and Davide Strusani.The team remains grateful for their helpful suggestions.Finally,this flagship report was conducted under the general direction of Albert Zeufack and Vivien Foster,with contributions from Andrew Dabalen.The team is also grateful for the overarching guidance received from Hafez M.H.Ghanem,Riccardo Puliti,Boutheina Guermazi,Christine Qiang,Michel Rogy,and Isabel Neto.Beatrice Berman,Flore Martinant de Preneuf,Kelly Alderson,and Breen Byrnes pro-vided superb communications support.Justice Mensah helped oversee the finalization of the book from the Office of the Chief Economist of the Africa Region.Nora FitzGerald,Mary Anderson,and Nora Mara provided timely editorial assistance.The World Banks formal publishing team included production editor Mark McClure,acquisitions editor Jewel McFadden,and print coordinator Orlando Mota.xvAbout the AuthorsTania Begazo is a senior economist in the Markets and Technology unit of the World Banks Trade,Investment and Competitiveness Practice Group.She leads analytical ini-tiatives and provides technical guidance on competition policy.In a previous position at the Digital Development Global Practice,she oversaw major economic policy and research initiatives related to digital infrastructure and policy to inform thought leader-ship,corporate strategy,and operational engagements with clients,with an emphasis on Africa.She led the dissemination of knowledge on digital development and contributed to the formulation and implementation of country operations targeting reforms in the digital sector,building on collaboration within the World Bank Group and external part-ners.Formerly,she was the global lead of the World Bank Groups Markets and Competition Policy team,overseeing the competition policy portfolio covering more than 60 countries and key areas for thought leadership and external partnerships.She also worked for the International Telecommunication Union,APOYO Consultora,and the Peruvian telecommunications regulator.She holds a masters degree in public admin-istration in international development from Harvard University.Moussa P.Blimpo is an assistant professor of economic inequality and societies at the University of TorontosMunk School of Global Affairs and Public Policy.Earlier,he was a senior economist in the World Banks Office of the Chief Economist for the Africa Region.He is primarily an applied economist interested in a range of research and policy issues in low-and middle-income economies,mainly in Africa.Before joining the World Bank,he served for three years as an assistant professor of economics and international studies at theUniversity of Oklahoma.He is a senior fellow at the Clean Air Task Forces Energy and Climate Innovation Program in Africa and is a fellow at the Energy for Growth Hub;he was the founding director of the Center for Research and Opinion Polls,a think tank in Togo that he led between 2011 and 2015.He holds a doctorate in economics fromNew York University and spent two years as a postdoctoral fellow at Stanford Universitys Institute for Economic Policy Research.Mark A.Dutz is a consultant in the Economic Policy Research department of the International Finance Corporation of the World Bank Group.He contributes to work on productivity growth and its interaction with poverty reduction and shared prosperity.He has worked at the World Bank since 1990 and has experience in all regions and in the Office of the Chief Economist,as well as most recently as lead economist in the Office of the Chief Economist for Africa.He also has worked as a senior consultant with Compass Lexecon LLC,as senior adviser to Trkiyes Minister of Economic Affairs and Treasury,as principal economist in the European Bank for Reconstruction and Developments Office of the Chief Economist,and as consultant to Organisation for Economic xvi About the AuthorsCo-operation and Development,World Trade Organization,World Intellectual Property Organization,and Canadas Networks of Centers of Excellence.He has published journal articles and books on applied microeconomics,including on competition,innovation,digital technology adoption,productivity,climate change,and investment and trade issues,as well as their links to growth and inclusion.He has also taught at Princeton University,from which he holds a doctorate in economics and a masters degree in public affairs.xviiMain MessagesThe promise of technological transformation for a growing African workforceDigital technologies(DTs)have emerged as an essential element of a good-jobs strategy for African countries.Digital Africa:Technological Transformation for Jobs presents the best available evidence on the transformative effects of DTsshowing,for instance,that internet use significantly increases inclusive jobs on the continent,which is poised to have the largest workforce in the world by 2100 relative to other regions.The reports robust analysis provides strategies that can be adopted to capitalize onthis growing evidence.For example,when high-quality internet(third-or fourth-generation mobile communications technology,3G or 4G)was available for at least three years,labor force participation increased by 3 percentage points in Nigeria and by 8 points in Tanzania.In addition,poverty rates fell by 7 percentage points in each country.These welfare impacts were higher among poorer and less-educated households.In highlighting results such as these,the report informs the digitalization and comple-mentary technology adoption policies and programs that African governments can employ for inclusive impactjobs that generate income growth for all,including fasterpercapita income growth for the bottom 40 percent of each countrys population as well as for women and for lower-skilled workers more generally.It is especially intended for technical advisers who provide input for government policies on economic transformation and growth in Africa,although it should also be of interest to all people in the region.Government beneficiaries include ministries and regulators in charge of information and communications,finance,industry(agriculture,manufacturing,and services),competition,technology and innovation,and jobs and poverty reduction.Africas digital challenges and dividesThe primary challenge for Africa is its low productive use of DTs.Enterprises and house-holds alike need greater ability to pay for and willingness to productively use these tech-nologies,as the following findings show.As a share of country populations averaged across Sub-Saharan Africa,84 percent live in areas where mobile internet services are available,yet only 22 percent used them by the end of 2021.This usage rate is the lowest in the world.Enterprise digitalization is also low,and small and medium businesses in Africa pay more for data plans than those in other regions,while 70 percent of sur-veyed microenterprises do not perceive the need for internet-supported technologies.xviii Main Messages Forty percent of Africans fall below the global extreme poverty line,meaning the cost of even basic mobile data plans would represent about one-third of their incomes.Only about 5 percent of extremely poor households access the internet.Africas lagging internet infrastructure and service quality constrain potential user willingness to use DTs.Although the regions mobile internet availability has increased in recent years,it still lags the worlds other regionsespecially regarding the quality of digital services,requiring support by reliable and resilient infrastructure.Policies to boost DT use for more,and better,jobsAfrica needs more activist policies that promote the use of digital and complementary technologies,especially affordable,attractive skill-appropriate technologies that support productive and inclusive jobs.Such policies must target all potential users ability to pay for these technologies as well as their willingness to productively use them.Policies that ensure the ability to pay should address internet affordability,additional infrastructure availability,adequate data infrastructure,and availability of affordable complementary technologies.Policies that support greater willingness to use should focus on developing more attractive applications and building the awareness and education required for productive DT adoption.These policies include innovation policies,data policies and regulations,capability support programs,and national strategies for produc-tive use of DTs.Internet affordability policies encompass effective pro-competition regulations to reduce investment costs,including rules on licensing and market dominance,infra-structure access and sharing,and spectrum availability and use,ideally through more integrated continental markets.Regulations to help drive down operational costs include rules on access to essential infrastructure controlled by state-owned enter-prises,operation of open-access fiber networks,and progressive elimination of excise taxes.Policies for better internet quality everywhere and for availability in areas that are not commercially viable after implementing regulatory reforms require targeted interven-tions.Demand-side incentives and financing(through earmarked funds,obligations on operators,and universal service funds)can boost use,improve service quality,and support climate-resilient infrastructure development.Policies for affordable availability of data infrastructure include pro-competition rules for upgrading internet exchange points that can grow into regional data centers and cloud computing facilities to help drive down costs.Effective regional integration for cross-border digital connectivity and data markets is critical to gain economies of scale and to expand and upgrade data infrastructure.Policies to support affordable access to complementary analog technologies require broader interventions.Improvement of electricity,transportation,and agricultural(tractors and irrigation)systems would enhance the income-generation potential of DT use and strengthen potential users ability to pay.Innovation policies can redirect technology development toward generating and scal-ing up skill-appropriate DTs.To enable enterprises and households to use DTs and learn as they work,Africa must provide sophisticated,inclusive,and attractive apps Main Messages xixthrough touch-screen pictures,voice,and video in languages that local people speak.Development requires public-private investments in public goods,such as country-wide availability of digital addresses,geotagged land records,and local weather map-ping,as well as public goods specific to value chains.More integrated continental markets will allow entrepreneurs to profitably design and scale attractive apps that are affordable and enhance peoples earnings.Data policies are needed as both enablers and safeguards of data use and reuse to ensure the development of new,attractive,data-driven DTs,along with appropriate levels of trust in their use.Capability support programs to enhance the productive use of available DTs must be institutionalized for micro,small,and medium enterprises as well as for households.These programs include business advisory services,technology information and upgrading services,and manager and worker skills training,together with longer-term investments in high-quality secondary and tertiary education.National strategies are essential to support familiarity with and use of DTs to support higher earnings.They could include investments in common-access facilities at inter-net cafs,local schools,or community centers,especially for microentrepreneurs.xxiOverviewAfricas imperative:Better technology for better jobsFor Africas large and growing youthful labor force to thrive,the continent urgently needs good jobs.Countries need business environments conducive to generating the kinds of jobs that enable productive learning as a basis for supporting growth in earnings over time.Africas jobs and technology challenges are immense and urgent.Its share of the global workforce is projected to become the largest in the world by the twenty-second century,rising from 16 percent in 2025 to over 41 percent by 2100.More than 22 million Africans between the ages of 15 and 64 join the workforce each yearalmost 2 million people per month.This flow of workers is expected to increase to over 33 million per year by 2050(UN DESA 2022).The imperative is to create good jobs for these millions of young entrants to the workforce and better jobs for todays workers.Greater adoption of improved and adequate technologies is a critical and underemphasized requirement to meet this goal.Moreover,the continent needs better technologies and products that all Africans want and can afford to buy.Africa has the potential to generate more and better jobs through greater adoption of technologies that enable scaled-up production and hence generate good jobs in expanding medium and large firms,entrepreneurial start-ups,and informal microenterprises.Often,though,productive technologies are designed in higher-income countries for use by work-ers with higher skill levels or to replace tasks performed by people to reduce the workers required.Adoption of such technologies in Africa can lead larger local firms to become more productive and competitive but generate few additional jobs.Smaller firms rarely use these technologies,remaining at lower productivity and competitiveness,with jobs that pay too little.And these technologies are often not appropriate for more productive use by lower-skilled owners,managers,and workers in Africas labor-abundant countries.There are two ways to bridge the gap between technologies designed for use in higher-income economies and those needed in the low-and middle-income world,espe-cially in African countries.The conventional strategy involves investment in longer-term upgrading of skills to match the level for which these technologies have been designed.The alternative is for entrepreneurs to design technologiesoften requiring cutting-edge adaptations of existing productsto fit with current skill levels and needs,ensuring that the technologies are attractive and easy to use,labor-augmenting,and supportive of con-tinuous learning and higher worker productivity.African economies require a technological transformation that generates both productive learning and job growth.The challenge is to produce and promote the expanded use of affordable,attractive,skill-appropriate technologies that support jobs that are more productive and inclusivethat is,jobs that generate income growth for all,including faster income per capita growth for the bottom 40 percent of each countrys population.Fortunately,Africas demographic dynamics can positively affect the use of new technologies.Great potential lies in the continents large and growing youth xxii Digital Africapopulation,including tech-savvy entrepreneurs,managers,and workers likely to gener-ate and use new digital and complementary technologies.By using better technologies,Africans can produce more goods and services for consumption in local markets and for export,thereby generating more good jobs for Africans.Contributions of the Digital Africa reportNew analyses to support job growth strategiesThis overview and the full report provide new analyses to support improved efforts on the part of governments and the private sector to spur more inclusive job growth with appro-priate technologies while narrowing the current digital divides.These findings can inform the implementation of the African Unions Digital Transformation Strategy for Africa(20202030)(AU 2020)and the Digital Economy for Africa initiative.1 The overview also summarizes the reports diagnostic review of current trends and drivers of digital and data infrastructure availability,and the use of digital technologies(DTs)in Africa.Broadly defined,DTs include not only digital and data infrastructure,broadband internet,smartphones,tablets,and computers but also a wide range of more specialized productivity-enhancing digital solutionsranging from communications,management upgrading,and worker training to procurement,production,marketing,logistics,and financing and insurance.DTs enable economywide productivity gains and job growth by catalyzing the uptake and use of complementary technologies,including many that are inaccessible without digital and data infrastructure.In general,taking advantage of Internet of Things tech-nologies requires investments in the“internet”as well as the“things.”In the agriculture sector,for example,precision agriculture requires internet coverage.Foremost,however,it requires the prerequisite of tractors and irrigation systems that can then be equipped with sensors,as well as smartphones to access weather forecasts and upload pictures of unusual plant diseases.Appropriate apps with video or voice interfaces enable farmers to integrate into formal value chains,learn from upstream seed providers and downstream buyers,and gain better access to financing and markets.Complementary technologies also include critical infrastructure for services such as electricity,transportation,and logistics.Therefore,even though the report largely focuses on provision and adoption of broadband internet,it must be viewed as an entry point or gateway to a broader discussion of the role of technology adoptionor lack thereofin the ability of African economies to meet their job creation challenges.A new conceptual framework for policy directionsThe report answers three primary policy questions:1.What are the effects of digital and data infrastructure,and the use of DTs,on enter-prise productivity,jobs,and household welfare?2.What is the extent of digital and data infrastructure availability and use of DTs and complementary technologies,and what are the main barriers preventing broader and more intensive productive use by enterprises and households?3.What are key areas where policy and regulatory interventions could be implemented tostrengthen consumers ability to pay and willingness to use DTs for productive purposes?Overview xxiiiThe reports conceptual framework lays the foundation for this policy analysis,empha-sizing that the impact of DTs on inclusive job growth depends on two objectives:ensur-ing potential users ability to pay for and willingness to use DTs(figure O.1).First,the affordable availability of digital and data infrastructure is a prerequisite for inclusive job growth.And the affordable availability of DTs,including broadband internet,depends on the affordable availability of electricity and transportation infrastructure.Second,inclu-sive job growth from DTs requires a willingness among all enterprises and individuals to use these technologiesmeaning that these consumers find DTs attractive to use,under-stand how to use them,and believe that the DTs meet their productivity needs with opportunities to learn.A complementary requirement is that users possess sufficient capabilities to use the DTs productively.DTs can lead to faster job growth,more inclusive jobs,and improved household wel-fare,primarily through(a)jobs and labor income,and(b)entrepreneurship and capital income(figure O.1).Through the first of these channels,productive use of DTs enables better,more inclusive jobs as well as higher earnings for more people.Through the sec-ond channel,productive use of DTs increases entrepreneurial jobs and capital income,including profits earned not only by entrepreneurs and owners of larger firms but also by owners of smaller formal and informal enterprises.By focusing on productive use and inclusive impacts,the conceptual framework highlights the critical distinction between two views of digitalization policy.Traditional digitalization policy prioritizes universal availability of digital infrastructure,largely a supply-side view.This view underscores the internets role as a general-purpose technology,through which widespread availabilityand presumably usagewill raise Individuals orhouseholdsEnterprisesJobs andlabor incomeLower prices,greater variety,andconsumer surplusAnalog and greener technologies(electricity,transportation)Income transfersystemNonmonetary gainsFoundations for technological transformationEconomywide impacts:faster and moreinclusive jobgrowth,reducedpoverty,other welfare benefitsGovernmentEntrepreneurshipand capital incomeAvailability of DTsProductive use of DTsInclusive impacts of DTsNet reductionin costs or frictionsand productivityincreases(search,replication,transportation,tracking,and verification)Digital factors Connectivity and data infrastructure Skills and capabilities Businesses Finance Public platformsAbility to pay for DTs:affordable availability policiesWillingness to use DTs:attractiveness and capability policiesRequired policiesFIGURE O.1Conceptual framework for policy analysis of DTs impacts on job and income growth Source:Original figure for this publication.Note:Bolded text indicates the primary focuses and themes of this report,emphasizing the production side of the economy(enterprises and workers).DTs=digital technologies.xxiv Digital Africaoverall economic productivity over time.However,in contexts of limited resources,formidable needs across sectors,low income,and countries that often lack scale,this approach faces daunting challenges on the financial front.The new conceptual framework in this report focuses instead on a second view of dig-italization policyprioritizing productive use that generates large,inclusive,jobs-related spillover effects while also expanding coverage of quality broadband internet.Innovations are essential in technologies that will attract people with fewer digital skills and boost their capabilities to generate higher earnings.This nuanced view of digitalization policy emphasizes the interdependency between demand and supply:greater demand for pro-ductive use and the ability to pay for these services will enable increased investments in higher-quality DT services.Technological transformation:A pathway to inclusive productivity growthTwo new empirical studies undertaken for the report have added to the rapidly growing positive evidence base by exploring the direct impact of mobile internet availability(third-generation 3G or fourth-generation 4G mobile communications technology cov-erage)on jobs and welfare.The studies examine geospatial information on the rollout of mobile internet towers over time,combined with at least two rounds of household data over six to seven years(Bahia et al.2020;Bahia et al.2021).Figure O.2 summarizes the main jobs and welfare(consumption and poverty)results for Nigeria and Tanzania.Internet availability improved jobs and welfare outcomes in both Nigeria and Tanzania.In Nigeria,labor force participation and wage employment increased by 3 percentage points and 1 percentage point,respectively,in areas having three or more years of expo-sure to internet availability relative to those without coverage,after accounting for poten-tial confounding factors.2 Total consumption increased by about 9 percent,and the proportion of households below the extreme poverty line(US$1.90 per person per day)declined by 7 percent after three years.Poorer households and those living in rural areas benefited the most,perhaps reflecting the internet connectivity already available to most urban households over the period of analysis.The job estimates for Tanzania are similarly significant.Working-age individuals(ages 1564)living in areas with internet availability witnessed increases of 8 percentage points in labor force participation and 4 percentage points in wage employment after three or more years of exposure.Total consumption per capita among households residing in areas with 3G availability was about 10 percent higher than in areas without coverage.Moreover,the proportion of households falling below the national basic needs poverty line dropped by 7 percentage points.3 Welfare gains were higher among households headed by women,those with lower incomes,and those with less education(not having completed primary school).Larger relative gains are observed in urban areas,reflecting an earlier rollout from zero to 3G coverage in the early 2010s.Other empirical studies highlight the indirect impacts of internet availability on access to more and better jobs through effects on improving firmworker matching and improving firm productivity through entrepreneurship,innovation,and foreign direct investment.A background study for this report has found evidence of internet-induced entrepreneurship in 10 African countries.4 The probability that a household establishes a nonfarm business is 17 percentage points higher in areas with internet availability.This increase in entrepreneurial activities is concentrated in the service sector,plausibly Overview xxvbecause of the low entry cost of establishing many service-related businesses relative to those in agribusiness and manufacturing(Houngbonon,Mensah,and Traore 2022).The same study also found evidence of a positive impact of internet availability on innovation:internet availability increases the probability of a firm undertaking process and product innovation by 20 percentage points and 12 percentage points,respectively.Confidence interval(95%)Point estimate15a.Nigeria,201016b.Tanzania,200813105051015Labor forceparticipationWageemploymentTotalconsumptionPovertya(US$1.90 per day)Labor forceparticipationWageemploymentTotalconsumptionBasic needspovertyb3 years of 3G/4G coverage3 years of 3G/4G coverageChange after 3 years3G/4G access(%)Change after 3 years3G access(%)2015105051015FIGURE O.2Effects of mobile internet availability on job creation and household welfare,Nigeria and TanzaniaSource:Bahia et al.2020;Bahia et al.2021.Note:The studies examine geospatial information on the rollout of mobile internet towers,combined with three rounds of household data over seven years for Nigeria and two rounds over six years for Tanzania.The estimates on poverty and consumption include all individuals or households,whereas labor outcomes include only working-age populations(ages 1564).The results represent percentage changes in the covered locations after three or more years of high-quality internet exposure relative to those without such coverage after accounting for potential confounding factors.The figure shows difference-in-difference average value point estimates with 95 percent confidence intervals.3G=third-generation mobile communications technology;4G=fourth-generation mobile communications technology.a.Nigerias poverty status of households is calculated based on the international poverty line of US$1.90 per day(2011 purchasing power parity)and after applying the Consumer Price Index to adjust for both spatial and temporal inflation.b.Tanzanias poverty status of households is calculated based on the cost of acquiring enough food to provide adequate daily nutrition per person(food line)plus the cost of some nonfood essentials(nonfood component).xxvi Digital AfricaThe effect on process innovation stems largely from the adoption of DTs for business functions,such as sales,distribution,and marketing,and is boosted by the availability of digital skills within the firm.Another new study for this report provides evidence that internet availability is associated with increases of 6 percentage points and 3 percentage points,respectively,in the probability of foreign direct investment in the financial and technology services sectors(Mensah and Traore 2022).The number of foreign direct investment projects in financial services increased by almost 20 percent following the arrival of submarine internet cables.Internet availability also expands the demand side of production and boosts aggregate growth.Evidence from a background study of the rollout of 3G internet networks in Ethiopia(Abreha et al.2021)suggests that internet availability can boost jobs by closing gaps in information between buyers and sellers.Enterprises operating in areas with 3G availability experienced an average 29 percent decline in markups,an 18 percent rise in firm productivity,and a 28 percent increase in jobs.These improvements are interpreted as resulting from increased competition as consumers become aware of price informa-tion and alternatives in nearby markets and as firms respond to increased competition and compressed profit margins by reducing costswith increased productivity enabling output expansion and more jobs.Finally,another study undertaken for this report indicates that internet availability boosts aggregate economic growth,with job expansion presumed from the output expan-sion accompanying faster growth.Aggregate country-level data show that increases in mobile internet subscriptions and the population share of internet users contribute to the growth of output per worker and reductions in poverty and income inequality(Caldern and Cant 2021).Internet use has a significant effect in reducing poverty,and mobile connections are found to have a significant effect on reducing income inequality.Digital transformation in Africa:Challenges and dividesDespite the good news on the positive causal inclusive impacts of internet availability on jobs and poverty,Africa faces the challenge of insufficient use.Too few people can truly access these benefits.Though mobile internet availability has increased,Africas internet infrastructure coverage and the quality of available services still lag other regions.Divides in availability of quality digital services remain an issue in all countries,especially in remote and poorer subregions.This divide is compounded by Africas large usage gap(Atiyas and Dutz 2022).Although 84 percent of country populations averaged across Sub-Saharan Africa had at least some level of 3Gmobile internet availability and 63 percent had some level of 4G mobile internet services,only 22 percent used mobile internet services as of the end of 2021(figure O.3,panel a).These figures represent a usage gap of 62 percent as a share of total population.Africas uptake gap,or internet users with internet availability,is 74 percent,almost three-quarters,on average across countries (figure O.3,panel b),the highest in the world.Recent increases in digital infrastructure investment following the onset of the COVID-19 pandemic have not been accompanied by concomitant increases in use.Instead,there are growing digital divides in use between large formal and micro-size informal enterprises;between enterprises owned by young men and those owned by older women;and between richer,urban,and better educated households and poorer,rural,and less educated households.Overview xxviiEnterprises:More jobs for more peopleTo increase the availability of jobs,African enterprises must invest to expand their technol-ogy frontier,which appears to be relatively stagnant.African and global entrepreneurs must also generate more digital and complementary technologies that align with Africas current skills profile and production context(such as smaller-scale farms)and that evolve with workers as they increase capabilities.In addition,most enterprises must adopt and use DTs and complementary technologies more intensively.Such skill-and context-appropriate technologies would enable existing and newly entering workers,managers,and entrepreneur-owners to continuously raise productivity and generate higher earnings.Productivity and job gains from sophisticated technologies The use of more sophisticated DTs and related technologies is associated with higher productivity across African countries for enterprises employing five or more full-time employees(Cirera,Comin,and Cruz 2022).Firms with higher average technological sophistication have higher productivity on average,with varying degrees of responsiveness(figure O.4,panel a).Interestingly,the association between technology use and productivity 90a.Mobile internet availability and usage inSub-Saharan AfricaShare of internet nonusers amongthose with 3G coverage(%)Share of population(%)b.Uptake gap,by region8070605040302010090807060504030201002010201120122013201420152016201720182019202020212010201120122013201420152016201720182019202020213G coverageUnique mobile internet subscriptionsEast Asia and PacificEurope and Central AsiaLatin America and the CaribbeanMiddle East and North AfricaNorth AmericaSouth AsiaSub-Saharan AfricaFIGURE O.3Gap between mobile internet coverage and usage,Sub-Saharan Africa and other regions,201021Source:Atiyas and Dutz 2022,based on Global System for Mobile Communications Association(GSMA)data.Note:The figure incorporates updated 201621 data based on an improved 2022 methodology for calculating unique subscribers.Inpanel a,mobile internet availability(3G coverage)and use(unique mobile internet subscribers)are expressed as unweighted averages across countries,as a share of total country population.In panel b,the“uptake gap”is the percentage of people who live within the footprint of a mobile broadband network but who do not use mobile internet.“North America”comprises Bermuda,Canada,and the United States.3G =third-generation(or later)mobile communications technoloby.xxviii Digital Africais stronger for informal than formal Senegalese firms.There is also a positive association between the use of more sophisticated technologies and job growth for Senegal(formal firms)and Ghana(figure O.4,panel b).Findings for microenterprises show a positive progression in the number of more sophisticated DTs(figure O.5,light blue bars)associated in turn with higher productivity,sales,and job levels.Six internet-enabled and three non-internet-enabled DT uses (figureO.5,dark blue bars)are the only significant conditional correlates of higher job levels.So a greater range of more sophisticated DT uses based on internet-enabled com-puters or smartphones relative to DT uses based only on second-generation(2G)phones is associated with higher jobs levels.Despite these beneficial associations,the average African enterprise with five or more full-time employees in Ghana,Kenya,Malawi,and Senegal lags in the use of computers relative to Brazil and in the use of smartphones for most enterprise size groupings.Informal enterprises(with Senegal being the only available country with nationally rep-resentative data)lag much more(figure O.6).Microenterprises lag even more,with large digital divides:only 7 percent of all microfirms and 3 percent of microfirms owned by older women(over 30 years of age)use a smartphone.The digital divide in computer use is even larger:only 2 percent of microfirms owned by young women(30 years of age or younger)use a computer,but four times as many(8 percent)microfirms owned by young men do(Atiyas and Dutz 2023).Factors affecting productive use of DTsThe key DT-related issue for African enterprises is low productive use.The main factors affecting enterprise use of smartphones,computers,and the more-sophisticated DTs that rely on these access technologies are related to the ability to pay for them and the FIGURE O.4Association between firms use of more sophisticated DTs and productivity and job growth,selected countries,201921 Source:Cirera,Comin,and Cruz 2022,based on 201921 FAT(Firm-level Adoption of Technology)survey data.Note:The figure shows regression coefficients(circles)and 95 percent confidence intervals(vertical lines)from country-level regressions of a new technology sophistication index that averages the most intensively used technologies across general business functions(GBF Int)for each firm on productivity levels(panel a)and changes in full-time workers over the preceding three years(panel b),while controlling for sector,firm size,and region.Country samples are restricted to enterprises with five or more employees.Senegal is the only country that includes a representative subsample of informal as well as formal enterprises.60Log value added per worker1.01.32.04.01.4GBF Int1.91.240200BrazilVietnamSenegal(formal)Senegal(informal)MalawiGhanaKenyaa.Association with productivity 4030100Log change in employment(%)200.16GBF Int0.150.100.120.110.230.03BrazilVietnamSenegal(formal)Senegal(informal)MalawiGhanaKenyab.Association with job growthOverview xxixwillingness to use them(figure O.7).These factors are relatively similar across larger enter-prises(with five or more workers)and microenterprises.Ability to pay.Affordable availability of DTs is linked to the prices of quality internet services,access technologies,and apps relative to enterprise earnings,as well as access to financing to help pay for DTs.Small and medium enterprises in Africa face high prices and lack adequate business offerings in terms of speed and data allowances.Ability to pay is also linked to the affordable availability of complementary infrastructure,especially that of reliable electricity as well as transportation and logistics services.FIGURE O.5Association between microenterprises use of technologies and higher productivity,sales,andjobs,2017180.590.280.440.470.180.250.200.290.130.430.460.300.440.460.300.220.180.330.470.460.290.290.340.440.270.240.180.290.500.500.3200.100.20Increase(log points)0.300.400.500.60Use internet for recruitmentUse internet for online bankingaUse POS/inventory control softwareUse accounting softwareaUse internet for emailUse a computerbUse SMS to advertisebUse MM to pay employeesUse voice to communicate w/customersbUse internet for online bankingaUse accounting softwareaUse internet to better understand customersUse a computerbUse 3G/4G smartphoneUse SMS to advertisebUse phone for bankingUse MM to pay suppliersUse MM to receive payments from customersUse voice to communicate w/suppliersUse voice to communicate w/customersbUse 2G mobile phoneUse internet to better understand customersUse a computerbUse 3G/4G smartphoneUse SMS to advertisebUse phone for bankingUse MM to pay suppliersUse MM to receive payments from customersUse voice to communicate w/suppliersUse voice to communicate w/customersbUse 2G mobile phoneIncrease in jobsIncrease in salesIncrease in productivityInternet-enabled computers or smartphones requiredOnly 2G phones requiredSource:Atiyas and Dutz 2023,based on 201718 Research ICT Africa(RIA)survey data.Note:The figure shows the association between average firm use of selected digital technologies(DTs)and the percentage increase in three outcome variables:productivity,sales,and jobs.The included business-related uses of DTslisted in order from simple-access technologies to more sophisticated usesare those for which the conditional correlates are significant at least at the 5 percent level based on ordinary least squares with robust standard errors using unweighted data.Controls include whether the enterprise has ever had a loan,has access to electricity,is run by transformational entrepreneurs,and has links with more sophisticated upstream suppliers or downstream buyers,among others,together with country fixed effects.The data cover 3,325 formal and informal microenterprises(the median firm being informal and self-employed with no full-time workers)across seven African countries.Dark blue bars represent non-internet-enabled DTs;light blue bars represent internet-enabled DTs.2G=second-generation mobile communications technology;3G=third-generation;4G=fourth-generation;MM=mobile money;POS=point of sale;SMS=shortmessage service.a.Variable is significant across all three performance outcomes:productivity,sales,and jobs.b.Variable is significant across both sales and jobs.xxx Digital Africa69667574929750544325414426261264869461585363909873979970921009097100152315961001001001001000102030405060708090Share of firms(%)100SmallMediumLargeSmallMediumLargeSmallMediumLargeSmallMediumLargeSmallMediumLargeSmallMediumLargeSmallMediumLargeGhanaKenyaMalawiSenegal(formal)Senegal(informal)BrazilVietnamHave smartphoneHave computerFIGURE O.6Smartphone and computer use,by firm size,selected countries,201921 Source:Cirera,Comin,and Cruz 2022,based on 201921 Firm-level Adoption of Technology(FAT)survey data.Note:Included enterprises are those employing at least five full-time workers.“Large”firms have 100 or more employees;“medium”firms,2099 employees;and“small”firms,519 employees.Affordability is influenced by whether enterprises,be they larger firms or microfirms,have loans;information is also available on whether microfirms have a credit line with suppliers,an indicator of their creditworthiness.Access to finance,as reflected by having a loan,is one of the largest correlates of use.Larger firms that have a loan are 12 percent more likely than those without loans to use smartphones and 9 percent less likely to use a 2G phone(Cirera,Comin,and Cruz 2022).Microenterprises that have a loan are 18 percent more likely to use smartphones and nearly 15 percent less likely to use a 2G phone;they are also over 9 percent more likely to use a computer(Atiyas and Dutz 2023).Having electricity and being in an urban location are associated with computer use for larger firms and with smartphone use for microenterprises.Willingness to use.Willingness to use DTs is linked to both the firms capabilities and the DTs attractivenessin turn related to both the availability of information about DTs and whether they meet the productive needs of users.Regarding capabilities,skills(especially at the managerial level in larger firms)and vocational training(in microenterprises)are strongly associated with both smartphone and computer use(Atiyas and Dutz 2023;Cirera,Comin,and Cruz 2022).Enterprise technological capabilities are also affected by the firms Size,with those employing five or more workers and microfirms that are larger(rela-tive to other microfirms)being more likely to use computers;Age,with those that have been in operation longer being less likely to use a smart-phone than younger firms;and Formality status,with formal firms of any size being more likely than informal firms to use computers.Overview xxxiThe attractiveness of DTs,and the consequent adoption of smartphones and computers,is likely driven by the need to adopt specific DTs when larger firms have business relationships with multinational companies and when microenterprises have large firms as customers.Business and socioeconomic factors.Finally,specific elements of the business envi-ronment(linked to market access and competition-related incentives)and socioeco-nomic factors(whether social norms and rules make ownership of access devices difficult for women)also affect DT use.Among microenterprises,female-owned firms are less likely than male-owned firms to use either a smartphone or a computer(Atiyas and Dutz 2023).Because most microfirms are owned and managed by self-employed individuals with no full-time paid employees,this digital divide may reflect prevailing social norms and rules that make access to finance and ownership of access devices more difficult for women.ComputerSmartphoneMobileFirm ageFormalMediumLarge firms as customersHave loanLargeHave credit line with suppliersHave electricityUrban locationFemale ownerManagers educationVocational training0.3 0.2 0.10.100.20.3Firm agea.Adoption correlates for larger enterprisesb.Adoption correlates for microenterprisesFormalMediumLargeBusiness relationship with MNCsLoans for purchasing machineHave electricityLocated in capital cityFemale ownerManagers educationManagers experience in MNCs0.3 0.2 0.10.100.20.3FIGURE O.7Correlates of smartphone and computer adoption by African firms,201721 Sources:Atiyas and Dutz 2023;Cirera,Comin,and Cruz 2022.Note:Reported results are marginal effects based on probit regressions on enterprise characteristics,controlling for country fixed effects.Error bars indicate 95 percent confidence intervals.Panel a is based on 201921 FAT(Firm-level Adoption of Technology)survey data.“Larger”enterprises are those with at least five full-time employees.Panel b is based on 201718 Research ICT Africa(RIA)data.The median“microenterprise”is informal and self-employed with zero full-time employees.MNCs=multinational companies.xxxii Digital AfricaPolicy recommendationsPublic policies and investments are needed both to incentivize the creation of attractive appsespecially solutions that are simple to use and boost the productivity of enterprises with lower-skilled workersand to stimulate use by enterprises,including through invest-ments in capabilities.Three broad policy recommendations arise from these findings:1.Institutionalize technology upgrading and worker and management capability support programs.2.Support start-up entrepreneurs in developing more appropriate technologies for Africas current and future asset base,including through incentives for creating skill-appropriate technologies,intellectual property rights protection,and regulations facilitating a more job-inclusive development of machine learning and other forms of artificial intelligence.3.Facilitate enterprise financing for the generation and use of DTs as well as complemen-tary technologies.Public financing support policies should include(a)targeted partial credit guarantees,matching grants,and vouchers for the adoption of technologies and needed capabilities;and(b)credit infrastructure with a focus on credit bureaus and secured transactions as well as mechanisms to access key data for credit ratings.Households:Inclusive impact through productive useSeveral factors could explain the low internet use and low intensity of use by African house-holds.The latest evidence from seven West African Economic and Monetary Union(WAEMU)countries finds that three key factors correlate with low adoption(Rodriguez-Casteln et al.2021):1.Affordable availability,encompassing the ability to pay(influenced by household expen-diture,the price of mobile services,and asset ownership);access to electricity;and urban location 2.Attractiveness of alternative modalities of internet access 3.Capabilities,including tertiary educational attainment,French language proficiency(infrancophone countries),and sector of employment,together with socioeconomic factorsConstraints on the ability to pay and willingness to useMany Africans do not use DTs because the costs appear to outweigh the benefits.Two main groups of factors underpin the low perceived benefits to costs:ability to pay for DTs and willingness to use them.Ability to pay involves the availability of quality digital services and the price and affordability of access devices,data plans,and apps relative to purchasing power.A package that covers a few hours of basic daily use1.5 gigabytes of data over 30 daysamounts to about a third of the income of the 40 percent of Africans who fall below the global extreme poverty line(US$1.90 per person per day at 2017 purchasing power parity).Low-consumption users face prices per unit of data that are more than double those for high-consumption users,holding back higher intensity of use among low-income users.Overview xxxiiiAttractiveness of DTs,and hence the willingness to use them,is linked to multiple factors:Do users have information about the existence of DTs and how to use them?Do DTs meet minimum speed and latency requirements for effective use?Do they meet users productive(and other)needs?Are they designed for the users skills level?Do they raise trust concerns related to data protection,cybercrime,or data surveillance?Do the expected benefits of using DTs outweigh the costs of devices,data plans,and other invest-ments?Ultimately,household members capabilitiestheir skills and technological sophisticationalso affect their ability to extract value from DTs.Policies to expand access to credit,better regulations,and market-induced price reductions can help address affordability.Policies that can induce the development of easy-to-use DTs and capability-enhancing content are also needed to meet the produc-tive needs of households,especially among poor people,who face constraints on many fronts including skills gaps and a lack of information on how internet use could benefit them.Providing information to households on the variety of ways DTs can help peoplethrough community-based associations,town hall meetings,religious organizations,and social networkscould help to address some of these constraints.Policy routes to productive internet use by householdsGiven the low income levels and high inequality across Africa,broader internet adoption among households is financially sustainable only if adoption results in higher earnings.Policy makers can play a role in promoting and enabling productive uses.Figure O.8 depicts a framework to increase internet use,offering two complementary approaches:Route 1 targets internet adoption as an end goal,while Route 2 views adop-tion as the means to enhance peoples earnings and livelihood opportunities and achieve greater economic impact.Although Route 2 may close gaps at a slower pace,it would be more financially sustainable in the long term.The goal is to create a positively reinforc-ing cycle through which productive internet use enhances earnings,feeding back into more DT use.Provide more information,attractive content,digital skills,affordability(subsidies,credit);facilitate leveraging of networksLarge andincreasing usagegap and lowintensity of usePillar 1Identify opportunities for DT-enabledproductivity gainsHigherearningsPillar 2Incentivize generation ofadequate DTsPillar 3Bundle with adequate complements(such as electricity,skills,and seed capital)Route 1:internetuse as an endAddress barriers to useProductive use Universal access (more people using)Lower intensity of use (relative to Route 2)Financial unsustainability More people using Greater intensity of use Greater feedback into more use Financial sustainabilityRoute 2:internetuse as a meansto an endFIGURE O.8Policy routes for increasing households inclusive uptake and productive use of DTs Source:Adapted from Blimpo and Cosgrove-Davies 2019.Note:DTs=digital technologies.xxxiv Digital AfricaInternet use as the end goal.Under Route 1,policies focus mainly on addressing the symptomatic barriers to use.These interventions will contribute to achieving the universal access goal faster,especially if countries support adoption and use with significant subsidies.Via this route,increased internet use ideally would lead to increased productivitywhich may happen in some households.However,without the presence of analog com-plements(such as electricity and skills),productive use and the returns that encourage further use are weaker.This strategy may thus be financially unsustainable because it requires sustained provision of credit or subsidies for adoption and use.Internet use as a means to an end.Under Route 2,internet use is seen as the means to increasing household earnings and reducing poverty.The policy goal is to increase the pro-ductive use of the internet to increase household earnings,thereby strengthening the abil-ity to pay and stimulating further internet use.This approach views the internet and related DTs as inputs and tools to enable technological transformation and higher earnings.As with many other types of inputs,DTs are necessary,but insufficient,to generate income.Availability of electricity,adequate education and skills,road access,and attain-able financing are all complements with varying degrees of relevance,depending on the context.(This policy alternative requires synergies among at least three types of inter-ventions,shown as the three pillars in figure O.8.)These policy interventions are expected to increase productive use,which will in turn boost household earnings.With higher earnings,households can afford to buy smart-phones and mobile broadband data and increase the intensity of internet use.Digital and data infrastructure:Policy reforms to increase availability and use Two sets of complementary and mutually reinforcing policies are required for DTs to support inclusive job growth in Africa:those that ensure the ability to pay for DTs and those that elicit willingness to use DTs for productive purposes(as illustrated earlier in figure O.1).Downside risks include the potential for increased digital divides affecting low-income people displaced by the adoption of newer technologies and unable to adjust and adapt.The potential for mis-use by business(data protection,cybersecurity,and consumer protection)and government(surveillance and misinformation)must also be managed.Policies to ensure ability to payPolicies to ensure all potential users ability to pay must address internet affordability,additional infrastructure availability,adequate data infrastructure,and affordable availability of complementary technologies.The big problem in effectively addressing affordability issues is that prevailing market structures do not yet enable enough compe-tition in Africa.Markets are concentrated(figure O.9).Monopolies and duopolies still exist in many African countries,including in key bottleneck markets such as international connectivity.State-owned enterprises remain important in the sector and have the potential to thwart competition.Moreover,vertical integration of dominant firms in Africa creates risks to competition:53 firms in 36 countries have at least 40 percent market share in mobile retail or fiber backbone and are vertically integrated into two other segments(World Bank,forthcoming).Regulation of dominant operators is weak.Internet affordability requires effective pro-competition regulations to reduce investment costsincluding rules on licensing and market dominance,infrastructure access and sharing,and radioelectric spectrum Overview xxxvavailability and usewithin the context of more integrated continental markets.Regulations are also required to drive down operational costs,including rules on access to essential infrastructure controlled by state-owned enterprises,operation of open-access fiber networks,and minimization of excise taxes.An empirical analysis of six countries conducted for this report shows that cost-reducing policy reforms(on spectrum,infrastructure sharing,and taxation)can save 1020 percent of the cost required to achieve near-universal availability,resulting in over US$200 million in savings for governments across the countries included in the analysis(World Bank 2022).Increasing market competition can deliver additional benefits and could achieve levels of use similar to those spurred by supply-side subsidies,as simulations for Ghana show.Infrastructure availability in areas that are not commercially viable after implement-ing regulatory reforms requires targeted subsidies and financing(through earmarked funds,obligations on operators,universal service funds,or alternative solutions)to incentivize universal access and service and to support climate-resilient development.Upstreaminfrastructure layerMarket structurevariableAFENAAFWMonopoliesDuopoliesAllAfricaSOESLEConcentration(HHI)aMarketstructurebNew entry(201720)cState presence(majority,minority)dInternationalconnectivity(submarinecables,gateways)Passiveinfrastructure(towers)Fixedwholesale(fiberbackbone)Mobilewholesale(roaming,MVNO,sharing)FixedretailMobileretailMobilemoneyData andcloudservicesDigitalplatformsMiddleinfrastructure layer21 countriesallowing forMVNO butno entry5,000 digital firmsheadquarteredin AfricaDownstreaminfrastructure layerDigital servicesFIGURE O.9Extent of competitive constraints in market structures across the digital value chain in Africa,2021 Source:World Bank,Africa Digital Market Players Database(internal),2021,built on data from numerous sources,including TeleGeography,Global System for Mobile Communications Association(GSMA),Africa Bandwidth Maps,Afterfibre.org,Policytracker,TowerXchange,PeeringDB,and Xalam Analytics.Note:Red circles represent higher risk to competition,on average;orange circles,medium risk;and green circles,lower risk.The sample covers 54 African countries for mobile retail,38 for fixed retail,52 for fiber backbone,26 for telecommunications towers,35for submarine cables,25 for data centers,and 15 for mobile money.AFE=Eastern and Southern Africa;AFW=Western andCentral Africa;HHI=Herfindahl-Hirschman index(market concentration measure);MVNO=mobile virtual network operator;NA=North Africa;SLE=state as minority shareholder;SOE=majority or fully state-owned enterprise;=not available.a.A market with HHI of less than 1,500 is considered to have a competitive market structure,HHI of 1,500 to 2,500 is moderately concentrated,and an HHI of 2,500 or greater is highly concentrated.b.In terms of monopolies and duopolies,less than 5 percent of countries are monopolies/duopolies=green,520 percent of countries=orange,above 20 percent of countries=red.c.For new entry,new entry in less than 5 percent of countries=red,in 520 percent of countries=orange,in more than 20 percent of countries=green;d.SOE presence in less than 10 percent of countries=green,in 1050 percent of countries=orange,and in more than 50 percent of countries=red.xxxvi Digital AfricaIf demand-side policies were to increase potential 4G use above the current level in uncovered areas(currently less than 5 percent)to 40 percent for the six studied African countries,expansion would become commercially viable,and 4G availability would reach the same near-universal levels as it would under a pure supply subsidy.This find-ing highlights the importance of demand-side programs to not only expand use but also boost coverage.Furthermore,affordable availability of data infrastructure requires transparent,pro-competition rules for upgrading internet exchange points and for accessing data centers and cloud computing to help drive down costs.Policies to increase willingness to usePolicies on attractiveness and capabilities are required to promote DT use for productive purposes.These include national strategies for productive use of DTs,innovation policies,data policies and regulations,and capability support programs.The implementation of these tailored strategies is essential to support familiarity with and use of DTs as well as to ensure productive gains by all enterprises.These strategies could include investments in common-access facilities and demonstrations at internet cafs,local schools,or commu-nity centers,especially for microentrepreneurs.For DT use to be inclusive,Africa must provide sophisticated yet simple-to-use and attractive apps through touch-screen pictures,voice,and video in the languages people speakenabling enterprises and households to want them,use them,and learn as they work.Africa must redirect technologies to the different contexts across its countries,particularly its differing skill compositions.To that end,entrepreneurs are needed to fur-ther develop existing DTs to enable productive use and learning by all people in the region.Development of new DTs by private entepreneurs may require prior public-private investments in public goods,such as countrywide availability of digital addresses,geotagged land records,and local weather mapping.Data policies are needed as both enablers and safeguards for data use and reuse to ensure the development of new,attractive,data-driven DTs along with appropriate levels of trust in their use.Finally,capability support programs must be institutionalized for micro,small,and medium enterprises as well as for households,so that they know how to make productive use of available DTs.These programs include business advisory services,technology information and upgrading services,and manager and worker skills training,together with longer-term investments in high-quality secondary and tertiary education.The role of regional cooperationLooking ahead,African countries have the potential to benefit further from deeper regional integration and the adoption of environmentally friendly DTs to advance the continents technological transformation.The African Union has developed and is implementing the Digital Transformation Strategy for Africa(20202030)to boost DT use and innovation to promote Africas integration(AU 2020).Creating a single continental market for both connectivity and data will require the harmonization and compatibility of national policy and regulatory frameworks.Integrated regional connectivity and data markets,in turn,can facilitate the scalability of DTs across the continent,boosting positive network effects,economies of scale and scope,and competition benefits.The operation of continental data infrastructure and cross-border connectivity infrastructure enabled by domestic and regional regulatory frameworks is fundamental for a single digital market.Table O.1 presents how national Overview xxxviiTABLE O.1Main policy recommendations for advancing the use of digital technologies to support inclusive job growth GoalPolicy areaTopicEmerging sectoraEvolving between“emerging”and“transitioning”Transitioning sectorbPolicies to ensure ability to pay Affordability of internetPro-competition regulationLicensing and regulation of dominanceEntry liberalization:simpler licensing,no exclusivities,including for cross-border connectivityRules to allow ISPs to deploy infrastructure,elimination of voice over internet protocol(VoIP)restrictionsSMP rules:designation and remedies;control of license transfers/mergersAccess and sharing of essential infrastructureInterconnection rules for domestic networksInfrastructure sharing/access to essential infrastructure,regulation of regional roaming and cross-border transportationRules for coinvestment and wholesale-only networksManagement of radio frequencies Spectrum policyPublished national spectrum frequency register Spectrum rules:allocation,assignment,pricing,sharing/transfer,coordination at regional level5G spectrum allocation and assignment;unlicensed spectrum and dynamic spectrum accessCost-reducing regulationSOEsSOEs open to private shareholdingRestructuring of SOEs for better governanceOpen access to state fiber networks(energy);SOE accountabilityPPPs for open-access fiber network,co-investments for uncovered areasSectoral taxes and feesElimination of sector-specific(excise)taxes on telecommunications servicesRevision of taxes on digital servicesCost-oriented regulatory feesHarmonization of subnational fees for infrastructure deploymentAvailability of internet and complementary technologies(analog infrastructure)Government interventions to complement marketsUniversal access and serviceCreation of USFTransparent and more effective USF,focusing on availability of demand-responsive services and useRedefine USF scope(DTs to pull internet demand)and contribution modality(capital expenditure versus contribution)Focus on use and upgrading:targeted demand-side support,pricing rules for vulnerable groupsClimate adaptation and resilienceMandatory emergency preparedness plansPolicies for resilient and green design,construction,operation of digital infrastructureE-waste management;incentives for energy-efficient and green digital infrastructureAffordable availability of dataData infrastructureIXPs,data centers,and cloud computingImproved governance of IXPs to allow for growth,updated telecommunications rules for regional IXPsRules on cross-border data flows that allow for regional data hubs and edge computingNeutral data centers,rules to facilitate switching between providers,including at regional level(continued)xxxviii Digital AfricaTABLE O.1Main policy recommendations for advancing the use of digital technologies to support inclusive job growth(continued)GoalPolicy areaTopicEmerging sectoraEvolving between“emerging”and“transitioning”Transitioning sectorbPolicies to ensure willingness to useAttractiveness of and capabilities to use DTs Digital entrepreneurshipReduction of barriers and support of drivers of entry and expansionElimination of administrative barriers;access to finance(partial credit guarantees,matching grants),incubators,and acceleratorsAccess to data and effective data portability,incentives to develop pro-poor DTs,creation of public-good data platforms,elimination of barriers to regional expansionAppropriate taxation of digital services and effective competition enforcement(entry and exit,mergers,abuse of dominance),including regional approach Technology and innovationDT generation and use by firmsInformation to increase attractiveness of DTs,support for basic digitalization,government e-services to pull demandSupport to business advisory and technology extension services and to FDI and joint ventures for tech transfer,for generation and use of DTsTest beds for generation and adoption of new DTs in specific industries,including low-skill-based DTs that enable learning over timeData policies and regulationsEnablers of new DTs and trust;safeguards for data use and reuseClear laws on data protection,cybersecurity,cybercrime,open data,e-transactions,and cross-border data flows,aligned at the regional and global levelsEffective enforcement by data protection authorities,cybersecurity agencies,and the likeCompliance and awareness for start-ups and SMEsRegional interoperability of national lawsData spaces,data sharing between government and private sector and across enterprisesRegional convergence and harmonization of frameworksSocial inclusionDTs for productive use by individuals and householdsExposure to DTs through access in community centers,schools and health clinics,government programs,digital public service deliveryComprehensive interventions complementing internet availability and affordability:skills and capabilities;attractiveness and information;affordability and access to finance,electricity,and transportation;social normsIdentification of productive DT uses by low-income,vulnerable,and underserved groups;programs to incentivize the generation and use of DTs targeting these segmentsSource:Original table for this publication.Note:5G=fifth-generation mobile internet technology;DTs=digital technologies;FDI=foreign direct investment;ISPs=internet service providers;IXPs=internet exchange points;PPPs=public-private partnerships;SMEs=small and medium enterprises;SMP=significant market power;SOE=state-owned enterprise;USF=universal service fund.a.An“emerging sector”refers to a digital sector where the digital economy is still emerging and internet use is low.b.A“transitioning sector”refers to a digital sector transitioning toward universal internet use.Overview xxxixand regional policy actions are complements to ensure ability to pay and willingness to use DTs in Africa.In addition,as African countries expand their data use,the deployment of a greener connectivity and data infrastructure that takes advantage of renewable energy and better e-waste management will become more important to support climate mitigation and adaptation while making DTs more environmentally sustainable.Africa should embrace the adoption of jobs-enhancing technologiesincluding cloud computing,artificial intelligence,and roboticsin ways that enhance the learning and earning potential of each countrys workforce.Positive impacts can materialize only if governments,enterprises,and households support bold policy actions to create an enabling environment.This report offers an evidence-based framework to spur action toward an even brighter future for the continent.Notes1.The Digital Economy for Africa(DE4A)flagship initiative is a partnership between the World Bank,African governments,the African Union,and other development partners.For more information,see the DE4A initiative website:https:/www.worldbank.org/en/programs/all-africa-digital-transformation.2.Because the regression specifications differ by type of outcome,some are expressed as percentage changes(when variables are in log such as for income)and others as percentage points(when variables are binary such as for poverty and labor outcomes).3.Tanzanias household poverty rate is based on the national“basic needs”poverty line:the cost of acquiring enough food to provide adequate daily nutrition per person(food line)plus the cost of some nonfood essentials(nonfood component).The food line is derived from the cost of buying 2,200 calories per adult per day according to the food consumption patterns prevailing in the population whose per adult real consumption is below the median during a period of 28 days valued at prices faced by the reference population.The nonfood component of the basic needs poverty line uses the average nonfood consumption share of the population whose total consumption per adult is in the bottom 25 percent.4.The countries studied included the Democratic Republic of Congo,Ghana,Kenya,Malawi,Namibia,Nigeria,Sudan,Tanzania,Uganda,and Zambia.ReferencesAbreha,Kaleb G.,Jieun Choi,Woubet Kassa,Hyun Ju Kim,and Maurice Kugler.2021.“Mobile Access Expansion and Price Information Diffusion:Firm Performance after Ethiopias Transition to 3G in 2008.”Policy Research Working Paper 9752,World Bank,Washington,DC.Atiyas,İzak,and Mark A.Dutz.2022.“Digitalization in MENA and Sub-Saharan Africa:A Comparative Analysis of Mobile Internet Uptake and Use in Sub-Saharan Africa and MENA Countries.”Working Paper No.1549,Economic Research Forum,Giza,Egypt.Atiyas,İzak,and Mark A.Dutz.2023.“Digital Technology Uses among Microenterprises:Why Is Productive Use So Low across Sub-Saharan Africa?”Policy Research Working Paper 10280,WorldBank,Washington,DC.AU(African Union).2020.“The Digital Transformation Strategy for Africa(20202030).”Strategy document,AU,Addis Ababa,Ethiopia.Bahia,Kalvin,Pau Castells,Genaro Cruz,Takaaki Masaki,Xavier Pedrs,Tobias Pfutze,Carlos Rodrguez-Casteln,and Hernan Winkler.2020.“The Welfare Effects of Mobile Broadband Internet:Evidence from Nigeria.”Policy Research Working Paper 9230,World Bank,Washington,DC.xl Digital AfricaBahia,Kalvin,Pau Castells,Takaaki Masaki,Genaro Cruz,Carlos Rodrguez-Casteln,and Viviane Sanfelice.2021.“Mobile Broadband Internet,Poverty and Labor Outcomes in Tanzania.”Policy Research Working Paper 9749,World Bank,Washington,DC.Blimpo,Moussa P.,and Malcolm Cosgrove-Davies.2019.Electricity Access in Sub-Saharan Africa:Uptake,Reliability,and Complementary Factors for Economic Impact.Africa Development Forum Series.Washington,DC:World Bank.Caldern,Csar,and Catalina Cant.2021.“The Impact of Digital Infrastructure on African Development.”Policy Research Working Paper 9853,World Bank,Washington,DC.Cirera,Xavier,Diego Comin,and Marcio Cruz.2022.Bridging the Technological Divide:Technology Adoption by Firms in Developing Countries.Washington,DC:World Bank.Houngbonon,Georges V.,Justice Tei Mensah,and Nouhoum Traore.2022.“The Impact of Internet Access on Innovation and Entrepreneurship in Africa.”Policy Research Working Paper 9945,World Bank,Washington,DC.Mensah,Justice Tei,and Nouhoum Traore.2022.“Infrastructure Quality and FDI Inflows:Evidence from the Arrival of High-Speed Internet in Africa.”Policy Research Working Paper 9946,World Bank,Washington,DC.Rodrguez-Casteln,Carlos,Rogelio Granguillhome Ochoa,Samantha Lach,and Takaaki Masaki.2021.“Mobile Internet Adoption in West Africa.”Policy Research Working Paper 9560,World Bank,Washington,DC.UN DESA(United Nations Department of Economic and Social Affairs).2019.World Population Prospects 2019.2 vols.ST/ESA/SER.A/426.New York:United Nations.World Bank.2022.“Using Geospatial Analysis to Overhaul Connectivity Policies:How to Expand Mobile Internet Coverage and Adoption in Sub-Saharan Africa.”Report No.169437,World Bank,Washington,DC.World Bank.Forthcoming.“Regulating the Digital Economy in Africa:Managing Old and New Risks to Economic Governance for Inclusive Opportunities.”Report,World Bank,Washington,DC.xliAbbreviations2G second-generation mobile communications technology3G third-generation mobile communications technology4G fourth-generation mobile communications technologyABFs all business functionsAI artificial intelligenceBAS business advisory services B2B business-to-businessDT digital technologyERP enterprise resource planningFAT Firm-level Adoption of Technology FDI foreign direct investmentGBFs general business functionsGDP gross domestic productGPS Global Positioning SystemGSMA Global System for Mobile Communications AssociationHIC high-income countryIoT Internet of ThingsME mesa ejecutiva(Peru)ML machine learningMNC multinational companyMSMEs micro,small,and medium enterprisesOECD Organisation for Economic Co-operation and DevelopmentPOS point-of-saleRCT randomized controlled trialR&D research and developmentRIA Research ICT AfricaSaaS software as a servicexlii AbbreviationsSBFs sector-specific business functionsSMEs small and medium enterprisesSMS short message system TC technology centerTES technology extension services SOE state-owned enterpriseTFP total factor productivity 1CHAPTER 1Digital TechnologiesEnablers ofTechnological Transformation for JobsWhat are digital technologies?Africa needs better and more jobs for its growing population.Digital technologies(DTs)can enable economic transformation for jobs.They do so by helping all people work better and learn as they work,catalyzing adoption and productivity of complementary technologies,and thereby boosting competitiveness,production,and jobs across the economy.DTs are technologies that capture,generate,store,modify,and transmit data through binary digits,1 encompassing The internet and internet-based databases,data tools,and other information services;All software,computers,and tablets;Internet-enabled smartphones(that is,using third-,fourth-,and fifth-generation mobile communications technology),which combine computing and telephone func-tions into one unit and progressively enable faster access to and processing of more data;Digital cameras and video;Geolocation systems;and Digital platformsthat is,software-based online marketplaces and intermediation systems that facilitate peer-to-peer transactions,match buyers and sellers of goods and services,and enable crowd-based transactions.Computers,tablets,and smartphones enable critical access to the vast range of infor-mation and digital services available on the internet.In addition to linking data collected by sensors on a variety of production and household goods through the IoT(Internet of Things),productivity-enhancing DTs also include cloud computing,on-demand avail-ability of data storage,and computing power so that enterprises and households,instead of buying the underlying software,can buy the associated online services on a per-use basis and discontinue use when no longer needed.They also include artificial intelligence offerings,typically supported by machine learning,which are predictive analytic algorithms that improve their efficacy over time with the use of increasingly large amounts of data.Other available DTs include blockchains(decentralized,distributed digital records linked together using cryptography to be tamper-proof and resistant to modification);2 Digital Africacryptocurrencies or digital money based on decentralized ledger technologies;and 3D printing or additive manufacturingthat is,the construction of objects from a digital 3D computer graphic.DTs help reduce economic production and transaction costs,including search,repli-cation,transportation,tracking,and verification costs.2Africas jobs and technology challengesThe jobs and technology imperativeAfricas jobs challenge is to put in place business environments conducive to sustainable“good jobs”for its growing workforce(box 1.1).3 Continental Africas workforce is estimated to triple by the twenty-second centuryfrom almost 875 million working-age people(ages 1564)in 2025 to over 2.5 billion by 2100(UN DESA 2022a).As a result,Africas share of the global workforce would increase from 16 percent to over 41 percent,surpassing South Asia and East Asia and Pacific for the largest global share by 2100(figure 1.1).This increase is overwhelmingly led by Sub-Saharan Africa,whose workforce is pro-jected to more than triple,from just over 700 million people in 2025 to 1.3 billion by 2050 and 2.3 billion by 2100.Meanwhile,North Africas working-age population is projected to almost double,from 142 million to 203 million people.BOX 1.1What are“good jobs”?This report defines“good jobs”as those that(a)generate sufficient income for anyone in the workforce and their household to be able to escape from and not fall back into poverty;and(b)enable productive learningin enterprises that enable increased earnings over time.However,various authors offer more expansive definitions.As Rodrik and Sabel(2022,62)acknowledge,“The definition of a good job is nec

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Retail Media Advertising:How Brands Can Boost Product Visibility and Sales in 2023&BeyondConfidential|Copyright ChannelAdvisor 2023Your Presenters2Greg IvesDirector,Product Marketing ChannelAdvisorBradley HearnProduct Marketing Manager,ChannelAdvisor3Confidential|Copyright ChannelAdvisor 2023Consumer JourneyRetail Media LandscapeStrategies for SuccessKey TakeawaysTodays Agenda12344Confidential|Copyright ChannelAdvisor 2023The Consumer Journey5Confidential|Copyright ChannelAdvisor 2023Consumer Journey is More Varied Than EverConfidential|Copyright ChannelAdvisor 2023We Surveyed Over 5,000 Online Consumers6Active online shoppers,who had purchased at least one item online in the last 12 months51male,49%MaleAge range:18-65 Self-administered,30 questionsUSA(1002)UK(1000)France(1001)Germany(1005)Australia(1001)In partnership withConfidential|Copyright ChannelAdvisor 2023The Journey BeginsQ:When you go online to buy products,where do you begin your product search?US&Europe7THE JOURNEY BEGINSConfidential|Copyright ChannelAdvisor 2023The Number of Digital Touchpoints is on the Rise8Q:On average,how many total websites(e.g.,search engines,marketplaces,brand websites,etc.)do you visit on your buying journey before actually purchasing a product?180%2-45 12%Confidential|Copyright ChannelAdvisor 20239The Popularity of Marketplaces Continues to GrowGlobal consumers who say they regularly use multiplemarketplaces for browsing,shopping or buying76%Confidential|Copyright ChannelAdvisor 202310Q:How many online marketplaces do you tend to use for browsing,shopping or buying on a regular basis?Global consumers who have purchased from foreign marketplace in the past 12 monthsThe Popularity of Marketplaces Continues to GrowConfidential|Copyright ChannelAdvisor 2023Marketplaces Lead to Discovery11Q:How have you discovered the products youve purchased online?Browsing marketplacesBrowsing brand or retail websitesWord of mouthAmazon recommended productsSocial media sitesGoogle ads4208%Source:Dynata/ChannelAdvisor survey:5,000 active consumers polled evenly across all age groups and genders,Aug 202223#Confidential|Copyright ChannelAdvisor 2023Confidential|Copyright ChannelAdvisor 2023Q:In the past 12 months,have you clicked on a Sponsored or Promoted Product ad that you saw on a marketplace or retail site?13500 %0B%Global consumersThe Rise of Retail MediaConfidential|Copyright ChannelAdvisor 2023Q:Have you ever purchased an item on Amazon after seeing an ad for that product on Amazon?1418-2526-3536-4546-5556-6565 55WGA23E%US consumers57%European consumersThe Rise of Retail MediaConfidential|Copyright ChannelAdvisor 202316Confidential|Copyright ChannelAdvisor 2023Retail Media LandscapeConfidential|Copyright ChannelAdvisor 2023Amazon Advertising Revenue Growing RapidlyAdvertising revenue grew 25%to$9.5 billion in Q3Past 12 months ad revenue was$36 billion17Source:Amazon18Confidential|Copyright ChannelAdvisor 202319Confidential|Copyright ChannelAdvisor 2023eMarketer:The retail media market is forecasted to grow by nearly 25%over the next two yearsRetail Media Continues Growth20Confidential|Copyright ChannelAdvisor 2023Sponsored ProductsSponsored BrandsSponsored DisplayStores*Amazon,Amazon Advertising,and all related logos are trademarks of A,Inc.or its affiliatesAmazon Advertising Ad Types21Confidential|Copyright ChannelAdvisor 2023Mobile browser and apps banner adsDesktop browser and apps display adsOTT,OLV and Amazon DSP video adsAmazon DSP(Demand-Side Platform)22Confidential|Copyright ChannelAdvisor 202323Confidential|Copyright ChannelAdvisor 202324Confidential|Copyright ChannelAdvisor 202325Confidential|Copyright ChannelAdvisor 202326Confidential|Copyright ChannelAdvisor 202327Confidential|Copyright ChannelAdvisor 202328Confidential|Copyright ChannelAdvisor 2023Top Successful StrategiesCopyright ChannelAdvisor 2023Focus on four key elements of retail media success:1.Optimize content2.Target the right audience3.Segment your catalog4.Automate your campaigns29CONTENTTARGETINGAUTOMATIONCATALOG SEGMENTATIONElements of Retail Media SuccessCopyright ChannelAdvisor 202330Focus on four key elements of retail media success:1.Optimize content2.Target the right audience3.Segment your catalog4.Automate your campaigns5.Test your campaigns.constantlyCONTENTTARGETINGAUTOMATIONCATALOG SEGMENTATIONElements of Retail Media Success31Confidential|Copyright ChannelAdvisor 2023Fully optimized titles,bullets&descriptions will allow consumers to have the ideal shopping experience.Be sure to:Provide six or more clear&high quality imagesInclude 80 or more product-identifying characters in titlesDevelop a detailed product description to give consumers ultimate buying confidenceProvide concise and catchy bullets that simplify&describe the product#1 Dont Neglect Your Product Content32Confidential|Copyright ChannelAdvisor 2023A Content allows you to develop a brand or product story that invites the consumer on a digital journey.Leveraging creative modules and in-depth product comparisons will create an eye-catching below-the-fold asset.Amazon says A Content increases total sales by 3%-10%Eye-pleasing creative thats easier for the consumer to understandProduct Spotlight modules that compare and contrast across other items you offerA Content Creates A Curated Customer Journey33Confidential|Copyright ChannelAdvisor 2023For optimal product page coverage:Target your own ASINs to eliminate competitor real estateProvide a boost with high impression placement to increase conversion from other paid sources(Sponsored Brands or Display)Use the Product Page Percentage adjustment to give your ads the upper hand#2-Refine Targeting on Your PDPs With Sponsored Products34Confidential|Copyright ChannelAdvisor 2023Significant opportunities to protect or conquest using product detail pages35Confidential|Copyright ChannelAdvisor 2023Product TargetingTarget other competitors with placements right below the Buy BoxSegment product targeting campaigns similar to Sponsored ProductsPromote your promotionsAudiences(Remarketing)Align your audience campaigns by having a single ad group and multiple adsRemarket consumers who have previously viewed your product or one similar to attract them back to the product pageSponsored Display Ads36Confidential|Copyright ChannelAdvisor 2023Use Sponsored Brand Videos to:Show off branded content that gives the consumer a welcoming inviteAdvertise a top seller or relevant product with high reviews and ratings Create brand and non-brand campaigns to also attract past purchasers as well as new customersSponsored Brand Video37Confidential|Copyright ChannelAdvisor 2023#3-Account Structure Enables Automation38Confidential|Copyright ChannelAdvisor 2023#3-Account Structure Enables Automation39Confidential|Copyright ChannelAdvisor 2023Automatically manage ads based on filter criteria that you set Automatically add products to an ad group(or unpause them)as they meet the defined criteria Pause ads for products that no longer meet the criteriaLeverage product and sales data from all of your marketplace listings#4 Automate Your Ad ManagementConfidential|Copyright ChannelAdvisor 202340Retail Media will continue to represent a significant part of overall digital ad marketEvery Brand needs a strategy to remain visible on their wholesale partnersAd formats increasingly cover all levels of the funnel with new formats like video Automation is key to building a successful,scalable strategyLike other digital ad programs,a data driven strategy drives the best resultsKEY TAKEAWAYSConfidential|Copyright ChannelAdvisor 202341A Multichannel Commerce Platform Built for Efficient GrowthQuestions?Thank YouPhone866-264-8595EUpcoming W

6人已浏览 2023-03-20 43页 5星级

Channel Advisor：2023年主要商业趋势、挑战及行动预测报告（英文版）（45页）.pdf

PERSPECTIVES IN E-COMMERCE:Key Trends,Challenges and Actions for 2023Confidential|Copyright ChannelAdvisor 2022Have a question?Use the Q&A feature to send messages.Todays presentation will last approximately 40-45 minutes.Yes!The webinar is being recorded and will be available on demand.HousekeepingConfidential|Copyright ChannelAdvisor 2022A Multichannel Commerce Platform Built for Efficient GrowthAllows brands and retailers to integrate,manage and optimize e-commerce operations across the entire consumer journeyMarketplacesFirst Party/Drop ShipDigital MarketingShoppable MediaFulfillmentBrand AnalyticsConfidential|Copyright ChannelAdvisor 2022Link WallsVP Digital Marketing StrategyLink is responsible for ChannelAdvisors Digital Marketing Strategy,serving as a strategic consultant to leading brands and retailers.Drawing on over 15 years e-commerce experience,he works closely with customers and industry partners to shape the future.Confidential|Copyright ChannelAdvisor 2022What Were Discussing TodayMacro Commerce EnvironmentKey Trends to WatchStrategies for Success in 2023Wrap-Up and Key TakeawaysQ&AConfidential|Copyright ChannelAdvisor 2022Confidential|Copyright ChannelAdvisor 2022Macro Commerce EnvironmentConfidential|Copyright ChannelAdvisor 2022Confidential|Copyright ChannelAdvisor 2022Reopening,strong job market,cash-flush consumers inflationRising interest rates,increased consumer debt recessionConfidential|Copyright ChannelAdvisor 202210Inflation has reached levels not seen in 40 years but is perhaps moderatingConfidential|Copyright ChannelAdvisor 2022Ocean Freight Rates Are NormalizingSource:Frieghtos Baltic Daily IndexNature is healingConfidential|Copyright ChannelAdvisor 2022Starting to See Prices Come Back Toward NormalConfidential|Copyright ChannelAdvisor 2022In response the US Fed has raised rates more aggressively than any time in the last 40 years.Confidential|Copyright ChannelAdvisor 2022.which has burst the bubble on nearly all asset markets and weighed down consumer sentiment.Source:University of Michigan consumer sentiment indexConfidential|Copyright ChannelAdvisor 2022Stimulus Checks Have Been Replaced with Credit CardsConfidential|Copyright ChannelAdvisor 2022and yet the job market has remained very resilient in the US.Confidential|Copyright ChannelAdvisor 2022Confidential|Copyright ChannelAdvisor 2022Confidential|Copyright ChannelAdvisor 2022Overall economic environment is slowing down consumer spendingJob market remains strong,despite tech layoffsE-commerce remains a significant portion of overall retailMany aspects are normalizing,such as freight rates,which should help inflationTrends vary widely based on category2022 Wrap-UpConfidential|Copyright ChannelAdvisor 2022Key Trends for 2023Confidential|Copyright ChannelAdvisor 2022Privacy and Regulatory Battles IntensifyConfidential|Copyright ChannelAdvisor 2022Apples Changes Have Hit Social Media HARDConfidential|Copyright ChannelAdvisor 2022Third-Party Cookies:Their Days Are Numbered But the Number Keeps Getting BiggerConfidential|Copyright ChannelAdvisor 2022Social Platforms Continue to Move Toward FrictionlessConfidential|Copyright ChannelAdvisor 2022Newer formats aimed more directly at shoppingLeverage product catalog to display product-specific contentTikTok for CommerceConfidential|Copyright ChannelAdvisor 2022Rise of Retail Media*Revenue is trailing 12 months through Q3 2022Growth rate is most recent quarter y/y. 3%-4% 25%Confidential|Copyright ChannelAdvisor 2022Advertising revenue grew 25%to$9.5 billion in Q3Past 12 months ad revenue was$36 billionAmazon Advertising Revenue Growing RapidlySource:AmazonConfidential|Copyright ChannelAdvisor 202228Delivery Rising Consumer Expectations,Rising CostsSource:Business Insider Intelligence|Dynata/ChannelAdvisor survey:1,001 active US consumersClick-to-door times shrinkingNext-day delivery becoming the new normSame-day delivery in many marketsCarriers now deliver 7 days a weekStricter requirements for Amazon SFP sellersShipping surcharges and increases on the rise49%of consumers say theyve used“click and collect”(or curbside pickup)options since the outbreak of COVID-19Confidential|Copyright ChannelAdvisor 2022More and more retailers are looking to extend their selection by experimenting with new modelsMany different models here but aim is to better compete with broader selectionEverything Becomes a MarketplaceConfidential|Copyright ChannelAdvisor 202230Consumers Are Choosing MarketplacesGlobal consumers who say they regularly use multiplemarketplaces for browsing,shopping or buying76%Source:Dynata/ChannelAdvisor consumer survey 2022Confidential|Copyright ChannelAdvisor 2022Key Strategies for 202332Confidential|Copyright ChannelAdvisor 2022Strategy#1Be EverywhereConfidential|Copyright ChannelAdvisor 2022Consumer Journey Is More Varied Than EverConfidential|Copyright ChannelAdvisor Confidential|Copyright ChannelAdvisor 2022Consumers Shop Everywhere3527%US&Europe24R%Q:In the past 12 months,have you researched products on any of these sites?41(Vq%AustraliaSource:Dynata/ChannelAdvisor consumer survey 202236Confidential|Copyright ChannelAdvisor 2022Strategy#2DiversificationConfidential|Copyright ChannelAdvisor 2022Diversification Builds DurabilitySupply ChainChannelGeographicFulfillment38Confidential|Copyright ChannelAdvisor 2022Strategy#3CollaborationConfidential|Copyright ChannelAdvisor 2022Brands and Retailers Need to Collaborate to Succeed40Confidential|Copyright ChannelAdvisor 2022Strategy#4Invest in First-Party DataConfidential|Copyright ChannelAdvisor 2022Apples changes and the coming demise of the third-party cookie are driving thisFirst-party data can enable a much better understanding of your customer baseFirst-Party DataConfidential|Copyright ChannelAdvisor 2022In closingConfidential|Copyright ChannelAdvisor 20221.Building the capability to sell through multiple channels your own DTC site,marketplaces,social channels,etc.is critical for long-term success.2.Multichannel strategy requires ongoing evaluation of the digital shelf to ensure optimal product content,pricing,etc.3.Advertising is needed to be found regardless of the channel Amazon,Facebook and Google will continue to gain strength and monetize their audience.4.Invest in fulfillment as consumer expectations will only continue to rise.5.Product data is at the core of“being shoppable”and an area brands should invest in.Key TakeawaysConfidential|Copyright ChannelAdvisor 2022Q&AThank YouEMAILSOCIALlinkwallsSCHEDULE A FREE DEMO WallsVP,Digital Marketing Strategy,ChannelAdvisor

4人已浏览 2023-03-20 45页 5星级

凯德工程（CKHL）美股IPO上市招股说明书（273页）.pdf

F-1 1 ff12023_chikoholdings.htm REGISTRATION STATEMENTAs filed with the Securities and Exchange Commission on March 15,2023.Registration Statement No.333-UNITED STATES SECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549_Form F-1REGISTRATION STATEMENTUNDER THE SECURITIES ACT OF 1933_Chi Ko Holdings Limited(Exact name of registrant as specified in its charter)_Cayman Islands 1540 Not Applicable(State or other jurisdiction of incorporation or organization)(Primary Standard Industrial Classification Code Number)(IRS Employer Identification Number)Room 2620,26/F.,New Tech Plaza34 Tai Yau Street San Po Kong Kowloon,Hong Kong 852 2155 9690(Address,including zip code,and telephone number,including area code,of registrants principal executive offices_c/o Cogency Global Inc.122 East 42nd Street,18th FloorNew York,NY 10168 212 947-7200(Name,address,including zip code,and telephone number,including area code,of agent for service)_Copies to:Virginia TamK&L Gates 44/F,Edinburgh Tower,The Landmark 15 Queens Road Central,Hong Kong 852 2230 3535 Mark E.Crone,Esq.The Crone Law Group P.C.500 Fifth Avenue,Suite 938 New York,NY 10110 646 861 7891_Approximate date of commencement of proposed sale to public:As soon as practicableafter this registration statement becomes effective.If any of the securities being registered on this form are to be offered on a delayed orcontinuous basis pursuant to Rule 415 under the Securities Act,check the following box.If this Form is filed to register additional securities for an offering pursuant toRule 462(b)under the Securities Act,check the following box and list the Securities Actregistration statement number of the earlier effective registration statement for the sameoffering.If this Form is a post-effective amendment filed pursuant to Rule 462(c)under the SecuritiesAct,check the following box and list the Securities Act registration statement number of theearlier effective registration statement for the same offering.If this Form is a post-effective amendment filed pursuant to Rule 462(d)under the SecuritiesAct,check the following box and list the Securities Act registration statement number of theearlier effective registration statement for the same offering.Indicate by check mark whether the registrant is an emerging growth company as defined inRule 405 of the Securities Act:Emerging growth company If an emerging growth company that prepares its financial statements in accordance withaccounting principles generally accepted in the United States(“U.S.GAAP”),indicate by checkmark if the registrant has elected not to use the extended transition period for complying with anynew or revised financial accounting standards provided pursuant to Section 7(a)(2)(B)of theSecurities Act._ The term“new or revised financial accounting standard”refers to any update issued by theFinancial Accounting Standards Board to its Accounting Standards Codification after April 5,2012.The registrant hereby amends this registration statement on such dateor dates as may be necessary to delay its effective date until theregistrant shall file a further amendment that specifically states thatthis registration statement shall thereafter become effective in accordancewith Section 8(a)of the Securities Act or until the registration statementshall become effective on such date as the Commission,acting pursuant tosuch Section 8(a),may determine.Table of ContentsThe information in this prospectus is not complete and may be changed.Wemay not sell these securities until the registration statement filed withthe Securities and Exchange Commission is effective.This prospectus is notan offer to sell these securities and it is not soliciting an offer to buythese securities in any jurisdiction where the offer or sale is notpermitted.PRELIMINARY PROSPECTUS SUBJECT TO COMPLETION,DATED ,2023 Ordinary SharesChi Ko Holdings LimitedThis is the IPO of the ordinary shares,par value US$0.0001 per share(“OrdinaryShares”or“Shares”),of Chi Ko Holdings Limited(“CKHL”).We are offering Ordinary Shares of CKHL,representing of the Ordinary Sharesfollowing completion of the offering of CKHL.Following the offering,of theOrdinary Shares will be held by shareholders for general trading,assuming theunderwriters do not exercise the over-allotment option.Prior to this offering,there has been no public market for our Ordinary Shares.The offering price of our Ordinary Shares in this offering is expected to be between$and$per share.We intend to apply to list our Ordinary Shares onthe Nasdaq Capital Market under the symbol“CKHL.”Listing of our Ordinary Shares onNasdaq is a condition to the offering.There is no assurance that such applicationwill be approved,and if our application is not approved,this offering may not becompleted.Investors are cautioned that you are buying shares of a Cayman Islandsholding company with operations in Hong Kong by its Operating Subsidiary.CKHL is a holding company incorporated in the Cayman Islands with no materialoperations of its own,and we conduct our operations primarily in Hong Kong throughour key Operating Subsidiary Chiu&Lee Partners.References to the“Company,”“we,”“us,”and“our”in the prospectus are to CKHL,the Cayman Islands entitythat will issue the Ordinary Shares being offered.References to“Chiu&LeePartners”are to the entity operating the business.References to“OperatingSubsidiary”refer to Chiu&Lee Partners.This is an offering of the Ordinary Sharesof CKHL,the holding company in the Cayman Islands,instead of the shares of theOperating Subsidiary.Investors in this offering may never directly hold any equityinterests in the Operating Subsidiary.Investing in our Ordinary Shares is highly speculative and involves ahigh degree of risk.Before buying any shares,you should carefully readthe discussion of material risks of investing in our Ordinary Shares in“Risk Factors”beginning on page 22 of this prospectus.Our operations are primarily located in Hong Kong,a Special AdministrativeRegion of the Peoples Republic of China(“China”or the“PRC”),with its owngovernmental and legal system that is independent from mainland China and has its owndistinct rules and regulations.As of the date of this prospectus,we are not subjectto the PRC governments direct influence or discretion over the manner in which weconduct our business activities outside of the PRC.However,due to long-armprovisions under the current PRC laws and regulations,there remains regulatoryuncertainty with respect to the implementation and interpretation of laws in China.We are subject to the risks of uncertainty about any future actions of the PRCgovernment or authorities in Hong Kong in this regard.We may also be subject tounique risks due to the uncertainty of the interpretation and application of PRC lawsand regulations.Should the PRC government choose to exercise significant oversight and discretionover the conduct of our business,they may intervene in or influence our operations.Such governmental actions:could result in a material change in our operations and/or the value of oursecurities;could significantly limit or completely hinder our ability to continue ouroperations;could significantly limit or completely hinder our ability to offer orcontinue to offer our securities to investors;and may cause the value of our securities to significantly decline or beworthless.We are aware that recently the PRC government has initiated a series ofregulatory actions and new policies to regulate business operations in certain areasin China with little advance notice,including cracking down on illegal activities inthe securities market,enhancing supervision over China-based companies listedoverseas using a variable interest entity(“VIE”)structure,adopting new measuresto extend the scope of cybersecurity reviews,and expanding the efforts in anti-monopoly enforcement.Since these statements and regulatory actions are new,it ishighly uncertain how soon the legislative or administrative regulation making bodieswill respond and what existing or new laws or regulations or detailed implementationsand interpretations will be modified or promulgated,if any.It is also highlyuncertain what the potential impact such modified or new laws and regulations willhave on Chiu&Lee Partners daily business operation,its ability to accept foreigninvestments and the listing of our Ordinary Shares on U.S.or other foreignexchanges.The PRC government may intervene or influence our operations at any time and mayexert more control over offerings conducted overseas and foreign investment in HongKong-based issuers.The PRC government may also intervene or impose restrictions onour ability to move out of Hong Kong to distribute earnings and pay dividends or toreinvest in our business outside of Hong Kong.Furthermore,PRC regulatoryauthorities may in the future promulgate laws,regulations or Table of Contentsimplementing rules that require our company or any of our subsidiaries to obtainregulatory approval from PRC authorities before this offering.These actions couldresult in a material change in our operations and could significantly limit orcompletely hinder our ability to complete this offering or cause the value of ourOrdinary Shares to significantly decline or become worthless.See“ProspectusSummary Recent Regulatory Developments in the PRC”beginning on page 13.As of the date of this prospectus,our operations in Hong Kong and our registeredpublic offering in the United States are not subject to the review nor prior approvalof the Cyberspace Administration of China(the“CAC”)nor the China SecuritiesRegulatory Commission(the“CSRC”).Uncertainties still exist,however,due to thepossibility that laws,regulations,or policies in the PRC could change rapidly inthe future.In the event that(i)the PRC government expanded the categories ofindustries and companies whose foreign securities offerings are subject to review bythe CSRC or the CAC and that we are required to obtain such permissions or approvals,or(ii)we inadvertently concluded that relevant permissions or approvals were notrequired or that we did not receive or maintain relevant permissions or approvalsrequired,any action taken by the PRC government could significantly limit orcompletely hinder our operations in Hong Kong and our ability to offer or continue tooffer our Ordinary Shares to investors and could cause the value of such securitiesto significantly decline or be worthless.Furthermore,as more stringent criteria,including the Holding Foreign CompaniesAccountable Act(the“HFCA Act”),have been imposed by the SEC and the PublicCompany Accounting Oversight Board(“PCAOB”),recently,our Ordinary Shares may beprohibited from trading if our auditor cannot be fully inspected.Our auditor,ZHCPA,LLC,the independent registered public accounting firm that issues the auditreport included in this prospectus,as an auditor of companies that are tradedpublicly in the United States and a firm registered with the PCAOB,is subject tolaws in the United States pursuant to which the PCAOB conducts regular inspections toassess ZH CPA,LLCs compliance with applicable professional standards.ZH CPA,LLCis headquartered in Denver,Colorado,and can be inspected by the PCAOB.As of thedate of this prospectus,our auditor is not subject to the determinations announcedby the PCAOB on December 16,2021,relating to the PCAOBs inability to inspect orinvestigate completely registered public accounting firms headquartered in mainlandChina or Hong Kong because of a position taken by one or more authorities in the PRCor Hong Kong.On August 26,2022,CSRC,the Ministry of Finance of the PRC(the“MOF”),and the PCAOB signed a Statement of Protocol(the“Protocol”),governinginspections and investigations of audit firms based in China and Hong Kong.TheProtocol remains unpublished and is subject to further explanation andimplementation.Pursuant to the fact sheet with respect to the Protocol disclosed bythe SEC,the PCAOB shall have independent discretion to select any issuer audits forinspection or investigation and has the unfettered ability to transfer information tothe SEC.On December 15,2022,the PCAOB Board determined that the PCAOB was able tosecure complete access to inspect and investigate registered public accounting firmsheadquartered in mainland China and Hong Kong and voted to vacate its previousdeterminations to the contrary.However,should PRC authorities obstruct or otherwisefail to facilitate the PCAOBs access in the future,the PCAOB Board will considerthe need to issue a new determination.See“Risk Factors Risks Relating to OurOrdinary Shares Although the audit report included in this prospectus is preparedby U.S.auditors who are currently inspected by the PCAOB,there is no guarantee thatfuture audit reports will be prepared by auditors inspected by the PCAOB and,assuch,in the future investors may be deprived of the benefits of such inspection.Furthermore,trading in our securities may be prohibited under the HFCA Act if theSEC subsequently determines our audit work is performed by auditors that the PCAOB isunable to inspect or investigate completely,and as a result,U.S.nationalsecurities exchanges,such as the Nasdaq,may determine to delist our securities.Furthermore,on December 29,2022 the Accelerating Holding Foreign CompaniesAccountable Act was enacted,which amended the HFCA Act by requiring the SEC toprohibit an issuers securities from trading on any U.S.stock exchanges if itsauditor is not subject to PCAOB inspections for two consecutive years instead ofthree,and thus,reduced the time before the securities may be prohibited fromtrading or delisted”on page 27.We cannot assure you whether Nasdaq or otherregulatory authorities will apply additional or more stringent criteria to us.Suchuncertainty could cause the market price of our Ordinary Shares to be materially andadversely affected.Our management monitors the cash position of our Operating Subsidiary regularlyand prepares budgets on a monthly basis to ensure it has the necessary funds tofulfill its obligations for the foreseeable future and to ensure adequate liquidity.In the event that there is a need for cash or a potential liquidity issue,it will bereported to our chief financial officer and subject to approval by our board ofdirectors.For CKHL to transfer cash to its subsidiaries,CKHL is permitted under the lawsof the Cayman Islands and its memorandum and articles of association(as amended fromtime to time)to provide funding to our subsidiaries incorporated in the BVI and HongKong through loans or capital contributions.CKHLs subsidiary formed under the lawsof the BVI is permitted under the laws of the BVI to provide funding to our Hong KongOperating Subsidiary Chiu&Lee Partners subject to certain restrictions laid down inthe BVI Business Companies Act 2004(as amended)and memorandum and articles ofassociation of the relevant CKHLs subsidiary incorporated under the laws of theBVI.As a holding company,CKHL may rely on dividends and other distributions onequity paid by its subsidiaries for its cash and financing requirements.According tothe BVI Business Companies Act 2004(as amended),a BVI company may make dividendsdistribution to the extent that immediately after the distribution,the value of thecompanys assets exceeds its liabilities and that such company is able to pay itsdebts as they fall due.According to the Companies Ordinance of Hong Kong,a HongKong company may only make a distribution out of profits available for distribution.If any of CKHLs subsidiaries incur debt on its own behalf in the future,the Table of Contentsinstruments governing such debt may restrict their ability to pay dividends toCKHL.During the years ended March 31,2022 and 2021,Chiu&Lee Partners declaredcash dividends in the amounts of HK$12,000,000(approximately US$1,538,462)andHK$6,000,000(approximately US$769,231),respectively to the then-shareholder,Mr.Keung Yun Yuen.For the cash dividend declared for the year ended March 31,2021,allwere offset by the amount due from Mr.Keung Yun Yuen in March 2021.For the cashdividend declared for the year ended March 31,2022,HK$10,704,314(approximatelyUS$1,372,348)were offset by the amount due from Mr.Keung Yun Yuen in February 2022and HK$1,295,681(approximately US$166,113)were offset by the amount due from Mr.Keung in May 2022.During the years ended March 31,2022 and 2021 and as of the dateof this prospectus,CKHL did not declare or pay any dividends and there was notransfer of assets among CKHL and its subsidiaries.We do not have any currentintentions to distribute further earnings.If we determine to pay dividends on any ofour Ordinary Shares in the future,as a holding company,we will be dependent onreceipt of funds from our Hong Kong Operating Subsidiary Chiu&Lee Partners by wayof dividend payments.See“Dividend Policy,”and“Consolidated Statements of Changein Shareholders Equity in the Report of Independent Registered Public AccountingFirm”for further details.We are an“emerging growth company”and a“foreign private issuer”as defined under the federal securities laws and,as such,will be subjectto reduced public company reporting requirements.See“ProspectusSummary Implications of Being an Emerging Growth Company and a ForeignPrivate Issuer”for additional information.Upon the completion of this offering,the outstanding shares of CKHL will consistof Ordinary Shares,assuming the underwriters do not exercise theirover-allotment option to purchase additional Ordinary Shares,or Ordinary Shares,assuming the over-allotment option is exercised infull.CKHL will be a“controlled company”as defined under the Nasdaq Stock MarketRules because,immediately after the completion of this offering,our ControllingShareholder of CKHL will own%of the total issued and outstanding OrdinaryShares,representing%of the total voting power,assuming that theunderwriters do not exercise their over-allotment option,or%of the totalissued and outstanding Ordinary Shares,representing%of the total votingpower,assuming that the over-allotment option is exercised in full.Per Share Total(2)IPO price$Underwriting discounts(1)and commissions$Proceeds,before expenses,to us$_(1)Represents underwriting discounts equal to%per Ordinary Share.(2)Assumes that the underwriters do not exercise any portion of their over-allotment option.We expect our total cash expenses for this offering(including cash expensespayable to our underwriters for their out-of-pocket expenses)to be approximatelyUS$exclusive of the above discounts.In addition,we will pay additionalitems of value in connection with this offering that are viewed by the FinancialIndustry Regulatory Authority(“FINRA”),as underwriting compensation.Thesepayments will further reduce proceeds available to us before expenses.See“Underwriting.”Neither the Securities and Exchange Commission nor any state securitiescommission nor any other regulatory body has approved or disapproved ofthese securities or determined if this prospectus is truthful or complete.Any representation to the contrary is a criminal offense.This offering is being conducted on a firm commitment basis.The underwriters areobligated to take and pay for all of the shares if any such shares are taken.We havegranted the underwriters an option for a period of forty-five(45)days after theclosing of this offering to purchase up to additional Ordinary Shares from usat the IPO price,less underwriting discounts to cover over-allotments,if any.Ifthe underwriters exercise the option in full,assuming the public offering price perOrdinary Share is US$,the total underwriting discounts payable will beUS$and the total proceeds to us,before expenses,will be US$.We expect our total cash expenses for this offering to be approximately US$,including cash expenses payable to the underwriters for their reasonable out-of-pocket expenses,exclusive of the above discounts.If we complete this offering,net proceeds will be delivered to us on the closingdate.The underwriters expect to deliver the Ordinary Shares against payment as setforth under“Underwriting”on or about ,2023.EF Huttondivision of Benchmark Investments,LLCThe date of this prospectus is ,2023.Table of ContentsTABLE OF CONTENTS PageProspectus Summary 1Risk Factors 22Special Note Regarding Forward-Looking Statements 52Industry and Market Data 53Use of Proceeds 57Dividend Policy 58Capitalization 59Dilution 60Exchange Rate Information 62Corporate History and Structure 63Managements Discussion and Analysis of Financial Condition and Results ofOperations 65Business 81Regulations 98Management 106Related Party Transactions 112Principal Shareholders 113Description of Share Capital 114Shares Eligible for Future Sale 124Material Income Tax Considerations 127Underwriting 132Expenses Related to this Offering 137Legal Matters 138Experts 138Enforceability of Civil Liabilities 139Where You Can Find Additional Information 141Index to Consolidated Financial Statements F-1We are responsible for the information contained in this prospectus andany free writing prospectus we prepare or authorize.We have not,and theunderwriters have not,authorized anyone to provide you with differentinformation,and we and the underwriters take no responsibility for anyother information others may give you.We are not,and the underwriters arenot,making an offer to sell our Ordinary Shares in any jurisdiction wherethe offer or sale is not permitted.You should not assume that theinformation contained in this prospectus is accurate as of any date otherthan the date on the front cover of this prospectus,regardless of the timeof delivery of this prospectus or the sale of any Ordinary Shares.For investors outside the United States:Neither we nor the underwriters havedone anything that would permit this offering or possession or distribution of thisprospectus in any jurisdiction,other than the United States,where action for thatpurpose is required.Persons outside the United States who come into possession ofthis prospectus must inform themselves about,and observe any restrictions relatingto,the offering of the Ordinary Shares and the distribution of this prospectusoutside the United States.CKHL is incorporated under the laws of the Cayman Islands as an exempted companywith limited liability and a majority of our outstanding securities are owned by non-U.S.residents.Under the rules of the SEC we currently qualify for treatment as a“foreign private issuer.”As a foreign private issuer,we will not be required tofile periodic reports and financial statements with the SEC as frequently or aspromptly as domestic registrants whose securities are registered under theExchange Act.Until and including ,2023(25 days after the date of thisprospectus),all dealers that buy,sell or trade our Ordinary Shares,whether or not participating in this offering,may be required to deliver aprospectus.This delivery requirement is in addition to the obligation ofdealers to deliver a prospectus when acting as underwriters and withrespect to their unsold allotments or subscriptions.iTable of ContentsCONVENTIONS THAT APPLY TO THIS PROSPECTUSUnless otherwise indicated or the context otherwise requires,all references inthis prospectus to:Articles or Articles of Association refers to the amended andrestated articles of association of our Company(as amended from time totime)adopted on and as amended,supplemented and/or otherwise modifiedfrom time to time;“BVI”refers to the British Virgin Islands;“Chiu&Lee Partners”refers to Chiu&Lee Partners Construction Co.,Limited,a company incorporated in Hong Kong with limited liability,anindirect wholly owned subsidiary of CKHL and our key Operating Subsidiary inHong Kong;“Companies Act”refers to the Companies Act(as revised)of the CaymanIslands,as amended,supplemented or otherwise modified from time to time;“Company,”“we,”“us,”and“CKHL”refers to Chi Ko Holdings Limited,an exempted Company incorporated in the Cayman Islands with limitedliability on March 29,2022,that will issue the Ordinary Shares beingoffered;“Controlling Shareholder”refers to the ultimate beneficial owner of theCompany,who is Mr.Keung Yun Yuen.See“Management”and“PrincipalShareholders”for more information;“COVID-19”refers to the Coronavirus Disease 2019;“Exchange Act”refers to the U.S.Securities Exchange Act of 1934,asamended;“HKD”or“HK$”refers to Hong Kong dollar(s),the lawful currency ofHong Kong;“Hong Kong”refers to Hong Kong Special Administrative Region of thePeoples Republic of China;“Independent Third Party”refers to a person or company who or which isindependent of and is not a 5%owner of,does not control and is notcontrolled by or under common control with any 5%owner and is not thespouse or descendant(by birth or adoption)of any 5%owner of the Company;“IPO”refers to an initial public offering of securities;“mainland China”refers to the PRC(excluding Hong Kong,Macau andTaiwan);Memorandum or Memorandum of Association refers to the amendedand restated memorandum of association of our Company(as amended from timeto time)adopted on and as amended,supplemented and/or otherwisemodified from time to time;“Nasdaq”refers to Nasdaq Stock Market LLC;“Orange Space”refers to ORANGE SPACE LIMITED,a BVI business companylimited by shares incorporated in the BVI,a direct wholly owned subsidiaryof CKHL;“Ordinary Shares”or“Shares”refer to our ordinary shares,par value$0.0001 per ordinary share;“PCAOB”refers to Public Company Accounting Oversight Board;“PRC”or“China”refers to the Peoples Republic of China;“PRC government”or“PRC authorities”,or variations of such words orsimilar expressions,refer to the central,provincial,and local governmentsof all levels in mainland China,including regulatory and administrativeauthorities,agencies and commissions,or any court,tribunal or any otherjudicial or arbitral body in mainland China;“PRC laws”refers to all applicable laws,statutes,rules,regulations,ordinances and other pronouncements having the binding effect of law inmainland China;iiTable of Contents “SEC”or“Securities and Exchange Commission”means the United StatesSecurities and Exchange Commission;“Securities Act”refers to the U.S.Securities Act of 1933,as amended;and “U.S.dollars”or“$”or“USD”or“dollars”refers to United Statesdollar(s),the lawful currency of the United States.We have made rounding adjustments to some of the figures included in thisprospectus.Accordingly,numerical figures shown as totals in some tables may not bean arithmetic aggregation of the figures that preceded them.Unless the context indicates otherwise,all information in this prospectusassumes no exercise by the underwriters of their over-allotment option.CKHL is a holding company with operations conducted in Hong Kong through its keyOperating Subsidiary in Hong Kong,Chiu&Lee Partners.Chiu&Lee Partnersreporting currency is Hong Kong dollars.This prospectus contains translations ofHong Kong dollars into U.S.dollars solely for the convenience of the reader.Unlessotherwise noted,all translations from Hong Kong dollars to U.S.dollars and fromU.S.dollars to Hong Kong dollars in this prospectus were calculated at the rate ofUS$1=HK$7.8,representing the noon buying rate in The City of New York for cabletransfers of HK$as certified for customs purposes by the Federal Reserve Bank of NewYork on the last trading day of March 31,2022.No representation is made that theHK$amount represents or could have been,or could be converted,realized or settledinto US$at that rate,or at any other rate.iiiTable of ContentsPROSPECTUS SUMMARYThe following summary highlights information contained elsewhere in thisprospectus and does not contain all of the information you should consider beforeinvesting in our Ordinary Shares.You should read the entire prospectus carefully,including“Risk Factors,”“Managements Discussion and Analysis of FinancialCondition and Results of Operations,”and our consolidated financial statementsand the related notes thereto,in each case included in this prospectus.You shouldcarefully consider,among other things,the matters discussed in the section ofthis prospectus titled“Business”before making an investment decision.Unless thecontext otherwise requires,all references to“CKHL,”“we,”“us,”“our,”the“Company,”and similar designations refer to Chi Ko Holdings Limited,an exemptedCayman Islands company and its wholly owned subsidiaries.OverviewWe are a holding company incorporated in the Cayman Islands with operationsconducted by our Hong Kong subsidiary,Chiu&Lee Partners.We are a one-stop shop construction service provider and establishedconstruction contractor in Hong Kong with over 40 years of experience in theconstruction industry,principally providing(i)foundation and site formationwork,which mainly include piling work,excavation and lateral support work andpile cap construction,work;(ii)general building work and associated services,which mainly include development of superstructures,alteration,and addition work;and(iii)other construction work,which mainly includes demolition work.We areable to undertake construction work as either a main contractor or a subcontractor.Competitive StrengthsWe believe the following competitive strengths differentiate us from ourcompetitors:Established market presence in the construction industry with over 40years of operating history;Possess a range of qualifications to undertake a range of constructionprojects;Strong and stable network of subcontractors and suppliers;Stable relationships with our customers;and Experienced and professional management team.Our StrategiesWe intend to pursue the following strategies to further expand our business:Adhere to our one-stop shop strategy and prudent financial management;Compete for sizeable and profitable construction projects;Grow through selected strategic acquisition for machinery and robotics;Enhance our participation in undertaking construction works from both theprivate sector and the public sector;and Further enhance our project management capability.Corporate History and StructureWe are a company principally engaged in construction work in Hong Kong.We haveobtained the relevant registration for our business operations via our keyOperating Subsidiary,Chiu&Lee Partners,as a general building contractor fromthe Buildings Department of Hong Kong since 1999 and as a specialist contractor inthe demolition work category,foundation work category,and site formation workcategory from the Buildings Department of Hong Kong since 2006.As of the date ofthis prospectus,our Controlling Shareholder owns of our issued sharecapital.In February 2022,Orange Space Limited was incorporated under the laws of theBritish Virgin Islands,as an intermediate holding company.1Table of ContentsIn March 2022,CKHL was incorporated under the laws of the Cayman Islands as anexempted company with limited liability,as the holding company of our BVI and HongKong subsidiaries.In April 2022,as part of the reorganization,CKHL acquired,through OrangeSpace,all the shares of Chiu&Lee Partners from the Controlling Shareholder andbecame the ultimate holding company of Orange Space and Chiu&Lee Partners.On May4,2022,CKHL issued 11,249,999 Ordinary Shares to the Controlling Shareholder.OnMay 4,2022,the Controlling Shareholder sold 551,250 Ordinary Shares each to Mr.Ling Chi Fai and Mr.Wong Chi Wai,respectively.Mr.Ling Chi Fai and Mr.Wong ChiWai are individuals that have no affiliation with CKHL and its subsidiaries.The chart below illustrates our corporate structure and subsidiaries as of thedate of this prospectus and upon completion of this offering(assuming theunderwriters do not exercise the over-allotment option):We are offering Ordinary Shares,representing%of the OrdinaryShares following completion of the offering of CKHL,assuming the underwriters donot exercise the over-allotment option.We will be a“controlled company”as defined under the Nasdaq Stock MarketRules because,immediately after the completion of this offering,our ControllingShareholder will own%of our total issued and outstanding Shares,representing%of the total voting power,assuming that the underwriters donot exercise their over-allotment option.Holding Company StructureCKHL is a holding company incorporated in the Cayman Islands with no materialoperations of its own,and we conduct our operations primarily in Hong Kong throughour key Operating Subsidiary Chiu&Lee Partners.This is an offering of theOrdinary Shares of CKHL,the holding company in the Cayman Islands,instead of theshares of the Operating Subsidiary.Investors in this offering will not directlyhold any equity interests in the Operating Subsidiary.As a result of our corporate structure,CKHLs ability to pay dividends maydepend upon dividends paid by our Operating Subsidiary.If our existing OperatingSubsidiary or any newly formed ones incur debt on their own behalf in the future,the instruments governing their debt may restrict their ability to pay dividends tous.2Table of ContentsTransfers of Cash To and From Our SubsidiariesOur management monitors the cash position of our Operating Subsidiary regularlyand prepares budgets on a monthly basis to ensure it has the necessary funds tofulfill its obligations for the foreseeable future and to ensure adequateliquidity.In the event that there is a need for cash or a potential liquidityissue,it will be reported to our Chief Financial Officer and subject to approvalby our board of directors.No regulatory approval is required for CKHL to transfer cash to itssubsidiaries is subject to the following:CKHL is permitted under the laws of theCayman Islands and its memorandum and articles of association(as amended from timeto time)to provide funding to our subsidiaries incorporated in the BVI and HongKong through loans or capital contributions.CKHLs subsidiary formed under thelaws of the BVI is permitted under the laws of the BVI to provide funding to ourHong Kong Operating Subsidiary Chiu&Lee Partners subject to certain restrictionslaid down in the BVI Business Companies Act 2004(as amended)and memorandum andarticles of association of the relevant CKHLs subsidiary incorporated under thelaws of the BVI.The ability of Orange Space,the direct subsidiary of CKHL,to transfer cash toCKHL is subject to the following:according to the BVI Business Companies Act 2004(as amended),Orange Space may make dividends distribution to the extent thatimmediately after the distribution,the value of the companys assets exceeds itsliabilities and that such company is able to pay its debts as they fall due.The ability of Chiu&Lee Partners to transfer cash to Orange Space is subjectto the following:according to the Companies Ordinance of Hong Kong,Chiu&LeePartners may only make a distribution out of profits available for distribution.Other than the above,we did not adopt or maintain any cash management policies andprocedures as of the date of this prospectus.During the years ended March 31,2022 and 2021,Chiu&Lee Partners declaredcash dividends in the amounts of HK$12,000,000(approximately US$1,538,462)andHK$6,000,000(approximately US$769,231),respectively to the then-shareholder,Mr.Keung Yun Yuen.For the cash dividend declared for the year ended March 31,2021,all were offset by the amount due from Mr.Keung Yun Yuen in March 2021.For thecash dividend declared for the year ended March 31,2022,HK$10,704,314(approximately US$1,372,348)were offset by the amount due from Mr.Keung Yun Yuenin February 2022 and HK$1,295,681(approximately US$166,113)were offset by theamount due from Mr.Keung Yun Yuen in May 2022.During the years ended March 31,2022 and 2021 and as at the date of this prospectus,CKHL did not declare or payany dividends and there was no transfer of assets among CKHL and its subsidiaries.If we determine to pay dividends on any of our Ordinary Shares in the future,as a holding company,we will be dependent on receipt of funds from oursubsidiaries by way of dividend payments.CKHL is permitted under the laws ofCayman Islands and its memorandum and articles of association(as amended from timeto time)to provide funding to its subsidiaries through loans or capitalcontributions.Chiu&Lee Partners is permitted under the laws of Hong Kong toprovide funding to CKHL through dividend distributions without restrictions on theamount of the funds distributed.We currently intend to retain all available funds and future earnings,if any,for the operation and expansion of our business and do not anticipate declaring orpaying any dividends in the foreseeable future.Any future determination related toour dividend policy will be made at the discretion of our board of directors afterconsidering our financial condition,results of operations,capital requirements,contractual requirements,business prospects and other factors the board ofdirectors deems relevant,and subject to the restrictions contained in any futurefinancing instruments.There are no statutory prohibitions in the Cayman Islands on the granting offinancial assistance by a company to another person for the purchase of,orsubscription for,its own,its holding companys or a subsidiarys shares.Therefore,a company may provide financial assistance provided the directors of thecompany,when proposing to grant such financial assistance,discharge their dutiesof care and act in good faith,for a proper purpose and in the interests of thecompany.Such assistance should be on an arms-length basis.Subject to theCompanies Act and our Memorandum and Articles of Association,our Company ingeneral meeting may declare dividends in any currency to be paid to the members butno dividend shall be declared in excess of the amount recommended by our board ofdirectors.Subject to a solvency test,as prescribed in the Companies Act,and theprovisions,if any,of the companys memorandum and articles of association,acompany may pay dividends and distributions out of its share premium account.Inaddition,based upon English case law that is likely to be persuasive in the CaymanIslands,dividends may be paid out of profits.The Cayman Islands does not impose awithholding tax on payments of dividends to shareholders in the Cayman Islands.3Table of ContentsUnder Hong Kong law,dividends could only be paid out of distributable profits(that is,accumulated realized profits less accumulated realized losses)or otherdistributable reserves,as permitted under Hong Kong law.Dividends cannot be paidout of share capital.There are no restrictions or limitation under the laws ofHong Kong imposed on the conversion of HK dollar into foreign currencies and theremittance of currencies out of Hong Kong,nor there is any restriction on foreignexchange to transfer cash between CKHL and its subsidiaries,across borders and toU.S.investors,nor there is any restrictions and limitations to distributeearnings from our business and subsidiaries,to CKHL and U.S.investors and amountsowed.Under the current practice of the Inland Revenue Department of Hong Kong,notax is payable in Hong Kong in respect to dividends paid by us.See“Dividend Policy”and“Risk Factors We rely on dividends and otherdistributions on equity paid by our subsidiaries to fund any cash and financingrequirements we may have,and any limitation on the ability of our subsidiaries tomake payments to us could have a material adverse effect on our ability to conductour business,”and Consolidated Statements of Change in Shareholders Equity inthe audited financial statements contained in this prospectus for more information.Enforceability of Civil LiabilitiesWe are incorporated under the laws of the Cayman Islands as an exempted companywith limited liability.Substantially all of our assets are located outside theUnited States.In addition,all of our directors and officers are nationals orresidents of jurisdictions other than the United States and all or a substantialportion of their assets are located outside the United States.As a result,it maybe difficult for investors to effect service of process within the United Statesupon us or these persons or to enforce judgments obtained in U.S.courts against usor them,including judgments predicated upon the civil liability provisions of thesecurities laws of the United States or any state in the United States.It may alsobe difficult for you to enforce judgments obtained in U.S.courts based on thecivil liability provisions of the U.S.federal securities laws against us and ourofficers and directors.We have appointed Cogency Global Inc.as our agent upon whom process may beserved in any action brought against us under the securities laws of the UnitedStates.Appleby,our counsel as to the laws of the Cayman Islands has advised us thatthere is uncertainty as to whether the courts of the Cayman Islands would(i)recognize or enforce judgments of U.S.courts obtained against us or our directorsor officers predicated upon the civil liability provisions of the securities lawsof the United States or any state in the United States,or(ii)entertain originalactions brought in the Cayman Islands against us or our directors or officerspredicated upon the securities laws of the United States or any state in the UnitedStates.Appleby has informed us that any final and conclusive judgment for a definitesum(not being a sum payable in respect of taxes or other charges of a like naturenor a fine or other penalty)and/or certain non-monetary judgments rendered in anyaction or proceedings brought against our Company in a foreign court(other thancertain judgments of a superior court of certain states of the Commonwealth ofAustralia)will be recognized as a valid judgment by the courts of the CaymanIslands without re-examination of the merits of the case.On general principles,wewould expect such proceedings to be successful provided that the court which gavethe judgment was competent to hear the action in accordance with privateinternational law principles as applied in the Cayman Islands and the judgment isnot contrary to public policy in the Cayman Islands,has not been obtained by fraudor in proceedings contrary to natural justice.Substantially all of our assets are located outside the United States.Inaddition,a majority of our directors and officers are nationals or residents ofjurisdictions other than the United States and all or a substantial portion oftheir assets are located outside the United States.As a result,it may bedifficult for investors to effect service of process within the United States uponus or these persons.Name Position Nationality ResidenceMr.Keung Yun Yuen Chairman of the board Chinese Hong KongMr.Chan Lee Chuen Director and Chief ExecutiveOfficer Chinese Hong KongMs.Choi Hiu Ying Chief Financial Officer Chinese Hong KongMr.ThirupathiNachiappan Independent Director Appointee Indian Hong KongMr.Wong Heung Ming Independent Director Appointee Chinese Hong KongDr.Liu Yuk Shing Independent Director Appointee Chinese Hong KongMr.Ng Wai Leung Quality Surveyor Manager Chinese Hong Kong4Table of ContentsCFN Lawyers,our counsel as to the laws of Hong Kong,has advised us that thereis uncertainty as to whether the courts of Hong Kong would(i)recognize or enforcejudgments of U.S.courts obtained against us or our directors or officerspredicated upon the civil liability provisions of the securities laws of the UnitedStates or any state in the United States,or(ii)entertain original actionsbrought in Hong Kong against us or our directors or officers predicated upon thesecurities laws of the United States or any state in the United States.A judgment of a court in the United States predicated upon U.S.federal orstate securities laws may be enforced in Hong Kong at common law by bringing anaction in a Hong Kong court on that judgment for the amount due thereunder,andthen seeking summary judgment on the strength of the foreign judgment,providedthat the foreign judgment,among other things,is(1)for a debt or a definite sumof money(not being taxes or similar charges to a foreign government taxingauthority or a fine or other penalty),and(2)final and conclusive on the meritsof the claim,but not otherwise.Such a judgment may not,in any event,be soenforced in Hong Kong if(a)it was obtained by fraud,(b)the proceedings in whichthe judgment was obtained were opposed to natural justice,(c)its enforcement orrecognition would be contrary to the public policy of Hong Kong,(d)the court ofthe United States was not jurisdictionally competent,or(e)the judgment was inconflict with a prior Hong Kong judgment.Hong Kong has no arrangement for the reciprocal enforcement of judgments withthe United States.As a result,there is uncertainty as to the enforceability inHong Kong,in original actions or in actions for enforcement,of judgments of U.S.courts of civil liabilities predicated solely upon the federal securities laws ofthe United States or the securities laws of any state or territory within theUnited States.Summary of Key RisksOur business is subject to a number of risks,including risks that may preventus from achieving our business objectives or may materially and adversely affectour business,financial condition,results of operations,cash flows,and prospectsthat you should consider before making a decision to invest in our Ordinary Shares.These risks are discussed more fully in“Risk Factors.”Risks Relating to Doing Business in Hong Kong Our key operations are in Hong Kong,a Special Administrative Region ofthe PRC.According to the long-arm provisions under the current PRC lawsand regulations,the PRC government may exercise significant oversight anddiscretion over the conduct of our business and may intervene in orinfluence our operations at any time,which could result in a materialchange in our operations and/or the value of our Ordinary Shares.The PRCgovernment may intervene or impose restrictions on our ability to movemoney out of Hong Kong to distribute earnings and pay dividends or toreinvest in our business outside of Hong Kong.Changes in the policies,regulations,rules,and the enforcement of laws of the PRC government mayalso be quick with little advance notice and our assertions and beliefs ofthe risk imposed by the PRC legal and regulatory system cannot be certain.See“Risk Factors Risks Relating to Doing Business in Hong Kong Ourkey operations are in Hong Kong,a Special Administrative Region of thePRC.According to the long-arm provisions under the current PRC laws andregulations,the PRC government may exercise significant oversight anddiscretion over the conduct of our business and may intervene in orinfluence our operations at any time,which could result in a materialchange in our operations and/or the value of our Ordinary Shares.Changesin the policies,regulations,rules,and the enforcement of laws of thePRC government may also be quick with little advance notice and ourassertions and beliefs of the risk imposed by the PRC legal and regulatorysystem cannot be certain”on page 22 of this prospectus.There are uncertainties regarding the interpretation and enforcement ofPRC and Hong Kong laws,rules,and regulations.See“Risk Factors Risks Relating to Doing Business in Hong Kong There are uncertaintiesregarding the interpretation and enforcement of PRC and Hong Kong laws,rules,and regulations”on page 23 of this prospectus.If the PRC government chooses to exert more oversight and control overofferings that are conducted overseas and/or foreign investment in China-based issuers,such action may significantly limit or completely hinderour ability to offer or continue to offer Ordinary Shares to investors andcause the value of our Ordinary Shares to significantly decline or beworthless.See“Risk Factors Risks Relating to Doing Business in HongKong If the PRC government chooses to exert more oversight and controlover offerings that are5Table of Contentsconducted overseas and/or foreign investment in China-based issuers,suchaction may significantly limit or completely hinder our ability to offeror continue to offer Ordinary Shares to investors and cause the value ofour Ordinary Shares to significantly decline or be worthless on page 23 ofthis prospectus.Adverse regulatory developments in China may subject us to additionalregulatory review,and additional disclosure requirements and regulatoryscrutiny to be adopted by the SEC in response to risks related to recentregulatory developments in China may impose additional compliancerequirements for companies like us with Hong Kong-based operations,all ofwhich could increase our compliance costs and subject us to additionaldisclosure requirements.See“Risk Factors Risks Relating to DoingBusiness in Hong Kong Adverse regulatory developments in China maysubject us to additional regulatory review,and additional disclosurerequirements and regulatory scrutiny to be adopted by the SEC in responseto risks related to recent regulatory developments in China may imposeadditional compliance requirements for companies like us with Hong Kong-based operations,all of which could increase our compliance costs andsubject us to additional disclosure requirements”on page 25 of thisprospectus.We may become subject to a variety of PRC laws and other obligationsregarding data security offerings that are conducted overseas and/orforeign investment in China-based issuers,and any failure to comply withapplicable laws and obligations could have a material and adverse effecton our business,financial condition and results of operations and mayhinder our ability to offer or continue to offer Ordinary Shares toinvestors and cause the value of our Ordinary Shares to significantlydecline or be worthless.See“Risk Factors Risks Relating to DoingBusiness in Hong Kong We may become subject to a variety of PRC lawsand other obligations regarding data security offerings that are conductedoverseas and/or foreign investment in China-based issuers,and any failureto comply with applicable laws and obligations could have a material andadverse effect on our business,financial condition and results ofoperations and may hinder our ability to offer or continue to offerOrdinary Shares to investors and cause the value of our Ordinary Shares tosignificantly decline or be worthless”on page 25 of this prospectus.Although the audit report included in this prospectus is prepared byU.S.auditors who are currently inspected by the PCAOB,there is noguarantee that future audit reports will be issued by auditors inspectedby the PCAOB,and,as such,in the future,investors may be deprived ofthe benefits of such inspection.Furthermore,trading in our OrdinaryShares may be prohibited under the HFCA Act if the SEC subsequentlydetermines our audit work is performed by auditors that the PCAOB isunable to inspect or investigate completely,and as a result,U.S.national securities exchanges,such as the Nasdaq,may determine todelist our securities.Furthermore,on December 29,2022 the AcceleratingHolding Foreign Companies Accountable Act was enacted,which amended theHFCA Act by requiring the SEC to prohibit an issuers securities fromtrading on any U.S.stock exchanges if its auditor is not subject to PCAOBinspections for two consecutive years instead of three,and thus,reducedthe time before our Ordinary Shares may be prohibited from trading ordelisted.See“Risk Factors Risks Relating to Doing Business in HongKong Although the audit report included in this prospectus is preparedby U.S.auditors who are currently inspected by the PCAOB,there is noguarantee that future audit reports will be issued by auditors inspectedby the PCAOB,and,as such,in the future,investors may be deprived ofthe benefits of such inspection.Furthermore,trading in our OrdinaryShares may be prohibited under the HFCA Act if the SEC subsequentlydetermines our audit work is performed by auditors that the PCAOB isunable to inspect or investigate completely,and as a result,U.S.national securities exchanges,such as the Nasdaq,may determine to delistour securities.Furthermore,on December 29,2022 the Accelerating HoldingForeign Companies Accountable Act was enacted,which amended the HFCA Actby requiring the SEC to prohibit an issuers securities from trading onany U.S.stock exchanges if its auditor is not subject to PCAOBinspections for two consecutive years instead of three,and thus,reducedthe time before our Ordinary Shares may be prohibited from trading ordelisted”on page 27 of this prospectus.The recent joint statement by the SEC,proposed rule changes submitted byNasdaq,and an act passed by the U.S.Senate and the U.S.House ofRepresentatives all call for additional and more stringent criteria to beapplied to emerging market companies.These developments could adduncertainties to our offering,business operations,share price,andreputation.See“Risk Factors Risks Relating to Doing Business6Table of Contentsin Hong Kong The recent joint statement by the SEC,proposed rulechanges submitted by Nasdaq,and an act passed by the U.S.Senate and theU.S.House of Representatives all call for additional and more stringentcriteria to be applied to emerging market companies.These developmentscould add uncertainties to our offering,business operations,share price,and reputation”on page 29 of this prospectus.The enactment of Law of the PRC on Safeguarding National Security in theHong Kong Special Administrative Region could impact our Hong Kongsubsidiary.See“Risk Factors Risks Relating to Doing Business in HongKong The enactment of Law of the PRC on Safeguarding National Securityin the Hong Kong Special Administrative Region could impact our Hong Kongsubsidiary”on page 30 of this prospectus.If we become subject to the recent scrutiny,criticism,and negativepublicity involving U.S.-listed China-based companies,we may have toexpend significant resources to investigate and/or defend the matter,which could harm our business operations,this offering,and ourreputation and could result in a loss of your investment in our OrdinaryShares,in particular if such matter cannot be addressed and resolvedfavorably.See“Risk Factors Risks Relating to Doing Business in HongKong If we become subject to the recent scrutiny,criticism,andnegative publicity involving U.S.-listed China-based companies,we mayhave to expend significant resources to investigate and/or defend thematter,which could harm our business operations,this offering,and ourreputation and could result in a loss of your investment in our OrdinaryShares,in particular if such matter cannot be addressed and resolvedfavorably”on page 30 of this prospectus.A downturn in Hong Kong,mainland China,or global economy,or a change ineconomic and political policies of China,could materially and adverselyaffect our business and financial condition.See“Risk Factors RisksRelating to Doing Business in Hong Kong A downturn in the Hong Kong,China,or global economy,or a change in economic and political policiesof China,could materially and adversely affect our business and financialcondition”on page 30 of this prospectus.Because our business is conducted in Hong Kong dollars and the price ofour Ordinary Shares is quoted in U.S.dollars,changes in currencyconversion rates may affect the value of your investments.See“RiskFactors Risks Relating to Doing Business in Hong Kong Because ourbusiness is conducted in Hong Kong dollars and the price of our OrdinaryShares is quoted in U.S.dollars,changes in currency conversion rates mayaffect the value of your investments”on page 31 of this prospectus.There are political risks associated with conducting business inHong Kong.See“Risk Factors Risks Relating to Doing Business in HongKong There are political risks associated with conducting business inHong Kong”on page 31 of this prospectus.The Hong Kong legal system embodies uncertainties that could limit theavailability of legal protections.See“Risk Factors Risks Relating toDoing Business in Hong Kong The Hong Kong legal system embodiesuncertainties that could limit the availability of legal protections”onpage 32 of this prospectus.You may experience difficulties in effecting service of legal process,enforcing foreign judgments or bringing actions in Hong Kong against us orour management named in this prospectus based on Hong Kong laws.See“Risk Factors Risks Relating to Doing Business in Hong Kong You mayexperience difficulties in effecting service of legal process,enforcingforeign judgments or bringing actions in Hong Kong against us or ourmanagement named in this prospectus based on Hong Kong laws”on page 32of this prospectus.Changes in international trade policies,trade disputes,barriers totrade,or the emergence of a trade war may dampen growth in Hong Kong,where the majority of our clients reside.See“Risk Factors RisksRelating to Doing Business in Hong Kong Changes in international tradepolicies,trade disputes,barriers to trade,or the emergence of a tradewar may dampen growth in Hong Kong,where the majority of our clientsreside”on page 32 of this prospectus.7Table of ContentsRisks Related to Our Business and Industry If we are unable to accurately estimate the overall risks,revenues,orcosts on our projects,we may incur contract losses or achieve lower thananticipated profits.See“Risk Factors Risks Related to Our Businessand Industry If we are unable to accurately estimate the overall risks,revenues,or costs on our projects,we may incur contract losses orachieve lower than anticipated profits”on page 33 of this prospectus.We may be unable to obtain or maintain sufficient bonding capacity,whichcould materially adversely affect our business.See“Risk Factors Risks Related to Our Business and Industry We may be unable to obtainor maintain sufficient bonding capacity,which could materially adverselyaffect our business”on page 33 of this prospectus.Design-build contracts subject us to the risk of design errors andomissions.See“Risk Factors Risks Related to Our Business andIndustry Design-build contracts subject us to the risk of design errorsand omissions”on page 34 of this prospectus.We depend on third parties for equipment and supplies essential to operateour business.See“Risk Factors Risks Related to Our Business andIndustry We depend on third parties for equipment and suppliesessential to operate our business”on page 34 of this prospectus.The construction services industry is highly schedule driven,and ourfailure to meet the schedule requirements of our contracts could adverselyaffect our reputation and/or expose us to financial liability.See“RiskFactors Risks Related to Our Business and Industry The constructionservices industry is highly schedule driven,and our failure to meet theschedule requirements of our contracts could adversely affect ourreputation and/or expose us to financial liability”on page 34 of thisprospectus.Failure to maintain safe work sites could result in significant losses,which could materially affect our business and reputation.See“RiskFactors Risks Related to Our Business and Industry Failure tomaintain safe work sites could result in significant losses,which couldmaterially affect our business and reputation”on page 34 of thisprospectus.Our revenue mainly relies on successful tenders or acceptance of ourquotations for construction projects which are non-recurring in nature andany failure in securing projects from our existing customers and/or newcustomers in the future would affect our business operation and financialresults.See“Risk Factors Risks Related to Our Business and Industry Our revenue mainly relies on successful tenders or acceptance of ourquotations for construction projects which are non-recurring in nature andany failure in securing projects from our existing customers and/or newcustomers in the future would affect our business operation and financialresults”on page 34 of this prospectus.A significant portion of our revenue was generated from contracts awardedby a limited number of customers and any significant decrease in thenumber of projects with our major customers and any significant decreasein the number of projects with our major customers may materially andadversely affect our financial condition and operating results.See“RiskFactors Risks Related to Our Business and Industry A significantportion of our revenue was generated from contracts awarded by a limitednumber of customers and any significant decrease in the number of projectswith our major customers and any significant decrease in the number ofprojects with our major customers may materially and adversely affect ourfinancial condition and operating results”on page 34 of this prospectus.We may not be able to bill and receive the full amount of gross amountsdue from customers for contract work and our revenue may fluctuate due tovariation orders.See“Risk Factors Risks Related to Our Business andIndustry We may not be able to bill and receive the full amount ofgross amounts due from customers for contract work and our revenue mayfluctuate due to variation orders”on page 35 of this prospectus.We rely on our subcontractors to help complete our projects and to supplythe machinery required.See“Risk Factors Risks Related to OurBusiness and Industry We rely on our subcontractors to help completeour projects and to supply the machinery required”on page 35 of thisprospectus.8Table of Contents As we from time to time engage subcontractors in our work,we may bearresponsibilities for any non-performance,delayed performance,sub-standard performance,or non-compliance of our subcontractors.See“RiskFactors Risks Related to Our Business and Industry As we from timeto time engage subcontractors in our work,we may bear responsibilitiesfor any non-performance,delayed performance,sub-standard performance,ornon-compliance of our subcontractors”on page 36 of this prospectus.There is no guarantee that safety measures and procedures implemented atour construction sites could prevent the occurrence of industrialaccidents of all kinds,which in turn might lead to claims in respect toemployees compensation,personal injuries,fatal accidents,and/orproperty damages against us.See“Risk Factors Risks Related to OurBusiness and Industry There is no guarantee that safety measures andprocedures implemented at our construction sites could prevent theoccurrence of industrial accidents of all kinds,which in turn might leadto claims in respect to employees compensation,personal injuries,fatalaccidents,and/or property damages against us”on page 36 of thisprospectus.We determine the price of our quotation or tender based on the estimatedtime and costs to be involved in a project and the actual time and costsincurred may deviate from our estimate due to unexpected circumstances,thereby leading to cost overruns and adversely affecting our operationsand financial results.See“Risk Factors Risks Related to Our Businessand Industry We determine the price of our quotation or tender based onthe estimated time and costs to be involved in a project and the actualtime and costs incurred may deviate from our estimate due to unexpectedcircumstances,thereby leading to cost overruns and adversely affectingour operations and financial results”on page 36 of this prospectus.The geological conditions of construction sites are difficult toanticipate and may result in higher project expenses.See“Risk Factors Risks Related to Our Business and Industry The geological conditionsof construction sites are difficult to anticipate and may result in higherproject expenses”on page 37 of this prospectus.There is no assurance that we can maintain the qualifications,licenses,and registrations for the operation of our construction business.See“Risk Factors Risks Related to Our Business and Industry There is noassurance that we can maintain the qualifications,licenses,andregistrations for the operation of our construction business”on page 37of this prospectus.We rely on the service of our authorized signatory(ies)(“AuthorizedSignatory”)and Technical Director for our registrations maintained withthe Buildings Department of Hong Kong.See“Risk Factors Risks Relatedto Our Business and Industry We rely on the service of our authorizedsignatory(ies)(“Authorized Signatory”)and Technical Director for ourregistrations maintained with the Buildings Department of Hong Kong”onpage 37 of this prospectus.Cash inflows and outflows in connection with construction projects may beirregular thus may affect our net cash flow position.See“Risk Factors Risks Related to Our Business and Industry Cash inflows and outflowsin connection with construction projects may be irregular thus may affectour net cash flow position”on page 37 of this prospectus.We may be liable for damage caused to underground service utilities andinfrastructures and/or foundation of aged building adjacent to theconstruction sites where we carry out our construction projects.See“Risk Factors Risks Related to Our Business and Industry We may beliable for damage caused to underground service utilities andinfrastructures and/or foundation of aged building adjacent to theconstruction sites where we carry out our construction projects”on page38 of this prospectus.Claims in connection with employees compensation or personal injuriesmay arise and affect our reputation and operations.See“Risk Factors Risks Related to Our Business and Industry Claims in connection withemployees compensation or personal injuries may arise and affect ourreputation and operations”on page 38 of this prospectus.We face keen competition from other players in the market.See“RiskFactors Risks Related to Our Business and Industry We face keencompetition from other players in the market”on page 38 of thisprospectus.9Table of Contents Any deterioration in the prevailing market conditions in the constructionindustry may adversely affect our performance and financial condition.See“Risk Factors Risks Related to Our Business and Industry Anydeterioration in the prevailing market conditions in the constructionindustry may adversely affect our performance and financial condition”onpage 38 of this prospectus.We are dependent on our key executives,management team and professionalstaff.See“Risk Factors Risks Related to Our Business and Industry We are dependent on our key executives,management team and professionalstaff”on page 39 of this prospectus.We may be unable to obtain sufficient funding on terms acceptable to us,or at all.See“Risk Factors Risks Related to Our Business andIndustry We may be unable to obtain sufficient funding on termsacceptable to us,or at all”on page 39 of this prospectus.Our insurance coverage may be inadequate to protect us from potentiallosses.See“Risk Factors Risks Related to Our Business and Industry Our insurance coverage may be inadequate to protect us from potentiallosses”on page 39 of this prospectus.We may be subject to litigation,arbitration,or other legal proceedingrisk.See“Risk Factors Risks Related to Our Business and Industry We may be subject to litigation,arbitration,or other legal proceedingrisk”on page 39 of this prospectus.We rely on our customer and subcontractor for the provision of machineryand equipment at construction sites.See“Risk Factors Risks Relatedto Our Business and Industry We rely on our customer and subcontractorfor the provision of machinery and equipment at construction sites”onpage 39 of this prospectus.We rely on a stable workforce to carry out our construction projects.Ifwe or our subcontractors experience any shortage of labor,industrialactions,strikes,or material increase in labor costs,our operations andfinancial results would be adversely affected.See“Risk Factors RisksRelated to Our Business and Industry We rely on a stable workforce tocarry out our construction projects.If we or our subcontractorsexperience any shortage of labor,industrial actions,strikes,or materialincrease in labor costs,our operations and financial results would beadversely affected”on page 40 of this prospectus.We may be unable to successfully implement our future business plans andobjectives.See“Risk Factors Risks Related to Our Business andIndustry We may be unable to successfully implement our future businessplans and objectives”on page 40 of this prospectus.A sustained outbreak of the COVID-19 pandemic could have a materialadverse impact on our business,operating results,and financialcondition.See“Risk Factors Risks Related to Our Business andIndustry A sustained outbreak of the COVID-19 pandemic could have amaterial adverse impact on our business,operating results,and financialcondition”on page 40 of this prospectus.A severe or prolonged downturn in the global economy could materially andadversely affect our business and results of operations.See“RiskFactors Risks Related to Our Business and Industry A severe orprolonged downturn in the global economy could materially and adverselyaffect our business and results of operations”on page 41 of thisprospectus.Risks Related to Our Ordinary Shares There has been no public market for our Ordinary Shares prior to thisoffering;if an active trading market does not develop you may not be ableto resell our Shares at any reasonable price.See“Risk Factors RisksRelated to Our Ordinary Shares There has been no public market for ourOrdinary Shares prior to this offering;if an active trading market doesnot develop you may not be able to resell our Shares at any reasonableprice”on page 42 of this prospectus.The trading price of our Ordinary Shares may be volatile,which couldresult in substantial losses to you.See“Risk Factors Risks Relatedto Our Ordinary Shares The trading price of our Ordinary Shares may bevolatile,which could result in substantial losses to you”on page 42 ofthis prospectus.10Table of Contents We rely on dividends and other distributions on equity paid by oursubsidiaries to fund our cash and financing requirements we may have,andany limitation on the ability of our subsidiaries to make payments to uscould have a material adverse effect on our ability to conduct ourbusiness.See“Risk Factors Risks Related to Our Ordinary Shares Werely on dividends and other distributions on equity paid by oursubsidiaries to fund our cash and financing requirements we may have,andany limitation on the ability of our subsidiaries to make payments to uscould have a material adverse effect on our ability to conduct ourbusiness”on page 43 of this prospectus.Our lack of effective internal controls over financial reporting mayaffect our ability to accurately report our financial results or preventfraud,which may affect the market for and the price of our OrdinaryShares.See“Risk Factors Risks Related to Our Ordinary Shares Ourlack of effective internal controls over financial reporting may affectour ability to accurately report our financial results or prevent fraud,which may affect the market for and the price of our Ordinary Shares”onpage 43 of this prospectus.Our Ordinary Shares are expected to initially trade under$5.00 per shareand thus would be known as a“penny stock.”Trading in penny stocks hascertain restrictions and these restrictions could negatively affect theprice and liquidity of our Ordinary Shares.See“Risk Factors RisksRelated to Our Ordinary Shares Our Ordinary Shares are expected toinitially trade under$5.00 per share and thus would be known as a“pennystock.”Trading in penny stocks has certain restrictions and theserestrictions could negatively affect the price and liquidity of ourOrdinary Shares”on page 44 of this prospectus.If we fail to meet applicable listing requirements,Nasdaq may delist ourOrdinary Shares from trading,in which case the liquidity and market priceof our Ordinary Shares could decline.See“Risk Factors Risks Relatedto Our Ordinary Shares If we fail to meet applicable listingrequirements,Nasdaq may delist our Ordinary Shares from trading,in whichcase the liquidity and market price of our Ordinary Shares could decline”on page 44 of this prospectus.The market price of our Ordinary Shares could be negatively affected bysales of substantial amounts of our Ordinary Shares in the public markets.See“Risk Factors Risks Related to Our Ordinary Shares The marketprice of our Ordinary Shares could be negatively affected by sales ofsubstantial amounts of our Ordinary Shares in the public markets”on page of this prospectus.If you purchase our Ordinary Shares in this offering,you will incurimmediate and substantial dilution in the book value of your Shares.See“Risk Factors Risks Related to Our Ordinary Shares If you purchaseour Ordinary Shares in this offering,you will incur immediate andsubstantial dilution in the book value of your Shares”on page 44 of thisprospectus.If a limited number of participants in this offering purchase asignificant percentage of the offering,the effective public float may besmaller than anticipated and the price of our Ordinary Shares may be morevolatile than it otherwise would be.See“Risk Factors Risks Relatedto Our Ordinary Shares If a limited number of participants in thisoffering purchase a significant percentage of the offering,the effectivepublic float may be smaller than anticipated and the price of our OrdinaryShares may be more volatile than it otherwise would be”on page 45 ofthis prospectus.Our directors,officers,and principal shareholders have significantvoting power and may take actions that may not be in the best interests ofour other shareholders.See“Risk Factors Risks Related to OurOrdinary Shares Our directors,officers,and principal shareholdershave significant voting power and may take actions that may not be in thebest interests of our other shareholders”on page 45 of this prospectus.Our board of directors may decline to register the transfer of OrdinaryShares in certain circumstances.See“Risk Factors Risks Related toOur Ordinary Shares Our board of directors may decline to register thetransfer of Ordinary Shares in certain circumstances”on page 45 of thisprospectus.11Table of Contents Because the amount,timing,and whether or not we distribute dividends atall is entirely at the discretion of our board of directors,you must relyon price appreciation of our Ordinary Shares for return on yourinvestment.See“Risk Factors Risks Related to Our Ordinary Shares Because the amount,timing,and whether or not we distribute dividends atall is entirely at the discretion of our board of directors,you must relyon price appreciation of our Ordinary Shares for return on yourinvestment”on page 46 of this prospectus.Our management has broad discretion to determine how to use the fundsraised in the offering and may use them in ways that may not enhance ourresults of operations or the price of our Ordinary Shares.See“RiskFactors Risks Related to Our Ordinary Shares Our management hasbroad discretion to determine how to use the funds raised in the offeringand may use them in ways that may not enhance our results of operations orthe price of our Ordinary Shares”on page 46 of this prospectus.Our disclosure controls and procedures may not prevent or detect allerrors or acts of fraud.See“Risk Factors Risks Related to OurOrdinary Shares Our disclosure controls and procedures may not preventor detect all errors or acts of fraud”on page 46 of this prospectus.We do not intend to pay dividends for the foreseeable future.See“RiskFactors Risks Related to Our Ordinary Shares We do not intend to paydividends for the foreseeable future”on page 46 of this prospectus.Securities analysts may not publish favorable research or reports aboutour business or may publish no information at all,which could cause ourOrdinary Share price or trading volume to decline.See“Risk Factors Risks Related to Our Ordinary Shares Securities analysts may notpublish favorable research or reports about our business or may publish noinformation at all,which could cause our Ordinary Share price or tradingvolume to decline”on page 47 of this prospectus.Certain judgments obtained against us by our shareholders may not beenforceable.See“Risk Factors Risks Related to Our Ordinary Shares Certain judgments obtained against us by our shareholders may not beenforceable”on page 47 of this prospectus.You may have more difficulties protecting your interests than you would asa shareholder of a U.S.corporation.See“Risk Factors Risks Relatedto Our Ordinary Shares You may have more difficulties protecting yourinterests than you would as a shareholder of a U.S.corporation”on page48 of this prospectus.Cayman Islands economic substance requirements may have an effect on ourbusiness and operations.See“Risk Factors Risks Related to OurOrdinary Shares Cayman Islands economic substance requirements may havean effect on our business and operations”on page 48 of this prospectus.We are a foreign private issuer within the meaning of the rules under theExchange Act,and,as such,we are exempt from certain provisionsapplicable to U.S.domestic public companies.See“Risk Factors RisksRelated to Our Ordinary Shares We are a foreign private issuer withinthe meaning of the rules under the Exchange Act,and,as such,we areexempt from certain provisions applicable to U.S.domestic publiccompanies”on page 48 of this prospectus.As a foreign private issuer,we are permitted to adopt certain homecountry practices in relation to corporate governance matters that differsignificantly from Nasdaq corporate governance listing standards.Thesepractices may afford less protection to shareholders than they would enjoyif we complied fully with Nasdaq corporate governance listing standards.See“Risk Factors Risks Related to Our Ordinary Shares As a foreignprivate issuer,we are permitted to adopt certain home country practicesin relation to corporate governance matters that differ significantly fromNasdaq corporate governance listing standards.These practices may affordless protection to shareholders than they would enjoy if we complied fullywith Nasdaq corporate governance listing standards”on page 49 of thisprospectus.12Table of Contents We may lose our foreign private issuer status in the future,which couldresult in significant additional costs and expenses.See“Risk Factors Risks Related to Our Ordinary Shares We may lose our foreign privateissuer status in the future,which could result in significant additionalcosts and expenses”on page 49 of this prospectus.There can be no assurance that we will not be a passive foreign investmentcompany(“PFIC”),for U.S.federal income tax purposes for any taxableyear,which could result in adverse U.S.federal income tax consequencesto U.S.holders of our Ordinary Shares.See“Risk Factors RisksRelated to Our Ordinary Shares There can be no assurance that we willnot be a passive foreign investment company(“PFIC”),for U.S.federalincome tax purposes for any taxable year,which could result in adverseU.S.federal income tax consequences to U.S.holders of our OrdinaryShares”on page 49 of this prospectus.We are an emerging growth company within the meaning of the Securities Actand may take advantage of certain reduced reporting requirements.See“Risk Factors Risks Related to Our Ordinary Shares We are anemerging growth company within the meaning of the Securities Act and maytake advantage of certain reduced reporting requirements”on page 50 ofthis prospectus.We will incur increased costs as a result of being a public company,particularly after we cease to qualify as an“emerging growth company.”See“Risk Factors Risks Related to Our Ordinary Shares We will incurincreased costs as a result of being a public company,particularly afterwe cease to qualify as an“emerging growth company”on page 50 of thisprospectus.As a“controlled company”under the rules of the Nasdaq Capital Market,we may choose to exempt our Company from certain corporate governancerequirements that could have an adverse effect on our public shareholders.See“Risk Factors Risks Related to Our Ordinary Shares As a“controlled company”under the rules of the Nasdaq Capital Market,wemay choose to exempt our Company from certain corporate governancerequirements that could have an adverse effect on our publicshareholders”on page 50 of this prospectus.Recent Regulatory Developments in the PRCWe are aware that,recently,the PRC government initiated a series ofregulatory actions and statements to regulate business operations in certain areasin China with little advance notice,including cracking down on illegal activitiesin the securities market,enhancing supervision over China-based companies listedoverseas using variable interest entity(“VIE”)structure,adopting new measuresto extend the scope of cybersecurity reviews,and expanding the efforts in anti-monopoly enforcement.For example,on July 6,2021,the General Office of theCommunist Party of China Central Committee and the General Office of the StateCouncil jointly issued a document to crack down on illegal activities in thesecurities market and promote the high-quality development of the capital market,which,among other things,requires the relevant governmental authorities tostrengthen cross-border oversight of law enforcement and judicial cooperation,toenhance supervision over China-based companies listed overseas,and to establishand improve the system of extraterritorial application of the PRC securities laws.Also,on July 10,2021,the Cyberspace Administration of China(the“CAC”)issueda revised draft of the Measures for Cybersecurity Review for public comments(the“Revised Draft”),which required that,in addition to“operators of criticalinformation infrastructure,”any“data processor”controlling personalinformation of no less than one million users that seeks to list in a foreign stockexchange should also be subject to cybersecurity review,and it further elaboratedthe factors to be considered when assessing the national security risks of therelevant activities.On December 24,2021,the CSRC released the Administrative Provisions of theState Council Regarding the Overseas Issuance and Listing of Securities by DomesticEnterprises(Draft for Comments)(the“Draft Administrative Provisions”)and theMeasures for the Overseas Issuance of Securities and Listing Record-Filings byDomestic Enterprises(Draft for Comments)(together with the Draft AdministrativeProvisions,the“Draft Rules Regarding Overseas Listing”).The Draft RulesRegarding Overseas Listing lays out the filing regulation arrangement for bothdirect and indirect overseas listing and clarifies the determination criteria forindirect overseas listing in overseas markets.Among other things,if a domesticenterprise intends to indirectly offer and list securities in an overseas market,the record-filing obligation is with a major operating entity incorporated in thePRC,and such filing obligation shall be completed within three working days afterthe overseas listing application is submitted.The required filing materials for anIPO and listing13Table of Contentsshall include,but not be limited to:regulatory opinions,record filing,approval,and other documents issued by competent regulatory authorities of relevantindustries(if applicable),and security assessment opinions issued by relevantregulatory authorities(if applicable).On December 27,2021,the NationalDevelopment and Reform Commission(“NDRC”)and the Ministry of Commerce jointlyissued the Special Administrative Measures for Entry of Foreign Investment(Negative List)(2021 Version)(“Negative List”),which became effective andreplaced the previous version.Pursuant to the Negative List,if a PRC company,which engages in any business where foreign investment is prohibited under theNegative List,or prohibited businesses seeks an overseas offering or listing,itmust obtain the approval from competent governmental authorities.Based on a set ofQ&A published on the NDRCs official website,a NDRC official indicated that aftera PRC company submits its application for overseas listing to the CSRC and wherematters relating to prohibited businesses under the Negative List are implicated,the CSRC will consult the regulatory authorities having jurisdiction over therelevant industries and fields.Because the Draft Rules Regarding Overseas Listingare currently in draft form and given the novelty of the Negative List,thereremain substantial uncertainties as to whether and what requirements,includingfiling requirements,will be imposed on a PRC company with respect to its listingand offerings overseas as well as with the interpretation and implementation ofexisting and future regulations in this regard.On February 17,2023,the CSRC issued the Trial Administrative Measures ofOverseas Securities Offering and Listing by Domestic Enterprises,or the TrialMeasures,which will become effective on March 31,2023.On the same date of theissuance of the Trial Measures,the CSRC circulated No.1 to No.5 SupportingGuidance Rules,the Notes on the Trial Measures,the Notice on AdministrationArrangements for the Filing of Overseas Listings by Domestic Enterprises and therelevant CSRC Answers to Reporter Questions on the official website of the CSRC,orcollectively,the Guidance Rules and Notice.The Trial Measures,together with theGuidance Rules and Notice,reiterate the basic supervision principles as reflectedin the Draft Overseas Listing Regulations by providing substantially the samerequirements for filings of overseas offering and listing by domestic companies,yet made the following updates compared to the Draft Overseas Listing Regulations:(a)further clarification of the circumstances prohibiting overseas issuance andlisting;(b)further clarification of the standard of indirect overseas listingunder the principle of substance over form,and(c)adding more details of filingprocedures and requirements by setting different filing requirements for differenttypes of overseas offering and listing.Under the Trial Measures and the GuidanceRules and Notice,domestic companies conducting overseas securities offering andlisting activities,either in direct or indirect form,shall complete filingprocedures with the CSRC pursuant to the requirements of the Trial Measures withinthree working days following its submission of initial public offerings or listingapplication.The companies that have already been listed on overseas stockexchanges or have obtained the approval from overseas supervision administrationsor stock exchanges for its offering and listing and will complete their overseasoffering and listing prior to September 30,2023 are not required to make immediatefilings for its listing yet need to make filings for subsequent offerings inaccordance with the Trial Measures.The companies that have already submitted anapplication for an initial public offering to overseas supervision administrationsprior to the effective date of the Trial Measures but have not yet obtained theapproval from overseas supervision administrations or stock exchanges for theoffering and listing may arrange for the filing within a reasonable time period andshould complete the filing procedure before such companies overseas issuance andlisting.On January 4,2022,the CAC,the NDRC,and several other administrationsjointly adopted and published the revised Cybersecurity Review Measures(“CRM”),which took effect on February 15,2022,and replaced the Revised Draft issued onJuly 10,2021.Pursuant to the revised CRM,if a network platform operator holdingpersonal information of over one million users seeks for“foreign”listing,itmust apply for the cybersecurity review.In addition,operators of criticalinformation infrastructure purchasing network products and services are alsoobligated to apply for the cybersecurity review for such purchasing activities.Although the CRM provides no further explanation on the extent of“networkplatform operator”and“foreign”listing,we do not believe we are obligated toapply for a cybersecurity review pursuant to the revised CRM,considering that(i)we are not in possession of or otherwise holding personal information of over onemillion users,and it is also very unlikely that we will reach such threshold inthe near future;and(ii)as of the date of this prospectus,we have not receivedany notice or determination from applicable PRC governmental authoritiesidentifying it as a critical information infrastructure operator.Our Operating Subsidiary may collect and store certain data from our clients inHong Kong,in connection with our business and operations.Given that(1)ourOperating Subsidiary is incorporated and located in Hong Kong;(2)we have nosubsidiary,VIE structure,nor any direct operations in mainland China;and(3)pursuant to the Basic Law,which is a national law of the PRC and theconstitutional document for Hong Kong,national laws of the PRC shall not beapplied in Hong Kong except for those listed in Annex III of the Basic Law(whichis confined to laws relating to defense and foreign affairs,as well as othermatters outside the autonomy of Hong Kong),and we do not currently14Table of Contentsexpect the Measures for Cybersecurity Review(2021),the PRC Personal InformationProtection Law,and the Draft Overseas Listing Regulations to have an impact on ourbusiness,operations,or this offering,as we do not believe that our OperatingSubsidiary is deemed to be an“Operator”that is required to file forcybersecurity review before listing in the United States because(i)our OperatingSubsidiary is incorporated in Hong Kong and operates in Hong Kong without anysubsidiary or VIE structure in mainland China,and each of the Measures forCybersecurity Review(2021),the PRC Personal Information Protection Law,and theDraft Overseas Listing Regulations remains unclear whether it shall be applied to acompany based in Hong Kong;(ii)as of date of this prospectus,our OperatingSubsidiary has neither collected nor stored any personal information of PRCindividuals;(iii)all of the data our Operating Subsidiary has collected is storedin servers located in Hong Kong;and(iv)as of the date of this prospectus,ourOperating Subsidiary has not been informed by any PRC governmental authority of anyrequirement that it file for a cybersecurity review or a CSRC review.Since these statements and regulatory actions are new,it is highly uncertainhow soon the legislative or administrative regulation making bodies will respond orwhat existing or new laws or regulations or detailed implementations andinterpretations will be modified or promulgated,if any.It is also highlyuncertain what the potential impact such modified or new laws and regulations willhave on CKHLs daily business operations,its ability to accept foreigninvestments,and the listing of our Ordinary Shares on a U.S.or other foreignexchange.There remains significant uncertainty in the interpretation andenforcement of relevant PRC cybersecurity laws and regulations.If the DraftOverseas Listing Regulations are adopted into law in the future and becomesapplicable to our Operating Subsidiary,if any of our Operating Subsidiary isdeemed to be an“Operator,”or if the Measures for Cybersecurity Review(2021)orthe PRC Personal Information Protection Law becomes applicable to our OperatingSubsidiary,the business operation of our Operating Subsidiary and the listing ofour Ordinary Shares in the United States could be subject to the CACscybersecurity review or CSRC Overseas Issuance and Listing review in the future.Ifthe applicable laws,regulations,or interpretations change and our OperatingSubsidiary becomes subject to the CAC or CSRC review,we cannot assure you that ourOperating Subsidiary will be able to comply with the regulatory requirements in allrespects,and our current practice of collecting and processing personalinformation may be ordered to be rectified or terminated by regulatory authorities.If our Operating Subsidiary fails to receive or maintain such permissions or if therequired approvals are denied,our Operating Subsidiary may become subject to finesand other penalties that may have a material adverse effect on our business,operations,and financial condition and may hinder our ability to offer or continueto offer Ordinary Shares to investors and cause the value of our Ordinary Shares tosignificantly decline or be worthless.Additionally,due to long-arm provisions under the current PRC laws andregulations,there remains regulatory uncertainty with respect to theimplementation and interpretation of laws in China.We are also subject to therisks of uncertainty about any future actions the PRC government or authorities inHong Kong may take in this regard.Should the PRC government choose to exercise significant oversight anddiscretion over the conduct of our business,they may intervene in or influence ouroperations.Such governmental actions:could result in a material change in our operations;could hinder our ability to continue to offer securities to investors;and may cause the value of our Ordinary Shares to significantly decline or beworthless.Permission Required from Hong Kong and PRC AuthoritiesDue to the registration requirements of the Buildings Department of Hong Kong,Chiu&Lee Partners is required to apply for the relevant registrations to conductits operation in Hong Kong and has been a registered specialist contractor in thecategories of foundation,site formation,and demolition work since 2006 andregistered general building contractor since 1999.As of the date of thisprospectus,Chiu&Lee Partners has received all requisite permissions andapprovals for the operation of our business in Hong Kong and no permission has beendenied.See“Business Major Qualifications,Licenses and Certifications”onpage 94.Chiu&Lee Partners business operation and personnel are also subject tothe relevant laws and regulations.See“Regulations Regulations Related to OurBusiness Operations in Hong Kong”on page 98.As of the date of this prospectus,Chiu&Lee Partners is not required to obtain any permission or approval fromHong Kong authorities to issue our Ordinary Shares to foreign investors.15Table of ContentsWe are also not required to obtain permissions or approvals from any PRCauthorities before listing in the United States and to issue our Ordinary Shares toforeign investors or operate our business as currently conducted,including theCSRC,the CAC,or any other governmental agency that is required to approve ouroperations.Hong Kong is a Special Administrative Region of the PRC and the basic policiesof the PRC regarding Hong Kong are reflected in the Basic Law,which serves as HongKongs constitution.The Basic Law provides Hong Kong with a high degree ofautonomy and executive,legislative and independent judicial owers,including thatof final adjudication under the principle of“one country,two systems”.The PRClaws and regulations do not currently have any material impact on our business,financial condition or results of operations.However,there is no assurance thatthere will not be any changes in the economic,political and legal environment inHong Kong in the future.In the event that(i)the PRC government expanded thecategories of industries and companies whose foreign securities offerings aresubject to review by the CSRC or the CAC and that we are required to obtain suchpermissions or approvals,(ii)we inadvertently concluded that relevant permissionsor approvals were not required or that we did not receive or maintain relevantpermissions or approvals required,or(iii)applicable laws,regulations,orinterpretations change and require us to obtain such permissions or approvals inthe future,we may face similar regulatory risks as those operated in mainlandChina,including the ability to offer securities to investors,list theirsecurities on a U.S.or other foreign exchanges,conduct their business or acceptforeign investment or sanctions by the CSRC,the CAC,or other PRC regulatoryagencies.Recent PCAOB DevelopmentsOn May 20,2020,the U.S.Senate passed the HFCA Act,which includesrequirements for the SEC to identify issuers whose audit work is performed byauditors that the PCAOB is unable to inspect or investigate completely because of arestriction imposed by a non-U.S.authority in the auditors local jurisdiction.The U.S.House of Representatives passed the HFCA Act on December 2,2020,and theHFCA Act was signed into law on December 18,2020.Pursuant to the HFCA act,oursecurities may be prohibited from trading on the Nasdaq or other U.S.stockexchanges if our auditor cannot be inspected by the PCAOB for three consecutiveyears,and this ultimately could result in our Ordinary Shares being delisted.On March 24,2021,the SEC adopted interim final rules relating to theimplementation of certain disclosure and documentation requirements of the HFCAAct.A company will be required to comply with these rules if the SEC identifies itas having a“non-inspection”year under a process to be subsequently establishedby the SEC.The SEC is assessing how to implement other requirements of the HFCAAct,including the listing and trading prohibition requirements described above.On June 22,2021,the U.S.Senate passed the Accelerating Holding ForeignCompany Act,which was signed into law on December 29,2022,reduced the number ofconsecutive non-inspection years required for triggering the prohibitions under theHFCA Act from three years to two years.On December 2,2021,the SEC issued amendments to finalize rules implementingthe submission and disclosure requirements in the HFCA Act,which took effect onJanuary 10,2022.The rules apply to registrants that the SEC identifies as havingfiled an annual report with an audit report issued by a registered publicaccounting firm that is located in a foreign jurisdiction and that PCAOB is unableto inspect or investigate completely because of a position taken by an authority inforeign jurisdictions.On December 16,2021,PCAOB issued a Determination Report,which found that thePCAOB is unable to inspect or investigate completely registered public accountingfirms headquartered in mainland China of the PRC or Hong Kong,a SpecialAdministrative Region and dependency of the PRC,because of a position taken by oneor more authorities in the PRC or Hong Kong.Our auditor,ZH CPA,LLC,the independent registered public accounting firmthat issues the audit report included elsewhere in this prospectus,as an auditorof companies that are traded publicly in the United States and a firm registeredwith the PCAOB,is subject to laws in the United States pursuant to which the PCAOBconducts regular inspections to assess our auditors compliance with theapplicable professional standards.ZH CPA,LLC is headquartered in Denver,Colorado,and can be inspected by the PCAOB.As of the date of this prospectus,ourauditor is not subject to the determinations announced by the PCAOB on December 16,2021 in mainland China or Hong Kong because of a position taken by one or moreauthorities in the PRC or Hong Kong.On August 26,2022,CSRC,the MOF,and the PCAOB signed the Protocol,governinginspections and investigations of audit firms based in China and Hong Kong.TheProtocol remains unpublished and is subject to further explanation andimplementation.Pursuant to the fact sheet with respect to the Protocol disclosedby the SEC,16Table of Contentsthe PCAOB shall have independent discretion to select any issuer audits forinspection or investigation and has the an exemption from the rule that a majorityof our board of directors must be independent directors;unfettered ability totransfer information to the SEC.On December 15,2022,the PCAOB Board determined that the PCAOB was able tosecure complete access to inspect and investigate registered public accountingfirms headquartered in mainland China and Hong Kong and voted to vacate itsprevious determinations to the contrary.However,should PRC authorities obstructor otherwise fail to facilitate the PCAOBs access in the future,the PCAOB Boardwill consider the need to issue a new determination.See“Risk Factors Risks Relating to Our Ordinary Shares Although theaudit report included in this prospectus is prepared by U.S.auditors who arecurrently inspected by the PCAOB,there is no guarantee that future audit reportswill be prepared by auditors inspected by the PCAOB and,as such,in the futureinvestors may be deprived of the benefits of such inspection.Furthermore,tradingin our securities may be prohibited under the HFCA Act if the SEC subsequentlydetermines our audit work is performed by auditor

8人已浏览 2023-03-20 273页 5星级

Talkwalker：2023年主流护肤品vs纯素护肤品消费者行为对比研究报告（英文版）（9页）.pdf

Vegan-only vs Mainstream skincareIn partnership with:ConvosphereTalkwalker&Convosphere:Vegan-only vs Mainstream skincare2Vegan-only vs Mainstream skincareThe brands shaping tomorrows skincare industry.AboutVS.2As sustainability continues to dominate vast swathes of the conversation around skincare,much attention has been drawn to the rise of vegan-only brands,the impact of this rise on the beauty market,and the blurred lines between the two.Whichever camp you are in,the cosmetics industry has seen significant change,and vegan-only brands have demonstrably made inroads.But in an era where marketing and communications practitioners so often talk to the idea of a brand being unable to be all things to all people,the challenge for many mainstream brands is to retain their share of the market,whilst not diverting from their authentic self.It is widely agreed that the brands shaking things up especially-the challenger vegan-only brands-are doing so by getting closer to the data,delivering up-to-the-minute insights,closing the consumer closeness gap,and developing the products people want at the price and convenience level consumers now expect.In such a rapidly evolving industry,and in a world where the customer reigns,it isnt sufficient to make assumptions or use out-or-date insights to drive strategic decision making.Against a complex socio-political and economic backdrop,your market research data isnt fresh;your review data doesnt provide the whole picture,and your traditional media analysis is only one piece of the puzzle.Only those brands who pull data from a range of sources,in real time,can have a holistic view of the marketplace and identify opportunities whilst driving future-proof strategy.With the vegan beauty industry valued at a whopping 26bn by 2030,a small slice of the pie goes a long way.Our latest report,Vegan-only vs Mainstream Skincare,distills twelve months of data to help understand the future of beauty,using earned and shared media to take a look into the cosmetics world of tomorrow.Talkwalker is the#1 consumer intelligence company and is dedicated to helping brands close the gap between brand and consumer.Recognised as a Leader in Consumer Intelligence and Social Listening,Talkwalker brings together market-leading social analytics and AI technology,with unstructured data expertise,and a global team of insights analysts and data storytellers.Convosphere is a social-first insights agency,working in 100 languages and hard-to-reach markets where we recognise that the value of global social listening lies in the impact data-driven decisions can make and the cultural relevance required to make them actionable.Weve combined our expertise to bring you this report,where Talkwalkers industry-leading,AI-powered,deep listening platform combines with the power of Convospheres data analysis and cultural insights expertise.Talkwalker&Convosphere:Vegan-only vs Mainstream skincare3Vegan-only vs Mainstream skincareThe brands shaping tomorrows skincare industry.3Generally speaking,mainstream brands return a much higher volume of results than their counterparts.But when looking at strictly vegan products,graphs draw a different picture.Both groups of brands feature an equal amount of results with a vegan-only brand even dominating the overall conversation.Generally speaking,Pacifica appears most often,with CeraVe and LOral most notably behind.This is a very different picture to industries like fashion or banking,where previous reports in this Talkwalker series have demonstrated a far greater gap between traditional and challenger brands,usually,at the advantage of the longer-established companies.In terms of engagement,vegan-only brands significantly outperform Mainstream brands(71k vs 41k).Vegan-only brands are perhaps more“lifestyle”brands that consumers are more prone to follow and engage with online as they are brands that consumers are happy to be associated with.Whilst quantitative metrics alone do not quantify the value of communications,they provide a useful foundation upon which to build.At a top level,results can act as a guide-demonstrating,generally speaking,where the weight of share of voice sits.Results overtime(6 months)MainstreamEngagement overtime(6 months)Mainstream Results overtime(6 months)Vegan-onlyEngagement overtime(6 months)Vegan-onlyTalkwalker&Convosphere:Vegan-only vs Mainstream skincare4CeraVeLOralThe Body Shop4Vegan-only vs Mainstream skincareThe brands shaping tomorrows skincare industry.Motivational conversation drivers:What product functions and aspects matter to consumers?Categorising motivational keywords under Heal,Preventive,Solve,Calm and Control is a great way to examine what type of words are being used along with vegan skincare products,to gain a better understanding of what motivates consumers to buy a specific product.Representing over half of the conversations with motivational drivers mentioned,Heal and healing properties of vegan skincare is an important consideration for these consumers.Could it be that consumer who have already tried regular,non-vegan products to aid healing of long-term scars are exploring the efficiency of new,vegan options?Sentiment analysis adds colour to the picture,with vegan-only brands spoken about more by consumers,but not necessarily favoured.While topic analysis identified Heal,Preventive,Calm,Solve and Control as key conversation drivers.Overall,the 2 brand groups display similar brand sentiment,largely positive with very few or no negative sentiment.Arguably,whether your allegiance sits with traditional or challenger cosmetics,consumers tend to have a positive outlook on brands that offer vegan skincare products.Brand Sentiment-Mainstream Brand Sentiment-Vegan-onlyCeraVeLOralThe Body ShopWith the likes of Pacifica,the Ordinary,and Milk Makeup;we have mature disruptor brands.Those brands who,it could be argued,have experienced growth and are now maturing at their peak.These challengers are,combined,just a percentage point ahead of those mainstream brands in terms of share of the conversation surrounding vegan cosmetics.The rise of these vegan-only brands is a clear example of brands which have got close to the data,understood the wants and needs of consumers,and closed the gap.Those steps are now paying off massively.PacificaThe OrdinaryMilk MakeupPacificaThe OrdinaryMilk MakeupTalkwalker&Convosphere:Vegan-only vs Mainstream skincare5 5Vegan-only vs Mainstream skincareThe brands shaping tomorrows skincare industry.At first glance,the breakdowns for Mainstream and Vegan-Only follow a similar pattern.By diving deeper,it would be possible to understand why a brand falls short in an area and whether there is an opportunity for growth.Once we analysed the overall distribution among motivational keyword usage,we then delved into vegan-only brands and mainstream brands.Although there wasnt any significant difference across categories,little nuances can be spotted.For example,in the overall conversation,we see an 11.3%share in Solve,yet,it deviates to 20.9%for The Ordinary.This may indicate end users focus on solving their skincare-related issues through The Ordinary products,or else they might complain about its efficiency too.To answer this question we looked into sentiment,80%of The Ordinary conversation categorised as Solve was positive.Especially,when we looked deeper,The Ordinarys eye serum caffeine solution seems to be the main reason behind this deviation.Exploring the future of skincare requires more than quantitative metrics.Insights teams need to be equipped with the topics and themes that matter,to help communications teams get closer to those consumers,and marketers to adapt too.To drive overall decision making,the data needs to tell a story that closes the consumer closeness gap.In doing so,we can begin to understand why so many people are making the switch.Motivational keywords-Mainstream:Heal,Prevent,Calm,Solve,ControlMotivational keywords-Vegan-only:Heal,Prevent,Calm,Solve,ControlTalkwalker&Convosphere:Vegan-only vs Mainstream skincare6Vegan-only vs Mainstream skincareThe brands shaping tomorrows skincare industry.33%-Mainstream41.5%-Vegan-onlyConversations from social profiles of millennials or younger(24)For the newer challenger brands,Twitter far outweighs any other media type;with the likes of The Ordinary,Milk Makeup and Pacifica still struggling to break through into mainstream media despite their brand maturity.It could be argued that,until they do,their growth is destined to stagnate.On the other hand,many marketers would argue that these brands have got to grips with the data,understood their audience,and refined their strategy and decision making accordingly.Whilst those driving online conversations are often largely from younger demographics,this is overwhelmingly true for the vegan-only brands weve featured in our analysis,where almost 42%of conversations are from the social profiles of people who are classed as Gen Z or younger.This is around 9%more than those mainstream brands,where channels like email and telephone are likely to plug the gap.Whilst blogs dominate the conversation,the significance of online and print media for more traditional and mainstream brands is not to be underestimated,with coverage impacting a range of outcome metrics,including share price.Everything you thought you knew about your consumers has changed-from who they are,to where they hang out,to how they feel about your brand.Its only those brands who get close to the data and understand emerging consumer behaviour that can really get ahead.In todays busy media landscape,and with millennials and younger consumers are turning to social for their news and influencers,mainstream media is a less crucial comms channel for these brandsIts clear.These two groupings of cosmetics brands are very different in a number of regards-their customers,their media profile,and their strategies.Its only through bridging the gap between brand voice and consumer that these strategies can truly be successful.Brand Sentiment Vegan-onlyBrand Sentiment-MainstreamTalkwalker&Convosphere:Vegan-only vs Mainstream skincare7Vegan-only vs Mainstream skincareThe brands shaping tomorrows skincare industry.Key takeawaysSpeak to an expertDemonstrating the value of marketing and communications is about more than simply counting stuff.Those pioneering,data-driven organisations foster environments which are home to communicators who leverage data to get closer to consumers,better understand the audience,and create proactive strategies accordingly.The virtually overnight popularity of veganism is largely driven by younger demographics.For skincare brands,this is good news.By introducing themselves as an everyday brand,they have the opportunity to become a staple in the consumers skincare routine for life,even as the individuals skin quality,and consequently skincare needs,change.Although sustainability,cruelty-free and animal welfare were all prominent keywords throughout,and undeniably aspects that matter to consumers,brands should think twice before trying to cover all bases.By making claims about their commitment to these areas,they put themselves in a position where they can easily be shot down if they fail to keep their promises.Instead,brands should identify their target audience,get to know them and their needs and design their product,marketing and communications accordingly.Keeping an ear to the ground,constantly.Trends quickly change and consumers move on.Brands should look for micro-trends that have the potential to grow big.Identify gaps that their brand can fill,whether its innovative buzz-generating packaging or a mini shampoo bar,designed for travelling.Plus,multinational brands must remember that what works in one market doesnt necessarily work in another.Cultural insights,gleaned through social listening,will help to connect on a local and even hyperlocal level.By listening to what their target audiences are talking about,and learning what matters to them,brands stand a much better chance to cultivate a positive community than a brand that does its own thing without paying attention to their customer base.The most successful brands are those who get close to the data,understand the contextual landscape,and take a proactive approach to marketing communications as a result.Alex HaynesAccount Executive,Consumer GoodsE: talkwalker Talkwalker&Convosphere:Vegan-only vs Mainstream skincare8The#1 Consumer Intelligence companyThe world is changing.Consumers are more demanding,more urgent,and more unpredictable than ever,and brands are struggling to keep up.Talkwalkers leading Consumer Intelligence Acceleration Platform helps you stay ahead by turning internal and external data into consumer insights that grow your brand.We bring together everything you need to help you get closer to your consumers than ever before.Accelerated data coverage and scale integrations Market-leading AI capabilities Platform services that elevate data to intelligence Deep dive human and cultural insight from our team of strategists Over 2,500 global brands trust Talkwalker,and our international team of experts,to guide them in making the most of every opportunity in this fast-paced world and accelerate their brand growth.

14人已浏览 2023-03-20 9页 5星级

前田·约翰：2023科技中的设计报告（英文版）（42页）.pdf

2Howdy!Back in 2015,I started sharing everything Id recently learned into a kind of“music album”of knowledge to drop at SXSW.Its a side project that hasnt left my side,thus farI guess it saves me time so I dont have to write another book: ).The typeface used in the 2023 Design in Tech Report is Inter by Rasmus AnderssonWhat is the 2023 Design in Tech Report?DESIGNINTECH.REPORTjohnmaedaDESIGNINTECH.REPORTAESTHETICS31.Design People 2.DE$IGN And Digital Transformation 3.How To Speak Machine How To Speak Human 4.The AI Ketchup Bottle Moment 5.Resilience Or Renewal 6.AESTHETICS of ETHICSUseful AI Stuff For Right Now0.TABLE OF CONTENTSSorry I couldnt fit the 150 other slides I had planned to go through because I realize the backstory may not matter as much to everyone than the parts about the now.I.Machines Run LOOPS 1.Computers excel at repeating themselves through loops.2.Hard machines are visible;soft machines are invisible.3.Human computers are the original computing machines.4.Recursion is the most elegant means to repeat oneself.5.Loops are indestructible unless a programmer has made an error.II.Machines Get LARGE 1.Embracing exponential thinking is unnatural at first.2.Loops wrapped inside loops open new dimensions.3.Be open to both directions of the powers of ten.4.Losing touch with human scale can make you toxic.5.Computers team up with each other way better than we do.III.Machines Are LIVING 1.Discerning whats alive versus whats not used to be simpler.2.The science of lifelikeness is undergoing a renaissance.3.An artists perspective keeps you humanly curious.4.Life is defined by how we live in relation to each other.5.Computers wont replace us if we remain audacious.How To Speak Machine Computational Thinking For The Rest Of Us2019Source:Raymond Kurzweil https:/ Kurzweils predictions from 2011 seem to trending towards“maybe he was right”DESIGNINTECH.REPORTAESTHETICSHow To Speak Machine Computational Thinking For The Rest Of Us 2019Source:johnmaeda.How To Speak MachineA biologist lives next to a pond.She clears the pond of lily pads.And runs and experiment with a species of lily pads that doubles over night Simple Moores Law explanation of why ChatGPT feels like it appeared“all of a sudden.”DESIGNINTECH.REPORTAESTHETICSHow To Speak Machine Computational Thinking For The Rest Of Us On Day 3014 15 16 17 18 19 20 21 22 23 24 25 26 27 28 292019Source:johnmaeda.How To Speak MachineOn day 1,theres 1 lily pad.On day 2,theres 4.And so forth.On day 30,the pond is covered with lily pads.Simple Moores Law explanation of why ChatGPT feels like it appeared“all of a sudden.”DESIGNINTECH.REPORTHow To Speak Machine Computational Thinking For The Rest Of Us On Day 3014 15 16 17 18 19 20 21 22 23 24 25 26 27 28 292019Source:johnmaeda.How To Speak MachineOn what day is the pond half full of lily pads?Day 15?Simple Moores Law explanation of why ChatGPT feels like it appeared“all of a sudden.”DESIGNINTECH.REPORTHow To Speak Machine Computational Thinking For The Rest Of Us On Day 3014 15 16 17 18 19 20 21 22 23 24 25 26 27 28 292019Source:johnmaeda.How To Speak MachineOn what day is the pond half full of lily pads?Or Day 30?Simple Moores Law explanation of why ChatGPT feels like it appeared“all of a sudden.”DESIGNINTECH.REPORTRESILIENCETECH.REPORT9Design 501:The 4th I.R.introduced a new kind of design.I wrote a book about it in 2019.The trope of,“Speed,price,quality:you only get to pick two”gives way to,“you get all three with computational design!”That means undesirable work can get automated so that you can work on the parts that you want.Finally!Source:johnmaeda TIMEValue creationClassical DesignPHYSICAL WORLDDesign ThinkingORGANIZATIONAL WORLDA GENTLE INTRODUCTION TO A.I./MACHINE LEARNINGComputational DesignDIGITAL WORLDIndustrial Revolution201520162017201820192020202120222023DESIGNINTECH.REPORTAESTHETICS10Computational Design:Artificial IntelligenceAI isnt good at inclusive design because we arent,too88%of designers surveyed believe that it will be atleast 5 years or more until visual designers arereplaced by AI.AI can already do a lot right now.The history of AI and generating visual art goes backto the 1960s with A.Michael Noll and other artists atBell Labs,and stretches back to Marcel Duchamp.AI is extremely proficient at tedious tasks that nohuman should really have to do,like:adjust imagecontrast,correct messy lines,and re-style images.Google is by far the leader in mixing AI with designexperimentation due to the amazing talent theyveacquired like Martin Wattenberg and FernandaViegas who at IBM first advanced datavisualization with their landmark Many Eyes.AI is showing us the unintended consequences ofrunning what appear to be“fair”algorithms that feedoff of past activity and practices that are convertedinto training data.But embedded in that trainingdata is our long history of exclusion.2018 Design In Tech Report|Computational Design:AI58/91201520162017201820192020202120222023DESIGNINTECH.REPORTAESTHETICS11Towards conversational designConversation is not a new interface.Its the oldest interface.Conversation is how humans interact with one another,and havefor millennia.We should be able to use the same principles tomake our digital systems easy and intuitive to use by finallygetting the machines to play by our rules.Erika HallSource:mulegirl Conversational Interfaces2018 Design In Tech Report|Computational Design54/91201520162017201820192020202120222023DESIGNINTECH.REPORTAESTHETICS12Nicholas Negroponte and team sensed the future,and made it.Imagine a machine that can followyour design methodology and at thesame time discern and assimilate yourconversational idiosyncrasy.The samemachine,after observing yourbehavior,could build a predictivemodel of your conversationalperformance.Such a machine couldthen reinforce the dialogue by using apredictive model to respond to you ina manner that is in rhythm with yourpersonal behavior and conversationalidiosyncrasies.”NicholasNegroponte,The ArchitectureMachine(1967)“Source:2019 Design In Tech Report|Yaaaaaaaaawn!Boring AI79/98201520162017201820192020202120222023/nollcurve /stepamp exch def/numsteps exch def/cycles exch def /xscale exch def/amp exch def 0 amp moveto/curx 0 def 1 1 cycles /i exch def/radbase 180 i 1 sub mul 90 add def /numincrs numsteps stepamp i mul mul def /dx 180 numincrs div def/x radbase def 1 1 numincrs pop curx amp x sin mul lineto/x x dx add def /curx curx xscale add def for for stroke def /noll90 .7 setlinewidth 0 setgray 1 1 90 gsave 3.4 mul 20 add 0 exch translate 15 1 9 8 1.25 nollcurve grestore for defnoll90A RT A N D C O M P U TAT I O N /1 9 9 0technologydesign1990ICYMIDESIGNINTECH.REPORTAESTHETICSDESIGNINTECH.REPORTAESTHETICS14Useful AI Stuff For Right NowSource:johnmaeda Things that are top of mind for me right now.Everything else in this preso is looking backwards,to help me look forwards.If you want to do that too,then stick around!0DESIGNINTECH.REPORTAESTHETICSEvery year I run a survey related to the Design in Tech Report.But this year Ive been a little busy with all-things GPT-universe.That said,I got a lot of great contributions!As Figma AI plug-ins go, has some really cool ones.My favorite obscure find was the Pokemon generator.For ready-to-eat prompts go to promptbase or lexica.art which are prompt marketplaces.Source:johnmaeda Annual Design in Tech Survey Respondees|futurepedia.io has amore of these kinds of finds for you to forage through 15Thank you to Henrik,Frederik,Sean-Wood,Kai,Kim,Samuel,Henry,Ryan,Chris,Colin,Agnieszka,Bob,Gary,Agu,Dave,Moiss,Me,Ankita,Darius,Rachel,Aldo,PChia,Heather,Justine,Miguel,Florentin,Juliana,Amanda,Sam,Gaby,Kerry,Chloe,Duncan,Jan,Harshika,Arum,Gael,Raffaela,Ghizlene,Marcel,Narasimha,Eelko,Jason,Debk,Andrea,Ashish,Andr,Bill,Maria,Art,Puneet,Vidhi,Matt,Lauren,Brian,Sridhar,Gaurang,Julie,Ocean,Axel,Sithembiso,Rodolfo,Sanmitra,Sbastien,Bruce,Jason,Maria,Carlo,Bs,Angelina,Silvia,Filippo,Manisha,Roland-Philippe,Andrs,Ame,Lucas,Marin,Mark,Cristin,Quang,Juhan,Pat,Luiza,Zyo,Chrys,Mea,Rupert,Ellie,Richard,Paolo,Sean,Guy,Kaladhar,Sebastian,Alessio,Surya,Richard,Andre,Dani,Vivek,Christina,Jesper,Ranjeet,Kshipra,Betsongeorge,Jodean,Marc,Paul,Akshay,Roman,Dylan,Naomi,George,Paul for contributing to the 2023 survey!How likely will the design profession need to change given the emergence of Large Language Model AI systems like ChatGPT?Average=8 10=“highly likely”What prominent Design AI tool out there is top of mind for you?Adobe Tools Figma AI Plugins DALL-E Midjourney Runway D-ID Copy.ai Elevenlabs Stable Diffusion Hugging Face*Anything*ChatGPT/ChatGDP/Chat GBTWhat*obscure*Design AI tool out there is top of mind for you?Pinecone|Weaviate|Qdrant:Vector DB Uizard:Instant UI NVIDIA Gaugan:Universe Painter Vizcom:3D From Prompts Autodraw:Early Google Experiment Wombo:Lip Sync Synesthesia:Avatar Spokesperson Luma AI:Instant 3D Deepl:Language translator Tome:Instant Presos Lyric Studio:Instant Music Playground:IRL Observability Photofeeler:Judge Your Photo Edward Teaching BotSomeone I know has been directly affected by the recent spate of layoffs in tech.65%Good luck to everyone out there who will find their next step in life.I believe in you!3 JohnCONTEXTNSWENSWETO DA I J I T E M P L E|N A R A,J A PA N 2 0 0 11992DESIGNINTECH.REPORTAESTHETICSD E S I G N“”I S D E F I N E D B YM AT E R I A L S S E L E C T I O Nmaterials1992DESIGNINTECH.REPORTAESTHETICSDESIGNINTECH.REPORTAESTHETICS“A Comprehensive Survey on Pretrained Foundation Models:A History from BERT to ChatGPT”Learn about many of the models out there at https:/huggingface.co/docs/transformers/model_doc/flavaSource:https:/arxiv.org/pdf/2302.09419.pdf18CV Context Exemplar-CNNCV BiGAN NAT CountingCV BigBiGAN DeepCluster RotNetCV MoCo SimCLR BEiT MAEGraph DeepWalk LINEGraph VGAE node2vec GraphSageGraph DGIGraph GCC GraphCL SUGAR MoCLHISTORY OF PRETRAINED FOUNDATION MODELS20142016201820202022NLP Skip-GramNLP GloVe LM-LSTMNLP CoVE Shared LSTM FastTextNLP RoBERTa GPT-2 BERTNLP GPT-3 BART PET SimCSE ChatGPT=Large Language ModelUnified PFMs UNIFIED-IO OFA FLAVA Gato BEiT-3=Unified PFMUnified IO https:/ OFA(Once For All)https:/ FLAVA(A Foundational Language And Vision Alignment Model)https:/ Gato https:/ BEiT(Bidirectional Encoder representation from Image Transformers)https:/ Ball)https:/en.wikipedia.org/wiki/BB-8 Just checking if youre still awake DESIGNINTECH.REPORTAESTHETICSThe end of the year seemed to go really fast for me.Same for you,too?Source:Sonya Huang https:/ 17OCT 24SEP 19DESIGNINTECH.REPORTAESTHETICSIt helps to squint a little to understand a few things.Because theres a lot to take in rn.Source:Sequoia https:/ OF MODELSpre-20202030?What you build will change as there are more models available to use.KINDS OF MODELSThe app you build depends upon the model(s)you have available.Green means“look to be surprised”MODEL LAYERAPP LAYERDESIGNINTECH.REPORTAESTHETICSSimons Scissors:Context and CognitionScissors Photo by Matt Artz on UnsplashSource:Dan Lockton,“Simons Scissors and Ecological Psychology in Design for Behavior Change”in SSRN Electronic Journal,Aug 2012.21CognitionHuman rational behavior is shaped by a scissors whose blades are the structure of task environments and the computational capabilities of the actor.”Herbert Simon,“Invariants of Human Behavior”in Annual Review of Psychology,41,1990,p.1-19“THE PRETRAINED FOUNDATIONAL MODELTHE PROMPT YOU FEED THE MODELDESIGNINTECH.REPORTAESTHETICSCognitionTo build apps with models takes a little time to settle into your mind.Its not as easy as saying to yourself as a dev,“Hey.This is similar to XYZ.”Because its not.New models are being built with plenty of determination across the world.The blade that matters to the non-model builders is where a lot is happening.OSS langchain and llamaindex are great for design-devs to try out!Source:Unusual VC https:/www.unusual.vc/post/devtools-for-language-modelsLLM APIPrompt DesignVector DB Other DataYour ProductEASYEASYEASY “DevTools for language models predicting the future”unusualvcMachine Learning Data WarehouseHire ML ExpertBuild ModelWrap EndpointHARDYour ProductDESIGNINTECH.REPORTAESTHETICSPrompt Engineering 101Source:https:/ the core promptMake your wish.Be specific about the outcome,length,format,and style.Use precision in how you prompt.When referring to text to act upon,delimit it with“”(3 double quote marks)or#(3 hash sign marks).3.Add in useful contextGive one example of how youd like your prompt to behave.Give multiple examples of how you want your prompt to behave.When you dont give guidance with examples,thats“zero shot.”The other cases are called“one shot”and“few shot.”4.Tune the models settingsSet the temperature high to make it more random;lower the temperature to make it more deterministic.Alternatively,adjust the“p”parameter to broaden or narrow the range of words that will be generated in response.Give it more tokens when you need to work with longer prompt or longer responses.OLDER($)NEWER($)1.Select a large language model*Davinci Curie Babbage Ada The OpenAI universe also includes Codex(for generating computer code)and the new ChatGPT model DESIGNINTECH.REPORTAESTHETICSPrompt Engineering 201Playing with the OAI tokenizer https:/ gives you valuable insights on how it“eats”text.And learn more about how“chain of thought”prompting works via https:/arxiv.org/abs/2201.11903 asap.Source:https:/arxiv.org/abs/2201.1190324C.Use“chain of thought”promptingGetting a model to use our own human tendency to“think out loud”has been shown to produce more accurate outcomes.When prompting,give an explicit“thinking out loud”explanation for how a problem is to be solved with your related reasoning.A.Shorten an often-used prompt You can reduce*the amount of tokens that get used by finding a similar but shorter version of a prompt.This way if youre using the prompt a lot,youre not using up as many tokens in a cumulative sense.*One DiT survey responder suggested using Quillbot.B.Go for a two-fer or three-ferSometimes with one prompt you can get multiple things done.DESIGNINTECH.REPORTAESTHETICSWhen I mentioned the Herbert Simon scissors metaphor to Sam Schillace,I recall him quickly saying,“And what did our parents teach us?Dont run with scissors.”Scissors Photo by Matt Artz on UnsplashSource:Sam Schillace https:/ HAI“On the Opportunities and Risks of Foundation Model”(2022)Its the most comprehensive take on the pros and cons of pretrained foundation models as a 160 page“weapon of understanding”with 30 pages of references if youre new to this space,its a godsend.Source:https:/arxiv.org/pdf/2108.07258.pdf26MACHINE LEARNINGDEEP LEARNINGFOUNDATION MODELSTIMEEmergence ofHomogenization of“how”featuresfunctionalitieslearning algorithmsarchitecturesmodels1.While new capabilities emerge,our reliance on a more homogenized approach creates a single point of failure.2.Ultimately,all of this modeling eventually gets deployed to real people.And the implications at the scale of millions are huge.Data CreationData CurationTrainingAdaptationDeploymentLarge uncharted data sets are a source of robustness and are an increased risk of poisoningFoundational models are a security choke point and also an increased attack surfaceDownstream apps easier to develop but“dual use”(use for unintended purposes)risk S E C U R I T YDESIGNINTECH.REPORTAESTHETICSFor my introductory AI course,I had Professor Joseph Weizenbaum as the instructor.His significance was lost on me until many years later I realized that he was a GOAT.Theres a fab article on Dr.Weizenbaum on 99%Invisible https:/99percentinvisible.org/episode/the-eliza-effect/Source:Computer Power and Human Reason(1976)27I knew of course that people form all sorts of emotional bonds to machines,for example,to musical instruments,motorcycles,and cars.And I knew from long experience that the strong emotional ties many programmers have to their computers are often formed after only short exposures to their machines.What I had not realized is that extremely short exposures to a relatively simple computer program could induce powerful delusional thinking in quite normal people.This insight led me to attach new importance to questions of the relationship between the individual and the computer,and hence to resolve to think about them.”Joseph Weizenbaum(1976)“DESIGNINTECH.REPORTAESTHETICSJudgment Call kicked off a nuanced approach to talking about AI in product companies.And Professor Helen Armstrongs 2021 book on AI for designers is certainly timely.Judgment Call(2019)was authored by Stephanie Ballard,Karen M.Chappell,Kristin Kennedy to use value sensitive design and design fiction to surface ethical concerns related to technology.Source:Mira Lane/Helen Armstrong/Sarah Gold28 More card toolkit recommendations courtesy of data and trust guru CEO/Founder Sarah Gold of (UK)DESIGNINTECH.REPORTAESTHETICSIts easy to get GPT-bots to“pretend youre a”for everything ranging from a JS console to a math teacher.Critical thinking is key right now;David Karam has“Culture Club”for you.Other approaches recommended by DiT survey responders are for simulate audience reaction, webcam reaction aggregation,and synthetic health which is an open source patient generator.Source:https:/ Karam https:/ give us the opportunity to explore concepts from multiple perspectives in simulation.”David Karam“DESIGNINTECH.REPORTAESTHETICSMorris was not entirely against the use of machines,but felt that the division of labour a system designed to increase efficiency,in which the manufacture of an object was broken into small,separate tasks,meaning individuals had a very weak relationship with the results of their labour was a move in the wrong direction.”V&A“Ruskin&Morris famously led the Arts&Crafts Movement in the late 1800s as a reaction to the Industrial Revolutions introduction of new fabrication technologies.A useful take on the plight of the Luddites in relationship to whats happening now with AI fears is https:/ Morris,made by Ada Phoebe Godman(1877)30DESIGNINTECH.REPORTAESTHETICSJust like in the Arts&Crafts Movement,we should expect to see*critical making*happen.Like this brand new animation just released by design technologist Masashi KawamuraSource:masakawa https:/ Will Foundation Models Impact Design Thinking?Source:https:/web.stanford.edu/class/me113/d_thinking.html32Summarize customer support or field logs1Categorize common problems2Generate possible solutions3Visualize solution journeys and examples4Simulate customer reaction5EmpathizeDefineIdeatePrototypeTestThis is one hypothetical way:DESIGNINTECH.REPORTAESTHETICSThe Creative ProcessExplore Experiment PracticeCreateReflect Assess ReviseShareImagine Examine PerceiveThis is one hypothetical way:How Will Foundation Models Impact Classical Design?Source:https:/www.kennedy-center.org/education/resources-for-educators/classroom-resources/articles-and-how-tos/articles/collections/arts-integration-resources/arts-integration-and-universal-design-for-learning/33Test options with AIUse AI audienceChat with AI criticGenerate options with AISketch with AIDESIGNINTECH.REPORTAESTHETICSIn this new age of partnering with PFMs,we need to keep in mind what we dont enjoy doing versus what we really love to do.Remove the drudgery while increasing your joy.I run a poll regularly in large groups of what people prefer not to do at work versus what they really love doing at work.It turns out theres tons of things that dont spark joy in the workplace.Ya think?Source:johnmaeda34Calendar Management Making Powerpoint Decks Cleaning Data Low-priority E-mails Competitive Research Summarizing Monitoring/Alerts “DOES NOT SPARK JOY”Decision Making Talking With People Learning With Others Mentoring/Coaching Relationship Building Delivering Presentations Crafting Strategy “DOES SPARK JOY”Simplifying the Laws of Simplicity.Quiz:Which cookie will a child choose?2005DESIGNINTECH.REPORTAESTHETICSQuiz:Which cookie will a child choose?2005DESIGNINTECH.REPORTAESTHETICSWhich pile of laundry will a child choose?2005DESIGNINTECH.REPORTAESTHETICSwant more(enjoy/consume)want less(work/transform)Simplicity is about living life with more enjoyment and less pain.2005LAUNDRYCOOKIEDESIGNINTECH.REPORTAESTHETICS2023Think of how to use AI to get rid of things you dont really want to do.So that you have more time to do more of what you love to do.LAUNDRYCOOKIE“DOES NOT SPARK JOY”“DOES SPARK JOY”DESIGNINTECH.REPORTAESTHETICSDESIGNINTECH.REPORTAESTHETICSSource:johnmaeda IMDB40 Ive used two sci-fi movie metaphors when struggling to understand this stuffUseful AI Stuff For Right Now1.Arrival(2016)Directed by Denis Villeneuve Story by Ted Chiang Its about communicating with an alien race within a set of strict limitations in how long you can talk with the alien.The mystery is grounded in discovering the language of the alien through trial and error.Spacetime Language=Prompts2.Black Panther(2018)Directed by Ryan Coogler Story by Ryan Coogler Joe Cole Its about the king of an African nation called Wakanda which is the most technologically advanced country on earth.Their early access to an alien material with special properties that defy physics shaped their history.Vibranium=Cognition BladeDESIGNINTECH.REPORTAESTHETICSSource:johnmaeda41 Designers tend to care about people as people.Instead of just as prospects or customers.Design as a field has evolved to speak more machine,more scale,and more$s.A lot of work has been done in the design world to birth a new“aesthetics of ethics.”Speaking human really well will matter more than speaking machine in this next chapter.But its not mainstage because it doesnt sound like“time or$s saved”or“new$s.”Next years report will center around the business value of this new kind of design.Good luck to us all!SummarySource:Tony Ruth lunchbreath in the 2020 CX ReportA MESSAGE FROM OUR SPONSOR THE EARTH DESIGNINTECH.REPORTAESTHETICS

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GWEC.NETCapturing economic opportunities from wind power in developing economiesReport March 2023Capturing green recovery opportunities from wind power in developing economies2Disclaimer Copyright February 2023This document contains forward-looking statements.These statements are based on current views,expectations,assumptions and information of GWEC and the Authors.GWEC,the Authors and their employees and representatives do not guarantee the accuracy of the data or conclusions of this work.They are not responsible for any adverse effects,loss or damage in any way resulting from this work.Permissions and UsageThis work is subject to copyright.Its content,including text and graphics,may be reproduced in part for non-commercial purposes,with full attribution.AttributionCapturing economic opportunities from wind power in developing economies.Global Wind Energy Council.2023.AuthorsThis report was commissioned by the Global Wind Energy Council and authored by BVG Associates.The lead authors of this report were George Hodgkinson and Patrick Browne of BVG Associates.AcknowledgmentsThis report was edited by Reshmi Ladwa and Joyce Lee of the Global Wind Energy Council.We are grateful to the following individuals and organisations for their input to this report:Argentina:CEA(Camara Eolica Argentina)Colombia:SER(Colombia Asociacin energas renovables)Egypt:Infinity Power Indonesia:UPC Renewables Morocco:SGREImage creditsGWEC.NET3ForewordThe window of opportunity to accelerate wind energy for a more resilient and sustainable future is closing fast.We now less than seven years from 2030,a key moment on the energy transition journey.Three years ago,as widespread lockdowns caused a dramatic reduction in carbon emissions,the wind industry joined climate scientists and concerned civil society groups to warn governments that without decisive action to phase out fossil fuels,emissions would quickly rebound to pre-pandemic levels.Post pandemic,in February 2022 the Russian invasion of Ukraine added another layer to the energy challenge,forcing energy security to the front of policymakers minds.The twin crises of climate change and energy security were now joined together by their shared solution.As we enter 2023,we are seeing coal powered generation reaching a record peak,natural gas prices at all-time highs andas predicted emissions rebounding alongside economic recovery.This comes at a time when wind energy has never been more price competitive.There are reasons to be optimistic however,as the policy environment evolves to enable the development in both emerged and emerging economies.This report looks at five countries where a strong policy environment can deliver enormous benefits for the local economy as well as delivering tangible benefits for local communities.Wind energy delivers wide-ranging benefits,from job creations to saving water.That makes wind energy particularly beneficial for developing economies addressing the phase out of fossil fuels alongside economic growth,a growing demand for electricity and the challenge of energy security.Wind projects have shown a significant cost reduction in established markets over the past twenty years.This report shows how support from government,through policy certainty and government commitment,can help new industries avoid the risk of higher potential costs.Wind energy also has the benefit of being predictable,as there are no fuel costs once installed so governments can benefit from that stability.This report looks at five countries Argentina,Colombia,Egypt,Indonesia,and Morocco that have significant and largely untapped wind resource potential.The report aims to demonstrate the huge socioeconomic benefits that wind energy development can deliver alongside the positive environmental outcomes.This report identifies three common hurdles for policymakers trying to accelerate the deployment of wind energy and outlines how to overcome those challenges.The wind industry has demonstrated its pivotal role in supporting thriving local economies through skilled jobs creation and the maintaining of critical infrastructure while dramatically contributing to reducing carbon emissions and delivering clean,affordable and secure energy.GWEC will continue to collaborate with governments to ensure that the world is well equipped to harness the full socioeconomic benefits of the energy transition.GWEC.NET5Contents1.Introduction 132.General barriers to wind energy deployment 15Country study:Argentina 20Current situation 20Case study-PEPE III wind project 24Recommendations for wind acceleration 25Project pipeline scenarios 25Impacts analysis 27Country study:Colombia 30Current situation 30Case study La Guajira wind farm 34Recommendations for wind acceleration 35Project pipeline scenarios 36Impacts analysis 37Country study:Egypt 40Current situation 40Case study West Bakr Wind Farm 43Recommendations for wind acceleration 44Project pipeline scenarios 44Impacts analysis 46Country study:Indonesia 50Current situation 50Case study Sidrap Wind Farm 54Recommendations for wind acceleration 55Project pipeline scenarios 55Impacts analysis 56Country study:Morocco 60Case study Midelt wind project 63Recommendations for wind acceleration 64Project pipeline scenarios 64Impacts analysis 65Conclusion 70Capturing green recovery opportunities from wind power in developing economies6List of figuresFigure 1 Countries examined in this study.17Figure 2 Argentina electricity energy mix by source.21Figure 3 Forecast of installed capacity in Argentina in the two scenarios.26Figure 4 FTE years created in the business-as-usual scenario in Argentina.27Figure 5 FTE years created in the wind acceleration scenario in Argentina.27Figure 6 Gross value added created in the business-as-usual scenario in Argentina.28Figure 7 Gross value added created in the wind acceleration scenario in Argentina.28Figure 8 Colombia electricity energy mix by source.31Figure 9 Forecast of installed capacity in Colombia in the two scenarios.36Figure 10 FTE years created in the business-as-usual scenario in Colombia.37Figure 11 FTE years created in the wind acceleration scenario in Colombia.37Figure 12 Gross value added created in the business-as-usual scenario in Colombia.38Figure 13 Gross value added created in the wind acceleration scenario in Colombia.38Figure 14 Egypt electricity energy mix by source.41Figure 15 Forecast of installed capacity in Egypt in the two scenarios.45Figure 16 FTE years created in the business-as-usual scenario in Egypt.46Figure 17 FTE years created in the wind acceleration scenario in Egypt.47Figure 18 Gross value added created in the business-as-usual scenario in Egypt.47Figure 19 Gross value added created in the wind acceleration scenario in Egypt.48Figure 20 Indonesia electricity energy mix by source.51Figure 21 Forecast of installed capacity in Indonesia in the two scenarios.55Figure 22 FTE years created in the business-as-usual scenario in Indonesia.56GWEC.NET7List of TablesFigure 23 FTE years created in the wind acceleration scenario in Indonesia.56Figure 24 Gross value added created in the business-as-usual scenario in Indonesia.57Figure 25 Gross value added created in the wind acceleration scenario in Indonesia.57Figure 26 Moroccos electricity energy mix by source.61Figure 27 Forecast of installed capacity in Morocco in the two scenarios.65Figure 28 FTE years created in the business-as-usual scenario in Morocco.67Figure 29 FTE years created in the wind acceleration scenario in Morocco.67Figure 30 Gross value added created in the business-as-usual scenario in Morocco.67Figure 31 Gross value added created in the wind acceleration scenario in Morocco.67Table 1 Summary of wind growth impacts in business-as-usual scenario versus wind acceleration scenario for 2023-2027 12Table 2 Argentina targets.21Table 3 Forecast of installed capacity in Argentina in the two scenarios.26Table 4 Colombia targets.31Table 5 Forecast of installed capacity in Colombia in the two scenarios.36Table 6 Egypt targets.41Table 7 Forecast of installed capacity in Egypt in the two scenarios.45Table 8 Indonesia targets.51Table 9 Forecast of installed capacity in Indonesia in the two scenarios.55Table 10 Morocco targets.61Table 11 Forecast of installed capacity in Morocco in the two scenarios.65Capturing green recovery opportunities from wind power in developing economies8GlossaryABEElicaAssociao Brasileira de Energia ElicaANEELNational Electric Energy Agency(Brazil)BAUBusiness as usualBNDESNational Bank for Economic and Social Development(Brazil)COP2626th Conference of the PartiesCO2eCarbon dioxide equivalentCPPACorporate power purchase agreementEPEEnergy Research Office(Brazil)ESKOMElectricity Supply Commission(South Africa)EVOSSEnergy virtual one stop shopFTEFull time equivalentGDPGross domestic productGHGGreenhouse gasesGRSGreen recovery scenarioGVAGross value addedGWECGlobal Wind Energy CouncilIEAInternational Energy Agency IPPIndependent power producerIRENAInternational Renewable Energy AgencyMMEMinistry of Mines and Energy(Brazil)NDCNationally determined contributionNERSANational Energy Regulator of South Africa PDETen-Year Energy Expansion Plan(Brazil)PPAPower purchase agreementPROINFAIncentive Program for Alternative Sources of Electric Energy(Brazil)SAWEASouth African Wind Energy AssociationUNFCCCUnited Nations Framework Convention on Climate ChangeGWEC.NET9EXECUTIVE SUMMARYCapturing green recovery opportunities from wind power in developing economies10An increasing number of countries are recognising the key role of wind energy in supporting a global clean energy transition,in energy security,and achieving stable energy prices.The urgency to scale up clean power generation and shift away from unabated coal power were key elements of the Glasgow Climate Pact,endorsed at COP26 summit in November 2021 by the nearly 200 countries signed up to the Paris Agreement.This was further cemented at the COP27 summit in Sharm El-Sheikh,held in November 2022.Renewable energy is a component of the Nationally Determined Contributions(NDCs)for most of the Parties to the Paris Agreement,and more than 100 Parties have a quantified clean power target within their NDCs.To reach our shared global goal of limiting temperature rise by the end of the century to 1.5C,the volume of annual wind energy installations must scale up roughly four times over the next decade.This is a huge challenge which will require shared vision and collaboration between governments,industry,and society.Given the urgency of the energy transition,it is vital that the deployment of wind energy does not face unnecessary delays due to resolvable challenges,such as bureaucratic permitting procedures and market barriers to investment.The resources and coordination required for this scale of action have been stretched over the last few years,due to the COVID-19 pandemic and recent commodity price increases.This challenge is particularly acute in developing economies,where public spending and policy response have focused on short-term protections of society and economy.As countries learn to manage the difficulties of the pandemic and economic activity returns,it is time to undertake the actions which will benefit society and economy in the long term.Wind energy can play a vital role in improving a countrys energy There is a growing mismatch between energy transition ambitions,net zero targets and market realities,however.Accelerated deployment of renewable energy,and particularly large-scale sources of clean power like wind and solar energy,are needed worldwide to limit the most harmful impacts of climate change.GWEC.NET11security and increasing its energy independence.This has been highlighted by Russias invasion of Ukraine in February 2022,following which many countries have examined their own balance between energy imports and exports.Countries reliant on fossil fuel imports are vulnerable to sudden changes in trade agreements and volatile international pricing markets.Wind energy offers a secure,reliable and affordable long term source of clean power generation.Wind energy also provides a boost to economic activity.Wind energy projects generate significant amounts of capital expenditure and create jobs and other economic benefits for local economies through their construction and operation.The opportunities in developing economiesThere is a growing body of evidence which shows that wind energy can help governments accelerate a green economic growth,and form a bedrock for sustainable economic growth in the future.The benefits of wind energy are wide-ranging and expand beyond clean power generation.They include sustainable job creation,public health cost savings which would be spent redressing the impacts of fossil fuel generation,water consumption savings which would otherwise be used for thermal generation,and a significant capital injection in a local value chain.The sector is particularly attractive for developing economies which need to phase out fossil fuels while maintaining economic growth,meeting fast-growing electricity demand,safeguarding energy security and prices.To decarbonise power,transport and heating is expected to significantly increase electricity demand.For example,the UK has legally committed to achieve net-zero in 2050 and it is expected to have about the same end user demand then as it has now.To achieve net-zero it will require 3 times as much energy supplied in the form of electricity than it is now.Almost all wind projects installed between 2023 to 2027 will still be generating in 2050 and contributing to achieving net-zero.Wind energy has achieved significant cost reduction and technological excellence over the past two decades,establishing it as a proven and market-ready alternative to fossil fuels.While costs might initially be higher in developing economies where the wind industry is new due to factors such as less experienced personnel,start-up costs,initial investment uncertainty and lack of established supply chain these costs can quickly reduce with government commitment,policy certainty and market forces.Wind energy has no fuel costs so once installed its costs remain stable and predictable.This report reflects a study of wind energy potential in developing economies around the world over the next five years,2023-2027,with the aim to highlight the vast and largely unexploited socioeconomic and environmental opportunities attached to wind energy.Accelerated deployment of wind projects will not only support climate action,but help countries to realise a range of benefits from job creation to cleaner air.The study identifies three common barriers facing wind energy deployment in developing economies and provides recommendations on how these barriers can be overcome.Five developing economies in particular were selected as country studies:Argentina,Colombia,Egypt,Indonesia,and Morocco.These were selected because they have significant and still largely untapped wind energy resource.Findings of the study:upsides of accelerated wind deployment in a wind acceleration scenarioThe findings of this study,summarised in Table 1 below,show that a wind acceleration scenario of wind deployment from 2023-2027 would realise tremendous socioeconomic benefits for each country.For developing economies facing the difficult balance of ensuring economic growth while maintaining energy security and resilience,investment in the wind sector offers a pathway to a robust and sustainable recovery.Capturing green recovery opportunities from wind power in developing economies12Table 1 Summary of wind growth impacts in business-as-usual scenario versus wind acceleration scenario for 2023-2027.Country2023-2027New wind installations(MW)FTE jobs created over wind farm lifetimes(jobs)Gross value added to economy over wind farm lifetimes($)Homes powered by clean energy annually from 2027(homes)Tons of carbon emissions saved over wind farm lifetimes(tons)Litres of water saved annually from 2027(litres)ArgentinaBAU1,500112,0003.3 billion1.7 million71 million12 millionWind Acceleration1,965176,0004.7 billion2.2 million93 million16 millionPotential Upside46564,0001 billion 0.5 million21 million4 million%increase31WE001%ColombiaBAU2,700191,0004.9 billion5.5 million233 million15.5 millionWind Acceleration3,900339,0008.1 billion7.8 million336 million22.5 millionPotential Upside1,200148,0003 billion 2.3 million103 million7 million%increase44weCDD%EgyptBAU2,602242,0003.5 billion6.5 million225 million21 millionWind Acceleration3,758406,0005.6 billion9.2 million326 million31 millionPotential Upside1,158164,0002.1 billion 2.8 million101 million10 million%increase45hCEE%IndonesiaBAU45034,0001.2 billion1 million23 million2.6 millionWind Acceleration56551,0001.6 billion1.2 million29 million3.2 millionPotential Upside11517,000400 million 0.2 million6 million0.7 million%increase26P6$&%MoroccoBAU1,50099,0002.1 billion4.7 million77 million8.6 millionWind Acceleration2,138174,0003.4 billion6.6 million110 million12.3 millionPotential Upside63875,0001.3 billion 1.9 million12.3 million3.7 million%increase43vcBC%GWEC.NET13While this report includes only five country studies,similar socioeconomic benefits can be achieved by other countries.A previous report in early 2022 studied this for Brazil,India,Mexico,South Africa and The Philippines,published by GWEC in February 2022.The study analysed international experience of the onshore wind industry and found that typically a 1 GW/year installation rate over 5 years could unlock nearly 157,000 new jobs and$13.8 billion gross value added(GVA)to national economies over wind farms lifetime,among other benefits.Recommendations to support wind growth in developing economiesIn the course of the study and conversations with industry and investment experts around the world(see the Methodology in Appendix A),several barriers to wind energy deployment were identified that are common to developing economies.The most significant common barriers are a lack of clear policy commitment,insufficient transmission system infrastructure,limited investment in grid upgrade and expansion,and complex regulatory frameworks.Addressing these barriers proactively,in coordination with the wind energy industry and other relevant stakeholders,can support accelerated deployment of wind energy and a wind acceleration in developing economies.Policy commitment:provide clarity and ambition for wind energyLack of policy commitment to consistently promote and enable wind energy is a barrier to wind energy deployment common to many developing economies.In many countries,governments remain committed to conventional fossil fuel-based electricity generation,particularly if it is a good source of foreign investment.Even in countries where the government is positive towards renewable energy,there can be a lack of enabling policy frameworks and regulation to adequately support investment in wind energy and other renewables.Invest to expand transmission system infrastructureWind energy projects rely on land availability,wind resource,and grid connection points.This means that projects cant always be developed in areas where the grid is well developed.This is particularly an issue for multi-island nations like Indonesia,in which the countrys best wind resources can be found on sparsely populated islands.In many countries,development of transmission system infrastructure is coordinated by a separate organisation to that for the development and planning for electricity generation.In other countries the governance of the transmission system and generation is split into regions.This fragmentation can lead to the transmission system not being efficiently developed in the optimal areas or at the necessary time for connecting wind energy projects,which can delay the deployment of new capacity,raise investment risk and hamper efforts to meet targets.Greater public and private investment in secure,smart and flexible grids which enable ever-larger shares of renewable energy is necessary to meet the urgent pace of the energy transition.Simplify permitting frameworks for renewable energyToo many countries are unable to leverage the enormous interest from investors to deploy wind energy projects due to inefficient permitting schemes.Frameworks for leasing,permitting,and power procurement can be overly complex and bureaucratic,which can delay wind energy deployment if projects cannot obtain the necessary permits and approvals in a sensible timeframe.These processes can cover spatial planning,environmental and social impact assessment,planning authorisation,grid connection,and legal challenges to project proposals.In many countries,developers must submit documents and applications to multiple national and local agencies.A lack of clarity on procedures and timelines and poor coordination between agencies and jurisdictions leads to delays,uncertainty,and inefficiencies.Capturing green recovery opportunities from wind power in developing economies14Based on industry experience to date,a country which installs 1 GW of onshore wind energy capacity per year from 2023 to 2027 could unlock a range of socioeconomic and environmental benefits*:The resulting 5 GW of wind energy:A total of 130,000 jobs during the development,construction,and installation phase of the wind farms 28.8 million litres of water saved annually from 2026 US$12.5 billion gross value added(GVA)to national economies over the lifetime of the wind farmsPower 4.9 million homes with clean energy per year from 2026 12,000 local jobs annually during the 25-year operations and maintenance phase of the wind farms 240 million metric tons of carbon emissions equivalent saved of carbon emissions over the lifetime of the wind farms Mitigates 240 million metric tons of CO2 emissions over the lifetime of the wind farms,which is the equivalent of:83.5 million return flights from New York to Sharm el-Sheikh Taking 53 million internal combustion engine cars off the road for one yearPlanting and maintaining 6.4 million trees for 10 years*Assuming a cost of 2 million/MW,and 25 years of operation.Assumes all major components are sourced in country,except for the turbine,where we assume only blades and towers manufactured locally.One job is defined as full-time employment for one person for one calendar year.GWEC.NET15Capturing green recovery opportunities from wind power in developing economies16An increasing number of countries have set wind energy targets in the coming decades,recognising wind energys key role in supporting a clean energy transition and achieving Nationally Determined Contributions(NDCs)and net zero targets under the Paris Agreement.The importance of energy security has also been brought into sharp focus in light of February 2022 Russian invasion of Ukraine.It is widely acknowledged that wind energy can play a key role in improving a countrys energy security,increasing self-reliance and providing a sustainable,reliable and affordable source of clean electricity generation independent of future fossil fuel prices and their associated uncertainty.Also in many countries,onshore wind power is the cheapest form of electrical energy.The development of wind energy also can be a major boost to economic activity forming a bedrock for sustainable economic growth.This is particularly critical given the current global energy crisis and volatility of energy markets around the world.The International Energy Agencys(IEA)recent World Energy Outlook 20221 asserts that current events are a reminder of the vulnerabilities of the current global energy system,and will fast-track structural change towards the clean energy transition.This report provides a:Study of wind energy potential in five developing economies around the world over the next five years,with the aim to highlight the vast and largely unexploited socioeconomic,energy security-related,and environmental opportunities attached to wind energy.Discussion of the common barriers facing wind energy deployment in developing economies,and Recommendations on how these barriers can be overcome.1 International Energy Agency,World Energy Outlook 2022,October 2022,available online at:https:/ report examines five developing economies,as shown in Figure 1.These countries were selected because they face particular socio-political and economic challenges which threaten to slow down the clean energy transition,as well as for having significant and still largely untapped wind energy resource.A previous report in early 2022 provided likewise for Brazil,India,Mexico,South Africa and The Philippines.2 Since then the relative economics of wind power has increased further,making the transition to wind more cost effective.2 GWEC,Capturing Green Recovery Opportunities from Wind Power in Developing Economies,Feb 2022,available online at:https:/ on offshore windGiven the five-year horizon and the countries selected for study,only onshore wind capacity and no offshore wind capacity has been included into the analysis of the countries discussed.While offshore wind makes up zero or a small proportion of the wind capacity in each of the countries discussed,all of the countries have significant offshore wind potential which could be realised in the coming decades.This is particularly the case for Argentina.Many of the broader recommendations made in this document are relevant for offshore wind.1.IntroductionGWEC.NET17Figure 1 Countries examined in this study.Capturing green recovery opportunities from wind power in developing economies18While the benefits of wind energy are great and numerous,there are a number of barriers to sector development which are common to the five countries selected for this study,as well as many developing economies around the world.Lack of clear policy commitmentLack of policy commitment to consistently promote and enable wind energy is a barrier to wind energy deployment common to many developing economies.In many countries,governments remain committed to conventional fossil fuel-based electricity generation,particularly if it is a good source of foreign investment.Even in countries where the government is positive towards renewable energy,there can be a lack of enabling policy frameworks and regulation to adequately support investment in wind energy and other renewables.A clear route to market is needed to decrease investment risk and cost of capital for developers.Similarly,long-term ambitions for wind energy ease pressures on local investment in a supply chain.Governments must increase wind power ambition and reflect this in updated NDCs and targets,comprehensive national climate strategies,and short-and long-term energy plans.The Glasgow Climate Pact called upon all Parties to COP to submit updated and strengthened NDCs by COP27.Beyond NDCs,national visions or policies should include concrete wind energy capacity or generation targets,with a clear,detailed timeline and a roadmap to achieve installation volumes.Insufficient transmission system infrastructure and investmentWind energy projects rely on land availability,wind resource,and grid connection points.This means that projects cant always be developed in areas where the grid is well developed.This is particularly an issue for multi-island nations,in which the countrys best wind resources can be found on sparsely populated islands.In many countries,development of transmission system infrastructure is coordinated by a separate organisation to that for the development and planning for electricity generation.In other countries the governance of the transmission system and generation is split into regions.This fragmentation can lead to the transmission system not being efficiently developed in the optimal areas or at the necessary time for connecting wind energy projects,which can delay the deployment of new capacity,raise investment risk and hamper efforts to meet targets.Greater public and private investment in secure,smart and flexible grids which enable ever-larger shares of renewable energy is necessary to meet the urgent pace of the energy transition.Forward-planning of transmission network expansion and investment in developing the network should be accelerated to increase the potential sites developers will consider for wind projects,as well as to avoid delays and grid congestion in the future.Through pooling expertise among system operators,regulators and utilities,public authorities can undertake long-term forward-planning on grid expansion and reinforcement,electrification of transport,as well as creating regional markets for power export and trading.2.General barriers to wind energy deploymentGWEC.NET19Complex permitting frameworks Too many countries are unable to leverage the enormous interest from investors to deploy wind energy projects due to inefficient permitting schemes.Frameworks for leasing,permitting,and power procurement can be overly complex and bureaucratic,which can delay wind energy deployment if projects cannot obtain the necessary permits and approvals in a sensible timeframe.These processes can cover spatial planning,environmental and social impact assessment,planning authorisation,grid connection,and legal challenges to project proposals.In many countries,developers must submit documents and applications to multiple national and local agencies.A lack of clarity on procedures and timelines and poor coordination between agencies and jurisdictions leads to delays,uncertainty,and inefficiencies.For onshore wind projects,permitting can take more than 8 years in Spain,Italy,Greece,Sweden,Belgium(Flanders)and Croatia,including the time taken by any legal challenges,according to WindEurope.In Japan it can take up to 5 years to complete the complex environmental impact assessment process.Policymakers must ensure that bureaucracy and red tape are not obstructions to achieving energy and climate goals.Lack of a consistent,clear permitting process adds risk for investors and developers and adversely impacts industry confidence in a country.Frameworks related to permitting,leasing,and auctions should be simplified to increase wind energy deployment.Consider establishing a single agency,or one-stop shop,to manage and coordinate all documentation and applications to greatly help simplify processes.Strong coordination between different framework administrators is key.This includes administrators of leasing,permitting,revenue support,and other frameworks,and ministries responsible for energy and environment.This ensures that processes fit well together,and that each can cater for the volumes of projects progressing.Capturing green recovery opportunities from wind power in developing economies20Current situationArgentina has some of the best wind resources in the world,with high wind speeds and extremely high potential capacity factors of up to 70%,as well as large amounts of open space for wind farm development.The largest contributors to Argentinas electricity mix are currently natural gas and hydropower.On average,Argentina produces 500,000 barrels per day(bpd)of oil,of which around 20%is exported.Despite this,Argentina is a net importer of fossil fuels.Inflation in Argentina has been rising for several years and is forecast to average 98%for the year 2023,causing economic uncertainty.These macroeconomic conditions,as well as turbulent financial markets,dampen investor confidence.Appetite for investment is still present,however,due to Argentinas huge technical potential and growing energy demand.The move to renewable energy will reduce the dependence on fossil fuels for power generation and the rising costs associated with natural gas and oil,as well as unleash international investor confidence in the growing renewables sector.Argentina currently has 3,300 MW of installed onshore wind capacity,and is forecast by GWEC to install around 300 MW per year under a business-as-usual scenario from 2023 to 2027.Under an accelerated transition scenario,if barriers to policy frameworks,transmission infrastructure and permitting schemes were resolved,Argentina could install 31%more onshore wind energy capacity in the next five years.Energy mix and targetsArgentina ratified the Paris agreement on the 21st of September 2016.It has an NDC to reach net-zero carbon emissions by 2050.It has set the goal of not exceeding the net emission of 349 MtCO2e in 2030,which is a 19%reduction compared to peak levels set in 2007.In 2015,the Government passed Law 27.191,which sets a non-hydro renewable energy target of 20%by 2025 with the potential of 25%by 2030.Of this,65%will be wind power.Relevant targets are shown in Table 2.COUNTRY STUDY ArgentinaArgentina currently has 3,300 MW of installed onshore wind capacity,and is forecast by GWEC to install around 300 MW per year under a business-as-usual scenario from 2023 to 2027.GWEC.NET21With increased focus these targets are realistic,as wind energy has been steadily increasing as a proportion of the total mix over the past five years.Continuation of this progress depends on the state of the local economy,however.Table 2 Argentina targets.Parameter2030 targetReduction of emissions intensity compared to 2007 levels(NDC as of November 2021)19%Share of non-fossil fuel sources(non-hydro)in installed electricity capacity mix20%(2025)Share of wind power in installed electricity capacity mix13%Argentinas electricity energy mix and dependence on natural gas and oil is shown in Figure 2.In 2020(most recent data available),the share of non-hydro renewables was 7.4%of the total mix.Figure 2 Argentina electricity energy mix by source.040801201602000 090199520002005201020152020Electricty generated(TWh)Share of electricity mixSource:IEACoalOilNatural gasBiofuelsNuclearHydroWindSolar PVTotalCapturing green recovery opportunities from wind power in developing economies22Economic stimulus and laws for clean energyVital to wind development in Argentina is Law 27.191(2015),which established a framework for renewable energy development.Central to this was the creation of the Renewable Energy Trust Fund(FODER)which is used to provide payment guarantees and project finance to renewable energy developers.This law grants multiple tax incentives to wind developers.These include:Accelerated depreciation of assets VAT refunds on pre-COD purchases Tax deduction of all financial expenses Extension of income tax loss credits to 10 years,and 20%tax credit available to local independent power producers that achieve 30%local content.The Ministry of Energy and Mines(MINEM)sets energy sector policies and oversees their implementation.The local wholesale market,Mercado Electrico Mayorista(MEM)is administered by state utility CAMMESA which is owned by MINEM(20%)and private sector companies(80%).To reduce the production of GHG associated with its energy generation,the Government created the RenovAr program in 2016,which aims to increase the development of renewable energy projects through competitive auctions and to establish 20-year power purchase agreements(PPAs)between renewables projects and CAMMESA.This programme seeks to increase the bankability of projects through a few measures:Payment and liquidity guarantee from FODER Provision of dispatch priority to renewables projects,and Issue of PPA tariffs in$USD that are payable in ARS.Since its launch in 2016,the RenovAr program has awarded 244 renewable energy projects,achieving 6.3 GW of installed capacity throughout its auction rounds of which 74%has been wind.In response to recent political and economic uncertainty that saw several large-scale projects fail to reach financial close,and in a bid to better utilise Argentinas medium voltage grid network,Round 3 of the RenovAr aimed at incentivising small-scale decentralised projects up to 10 MW in capacity.GWEC.NET23Current barriers to wind energyGrid development A programme of expansion across the countrys high voltage and medium voltage grid networks is urgently required to support the planned expansion of wind energy.Though proposals have been brought forward by regulators,substantial progress in this area has been slow,mostly due to embedded government bureaucracy and lack of government focus.Investment environmentInflation in Argentina for 2022 averaged approximately 75%and has been over 40%since 2019.This has created an unstable environment for investors.Developers have been able to help account for these inflationary pressures through contracting strategies,but problems are compounded by foreign exchange limitations that are enforced as a legacy of recent financial instability.These limitations prevent investment dollars from being expatriated outside Argentina to preserve the financial strength of the Argentine Peso,and severely dampen investor appetite in the region as any profits or revenue cannot be converted to other currencies.This restricts the amount of foreign investment in the country,the financing options available to developers,and the extent to which equipment can be purchased overseas.It has limited involvement in the market to smaller national power providers and limits the scope for private overseas investment in critical high-voltage network upgrades needed to accommodate future growth.Changes to auction eligibilityLarge wind projects(larger than 10 MW)were excluded from the latest round of the RenovAr programme,which is targeted at small scale de-centralised generation projects.Wind projects are less attractive at this scale as economies of scale during maintenance are not possible.Although large scale wind projects can still find a route to market via the MATER framework,which seeks to incentives corporate PPAs between developers and large users of power with average demand more than 0.3 MW,the rate of project development under this framework has historically been slow.Capturing green recovery opportunities from wind power in developing economies24Case study PEPE III wind project 3 Pampa Energa,Pampa Energa Wind Farm III(PEPE III),available online at:https:/ Vestas,New 106 MW order extends Vestas Argentinean leadership,May 2018,available online at:https:/ 5 Cmara Elica Argentina,Activity,available online at:https:/.ar/?page_id=6076 The PEPE III wind project is the twin to its predecessor PEPE II,located off 3 km from the City of Bahia Blanca,a province of Buenos Aires.This project was commissioned in 2019 and came into operation in 2020.As of 2021 both PEPE II and III are authorised under the International Renewable Energy Certificates(IREC)standard.As of 2020,the installed capacity can generate 243GWh of clean power.3 This generation comes from the 53 MW of capacity produced by 14 wind turbines procured from Vestas.4While the job creation from this exact project is not entirely clear,there has been significant value created,reflected in investment in the wind industry of approximately$4.6 billion since 2016.Argentina being Latin Americas second largest producer of wind this is a positive signal that a significant work force will be required.PEPE III is one of many projects in nine provinces in Argentina which have collectively contributed towards the mitigations of over 5.8 million tonnes of CO2 emissions annually.5GWEC.NET25Recommendations for wind acceleration Allow the expatriation of the revenue and profit of wind projects in dollars.This will greatly improve investor appetite as the chances of wind projects succeeding will not be tied down directly to the local economy.Incentivise the next round of the RenovAr programme to allow for small and medium sized decentralised projects(up to 50 MW).This will continue the best use of Argentinas medium voltage grid network,while increasing the capacity of most projects slightly to further accelerate wind capacity and encourage the shift to a high voltage network.Larger projects will also increase the need and incentive to develop a skills base in Argentina.Improve wind industry visibility by establishing an auction pipeline with at least a 34 year timeframe.This will allow developers time to prepare their bids,increase investor certainty and increase competition in the market by de-risking the market for smaller developers.A longer-term auction framework can also support more efficient coordination with grid planning.Increase coordination between strategic grid development and future energy generation plans,to streamline future grid connection planning for wind energy projects.The planning timelines for grid connection should be aligned with the implementation of grid augmentation,as well as the shift from the current medium voltage grid to high voltage.Construction of additional substations should be prioritised to ensure that renewable energy can be integrated across different regions of the country.Project pipeline scenarios The methodology for these scenario forecasts is in Appendix A.In the business-as-usual scenario we forecast that almost 1.5 GW of wind capacity will be installed between 2023 and 2027.If wind is accelerated and barriers are removed,we forecast a fast acceleration of wind capacity from Capturing green recovery opportunities from wind power in developing economies262025 which would result in almost 2 GW being installed between 2023 and 2027 a potential upside of 500 MW.The greatest difference is seen in 2027,and this trend is expected continue past 2027.0.00.20.40.620232024202520262027Capacity installed(GW)Year of installationBusiness as usualWind accelerationFigure 3 Forecast of installed capacity in Argentina in the two scenarios.Table 3 Forecast of installed capacity in Argentina in the two scenarios.New wind installed capacity(MW)20232024202520262027Business as usual300300300300300Wind acceleration300315375450525Figure 3 shows the forecast pipeline in the two scenarios between 2023 and 2027.Table 3 shows the forecast installed capacity in MW in the two scenarios between 2023 and 2027.GWEC.NET27different segments of an onshore wind farm can be found in the Appendix B.In the wind acceleration scenario,50,000 direct and indirect FTE job years are created from wind energy in Argentina between 2023 and 2027 in the development,construction,and installation phase.In addition,5,000 annual direct and indirect FTE job years are created in O&M,which continues for the lifetime of the wind farms.Figure 5 shows the annual FTE years created in the wind acceleration scenario by supply chain category.There is a potential upside of 64,000 new FTE jobs created in a wind 8.4 9.3 11.5 14.4 12.8 -20 40 60 80-5 10 15 2020232024202520262027Aunual FTE years(Thousands)Cumulative FTE years(Thousands)Development and project managementTurbineBalance of plantInstallation and commissioningO&MCumulativeFigure 4 FTE years created in the business-as-usual scenario in Argentina.Impacts analysisIn the business-as-usual scenario,41,000 direct and indirect FTE job years are created by wind energy in Argentina between 2023 and 2027 in the development,construction,and installation phase.In addition,2,900 annual direct and indirect FTE job years are created in OMS,which continue for the lifetime of the wind farms.Figure 4 shows the annual FTE years created in the business-as-usual scenario by supply chain category.Examples of occupations across -20 40 60 80-5 10 15 2020232024202520262027Aunual FTE years(Thousands)Cumulative FTE years(Thousands)Development and project managementTurbineBalance of plantInstallation and commissioningO&MCumulative8.4 9.3 11.5 14.4 12.8 Figure 5 FTE years created in the wind acceleration scenario in Argentina.Capturing green recovery opportunities from wind power in developing economies28acceleration scenario over the lifetime of the wind farms.$1.9 billion direct and indirect gross value added is created from wind energy in Argentina between 2023 and 2027 in the business-as-usual scenario over the lifetime of the wind farms.Figure 6 shows the GVA created in the business-as-usual scenario by supply chain category.$2.4 billion direct and indirect gross value added is created from wind energy in Argentina between 2023 and 2027 in the wind acceleration scenario over the lifetime of the wind farms.Figure 7 shows the GVA created in the wind acceleration scenario by supply chain category,with a difference of$500 million from the BAU scenario.20232024202520262027Development and project managementTurbineBalance of plantInstallation and commissioningO&MCumulative0.4 0.4 0.4 0.5 0.3 -1.0 2.0 3.0 4.0-0.2 0.4 0.6 0.8Aunual GVA($billions)Cumulative GVA years($billions)20232024202520262027Development and project managementTurbineBalance of plantInstallation and commissioningO&MCumulative 1.0 2.0 3.0 4.0 0.2 0.4 0.6 0.80.4 0.5 0.6 0.7 0.5 Aunual GVA($billions)Cumulative GVA years($billions)Figure 6 Gross value added created in the business-as-usual scenario in Argentina.Figure 7 Gross value added created in the wind acceleration scenario in Argentina.GWEC.NET29Impacts created in Argentina in the business as usual scenario Impacts created in Argentina in the green recovery scenario A total of 112,000 FTE job years created over the lifetime of the wind farmsUS$3.3 billion gross value added(GVA)to national economies over the lifetime of the wind farms6,570 GWh electricity produced per year from 2027,which is the same as 1.7 million homes powered with clean energy per year 1.8 million electric vehicles powered annually from 202771 million tonnes of carbon emissions saved during the lifetime of the wind farm,which is the same as:15.5 million cars of the road 21.2 million return flights from Buenos Aires to Sharm el-Sheikh Planting and maintaining 1.9 million trees for 10 years12 million litres of water saved annually from 2027 which would otherwise be used for thermal power generationA total of 176,000 FTE job years created over the lifetime of the wind farmsUS$4.7 billion gross value added(GVA)to national economies over the lifetime of the wind farms8,600 GWh electricity produced per year from 2027,which is the same as 2.2 million homes powered with clean energy per year 2.3 million electric vehicles powered annually from 202793 million tonnes of carbon emissions saved during the lifetime of the wind farm,which is the same as:20.2 million cars of the road 27.6 million return flights from Buenos Aires to Sharm el-Sheikh Planting and maintaining 2.5 million trees for 10 years16 million litres of water saved annually from 2027 which would otherwise be used for thermal power generationCapturing green recovery opportunities from wind power in developing economies30Current situationColombia has started to develop an onshore wind industry,with substantial policy frameworks and regulations,and a project pipeline for wind projects of over 2 GW.Colombia has large regions of both untapped onshore and offshore wind potential.Despite government efforts,Colombia is still a large greenhouse gases(GHG)emitter.The largest contributions to emissions come from the transport sector at 41%,with the industrial sector following behind at 28%and electricity and heating at 10%.With an energy mix that heavily relies on hydropower,the system is vulnerable to El Nio weather patterns with drier years causing the country to utilise more fossil fuel combustion for power generation.More renewables in the energy mix will provide greater energy security and less reliance on fossil fuels in drier years.In mid-2022 a new political party came into power with environmental issues at the centre of its campaign and is likely to boost Colombias renewable ambitions further.The public and private sector are working collaboratively to make Colombia a leader in wind power in Latin American markets.Additionally,Colombia has begun enacting policies outlined in its offshore wind and hydrogen roadmaps6,7,signalling political ambition.Colombia currently has 23 MW of installed onshore wind capacity,and is forecast by GWEC to install around 300-800 MW per year under a business-as-usual scenario from 2023 to 2027.Under an accelerated transition scenario,if barriers to policy frameworks,transmission infrastructure and permitting schemes were resolved,Colombia could install 44%more onshore wind energy capacity in the next five years.Energy mix and targetsColombia ratified the Paris agreement on 12 July 2018,and announced its NDC in December 2020 to reduce emissions 51%by 2030 compared to the 2014 levels.This represents a 6 The World Bank,Colombia Offshore Wind Roadmap,2022,available online at:https:/www.minenergia.gov.co/documents/5859/Colombia_Offshore_Wind_Roadmap_VE_compressed.pdf 7 Inter-American Development Bank,Colombia Hydrogen Roadmap,2021,available online at:https:/www.trade.gov/market-intelligence/colombia-hydrogen-roadmap COUNTRY STUDY ColombiaColombia currently has 23 MW of installed onshore wind capacity,and is forecast by GWEC to install around 300-800 MW per year under a business-as-usual scenario from 2023 to 2027.GWEC.NET31maximum of country emissions of 169.44 MtCO2eq in 2030.It has the goal to reach net zero by 2050.Other relevant targets are shown in Table 4.Colombias targets are realistic.The new government installed in 2022 will likely ensure these targets maintain a Table 4 Colombia targets.Parameter2030 targetLevel of deforestation Zero deforestationReduction of emissions intensity compared to 2014 levels(NDC as of November 2021)51%Share of non-fossil fuel sources in installed electricity capacity mix7004060801000 0%Electricty generated(TWh)Share of electricity mixSource:IEACoalOilNatural gasHydroBiofuelsWindSolar PVTotalFigure 8 Colombia electricity energy mix by source.priority,and the country already has a strong track record of expanding renewables generation,mostly via hydropower.Alternative renewable energy should continue to however,to diversify the electricity mix and thus help increase energy security.Capturing green recovery opportunities from wind power in developing economies32Colombia established an overarching legal framework for the development of onshore wind energy in 2014(Law 1517/2014).This has been continually updated and amended in the years since,and grants multiple tax incentives to developers,and is in force until 2051.Incentives include:Exclusion of sales tax on goods and services Exemption of import tariffs The right to discount up to 50%of total investment values from tax revenues over the first 15 years of a projects operational lifetime,and Tax recovery is supported by an accelerated depreciation mechanism,which allows annual depreciation of up to 33.3%to be applied to assets.This allows developers reduce their tax burden.Decree 570 of 2018 established the Ministry of Mines and Energy as the authority responsible for regulating,planning co-ordinating and monitoring the development of wind energy.This includes defining target volumes,as well as developing competitive allocation schemes and the assessment criteria that will be used to develop wind projects.Despite being the largest coal producer in Latin America,only 5%of the total electricity was generated from coal in 2021,as shown in Figure 8.Colombias electricity energy mix has remained remarkably constant over the past two decades,with the proportion of renewables(dominated by hydropower)gradually increasing from 76.4%in 1990 to 76.6%in 2021.Of this,wind comprised 0.1%of the electricity mix in 2021.Economic stimulus and laws for clean energyThe Sustainable and Inclusive Reactivation and Growth Policy(PRCSI),a recovery plan for a just energy transition,was launched in 2020.This focuses on developing Colombias energy infrastructure for better integration of renewables and inter-region connectivity.Additionally,Law 2169/2021,passed in 2021,is inspired by Colombias NDC targets and establishes a goal of reducing Colombias Greenhouse gas emissions by 51%against a 2014 reference.GWEC.NET33Auctions are run by Colombias Mining and Energy Planning Unit(UPME),a technical unit within the Ministry.Colombia has hosted three stand-alone technology neutral auctions since 2019.The first was unsuccessful,as stringent prequalification requirements were not met.These requirements were dropped for subsequent rounds,which were more successful as a result.An additional key reason for the success of subsequent rounds was the enaction of a 10%mandatory renewable energy target in the 2019 National Plan of Development.Renewables auctions have adopted a design that matches pre-qualified buyers and sellers to determine long term PPAs.Current barriers to wind energyLack of auction visibilityColombia has hosted two successful auctions,but these have been issued on an ad-hoc basis.This lack of certainty over the timing and size of future rounds hampers the ability of market players to make long term plans,providing a barrier to supply chain participation and growth.Market schemes have been implemented to encourage the development of corporate PPAs,but volumes are still small.Social and environmental licencingThe social and environmental licencing process in Colombia is supposed to take 110 working days for a project,plus the additional time to deal with any problems encountered during the evaluation of paperwork.Environmental permitting has been a source of significant delay for wind energy projects however,with delays of multiple months.A problematic part of the process is the need for infrastructure developers to establish free,prior,informed consent with indigenous and ethnic groups as a fundamental part of the environmental and social licencing process.This is managed by the Directorate of Prior Consultation and requires significant resources of development teams that struggle to manage multiple applications in tandem.Developers are eager to meet prior consent requirements projects but would like to see clearer regulation to streamline the process and limit development risk.Capturing green recovery opportunities from wind power in developing economies34Grid development One of the least developed areas of the energy transmission system is in the wind-rich region of La Guajira.The lack of transmission development means wind farms struggle to begin operations due to lack of grid connection point availability.The Colombian energy sector is structured and overseen by the Ministry of Mines and Energy,which can intervene to help with expansion of the energy network to remote areas of the country.Case study La Guajira wind farm8 Vestas,Vestas enters new market with an order in Colombia,September 20,available online at:https:/ La Guajira,Colombias first wind farm after a 17-year hiatus,came online in January 2022.The Colombian multinational Elecnor and energy generator Isagen formed a partnership to develop this wind farm.This partnership between an electricity utility and an operations and maintenance company can be valuable when looking at synergies for collaboration along the value chain.Vestas was commissioned to supply 10 turbines,which together can generate up to 20 MW of clean energy for the region.8This project alone created over 50 jobs and generated in the region of$75,000 million pesos.As this project is one of 14 in the pipeline,more jobs and further investment can be expected in the region.In 2022,Colombia experienced a record high of investment million in renewable energy investment in the region of$800 million pesos,the positive effects of which will be felt throughout the local economy.GWEC.NET35Recommendations for wind acceleration Improve wind industry visibility by establishing an auction pipeline with a 34 year timeframe at least.This will allow developers time to prepare their bids and increase investor certainty.In addition to the further encouragement of corporate PPAs,this will increase competition in the market by de-risking the market for smaller developers.Simplify the permitting,environmental and social licencing process,especially to streamline the process for achieving informed consent with indigenous and ethnic groups.Expanding the number of staff at the Directorate of Prior Consultation will also allow the faster processing of applications.Increase government spending commitments directed at grid modernisation and expansion to promote a reliable operation and prevent bottlenecks,especially in the La Guajira region,and to help futureproof the system for further low-cost wind additions.Failure to adapt market design to the needs of the future energy system may result in higher long-term costs,higher electricity prices for consumers and systematic integration challenges for clean energy.Continue to strengthen the dialogue between the government and renewable energy stakeholders,including investors in the sector,IPPs and civil society organisations representing community,especially ingenious groups,interests.Limited channels for dialogue can make it challenging to assess investment risk in wind projects,particularly in an environment of policy variability and new institutional frameworks.Establishing a semi-permanent forum for dialogue and consultation between the government,industry and wider stakeholders would allow for more effective responses and contributions to policy changes.Capturing green recovery opportunities from wind power in developing economies36Project pipeline scenarios The methodology for these scenario forecasts is in Appendix A.In the business-as-usual scenario we forecast that 2.7 GW of wind capacity will be installed between 2023 and 2027.If wind is accelerated and barriers are removed,almost 4 GW of wind capacity will be installed between 2023 and 2027 an upside of over 1 Table 5 Forecast of installed capacity in Colombia in the two scenarios.New wind installed capacity(MW)20232024202520262027Business as usual800600500300500Wind acceleration840720800540100020232024202520262027Capacity installed(GW)Year of installationBusiness as usualWind acceleration0.00.51.01.5Figure 9 Forecast of installed capacity in Colombia in the two scenarios.GW of more wind energy installed over the five-year period.The greatest difference is seen in 2027,and this trend is expected continue past 2027.Figure 9 shows the forecast pipeline in the two scenarios between 2023 and 2027.Table 5 shows the forecast installed capacity in MW in the two scenarios between 2023 and 2027.GWEC.NET37Impacts analysisIn the business-as-usual scenario,68,000 direct and indirect FTE job years are created by wind energy in Colombia between 2023 and 2027 20232024202520262027Aunual FTE years(Thousands)Cumulative FTE years(Thousands)Development and project managementTurbineBalance of plantInstallation and commissioningO&MCumulative-20 40 60 80 100 120 140-5 10 15 20 25 3023.6 21.2 24.6 17.3 24.3 20232024202520262027Aunual FTE years(Thousands)Cumulative FTE years(Thousands)Development and project managementTurbineBalance of plantInstallation and commissioningO&MCumulative22.5 17.7 15.4 9.6 12.2 -20 40 60 80 100 120 140-5 10 15 20 25 30Figure 10 FTE years created in the business-as-usual scenario in Colombia.Figure 11 FTE years created in the wind acceleration scenario in Colombia.in the development,construction,and installation phase.In addition,4,800 annual direct and indirect FTE job years are created in O&M,which continues for the lifetime of the wind farms.Figure 10 shows the annual FTE years created in the business-as-usual scenario by supply chain category.Examples of occupations across different segments of an onshore wind farm can be found in the Appendix B.In the wind acceleration scenario,92,500 direct and indirect FTE job years are created from wind energy in Colombia between 2023 and 2027 in the development,construction,and installation phase.In addition 9,500 annual direct and indirect FTE job years are created in O&M,which continues for the lifetime of the wind farms.Figure 11 shows the annual FTE years created in the wind acceleration scenario by supply chain category.There is a potential upside of 148,000 new FTE jobs created in a wind acceleration scenario over the lifetime of the wind farms.$2.6 billion direct and indirect gross value added is created from wind energy in Colombia between 2023 and 2027 in the business-as-usual scenario over the lifetime of the wind Capturing green recovery opportunities from wind power in developing economies38Figure 13 Gross value added created in the wind acceleration scenario in Colombia.Figure 12 Gross value added created in the business-as-usual scenario in Colombia.20232024202520262027Development and project managementTurbineBalance of plantInstallation and commissioningO&MCumulative0.9 0.7 0.6 0.4 0.4 -1 2 3 4 5 6-0.5 1.0 1.5Aunual GVA($billions)Cumulative GVA years($billions)20232024202520262027Development and project managementTurbineBalance of plantInstallation and commissioningO&MCumulative0.9 0.8 0.9 0.6 0.8 -1.0 2.0 3.0 4.0 5.0 6.0-0.5 1.0 1.5Aunual GVA($billions)Cumulative GVA years($billions)farms.Figure 12 shows the GVA created in the business-as-usual scenario by supply chain category.$3.7 billion direct and indirect GVA is created from wind energy in Colombia between 2023 and 2027 in the wind acceleration scenario over the lifetime of the wind farms.Figure 13 shows the GVA created in the wind acceleration scenario by supply chain category.The potential upside in the wind acceleration scenario is$1.1 billion direct and indirect GVA.GWEC.NET39Impacts created in Colombia in the business as usual scenarioImpacts created in Colombia in the wind acceleration scenarioA total of 191,000 FTE job years created over the lifetime of the wind farmsUS$4.9 billion gross value added(GVA)to national economies over the lifetime of the wind farms8,300 GWh electricity produced per year from 2027,which is the same as 5.5 million homes powered with clean energy per year 2.3 million electric vehicles powered annually from 2027233 million tonnes of carbon emissions saved during the lifetime of the wind farm,which is the same as:51 million cars of the road 80 million return flights from Bogot to Sharm el-Sheikh Planting and maintaining 6 million trees for 10 years15.5 million litres of water saved annually from 2027 which would otherwise be used for thermal power generationA total of 339,000 FTE job years created over the lifetime of the wind farmsUS$8.1 billion gross value added(GVA)to national economies over the lifetime of the wind farms12,000 GWh electricity produced per year from 2027,which is the same as 7.8 million homes powered with clean energy per year 3.3 million electric vehicles powered annually from 2027336 million tonnes of carbon emissions saved during the lifetime of the wind farm,which is the same as:73 million cars of the road 115 million return flights from Bogot to Sharm el-Sheikh Planting and maintaining 8.8 million trees for 10 years22.5 million litres of water saved annually from 2027 which would otherwise be used for thermal power generationCapturing green recovery opportunities from wind power in developing economies40Current situationAs country host of COP27 in late 2022,governments worldwide will be looking to Egypt to demonstrate leadership and initiative on climate change,including wind power acceleration and progress towards its NDCs,most recently updated in July 2022.Egypt is currently responsible for over one-third of Africas total natural gas consumption,and has a predicted increase in emissions of 50%from 2022 levels by 2030.The government is committed to renewable energy expansion however,to ensure the countrys continuous energy security and stability of energy supply.Egypt has a long history with wind energy,having first developed projects in the early 1990s.Its wind industry was boosted through the World Bank and foreign government support in 2014,with Denmark and Japan providing wind turbines and expertise.Egypt has a large wind energy potential,with high wind speeds along the Red Sea coast and the Gulf of Suez.Its wind capacity is expected to reach 7 GW by the end of 2022 making it an important contributor to its electricity energy mix.Egypt currently has 1,700 MW of installed onshore wind capacity,and is forecast by GWEC to install around 250-700 MW per year under a business-as-usual scenario between 2023 to 2027.Under an accelerated transition scenario,if barriers to policy frameworks,transmission infrastructure and permitting schemes are resolved,Egypt could install 45%more onshore wind energy capacity in the next five years.Energy mix and targetsThe Paris agreement was ratified by Egypt on 29 June 2017,with targets of net GHG emission reductions of 22%by 2022 and 42%by 2035 conditional on international support,though these vary by sector.Egypt has a target of wind making up 14%of the electricity mix by 2035.Relevant targets are shown in Table 6.It is uncertain whether Egypt will meet these targets,in particular the target of 14%share of wind capacity in the electricity mix by 2035.A sharp increase of focus and resource in expanding wind capacity will be COUNTRY STUDYEgyptEgypt currently has 1,700 MW of installed onshore wind capacity,and is forecast by GWEC to install around 250-700 MW per year under a business-as-usual scenario between 2023 to 2027.GWEC.NET41required by government agencies and the private sector.The share of fossil fuels in the electricity energy mix has increased over the past two decades,rising from 0501001502002500 0%Electricity generated(TWh)Share of electricity mixSource:IEANatural gasHydroWindSolar PVTotalTable 14 Egypt electricity energy mix by source.Table 6 Egypt targets.Egypt 2030 targetsReduction of emissions intensity compared to BAU scenario(NDC as of July 2022)33%(in power generation,transmission and distribution)Share of non-fossil fuel sources in installed electricity capacity mix42%(2035)Share of wind capacity in electricity mix14%(2035)around 77%in 1990 to 88%in 2020.Natural gas use has increased sharply since 2015,replacing oil.Meanwhile,the use of renewable energy sources including hydro has stayed relatively constant in this timeframe.Capturing green recovery opportunities from wind power in developing economies42Economic stimulus and laws for clean energyLaw 203,introduced in 2014 and assisted by the World Bank,has helped encourage private investment in renewables.There remains concerns from foreign investors however,due to the slow and bureaucratic nature of the permitting process.The General Authority for Freezones and Investment(GAFI)issues so-called“golden licenses”.These are single-approval licenses that allow some investors to secure a single document that covers land allocation,building licencing,and operations.Projects eligible for these licences must remain compliant with the usual regulatory requirements but the process spares developers from having to seek individual approvals from different entities.Renewable energy projects are eligible for these projects,as are green hydrogen and desalination projects.Eligibility requirements for projects seeking GAFI licenses include:A 50%local content quota An ability to export 50%of output from the project,and A reliance on financing from foreign funders and investors.Current barriers to wind energyBankabilityWind developers in Egypt have expressed concern that the Government tariffs to support wind projects continue to reduce when global wind energy supply chain costs are rising,making the economics of new projects challenging.Energy over-supplyPeak electricity demand in Egypt stands at around 30 GW,however there is currently 60 GW of generation capacity operational in the country,the majority of which is from dispatchable sources like gas and hydro that can be switched off and on according to market demand.The Government has moved to prioritise the development of renewable energy projects by cancelling the development of non-renewable power plants,however,there is no urgent supply need for the country to increase the size of its intermittent renewables generation capability,which limits incentives for developers and investors.GWEC.NET43Lack of competition in offtake marketThe Egyptian energy sector is largely a single-buyer market.The Egyptian Electricity Holding Company(EEHC)owns almost all transmission and distribution assets.Meanwhile,the state-owned company Egyptian Electricity Transmission Company(EETC)executes power purchase agreements with public and private generation companies,and sells power to the nine main distribution companies in Egypt.Egyptian legislation does not allow private offtake agreements for projects over 20 MW,which means the larger and more economic wind projects can struggle to find a route to market.The government has taken steps to liberalise its energy sector,but progress has been slow.Case study West Bakr Wind Farm9 SGRE,Egypt:Wind brings clean energy,growth and hope,November 2020,available online at:https:/ The West Bakr Wind Farm is located 30 km away from the historically oil producing town of Ras Ghareb,Egypt.The areas high wind speeds give the wind farm the potential to produce of 262 MW of energy.Project installation started in 2020 and commercial operation began 2021,an impressive one-year turnaround for construction.Turbines were supplied by Siemens Gamesa Renewable Energy(SGRE).Lekela Power completed the PPA with the Egyptian Electricity Transmission Company and the New and Renewable Energy Authority(NREA)in February 2019.The project created opportunities for local employment and boosted socio-economic activity in the Ras Ghareb and surrounding areas.During construction peak,up to 550 people were employed,with over 25%of the wind farm being constructed by those from the local region.9 In regions where an oil industry once thrived,clean energy jobs have been created,providing a significant boost to the local economy.The West Bakr Wind Farm mitigates 550 MT of CO2 emissions annually and produces 1000 GWh of clean energy per year to the region.Capturing green recovery opportunities from wind power in developing economies44Recommendations for wind acceleration The Government should continue to increase or at least maintain the level of tariffs that support wind energy.This will improve investor confidence that Egypt has the correct economic conditions for continuing to increase wind capacity in the country.Accelerate the electrification of transport and industry,and interconnections between neighbouring countries.This will further increase electricity demand as well as the means to export electricity,and so increase the incentive to increase renewables capacity,which requires more urgency.Allow private offtake agreements for larger wind projects.This will increase the possible route to markets for projects over 20 MW and increase investor confidence and incentives to develop wind capacity.Larger projects will also allow for a greater amount of the wind energy supply chain to be set up in the country,creating further jobs and local investment.Project pipeline scenarios The methodology for these scenario forecasts is in Appendix A.In the business-as-usual scenario we forecast that 2.6 GW of wind capacity will be installed between 2023 and 2027.If wind is accelerated and barriers are removed,we forecast a fast acceleration of wind capacity from 2025 which would result in almost 4 GW being installed between 2023 and 2027 a potential upside of over 1 GW.The greatest difference is seen in 2027,and this trend is expected continue past 2027.GWEC.NET45Figure 15 shows the forecast pipeline in the two scenarios between 2023 and 2027.20232024202520262027Capacity installed(GW)Year of installationBusiness as usualWind acceleration0.00.51.01.5Table 15 Forecast of installed capacity in Egypt in the two scenarios.Table 7 shows the forecast installed capacity in MW in the two scenarios between 2023 and 2027.Table 7 Forecast of installed capacity in Egypt in the two scenarios.New wind installed capacity(MW)20232024202520262027Business as usual250250700700700Wind acceleration26327591010501260Capturing green recovery opportunities from wind power in developing economies46scenario by supply chain category.Examples of occupations across different segments of an onshore wind farm can be found in the Appendix B.In the wind acceleration scenario,96,000 direct and indirect FTE job years are created from wind energy in Egypt between 2023 and 2027 in the development,construction,and installation phase.In addition,12,000 annual direct and indirect FTE job years are created in O&M,which continues for the lifetime of the wind farms.20232024202520262027Aunual FTE years(Thousands)Cumulative FTE years(Thousands)Development and project managementTurbineBalance of plantInstallation and commissioningO&MCumulative 0 20 40 60 80 100 120 1400 10 20 30 40 507.88.123.624.418.8Table 16 FTE years created in the business-as-usual scenario in Egypt.Impacts analysisIn the business-as-usual scenario,70,500 direct and indirect FTE job years are created by wind energy in Egypt between 2023 and 2027 in the development,construction,and installation phase.In addition,6,700 annual direct and indirect FTE job years are created in O&M,which continues for the lifetime of the wind farms.Figure 16 shows the annual FTE years created in the business-as-usual GWEC.NET4720232024202520262027Aunual FTE years(Thousands)Cumulative FTE years(Thousands)Development and project managementTurbineBalance of plantInstallation and commissioningO&MCumulative8.2 8.9 30.6 36.7 33.8 -20 40 60 80 100 120 140-10 20 30 40 5020232024202520262027Development and project managementTurbineBalance of plantInstallation and commissioningO&MCumulative0.2 0.2 0.5 0.6 0.4 -1 2 3-0.2 0.4 0.6 0.8 1.0Aunual GVA($billions)Cumulative GVA years($billions)Table 17 FTE years created in the wind acceleration scenario in Egypt.Table 18 Gross value added created in the business-as-usual scenario in Egypt.Figure 17 shows the annual FTE years created in the wind acceleration scenario by supply chain category.There is a potential upside of 164,000 new FTE jobs created in a wind acceleration scenario over the lifetime of the wind farms.$1.7 billion direct and indirect gross value added is created from wind energy in Egypt between 2023 and 2027 in the business-as-usual scenario over the lifetime of the wind farms.Figure 18 shows the GVA created in the business-as-usual scenario by supply chain category.Capturing green recovery opportunities from wind power in developing economies48$2.3 billion direct and indirect gross value added is created from wind energy in Egypt between 2023 and 2027 in the wind acceleration scenario over the lifetime of the wind 20232024202520262027Development and project managementTurbineBalance of plantInstallation and commissioningO&MCumulative0.2 0.2 0.7 0.8 0.7 -1.0 2.0 3.0-0.2 0.4 0.6 0.8 1.0Aunual GVA($billions)Cumulative GVA years($billions)Table 19 Gross value added created in the wind acceleration scenario in Egypt.farms.Figure 19 shows the GVA created in the wind acceleration scenario by supply chain category,with a difference of$600 million in GVA over the forecast period.GWEC.NET49Impacts created in Egypt in the business as usual scenarioImpacts created in Egypt in the wind acceleration scenarioA total of 242,000 FTE job years created over the lifetime of the wind farmsUS$3.5 billion gross value added(GVA)to national economies over the lifetime of the wind farms11,400 GWh electricity produced per year from 2027,which is the same as 6.5 million homes powered with clean energy per year 3 million electric vehicles powered annually from 2027225 million tonnes of carbon emissions saved during the lifetime of the wind farm,which is the same as:49 million cars of the road 2 billion return flights from Cairo to Sharm el-Sheikh Planting and maintaining 6 million trees for 10 years21 million litres of water saved annually from 2027 which would otherwise be used for thermal power generationA total of 406,000 FTE job years created over the lifetime of the wind farmsUS$5.6 billion gross value added(GVA)to national economies over the lifetime of the wind farms16,500 GWh electricity produced per year from 2027,which is the same as 9.2 million homes powered with clean energy per year 4.5 million electric vehicles powered annually from 2027326 million tonnes of carbon emissions saved during the lifetime of the wind farm,which is the same as:71 million cars of the road 3 billion return flights from Cairo to Sharm el-Sheikh Planting and maintaining 8.6 million trees for 10 years31 million litres of water saved annually from 2027 which would otherwise be used for thermal power generationCapturing green recovery opportunities from wind power in developing economies50COUNTRY STUDY:IndonesiaCurrent situationHome to the fourth-largest population in the world,Indonesia is a large contributor of GHG emissions,with coal being its biggest energy export as well as accounting for over 50%of its electricity mix.This contrasts its stated Paris Agreement commitments,which outline a long-term strategy of peak GHG emissions by 2030 and aims to achieve net-zero emissions by 2060.Indonesia consists of several large land masses and islands.As a result,an interconnected national grid system would be challenging.This,combined with the best wind resources located away from large population centres,makes it difficult to accelerate wind deployment.Renewables expansion is necessary,however,for energy security.In addition to coal export dependency,Indonesia currently imports a large amount of its oil,and so is vulnerable to volatile market prices.To partly address energy security,the National Economic Recovery(PEN)program ringfenced 3.5%of its budget for support of renewables.This has been overshadowed by the continued expansion of fossil fuel use,missing an opportunity for wind acceleration and boosting Indonesias reliance on fossil fuels imports.Indonesia aims to meet a large share of its climate commitments through emission reductions,primarily by reducing deforestation levels.This is expected to contribute to almost 60%of the emissions reductions necessary to meet both conditional and unconditional NDC targets.Indonesia currently has 150 MW of installed onshore wind capacity,and is forecast by GWEC to install about 75-100 MW per year under a business-as-usual scenario from 2023 to 2027.Under an accelerated transition scenario,if barriers to policy frameworks,transmission infrastructure and permitting schemes were resolved,Indonesia could install 26%more onshore wind energy capacity in the next five years.Energy mix and targetsIndonesia ratified the Paris Agreement on 23 April 2016 through Law No.16/2016,with the target goals of 23%renewables by 2025 and 31%by 2050.It aims to be carbon neutral by 2060,although this is not ratified through any legislation or executive motions.Indonesia currently has 150 MW of installed onshore wind capacity,and is forecast by GWEC to install about 75-100 MW per year under a business-as-usual scenario from 2023 to 2027.GWEC.NET51Indonesia aims to meet a large share of its commitments through emission reductions by reducing deforestation levels.This is expected to contribute to almost 60%of the emissions reductions necessary to meet both conditional and unconditional NDC targets.Relevant targets are shown in Table 8.Indonesias renewables target is realistic if the rate of renewables expansion increases or remains on course.The 2030 wind target is Table 8 Indonesia targets.Parameter2030 targetReduction of emissions intensity compared to BAU scenario(NDC as of September 2022)32%unconditional 43%conditionalShare of non-fossil fuel sources in installed electricity capacity mix23%(2025)Wind capacity in electricity mix1.8 GW0701402102803500 090199520002005201020152020Electricty generated(TWh)Share of electricity mixSource:IEACoalOilNatural gasHydroGeothermalBiofuelsWindSolar PVTotalTable 20 Indonesia electricity energy mix by source.unlikely to be met,however,as an extremely large increase in installed capacity is required in a short amount of time.Even if the renewables target is met,the past recent expansion of the use of coal is concerning and will partly counteract any progress made on renewables,even with a recently announced moratorium on coal.Indonesias electricity energy mix is dominated by fossil fuels,which have increased over the past two decades.The use of renewables has increased at a steady rate,but just behind the rate needed to maintain its share of the energy mix as shown in Figure 20.Capturing green recovery opportunities from wind power in developing economies52Economic stimulus and laws for clean energyLaw 112 of 2022 seeks to address perceived bottlenecks in the development of renewables and provide a framework for the procurement of renewable energy.It allows state-owned electricity company PLN to sign offtake agreements up to 30 years in length with generators of selected projects.Potential projects are initially screened to ensure they meet minimum administrative,technical and financial requirements.Then projects are bid in an auction with a pre-defined ceiling price adjusted by locational factors for projects connecting in different regions of the country.The ceiling price for proposed extensions of existing projects is capped at 70%of the original project price.PLNs procurement quotas are set by the Minister of Energy and Resources.These quotas use the Governments Electric Business Plan(RUPTL),which sets out Indonesias future electricity capacity and network development plans up to 2030,as the main guideline for procurement.Law 112 also mandates that no new coal fired power plants can be built in the country and sets out a framework for the early retirement of coal assets.Domestic and international funding is available to support the early retirement of coal power assets via a Clean Energy Fund that can support the development of renewables projects.Renewable energy projects are also eligible for other forms of government support including import duty exemptions,land availability guarantees,and land and building tax facilities.Current barriers to wind energyInadequate project screeningThere are currently doubts about the deliverability of the 600 MW of wind energy capacity that PLN has committed to.This is because projects can currently secure offtake deals without having to demonstrate permitting,feasibility or sufficient wind resource.They merely need to be led by entities that meet financial,technical and administrative criteria.This,combined with a lack of penalties for non-delivery,has led to projects that are not credible or GWEC.NET53robust securing offtake agreements.This presents a challenge to Indonesias ability to hit its renewable energy targets and potentially damages trust in the wind industry.Grid planningGrid planning in Indonesia is complicated by the nature of the countrys archipelagic geography.This means having a centralised grid is extremely difficult and not practical,making grid planning uniquely difficult in Indonesia comparted to other countries in this study.An opportunity from this would be to implement smaller decentralised micro grids with wind energy as a key generator.This allows for the reliance on fossil fuel generators to be negated and increase energy security within these isolated regions.Government will While the Indonesian Government publicly supports the expansion of renewables,there has been a reluctance to meaningfully invest in wind energy to date due to several factors:Continued focus on fossil fuels,particularly coal production,which is a large source of income for the state Reliance on reducing deforestation as a means to meet climate goals,and Lack of certainty on optimal locations for wind projects.Capturing green recovery opportunities from wind power in developing economies54Case study Sidrap Wind FarmIndonesia currently has just one utility scale wind farm project,Sidrap wind farm,which came online in March 2018.The 75 MW project comprises of 30 SGRE turbines rated at 2.5 MW which provides power to the Sulawesi PLN grid in South Sulawesi.The Sidrap project was developed in partnership between UPC Renewables and AC Energy Holding,a subsidiary of Ayala Corporation based in the Philippines.This project received funding from the U.S Overseas Private Investment Corporation and was completed on time and on budget.The project is in a windy area of the Sidrap region that has a large onshore wind energy potential.10 UPC Renewables,Project details Sidrap Wind Farm,2018,available online at:https:/ ACEN Renewables,Sidrap Wind,2021,available online at:https:/ Wind Farm has been well received by the local community which is supportive of the growth of wind energy in the region.Jobs have been created as a result of the wind farm being built,in both project development and construction sectors.A majority of these jobs have been occupied by the local people from the Sidrap region.10As of 2021 the renewable energy output of the wind farm had positively contributed towards a reduction in annual emissions of 129,460 MT CO2e.11 GWEC.NET55Recommendations for wind acceleration Broaden pre-qualification criteria to cover project viability.A more comprehensive set of pre-qualification criteria for participation in procurement rounds would help ensure that Indonesia has a more viable pipeline of projects.These criteria should include metrics related to resource analysis,permitting status,stakeholder engagement status,site control,and procurement,transportation,and logistics plans.Commission a government-funded study to establish the optimal locations for wind energy projects and ringfence the selected locations for wind development only.This will increase investor confidence as it will signal the government is making a commitment on wind energy.It will also give project developers greater amount of time to plan and develop projects as the locations are known further in advance.Increase government spending commitments directed at grid modernisation and expansion to promote a reliable operation and prevent bottlenecks.This is especially the case of Indonesia,an island nation,and will help futureproof the system for further low-cost wind additions.Promote diversification of the energy mix and competitive procurement processes to ensure low-cost renewable energy supply to meet decarbonisation commitments.This includes establishing priority dispatch for renewable energy generation on the grid.Project pipeline scenarios The methodology for these scenario forecasts is in Appendix A.In the business-as-usual scenario we forecast that about 450 MW of wind capacity will be installed between 2023 and 2027.If wind is accelerated and barriers are removed,we forecast about 550 MW being installed between 2023 and 2027.The greatest difference is seen in 2027,and this trend is expected continue past 2027.Figure 21 shows the forecast pipeline in the two scenarios between 2023 and 2027.Table 9 shows the forecast installed capacity in MW in the two scenarios between 2023 and 2027.20232024202520262027Capacity installed(GW)Year of installationBusiness as usualWind acceleration0.00.10.2Figure 21 Forecast of installed capacity in indonesia in the two scenarios.Table 9 Forecast of installed capacity in Indonesia in the two scenarios.New wind installed capacity(MW)20232024202520262027Business as usual7510010075100Wind acceleration75105120105160Capturing green recovery opportunities from wind power in developing economies56Impacts analysisIn the business-as-usual scenario,8,300 direct and indirect FTE job years are created by wind energy in the Indonesia between 2023 and 2027 in the development,construction,and installation phase.In addition,950 annual direct and indirect FTE job years are created in O&M,which continues for the lifetime of the wind farms.Figure 22 shows the annual FTE years created in the business-as-usual scenario by supply chain category.Examples of occupations across different segments of an onshore wind farm can be found in the Appendix B.In the wind acceleration scenario,10,100 direct and indirect FTE job years are created from wind energy in the Indonesia between 2023 and 2027 in the development,construction,and installation phase.In addition,1,500 annual direct and indirect FTE job years are created in O&M,which continues for the lifetime of the wind farms.Figure 23 shows the annual FTE years created in the wind acceleration scenario by supply chain Figure 22 FTE years created in the business-as-usual scenario in Indonesia.Figure 23 FTE years created in the wind acceleration scenario in Indonesia.20232024202520262027Aunual FTE years(Thousands)Cumulative FTE years(Thousands)Development and project managementTurbineBalance of plantInstallation and commissioningO&MCumulative1.8 2.5 2.7 2.1 2.2 -5 10 15-1 2 3 4 520232024202520262027Aunual FTE years(Thousands)Cumulative FTE years(Thousands)Development and project managementTurbineBalance of plantInstallation and commissioningO&MCumulative1.8 2.7 3.2 2.9 3.5 -5 10 15-1 2 3 4 5GWEC.NET57Aunual GVA($millions)Cumulative GVA($millions)Development and project managementTurbineBalance of plantInstallation and commissioningO&MCumulative0 200 400 600 800 1,0000 100 200 300133 179 180 136 122 20232024202520262027Aunual GVA($millions)Cumulative GVA($millions)Development and project managementTurbineBalance of plantInstallation and commissioningO&MCumulative20232024202520262027133 188 216 190 195 0 200 400 600 800 1,0000 100 200 300Figure 24 Gross value added created in the business-as-usual scenario in Indonesia.Figure 25 Gross value added created in the wind acceleration scenario in Indonesia.category,with a potential upside of 17,000 new jobs created compared to the BAU scenario over the lifetime of the wind farms.$700 million direct and indirect gross value added is created from wind energy in the Indonesia between 2023 and 2027 in the business-as-usual scenario over the lifetime of the wind farms.Figure 24 shows the GVA created in the business-as-usual scenario by supply chain category.$850 million direct and indirect gross value added is created from wind energy in the Indonesia between 2023 and 2027 in the wind acceleration scenario over the lifetime of the wind farms.Figure 25 shows the GVA created in the wind acceleration scenario by supply chain category,with a difference of$150 million compared to the BAU scenario.Capturing green recovery opportunities from wind power in developing economies58Impacts created in Indonesia in the business as usual scenarioImpacts created in Indonesia in the wind acceleration scenarioA total of 34,000 FTE job years created over the lifetime of the wind farmsUS$1.2 billion gross value added(GVA)to national economies over the lifetime of the wind farms1,400 GWh electricity produced per year from 2027,which is the same as 1 million homes powered with clean energy per year 0.4 million electric vehicles powered annually from 202723 million tonnes of carbon emissions saved during the lifetime of the wind farm,which is the same as:5 million cars of the road 7.6 million return flights from Jakarta to Sharm el-Sheikh Planting and maintaining 0.6 million trees for 10 years2.6 million litres of water saved annually from 2027 which would otherwise be used for thermal power generationA total of 51,000 FTE job years created over the lifetime of the wind farmsUS$1.6 billion gross value added(GVA)to national economies over the lifetime of the wind farms1,700 GWh electricity produced per year from 2027,which is the same as 1.2 million homes powered with clean energy per year 0.5 million electric vehicles powered annually from 202729 million tonnes of carbon emissions saved during the lifetime of the wind farm,which is the same as:6 million cars of the road 9.5 million return flights from Jakarta to Sharm el-Sheikh Planting and maintaining 0.8 million trees for 10 years3.3 million litres of water saved annually from 2027 which would otherwise be used for thermal power generationGWEC.NET59Capturing green recovery opportunities from wind power in developing economies60Morocco hosted COP22 in 2016 and has since launched further reforms to develop its renewable energy sector.This involves a target of producing over half of its energy requirements from renewable sources by 2030,up from around 15%today.As a developing country with low per capita emissions,Morocco is already implementing measures to achieve its updated 2021 NDC targets.Morocco remains largely dependent on the international energy market,as it imports more than 90%of its energy needs.Achieving energy security has been a top priority for Morocco over the last decade,and current high gas prices have greatly increased national energy costs,underscoring the need for Morocco to adopt a more self-sufficient energy policy.The Government of Morocco seeks to increase security of supply by reducing dependence on energy imports,including through the expansion of renewable sources for electricity production.Morocco has excellent wind resources,and currently has one of the largest onshore wind fleets on the African continent,after South Africa and Egypt.Installed capacity is forecast to reach 5 GW by 2035,supported by aggressive renewable energy targets.Morocco currently has 1,512 MW of installed onshore wind capacity,and is forecast by GWEC Market Intelligence to install about 200-510 MW per year under a business-as-usual scenario from 2023 to 2027.Under an accelerated transition scenario,if barriers to policy frameworks,transmission infrastructure and permitting schemes were resolved,Morocco could install 43%more onshore wind energy capacity in the next five years.Energy mix and targetsMorocco ratified the Paris Agreement on the 21 September 2016.It passed the Climate Change Policy of Morocco in 2019,which has the aim to add 10 GW of renewable energy capacity by 2030,of which 4.2 GW will be wind and 4.5 GW solar.Further plans aim to have 80%of the energy supplied by renewable energy by 2050.Relevant 2030 targets are shown in Table 10.Morocco hit its 2020 target of achieving 42%renewable energy by 2020 and a 10%growth in renewables out to 2030 seems reasonable.Wind COUNTRY STUDY MoroccoMorocco currently has 1,512 MW of installed onshore wind capacity,and is forecast by GWEC Market Intelligence to install about 200-510 MW per year under a business-as-usual scenario from 2023 to 2027.GWEC.NET61capacity targets may prove more challenging.Morocco was unable to meet its 2020 target for wind energy of 2 GW,though capacity expanded continually up to then,as can be seen in Figure 26.Figure 26 shows Moroccos electricity energy mix is highly fossil fuel dependant,though the share of renewables has been steadily increasing over the past decade.The continued expansion of coal in recent Table 10 Morocco targets.Parameter2030 targetReduction of emissions intensity compared to BAU scenario(NDC as of July 2021)29%unconditional 45%conditionalShare of non-fossil fuel sources in installed electricity capacity mix52%Wind capacity in electricity mix4.3 GW09182736450 0%Electricity generated(TWh)Share of electricity mixSource:IEACoalOilNatural gasHydroWindSolar PVSolar thermalTotalFigure 26 Moroccos electricity energy mix by source.Capturing green recovery opportunities from wind power in developing economies62years threatens to undo any progress made in renewables expansion.Economic stimulus and laws for clean energyLaw 345/68(1968)granted Moroccos National Electricity Office monopoly control over energy generators and limited self-generation by industrial sites to 10 MW of capacity,but an amendment in 2008 aimed at encouraging wind energy expansion raised this cap to 50 MW.Law 13.09/2009 establishes the core mechanism for the production and commercialisation of renewable energy.It allows independent producers to sell electricity from renewable energy projects to the national market,or private consumers connected to the medium and high voltage grids.Law 57.09/2009 created the National Agency for Solar Energy to manage and promote the solar sector.The remit of this body changed in 2016 when it became the Moroccan Agency for Solar Energy(MASEN).It is responsible for the development of international investments in renewable energy projects as Morocco looks to liberalise its renewable energy market.Energy project development was previously dominated by the Moroccan National Office for Electricity and Potable Water(ONEE).Wind projects in Morocco are largely financed by project finance mechanisms.There are well-developed capital markets in Morocco,primarily local banks.National subsidiaries of international outfits have also supported the development of wind projects.State-backed multilateral climate and development funds,such as the Climate Investment Fund and the European Bank for Reconstruction and Development,have also backed projects in addition to participation from private equity funds.The authorisation process for wind projects is run by The Ministry of Energy,Mines and Sustainable Development(MEM).Developers are able to secure the right to operate projects for 25 years with the option of securing a 25-year extension.Provisional permits enabling construction to commence are released following a technical review.MEM awards final permits after checking installations conform with the provisional consent terms.GWEC.NET63Current barriers to wind energyGrid legislationNew grid codes detailing the technical requirements for connecting to the grid have been published by MASEN.Turbine suppliers are struggling to meet some of these requirements which is complicating the project development process and delaying projects.New costs for grid usage have been introduced which increase the selling price of electricity for independent power producers,making their projects less competitive against those led by ONEE.Competition with solarLaws currently do not allow wind and solar projects to share grid connection points.Hybrid wind and solar projects are also not allowed.This increases competition for space between developers and reduces the opportunities for cost reductions that co-development of dual technology projects would enable.Offtake mechanismsThe Moroccan Governments tendering of renewables projects to the private sector has been slow.The current legal framework for PPAs puts the obligation solely on private producers to identify companies to enter into agreements with,rather than the government acting as an intermediary.This adds a time constraint and is challenging for developers and means wind projects can struggle to enter PPAs.Case study Midelt wind projectThe 210MW Midelt onshore wind project came online in 2020.The project came online quickly,with construction starting in 2018 and commercial operation beginning in 2020.SGRE supplied 50 turbines each with a rating of 4.2MW.12This project is the result of a joint venture between Enel Green Power and Nareva.The Midelt wind farm is one of the first in a project pipeline known as Projet olien Intgr,secured by both companies after they were successfully awarded an international tender.13The socioeconomic benefits of the wind farm have been experienced by the local community,with the 12 Power Technology,Midelt Wind Farm,Morocco,Dec 2021,available online at:https:/www.power- Enel Green Power,Midelt,Enel Green Powers best sustainable building site,Oct 2019,available online at:https:/ project employing 500 people,of which 250 came from local communities.Providing local jobs has generated job security and economic growth in the site area.In excess of 2000 hours were spent on training workers along the value chain,including in quality,as well as health and safety.Local businesses and communities are also able to benefit from the external benefits facilitated by the investment brought by the project,including the refurbishment of local infrastructure like roads and bridges.The electricity generated from the wind farm offsets 326

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国际治理创新中心：中国的数字治理：数据、人工智能和新兴技术以及数字贸易（英文版）（24页）.pdf

Conference Report Virtual Workshop,November 28,2022Digital Governance in China Data,AI and Emerging Technologies,and Digital TradeAlex He and Robert FayConference Report Virtual Workshop,November 28,2022Digital Governance in China Data,AI and Emerging Technologies,and Digital TradeAlex He and Robert FayAbout CIGIThe Centre for International Governance Innovation(CIGI)is an independent,non-partisan think tank whose peer-reviewed research and trusted analysis influence policy makers to innovate.Our global network of multidisciplinary researchers and strategic partnerships provide policy solutions for the digital era with one goal:to improve peoples lives everywhere.Headquartered in Waterloo,Canada,CIGI has received support from the Government of Canada,the Government of Ontario and founder Jim Balsillie.propos du CIGILe Centre pour linnovation dans la gouvernance internationale(CIGI)est un groupe de rflexion indpendant et non partisan dont les recherches values par des pairs et les analyses fiables incitent les dcideurs innover.Grce son rseau mondial de chercheurs pluridisciplinaires et de partenariats stratgiques,le CIGI offre des solutions politiques adaptes lre numrique dans le seul but damliorer la vie des gens du monde entier.Le CIGI,dont le sige se trouve Waterloo,au Canada,bnficie du soutien du gouvernement du Canada,du gouvernement de lOntario et de son fondateur,Jim Balsillie.CreditsManaging Director of Digital Economy Robert FayProgram Manager Jenny ThielPublications Editor Susan Bubak Senior Publications Editor Jennifer GoyderGraphic Designer Brooklynn SchwartzCopyright 2023 by the Centre for International Governance InnovationThe opinions expressed in this publication are those of the authors and do not necessarily reflect the views of the Centre for International Governance Innovation or its Board of Directors.For publication enquiries,please contact publicationscigionline.org.This work is licensed under a Creative Commons Attribution Non-commercial No Derivatives License.To view this license,visit(www.creativecommons.org/licenses/by-nc-nd/3.0/).For re-use or distribution,please include this copyright notice.Centre for International Governance Innovation and CIGI are registered trademarks.67 Erb Street West Waterloo,ON,Canada N2L 6C2www.cigionline.org Table of Contentsvi About the Authorsvi Acronyms and Abbreviations1 Introduction1 Key Takeaways3 Data Governance in China7 Governance of AI and Emerging Technologies in China 10 Chinas Participation in Digital Trade12 Conclusion13 Agenda15 ParticipantsviConference Report Virtual Workshop,November 28,2022 About the AuthorsXingqiang(Alex)He is a CIGI senior fellow.He is an expert on digital governance in China,the Group of Twenty(G20),China and global economic governance,domestic politics in China and their role in Chinas foreign economic policy making,and Canada-China economic relations.Prior to joining CIGI in 2014,Alex was a senior fellow and associate professor at the Institute of American Studies at the Chinese Academy of Social Sciences(CASS)and a visiting scholar at the Paul H.Nitze School of Advanced International Studies,Johns Hopkins University,in Washington,DC(20092010).Alex was also a guest research fellow at the Research Center for Development Strategies of Macau(20082009)and a visiting Ph.D.student at the Centre of American Studies at the University of Hong Kong(2004).Alex is the author ofThe Dragons Footprints:China in the Global Economic Governance System under the G20 Framework,published in English(CIGI Press,2016)and Chinese editions,and co-author ofA History of China-U.S.Relations(Chinese Social Sciences Press,2009).Alex has published dozens of academic papers,book chapters,and newspaper and magazine articles.Alex has a Ph.D.in international politics from the Graduate School of CASS and previously taught at Yuxi Normal University in Yunnan Province,China.Alex is fluent in Chinese and English.Robert(Bob)Fay is a highly accomplished and respected leader in the field of digital economy research.With more than 30 years of experience working in the public and private sectors,he has developed expertise in economics,policy analysis and strategic planning.Currently,Bob serves as managing director of digital economy at the Centre for International Governance Innovation(CIGI),where he leads a network of researchers focused on the intersection of technology,trade,innovation and governance.In this position,he has played a key role in shaping the discourse around the digital economy and has contributed to numerous policy debates and research initiatives on topics such as data governance,digital innovation and the future of work.Before joining CIGI,Bob held various leadership positions at the Bank of Canada(BoC),where he was responsible for the assessment of digital technologies for Canadas economy and international economic developments,and provided short-term forecasting,structural analysis and policy advice.He was also special assistant to BoC Governor Mark Carney and his chief of staff,playing a key role in delivering policy direction.Bob began his career as an economist at the Organisation for Economic Co-operation and Development,where he worked on labour market issues and country-specific analyses.Bob holds an M.A.in economics from Queens University and has published numerous research papers and policy briefs on a range of economic and policy topics.Acronyms and AbbreviationsAI artificial intelligenceCAC Cyberspace Administration of ChinaCCP Chinese Communist PartyCIGI Centre for International Governance InnovationCPTPP Comprehensive and Progressive Agreement for Trans-Pacific PartnershipDEPA Digital Economy Partnership AgreementGDPR General Data Protection RegulationIP intellectual propertyIT information technologyMIIT Ministry of Industry and Information TechnologyPIPL Personal Information Protection LawR&D research and developmentRCEP Regional Comprehensive Economic PartnershipWTO World Trade Organization1Digital Governance in China:Data,AI and Emerging Technologies,and Digital TradeIntroductionChinas massive presence in the digital economy is defined by its focus on big data,artificial intelligence(AI)and other emerging technologies,digital trade,standards,intellectual property(IP)and innovation.Further,digital governance in China constitutes a significant global issue at the intersection of technology and international governance.At the same time,the ongoing technological and trade decoupling between the United States and China may have dimmed the future of the digital economy and high-tech development in China.The long-awaited Chinese Communist Partys(CCPs)20th National Congress in October 2022 concluded with a norm-breaking third term for President Xi Jinping as the partys general secretary,consolidating unprecedented power among Xi and his loyalists(not seen since Chairman Mao Zedong)in the top leadership positions,which has left more questions and uncertainties for the future of China.In the context of these latest developments,the Centre for International Governance Innovation(CIGI)organized and hosted a virtual workshop on November 28,2022,to examine the status and future development of Chinas digital governance practices.With experts from Canada,China,Europe,Singapore and the United States,the workshop discussed Chinas digital governance practices in three critical areas:data governance,governance of AI and other emerging technologies,and Chinas participation in digital trade to shed light on the countrys digital governance and its international implications.This conference report shares key takeaways from the workshop,which was held under the CIGI Rule.1 The workshop summary does not purport to represent a consensus among the participants,nor to convey the views of any individual or organization.Rather,its goal is to review the latest developments in Chinas digital governance,in particular in the three areas mentioned above to demonstrate the global impact of the countrys digital governance system.1 See www.cigionline.org/about/cigi-rule/.Key TakeawaysData Governance The enormous economic value of data is a key to understanding Chinas data governance system,which is different from the data protection frameworks in Europe that primarily focus on protecting the individuals right to privacy,and practices in the United States that focus on regulating private law relationships between economic players and protecting individuals from government intervention.Chinas data protection framework has evolved to consist of two major pillars:the Personal Information Protection Law(PIPL)and the Data Security Law.The former is primarily concerned with data by which individuals can be identified but is not a legal framework that deals with any kind of data.The latter,with its vague definition of key terms and wide coverage of potentially all data,makes China unique among major digital players as it essentially protects national security,the public interest and the collective against harm that might arise out of the misuse of any kind of data.A significant effort has been made to create a protective wall in China regarding the export of data and its accessibility to safeguard the economic value of data as well as to address national security as“securitization”has become a leading economic objective under President Xi.The future of outbound data transfers from China is in a state of flux.Regulations are becoming increasingly clear when it comes to cross-border data transfer while the vague terminologies on data governance remain in place.Regulators still retain a lot of leeway and can mandate an outbound data transfer assessment and block data export whenever they deem it necessary.Data security is clearly regarded as a very important part of Chinas national security strategy,and the crackdowns on digital and data trade regulations in the name of national security will continue after the 20th National Congress everything in China can be connected to national security.China is building its own version of a digital economy to integrate with the real economy or the industrial sector.Chinas digital giants 2Conference Report Virtual Workshop,November 28,2022 have refocused on industrial sectors,such as those that develop AI and information technology(IT),to bolster high-tech innovation using Chinas digital and data capacity.Most of Chinas big digital platforms are transactions-based platforms related to payments and are therefore not innovative,although they have a large number of users and access to massive amounts of personal data.These platforms are now facing strict data supervision for violating personal data regulation after a period of wild growth.In that context,Chinas data regulation framework requires large digital platforms to take more responsibility to protect data security and personal information while stressing the need for data-driven economic development to maximize the value of data.Digitalizing the real economy and unlocking the potential of data is a top priority for China.In this sense,use of the term“crackdown”on the digital economy is misleading.Nevertheless,Chinas data governance regime is developing a dual-track trajectory.Data abuses by tech giants are severely punished while state entities have mostly free rein to collect citizens information.Although the Chinese,EU and US regimes have very different starting points and different emphasis and values in specific areas of data privacy versus data as a national security issue versus rent capture in industrial policy,there appears to be some general convergence moving toward a framework with features from each.The antitrust actions that are being taken by China,Europe and the United States,as well as the fact that they all heavily engaged in industrial policy to capture rents,are two important technological conditions that are driving the convergence.Although there will be many obstacles en route to building a rules-based order for the digital economy,perhaps this can be achieved by negotiations rather than through unilateral actions such as harsh bans on the export of data,whether in China or the United States.China is pursuing multiple goals simultaneously and is seeking to balance trade-offs between the use of data as an economic resource and its role in domestic governance.This approach stands in contrast to the popular Western commentary framing data issues in China in binary terms:either totalitarian surveillance or personal information protection,either data localization or a competitive digital economy.The CCP is preoccupied with mass collection of Chinese citizens data as a conduit to security and stability.However,big problems such as data silos continue to hinder the achievement of this data-driven governance.Governance of AI and Emerging Technologies China has moved first in algorithm regulation relative to other major jurisdictions,especially in areas such as online delivery services and social media platforms.The Internet Information Service Algorithmic Recommendation Management Provisions,effective March 1,2022,regulate the recommendation algorithms,setting an example for the West on how to regulate algorithms and tech companies.However,the key question for the far-reaching policy and incredibly ambitious regulations is whether they can be implemented.Chinas new regulation on recommendation algorithms has increased state control over the dissemination of information via vague definitions and rules forbidding algorithms from engaging in activities that harm national security or the public interest.At the same time,the regulation has also tried to protect worker and consumer rights,which gives Chinese internet users more consumer rights related to algorithms than users anywhere else on the planet.The policy dilemma for China developing emerging technologies is that leading technologies have been financed by venture capital,which is profitability driven and growth-stage investment oriented,and not well suited under the current geopolitically uncertain global environment.Chinas biggest problem in financing emerging technologies is its lack of patience.There is a lot of investment in emerging technologies because of foreign import substitution,but it is unclear whether this investment is sustainable.China has become the largest global source of top AI research talent,followed by the United States,the European Union and India.China led 3Digital Governance in China:Data,AI and Emerging Technologies,and Digital Tradeall countries in the number of AI-related papers it published in 2020.Although China is trying to produce a lot of AI research and development(R&D),US companies and universities remain the driving force behind most of the game-changing breakthroughs,especially in recent years.With the US export control on high-end chips,including AI chips to China,there is not much China can do in the short term,but it will be very difficult for American tech companies to give up the huge market in China.Chinese regulators behave like start-ups:they fail fast and early.Under Chinas one-party system,implementing and updating policy does not involve arguing with many other parties.It is expected that regulators will see what works and what does not,and then release a series of policy updates and supporting regulations that define some of these more ambitious and vague rules.It is very clear that Chinas AI governance regulations and practices borrowed many ideas from the European Union,especially the risk-based AI classification system.China can contribute to global AI governance based on its rich AI applications and the challenges it faced.Digital Trade China is very serious about joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership(CPTPP)and the Digital Economy Partnership Agreement(DEPA)and willing to meet their obligations as part of its promotion of high-level opening up.It would not be difficult for China to meet the requirements of the CPTPP and the DEPA as the exceptions within those agreements would allow China to do what it wants.With more than 600 pages of legally binding rules in the CPTPP,it is better to have China in the agreement than not,if China can meet the requirements to join.Still,it could be politically difficult for some members to agree with Chinas entry into the CPTPP and the DEPA,and it may be a much tougher task for China to join the DEPA than to join the CPTPP as the DEPA is a very young agreement(it entered into force in 2021),and there is significant risk if China joined on the ground floor since the DEPA is more a venue for shared values and norms,which are different in China.There are also political considerations that will play an important role.With either a weak or not very effective agreement or no regional agreement,the world would go back to a reinforcement of three different data or digital realms of the United States,the European Union and China,with everyone else in between.This is not really a solution.Data Governance in ChinaChinas Data Governance FrameworkData has become a critical part of economic,social and governance policy making in China in recent years.In the development of Chinas data governance system,data was first defined as a factor of production,a source of value or productivity on par with land,labour,natural resources and so forth,which gives data an enormous economic value.This is a key to understanding Chinas data governance system as it is obviously different from the data protection framework in Europe,which is mainly focused on protecting individuals privacy.It is also different from data governance practices in the United States,which focus on regulating private law relationships between economic players as well as protecting individuals from certain forms of government intervention.Today,Chinas data protection framework has evolved into a comprehensive two-pillar system.The first one is the PIPL,which builds on a longer trajectory of data-related regulations that emerged in the early 2010s and has now matured into a full-fledged legislative framework.The PIPL bears a clear family resemblance to Europes General Data Protection Regulation(GDPR)in the objectives that it tries to achieve and the legal tools by which it tries to achieve them.In short,the PIPL is aimed at preventing harm to individuals arising from the abuse of personal information such as through telecom fraud and data theft.It is primarily concerned with data by which individuals can be identified,but it is not a legal framework that deals with any kind of data and does not regulate all possible uses of information.4Conference Report Virtual Workshop,November 28,2022 The PIPL covered stipulations related to business models(for instance,how do large private companies use data in a way that might impact the economic rights and interests of users,the competition with and between platforms themselves,and third-party merchants operating on those platforms).It also contains fairly strict provisions on personal information exports,which demonstrates a growing concern in China about how information on Chinese citizens is being exported.The second pillar is the Data Security Law,which makes China unique among major digital players as it essentially protects national security,the public interest and the collective against harm that might arise out of the misuse of any kind of data.It covers potentially all data,and it seeks to prevent public harm rather than private individualized harm.To that extent,it divides data into three categories:ordinary data;important data;and core national data with increasing security requirements,reporting and auditing standards,and limitations on the collection,processing,and trade and export of that data.The problem with both laws is that much of the implementing regulations have yet to be made,especially the Data Security Law,which remains very vague,with broad mandates of charging ministries and compiling catalogues of data to be categorized under the three categories mentioned above.There are obviously technical difficulties associated with this process and also political steps to be made,as any form of regulation will create massive winners and losers.Progress has been achieved in some priority areas,such as the broad pharmaceutical regime,as well as the development of smart vehicles,including self-driving vehicles.Chinas digital and data governance framework has two outstanding features that persist following the CCPs 20th National Congress.First,data security is clearly regarded as a very important part of Chinas national security strategy,and this trend will definitely continue after the partys 20th National Congress.The national security crackdowns on digital and data regulations will continue because China overly focuses on national security.In addition,Chinas internet regulator,the Cyberspace Administration of China(CAC)that oversees data and digital regulation,does not have any corresponding responsibility for the development of the sector,which is the jurisdiction of the Ministry of Industry and Information Technology(MIIT)and the Ministry of Commerce.Data was mentioned only once in the 20th National Congress report and it was mentioned as part of the section on Chinas security strategy,where the report emphasized the need for strengthening the construction of security systems for the economy,major infrastructure,finance,networks,data,biology,resources,nuclear energy,space and the ocean.Second,China is building its own version of a digital economy to integrate with the real economy or the industrial sector.This type of digital economy is different from that of the United States,which is home to digital giants such as Google,Facebook,Twitter and so on.Under President Xis direction to build China into an industrial power,Chinas digital giants such as Alibaba and Tencent refocused from online payment services such as food and grocery delivery and online games and tried to move into industrial sectors,such as AI and IT,to bolster high-tech innovation using Chinas digital and data capacity.Although this is a clear focus,whether anything will materialize from it is another question.Digital Platform GovernanceMost of Chinas big digital platforms are based on transactions,not innovation.They include e-commerce platforms such as Taobao(owned by Alibaba),JD.com and Pinduoduo;online services platforms such as Meituan and ele.me;social media platforms such as WeChat and Xiaohongshu;and digital content platforms such as ByteDance,Bilibili and so forth.Benefiting from Chinas demographic dividends,these platforms grow very fast and have a large number of users and massive amounts of personal data.With the PIPL and Data Security Law coming into effect and the introduction of implementation rules,including the Measures for Security Assessment of Outbound Data Transfer and Measures for Cybersecurity Review,an era of tough data regulation has begun after a period of rapid growth of these platforms.The drafted amendment for the Cybersecurity Law released in 2022 increased fines for violations of cybersecurity obligations.As for digital platform governance,the balance between security and development and between domestic and international dimensions are worth noting.5Digital Governance in China:Data,AI and Emerging Technologies,and Digital TradeThese platforms have faced the risk of severe punishment for violating data-related regulation since last year.The CAC strengthened enforcement efforts in areas such as cybersecurity data,security and personal information protection,and increased exposure of typical cases such as the massive RMB8 billion fine imposed on ride-hailing giant DiDi for data violation.On the one hand,platforms are taking more responsibility to protect data security and personal information as the legal framework becomes more robust.On the other hand,China has stressed the need for data-driven economic development.Both the Data Security Law and the PIPL promote data utilization while regulating data-processing activities.The laws put aside some contentious issues such as data ownership and focus on rights and obligations related to data processing and data utilization to maximize the value of data.In this sense,Chinas approach is far from what is being called a regulatory crackdown.Most of the Chinese digital platforms are doing business in domestic markets,with only a few overseas users.For example,the vast majority of WeChat users are in China.ByteDance has many overseas users but has separate entities operating independently at home(Douyin)and abroad(TikTok).The differences in entities and where they operate may be one explanation for why and how China tends to be more conservative toward cross-border data flows;the recent international competition and confrontation in digital is another.Cross-Border Data Flow RegulationsA significant effort has been made to build a protective wall in China to shield the economic value of data through its export and accessibility as well as to address national security as“securitization”has become a leading economic objective under President Xi.At the same time,the data-driven economy has matured rapidly in China.And contrary to what some may believe,it has experienced an enormous expansion of cross-border data transfers since it is integrated into global manufacturing,probably more so than any other economy.Further,with the Digital Silk Road initiative,China also has had a chance to capture global economic rents in the data space.Its moves to accept data commitments on the free flow of data and no data localization in the Regional Comprehensive Economic Partnership(RCEP)and its application to join the CPTPP make sense in that context.The future of outbound data transfers from China is obviously in a state of flux.On the one hand,the Chinese government has no intention to ban everything or to localize all data and stop outbound flows of data across the board,and its PIPL includes a clause indicating Chinas willingness to negotiate cross-border data transfer agreements with other jurisdictions.There are mechanisms such as standard contractual clauses or a certification mechanism for the transfer of personal data in its latest draft regulation from summer 2022.The CAC has released the cross-border rule for data transfer,which clarified the process through which the CAC reviews outbound data transfer requirements.This means that regulations are becoming increasingly clear when it comes to cross-border data transfers.Obviously,regulators still retain a lot of leeway.The CAC still mandates an outbound data transfer assessment and blocks data export whenever it is deemed necessary.On the other hand,the vague terminologies on data governance still exist.There is a need to clarify further what constitutes important data and what constitutes core national data,which obviously raises questions for other jurisdictions and companies as well.There are concerns about inbound data transfers to China.The debate in the European Union and the United States on how to regulate TikTok reflects the concern of how much the Chinese state is codifying and accessing privately held data sets that contain personal data.This complicates inbound data transfers to China to the extent that other jurisdictions may not trust Chinas government in keeping data secure.To some extent,the world digital market is being divided into two separate markets:the global market without China and the Chinese market,which stands in contrast to the global nature of the digital economy.At the same time,as digital globalization is moving forward,traditional economic globalization is standing still or even going in reverse.Only by integrating into the global market can China seize the opportunities of digital globalization.Building a rules-based order for the digital economy comes with many complications,but perhaps negotiations can be used to achieve this goal rather than unilateral actions such as harsh bans on the export of data in China or the United States.6Conference Report Virtual Workshop,November 28,2022 Policy Trade-Offs in Chinas Data Governance PracticesMuch like other jurisdictions,Chinas government is balancing different policy objectives in data governance between data as an economic resource and security concerns over the uses of data.This is important to highlight as it contrasts with the popular Western perspective that views data issues in China as an either/or scenario:either totalitarian surveillance or personal information protection,either data localization or a competitive digital economy.Regulators in China are pursuing multiple goals at the same time and trying to balance these different trade-offs,which are quite difficult to achieve for China or any other jurisdictions.The Chinese government has no intention of protecting everything or excluding all types of data from domestic and cross-border exchange and trading,which is where the data classification process under the data security law comes in.Digitalizing the real economy and unlocking the potential of data is a top priority in China.In this case,the term“crackdown”on the digital economy is misleading.Collecting,analyzing,processing and sharing data effectively and productively is a precondition to achieving that objective.In Chinese policy terms,this is called“informatization,”meaning to digitalize everything,which entails several approaches with respect to data.First,there is a policy trade-off in the creation of a state-led national data market.The Chinese government is trying to create a functioning market where companies can buy and sell their data sets and make a profit.The problem is that companies do not have the incentives to participate in data markets,put their data sets to use and share them openly via data exchange platforms.The central government is now starting to work on a new batch of data exchanges to try to persuade market actors to use them.The trade-off here is between state control and marketization:To what extent is Beijing willing to push for these state-led marketplaces to become the default for data trading in China?Considering that one objective is to fight monopolies,to increase economic productivity and public welfare,tension between the state and market actors may continue to be part of this process.Second,a policy trade-off exists between the CCPs obsession with mass data collection of its citizens to maintain security and stability and the high standards of data protection and data security the party wishes to achieve.Chinese leaders believe data-driven governance is the key to social stability and regime security.The CCP aspires to have data-driven,AI-enabled predictive products to keep tabs on any perceived threats to its rule,for example,protests.However,data silos that have hindered the achievement of data-driven governance are a big problem.For example,the government has tried for years to close data silos in the public security sector to better merge different pools of data such as surveillance data or police data(for instance,facial recognition footage from surveillance cameras).The work is still in progress,and officials continue to complain about the issues with data silos.More generally,Chinas data governance regime is developing along a dual-track trajectory.On the one hand,data abuses by tech giants are severely punished.On the other hand,state organizations have mostly unfettered access to collect and harvest citizens information,even against their consent,as the states security-motivated exemptions are written into all key laws,including in the PIPL.Third,there is a policy trade-off between digital transformation and environmental protection.Data governance in China is not only accomplished through laws and regulations but also through industrial policy.Processing and storing data requires a huge amount of energy.China,like other countries,faces this major environmental challenge in advancing its digital transformation.In 2020,Chinas data centre power consumption was projected to grow by 65 percent until 2023,which is equal to the carbon emissions of a mid-sized country.The campaign to roll out digital infrastructure or new fifth-generation networks,data centres,cloud computing,AI facilities and so forth can be at odds with Chinas lofty ambitions for its green transition.China is working to improve the layout of national data centres,trying to transfer data from coastal areas of China to more resource-rich provinces in the west to improve energy efficiency.And the MIIT has also further raised its requirements for data centre power usage efficiency to try to solve that problem.7Digital Governance in China:Data,AI and Emerging Technologies,and Digital TradeConvergence of Regimes for Data Governance in the European Union,United States and ChinaTechnology should be driving convergence toward a structure that is efficient for the economy.To the extent that new technologies open up a major new source of economic rent,the rivalry to capture those rents inevitably leads to frictions.This applies to digital transformation and data governance.It was not necessary to have one uniform regime for data governance in the pre-digital era.This was the starting point for regimes in Europe,the United States and China.In the absence of national champions,which are able to commercially exploit data,the European Unions natural incentives were to regulate data abuse,protection of personal privacy and antitrust measures.The European Union has since moved toward a system that emphasizes data,sovereignty and strategic autonomy,and then moved to engage in industrial policy with its digital single market exercise.It is now developing its own internal market to capture some of these rents.The United States has national champions and the data-driven economy,so the scope for data for global rent capture for the United States naturally led to concepts such as the free flow of data and no data localization and light-touch regulation domestically.These incentives reflect the starting points for the United States.They are not necessarily the endpoint for a mature system of data regulation.Chinas trajectory has more or less followed a similar path as the United States,where it started with no general regime but has now moved toward an EU GDPR style.Although these regimes have very different starting points and different emphasis on specific areas such as data privacy versus national security of data versus rent capture in industrial policy,what can be seen is the general convergence of all three regimes toward a structure that features all three areas.The antitrust actions that are being taken by Europe,the United States and China,as well as the fact that they all heavily engaged in industrial policy to capture rents,are two important technological conditions that are driving the convergence.In the short run,as the digital economy matures and competition erodes the rents,there will be no economic peace or a rules-based order.But in the long run,governments move in the direction of the most efficient path.There are practical ways to deal with these three major areas,and governments are discovering their way forward.China will likely be moving in ways that ultimately will be compatible with other major jurisdictions.Governance of AI and Emerging Technologies in China AI Governance in China:Status and Future DirectionIn recent years,China issued three data governance laws that include measures related to AI governance,as well as regulations to strengthen the ethical governance of science and technology while promoting the development of the AI industry as part of the global wave of AI governance.To better regulate AI and algorithms,the China Academy of Information and Communication Technology under the MIIT issued a comprehensive framework on AI governance that includes the idea of trustworthy AI and built test platforms to demonstrate what trustworthy AI means.At the industrial level,some big enterprises such as Alibaba and SenseTime have established technology ethics committees consisting of reputational scientists,economists and researchers from public administration to foster better AI governance and create an inner synchronized assessment pipeline to avoid the potential risks of AI applications and the delivery of products and services.It is very clear that AI governance regulations and practices in China have borrowed extensively from the European Union,especially the risk-based AI classification system.This similarity can also be seen in Chinas Data Security Law and the PIPL.In local-level regulations in Shenzhen,more discretion is given for experiments on what are known as low-risk scenarios.For example,if something goes wrong with a test product or service provided by an AI start-up,and it poses no threat to national security,the public interest or citizens personal safety,no punishment would be applied.The risk-based AI classification system is important because AI technology is generally defined and can be applied widely.Even at the central level,8Conference Report Virtual Workshop,November 28,2022 the government has also mentioned that AI regulations should create classifications to deal with different scenarios and different levels of risk.In the future,China will focus on building an AI governance mechanism following these steps:First,form a value consensus that consists of the principles of inclusiveness,sharing,prudence and responsibility.Second,complete the division of value in AI governance,or build interactive and collaborative mechanisms between regulators and governance subjects,such as AI technology users and providers.Third,keep the interactive and collaborative AI governance mechanism agile,adaptive and exploratory as required by the rapidly evolving AI technology and changing preferences and governance demands of AI governance subjects.China can contribute to global AI governance using its rich experiences with AI applications in a variety of fields.Chinas experiences,including the challenges it faced,could benefit other parts of the world in terms of developing AI governance,as shown in the“Position Paper of the Peoples Republic of China on Strengthening Ethical Governance of Artificial Intelligence(AI)”that China issued in November 2022,which is based on its AI governance practices and related challenges.Chinas Emerging Algorithm Governance RulesChinese regulators have done a lot of work on AI ethics to create foundational ideas about ethical AI principles.Algorithm regulation has become a hot topic in China in recent years,especially in areas such as online delivery services and social media platforms.The Internet Information Service Algorithmic Recommendation Management Provisions that came into effect in March 2022 had broad implications for the internet in China.This policy is designed to regulate a specific use case of algorithms known as recommendation algorithms.A recommendation algorithm looks at content that a user has viewed in the past and then recommends an advertisement based on that content or data,or it looks at what is in a users shopping cart and what they purchased in the past and then offers product recommendations based on that data.This regulation takes a slightly broader view of what a recommendation algorithm is and looks at things such as maximizing the efficiency of delivery driver schedules.On the one hand,the policy increased state control over the dissemination of information and the way that algorithms work,and one of the ways that state control is increased is through vague definitions that are included in the policy.Article 6 of this rule essentially states that any recommendation algorithm must uphold mainstream values or positive energy,but there is no legal definition of what“positive energy”is or what“mainstream values”are.This lack of clarity leaves those rules up to state interpretation and gives regulators a lot of discretion over what kind of information recommendation algorithms are allowed to disseminate,and what kind can be cracked down upon.The policy also forbids algorithms from engaging in activities that harm national security or the public interest.The fact that“national security”and the“public interest”are not defined means that anything could potentially fall into the policys scope.The policy also states that any algorithms that have“public opinion attributes or social mobilization capabilities”must register with the CAC,Chinas internet regulator,and must submit to a security risk assessment by the CAC,and algorithm providers are responsible for ensuring machines do not spread illegal and politically sensitive information.By doing so,the state is essentially requiring big tech companies that run these algorithms to decide what kind of content the public is going to consume,and what kind of products the public is going to buy.The CAC even required tech companies to submit basic information about their algorithms and created a searchable public database of the algorithms to make it convenient for regulators looking at how those algorithms could be regulated.On the other hand,the rules have also tried hard to protect worker and consumer rights.Under this policy,Chinese internet users now have more rights related to algorithms than users anywhere else in the world.These rules essentially go much further than the European Union at this time in terms of protecting the rights of internet users who are being targeted by recommendation algorithms.Under the policy,Chinese internet companies are required to inform users when they are being targeted with algorithm-driven recommendations 9Digital Governance in China:Data,AI and Emerging Technologies,and Digital Tradeand let them opt out and choose to see only generic content that does not take their personal data into account.The policy also forbids algorithms from tagging users with illegal or discriminatory keywords.For example,users cannot be tagged based on their ethnicity or religion.The policy also requires internet companies to show users which keywords are being used to target them and delete those keywords.It also seeks to clamp down on misinformation around prohibiting algorithmically generated news.This rule can prevent internet companies from using a program or an algorithm that goes into a users search history,looks at keywords and then cobbles together news content designed to manipulate the users thinking.The policy also forbids algorithms from faking likes,comments,forwards or real human engagement,and prohibits the use of algorithms that violate labour rights,spread harmful content to minors,scam people(especially the elderly)and impose differential trade conditions(such as prices).Contrary to the view that there is nothing to learn from Chinas tech policy,this particular regulation can set an example for the West on how to regulate algorithms and tech companies.The biggest concern is what happens if this regulation restricts tech company income and the development of the tech sector and digital economy.The key question for the far-reaching policy and incredibly ambitious regulations is whether they can be implemented.Some of these rules can be enforced easily and others cannot.An interesting observation is that Chinese regulators behave like start-ups,failing fast and early.Under Chinas one-party system,the government does not have to argue with too many other parties in order to implement and update policy.Regulators will see what works and what does not,and then release a series of policy updates and supporting regulations that define some of the more ambitious and vague rules that have come out of a particular regulation.Nevertheless,China can be an example of what to watch for regarding the implications of these regulations as algorithms are regulated more heavily.There will likely be lessons that other jurisdictions can draw on in their own regulation.Developing Emerging Technologies in China under US Export Restrictions:The Venture Capital Perspective The dilemma for China is its long-term goal of playing technological catch-up with the United States by focusing on tech applications and global sourcing,which is no longer sustainable given the stricter US export restrictions at a time of plateauing free trade.A lot of industries,global products and services may not be available to China anymore,therefore the country is basically entering a period of forced import substitution.The policy dilemma for China in developing emerging technologies is that leading technologies have been financed by venture capital,which is profitability driven and growth-stage investment oriented and not well suited to the current geopolitically uncertain global environment.China now needs to support high-risk,early-stage small and medium-sized tech enterprises and transition to longer-term state venture funding.The Chinese government has supported initiatives that are not necessarily profitable,whereas the private sector is focused mainly on profitability.At this stage,the government and private sector have to collaborate whether they like it or not.In response to stricter chip restrictions from the United States,a lot of private venture capital funds and government guidance funds have flowed into Chinas semiconductor industry.This trend picked up in 2021 following the ban on Huawei.But Chinas biggest problem is that it needs more patient capital in financing emerging technologies.There is a lot of money in emerging technology because of foreign import substitution.But it is not yet clear whether the investment is sustainable.On average,venture capital funds usually have a 10-year life cycle plus a two-year possible extension.But in China,the life cycle is typically three years plus five years,sometimes even less.Perhaps China can learn from its industries in solar photovoltaics and electric cars,where government support was gradually withdrawn.Western Countries Cooperation with China on AI R&DAlthough China is trying to produce a lot of AI R&D,US companies and universities remain the driving force behind most of the game-10Conference Report Virtual Workshop,November 28,2022 changing breakthroughs,especially in recent years.There exists cooperation between China and the United States and its allies such as the European Union and Canada on AI R&D,and this collaboration can be identified by five indicators.First,international students account for very significant majorities across all graduate-level science and engineering programs at US universities.Chinese students enrollment in graduate-level computer science programs at US universities was second only to Indian students in 2017 and 2018.Chinese engineering graduate students outnumbered Chinese computer science students,and at the Ph.D.level,China leads in the cumulative number of US doctorate recipients over the last 20 years or so.China has become the largest global source of top AI research talent,followed by the United States,the European Union and India,which certainly had an enduring impact on AI R&D outside of China.Most of these Chinese students choose to attend graduate school in the United States.The vast majority(about 89 percent)of Chinese researchers who attend US graduate schools stay to work in the United States and publish cutting-edge research.This pipeline of research talent is expected to decline due to the negative impact of COVID-19 and the chilling effects caused by a policy during Donald Trumps presidency to restrict access of Chinese students with any involvement in Chinas military civil fusion strategy.Second,China led all countries in the number of AI papers published in 2020,but only 12 percent of them are co-authored AI publications,which usually received significantly higher citation counts.From the US perspective,Chinese researchers are the top collaborators on AI papers,followed by those from the European Union,Canada,Australia,Japan and Singapore.The third indicator is the publication of AI research and the fourth is the number of AI conferences hosted by country,which is an important pathway for dissemination of information.The United States leads by a wide margin,with half of the 16recent and future major AI conferences scheduled in that country,followed by Canada and China.The fifth factor is the number of US private labs overseas.American big tech companies such as Amazon,Apple,Facebook,Google,IBM and Microsoft have about 70 percent of their AI labs outside the United States.Most are in Europe,mainly the United Kingdom and France;there are also labs in Israel and China.About 10 percent are in China.Chinese AI company Baidu has a significant lab outpost in Silicon Valley in the United States.But with the growing ethical,competitive and geopolitical concerns about China,these types of interconnections have come under increasing scrutiny.With China facing the US export control on high-end chips,including AI chips,there is not much it can do in the short term,but it is very difficult for American tech companies to give up the huge market in China.To date,Chinese nationals studying and working in the United States have not been caught up in this rule,and collaboration on AI R&D with non-US nationals will continue.Chinas Participation in Digital TradeChina and the Governance of International Digital TradeA trade agreement can help focus attention,limit the actions that governments may take,provide more certainty and lower risks.It can also create more opportunities for companies that demonstrate profitability,competitive advantage,market leadership,good management and so forth.But the challenge facing any trade agreement is that it does not constrain big players who do not want to follow the rules of the trade agreement,as can clearly be seen in the World Trade Organization(WTO)system.But small players break the rules as well.The challenge always is how to hold them accountable and how often to hold them accountable.There are no global rules for digital trade.There are some regional rules in data and digital agreements,but they have many loopholes and exceptions.The global rules are unlikely to be easily reached in the digital space because even the governments that are enthusiastic about signing agreements are unclear about what those rules should look like,and how they should be implemented.11Digital Governance in China:Data,AI and Emerging Technologies,and Digital TradeChinas position on digital trade agreements is that there should be no duties on e-commerce,and it supports the WTOs moratorium on imposing duties,tariffs and taxes on electronic transactions.This position can be seen in the WTO Moratorium on Customs Duties on Electronic Transmissions and also in the RCEP and in Chinas free trade agreements with Australia,New Zealand and others.The likelihood of whether an international agreement on digital trade is reached or not depends on if there is enough common ground among the three data realms:China,the European Union and the United States.But even if there is an agreement,it will be very weak,like the version of the data draft for trade-related aspects of e-commerce at the WTO.It is probably along the lines of the e-commerce chapter in the RCEP,in which a country such as China would be able to use national security to ultimately impose legitimate restrictions on cross-border data flows that cannot be disputed.An agreement like this would not foster or support digital trade and cross-border data flows.With a weak or not very effective agreement or no regional agreement at all,the world would go back to the reinforcement of three different data or digital realms,which is not really a solution.The United States makes it more difficult by creating the Global Cross-Border Privacy Rules Forum as part of its Indo-Pacific Economic Framework,trying to pull the cross-border privacy rules out of the Asia-Pacific Economic Cooperation forum.This would make it more incompatible with the European Unions GDPR and creates more challenges for countries in between,such as Australia,Canada or Japan.For China,there is substantial unrealized potential with respect to the digital economy as some capacity constraints are still impeding its engagement in this sector.The constraints also apply at the border and to Chinas embrace of digital trade agreements.The Organisation for Economic Co-operation and Development has developed an indicator for digital services trade restrictiveness,which considers discrimination against foreign supply and market access with respect to infrastructure,connectivity,electronic transactions,payments,IP rights in the digital realm and other barriers to digitally enabled services,such as access to cross-border digital trade,downloading and streaming.Chinas trade restrictiveness score as of 2021 indicates that it is four times more restrictive than a typical advanced economy.This constraint will have a negative impact on innovation.The indicator of private R&D expenditures is important since R&D is an input for innovation processes.The annual data on R&D expenditures among the top 2,500 firms since 2014 shows a highly significant and negative relationship between digital trade services and trade restrictiveness.If the source of most technologies around the world is imported,barriers to market access would affect innovation,and impediments to digital inputs would limit Chinas capacity for its own technological development.Chinas Prospects for Joining the CPTPP and the DEPAChina is very serious about joining the CPTPP and the DEPA as part of its promotion of high-level opening up,and it is willing to meet the obligations when it comes to the digital trade sector.From Chinas perspective,the top leadership would try to relax data regulations such as restrictions on cross-border data flows to meet the rules and requirements for joining the CPTPP and the DEPA to promote economic development and Chinas model overseas.The gap between the new obligations in both the digital trade chapter in the CPTPP and the DEPA,and Chinas existing obligations in the RCEP,is not that wide.That is not the most challenging issue.The main reason why it would not be that difficult for China to meet the requirements to join the CPTPP and the DEPA is the exceptions within those agreements that would allow China to do practically whatever it wants.The CPTPPs rule on data flows and data localization has many exceptions that are broad and unclear,which makes it hard to hold any country accountable.For example,the fact that it is not clear what a legitimate public policy objective means as an exception to applying restrictions on data could enable China to claim that restricting data flows and requiring permission for data to leave China is in the pursuit of a legitimate public policy objective.Further,the language in the RCEPs digital trade and e-commerce chapters is built on the CPTPP,but it dilutes or weakens the language in the CPTPP.Chinas push for that kind of language in the RCEP is a strong indication that the country ultimately wants to be allowed to impose whatever exceptions it wants on cross-border data flows.12Conference Report Virtual Workshop,November 28,2022 At the same time,there is no alternative to these rules in trade agreements such as the CPTPP and the DEPA.With more than 600pages of legally binding rules in the CPTPP,it is better to have China in the agreement than not if it can meet the rules and requirements.The DEPA is slightly different and more challenging for China to join than the CPTPP as the DEPA is not just about the rules and how to follow them but much more about how to create rules for the future.It is more about shared values and norms,which would be at risk if China joined on the ground floor because of the countrys different values.One of Chinas motives for joining the DEPA is to try to get into organizations through multilateral trade frameworks and shape these frameworks.However,China could still join the DEPA as the agreement has some exceptions from the commitments that are particularly important.Whether China can join the CPTPP and the DEPA also depends on how other member countries such as Canada and New Zealand see the issue.It could be politically challenging for some members to agree on China joining.For example,it would be difficult for Canada to accept China into the CPTPP in the current political context.Furthermore,Chinas lack of diplomacy in seeking to join the DEPA was not helpful:the country announced that it would join the DEPA when none of the three founding members of the agreement were present.ConclusionThree distinct features stand out in Chinas digital governance.First,digitalizing the real economy and unlocking the potential of data is a top priority in China.Second,China has moved first in some key areas of digital governance such as digital platform and algorithm regulations,but whether these regulations can be implemented remains uncertain.Third,data security is clearly regarded as a very important part of Chinas national security strategy.However,it is fair to say that China,like other countries and regions,is struggling to find that balance between cybersecurity,privacy,economic development and innovation in terms of digital governance.Technology should be driving convergence toward a structure that is efficient for the economy.In the long run,there is a general convergence moving toward a structure that features data privacy,data security and datas economic value in China,Europe and the United States.But in the short term,there will be many frictions along the path to building a rules-based order for the digital economy.The participants of the workshop agree that there is a lot of work left to do in research on digital governance in China and its implications for the world,and discussion on these issues should continue to explore constructive and compatible ways to build a rules-based global digital economy.13Digital Governance in China:Data,AI and Emerging Technologies,and Digital TradeAgendaNovember 28,20229:009:10 Introduction Bob Fay,Managing Director of Digital Economy,CIGI Opening Remarks Paul Samson,President,CIGI9:1010:10 First Panel:Data Governance in China:Platforms,Competition,Standards Moderator:Henry Gao,Law Professor,Singapore Management University;Senior Fellow,CIGI Rogier Creemers,Co-founder,DigiChina;Assistant Professor,Leiden University Mosi Li,Professor,Shanghai University of International Business and Economics Rebecca Arcesati,Analyst,Mercator Institute for China Studies(MERICS)Dan Ciuriak,Director and Principal,Ciuriak Consulting;Senior Fellow,CIGI Round Table Discussion and Q&A10:1010:15 Health Break10:1511:15 Second Panel:Governance of AI and Emerging Technologies in China Moderator:Rohinton P.Medhora,Distinguished Fellow,CIGI Zheng Liang,Professor,School of Public Policy and Management,and Vice President,Institute for AI International Governance,Tsinghua University Kendra Schaefer,Head of Tech Policy Research and Partner,Trivium China Anton Malkin,Assistant Professor,Chinese University of Hong Kong,Shenzhen;Fellow,CIGI Joshua P.Meltzer,Senior Fellow,Global Economy and Development,Brookings Round Table Discussion and Q&A11:1511:20 Health Break14Conference Report Virtual Workshop,November 28,2022 11:2012:20 Third Panel:Chinas Participation in Digital Trade:Data Flows,Privacy,IP Moderator:Susan Ariel Aaronson,Research Professor,Elliott School of International Affairs,The George Washington University;Director,Digital Trade and Data Governance Hub;Senior Fellow,CIGI Henry Gao,Law Professor,Singapore Management University;Senior Fellow,CIGI Patrick Leblond,Associate Professor,University of Ottawa;Senior Fellow,CIGI Deborah Elms,Founder and Executive Director,Asian Trade Centre;President,Asia Business Trade Association Douglas Lippoldt,Senior Fellow,CIGI Round Table Discussion and Q&A12:20 Closing Remarks Bob Fay,CIGI15Digital Governance in China:Data,AI and Emerging Technologies,and Digital TradeParticipantsSusan Ariel Aaronson Research Professor,Elliott School of International Affairs,The George Washington University;Director,Digital Trade and Data Governance Hub;Senior Fellow,CIGI Aya Adachi Analyst,Mercator Institute for China Studies(MERICS)Daniel Araya Senior Partner,World Legal Summit;Senior Fellow,CIGIRebecca Arcesati Analyst,MERICSVeronika Blablov Data Analyst,Association for International AffairsVincent Brussee Analyst,MERICSGreg Cederwall Senior Trade Policy Officer,Global Affairs CanadaEugene Cheah Graduate Student,Peking Universitys School of International RelationsShenjie Chen Director of Economic Research,Government of CanadaDan Ciuriak Director and Principal,Ciuriak Consulting;Senior Fellow,CIGI Rogier Creemers Co-founder,DigiChina;Assistant Professor,Leiden University Deborah Elms Founder and Executive Director,Asian Trade Centre;President,Asia Business Trade Association Paul Evans Professor,School of Public Policy and Global Affairs,University of British ColumbiaBob Fay Managing Director of Digital Economy,CIGISridhar Ganapathy Senior Associate,Artha GlobalHenry Gao Law Professor,Singapore Management University;Senior Fellow,CIGI Tommaso Giardini Associate Director,Digital Policy AlertMichel Girard Senior Fellow,CIGIAnita Gurumurthy Executive Director,IT for ChangeAlex He Senior Fellow,CIGIGurumurthy Kasinathan Director and Lead,Education and Technology,IT for ChangeMark Kruger Opinion Editor,Yicai Global;Senior Fellow,CIGIPatrick Leblond Associate Professor,University of Ottawa;Senior Fellow,CIGI Mosi Li Professor,Shanghai University of International Business and Economics Zheng Liang Professor,School of Public Policy and Management,and Vice President,Institute for AI International Governance,Tsinghua UniversityDouglas Lippoldt Senior Fellow,CIGI Anton Malkin Assistant Professor,Chinese University of Hong Kong,Shenzhen;Fellow,CIGI Akshay Mathur Senior Fellow,CIGIRohinton P.Medhora Distinguished Fellow,CIGIJoshua P.Meltzer Senior Fellow,Global Economy and Development,Brookings Paul Samson President,CIGI16Conference Report Virtual Workshop,November 28,2022 Kendra Schaefer Head of Tech Policy Research and Partner,Trivium China Shreeja Sen Research Associate,IT for ChangeVikram Sinha Head,Data Governance Network,IDFC Institute67 Erb Street West Waterloo,ON,Canada N2L 6C2www.cigionline.org

19人已浏览 2023-03-20 24页 5星级

Talkwalker：2023全球最具社交性的足球比赛分析报告（英文版）（22页）.pdf

Focus on the FootballAnalysis of the worlds most social football gameNothing without the fansFtbol.Soccer.Football.Whatever you call it,every 4 years the world goes crazy for one major tournament.Uniting fans from across the globe,as they root for their team to win.For brands,it opens up new opportunities.Play it right,and they can get closer to this fanatical audience,and score bigs wins for their business.In this report,we take a deep dive into the football audience,to understand its drivers,and demonstrate how brands can profit by connecting with the fans.Talkwalker is not a sponsor of the championship and this report only analyzes social media coverage of the event(as one of the biggest worldwide sporting events)in comparison with its past editions.2Introduction23MethodologyAnalysis was made using Talkwalkers Consumer Intelligence Platform,monitoring the use of a range of tournament-related keywords and hashtags across various social media channels.To compare the 2018 and 2022 tournaments,analysis was done from the opening match to the final(14/06/18 to 15/07/18,20/11/22 to 18/12/22 respectively).Talkwalker Blue Silk AI was used to help pull additional insights(through features like image recognition and sentiment analysis)and to accelerate time-to-insight.34 42018 vs 2022A lot can change in 4 yearsA lot has changed since 2018.A pandemic and a rising cost of living crisis,has changed how fans are living their lives.By analyzing the two tournaments,we get a better understanding of how this audience has developed over time,and how its new habits could impact the impact of the big game.562018202234.2 million mentions153.2 million mentions94.5 million engagement1.1 billion engagementMost mentioned teams1.France(12 million)2.England(4.5 million)3.Argentina(3.3 million)Most mentioned teams1.Argentina(40.4 million)2.France(13.3 million)3.Portugal(12.8 million)Most mentioned players1.Lionel Messi(889,000)2.Cristiano Ronaldo(780,000)3.Kylian Mbapp(507,000)Most mentioned players1.Lionel Messi(32.1 million)2.Cristiano Ronaldo(10.1 million)3.Kylian Mbapp(8.5 million)Most mentioned brand Coca-Cola(1.6 million)Most mentioned brand Coca-Cola(1.2 million)7Top stories 2018Kylian Mbapps rise to superstardom was the talk of the tournament as he helped France to their second title.Englands reinvigorating run to the semi-final had football fans around the world singing“Its Coming Home.”Host nation Russia went on a surprise Cinderellarun to the quarter finals after knocking Spain out in the last-16 shootout match.Top stories 2022Japan amazed everyone on the field and off,leaving its changing room spotless post-match.A surprise win from Morocco got everyone talking across the world.Argentina drove the most conversations as the eventual winners.7Comparison of tournament mentions,2018 vs.20222022 Tournament analysis89Conversation drivers 2022Conversation Clusters of topics discussed in relation to the tournament,November to December 2022.Conversation Clusters are Talkwalkers topic-mapping feature,used to identify the key conversation drivers around the tournament.9 9Conversation drivers 2022Jungkook sings at the opening ceremonyBTS always drives a lot of social traffic.Having BTS Jungkook sing at the opening ceremony created as many conversations as youd expect.10Match surprises and successesMoroccos journey to the quarter-finals,Japans win against Germany,Argentinas success.Fans loved to discuss the surprises the tournament created.Iranian protestThe Iranian teams silent protest,to raise awareness of the situation in their home country,sent social media shockwaves across the web.1011Podcast mentions1111Using Talkwalkers Speech Analytics,we found:An additional 6,200 discussions about the tournament.Most mentions came from non-sports related podcasts,highlighting how significant the game is even for those less-fanatical fans.Mentions of the tournament identified in podcasts,November to December 2022.12Mentions by region1212Looking at the global mentions of the tournament:We can see that its a truly global game,enrapturing the world for four weeks.Even countries that werent represented,such as India and Indonesia,were actively involved in the related online conversation.Mentions of the tournament,split by region,November to December 2022.13The G.O.A.T.There was much fan discussion of the G.O.A.T.(greatest of all time)throughout the tournament,with Lionel Messi dominating the conversation(74.6%).Cristiano Ronaldo is second with 16.1%.Brands should monitor,as Cristiano Ronaldo is currently Instagrams highest earner(and potentially most influential).But with rumors of his potential retirement,brands should know who else fans are loving.Players associated with the phrase G.O.A.T.November to December 2022.14Brand spotlight14Quarter-final team analysis151515A look at how well the 8 quarter-final teams performed online during the tournament,and which official tournament partner or sponsor the team was most associated with.15NetherlandsArgentinaCroatiaBrazil1.4M mentions40.4M mentions2M mentions10M mentions34.7M engagement647.3M engagement52M engagement225.4M engagementMost mentioned playerMemphis DepayMost mentioned playerLionel MessiMost mentioned playerLuka ModriMost mentioned playerNeymarMost mentioned brand-BudweiserMost mentioned brand-adidasMost mentioned brand-BudweiserMost mentioned brand-Budweiser161616Quarter-final team analysis16EnglandFranceMoroccoPortugal3.8M mentions13.3M mentions2.9M mentions12.8M mentions115.6M engagement254.4M engagement78.8M engagement212.1M engagementMost mentioned playerHarry KaneMost mentioned playerKylian MbappMost mentioned playerHakim ZiyechMost mentioned playerCristiano RonaldoMost mentioned brand-BudweiserMost mentioned brand-adidasMost mentioned brand-BudweiserMost mentioned brand-adidas17Sentiment analysisTalkwalkers sentiment analysis,helped identify the positive mentions of the tournament sponsors and partners.The benefit of sponsoring the winning team is demonstrated here,as adidas received a significant number of positive brand mentions in the final.As a new 2022 partner,Algorand also saw some early positive wins for its brand.Positive brands mentions during the tournament,November to December 2022.18Most discussed broadcastData was pulled from Social Content Ratings:Everyone was tracking Argentinasrun to their third star with their semi-final match and final match drawing the most discussion.Telemundos coverage far outpaced engagement versus FOXs coverage.Despite not being the biggest kit sponsor of the tournament(Nike sponsors 14 kits vs.adidas 12),adidas still gained the most brand mentions.The tournament itself is a great awareness booster for the brand.The average number of adidas mentions per week were 16.1%higher during the tournament.19Kit analysisUnexpected brand wins20Even though there was a last minute ban of beer in the stadiums,Budweiser had a few wins.It announced that the winning country would get the beer that was stocked up for the tournament-tweet generated 24K engagements.The player of the tournament award was also sponsored by Budweiser,which helped the brand build 80%net sentiment(125K mentions).Spotify is living the Dream(ers)Spotify generated a whopping 95%net sentiment with 128K brand mentions connected to the tournament.Jungkooks“Dreamers”became the most popular official tournament song ever,and went on to be streamed 4.8 million times when it debuted on Spotify.Budweiser raises a glass202021Fans being fans2122Kit analysisFabrizio RomanoAs one of the most trusted football journalists in the world,Fabrizio Romano is the industry expert,especially in the transfer market.He had created more tweets about the tournament than FIFA,generating 17M engagements-4.5X more than that of Elon Musk.Ghanim Al-MuftahAs a Qatari YouTuber and official ambassador for the tournament,Ghanim Al-Muftah drove significant awareness for the games.He headlined the opening ceremony alongside Morgan Freeman,with Ghanims behind the scenes YouTube video being watching over 800,000 times.Top influencersFabrizio RomanoElon MuskGhanim Al-MuftahAndy Murrayksi23The finalMentions of the tournament as they happened during the final,18 December 2022Following the final results as they happened,the first spike in conversation was down to Mbapps two back-to-back goals in the 80th and 81st minutes.The second spike continued celebrating Mbapps success,as he cemented his hat trick.And the biggest spike of the game,concluded the tournament,as fans celebrated Argentinas win.24The winners2424Mentions of Argentina went crazy,with 9.7 million mentions in just 2 days.The majority of these were positive,as fans across the world celebrated the success of the team.Locker room funThe most engaging posts came from ESPN FC,as it shared behind the scenes video from the Argentinian locker room.Just 2 posts gained over 1.65 million engagements and 13.3 million views.And who provided the celebratory refreshments?Budweiser of course.Another win for the brand.Argentina goes viral25Hyundai jumped onto the buzz around Argentina,with a final Felicidades Argentina post on Instagram.This one post nailed the growing sentiment of the audience,and garnered 564,000 views for the brand.Aldi does guerilla marketingUK retailer Aldi kicked of its Christmas campaign in early November,but this time it had a football twist.Featuring fan favorite#KevinTheCarrot,Aldi recreated the famous Nike ad from the 1998 edition of the tournament.With 71%net sentiment on social media,the ad had 5K engagements on Twitter,and 2.5M YouTube views.Showing even non-sponsors can deliver football success.Hyundai cheers the winnersThe final brand wins26Conclusion2626Why sports marketing mattersWhen it comes to global sports events like this,there will always be a risk.Not everyone will be a fan.Yet there are opportunities for any brand.Look for the connections between your consumers and the event,and make the most of that moment.This will enable you to be more relevant and build those all important connections.Remember,you dont have to be a fan yourself,but your support should be genuine one way or the other.Follow your audience sentiment,and if that means opposing an event,that is still a conversation you can be a part of.The goal is to know your audience,inside and out,and take data-driven actions where possible.Get a Free DemoThe#1 Consumer Intelligence companyThe world is changing.Consumers are more demanding,more urgent,and more unpredictable than ever,and brands are struggling to keep up.Talkwalkers leading Consumer Intelligence Platform helps you stay ahead by turning internal and external data into consumer insights that grow your brand.Over 2,500 global brands trust Talkwalker,and our international team of experts,to guide them in making the most of every opportunity in this fast-paced world and accelerate their brand growth.

6人已浏览 2023-03-20 27页 5星级

世界卫生组织：2021-2025东帝汶国家合作战略（英文版）（93页）.pdf

WHO Timor?LesteCountry Cooperation Strategy2021?2025ISBN:9789290210047Country Cooperation Strategy Timor-Leste|20212025 World Health Organization 2022Some rights reserved.This work is available under the Creative Commons Attribution-NonCommercial-ShareAlike 3.0 IGO licence(CC BY-NC-SA 3.0 IGO;https:/creativecommons.org/licenses/by-nc-sa/3.0/igo).Under the terms of this licence,you may copy,redistribute and adapt the work for non-commercial purposes,provided the work is appropriately cited,as indicated below.In any use of this work,there should be no suggestion that WHO endorses any specific organization,products or services.The use of the WHO logo is not permitted.If you adapt the work,then you must license your work under the same or equivalent Creative Commons licence.If you create a translation of this work,you should add the following disclaimer along with the suggested citation:“This translation was not created by the World Health Organization(WHO).WHO is not responsible for the 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from the copyright holder.The risk of claims resulting from infringement of any third-party-owned component in the work rests solely with the user.General disclaimers.The designations employed and the presentation of the material in this publication do not imply the expression of any opinion whatsoever on the part of WHO concerning the legal status of any country,territory,city or area or of its authorities,or concerning the delimitation of its frontiers or boundaries.Dotted and dashed lines on maps represent approximate border lines for which there may not yet be full agreement.The mention of specific companies or of certain manufacturers?products does not imply that they are endorsed or recommended by WHO in preference to others of a similar nature that are not mentioned.Errors and omissions excepted,the names of proprietary products are distinguished by initial capital letters.All reasonable precautions have been taken by WHO to verify the information contained in this publication.However,thepublishedmaterialisbeingdistributedwithoutwarrantyofanykind,either expressedorimplied.The responsibility for the interpretation and use of the material lies with the reader.In no event shall WHO be liable for damages arising from its use.Printed in Timor-LesteWHO Timor-LesteCountry Cooperation Strategy2021?2025ContentsExecutive summary1.Introduction2.Health and development situation4842469111221303747483.WHOTimor-Leste collaboration:progress during past five years4.Setting the strategic agenda5.Implementing the CCS strategic agenda6.Monitoring and evaluationReferencesAnnexes2.1 Political,economic,demographic and social context2.2 Overall health status of the population2.3 Health system and progress towards universal health coverage2.4 Health sector response to SDG priorities2.5 Reducing vulnerability to climate change:preventing,preparing for,and responding to health emergencies2.6 Beyond the health sector4.1 Prioritization process4.2.Strategic priorities and focus areas?5.2 Harnessing the strengths of all health partners5.3 Collaborating with the UN system and the Global Action Plan for Healthy Lives and Well-being for All6.1 Monitoring of CCS implementation6.2 CCS evaluationAnnex 1:Mapping of CCS priorities?Annex 3:Key interventions in HNAP to control and reduce air pollution.606263767878596768687276Timor-Leste-WHOCountry Cooperation Strategy 2021?2025iAcronyms and abbreviationsAMR Antimicrobial ResistanceCHC Community Health CentreDHS Demographic and Health Survey?GPW General Programme of Work?HEOC Health Emergency Operation CentreHNAP Health National Adaptation PlanHP Health Post?JEE Joint External ExaminationMMR Maternal Mortality RatioNAPHS National Action Plan for Health SecurityNCD Noncommunicable DiseaseNHSSP National Health Sector Strategic PlanNTDs Neglected Tropical DiseasesPHC Primary Health CareRMNCAH Reproductive,Maternal,Newborn,Child and Adolescent Health?STEPS STEPwise Approach to Noncommunicable Disease Risk Factor SurveillanceTAPS Tobacco Advertising,Promotion and SponsorshipTFR Total Fertility RateUHC Universal Health CoverageUNSDCF United Nations Sustainable Development Cooperation FrameworkWSP Water Safety PlanTimor-Leste-WHOCountry Cooperation Strategy 2021?2025iiWHO Regional Director forSouth-East AsiaIt is my pleasure to introduce this fourth Country Cooperation Strategy(CCS)20212025 for the Democratic Republic of Timor-Leste.This document will form the basis for WHO?s collaborative work with the government of Timor-Leste and other United Nations agencies and development partners to achieve theUN Sustainable Development Goals(SDGs)andWHO?s thirteenth General Programme of Work.In doing so,this CCS aims to anticipate and address Timor-Leste?s future health needs as defined in the country?s National Health Sector Strategic Plan 20112030.Timor-Leste has in recent years made commendable progress on strengthening health systems and improving health status and outcomes,achieving several health-related Millennium Development Goals.Timor-Leste has significantly increased immunization coverage and eliminated several infectious diseases,such as polio,measles,and maternal and neonatal tetanus.High-level political commitment has been critical to the country?s achievements,andwill be especially important in tackling noncommunicable diseases,addressing communicablediseases such as TB,and mitigating risks associated with disasters,environmental threats,and health emergencies.This new CCS is designed to provide Timor-Leste needs-based technical support over the next five years,with a focus on health system strengthening to achieve the SDGs.It was developed in close consultation with the Ministry of Health,as well as with nongovernmental organizations,civil society,United Nations agencies and other development partners.I thank all stakeholders for their contributions.As a trusted partner of the Democratic Republic of Timor-Leste,WHO Country and Regional?ces will continue to provide its full support to the Ministry of Health in its e?orts to improve health and well-being and achieve Health for All.MessageiiiTimor-Leste-WHOCountry Cooperation Strategy 2021?2025iiiH.E.Minister of Health,Democratic Republic of Timor-Leste?Health and other stakeholders and development partners,which included Bilateral Agencies,?donors.WHO has been providing technical assistance to the Government of Democratic Republic of?Timor-Leste has made remarkable progress in strengthening its health system and improving the health status of the population.Overall life expectancy has increased.Timor-Leste has successfully achieved the MDG4 target by reducing infant and under 5 mortality and substantial progress being made in improving maternal and child health outcomes including increased immunization coverage,eradication and elimination of infectious diseases like polio,measles,maternal and neonatal tetanus.Support provided by WHO has been very helpful to attain these precious gains.We are thankful to WHO.Despite a number of achievements,the country has been facing challenges like increasing noncommunicable diseases,high burden of communicable diseases especially TB,increased risks associated with disasters,environmental threats and health emergencies during diseases?June,accompanied by the worst flooding crisis in many decades,has severely disrupted Essen-tial Health Services in Timor-Leste.The government,with support from WHO,has successfully?Strong political commitment exists to implement the SDG Agenda and great emphasis has been?2030.The Ministry of Health appreciates the identification of the four strategic priorities?Country Cooperation Strategy 2021?2025.These are very much in alignment with the NationalMessageTimor-Leste-WHOCountry Cooperation Strategy 2021?2025iv?Health Sector Strategic Plan(20112030)of Timor-Leste.This comprehensive strategic?further strengthened.Timor-Leste-WHOCountry Cooperation Strategy 2021?2025vWHO RepresentativeThe World Health Organization has been working closely with the Government of the?for Timor-Leste is the fourth strategic continued collaboration that describes the medium-term strategic vision and guides its work in Timor-Leste.This CCS has been developed based on lessons learned and experiences includingbest practicesand partnership experiences from the previous CCS.An extensive consultative,iterative and interactive process has been followed that included in-depth interviews,group discussions,?agencies and development partners,non-governmental organizations,academic institutions,professional bodies and civil society organizations.The underlying principles of the CCS development process included ownership,alignment with the national priorities,harmonization?advantages and expertise.?people from Health Emergencies including disease outbreaks and disasters through strengthened?Supporting health systems by strong and sustainable leadership and governance at every level towards the vision of“Healthy East Timorese People in a Healthy Timor-Leste”.These strategic priorities are inextricably linked and aligned with the National Health Sector?The CCS will serve as an instrument to navigate and foster multisectoral engagement and integrated approaches to achieve the health-related SDGs.ForewordTimor-Leste-WHOCountry Cooperation Strategy 2021?2025vi?Timor-Leste-WHOCountry Cooperation Strategy 20212025viiTimor-Leste-WHOCountry Cooperation Strategy 2021-2025viiiExecutive summary?its health system and improving the health status of its population.This has resulted in an increased life expectancy,and the achievement of Millennium Development Goals such as a reduction in infant and under-five mortality,an improvement in maternal and child health outcomes,and an increase in immunization coverage.Further,the country has successfully eliminated infectious diseases such as polio,measles,and maternal and neonatal tetanus.There is full political commitment?streamlined the procurement and supply of medicines,consumables,personal protective?and tertiary health care,to better respond to future pandemics and other disaster situations.Despite this substantial progress,Timor-Leste faces new challenges,such as the increasing?risks associated with disasters,environmental threats,and emergence and re-emergence of?by disrupting the maintenance of essential health services and negatively impactingsocioeconomic outcomes.?distribution and supply of logistics and medicines.The Government of Timor-Leste has been?to the provision of UHC for all Timorese,free at the point of delivery.?health goals,the goals of the WHO regional flagship programmes,and the global goals and?billion targets of the Thirteenth General Programme of Work?as relevant to and agreed upon by the government of Timor-Leste.The CCS complements?of the fact that improving the health and well-being of the Timorese population is the joint responsibility of the government,WHO and development partners,the CCS will be monitored and evaluated jointly with the government and the development partners.Timor-Leste-WHOCountry Cooperation Strategy 2021?20251Strategic Priority 1:Strategic Priority 2:Strategic Priority 4:Strategic Priority 3:Country Cooperation Strategy 2021?2025?Timor-Leste-WHOCountry Cooperation Strategy 2021?20252Fig.1.Country Cooperation Strategy 2021?2025Chapter IIntroductionCountry Cooperation Strategy 2021?2025?of the Democratic Republic of Timor-Leste for the development and strengthening of the?became a Member State of the South-East Asia Region.The Country Cooperation Strategy?with the government and partners.The strategic priorities of the CCS are designed to provide need-based technical support to the government for the next five years to strengthen the health system with an eye to achieving the SDGs.This CCS has been developed on the basis of the lessons learnt and experiences gained during the previous CCSs,as well as extensive consultations and policy dialogues with the government?following objectives were kept in mind during the formulation of the CCS:?to achieve the desired results.Policy dialogue and strategic support will be the mode of delivery to support the major transformations envisaged in the health system,while technical?capacity.Service delivery will be used as a modality in times of emergency or to provide critical services as provider of last resort.To set in motion a process to transform the health system and promote country ownership?To encourage the development of partnerships involving multiple health and development?Timor-Leste-WHOCountry Cooperation Strategy 2021?20255?for the implementation,monitoring and evaluation of the CCS,technical assistance will be?of global goods to the Timor-Leste context,implement the Regional Flagship Programmes1,support intercountry collaboration and share learning.A mid-term review of the CCS will be conducted in the year 2023 and a final evaluation by the end of 2025.Source?Driving public health impact in every country?PolicydialogueMature health systemFragile health systemTo developsystems ofthe futureTo build highperformingsystemsTo buildnationalinstitutionsTo fill criticalgaps inemergenciesStrategicsupportTechnicalassistanceServicedeliveryStepping up leadershipDiplomacy and?multisectoral?Focusing globalpublic goodson impactNormativeguidance and?data,researchand innovationTimor-Leste-WHOCountry Cooperation Strategy 2021?20256Happy children in Manufahi municipalityChapter IIHealth and Development SituationCountry Cooperation Strategy 2021?2025Timor-Leste-WHOCountry Cooperation Strategy 2021?202592.1 Political,economic,demographic and social context2.1.1 Political2.1.2 Economic2.1.3 DemographicTimor-Leste,a small country located in the island of Timor,became an independent state in?unitary,semi-presidential,representative democratic republic.The Prime Minister is the head of government,while the President exercises the functions of head of state.East Timor has a multiparty system.Legislative power is vested both in the government and the National Parliament.Usually,the Prime Minister is the leader of the political party that forms a majority or majority coalition in the unicameral national parliament.There are 13 ministries,including the Ministry?developmental sectors,including the achievement of the health Millennium Development Goals.However,in recent years,Timor-Leste has faced a series of political crises,leading to the?Timor-Leste aspires to become an upper middle-income country by 2030 and has developed its?dependent on the petroleum sector,oil and gas revenues being the main sources of governmentrevenue.The percentage of the population living below the national poverty line fell from 50.4in 2007 to 41.8 in 20142.Overall,the economic situation has worsened,with a decline in the?3?forecasted that the petroleum sector is likely to grow smaller in the coming years,causing asharp contraction of the GDP and a rise in inflation.The key challenges facing Timor-Leste arethe diversification of economic activity from the public to the private sector,and from petroleumto other sectors.Most of the countrys population lives in rural areas and is heavily reliant onsubsistencagriculture,with very limited access to markets.According to the 2015 Census,Timor-Leste had a population of 1,179,654.The population was relatively young,the median age being 19.6 years,and the annual population growth rate was?,a large cohort of young population will enter the reproductive age group in the coming decades.This young population will place a burden on?the future.Timor-Leste-WHOCountry Cooperation Strategy 2021?2025102.1.4 SocialTimor-Leste ranked 131st?6.The attendance rate for primary school?Report 2017,published by the World Economic Forum,ranked Timor-Leste at 128 among 144?However,the prevalence of violence against women is alarming.As per the findings of the?physically abused by their male partners,reports experiencing severe violence.As per DHS?Experiences Study7.Fig.3.Population pyr?r-Le?te,2015Age group?year?70 65-6960-6455-5950-5445-4940-4435-3930-3425-2920-2415-1910-145-90-4Males51%of the populationFemales49%of the population15105151050Percentage of total populationSource:Timor-Leste Population and Housing Census,2015Timor-Leste-WHOCountry Cooperation Strategy 2021?2025112.2 Overall health status of the population?Source:World Health Statistics,WHO,2018The Global Burden of Disease Study 2017 explored the causes of death in Timor-Leste and the?trends,the country will face a double disease burden by 2040:NCDs will be the major cause of?neonatal illnesses will still be among the top 10 causes?.Further,the study revealed that compared to 2007,poor diet,high blood pressure,high blood glucose,tobacco use,and high cholesterol were increasingly becoming disease risk factors in the country10.While there was an?period,they remained in the list of top 10 disease risk factors.Malnutrition,which has been?would continue.?life expectancy,a good summary measure of the overall health of the population,improved by?.100595269592000Life expectancy at birth?Health life expectancy200720152016500Timor-Leste-WHOCountry Cooperation Strategy 2021?2025122.3 Health system and progress towards universal health coverageThe Constitution of Timor-Leste protects the right to health,medical care and a healthy environment.aUnder Article 57,the State has the responsibility of providing free universal health care through a decentralized public health-care system.Since 2002,successive governments have been?provider and care is free of charge.?presents a vision for a“Healthy East Timorese People in a Healthy Timor-Leste”11.The Government has just initiated work to adapt the NHSSP to better respond to the current?comprehensive set of reforms,was launched in July 2021.These relate to a new health financing strategy,human resources for the health strategy,and an essential package of primary care services.a The Constitution of Timor-Leste,entered into force on 20 May 2002A doctor conducting medical check up during house-to-house visit as part of Saude Na Familia programme Timor-Leste-WHOCountry Cooperation Strategy 2021?202513?Health care is financed predominantly from public sources.According to the National Health?12.While external funding from development partners has played a very important role since the country regained independence,its importance has?total health spending12.While domestic general government health expenditure was seen to be increasing over the five years,it declined as a proportion of general government expenditure,?13.?interventions to accelerate progress towards UHC14.These include introducing public financial?performance-based allocation of resources to municipalities.?12020132014Year?2015201620171006040200Development Partners(DP)Voluntary Health Insurance(VHI)Households out-of-pocket expenditures(OOP)Domestic General Govt.Health Expenditure(GGHE-D),reccurent)Timor-Leste-WHOCountry Cooperation Strategy 2021?202514?protection.The coverage of essential health services is defined as the average coverage of essential services based on tracer interventions that include reproductive,maternal,newborn?and most disadvantaged population.Fig.6,based on the composite UHC index using 16 indicators,shows that the estimated essential health services coverage has more than doubled since 200015.Health services in Timor-Leste are organized at four levels of care:outreach services,health posts,community health centres at the municipal and submunicipal levels,and referral hospitals at the regional and national levels.Private sector involvement in the health system is low,with only 52?and?12.?1995010203040506020002005201020152020A nurse providing counselling to a mother of newborn baby Timor-Leste-WHOCountry Cooperation Strategy 2021?202515Primary health careb SISCa aims at delivering population-based interventions in the community.The interventions include promotion of health,mass drug administration for neglected tropical diseases and immunizations,health registration,and follow-up of children,pregnant women and people with chronic conditions.c?domiciliary visits.Recording the overall households and individuals health status and clinical information are a part of these visits,as are clinical consultations,follow-up,long-term care,and referrals by a multidisciplinary team of health professionals.d?in schools,including general hygiene and health education,oral and eye check-ups,monitoring of weight and growth,provision of vitamin A and coordination of immunization.?level are the HPs,which cover a population of between 1500 and 2000 in rural areas and around 5000 in urban settings.Community ambulatory health services are provided by the CHCs to a population of between 7500 and 12,000 in rural areas and around 15,000 in urban settings.The three main?b?c and the school-based health programme.d?Secondary and tertiary care?and Oecusse.They have been providing a common set of services,including internal medicine,paediatrics,surgery,obstetrics and gynaecology,emergency care and ambulatory outpatient care.The referral hospitals have around 500 beds.Half of these are distributed among the five district?National Referral Hospital Guido?National DiagnosticsService?Timor-Leste-WHOCountry Cooperation Strategy 2021?202516Quality?16.As part of the comprehensive set of health system?households,it is more than a two-hour walk to the nearest primary health facility17.A 2016 study18on the barriers to access to health services found that a lack of transport facilities for patients was a?the hospital.Sometimes they had to resort to having patients carried by porters or on horseback.?accessible and acceptable substitute for hospital care.Poverty,the lack of education,opportunity?levels of utilization of health-care services,especially among vulnerable groups.A 2014 World Bank report revealed that despite the fact that care is free,wealthier patients access hospital care at nearly twice the rate at which poorer patients do19.This is backed by the?ePeople with?physical access,and because health workers lack the basic knowledge and skills to assist them.Services for persons with mental disabilities are extremely limited20.?outpatient and emergency services covering all major medical and surgical specialties.Specialist services are largely unavailable in Timor-Leste,mainly due to the lack of trained specialists and?for the transfer of patients for specialist tertiary care.e?Timor-Leste-WHOCountry Cooperation Strategy 2021-20258Timor-Leste-WHOCountry Cooperation Strategy 2021?202518?Timor-Leste has been doing well in terms of the overall workforce numbers,with the density of?21.Source?institutions produce more than 800 new health professionals a year.The health workforce includes health professionals such as doctors,nurses,midwives and allied health professionals,including laboratory technicians,pharmacy technicians,physiotherapists and nutritionists.?summary of the workforce in the public health sector22.Though the country has been successful in increasing the number of health workers,serious concerns have arisen about the health workforce in terms of skill mix,productivity,and even future?One third of the human resources for health are working in the municipality of Dili,though the area?workforce.?Global StrategyOn HRH 2016?World HealthReport 200601011.12008200920102011201420152017Medical Specialist3588964861812672301224General DoctorAllied Health Professional*MidwifeNurseNurse?s Aid?otal491112.112.712.721.222.025.02030405060Health workers(doctors,nurses,and midwives)DoctorsNurses and MidwivesCadr?roupAv?o.Timor-Leste-WHOCountry Cooperation Strategy 2021?202519?strategic documents provide guidelines and orientation on the continuous enhancement of health?commitment and investments have not been secured.?Target 3.8 of the SDGs underscores the importance of access to essential medicines and vaccines for all as part of attaining UHC.The government has established the Servio Autnomo?Refresher training on Timor-Leste Health Information System for HMIS,EPI and MCH Focal Points Timor-Leste-WHOCountry Cooperation Strategy 2021?202520?was developed in 2010 and updated in 2017.?infrastructure,death of trained personnel,lack of monitoring,and fragmentation of the?Directorate of Pharmacy and Medicines is responsible for some regulatory functions.With the increasing number of pharmaceutical importers and drug outlets,as well as the ongoing?13.WHO has estimated the?23.H.E Minister of Health,H.E Vice Minister of Health and WHO Representative along with SAMES Executive Directorand team visited SAMES warehouseTimor-Leste-WHOCountry Cooperation Strategy 2021?202521?2.4 Health sector response to SDG priorities?infrastructure,death of trained personnel,lack of monitoring,and fragmentation of the?Directorate of Pharmacy and Medicines is responsible for some regulatory functions.With the increasing number of pharmaceutical importers and drug outlets,as well as the ongoing?13.WHO has estimated the?23.The access to modern family planning methods,decreasing desire for very large families,and?fThis is one of the fastest declines in the world,but it is still 2.7 births higher than the global average and almost three times higher than the Asia-Pacific average of 2.1.Moreover,there are regional variations in the TFR across the country.The unmet need for contraceptiong was?.While the birth rates are traditionally the highest among rural adolescent girls,they seem to be increasing among urban girls.f Fertility rates differ,depending on the source consulted.For example,the TFR based on the 2015 Census is 4.5,while that based on?g The unmet need is the percentage of women of the age of 15-49 years who want to stop or delay childbearing,but are not using any method of contraception.A midwife in Community Health Center providing counselling to a mother of newborn babyTimor-Leste-WHOCountry Cooperation Strategy 2021?202522?24.?2030.Good progress has been made in the number of institutional deliveries and deliveries assisted by skilled birth attendants,according to successive DHSs.However,the 2016 DHS revealed that?190836445413019Neonatal mortality?Under-5 mortality807060504030201002003 DHS2016 DHS2009-10 DHSTimor-Leste-WHOCountry Cooperation Strategy 2021?202523?campaigns.As a result,the vaccination coverage for children under one year of age has reached?been free of locally transmitted measles for three years,Timor-Leste was verified as having eliminated endemic measles and controlled rubella and congenital rubella syndrome.?established.A twinning agreement between Timor-Leste and Sri Lanka on the strengthening of?in the country.However,to sustain the progress,technical support from WHO and the United?On the basis of the Maternal Death Surveillance and Response Annual Report for 2017,the?h reflecting a lack of?three DHSs,the mortality rates of both infants and under five-year-olds have steadily decreased,by about half,since 2003.Neonatal mortality,on the other hand,declined by one?The country has been able to significantly reduce the under-five and neonatal mortality rates compared to the 1990 baseline.Preterm birth complications are the foremost cause of?Undernutrition is an important underlying cause of child mortality.Timorese children have the?of Breastmilk Substitutes.h?Timor-Leste-WHOCountry Cooperation Strategy 2021?202524?stagnated at approximately 500 new cases per 100 000 population per year26.The barriers to the reduction of the TB burden include lackings in case-finding,diagnosis and treatment,as well as?-?Table 2:TB burden,2018TB burdenTotal TB incidence?Number(thousand)Rate(per 100 000 population)Source:?Midwives demonstrating the importance of vaccine to the mothers at Community Health CenterTimor-Leste-WHOCountry Cooperation Strategy 2021-202525TB event:signing pledge?Actions for Ending TB by 2025 at the same event.?the second highest incidence rate in the WHO South East Asia Region and one of the highest in the world To combat the scourge of TB in Timor?Leste,the National Strategic Plan for Ending TB was developed with support from WHO The National Plan for Accelerated Actions,launched by the Prime Minister,is in line with the National Strategic Plan and aims to close gaps in prevention and care.?developed with technical support from WHO This application is a part of a broader vision and innovation in transitioning?Fund Grant.Timor-Leste-WHOCountry Cooperation Strategy 2021-202526?plan to continue the outreach activity to screen individuals and households.We are continuing with?Sr Constantino Lopes?TB,Timor-Leste?ted to extending the most scientific and actionable technical assistance and partner with all stakeholders in supporting the Ministry of Health and people of Timor-Leste in realizing their vision?Dr Arvind Mathur?Timor-Leste?disabling and sometimes fatal disease,is not only an objective defined in the National Health Plan or in the?constitutional duty undertaken towards our citizens,who wish to see the right to a?H.E.Taur Matan Ruak?Timor-Leste-WHOCountry Cooperation Strategy 2021?202527?reported was 840 in 2018.Between 2011 and 2017,the average number of new cases per year?27.?sex workers and men who have sex with men and transgender men considered to be thepopulations most at risk28?29.A new strategy for?among the general population and key populations.?30.With the aim of reducing the incidence of?in order to achieve its goals.H.E Vice Minister of Health,WHO Representative together with Ministry of Health team,and civil society representativesreleasing advocacy poster during Hepatitis advocacyTimor-Leste-WHOCountry Cooperation Strategy 2021?202528?Among the goals set by the country is the elimination of lymphatic filariasis by 2024 and of yaws by 2023,in addition to the control of soil-transmitted helminths.The MoH successfully conducted round 1 of the mass drug administration against lymphatic filariasis and soil-transmitted?Early intervention and raising awareness among the community are the other priorities.Although the government has been successful in eliminating leprosy through the use of multidrugtherapy throughout the country,it remains endemic in a few municipalities,including Dili.Laboratory technician taking the student blood sample to check for microflariaeWHOs staf conducting physical exam to LF patient in the feldDoor-to-door patient visit for morbidity managementand disability prevention to lymphatic flariasis Contented children together with WHO and Ministry of Health teams during Transmission Assessment Survey(TAS)Timor-Leste-WHOCountry Cooperation Strategy 2021?202529?31,though the precise rate is not?occured outside the hospital.A WHO STEPs survey on NCD surveillance,undertaken in 2014,found a high prevalence of risk factors32?three or more risk factors,including smoking,an unhealthy diet,overweight and high blood?the types of risk factors,particularly smoking,alcohol consumption and dietary habits,including the?Table 3:Key risk factors for NCDs among adults(1869 years)in Timor-Leste,2014Source?Key risk factors?70.6Men(%)Combined(%)Women(%)56,128.9With raised blood pressure or on medication for hypertension45.339.328.0With raised fasting blood glucose or on medication for diabetes1.51.6Ate 80TBD?NHSSP,GPW 13,UNSDCF,Regional Flagships,SDGsNHSSP,GPW 13,UNSDCF,Regional Flagships,SDGsNHSSP,GPW 13,UNSDCF,Regional Flagships,SDGsNHSSP,GPW 13,UNSDCF,Regional Flagships,SDGs?Indicator?This CCS will be contributing to priority health national indicators.Table 5 shows how the indicators are aligned to the GPW 13 result framework,SDGs,UNSDCF and NHSSP.?Tuberculosis incidence per 1 000 persons per year?Communicable diseasesMaternal health498TB programme,MoH?249100?,GPW 13,UNSDCF,Regional Flagships,SDGs?,GPW 13,UNSDCF,Regional Flagships,SDGsTimor-Leste-WHOCountry Cooperation Strategy 2021?202555Proportion of births attended by skilled health personnelUnder-5 mortality rateMaternal healthChild health?NHSSP,GPW 13,UNSDCF,Regional Flagships,SDGsNHSSP,GPW 13,UNSDCF,Regional Flagships,SDGsNeonatal mortality rateMortality due to cardiovascular diseases,cancer,diabetes or chronic respiratory disease?deviation from the median of the WHO Child Growth?Child healthNoncommunicable diseases?80?TBDTBDReduction by half?,GPW 13,UNSDCF,Regional Flagships,SDGsUNSDCF?,GPW 13,UNSDCF,SDGs?,GPW 13,UNSDCF,SDGs?Emergency preparedness and responseEmergency preparedness and response?vwww.ghsindex.org80TBDGPW 13?,GPW 13,UNSDCF,Regional Flagships,SDGsTimor-Leste-WHOCountry Cooperation Strategy 2021?202557Tobacco and Alcohol Control Council as per Article 24 decree Law?Governance?-Tobacco and Alcohol Control Council establishedNHSSP,GPW 13WHO STEPS survey of NCDs?GovernanceNCDSTEPS survey conductedCode for Breastmilk Substitutes implemented?GPW 13,UNSDCF SDGs,Regional Flagships-WHO STEPS survey 2014Updation of National Multisectoral AMR Action PlanDevelopment and implementation of national digital health strategy?of Timor-LesteGovernance?Environmental healthHuman resources?and National e-Health?AMR Action Plan updated and implementedNational digitalhealth strategy?developed and implementedStrategic Plan for National?University of Timor-Leste developed and implemented?GPW13,Regional Flagships?,GPW 13,UNSDCF,SDGs?GPW 13-a?b?to political,socioeconomic,and environmental risks that can confound outbreak preparedness and response in the light of adherence to international norms.?Implementing the CCS StrategicAgendaCountry Cooperation Strategy 2021?2025Timor-Leste-WHOCountry Cooperation Strategy 2021?202560?1.2.3.4.?Timor-Leste.The“way of working”adopted will depend on the need,national capacity and partnership environment in relation to each strategic priority and focus area.Emphasis will be laid on the development of leadership,advocacy,policy dialogue and the strengthening of national institutions to enhance the impact.?include the following.Strategic policy dialogue?support the government with evidence and policy options and examples of best practice from across the globe that are relevant to the national context,for example,emphasis would be laid on a multisectoral approach for the prevention of NCDs,nutrition and AMR containment.St?cooperation with the MoH and other ministries,the UN system,the development partners?development partners,and help mobilize resources for health and develop sound national strategies on health sytems.?the?of health programmes and services,for example,the strengthening of PHC and implementation of essential services package.Service delivery?and critical shor ages of supplies.?Provide healthleadership anddeveloppartnershipsGenerate,translate anddisseminateknowledgethrough researchSet normsandstandardsProvidetechnical supportArticulateethical andevidencebased policyoptionsMonitor healthsituation andassess healthtrendsTimor-Leste-WHOCountry Cooperation Strategy 2021?202561To achieve a sustainable impact,a longer-term technical assistance plan,with a follow-up?missions would be planned to build national capacity to accelerate the unfinished tasks in?enhancement of technical capacity.?sector,more joint programming would be undertaken,involving the development partners,professional groups,NGOs and civil society organizations.A comprehensive plan would be developed in line with the WHO Framework of Engagement with Non-State Actors to involve professional bodies,civil society organizations and NGOs.Research and the dissemination of knowledge would be one of the priority focuses during the CCS period.To build research capacity and increase knowledge sharing,stronger networks would be developed with academic institutions and WHO collaborating centres.Based on the lessons from the last CCS period,more emphasis would be laid on resource mobilization.Coordination with current donors would be strengthened and new funding opportunities would be explored.A comprehensive resource mobilization plan specific to the four strategic?public health.?priority areas such as human resources for health,PHC,RMNCH,food and nutrition,NCDs,?in All Policies”approaches.?d?and technical expertise that are needed to deliver support from each of the three levels of the?provide support for adapting the global tools to the regional context,implementing theTimor-Leste-WHOCountry Cooperation Strategy 2021?202562?5.2 Harnessing the strengths of all health partnersThe development partners which are providing support to the health sector include multilateral?and the Global Fund.?cooperation for sharing experience,exchange of technology and expertise within the Region and also to assist in mobilizing resources.Bilateral partnersDevelopment PartnersHealth Coordination GroupAustraliaEuropean Union?CubaPortugalThailandROKNew ZealandJapanChinaMultilateral partnersUN Women?UNFPAWFPUNDPWHOWorld BankADBGlobal FundsNGOs/CSOs/OthersGlobal Health Institutions?Timor Leste Red CrossGlobal Health AllianceSaint John of God?Maluk TimorAlola FoundationNational Alliance for Tobacco ControlWater AidCRS RACS?CatalpaMarie StopesThe DPHCG is currently chaired by DFAT and co-chairedby WHO.It works closely with the MoH with thefollowing objectives:To strengthen the health sector in line with?S?To align,collaborate and coordinate DPworkplans as per government policiesTo avoid duplication of resources and e?orts,?cyTo facilitate information sharing betweenpartners and the governmentTo ensure policy coherence across all healthprogrammes supportedTo establish stronger links with relatedministries?departmentsMother embracing the baby childTimor-Leste-WHOCountry Cooperation Strategy 2021?202563k?It focuses on the country level and its aim is to leverage the strengths and capacities of each of the six member organizations?improve the survival,health and well-being of every woman,newborn,child and adolescent?agencies to improve collaboration so as to accelerate progress towards the health-related SDGs,with a focus on strengthening PHC.5.3 Collaborating with the UN System and the Global Action Plan for Healthy As a member of the United Nations Country Team,WHO has been working very closely with all the UN agencies and has strong partnerships through which it can support the MoH.At the country level,the UNSDCF is the primary overarching instrument for coordinating andimplementing UN System activities in support of the National Priorities and the 2030 SDG Agenda.As the CCS elaborates the strategic health priorities for WHO,in line with the UNSDCF?and partnership among the UN agencies.To achieve a greater impact,emphasis will be laid on?k NCDs,AMR,food safety,health financing,essential medicine,water and sanitation,waste management and environmental health.To accelerate progress with respect to the health-related SDGs,the Global Action Plan for Healthy Lives and Well-being for All was launched at the UN General Assembly in September?the heads of the signatory agencies,as shown in Fig.17.Lives and Well-being for All?Better engagement with countries?ENGAGEACCELERATEALIGNACCOUNTProgress in countries through joint action under specific programmatic?Progress in delivery of global public goodsSupporting countries by harmonizing their operational and financial strategiesReviewing progressLearning together to enhance shared accountabilitySupporting countries by harmonizing their policies and approachesTimor-Leste-WHOCountry Cooperation Strategy 2021?202565?Minister of Health,Timor-Leste?the centrality of the data is maintained without the need to create a spearate and new?challenges to circumvent.The vaccination target group was the entire adult population,and the task of maintaining dual dose vaccination records for every individual was daunting.Manual data entry raised challenges related to real time collection of vvaccination data,collation and centralization of data from 13 municipal divisions with 72 CHCs,and merging data from hundreds of vaccination posts.T?operational?National Parliament President Aniceto Guterres Lopes,in the presence of HE Prime Minister Taur Matan Ruak on 7 April 2021,on the occasion of World Health Day.?following immunization,and can be used as a?of vaccine deployment.The tracker has made it possible to compile daily and cumulative vaccine coverage reports for review and monitoring by the Minister of Health,Director General of Health Services and other key?Dr.Arvind MathurWHO Country Representative,Timor-Leste?system in use globally,it is crucial that Timor-Leste should keep this up and find?How Timor-Leste employed digital innovation during the pandemicH.E Prime Minister,Taur Matan Ruak and H.E President of the National Parliament ofcially launchingthe Timor-Leste Health Information System COVID-19 Immunization Tracker?Monitoring and EvaluationCountry Cooperation Strategy 2021?2025Timor-Leste-WHOCountry Cooperation Strategy 20212025686.1.Monitoring of CCS implementationPurpose:ThepurposeofmonitoringtheimplementationoftheCCSwouldbeto:1)ensurethat thepriorityactivitiesunderthe CCSarebeingcarriedout?andinatimelymanner;and 2)receive early warning signals to identify problems/challenges related to the implementationof the strategic priorities.Process:TheperformanceoftheCCSwillbemonitoredregularlybytheJointMonitoringGroup,composed of st?members from the WHO Country?ce,Regional?ce and headquarters,UN country team,and members from the MoH and other partners.The mechanisms ofcoordination to be used by WHO together with the MoH will consist of six reviews of monthly performance,and the annual review of the Biennial Work Plan will be strengthened.Factors thatmayhamperthesmoothimplementationoftheCCSpriorities,suchasthepoliticalscenario,natural disasters,including disease outbreaks,and socioeconomic conditions,will be closely monitoredthroughout.TheprogressoftheCCSwillbesharedannuallyattheHealthDevelopmentPartnersGroup?smeetingsandtheannualreportwillbecirculatedamongallstakeholders.The main achievements,best practices and lessons learnt will be documented at the end of each biennium.These periodical reviews will be used as major inputs for the mid-term and final evaluation of the CCS.6.2.CCS evaluationThe main purpose of the evaluation will be to measure whether the targets identified in the countryresultsframeworkhavebeenachieved,andtodeterminewhetherthe CCShascontributedto the achievement of the national targets and health-related indicators of the UNSDCF and SDGs.The evaluation process will be commissioned by the WHO Representative.A working groupfortheevaluationoftheCCSwillbeformed.Itwillbecomposedofst?fromtheCountry?ce,and st?rs from the Re?ce and headquarters.Mid-term evaluation:The main purpose of the mid-term evaluation would be to assess the progress made in the focus areas of the CCS and to determine whether the expected achievements are on track.In addition,the evaluation will aim to identify impediments that may require changes to the strategic priorities,and recommend actions to enhance progress during the second half of the CCS cycle.The review will adopt an interactive and participatory approach,involvingstakeholders.ThesewillincludetheMoH,developmentpartners,academic institutions,professionalgroupsandNGOs.Onthebasisoftheassessmentandrecommendations,a joint action plan will be developed with the MoH.Timor-Leste-WHOCountry Cooperation Strategy 2021?202569?Final evaluation?recommendations on priorities and ways of working to strengthen collaboration under the next generation CCS.To ensure that the evaluation is made in an independent and objective manner,an Evaluation?evaluation policy and practice guidance41,42,43,the group will review the implementation of the CCS and the progress made towards the outcomes defined.The main aspects covered by the?the strategic priorities.The final findings and recommendations of the evaluation will be shared with all relevant stakeholders,including the MoH,members of the UN country team and other development partners.Monitoring will be carried out on a regular basis by the Joint Monitoring Group,composed of?and members of the MoH and other partners.The?in monitoring and evaluation are shown in Fig.18.2021CCS launch?Monitorimplementation2023Mid-termevaluation2023-2025Monitorimplementation2025FinalevaluationOutcome and impact indicators chosen for each strategic priority,with baselines andtargets establishedBased on WHO GPW13 results frameworkCountry level datacapacity strengthenedEnsurealignment of?workplan withCCS prioritiesand annuallymonitorimplementationof the focusareasReport sharedwith MoH andcoursecorrectionsmade as neededEnsurealignment of?workplan withCCS prioritiesand annuallymonitorimplementationof the focusareas?Framework and SEA Regional Results Measurement Framework,WHO outputs and UNSDCF country indicatorsJoint evaluation withGovt.and DPs,usingobjective methodologyto determine relevance,?validate report published withlessons learnt for next generation CCSTimor-Leste-WHOCountry Cooperation Strategy 2021?202570Vaccination roll-out:a success story from Timor-LesteThe first dose of the COVID-19 vaccine was administered on 7 April 2021,coinciding with?the countrywide campaign by taking the first shots.Though the vaccine arrived in the country in April 2021,the work to obtain the final physical delivery began nearly a year ago.On 28 May 2020,the Minister of Health sent a“letter of intention”to join the COVAX Facility,supported by WHO,to the WHO Director-General.This was followed up with a letter to Gavi,the Vaccine Alliance in September 2021.On 19 November 2021,the COVAX Facility confirmed?Market Commitment(AMC).WHO provided technical assistance to the MoH in the development?On 12 January 2021,a Prime Ministerial dispatch instituted an Interministerial Commission(IMC),chaired by the Vice Prime Minister and including seven cabinet ministers,to coordinate and steer the COVID-19 vaccination campaign.A National Technical Committee(NTC)chaired by the Director General Health Services was formed.The director generals under other relevant ministries,and heads of the armed forces and police were included in the committee.The national EPI Working Group of the MoH continued to work as the key technical advisory body.In coordination with WHO technical experts,the national EPI Working Group developed a costed National Vaccine Development Plan(NVDP)in consultation with the NTC and IMC.The?2021,the NVDP was duly submitted to the COVAX Facility.With the NVDP in place,WHO recruited international consultants to assist in the development of technical guidelines and training materials for the campaign and for training health workers.The WHO EPI team conducted national-level training of trainers and assisted in conducting municipal-level trainings on a range of subjects,including volunteer orientation,listing of target population and microplanning.It conducted hands-on demonstration of vaccine administration,injection safety,vaccination rollout,waste disposal and adverse events following immunization.The first COVID-19 vaccine advocacy session on the media for Oxford AZ was conducted on 19 February 2021.And the first batch of COVID-19 vaccines arrived on 5 April 2021.The first phase of vaccination targeted the priority group health workers,frontline workers and?ministers and members of Parliament to participate in the campaign to increase vaccination coverage in all municipalities.On 16 October 2021,the country received the first shipment of the Pfizer COVID-19 vaccine for the age group of 1218 age group.The Pfizer vaccine rollout began on 28 October 2021.Excited school children after getting their frst dose of Pfzer vaccineHealth workers along with WHO EPI team in feld for COVID-19 vaccination driveWHO Representative observing the community vaccination drive in RAEOATraining of Trainers for health workers ahead of Pfzer vaccine campaignA nurse providing vaccine shot to school children during the vaccine campaign in schoolsCommunity members after receiving their frst dose of COVID-19 vaccineTimor-Leste-WHOCountry Cooperation Strategy 2021?202572References?-?-mor-leste-popu-?-?-?-?-?Timor-Leste National Health Accounts 2013-2017,Summary Report.Ministry of Health Timor-Leste and WHO.?-?Timor-Leste and Macao SAR China.Geneva:World Health?-?1.2.3.4.5.6.7.8.9.10.11.12.13.14.15.16.17.18.19.20.Timor-Leste-WHOCountry Cooperation Strategy 2021?202573?-?Human Resources,Ministry of Health,Timor-Leste.WHO.Estimating service consumption for updating the primary health care essential service package in?Population Division,Timor-Leste?WHO.Ending Preventable Child Deaths from Pneumonia and diarrhoea by 2025:The integrated Global Action?-?-?-?-?-?National survey for noncommunicable disease risk factors and injuries using WHO STEPS approach in?-?-?-?-?-?21.22.23.24.25.26.27.28.29.30.31.32.33.34.35.36.37.38.39.Timor-Leste-WHOCountry Cooperation Strategy 2021?202574Further Reading?-?Demographic and Health Survey 2016,General Directorate of Statistics,Ministry of Finance,Timor-Leste,?-?-?National Directorate for Human Resources.?Timor-Leste,July 2019.?-?Timor-Leste TB Profile,Global TB Report 2018,WHO Estimates of TB and MDR-TB burden produced in consulta-?-?-?-?1.2.3.4.5.6.7.8.9.10.11.12.13.14.?-?-?40.41.42.43.Timor-Leste-WHOCountry Cooperation Strategy 2021?202575National survey for noncommunicable disease risk factors and injuries using WHO STEP approach in?-?-?-?15.16.17.?-?-?World Health Organization,World health statistics 2019:monitoring health for the SDGs,sustainable develop-?-?-?-?-?Zero Hunger Challenge,National Action Plan for a Hunger and Malnutrition Free Timor-Leste,National Council?-?-?-?Framework for action in building health systems resilience to climate change in South-East Asia Region,?-?18.19.20.21.22.23.24.25.26.27.28.29.30.Timor-Leste-WHOCountry Cooperation Strategy 2021?202576A?EAS OF S?E?IC ALI?ME?P?IO?I?Y 1and?ocu?area?Operational planning?HSSP?20112030?priorit?CCS?20152019?SDCF?20202025?prioriti?WHO?PW13 goal?egional Flag?hip?S?rom the 2030 agenda?Are?o?upport identi?ied to achieve prioriti?Delivery of health?ervice?,including?a?ic package o?:maternal health;child health;nutrition;control o?communica?le di?ea?e?,?uch a?malaria,?B,HI?AIDS,lepro?y,lymphatic?ilari?;?C?;mental health and epilep?y;oral health and eye health?Section?,p.3?Development?management of human re?ourc?for health?Section?,p.6?Development of health infrastructure,including medical equipment and supplies,transport and am?ulance?ervic?Section?,p.70?Development of support services,including d?and con?uma?le?,la?oratory,?lood?ank?ervice?,health in?ormation?y?tem?Section?,p.77?Financing the national health system?Section?,p.86?SP1:Strengthening health?y?te?to en?ure?HCSP2:Reducing burdenof communica?le di?ea?SP3:Reducing burdenof?CD?,mentalhealth,violence,injuries,disabilities and ageing SP4:?mproving reproductive,maternal,new?orn,child,and adole?cent health and nutritionOUTCOME 4:By 2025,the people of Timor-Leste increasingly demand and have accessto gender-responsive e?uitable,high?uality,resilient and inclusive primary health care and?trengthened?ocial protection,including in times of emergencies.Sub-outcome 4.1:By 2025,health care institutions provide improved delivery of?uality,gender-responsive,e?uitable and resilient primary health care,including sexual and reproductive health,for?HC,and in times of emergencies OUTCOME 1:By 2025,nutrition,food security and agricultural productivity have improved for all,irrespective of individual ability,gender,age,socioeconomic status and geographical location Sub-outcome 1.1:By 2025,access to?uality nutrition services,in particular for adolescents,women of reproductive age and children under five years of age?including life-saving interventions,micronutrient supplementation,social protection programmes,infant and young child feeding,in particular breastfeeding?,hygiene,water and sanitation services have improved significantly and sustainably for all Contribute to 1 billion more people with?HC Outcome 1.1:?mproved acce?to qualitye?ential health?erv?Outcome 1.2:Reduced number of peoplesu?ering?inancial hard?hip?Outcome 1.3:?mproved availability of e?entialmedicine?,vaccine?,diagno?ti?and devices for primary health care Continue progressing towards?HC with focus on human re?o?for health and e?ential medicin?.Accelerate reduction of maternal,neonatal and under-?ive mortality.Finish the task of eliminating?and other diseases on the verge of elimination.Prevent and control?CD?through multisectoral policies and plans,with focus on“best buys”.Accelerate e?orts to End?B by2030.S?3.?:Achieve UHC,including financial risk protection,access to?uality essential health-care services and access to safe,e?ective,?uality and a?ordable essential medicines and vaccines for all.S?3.c:Substantially increase health financing and the recruitment,development,training and retention of the health workforce in developing countries,especially in least developed countries and small island developing States.S?3.3:End the epidemics of A?DS,tuberculosis,malaria and neglected tropical diseases and combat hepatitis,water-borne diseases and other communicable diseases.S?3.?:Support the research and development of vaccines and medicines for communicable and noncommunicable diseases.S?3.4:Reduce by one third premature mortality from noncommunicable diseases through prevention and treatmentand promote mental health and well-being.S?3.5:Strengthen the prevention and treatment of substance abuse,including narcotic drug abuse and harmful use of alcohol.S?3.1:Reduce the global maternal mortality ratio.S?3.2:End preventable deaths of newborns and children under 5 years of age.S?3.?:Ensure universal access to sexual and reproductive health-care services,including for family planning,information and education,and the integration of reproductive health into national strategies and programmes.S?2.2:End all forms of malnutrition,including achieving by 2025,the internationally agreed targets on stunting and wasting in children under 5 years of age,and address the nutritional needs of adolescent girls,pregnant and lactating women and older persons.By 2025,the people o?imor-Le?te have acce?to equita?le,high-quality,re?ilient,inclu?ive,and people-centred?HC?Strengthened health s?stem through:?improved?rkforce?improved access to medicines?health information?sustainable financing?implementation of service packages?2 Improved care through the life course and for communicable and noncommunicable diseases Support in the?ollowing area?:?Electronic medical record for PHC?implementation of SnF?Strengthening of the National Regulatory Authority for medicines,devices,vaccines and blood products?Priority implementation of interventions on human resources for health,health financing and?uality improvement?Strengthening of health information systems and implementation of telemedicine strategies?Strengthening of the emergency care system and critical care services?secondary leve?mplementation and monitoring of multisectoral action plan on NCDs?ntegration of the Package of Essential NCD interventions with PHC?mplementation of guidelines on eye and oral health care?Revision of mental health strategy on the basis of the Mental Health Gap analysis?ncrease of immunization coverage and introduction of new vaccine?s?Establishment of malaria-free certification?mplementation of national plan for elimination of TB?Updation of National Strategic Plan on H?A?DS and ST?s?Revision of strategies on RMNCAH-family planning and support for implementation of high-impact evidence-based strategies?Maternal and Child Health department?s response to Maternal and Perinatal Death Surveillance and Response System,together with UN?CEF and UNFPA?Establishment of colposcopy centre in maternity outpatient department of national hospital,and online NBBDS?new born birth defects database system?in national hospital and 5 regional hospitals?Curriculum revision by National University of Timor-Leste for School of Nursing and Midwifery and procurement process for establishment of skill laboratories for the university faculty?mplementation of National Health Sector Nutrition Strategy?Supported strengthening of health sector capacity to address Gender Based?olenceA?EAS OF S?E?IC ALI?ME?P?IO?I?Y 2and?ocu?area?Operational planning?HSSP?201130?priorit?CCS?201519?SDCF?202025?priorit?WHO?PW13 goal?egional Flag?hip?S?rom the 2030 Agenda?Are?o?upport identi?ied to achieve prioriti?Services for emerging di?ea?Section?F,p.61?SP5:Emergency preparation,surveillance and response,including implementing the I?OUTCOME 4:By 2025,the people of Timor-Leste increasingly demand and have accessto gender-responsive,e?uitable,high-?uality,resilient and inclusive primary health care,and strengthened social protection,including in time?o?emergen?COME 6:By 2025,national and subnational institutions and communities?particularly at-risk populations,including women and children?are better able to manage natural resources and achieve enhanced re?ilience to climate change impact?,natural and human-induced hazard?,and environmental degradation,inclusively and sustainablyContribute to 1 billion more people?etter protected?rom emergen?Outcome 2.1:Country health emergency preparedne?trengthenedOutcome 2.2:Emergence of high-threat in?ectiou?hazard?preventedOutcome 2.3:Health emergen?rapidly detected and re?ponded Scale up capacity development in emergency ri?managementS?3.d:Strengthen the capacity of all countries,in particular developing countries,for early warning,risk reduction and management of national and global health risks.S?3.d.1:Strengthen?nternational Health Regulations?HR?capacity and health emergency preparedness.S?3.9:Substantially reduce the number of deaths and illnesses from hazardous chemicals and air,water and soil pollution and contamination.S?13.3:?mprove education,awareness generation and human and institutional capacity on climate change mitigation adaptation,impact reduction and early warning.By 2025,the people o?imor-Le?te are?etter protected?rom health emergen?,including di?ea?e out?rea?and natural di?a?t?,through?trengthened national prevention,preparedne?and re?pon?e capa?ilit?.?1 Strengthened National capaci?in emergenc?health preparedness?2 Strengthened prevention of high-threat infectious hazards?Strengthened National capaci?to build climate resilient health s?stem?Support for NAPHS implementation,in line with the lessons learnt from CO?-19 response?Enhancement of national capacity for health emergency preparedness and responses,including strengthening of the National?ntegrated Diseases Surveillance and Response System,laboratories and case management?Enhancement of?HR core capacity?including coordination,points of entry and?uarantine?Support for establishment of national HEOC and emergency medical teams A?EAS OF S?E?IC ALI?ME?P?IO?I?Y 3and?ocu?area?Operational planning?HSSP?20112030?priorit?CCS?20152019?SDCF?20202025?Priorit?WHO?PW13 goal?egional Flag?hip?S?rom the 2030 Agenda?Are?o?upport identi?ied to achieve prioriti?Annex 1:Mapping of CCS priorities to national,regional and global strategic agenda,with key deliverables identifiedTimor-Leste-WHOCountry Cooperation Strategy 2021?202577Services for emerging di?ea?Section?F,p.61?Health promotion?Section?H,p.65?SP3:Reduce the?urden o?CD?,mental health,violence,injuries,disabilities and ageing SP5:Emergency preparedness,surveillance and response,including implementing the?HR?focus on?ocial determinant?Sub-outcome 4.3:Behaviour change?or determinant?o?health By 2025,communities,particularly women and girls,persons with disabilities,and civil society actors are engaged and empowered to influence decisions and behaviour that a?ect health and well-being to ensure that the needs of the poor,less educated,rural communities,women and children,persons with disabilities,migrant and mobile populations and other marginalized and vulnerable population groups are metContribute to 1 billion more people en?oying?etter health and well-?eing Outcome 3.1:Determinant?o?health addre?ed,leaving no one behind Outcome 3.2:Reduced risk factors through multi?ectoral approach?Outcome 3.3:Healthy settings and health in all policies promotedPrevent and control noncommunica?le di?ea?through multi?ectoralpol?and plans,with focus on“best buys”.S?3.4:Reduce by one third premature mortality from noncommunicable diseases through prevention and treatment and promote mental health and well-being.S?3.6:Halve the number of global deaths and injuries from road tra?ic accidents.S?6.2:Achieve access to ade?uate and e?uitable sanitation and hygiene for all and end open defecation,paying special attention to the needs of women and girls and those in vulnerable situations.By 2025,the people o?imor-Le?teen?oy?etter health and well-?eing?y addre?ing determinant?o?health through?trong multi?ectoral action.?1 Strengthen legal and regulator?mechanism for health protection and promotion?2 Facilitate environmental health and improve access to clean air,?r and sanitation?Strengthen health promotion interventions for improved health?behaviors?Support for development and implementation of National Health Promotion Strategy?Strengthening school health promotion interventions?Support for implementation of evidence-based interventions to reduce malnutrition and promote healthy diets?Support for implementation of programme on strengthening water?uality surveillance and improving water safety?Support for integration of climate-related risk interventions with national policy,planning and regulatory frameworks?Support for implementation of HNAP?for climate change?and National Environmental Health Strategy?Support for tobacco cessation interventions?including policy on taxes and comprehensive TAPS ban?Support for implementation of National Food Safety Strategy?Support for framing and implementing alcohol prevention policy?Support for ratification and implementation of Code for Breastmilk Substitutes?Support for promotion of rights of disabled people to health through legal framework?Support for and promotion of policies and interventions on road safety and drowning prevention and promotion of the same?Health Promoting School policy guideline and implementation?Healthy Lifestyle physical activity promotion and implementation supported A?EAS OF S?E?IC ALI?ME?P?IO?I?Y 4and?ocu?area?Operational planning?HSSP?20112030?priorit?CCS?20152019?SDCF?20202025?prioriti?WHO?PW13 goal?egional Flag?hip?S?rom the 2030 Agenda?Are?o?upport identi?ied to achieve prioriti?Health planning and?inancial management systems?Section?.6,p.83?Financing the?tional Health Sy?tem?Section?,p.86?Delivery o?health?ervic?,?Section?,p.33?Health partner?hip and colla?oration?Section?,p.84?Health re?earch and in?ormation?Section?,p.8182?Implementation,monitoring and evaluation?Section?,p.91?Cross-cuttingSub-outcome 4.2:Evidence-?a?ed deci?ion-making and digital?y?tem?By 2025,evidence,such as sex-disaggregated data,is systematically used for policies,strategies,programmes and investment decisions to address public health needs,determinants of health and multisectorality,including through strengthened digital health systems Sub-outcome 4.4:Health?inancing and?udgeting By 2025,sustainable and gender-responsive financing and budgeting for health is ensured to address unmet need for health services,reduce financial hardship arising from out-of-pocket payments and increase resilience to shocks,especially for vulnerable population groups Strategic Priority 5:Accountable,inclusive and participatory governance and?uality public services Sub-outcome 5.2:E?ective and innovative public administration facilitated by SDG-focused,evidence-based and gender-responsive planning and budgeting systems and professional and meritocratic civil service professionals at all levelsContribute to the“triplebillion”goal and Strategic Priority 4 on health leadership and evidence generation for decision-making Foundational?or alltechnical outcom?and Outcome 4.1:Strengthened country capacity in data and innovationCross-cuttingS?3.a:Strengthen the implementation of the WHO Framework Convention on Tobacco Control in all countries,as appropriate S?3.5:Strengthen the prevention and treatmentof substance abuse,including narcotic drug abuse and harmful use of alcohol By 2025,the health?y?tem?upported?y increa?ingly?trong and?u?taina?le leader?hip and governance at every level toward?the vi?ion o?Healthy Ea?t?imore?e People in a Healthy?imor-Le?te?4.1?ective governance?tructure?and mechani?m?trengthened to improve?unctionality and regulation o?health?y?tem?2 Communi?engagement and em?erment for the realization of the right to health?Monitoring and addressing equi?to ensure that no one is le?behind?4 WHO acts as an e?ective leader,convener and advocate for health through partnerships and collaboration?ith all sectors of government,UNCT and development partners?Support for strengthening of the National Regulatory Authority?Support for establishment of professional councils?doctors,nurses,midwives?Support for establishment and operation of National Codex Commission?Support for establishment of Tobacco and Alcohol Control Council?as per Article 24 decree La?Support for implementation of revised NHSSP?2021?2030?Support for updating and implementing the National Multisectoral AMR Action Plan?Strengthening of national capacity on health research and knowledge management?Strengthening MoH leadership capacity,including through National University of Timor-Leste?Strengthening national capacity to track progress in the context of global?GPW 13 and SDGs?and regional?Regional Flagships?goals?Strengthening partnership with local stakeholders,including NGOs,professional bodies,academia and civil society organizations,for people?s participation in health?People?s Health Assembly?Enhancing engagement with parliamentarians?Strengthening coordination among UN agencies and other development partners for health Timor-Leste-WHOCountry Cooperation Strategy 2021?202578FAC?:Timor-Leste?s?uick response to the CO?-19 crisis has been a result of e?ective government leadership,supported by technical guidance from WHO and needs-based support from the UHC Partnership.WHY I?M?E?S:Timor-Leste has a fragile health system,with limited capacity for managing critical cases,few functional isolation facilities and di?iculties in procuring timely medical supplies.?ES?L?S:Timor-Leste has now increased its capacity to respond to CO?-19 and is better prepared than before to deal with the emergence and control of new cases.WHO guided the nationwide response by providing technical assistance to establish?uarantine and isolation centres?set up testing facilities?train health workers and emergency responders in case management,infection prevention and surveillance?and build capacity for data collection.?t also provided the country with its first set of test kits and personal protective e?uipment?PPE?for health workers.Moving ahead,WHO supported several vaccine procurement deals through CO?A?and bilateral agreements with countries.?t also supported vaccine advocacy campaigns,the capacity-building of health-care workers,as well as the streamlined launching of vaccination and e?uitable distribution of vaccines across the districts.I?P?AC?ICE:WHO raised the alarm about the urgent need for CO?-19 preparedness,and the UHC Partnership,along with other multilateral and bilateral partners,provided critical technical,logistical and financial support for the CO?-19 response.WHO was on the ground straight away when the first suspected case of CO?-19 was reported.The initial patient interview and support for testing was provided by WHO sta?backed by the UHC Partnership.WHO?s previous work with Timor-Leste was helpful in launching an e?ective response.?n 2019,WHO helped Timor-Leste develop its Pandemic?nfluenza Preparedness Plan and integrate it with the National Action Plan for Health Security.This placed Timor-Leste in a strong position to prepare for all health security situations in the medium-to long-term,map multisectoral health security resources and take action around CO?-19 for sustainable preparedness.Moving?orward:Stronger surveillance and expanded testing are currently providing?ears on the ground?to pick up early signals of cases.All referral hospitals and municipalities now act as sentinels and collect samples on a regular basis.A la?technician working at the?ational Health La?oratory on the PC?work?tation donated?WHO?imore?e health worker?undergoing training on how to u?e PPE?acilitated?WHO and other health development partne?Source:Stories from the field:special series on the CO?-19 response?Timor-Leste,23 July 2020,Universal Health Coverage Partnership https:?tory-timor-leste?According to the?inding?o?Demographic Health Survey carried out in 2016,e?po?ure to?oke in?ide the home,either?rom the u?e o?olid?uel?or cooking or?rom?moking?acco,ha?potentially har?ul health e?ect?.Eighty-?even percent o?hou?ehold?u?e?olid?uel?,con?i?ting mo?tly o?irewood,?or cooking.?he u?e o?olid?uel?or cooking i?more common in rural are?95%?than in ur?an area?5?%?.In?imor-Le?te,62%o?hou?ehold?cook outdoor?under a cover,14%cook outdoor?,and 12ch cook in a?eparate?uilding and in?ide the hou?e.The following interventions have been emphasized in the Health National Adaptation Plan?2020?2024?to reduce and control air pollution:1.conducting research and studies on climate change,air pollution and respiratory illness?2.developing national policy and strategy for controlling air pollution,including national standards for both indoor and outdoor air?uality?3.promoting use of improved cooking stove in the rural community?4.awareness generation on solid waste?domestic and industrial?management to reduce ambient pollution?and5.procuring and installing air?uality monitoring stations in major urban areas and monitoring public transport.?Annex 3:Key interventions in HNAP to control and reduce air pollution1,183,643(2015)010203040506070910111213141508Population6Total numberof hospitals344Total no.of health posts84.373ult literacyrates(M&F)Immunizationcoverage(infants)142MaternalMortalityRatio91.5(Urban)&68.6(Rural)81.1(Urban)&38(Rural)Populationhaving improvedaccess to waterPopulationusing improvedsanitation facilities13No.of districts/municipalities71Total CHCs103Sex ratio30InfantMortalityRate19NeonateMortalityRate3.7Govermenthealth expenditureas a%of GDPLife expectancyat birth 69.5(M&F:71.6&67.5)ToiletWHO Timor-LesteCountry Cooperation Strategy2021?2025

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思略特：2023时尚消费品牌DTC转型白皮书（英文版）（40页）.pdf

0Enlighten Fashion Brands Routes to the DTC ModelBuilding eight pillars to enable DTC transformation for continued growth1Editorial Board:Tiger ShanLead Partner,PwC Strategy&ChinaEmail:Steven JiangPartner,Digital Growth Services,PwC Strategy&ChinaEmail: Jerry HuaPartner,Consumer Markets,PwC Strategy&ChinaEmail:Contact us:Contributors:Ryan Ding,Rose Chen and Patrick Pan,Senior Associates of Strategy&ChinaConsumer Markets Leadership:Michael Cheng Asia Pacific,Mainland China and Hong KongConsumer Markets Leader,PwC ChinaEmail:Jennifer YeMainland China Consumer Markets Leader,PwC ChinaEmail:Jane WangLead Partner for Consumer Markets,PwC Advisory ChinaEmail:1Strategy&|Enlighten Fashion Brands Routes to the DTC Model2ContentsForeword03I.Key success factors for DTC fashion brands to achieve profitable growth06II.Five constraints to growth during DTC transformation16III.Eight pillars for DTC fashion brands to unleash growth23Conclusion37Enlighten Fashion Brands Routes to the DTC Model|Strategy&23The way people socialize and work has beenreshapedduetotheepidemicandotheruncertainties,leading to dramatic shrinkage ofpopulation flow and offline shopping.It bringsnegativeeffecttobricks-and-mortarretailindustries in terms of consumer flow dropped,offline shopping flumped,and social activitiesdecreased.Thus,unprecedented challenges arepresented to fashion brands for business growth,especiallyinthefootwear,apparel,andcosmetics sectors.Meanwhile,given that China has a vast marketand complex distribution systems,traditionalplayersoffashionconsumergoodsoftenconnect to terminal retailers or final consumersvia regional distributors.In the past,this couldreduce inventory and capital pressure,as well asthecomplexityandinvestmentneededforexpanding the sales network and managingsales in different regional markets.However,alongsidea backdropofupgradeddemandamong the main customer segments,intensifiedindustry competition,and digital transformationof the value chain,the drawbacks of relyingsolely on distributors to reach the market areconstantly exposing.Typical challenges includelagging response to market competition andchanges in consumption,long process to launchnew products,brand damage by hunting short-termyield,inflatedterminalpricesandimbalance in consumer valueperception.The pandemic has made those worse,butconsumers demands still need to be met,so theclick-and-mortar retail model,whereby offlinestoresserveaswarehousesanddeliverycentresandonlineonestakeorders,hasbecomemorepopular.Benefitingfromthismodel,some brands are embracing the Direct toConsumer(DTC)model.Strategy&subscribesto the view that,unlike traditional direct retail,DTCconnectsthebrandandconsumersdirectly.By delivering personalized products,services,experiences,communication and valuetransfer via digital insights on customers,DTChighlyfacilitatesconsumersacquisitionandretention,as well as market expansion.It should be noted that Covid-19 is just one ofthe factors that make DTC model under heateddiscussion.Many of Chinas leading fashioncompanies had plans for DTC transformationbeforethepandemic.Byanalyzingtheperformance in the past three years(2019-2021)of 19 major DTC fashion brands(including DTC-oriented ones)in China and North America,wespotted an increasing number of Chinese brandsachievinghighnetprofitmarginswhilemaintaininghigh revenue growth.In summary,many fashion companies haveencountered unprecedented challenges underthe post-pandemic era.Therefore,it is of highsignificance to dig into the early adopters of theDTC model that have sustained healthy growth.This white paper aims to analyze the keysuccess factors for fashion brands who adoptthe DTC model,as well as the five challengesfor growth-seeking players.Finally,it proposeseight pillars for DTC transformation to unleashgrowth potential.ForewordStrategy&|Enlighten Fashion Brands Routes to the DTC Model34DTC model has developed for a long time inEuropeandAmericafashionindustries,while several new DTC brands sprung uprecently.Some traditional worldwide brandshave announced transformation strategies,striving to boost their DTC revenue to half,oreven 60%of the total revenue in the next 3to 5 years.“DTC revenue over60%Against the backdrop of the pandemic,it is meaningful to analyze how typical DTC brands(includingcompanies for which DTC accounts for the majority of revenue,hereinafter referred to as DTC brands)at home and abroad have performed in the past three years,and summarize the useful experience ofoutstanding players.This white paper singles out 19 fashion DTC brands,of which 9 are in China and10 in North America,covering 6 sub-industries,including apparels,footwear,skincare,jewellery anddesigner toys(see Figure 1).Source:Strategy&analysis711352ApparelsDesignertoyJewelrySkincareHomesFootwearFigure 1:Sub-Industry and geographic distribution of the sampled DTC fashion brandsChinaNorth America47S%Enlighten Fashion Brands Routes to the DTC Model|Strategy&4Sub-industry distribution of the sampled DTC brands in China and North America N=19Geographic distribution of the sampled DTC brands in China and North AmericaN=195The sampled companies have managed to re-construct their relations to consumers as directconnections through digital technology and data insight applications,enabling them to capture usersneeds and meet them perfectly,to deliver differentiated consumer experiences.Figure 2 shows thedifferences between the traditional retail model and DTC models in terms of consumer insights,business model,marketing,and distribution channels.Figure 2:Traditional model versus emerging DTC model*Note:Spray and Pray here means to randomly send out a large amount of marketing information,praying to get orders.Source:Strategy&analysisConsumer InsightsData-driven,real-time insights about individual consumers through digital technologiesBusiness modelProduct,price and promotion determined at an individual customer level(or micro-segments)MarketingMarketing across multiple digital media,but increasingly targeted at individual consumers based on insight and preferencesChannelsIncreasing use of several direct channels Owned e-commerce,owned physical retail,1-to-1 social selling,in-store shopsEmerging DTC ModelConsumer InsightsAd-hoc research(focus groups,panels,surveys)dominated by third-partyagenciesBusiness model Product,price and promotion determined at a general customer level MarketingOnline advertisement driven.Spray and Pray model*with no clear approach for customer acquisition,conversionChannels Reliance on retailers to sell products to the consumer.Limited direct interaction with consumersTraditional ModelStrategy&|Enlighten Fashion Brands Routes to the DTC Model56I.Key success factorsfor DTC fashion brandstoachieveprofitablegrowthEnlighten Fashion Brands Routes to the DTC Model|Strategy&67To identify high-performance DTC fashion brands,Strategy&tracked these 19 sampled companies inChina and North America in the past three years.We constructed a two-dimension performance matrixwith two core indicators,i.e.,the Compound Annual Growth Rate of Revenue(CAGR)and the netprofit margin(using 2021 figures as a baseline),between 2019 and 2021.Based on the median of thetwo indicators,the matrix was divided into four quadrants,i.e.,high-performance quadrant,high-growthquadrant,high-profit margin quadrant,and relatively low-performance quadrant.As shown in Figure 3,about two-thirds of the samples have sustained both high revenue and positiveprofitability.More importantly,within the high-performance quadrant,i.e.,the range with revenue growth and profitmargin both above the median,China has more companies than North America does(red dotsrepresent Chinese brands,and grey dots represent North American brands).It indicates that duringthe pandemic in recent years,China has more DTC brands with higher revenue growth and higherprofit margin.Now the question is why they stand out.Figure 3:Revenue growth and profit margin in recent 3 years of the sampled DTC fashion brands*in China and North America117-16-14-2-15101015160125133142920116-117-412018-619-713021 220230-10-8-54-9-320630-104050-1160708-12140-27150-132019-2021 Revenue CAGR2021 Profit MarginDABLCChinaNorth AmericaMedian=6.9%Median=19.7%N=19(%)(%)High PerformanceHigh GrowthHigh Profit MarginRelatively Low PerformanceNote:Brands in the above diagram are 19 sampled DTC-oriented brands,which are desensitized as A,B,C,D,L,etc.Sources:Annual Reports,Strategy&analysisStrategy&|Enlighten Fashion Brands Routes to the DTC Model78It was not easy for the top performers to make achievements in the past three years,as the overallbusiness environment in China was experiencing uncertainties and weak growth.Here,take apparel&footwear sub-industry and the skincare sub-industry as two examples.Since the end of 2019,the twosegments had dropped to the bottom of the MoM growth rate at least twice,in January 2020 andFebruary 2022 respectively.But January 2021,the MoM growth rate witnessed a high peak in nearly adecade,quickly rebounding from the first trough with a booster of the recovery of the pandemic.Puttingthese extremes aside,the two sub-industries endured lower growth during the pandemic,comparedwith the pre-covidlevels(see Figure 4).Figure 4:Month-to-month sales growth rate of apparels&footwear and skincare in ChinaNote:Jan to Feb data for 2012 and subsequent years are not disclosed by the National Bureau of Statistics,thus not includedin this figure.Source:National Bureau of Statistics-40-30-20-100102030405060702014.122011.12011.122013.122012.122016.122015.122017.122018.122019.122020.122021.122022.7MoM Growth Rate(%)SkincareApparels&footwear2011.1-2022.7Enlighten Fashion Brands Routes to the DTC Model|Strategy&89In this context,it is even more valuable to further analyse andidentify how these outperformers sustained growth.Analyzing thefourChineseDTCbrandswithexcellentperformance,andeliminating covid-related factors(such as business disruptions dueto social isolation policies,non-habitual buying in e-commence dueto blocked shopping in stores and etc.),we summarize three keyfactors for their success:Even negatively impacted by COVID-19,both online and offlinestores of outperforming DTC players have experienced double-digit growth,whereas online stores have achieved much highergrowth.ThosechannelsintheDTCmodeldonotoperateindependently.Offline stores function as experience centersandprovideexcellentexperience,whichencouragesconsumers to share posts on social media for word-of-mouthcommunication.Then,these user-generated contents(UGC)will guide potential customers to online stores.01Offline brand-owned stores guide potential customers to online storesThis white paper will dig deeper into the above three key factorsfrom the perspectiveof data insights.Consumers of outperforming DTC brands are more willing torepurchase.High consumer retention rate is not only driven by the superiorexperience and customer satisfaction from both online andoffline brand-owned stores,but also by membership systemsand operation targeting existing customers.02Repurchase contributes more to the sales growth High-performance DTC brands have balanced product portfolio,which providesa more obvious long-tail effectin sales.Assisted with direct consumer connection,DTC brands candynamically perceive consumers preferences and feedback,torespond to consumers needs,iterate new products,andupgrade existing products at a faster pace.03Product portfolio driven by real-time market insights contributes to balanced sales growthStrategy&|Enlighten Fashion Brands Routes to the DTC Model10As shown in Figure 3,four of the nine DTC fashion brands in China arewithin the high-performance quadrant,and the rest are distributed acrossthe other quadrants.These four companies will be referred to as the“outperformers”(desensitized as A,B,C and D)and the rest as“othercompanies”(X1,X2,X3,X4 and X5)respectively.In comparison,wetrack the changes in their revenue CAGR in the recent three years of theDTC channels,including brand-owned stores online and offline.Ouranalysis shows that,for the four outperformers,both online and offlinestores have sustained revenue growth(except for company B,a lateadopter of DTC,whose offline stores were under self-adjustment),andonline stores have maintained a rate much higher than offline storesdoes.For the other companies,the revenue growth rate of online andoffline stores is different.For example,the offline stores of company X1record a much higher growth rate than its online stores does.So,are there synergies between the revenue growth of online and offlinebrand-owned stores of the outperformers?From the perspective of thecustomer journey,more and more fashion goods consumers,especiallythe younger generation,wont buy a product without being deeplyattracted to it at first.Frankly speaking,if there are no effectivetouchpoints for a fashion brand or new product to establish consumerrecognition,consumers are likely not to purchase.We also notice thatthe brand-owned stores of outperformers have both merchandising andexperience functions,and there are many posts related to theirexperience centers on social media.Based on the number of posts in a leading lifestyle social mediaplatform,outperformers have on average more than twice of posts as theother companies.Besides,not all of these posts are released by thebrands official account,instead,most are created by users after theyvisited experience stores,i.e.,user-generated contents(UGC).Eventhough such stores are usually located in a few first-and second-tiercities and a large number of consumers in other cities cannot becovered,these online contents are able to attract online customers anddrive potential customers to make purchases online.This business loopis creating greater opportunities for brands to improve user conversionon e-commerce platforms.Similarly,considering the popularity of shortvideos,we also look into the user traces of a well-known short-videoplatform and find out a similar result.The offline experience centersignite numerous UGC short videos,and these contents attract morepotential consumers to watch and give a like.We count the number oflikes,and find out that outperformers receive more than four times ofpositivereviews than the other companies.1.Offline brand-owned stores guide potential customers to online storesEnlighten Fashion Brands Routes to the DTC Model|Strategy&1011Therefore,it can be seen that the outperformers online and offline channels do notoperate separately;bricks-and-mortar stores are no longer solely for sales,but alsodouble up as key touchpoints that offer interaction,experience,service valueextension,digital perception and application to consumers.Meanwhile,to make thestores popular on social media to attract more users,outperformers often designinteractions,activities and integrated experience to target users demands and usingscenarios.In addition,they produce banners,slogans or visual hammers to resonatewith users based on their value proposition.In this way,they could acquire newcustomersorpurchasesthroughusersrecommendations.Inconclusion,outperformers achieve growth in both offline and online stores,while the formerprovidesleverage valuefor the latter.A fashion clothing brand leverages its offline stores to directtraffic to its online.In 2021,the brand opened the firstexperience store that integrated coffee customization clothing retail in a popular business district in Beijing.Combining clothing products with coffee,the store allowedconsumerstotastespecialcoffeeanddessertswhileshopping,creating a fashionable lifestyle.The newly opened store quickly attracted a large number ofpotential customers.Within a month,more than 300 postshave been posted on a leading lifestyle social platform,andreceived more than 10,000 likes,favorites and comments intotal.A large number of non-Beijingers asked how to buy theproducts via comments,and the bloggers replied to them,telling them that the items could be bought in the brandsonline flagship store.According to sales data,in the first month when the storeopened,the online flagship store reported a double-digitgrowth in sales compared with the previous month,and sawsustained growth of this scale in the following months.Itdemonstrates how offline store is valuable in the surroundingarea,as well as how offline store boosts online exposure ande-commerce conversion as the young generation has apreference for online shopping.“Case study:A fashion brand opened a strong experience store to boost e-commerce salesStrategy&|Enlighten Fashion Brands Routes to the DTC Model1112By tracking the performance of the 9 Chinese DTC companies self-owned flagship stores on animportant e-commerce platform in China,we identified two noteworthy dimensions of data:one is thetotal sales in the past 12 months,and the other is the number of the stores existing fans.We tried toillustrate the retention rate through the linear relations between these two dimensions.It should benoted that flagship stores fans are usually more than actual customers,which means that it is almostimpossible to have each fan purchase at least once.As shown in Figure 5,axis X notifies the numberof fans”and axis Y refers to the total sales in the past 12 months“.If YX,i.e.,the intersection of Xand Y is on,or in the upper left of,the line Y=X(the slope=1),it means a fan-converted customermakes multiple purchases on average.It is worth noting that three of the outperformers(A,B,D)fall on or in the upper left of the line Y=X,while most of the other companies(X2,X4,X5)fall in the lower right of the line.It indicates that theoutperformers attracted more repurchasers(defined as those who made two or more purchases in thepast 12 months),reflectinga higher rate of customer retention.2.Repurchase contributes more to the sales growthFigure 5:Linear relationship between the number of fans of self-owned flagship stores and the total sales in the past 12 months of DTC fashion brands in ChinaNote:The total sales in the past 12 months refer to those of the Tmall flagship store of respective brands between July 2021and June 2022;and the number of fans is based on the data of the Tmall flagship store of respective brands in early July 2022Source:Tracker of e-commerce flagship stores,Strategy&analysis05,000,00010,000,00015,000,00020,000,00005,000,00010,000,00015,000,00020,000,00025,000,00030,000,000X3Number of fansTotal sales in the past 12 monthsX1X2ADBX4X5Y=xJuly 2021-June 2022;N=9Dots on or in the upper left of the line Y=X(the slope is 1)represents a higher repurchase rate(since the number of fans the number of e-commerce customers,if Y X,it means that existing customers made multiple purchases)CEnlighten Fashion Brands Routes to the DTC Model|Strategy&1213Given the completely different performance results as described above,why does repurchasecontribute more to the sales growth at the high-performance DTC brands?According to our analysis,itcould be attributed to two factors:First,outperformers attach great weight to the experience of non-member users.They provide betteruser experience perception around products,retail touchpoints,integrated services,etc.Specifically,they not only provide products that match personalized needs based on customers characteristicsthrough user insights,but also build online and offline retail stores to improve consumers shoppingexperience in all aspects.Therefore,with better experience regarding products,online and offlineshopping and customer services,consumers are more likely to stick to the brand,and are more willingto recommend them to others.Second,they emphasize membership systems and operation strategies targeting existing customers.Traditional fashion brands usually use membership point systems to motivate engagement andspending(i.e.,brands allow consumers to redeem points for gifts,thereby encouraging them to makerepurchases and continue to earn points).Compared with them,outperformers know how to betterretain high-value users in a differentiated way.Instead of offering extra benefits like discount couponsor special discounts for members,outperformers forge an emotional connection with consumersthrough interest circles and lifestyle circles,and provide exclusive experiences throughout theconsumer journey,thus creating a sense of belonging and value identity among members.Therefore,consumers can interact with the brand,connect with other members,and attract more potentialcustomers,which in turn drivesrepurchases and sales growth.A designer toy brand has transformed its membership system under the DTCmodel in recent years.In 2017,it had only about 300,000 members.The poorlydesigned membership system failed to attract and engage members,andmembership-based operation created little value.In 2020,the brand decided toupgrade the existing membership system,with the aim of improving customerretention and value contribution through circles of interest.The company startedwith WeChat official account,mini program,storefront and social media to pursueexposure and establish online communities,and set up a community operationdepartment in 2021.With more than 800 online groups,it gathered more than100,000 like-minded designer toy lovers,forming a foundation for customeracquisition and retention.Therefore,the brands number of members hasincreased by tens of millions since 2020;and,by 2021,members contributed 92%of its total sales,with a repurchase rate of 56%.“Case study:A designer toy brand re-designed its membershipsystem to drive repurchasesStrategy&|Enlighten Fashion Brands Routes to the DTC Model1314We tracked the sales of the above-mentioned 9 DTC companies Standard Product Units(SPUs)fromtheir self-owned online flagship stores,trying to identify how the sales contribution of SPUs differs fromoutperformers and other companies under the DTC model.We divided the SPUs of flagship stores intothree groups based on their sales:the top 5 SPUs,the top 5 to the top 5%SPUs,and the bottom 95%SPUs.According to statistics(see Figure 6),more than half of the other companies rely heavily on afew of hot selling products that their top 5 SPUs account for more than 50%of the total sales;whileoutperformers are with obvious long-tail effect,that their non-top 5 SPUs contribute a large share ofsales.Here outperformers C and D are taken as examples.Each of them has more than 2,000 SKUs.Among these SKUs,their top 100 SKUs contribute 50%and 51%of total sales respectively,and thetop 500 SKUs contribute 83%and 85%respectively.Compared with the other companies,theoutperformers are better at creating popular products.Instead of relying on a few hit products,theyusually scale up the sales with variousproduct portfoliosto balance SPUs sales contribution.Abundant SKUs are required for a brand to scale up.But if they are not recognized by the market,thestock of long-tail SKUs will pile up,resulting in a waste of resources and costs.Therefore,companiesneed to make more popular products,to achievesales synergy and driverevenue growth.3.Product portfolio driven by real-time market insights contributes to balanced sales growthFigure 6:The outperformers versus the other companies-Sales contribution of SPUs at online flagship storesSource:Tracker of e-commerce flagship stores,Strategy&analysis27QQiT)8A&B%9D9PIIaE7Top 5 SPUsCBottom 95%SPUs100%X5DX1X2X3X40%The high-performance DTC brands havemore balanced product portfolios in terms of sales contribution,achieving a long-tail effectMore than half of the other DTC brands overly relied on a few hit products-the top 5 SPUs contribute more than half of salesJune 2022;N=950%Top 5 totop 5%SPUsEnlighten Fashion Brands Routes to the DTC Model|Strategy&1415As mentioned above,an important lever for companies to create a morebalanced product portfolio is to better understand and respond to changes inmarket trends and demands,so that products can be converted to revenuerather than become useless stock.Then,how to realize that?We find thatoutperformers attach more weight to their capability of grasping market trends,and try to improve their products marketability from the perspective of users(outside-in)rather than the designer(inside-out).More specifically,the DTCoutperformers are better at perceiving changes in market trends and consumerdemands using big data,the Internet of Things and other digital technology.They can understand the market performance and consumer feedback of theirnewproductsmoreefficiently.Accordingly,theycanimproveproductportfolios,adjust clothes design and materials,andoptimize customerexperience,thus,driving sales synergy via product portfolios.These explainwhy outperformers can maintain strong competitiveness despite their variety ofSPUs and the complexityof the business.Lets look into the womens apparel industry.By trackingthe popular trends of silhouette dresses in the spring andsummer of 2022,we find that X-shaped and A-shapeddresses account for a relatively large share of sales,while S-shaped,T-shaped and O-shaped dresses salesalso grow rapidly at a rate of 30P%.It indicates thatthesetypesaremorepopularinthemarket.Outperformers tend to perceive the latest trends in time.For example,a womens wear brand launched a varietyof silhouette dresses in this years product portfolio,especially A-shaped,S-shaped and T-shaped dresses,each of which accounted for about 30%of the totalnumber of SPUs.This move was largely consistent withmarket trends.In contrast,its competitors relied more onthe designers experience and value proposition whendesigningproducts.Theirportfoliowasmainlyconcentrated on A-shaped and H-shaped dresses,whoseSPUsaccountedfor80%and20%respectively.Unsurprisingly,due to the difference in their ability toperceive changes in market demand,their sales werevery different-the womens wear brands top 1 SPU atthe flagship store sold nearly 10,000 pieces per month,and other SPUs also achieved good sales results.Incomparison,the top 1 SPU of its rivals only sold 200pieces in the same period,let alone other SPUs sales.“Case study:A womens apparel brand usedmarket insights to improve marketabilityStrategy&|Enlighten Fashion Brands Routes to the DTC Model1516II.Five constraints togrowthduringDTCtransformationEnlighten Fashion Brands Routes to the DTC Model|Strategy&1617Figure 7:Five typical factors challenging fashion companies DTC transformationHomogeneous user operations:Undifferentiated management of existing customers/membershipLack of synergy:Online and offline channels compete with each other and compromise profitsPoor experience:Separated design and management of online and offline experienceSingle data source:Focusing on internal data only and ignoring exterior data analysisUnresponsive supply chains:Failure to coordinate design,procurement,manufacturing and distributionFive typical factors challenging fashion companies DTC transformationOffline brand-owned stores guide potential customers to online stores01Product portfolio driven by real-time market insights contributes to balanced sales growth03Repurchase contributes more to the sales growth02Key success factors of the high-performance DTC brandsSource:Strategy&analysis12345To realize DTC transformation,fashion companies not only need to possess the three successfactors of outperformers mentioned above,but also overcome the challenges caused by differencesin business and operation models,managerial and digital capabilities,etc.There are five typicalchallenges:lack of synergy,poor experience,homogeneous user operation,single data source,andan unresponsive supply chain(see Figure 7).Strategy&|Enlighten Fashion Brands Routes to the DTC Model1718Companies often face conflicts when distributing product portfolios bothonline and offline.Some may adopt a very simple business logicmoveoffline best-selling products online in the hope of maximizing sales.Asonline stores often have to reduce prices under the pressure of e-commerce platforms for promotion,a product may sell for different priceson online and offline channels,leading to competition between the twochannels and limitedprofits.Here a womens shoe brand is taken as an example.The overlappedSPUs between its online and offline are up to 72%;half of the best-selling SPUs online can be found in offline stores;among the overlappedSPUs,nearly 70%also sell well offline.Furthermore,as the brands self-own e-commerce channel adopts the low-pricing strategy to attractpotential customers,the average difference between online and offlineprices is up to 42%.In this case,rational consumers prefer to“kick thetires offline and purchase online,which has caused huge profit losses tocompanies.In other words,the more the brand sells online,the greaterthe overall profit loss will be.Therefore,the lack of synergies betweenonline and offline channels and the“same product with different prices”strategy is obviously bad for companies.In the long term,it would bedifficult for them to maintainmarket competitiveness.Will a company be competitive if it adopts the“same product with sameprice”strategy?If a product sells for the same price everywhere,price-sensitive customers may choose where to buy more randomly.Forexample,they may buy a product in offline stores because of thechances to try it out,or go online considering the efficiency of delivery.However,it is worth noting that Chinas online and offline consumershave fundamentally different profiles,preferences and needs.For onlinebuyers,women,especially those women aged under 30,make up alarge share.Online buyers are more likely to make their own judgmentsand decisions based on product reviews given by other consumers oreven strangers,while offline buyers are more willing to talk with shopassistants and accept their recommendations.Therefore,adopting the“same product with same price”strategy alone is unlikely to improve theattractiveness and drive synergistic growth between online and offlinechannels.Here the scene of buying cosmetics is taken as an example.There is asignificant demographic difference between people who like shoppingoffline and those who prefer shopping online.Users in different channelsmay have fundamentally different preferences and needs in terms ofbrands,categories,packaging,andproductcombinationswhenpurchasing cosmetics.1.Lack of synergy:Online and offline channels compete with each other and compromise profitsEnlighten Fashion Brands Routes to the DTC Model|Strategy&1819Different from the first-hand experience”provided by brick-and-mortar stores,only second-handexperience such as fine-tuned pictures or videos is available for online shoppers.As a result,how toimprove potential customers awareness of the brand before they make a purchase decision isparticularly important for companies,especially for fashion categories such as clothing&shoes,andhome furnishing.However,many companies do not have effective means of managing userexperience and online and offlinecoordination.With the example of underwear products,when shopping online,consumers may wonder whether thesize is suitable or whether there are differences in size between different brands even if the brandsadopt the standard size measurement.Bad experiences such as size issues and mismatches cause alarge proportion of underwear return orders,which is one of the core pain points for online sales in thisindustry.Some brands have solved this problem to a certain extent by opening offline experiencestores,allowing users to try on them and find the most suitable size.But not all online users will visitofflinestores for this purpose.Apart from product selection,a big gap also exists between traditional brands and DTC brands inconsumer experience management.A typical example is the unboxing experience.Before receivingthe delivery,the users awareness of the brand and product is virtual(often gained through pictures,videos,etc.).The moment when the user opens the package is the first time consumers establishphysical perception,so the experience is very important.However,this point is ignored by manybrands,which dents the users value perception and satisfaction.Therefore,users will be less willing topost pictures of the product and recommend the brand to others.Some might even give a negativereview.Moreover,the consumer journey is becoming more and more randomized.In the past,consumersoften had a clear idea of what to buy,such as a pair of shoes and a piece of clothing.They often askedfriends for recommendations or searched for related information in forums,and then bought theproducts in department stores,shopping malls or other offline channels.However,as Gen Z andmillennials have become the main consumer group,they can be very random when choosing where tobuy,online or offline.Besides,they wont buy a product without being deeply attracted to it at first.Iffashion companies can not manage these user touchpoints well,they will be unable to providedifferentiated experiencesfor consumers,and,as a result,likely to lose potential customers.2.Poor experience:Separated design and management of online and offline experienceStrategy&|Enlighten Fashion Brands Routes to the DTC Model1920Although many fashion brands have increasingly valued customer repurchases and introducedmembership programs,they often fall into a homogeneous competition.Many brands set up pointaccumulation and redemption rules with basic membership levels and benefits.These membershipsystems are roughly similar and are often separate for online and offline stores,which fails to attractcustomers.In the absence of a differentiated loyalty program,the customer retention rate and the share ofrepurchase sales decline(see Figure 8).If a brand simply labels its customers based on basic userprofiles,and pushes coupons and point redemption notifications accordingly,it barely boosts theincrease in customer repurchase.3.Homogeneous user operation:Undifferentiated management of existing customers/membershipFigure 8:Number of repurchase consumers and repurchase sales contribution of brands without differentiated user operation 42%Customers52%SalesCustomerdistributionSales distributionCustomer and sales distribution of Tmall stores for a certain brand in the Year X 1Customer distributionSales distributionCustomer and sales distribution of Tmall stores for a certain brand in the Year X305%ExampleLabel customers by user profilePush coupons and point redemption notifications based on label screening What do customers expect from a brand?How to interact with customers based on their expectations?Is there continuous improvement in product and customer experience?More than onepurchaseOne purchaseMore than onepurchaseOne purchaseCustomersSalesSource:Strategy&analysisEnlighten Fashion Brands Routes to the DTC Model|Strategy&2021As most fashion companies relied on distributors for sales in the past,who only recorded point-of-sale(POS)data,details such as customer purchase behavior,customer profile and customer preferencewere often unavailable.Meanwhile,since brand-owned channels are new to most brands,they are stillunable to systematically acquire,integrate and utilize the data from these channels,resulting ininsufficient understanding of final consumers.Quite a number of brands collect the POS data andproduct category data from major e-commerce platforms,and use them to analyze owned businessesand competitors.However,due to requirements on data asset protection and data desensitization,thebrands cannot obtain detailed basic user data.Therefore,even if the brands have comprehensive data analysis teams and tools,they can hardlyperceive in-depth consumer insights and accurate demand forecasting due to the limited data sharedby the distributors or e-commerce platforms.In other words,knowing what customers have purchasedand how often they purchase is not enough for the brands to engage customers,meet their demandsand retain them.Furthermore,for self-owned channel or private traffic,brands can hardly leverage data to boostsustainable sales growth from products upgrade if they only focus on their own products and salesdata,and ignore market and competitor data.For example,designers and consumers often have different tastes in Martin boots.Designers tend tomake masculine Martin boots with sharp lines,in a way different from the ideal boots for women usersof e-commerce platforms.Martin boots that sell well have small and round toes,and are streamlinedrather than angular heels.In summary,only brands that utilize both internal and external data canrealize data-driven valuecreation.4.Single data source:Focusing on internal data only and ignoring exterior data analysisStrategy&|Enlighten Fashion Brands Routes to the DTC Model2122Traditionally,the supply chain of apparel&footwear is driven by order-placing conferences andpersonal experience instead of the market.In a typical supply chain lifecycle of this industry,forexample,the preparation for the launch of new spring products in February-March of 2023,often startsin August-September of 2022.At first,the designer needs to decide new products to be developed(e.g.,selecting 300-500 prototypes from 1,000 proposed ones).Then,the brands will hold order-placing conferences with distributors,sales teams and operation teams in advance where participantsselect new products based on their understanding of user preference,popular trends and customercharacteristics in their own sales areas.After that,the brands decide which new products to launchand how many quantities to produce based on distributors and regional sales teams order placement.Finally,the brands inform procurement and manufacturing departments to initiate their work.It takesabout 5-6 months for the new products to be officiallylaunched(see Figure 9).5.Unresponsive supply chains:Failure to coordinate design,procurement,manufacturing and distributionFigure 9:Four stages of typical supply chain lifecycle in the apparel&footwear industryCurrentfashion trendStoreStoreStore.About 170 daysDesign and development90-120 daysProcurement15-20 daysManufacturing60-90 daysDeliveryabout 7 days20-30 days for inventory replenishmentAbout 80 days for reproductionHow to deal with stockout during the short online hot-selling period?Typical supply chain challengesIn case of offshore outsourcing production,the preparation needs to start earlier to ensure sufficient shipping time(e.g.around 1 month is required from China to the United States by ocean shipping)Source:Strategy&analysisOn theone hand,competition is getting fiercer on the supply side.To win the competition,brands haveto stand out both in efficiency and differentiated product innovation.On the other hand,fashion trendsvary according to market dynamics on the demand side.For example,weak economic growth leads tothe“lipstick effect”,and the colors of new smartphones may affect the fashion trend.It is incredibly hardto forecast fashion trends or hot-selling elements in a relatively distant future.Therefore,it is verychallenging to boost sales by taking the DTC model only as a way of changing sales channels,if thefashion industry fails to build shorter supply chains that are more responsive in terms of speed andflexibility.Enlighten Fashion Brands Routes to the DTC Model|Strategy&2223III.Eight pillars forDTC fashion brands to unleash growthStrategy&|Enlighten Fashion Brands Routes to the DTC Model2324Figure 10:Eight pillars for building new capabilities of DTC fashion brandsPrioritize user segmentationLeverage key cities as retail touchpointsCoordinate online and offline product portfoliosDeliver superior customer experience and interactionFront-end strategies of DTC modelBack-end coordination of DTC modelReshape business processUtilise digitalsystems and toolsHarness computing power and algorithmsRejuvenate organizationsReach more customers with fewer touchpoints:leverage the metropolitan areas role in driving consumption of surrounding areas,achieving synergistic growth in DTC model through fewer experience stores in central citiesMeet the demands and preferences of different online and offline customers,make online and offline products complement each other,and balance product portfolios salesMake the most of data insights to further segment target customers,both online and offline,and identify their divergent demands,preferences,as well as expectations on value propositions“Surpass customer expectations”:brand owned stores need to provide not only excellent product and service experience,but also deliver surprises in the customer journeyFor example,the DTC model of the apparel&footwear industry requires more accurate understanding of customer demand,more intelligent decision-making process and quicker responses,which will reshape the traditional OTC processAdvanced Internet-of-Things(IoT)applications and application management systems(e.g.,ERP and MES)are necessary for the front end to connect with users and perceive their needs,and for the supply chain at the back end to respond and collaborate effectively.As business complexity and response speed increase,computing power and algorithm need to be upgraded via cloud computing,big data and AI.To enhance market insights perception,response speed and seamless collaboration,enterprises should break internal and external boundaries,ensure high flexibility and vitality in decision-making and implementation,and reform organizational structures12453687Based on our practice of empowering fashion companies,we suggest that DTC fashion brands rollout a slew of consistent business strategies to enable organic growth.Furthermore,efforts should bemade in coordinating the 8 key factors through front-end strategies and back-end coordination.As forthe 8 key factors of building new DTC capabilities,we call them“eight pillars”(see Figure 10).Enlighten Fashion Brands Routes to the DTC Model|Strategy&2425Pillar 1:Prioritize user segmentationEven in an era of personalized and diversified consumption,the rule of birds of a feather flocktogether remains unchanged,especially in the fashion industry.Fashion consumption represents thepursuit of specific popular elements and value propositions shared among a particular group of people.For DTC retail,consumers of different channels,online or offline,are diverging.Yet,it is impossible forenterprises to use digital technologies to satisfy the unique needs of every customer,considering thesubstantial operation cost and the inherent collectivity of fashion consumption.Therefore,to realize DTC transformation,fashion brands should further segment existing and potentialcustomers to developdifferentiated strategies and tactics(see Figure 11).1.Front-end strategies of DTC modelFigure 11:Examples of user segmentation at different marketing levelsStrategic perspective(4-16 segments)DemographyRegionCustomer valuexxxTactical perspective(16-70 segments)Attitude/psychologyPraxiologyMicro perspective(10-100 segments)Adoption of several methods togetherMacro perspective(2-6 segments)Enterprise and consumerOpportunity related to wealthOne-on-one perspective(100 1,000,000 segments)Individual customer Business strategy Branding/mass marketing Retail/consultancy Overall marketing strategy Business and resource allocation Direct mail marketing campaign High-level product development Typical product development Direct marketing via low/medium-cost channels“Pocket”behavior identification Product differentiation/customization Direct marketing via low-cost channels Marketing driven by realtime reasoning High-value/highly interactive activity Supply and marketing of highly automated/large-scale customized productsLevel of wealthLevel of wealth:Rich,fairly well-off,average,etc.Categories of investable assets or financial assetsTendency to increase or decrease financial assetsGeographyRegion:continent,country,state,community,etc.Scale of metropolitan cityDensity of population:downtown,suburb,rural area,etc.Population statisticsAge,generationGenderFamily sizeMarriage statusFamily informationIncomeOccupationEducationAttitude/psychologicalcharacteristicsActivity/interestOpinion/demandAttitudeValueProfitability/customer valueRevenue,cost,profitability,customer lifetime valueProfit contribution of individual customers or familiesTendency to increase profit margin/or valueEach segment can be defined from aspects below:Prefered purchase/interaction channelsPreference for online or offline purchaseKnowledge sharing platformShort video platformSocial media platforms such as WeChatTypical segmentation:Source:Strategy&resource libraryStrategy&|Enlighten Fashion Brands Routes to the DTC Model2526For example,when evaluating market opportunities and positioning anew self-owned store for market entry under DTC model,enterprisesare more concerned about macro factors such as regional demographiccharacteristics,consumption level and demand.However,from the pointof brand marketing,it is impossible to impress all target groups identifiedby marketing strategies.Therefore,enterprises should further segmentconsumers from the perspectives of attitude,motivation,etc.,therebylocating further segmented customers that highly identify with their brandvalue propositions.Then,it is much easier to acquire a wider range ofconsumers with the influence of these precisely reached and deeplyimpressed groups of consumers.As mentioned above,online and offline consumers of DTC brands aredifferentiated and diversified.It is inevitable that online and offline storeshave overlapped customers in regard to customer convenience andcoordination between channels.However,considering complementarityand differentiated competition,online stores need to target differentcustomers from offline stores.In particular,to avoid the phenomena ofprice is everything or online stores compete for offline hot products,itis crucial for the brands to engage differentiated and segmented onlinecustomers,and closely connect them with brands valuepropositions.Overall,to meet granularity requirements for customer segmentation atdifferent business levels,the brands should collect multi-dimensionalcustomer data for DTC transformation by leveraging digital technologiesand direct connection with customers.This requires the brands to collectand update the data through more customer interactions.Furthermore,on the premise of data security and privacy protection,the brandsshould effectively integrate and utilize the data to explore segmentedand extended consumer behavior insights.Enlighten Fashion Brands Routes to the DTC Model|Strategy&2627Pillar 2:Coordinate online and offline product portfoliosMany offline shoppers have turned to online stores due to the recurrent outbreaks of Covid-19.In thethird year of the pandemic,these new online customers have become regular ones.Therefore,theDTC channels have seen a growing number of customers shopping both online and offline,besidesthose that switch between online and offline channels for price differences.In light of this,fashionbrands should provide a certain proportion of SPUs to sell both online and offline to meet the demandsof overlappedcustomers,considering trafficdirection,availabilityand convenience.In 2022,there were over 840 million online shoppers in China,of which Millennials and Gen Z made upthe majority.They are willing to pay premiums for the appearance,experience,quality and reputationof products.Meanwhile,young online shoppers are more willing to evaluate products through variousonline social platforms,search engines and e-commerce platforms.Then they can make independentpurchase decisions rather than just take the advice of salespeople at physical stores.This brings newopportunitiesfor DTC brands to develop online SPUs with differentiatedexperience and quality.To build more responsive supply chains,it is practical and effective to provide a certain portion of thesame SPUs for all channels,and develop differentiated product portfolios for different channels.Interms of traditional procurement and production,scale is a top priority.Keeping an appropriateproportion of SPUs to sell both online and offline can expand production scale,improve capacityutilization and reduce unit production cost.Moreover,the scale of differentiated online SPUs will berelatively small,hence,more flexible production and inventory management are required.Althoughflexible production and inventory might increase the overall cost of the supply chain,these productshigh gross profitsrate can cover the extra cost of the supply chain,making sustainable profits.In conclusion,brands should meet the demands and preferences of differentiated online and offlinecustomers with product portfolios for complementarity and differentiated competition,and balanceproduct portfoliosfor sales growth according to market trends.Strategy&|Enlighten Fashion Brands Routes to the DTC Model2728Pillar 3:Leverage key cities as retail touchpointsTo leverage the consumption-boosting effect of city clusters(metropolitan areas),fashion DTC brandsoften open a limited number of experience stores in first-and second-tier cities to drive theconsumption of surrounding areas and the sales growth of online channels.Unlike linear growthachieved by adding the number of stores,this model helps to gain strong growth momentum and ahigh conversionrate.PwC recently released Cities of Opportunity 2022.The report analyzed 47 cities,covering central andnode(“radiated”)cities of Chinas major city clusters in the Beijing-Tianjin-Hebei region,the YangtzeRiver Delta,the Guangdong-Hong Kong-Macao Greater Bay Area,the Chengdu-Chongqing economiccircle,the middle reaches of the Yangtze River,the central Henan province,the Guanzhong Plain,etc.Three noteworthy features of city clusters strongly support us to leverage key cities for consumption-boosting effect:cities within the cluster are closely linked in terms of economy and infrastructure(about1-hour travel by high-speed railway between cities);culture and customer preferences are similar in theregion;the brands of central cities have dominant advantages in leading and driving the consumptionof surrounding cities.Leveraging key cities as retail touchpoints,the DTC brands can invest resources for stores in centralcities and rely on these stores to reach customers of surrounding cities.But if the brand operates astore in the central city with a traditional model,the store cannot deliver a leverage effect.As previouslymentioned,more and more high-performance DTC brands are opening experience stores,so as torealize multi-dimensional interactionwith customers.We have summarized the major functionsof experience stores as“RCES”:Diversified interactions in the store will further enhance customer acquisition and conversion.Meanwhile,user-generated content(UGC)and media communication will strengthen the role of centralcities in driving surrounding cities:on the one hand,a rising number of visitors from satellite cities willbe attracted to visit the offline experience stores;on the other hand,more online followers can beconverted into fans and purchasers directly through the shortest link”(i.e.,DTC e-commerce stores).Therefore,brands should stick to enhancing customer acquisition and conversion by establishingtouchpoints for a close-loop business,so as to provideleveragefor the DTC retail model.Retail:Customization:Experience:Service:Sell core products and their spin-offsProvide offline body-measurement service,booking fortailored and personalized product customizationProvidebrand,product and lifestyleexperienceProvide fashion outfit advice,personalized productselection,membership service,etc.Enlighten Fashion Brands Routes to the DTC Model|Strategy&2829Pillar 4:Deliver superior customer experience and interactionWe have described the importance of experience and interaction for self-owned stores.The storesshould deliver not only products and experiences with high quality,but also surprises in the customerjourney,so as to outperform their competitors.Above all,we suggest that brands“build omni-channel service platform”(see“a”in Figure 12).Onlineand offline stores are not separate but sharing customers.It is essential for these stores to renderconsistent online and offline DTC experiences,e.g.offline store pickup for online orders,delivery fromnearby stores,online booking for in-store fitting,and other services.Even the simplest coordinatedservices require the brands to realize system integration,enable data sharing and align salesmanagement at front-and back-ends(we will discuss it from the aspect of back-end coordination later).Otherwise,no progress will be made.Figure 12:How to deliver consistent DTC experienceDifferentiated online customer journeyLocalized content for the homepage of brand and storePersonalized search resultCustomized online productAR/VR(virtual fitting room,etc.)AI(personalized recommendation,chatbot,virtual agent,etc.)Differentiated offline store experienceUnique characteristics of the storeAR and 3D holographic product categoryIntelligent in-store fitting room mirrorCustomized product displayScanning by mobile APP to add to favorites,search,buy and shareBooking for in-store fittingIn-store experience of presale itemsDigital service areaHome delivery for in-store purchaseOmni-channel retail platformAdequate in-store stockIn-store return and replacementHome deliveryLoyaltyReal-time customer supportBuild omni-channel service platformbaDeliver differentiated and customized experienceStrategy&|Enlighten Fashion Brands Routes to the DTC Model2930Moreover,brands should deliver differentiated and customized experience for online and offlinecustomers(see part“b”in Figure 12).The key is to overcome the limitations of online and offlineshopping experience.For example,virtual reality(VR)and augmented reality(AR)technologies,suchas virtual fitting rooms,can provide highly immersive and multisensory customer experiences andfacilitate more informed decisions.A home-furnishing retailer integrates AR technology into its App tohelp shoppers visualize products in their homes,which contributes to positive consumer reviews and ahigher conversion rate.Digital technologies can also be used by brick-and-mortar stores to improve product selectionexperience and service efficiency.On the one hand,due to the limited shelf space of traditional fashionshops,most of the products are stacked on the shelves instead of being fully displayed to attractconsumers.Also,apart from product appearance,consumers are increasingly concerned about detailssuch as fabric,material source,design philosophy,etc.If users can scan the display shelves and seethe 3D presentation of related products via AR technology,they will get extraordinary experience anddetailed information for product selection.On the other hand,processes such as payment,productreturn and replacement in fashion shops used to be handled manually.At peak hours,customerscannot be served in time,resulting in long waiting time.Based on the application of radio frequencyidentification(RFID)and other smart label technologies,brand-owned stores can install self-servicecashiers,which can improve payment and packaging efficiency and collect user profiles and dataseamlessly,leading to further digitalization.Enlighten Fashion Brands Routes to the DTC Model|Strategy&3031Pillar 5:Reshape business processDTC brands need more agile business processes to stay ahead of the competition and meet fast-changing customer demands.For example,to adopt the DTC model,apparel&footwear companiesneed to have more accurate understanding of customer demand,more intelligent decision-makingprocess and quicker response to the market.They should also reshape the core business processregarding the order-placing conferences(i.e.,45 the process from order-placing to cash flowgenerating)to better match the business strategy at the front end.Enabled by digital technologies,DTC brands should establish an agile supply chain that candynamically perceive demands and market changes to optimize product design,procurement andproduction,making product portfolio and production more flexible.Brands can adjust product design and procurement according to the changes in consumer demand,while adopting the flexible production principle of“multiple batches and small quantities”.For hotproducts,brands should follow up existing orders and arrange production for additional orders in atimely manner,while utilizing materials of unpopular products to manufacture popular ones.This cangreatly reduce unsaleable inventoriesand increase the profitsof best-selling products.As is shown in Figure 13,if the business process can be reshaped based on customer demand ratherthan the traditional order placing meeting,the production cycle of the initial order for new products canbe shortened to 1-2 months.Brands can lower the proportion of products manufactured for the initialorder(for certain brands,the ratio is 50 %Digital supply chain 2 monthsTraditional supply chain10%Note:We do not include factors such as brand diversification,product and regional market penetration in the business growthstrategyStrategy&|Enlighten Fashion Brands Routes to the DTC Model3132Pillar 6:Utilise digital systems and toolsEnterprises need systems and tools for continuous DTC empowerment after reshaping businessprocess.Application of IoT applications and management systems,such as ERP(enterprise resourceplanning)and MES(manufacturing execution system),is necessary for the front end to perceiveconsumers demands,and for the supply chain to respond and collaborate at the back end.Notably,the traditional front-end digital systems are fragmented and isolated,as different channels andregional teams may have their own digital systems and platforms.It creates difficulties for front-andback-end coordination.Besides,it is detrimental to business expansion due to the lack ofresponsiveness to market changes,and is challenging to improve operational efficiency due toinsufficient data sharing(e.g.,membership management,inventory,orders and products).Therefore,a digital platform is attached with great importance to utilize digital systems and tools.It canmake data links shorter and operational response quicker,and facilitate efficient and coordinated digitalmanagement,as well as continuous innovation(see Figure 14).Essential functions of a digital platforminclude:Figure 14:The digital platform for DTCFront-endusers:staff and customerDigital systems that support the DTC modelIT systemB2C/B2B e-commerceO OservicePOSIntelligence retail terminalFacial recognitionAPPMini programsTouchpoints across the value chainDashboardROI-based marketingPublic opinionanalysis.Open service|APP registration|Service call|Product serviceInventory serviceOrder serviceMembership serviceReporting service.Business systemBusinessapplicationCRMSCRMDMSTPM.BusinesscenterOrder centerMember centerBenefits centerDistribution centerContent centerProduct centerCustomer service centerPoints centerERPPLMWMS/TMSSCMOAFINMESOthersData systemDataplatformCDPMA.Data integrationData governanceData warehouseAlgorithm modelData lineageOneIDDataassetQuickly adapt to different channels and customer service platformsFlexibly manage business lifecyclesQuickly integrate multi-source heterogeneous and discrete information and share business dataInnovate for flexible expansion,and simplify the logic of back-end developmentBroadly utilize realtime computing,big data analysis and coordinated planningSource:Strategy&analysisEnlighten Fashion Brands Routes to the DTC Model|Strategy&3233Pillar7:HarnesscomputingpowerandalgorithmsIt is impossible for an analyst to constantly generate front-endinsights through one-time data analysis.Instead,algorithms arerequired to discover,respond to and solve problems.In addition,large-scale computing relies on computing power.Due to thecomplexity of business and the demand for quicker response,computing power and algorithm need to be iterated and upgraded,with the help of cloud computing,big data and AI.Fashion brands can use cloud computing,big data and AI to makethe DTC model more intelligent,with respect to users,productsand services.Analyze customer preference and behaviors through big data,segment customers according to brand strategy,and forecastcustomer behaviorsfor products recommendation.Realize data harmonization and integration among differentplatforms,develop360customerprofiles,andidentifycustomers pain points and insights through multi-channelcollaborationfor experience optimization.01User level Track sales of goods,forecast shelf sales ratio and adjustsupply chains in a timelymanner.Develop new products by digging into trending products fromdifferent dimensions such as color,silhouette and fashiontrend.02Products level Deliver excellent in-store experience with technologies.Forexample,use robots to interact with consumers and serve asshopping guides.Realize omni-channel customer interaction,connection andtransfer,such as differentiated membership management,andmutual traffic-direction of customers between online and offlinechannels.03Service levelStrategy&|Enlighten Fashion Brands Routes to the DTC Model3334Pillar 8:Rejuvenate organizationsToenhancemarketinsights,responsespeedandseamlesscollaboration,enterprises should break both internal and externalorganizational boundaries,build flexibility and vitality into decision-making and implementation,and reform organizational structures.Asthe DTC model functions via organizational arrangements,it is crucialfor brands to optimize organizational structure and make it compatiblewith the DTC model to realize cross-sector coordination.Wehavetworecommendationsforcompaniestooptimizeorganizational structure:1Builduser-centricorganizations.Generally,businessunitsaredividedbasedonstaffsfunctionsandspecialization.For a complex business that requirescross-function coordination,it sets positions like productmanagers and brand managers to coordinate differentteams,e.g.product design team,marketing team andsales team(see Figure 15).However,the DTC modelimposes new management challenges.For example,aspecializeduserexperiencemanagementteamisnecessary for the whole customer journey(i.e.,beingattracted purchasing promoting products to others-interacting with brands becoming loyal customers),which is ignored by many brands.Under the DTC model,organizationsneeduser-centricandresults-orientedmanagement across multiple functions.Therefore,a neworganizational structure is needed to promote seamlessinternal coordination and execution.Enlighten Fashion Brands Routes to the DTC Model|Strategy&3435Figure 15:Transform into a user-centric organizationFunctionCapability-based organizationTraditional function-based organizationSenior executivesBoard of DirectorsBusiness units/regionResults-oriented teamSolution developmentHuman resourcesFinanceMarketing.Total quality managementCustomer experience managementInnovation.Business units/regionFunction/shared serviceHuman resourcesFinanceLegalMarketing.Business units/regionBusiness units/region.Senior executivesBoard of DirectorsBusiness units/regionBusiness units/region.Headquarters functionCorporate strategyCorporate financePublic relations.Headquarters functionCorporate strategyCorporate financePublic relations.Focus more on users and marketsto meet customer demands by integrating different capabilitiesNarrow the scope of work and focus more on core functions such as investor relations managementStrategy&|Enlighten Fashion Brands Routes to the DTC Model35362Alignorganizationalgoalswithperformancemanagement.DTCpracticedoesnotmeansimplifyingitsorganizationalstructure.Ifenterprises only divide sales teams based on onlineand offline channels and set separate goals forthem,these teams can easily become potentialcompetitors of each other.DTC brands can setconsistent goals for sales teams and help themgain a holistic view.On the one hand,brandsshould develop a top-down holistic strategy tofacilitatefront-endcoordination,includingthecoordination between product portfolios,touchpointcities,and delivery of the experience.On the otherhand,brands should break the overall goal intoseveralsub-goalsforbettercoordination.Forexample,all the online and offline sales teamsshould have two KPIsthe revenue goal of theirown channel and their contribution to the revenueof other channels.As for performance evaluationand incentive mechanism,brands can evaluatebusiness units and staff based on these KPIs andtheir weights,and use them as key indicators forperformancerewards and other variableincentives.Enlighten Fashion Brands Routes to the DTC Model|Strategy&3637ConclusionFashion brands,and even all consumer goods companies,cannotimprovetheirsalesperformanceovernightviaDTCtransformation.They should respond agilely to market dynamicsregarding emerging consumer segments,consumption paradigms,channels,and marketing approaches,while making trade-offsbasedontheirexistingbusinessmodels,organizationalcapabilities and digital technologies.Therefore,we suggest fashion brands strengthen the top-leveldesign,make a clearer strategic positioning,and transform step-by-step under the guidance of a business roadmap,to betterimplementtheaforementioned“eightpillars”forDTCtransformation.Realize front-and back-end transformation andbusiness coordination at a fast but steady pace;rely on digitaltechnologies,computing power and algorithms;pivot on userexperience management,membership-specific operation and datainsights;andcreatenewcompetitivemoatsbyconstantlyaccumulating and utilizing user pool and data assets.All of theseenable companies to outperform their competitors in the surgingwave of digital transformation.Strategy&|Enlighten Fashion Brands Routes to the DTC Model3738Strategy&is a global strategy consulting business uniquelypositioned to help deliver your best future:one that is built ondifferentiationfrom the inside out and tailored exactlyto you.As part of PwC,every day were building the winning systems thatare at the heart of growth.We combine our powerful foresight withthis tangible know-how,technology,and scale to help you createa better,more transformative strategy from day one.As the only at-scale strategy business thats part of a globalprofessional services network,we embed our strategy capabilitieswith frontline teams across PwC to show you where you need togo,the choices youll need to make to get there,and how to get itright.The result is an authentic strategy process powerful enough tocapture possibility,while pragmatic enough to ensure effectivedelivery.Its the strategy that gets an organization through thechanges of today and drives results that redefine tomorrow.Itsthe strategy that turns vision into reality.Its strategy,made real.Please see for further details.Strategy&Enlighten Fashion Brands Routes to the DTC Model|Strategy&3839 2023 PwC.All rights reserved.PwC refers to the PwC network and/or one or more of its member firms,each of which is a separate legal entity.Please see for further details.Mentions of Strategy&refer to the global team of practical strategists that is integrated withinthe PwC network of firms.For more about Strategy&,see .No reproduction is permitted in whole or part without writtenpermission of PwC.Disclaimer:This content is for general purposes only,and should not be used as a substitute for consultation with

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ATscale：分析和数据团队如何运用语义层（英文版）（11页）.pdf

John is an international technology executive with over 35 years of experience in the fields of data,advanced analytics,and AI.He is the author of“Analytics Teams:Leveraging Analytics and Artificial Intelligence for Business Improvement”and co-author of“Analytics:How to Win with Intelligence”.How Analytics&Data Science Teams can leverage the Semantic LayerJohn K.Thompson,Best Selling Author,Analytics Thought Leader and InnovatorWh i t e pap e r1IntroductionAnalyzing data has been a unique business activity for at least 5,000 years,and possibly as long ago as 20,000 years.We have come a long way in how we count,summarize,analyze,predict,and prescribe upcoming courses of action in science,business,and all fields of human endeavor.In the past 75 years,the progress in how we analyze data has increased exponentially.We now regularly build analytical models and complete applications that analyze massive amounts of data.One of the most recent announcements in analytical technology hailed an upcoming Generative Pre-trained Transformer(GPT)model in GPT-4 that will have the capability of managing and maintaining over 100 trillion parameters.The current version of GPT-3,as of April 2022,has a capacity of analyzing 175 billion parameters.GPT-3 was released for general use in July 2020.In the span of less than 2 years,the state of the art in analyzing language has moved from billions of parameters to trillions of parameters.In the US system of math and counting,that is a 1000 times increase;and there is no sign of this trend slowing.100 trillion parameters is enormous;lets compare that to the human brain.The brain has around 80100 billion neurons and approximately 100 trillion synapses.The hotly anticipated version of GPT-4 will have as many parameters to manage and tune as the human brain has synapses!While scaling up to an equivalent number of synapses as in the human brain is impressive,scaling up is not the only dimension of how data analytics has transformed.Scaling out is,in my opinion,even more important to analytics and artificial intelligence(AI)than scaling up.To be clear,scaling up means using more and more data of the same type or source or the volume of data.Scaling out means including or incorporating more data of various types or the variety of data being included in the analytical process.Scaling out means that we are bringing in a wide variety of data which provides an opportunity to have a better chance of achieving our ultimate goal.In analytics,our ultimate goal is to be able to model the world,or a process,or an activity,or a human behavior that we see and experience in the physical world with increasing accuracy,reliability,and specificity in the computing world.While scaling out means that we know and have all the tools we need to model the real world with increasing accuracy in the computing world,it also brings significantly more complexity into the process.Complexity in defining data elements,defining the integration of data together,defining the relationship of data elements to another and other elements,and defining,setting,and managing the rate of change of a data element in relation to itself and all other relevant data elements.2Scaling out increases the complexity of our work,and increases the probability of our success,exponentially in both cases.For teams involved in the field of AI,they,and we,are striving to build models that produce results that are indistinguishable from the results produced in the everyday world.We as analytics professionals are seeking to achieve the modeling reality with unfailing levels of accuracy,maintainability,flexibility,and extensibility.We are seeking to be able to model the world as we see it and live it each and every day.To be clear,this is very difficult to do.That is why our progress in AI seems to be slow at times.This rate of progress is partially due to the fact that we need to examine each process and activity that we want to model,then attempt to model that activity.Generally,we get it wrong once,twice,or a few times,and then we do get it right and we immediately move into iterative cycles of improvement.All of this takes time,energy,and resources,but we are moving in a direction where we have an understanding of what we need to do in order to accurately model a small part of the complex world that we see and experience with our five senses.The teams that are making the most progress in this process are teams of professionals focused on advanced analytics and AI.Next,lets outline who these teams are.I refer to myself,and the teams that I build and manage,as being comprised of“special snowflakes”.I say this because it is evocative of the truth.In addition to being truthful,I say it because the differences we exhibit and embody are a very positive aspect of our personalities and the value that we deliver.The rest of the organization needs to know that analytics&data science teams,and the individuals within those teams,are different,and that difference is,and can be,a source of power,change,and competitive advantage.These differences are not to be managed out or reduced,they are to be understood,nurtured,and employed for the greater good.Each individual that I have hired over the 30 years who has turned out to be a brilliant developer,programmer,data scientist,business analyst,system engineer,data engineer,or data architect,has been an unusual or unique person.Analytics&Data Science Teams3For the most part,individuals who are adept at building analytical environments possess or exhibit the following characteristics?Optimistic,yet skeptica?Intensely curiou?Mostly introverte?Logica?A combination of left and right brain orientation at the same tim?Intelligen?Self-critica?Prone to perfectio?Social,but reserve?In some cases,they appear to exhibit a lack of focus or possibly too much focusManaging a high performing analytics team is a unique endeavor.The teams need solid guidance,but in general,do not react well to micromanagement.Advanced analytics projects are not,for the most part,linear.They are iterative,marked by exhilarating successes and punctuated by dead ends,missteps,and disproved theories.Most information technology professionals,while intelligent and mildly curious,do not have the intestinal fortitude for the iterative or recursive nature of advanced analytics projects.Advanced analytics&data science teams,at least high-performing eams,are seeking to solve challenging problems.The pursuit of the solution is the goal,not adherence to a budget number or delivery according to a preset date.The optimal solution,the source of competitive advantage,is the objective.The most successful advanced analytics and artificial intelligence teams are creative groups staffed with talented,motivated,and curious people who can convert business discussions with subject matter experts into analytical applications and solutions that can drive operational change on a daily basis.The analytical teams that realize the most success have wide-ranging mandates to drive practical and pragmatic change resulting in competitive advantage.What does it mean to have a high performing advanced analytics and artificial intelligence team?It means that the team is staffed with the highest caliber team members that you can attract,afford,and retain.The team is cohesive and collaborative and willing to review the projects of each other and sub teams.The team members are willing to work together for the greater good of the whole team.4The advanced analytics&data science teams present results with confidence and receive feedback and input from internal and external parties to improve data quality,model results,and the fit of the applications built for use by end users,business analysts,and other data scientists outside.Projects are scoped,described,undertaken,and completed and the groups move on to execute subsequent projects with enthusiasm and engagement.When these foundational team dynamics are in place and improving over time,you have achieved the establishment of a highly functioning advanced analytics capability for your team and organization.An analytics team works,typically,in an organization.Each organization is moving through an Analytical Maturity Model(AMM).A number of AMMs have been offered and used in the market.I have extended Gartners base model to be more representative of what I have seen and experienced in enterprise class companies around the world.Lets take a look at a version of the AMM.All companies are on a journey to move forward through the stages and phases of the Analytical Maturity Model.All companies move through the stages in a linear manner.No stages can be skipped,and all stages are required to move to the subsequent stage.An Analytical Maturity ModelAnalytical Maturity ModelAnalytical MaturityPotential Relative ValueSense&RespondPredict&ActCompetitive AdvantageRawDataCleanDataStandardReportsAd HocReports&OLAPPredictiveProjectsPredictiveProgramsPrescriptiveProgramsSimulationOptimizationWhat is the bestcourse to take?What is the best we can do?What should we do?What will happen?What happened?5This version of the AMM has been developed from my experience in working across 20 different industries over 37 years and having delivered over 60 predictive analytical applications.The Sense&Respond section is the phase that all companies have experienced when building their data warehouses,business intelligence,and data lake environments.This phase enables historical reporting,descriptive statistics,and the beginning of advanced analytics.The Predict&Act phase is where advanced analytics and AI are established and evolved in all organizations.The recursive loops between the stages of Predictive/Prescriptive and Simulation/Optimization denote the next level of development that is possible for leading firms when they have mastered building and managing predictive and simulation applications.In both cases,predictive and Simulation applications,leading organizations realize that by saving every prediction and simulation scenario,that data becomes the database which is the foundation for prescriptive and optimization applications.Only when companies come to this realization and build the environment to produce,save and manage these analytical outcomes can they move up to the highest level of achievement in analytics.In 2022,only the most advanced firms are working at the Predictive/Simulation levels and only the top 1%of all firms are executing at the Prescriptive/Optimization levels.One foundational element that helps all companies across both phases and all stages of the AMM is to have a well-established,highly-functioning semantic layer for all staff members to access and leverage as they are using data and analytics to execute their jobs more effectively and efficiently.Lets discuss what a semantic layer is and why it is critical for enterprises today.The Semantic LayerWhat is the Semantic Layer?Why is the semantic layer important,useful,and valuable to analytics&data science teams in their journey to model and understand our physical world?A semantic layer provides a single,consistent definition of corporate data that also enables operational improvement in the creation of insights and analytics(e.g.,BI and AI),including autonomous data access and rapid data product creation combining rapid data modeling,virtualized data pipelining,automated data aggregation,and optimized query performance.6To model and understand a process,an activity,a cycle of human behavior,and any other phenomena that we are attempting to analyze,we need to be working from a common definition of what we are examining,modeling,predicting,and prescribing.One of the most challenging problems faced by analytics&data science teams in all the years that I have been involved in the advanced analytics and AI field is arriving at a common definition of data describing data elements,relationships between data elements,people,processes,time,geography,models,rates of change,and concepts.When talking about gender,geography,or any other dimension or description of data that we will use in our modeling work,what definitions are we to employ?We need to start with a common understanding of the base data and the base model that we are building.Lets take Chicago as an example.Are we talking about the legal definition of Chicago,where the city boundaries are drawn?Are we talking about the Chicago metro area that encompasses the surrounding counties?It makes a significant difference due to differences in geographic size,population,ethnic and racial composition,and more.Is this Chicago?Or is this Chicago?If you have been in a meeting where basic performance measurements are being discussed,then you know from firsthand experience that,on many occasions,the discussion starts as a debate about who has the“right”data.Who has the data that will form the basis of the discussion?This has been problematic for decades if not millennia.The semantic layer is a solution to this problem.The semantic layer is where we as collaborators and companies as a whole decide,define,and document an agreement of definitions of data,processes,people,analytical models,and more.7As a start,we can use the semantic layer to define basic concepts like Chicago as an entity that we can all use and agree upon.And it is not that we need one definition of an entity,that is simple,easy,and would make life and our work much easier,but in many cases,organizations need multiple definitions of concepts,data,entities,and more.Lets use Chicago again.Perhaps for legal analyses and definitions of work for the local,state,or federal governmental projects,Chicago is defined in the legal sense.The semantic layer would hold that definition of the city,boundaries,population,and related statistics.Perhaps for marketing projects and purposes,Chicago needs to be defined as the metro area including the collar counties,which includes parts of the neighboring state of Indiana.The semantic layer can hold and maintain both definitions.The semantic layer is the repository for all definitions of all objects,simple to complex.The semantic layer holds definitions of all possible objects,concepts,and elements that we need to have defined and also holds definitions of objects beyond data.The semantic layer is where we create and maintain definitions for models,processes,organizations,concepts,and more.In advanced analytics and AI,as AI models and environments become increasingly more common and complex,it will be imperative that those models and environments are built upon definitions that are documented,understood,and are capable of being explained to executives,managers,oversight committees,federal and state regulators,and more.The semantic layer is where these definitions and the evolution of these definitions will be held,managed,maintained,and used for internal and external purposes.Time also plays a role in this discussion because definitions do change.They evolve and morph to fit the current time and purpose.Lets go back to our example of Chicago.In recent history,Chicago grew by annexing the land where OHare Airport operates.As you can see from the maps below,Chicago expanded,and the legal boundaries of the city changed.These definitions and the evolution from one state to the next needs to be documented and maintained.The semantic layer is the tool to maintain this information and knowledge.8Chicago before OHareAirport AnnexationChicago After OHareAirport AnnexationCities change,they grow,and they contract in some cases.Similarly,models change constantly.The semantic layer is the place where all these definitions,over time,can reside and provide documentation to the evolutions of data,definitions,models,and more.In advanced analytics and AI,it is crucial that companies document the changes in their analytical approaches and models.Also,as companies include more and more data sources in their scaling out of their modeling and analytics work,the relationship of each data source and data elements in those sources needs to be understood,documented,and maintained.The semantic layer is the perfect place to document these definitions,relationships,versions,changes,and the evolutionary process.Explainable AI(XAI)is an important development in the field of AI.XAI enables the development of human readable documentation that explains how a model made all of its adjustments and decisions.One of the primary reasons why this is important is that we can now use our most powerful AI tools on the most intractable problems.Especially where regulatory bodies and governments mandate that companies be able to explain and describe how their models work.In industries such as pharmaceuticals and finance it is required by law that the companies in those industries be able to clearly explain how their AI models operate.The sematic layer is the most appropriate place to store and manage the output of XAI modules of AI environments.9The semantic layer is an enabling technology that forms a crucial part of the data and analytics infrastructure of any company.As analytical environments grow more and more detailed,complicated,and intricate,the need for a semantic layer will increase exponentially.The majority of companies are interested in at least understanding advanced analytics and AI.All leading companies are building AI environments,and leveraging data and analytics to extend their competitive advantage in their chosen markets.AI,data,and analytics are complex endeavors that require intelligence,resources,investment,vision,and fortitude.Not all companies have these attributes.In addition to these tangible and intangible attributes,companies need to invest in the infrastructure that makes AI possible.Most people are aware that they need servers,software,databases,analytical tools,and more,but not all firms are aware of what the leading firms are using to build a solid,extensible,flexible,and valuable foundation that their AI operations can stand on and grow from.The journey into the world of AI is not a single project or program,it is not a one-time excursion.Engaging the market and the world through AI is a mindset.It is a way of operating that does not have an end,and it is a way of working.To engage in the world of AI,your team needs to be world class in how they find,define,leverage,and employ data.Not just a single source of data,but many sources of data and not data on a stand-alone basis,but massive amounts of various data sources all interrelated and integrated in many different manners and schemes.This AI and data environment needs to be understood,documented,and managed.How do leading firms accomplish this nearly Herculean task?One way is with a semantic layer.The semantic layer becomes the enabling technology that empowers the organization to not only use data,but to leverage data for measurable and repeatable competitive advantage.Thank you for taking the time to read our white paper on analytics&data science teams and the semantic Layer.More about the semantic layer and AtScale can be found at-https:/ is an international technology executive with over 35 years of experience in the fields of data,advanced analytics,and AI.He is the author of“Analytics Teams:Leveraging Analytics and Artificial Intelligence for Business Improvement”and co-author of“Analytics:How to Win with Intelligence”.10

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麦肯锡：抓住不断发展的英国储蓄和退休市场的增长机遇（2023）（英文版）（11页）.pdf

Insurance PracticeCapturing growth in the evolving UK savings and retirement marketCompanies in the UK savings and retirement market can consider targeting four high-growth segments to create a competitive advantage and to boost their resilience in challenging times.March 2023by Sid Azad,Rajiv Dattani,Jonathan Deakin,and Leda Zaharieva piranka/Getty ImagesTodays rapidly evolving macroeconomic conditions are creating considerable uncertainty for both consumers and companies participating in the UK savings and retirement market.In the near term,inflation is posing significant challenges for UK households and is likely to lead to a further reduction in the real value of total savings and the savings rate.It is not yet clear just how deep an economic downturn might be,the effect it might have on employment,the extent to which rising interest rates might offset a lower savings rate,and how customer needs and preferences regarding products with guarantees or downside protection will evolve.These are just some of the uncertainties that will shape consumers savings behavior and their need for financial advice and support in the years ahead.Already,companies throughout the industry are responding with a variety of balance sheet actions and revenue and cost actions intended to protect margins and support customers through this challenging period while investing to meet consumers future needs.Managing through this volatile period will require companies to build resilience,1 maintain their strategic courage,2 and take a through-cycle view.Those who do so will not only meet their societal obligations but also build a competitive advantage,delivering leading shareholder returns.Analysis of historical revenue growth data for more than 200 large companies around the world indicates that a companys growth is driven largely3 by market growth in the industry segments where it competes and by the revenues it gains through mergers and acquisitions.These two elements explain almost 80 percent of the growth difference among the companies we studied;whether a company gains or loses market sharethe third element of corporate growthexplains just 20 percent of the difference.(Capturing growth 1“Somethings coming:How US companies can build resilience,survive a downturn,and thrive in the next cycle,”McKinsey,September 16,2022.2 Michael Birshan,Ishaan Seth,and Bob Sternfels,“Strategic courage in an age of volatility,”McKinsey Quarterly,August 29,2022.3 Mehrdad Baghai,Sven Smit,and S.Patrick Viguerie,“The granularity of growth,”McKinsey Quarterly,May 1,2007.4 Ariel Babcock,Sarah Keohane Williamson,and Tim Koller,“How executives can help sustain value creation for the long term,”McKinsey,July 22,2021.by gaining market share requires a nuanced understanding of the trends and competitive dynamics at the complex intersection of products,channels,value chain segments,and consumer wealth bands.)With this analysis in mind,it behooves industry players to consider investing in the most attractive high-growth market segments.Todays period of uncertainty represents a distinct opportunity to get ahead of the curve while competitors are prioritizing short-term defensive moves over long-term growth.In this article,we examine the trends shaping the UKs savings and retirement market and their impact on companies and customers.These trends include a shift to capital-light products,rising technology-led customer engagement,and greater choice and responsibility among individual consumers for generating and managing their savings.We identify four market segments that could enable through-cycle growth opportunities and the factors that might govern decisions regarding which segments to prioritize.We also explore what it will takefor example,capability shifts,cultural and organizational changes,and M&A dealmaking to help meet customers channel and product needsto successfully serve customers in prioritized segments.Three trends in the UK savings and retirement marketStrong revenue growth is well established as being critical to long-term returns.An analysis of public companies4 showed that those in the top third of their industries in revenue growth generated total returns to shareholders that exceeded those of their bottom-third peers by six to eight percentage points per yeara difference of 80 to 110 percent over a ten-year period.2Capturing growth in the evolving UK savings and retirement marketMarket segments in the UK savings and retirement market are growing at different rates as structural macroeconomic,regulatory,demographic,technology,and consumer preference trends transform the supply of(and demand for)personal financial products.Three trends stand out.A shift to capital-light products.At the product level,asset flows are shifting from traditional guaranteed products to capital-light products,including defined-contribution(DC)workplace pensions,that give consumers more power to manage their overall wealth.Guaranteed retirement income products have become significantly less attractive for providers and consumers alike,given historically low interest rates(despite recent rate increases)and the significant capital burden placed on the provision of policyholder guarantees because of Solvency II requirements.At the same time,an aging population with evolving protection and savings needs and the rollout of auto-enrollment pension schemes are increasing demand for accumulation and decumulation solutions.And there is a growing customer need for hybrid products that offer capital appreciation with downside protection and stable income,especially given the prolonged period of uncertainty due to the COVID-19 pandemic and ongoing macroeconomic volatility.A push for technology-led engagement.Both customers and companies are pushing for technology-led engagement in traditional adviser and workplace channels,with digital platforms and improved technology enabling lower cost propositions.A small but fast-growing digital-first and mobile channel is emerging,particularly in direct-to-consumer(D2C)distribution,driven by changing customer preferences and technological developments.Creating business models built on a hybrid of human and robo-advisers is now a key agenda item for most wealth managers.So far,however,few participants in the UK market have made it work,and robo-advice offerings have focused more on asset allocation than on deep financial engagement that nudges customers to act.Traditionally distinct channels are converging as participants increasingly view customers lifetime financial needs holistically across multiple channels,thus blurring the lines between workplace,D2C,and advisory channels.Meanwhile,technological developments are driving commoditization and consolidation in asset administration.A shift to the responsibility of individuals for savings.Within this increasingly complex product landscape,there has been a shift in responsibility for generating and managing retirement savings from government and defined benefit pensions to individuals.From a value chain perspective,the need for financial advice is on the rise;however,a significant“advice gap”remains,driven by a shrinking adviser base and a lack of affordable advice offerings.As a result,consumers are finding a shortage of simple and affordable asset management products and advice.These trends have profoundly transformed the market dynamics within and across segments and the nature of companies relationships with their current and prospective customers.In the next section,we explore the impact of these trends on four segments that offer significant growth potential,focusing on a segmental view(channel or product)because this is how participants have Creating business models built on a hybrid of human and robo-advisers is now a key agenda item for most wealth managers.3Capturing growth in the evolving UK savings and retirement markethistorically organized themselves.In the closing section,we cover the broader implications for market participants,given the growing importance of adopting a customer-focused mindset through their life cycle.Four segments offer significant growth potentialAs certain segments of the industry rise in value and potential,others are declining as the trends discussed above take hold(Exhibit 1).While overall savings and retirement assets in the UK have grown at a healthy 7 percent annually since 2015,heritage life products,for example,are in runoff and closed to new business.And after UK pensions deregulation,annual sales of new retail annuities collapsed by more than 50 percent,although rising interest rates have recently resuscitated the segments growth.The 7 percent growth in defined-benefit(DB)pension assets has been a function of market forces and the need for schemes to meet funding requirements.In fact,active membership in private DB schemes has fallen from about 2.1 million in 2012 to less than 1.0 million in 2021.DC membership,on the other hand,has increased from about 1.0 million people in 2012 to more than 26.0 million today.Looking forward,four segments in particular offer attractive growth opportunities:bulk purchase annuities(BPA),DC workplace,direct-to-consumer(D2C),and advised channels(Exhibit 2).The BPA and D2C channels have strong tailwinds supporting continued historic growth rates.DC workplace is expected to see continued growth following auto-enrollment.The increasing need for financial advice will drive attractive opportunities in advised Exhibit 1Total UK personal fnancial assets under administration by segment,trillions CAGR,201521e,xcludes cash,property,and private-banking assets.2Bulk purchase annuities.3Direct to consumer.4Defned contribution.5Individual savings account.6Self-invested personal pension.7Defned beneft.Source:ABI;expert interviews;HMRC;Investment Association UK;McKinsey UK PFA distribution model;Platforum;ONS The UK pensions market grew by an estimated CAGR of 7 percent from 2015 to 2021.McKinsey&CompanyBPAD2COccupational DC pensionsOverallAdvised(on-platform,ISA,SIPP,drawdown)Heritage(life)AnnuitiesDB pension20152021e1.50.30.60.80.30.23.80.12.20.50.61.20.60.40.277079132275.74Capturing growth in the evolving UK savings and retirement marketchannels.And several of these segments offer the potential to grow through M&A.Bulk purchase annuities Despite the overall shift toward sales of new capital-light products,BPAs have been a major growth segment due to the large number of corporate pension schemes derisking and transferring their liabilities to the insured market.There is approximately 1.7 trillion in DB pension scheme assets on UK companies balance sheets.The growth in BPA is likely to increase in the near term as rising rates make transactions more feasible for pension fund trustees,with their funding ratios increasing by 12 percentage points on average in the 12 months preceding September 2022.5 Up to 300 billion of transactions is expected in the next four years,compared to approximately 125 billion in the past four years.65 WTW Global Pension Finance Watch.6 Risk transfer report 2022,Hymans-Robertson,February 17,2022;Insurance enters a new phase:A skyrocketing market,Lane Clark&Peacock(LCP),October 2022.Internal rates of return in the midteens remain attractive for BPA players today,a function of the healthy balance between the desire on the part of pension schemes to transfer risk and the limited supply of capital(including reinsurance)available to participants.However,the volume of BPA deals is projected to peak in the next three to five years.High investment returns and stable long-term cash flows have already attracted new entrants to the market,including established life insurers and private capital-backed players aware of the current window of opportunity.They are setting the standard for the capabilities needed to drive returns.These capabilities include specialist investment capabilities(such as illiquid asset origination and infrastructure);increasingly sophisticated technology and operational capabilities(including Exhibit 2Low competitive intensityHigh competitive intensityLimited growthSignifcant growthWeb Exhibit of 1Direct contribution.2Direct beneft.3Bulk purchase annuities.4Direct to consumer.5Individual savings account.6Self-invested personal pension.Source:McKinsey analysisThe potential for growth in the UK pensions market varies considerably by segment.McKinsey&CompanyChannelWorkplaceD2CAdvisedOccupationalDC pensionsDB pension(including BPA)On-platform ISA,SIPP,or drawdownISA,SIPP,ordrawdownHeritage(life)AnnuitiesCore productsValue chain segmentAdvice orguidancePlatform oradministrationInvestmentsolutionsAssetmanagementProjectedasset growth N/AN/ANo competition for assets;focus on operational improvementN/AN/AN/A5Capturing growth in the evolving UK savings and retirement markettechnology-enabled policy administration systems);and deep deal experience.All companies looking to participate meaningfully must meet this capabilities bar and create value across multiple levers.7Defined-contribution workplaceDriven by the shift from DB to DC pensions and the rollout of auto-enrollment schemes,DC workplace is one of the largest asset accumulation channels today.With about 17 million active consumers in the UK market,the segment has been growing at about 8 percent annually since 2018 and is expected to continue to do so through 2025.However,revenue and operating margins for DC are lower than in other segments;average fee levels are about 50 basis points,compared with 150 basis points for D2C pensions.And these margins are under constant pressure for several reasons:The market is highly commoditized,with low marginal costs.Pension trustees whose role is to constantly push for better value for members continue to put pressure on prices.And the level of competition is increasing,particularly as employee benefit consultants enter the market.The top six players now account for 80 percent of the market.Given the DC markets sheer competitive intensity,companies looking to participate in its growth will need to build scalea critical factor given its platform-like economicsand develop deep customer relationships,which can unlock access to a greater share of a customers assets and extend the relationship into and through decumulation.Recent developments in the UK and US markets offer evidence of meaningful growth opportunities in this segment:In one recent UK consumer survey,8 half of DC workplace customers indicated they would consider seeking financial advice from their current provider or purchasing savings or investment products.7“Running up on runoff:Strategic options for life closed books,”McKinsey,February 10,2021.8 McKinsey consumer survey,July 2022,n=1,000.9“From saving to spending:A second front emerges in the US retirement challenge,”McKinsey,July 29,2022.Our recent US survey9 of about 9,000 households showed that providers who hold a customers primary relationship manage six times the assets of any of their other providers.By contrast,in the United Kingdom,the average person maintains two or more pension pots and does not hold broader savings and investments with their DC provider.By focusing on a specific growth opportunity(potential transfers of assets from DC accounts),one US asset manager has successfully built a leading wealth and retirement offering,capturing 60 percent of rollovers from its DC accounts into individual products.However,developing deep customer engagement is hard,even for incumbents that benefit from scale and a large base of existing customers.And it has become more competitive as new digital-first consumer-focused companies and others providing financial advice in the workplace enter the market.Regulatory change will soon lead to the arrival of a pensions dashboard,an online portal providing customers with an integrated view of all pension pots,increasing consumer awareness and making consolidation of assets more likely.With the right capabilities and proposition to effectively engage consumers,those holding a customers primary wealth relationship will be well positioned to capture this growth opportunity.If they are to maintain their position,leaders in the DC workplace segment must build distinctive capabilities in line with these new market entrants.Strong analytics will be needed to target the most promising potential customersboth those most likely to engage and those offering the highest valuecombined with targeted customer service outreach capabilities across channels,including call centers and web,mobile,and in-person channels.Players must be able to provide a dynamic combination of financial advice,guidance,and education,and could learn valuable lessons from 6Capturing growth in the evolving UK savings and retirement marketsuccessful companies in the United States and the United Kingdom(see sidebar,“Good advice”).They must also offer a broad range of product offerings,such as individual savings accounts,self-invested personal pensions,and brokerage accounts.Finally,a strong brand is critical to build trust among consumers.Given the DC markets high degree of consolidation and the challenges surrounding integration,the potential for growth through consolidation among the major DC pension platforms is extremely limited.At present,the most viable M&A lever for driving revenue growth involves master trusts.Single trusts will continue to be consolidated into master trusts,and the master trust market,which has already shrunk from 82 trusts in 2017 to about 30 today,will likely consolidate further in the next two to four years.As a result,DC providers looking to capture growth through M&A will have to take advantage of this limited window of opportunity to participate in the markets consolidation.Successfully pursuing M&A in the master trust market requires strong integration capabilities,deep industry relationships,and attractive participant propositions,including a broad range of investment options,strong customer service,and expert financial education and advice offerings.Some of these capabilities can be developed internally or acquired in the market.For example,one top-five pension provider recently acquired a financial-education business that it plans to use to drive greater customer engagement across its workplace offerings.Direct-to-consumer The dynamics of the D2C segment are complex and challenging.The market has been growing at about 13 percent annually since 2015,but it is Good adviceWorkplace pension providers have taken a variety of approaches to offering cost-effective advisory services to their customers and building stronger customer relationships,often making use of technology to boost their presence and accessibility.One UK advice provider has been looking to use workplace pensions as a conversion channel for capturing broader financial assets by working directly with employers to engage employees through seminars,educational materials,and connections to advisers to build relationships and trust with consumers through workplace channels.A US workplace pension provider paid$1 billion for a robo-adviser that allowed it to expand its digital offerings in retirement pensions and create a leading workplace wealth management franchise.Differentiating capabilities include a financial-wellness platform with tools and advice offerings,a more complete financial snapshot beyond the retirement plan(previously not possible within the workplace context),and a financial adviserfirst digital solution for high-net-worth clients(which helped reduce channel conflicts).The goal:to build long-term customer relationships,retain plan participants into retirement,and extend customer lifetime value.Another US retirement and wealth manager has successfully applied digital and analytics to revolutionize its decumulation offering.This bespoke income product uses an algorithm-based robo-adviser to automate investment strategies and withdrawals across asset pools to meet customers financial goals,optimizing risk and tax considerations.The product is supported by a hybrid advice offering with an AI-powered mobile assistant,which provides simple servicing needs and offers access to phone-based financial advisers.In hopes of driving additional product sales and improving retention of existing customers and assets,another US retail savings company recently built a range of customer-focused financial education and automated advice capabilities,including financial-planning calculators,credit improvement advice,budgeting worksheets,and spending analysis tools.Thanks to the new app-based resource,the company captured more than five million users in its first year and increased assets by more than$35 billion.7Capturing growth in the evolving UK savings and retirement markettop-heavy.Three major players have captured about 70 percent of direct platform assets.The rest of the market consists of a long tail of small,typically loss-making competitors that struggle to gain the scale required to be profitable in the face of intense price pressure from the market leaders.This includes multiple new entrants in recent years,both privately funded and as part of larger savings and retirement groups,which have not yet generated stand-alone stable profits.Moreover,while the segments revenue margins are higher than in the workplace segment,margin pressure is increasing as participants compete for scale.A number of the new entrants in the market,including several large players from the United States,hope to build a competitive advantage through their lower cost base,while a new breed is emerging that offers a differentiated customer proposition such as free share dealing.Given these dynamics,there are essentially three archetypes of successful participants in the D2C market:those that have or could generate the stand-alone scale to drive profitability;those that could act as an acquisition channel for other areas of a business,such as advised or workplace,with no requirement to achieve the scale needed to be profitable as a stand-alone entity;and those that could act as a simple self-service offering aimed at less-wealthy customers under a hybrid advice model.The critical capabilities needed to develop a leading customer value proposition include a strong consumer brand,a low-cost platform built on scalable technology,and the right customer engagement tools for this strategy.The sophistication of the technology and engagement tools needed will depend on the platforms strategic role,whether stand-alone or part of a broader offering.The requirement to develop winning capabilities is increasing as at-scale international players enter the UK market,so continuing to invest in these capabilities remains vital.Recently,many companies taking an organic approach to growth have struggled to bridge the capability gap and attract requisite talent.There is an opportunity to acquire point solutions to gain some of the niche capabilities needed for market leadership.And given the long tail of smaller platforms,there is also an opportunity to acquire scale,which is critical,given that platform administration is largely a fixed-cost business.Indeed,large wealth and asset management players have recently been acquiring digital platforms to increase their market presence.For example,a large UK asset manager acquired a top-five D2C investment solutions company to gain an at-scale position.Current market conditions could provide opportunities for those with the capital and operational capacity to invest.AdvisedSince 2015,advised assets have grown at about 7 percent annually to a total of about 1.2 trillion today.As in the D2C market,adviser networks and platforms are seeing increasing fee pressure While the D2C segments revenue margins are higher than in the workplace segment,margin pressure is increasing as participants compete for scale.8Capturing growth in the evolving UK savings and retirement marketand M&A activity as the competition for assets intensifies in the drive for scale.In the face of this pressure,participants looking to win in this market are being forced to adopt one of two models:vertical integration or targeted value chain participation.Each requires a distinct set of capabilities.Vertical integration.This model,which covers advice,administration,investment solutions,and asset management,aims to attract assets through advice networks and capture revenue margin across several of these value chain segments.Participants adopting this strategy must develop an at-scale advice network with the potential to extend it into hybrid advice.They will also need a top-quartile adviser platform,with the ability to add adviser tools as needed to improve effectiveness and efficiency,and to focus the declining population of advisers on mission-critical customer interactions while removing their administrative burdens.Finally,they will need to develop a compelling investment solution and asset management offering to maximize asset capture in this high-margin part of the value chain.Targeted value chain participation.In this model,specialists will look to provide a distinctive,targeted offering,whether dependent on excellent service and support or low cost,to serve larger,integrated market players.For example,a specialist could act as a utility provider of platform administration services,acting as an outsourcing partner to vertically integrated companies.In this role,companies need leading capabilities in their chosen value chain segment.Often this requires scalable technology;a fail-fast,agile culture;and strong analytics.One provider of wealth and asset management technology and business process outsourcing was able to radically reduce the costs of servicing and regulatory-related technology upgrades through process automation.This targeted value chain play has enabled it to become a core part of the industrys infrastructure,while leaving the front-end customer-facing layer to individual companies to customize as part of their differentiated proposition.Some players have been successful pursuing M&A in the advised space(for example,rolling up networks of independent financial advisers)but do face challenges with integration,given the significant consolidation that has already taken place and the risk of advisers leaving after the deal is completed.M&A activity in the space is therefore likely to focus on platforms to realize scale synergies and smaller advice networks.Looking forwardAlthough all four segments offer attractive pockets of growth,they also have a high bar for meaningful participation,and established incumbents and specialist new entrants are continually raising it.To compete,players will need to make strategic participation choices based on their current portfolio positioning,their core capabilities,and the attractiveness of the growth areas in which they aspire.Across all market segments,there are common capabilities required to build cost-advantaged scale positions,with efficient and scalable technology notably important.There are also a number of segment-specific capabilities required to win.Companies looking to enter or grow in the B2B,capital-heavy BPA segment must secure their access to capital,reinsurance capacity,and asset origination.The segment will continue to be most attractive to companies with distinctive investment capabilities that can originate long-dated assets,treating the liabilities as a form of permanent capital,or to those with large retail annuity portfolios for whom there are synergies.Companies looking to enter or consolidate their existing positions in the consumer-facing areas will 9Capturing growth in the evolving UK savings and retirement marketSid Azad,Rajiv Dattani,Jonathan Deakin,and Leda Zaharieva are partners in McKinseys London office.The authors wish to thank Raman Bhan,Chien-Teng Chia,Alex DAmico,Sebastian Elliott,Aditi Jain,Nils Jean-Mairet,Ross Macdonald,Sid Pandey,David Rogers,Shrey Sakhuja,Urmila Shenoy,and Archie Sinclair for their contributions to this article.Scan Download PersonalizeFind more content like this on the McKinsey Insights AppCopyright 2023 McKinsey&Company.All rights reserved.likely focus on the capital-light DC workplace,D2C,and advised segments.However,the distinction between these channels is blurring.Successful companies from the United States and from other sectors such as banking have demonstrated the value of reorienting the organization and its mindset on specific customer segments to meet their holistic financial needs through the full life cycle.For insurers,reorienting to a customer-driven approach can help the introduction of hybrid models that sit across D2C and advised channels,offering greater flexibility to consumers looking to access advice for critical decisions and self-serve offerings for their simpler transactions.This path may be open to participants who have a presence in any one of these channels today.Building or extending competitive advantages,however,will require meeting the rising capability bar that incumbents and new entrants have set,whether that means developing compelling customer engagement tools,being at the forefront of new product development,or ensuring operations are built around scalable technology.Companies choosing to operate across multiple segments must bring together their capabilities in workplace,advised,and D2C segments to develop a coherent consumer-focused offering.Success in this effort,however,will require significant investment in bringing together often disparate data and technology platforms and the ability to make the shift away from a product mindset to a customer mindset.All participants must balance a series of competing demands in this period of uncertainty:building short-term resilience,meeting investor dividend expectations,and investing for through-cycle growth.The pace and scale of capability innovation required to capture this growth means that executives must strike a careful balance between investing to strengthen competitive advantage in existing segments and extending into attractive growth segments.Moving quickly is imperative;future market leaders are investing now to set up for long-term success in these fast-moving segments and embracing todays market uncertainty as an opportunity to forge ahead of competitors.10Capturing growth in the evolving UK savings and retirement marketFurther insightsGlobal Insurance Report 2023:Reimagining life insuranceInfusing tech talent into the UK insurance industryFrom saving to spending:A second front emerges in the US retirement challengeContact Sid AzadPartner,LondonSid_AzadMcKRajiv DattaniPartner,LondonRajiv_DattaniMcKJonathan DeakinPartner,London Jonathan_DeakinMcKLeda ZaharievaPartner,London Leda_ZaharievaMcK11Capturing growth in the evolving UK savings and retirement market

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