Speaker 1: This is Bloomberg Business Week inside from the reporters and
Speaker 1: editors who bring you America's most trusted business magazine, plus
Speaker 1: global business, finance and tech news as it happened. Sloomberg
Speaker 1: Business Week with Carol Messier and Bloomberg Quick Takes Tim
Speaker 1: Stinovic on Bloomberg Radio. Hi, everyone, Welcome to the weekend
Speaker 1: edition of Bloomberg Business Week. Another busy week full of
Speaker 1: financial market volatility, tech stock selling off, and then of
Speaker 1: course you had President by marking his first year in office.
Speaker 1: And even after a nearly two our press conference on Wednesday,
Speaker 1: the administration's plans and goals when it comes to China, well,
Speaker 1: they're still largely unclear. We're gonna get into that with
Speaker 1: our White House team. And speaking of China, the Winter Olympics,
Speaker 1: they're just around the corner. Beijing is in a very
Speaker 1: different place than it was the last time it hosted
Speaker 1: the games back in two thousand eight. That's the subject
Speaker 1: of our global cover story. We'll also check in with
Speaker 1: a pair of CEOs from two global giants, Cisco and
Speaker 1: a B InBev. Chuck Robbins and Michelle Dukeris weigh in
Speaker 1: on the outlook and challenges ahead. All of that to
Speaker 1: and let's kick things off with an overview of this
Speaker 1: week's new issue of Bloomberg Business Week, editor Joel Webber
Speaker 1: joining us now, and Joel, we're gonna start with some
Speaker 1: news right in technology, massive deal Microsoft set to buy
Speaker 1: video GameMaker Activision, Blizzard, Serifire and Dina Bass covering that story.
Speaker 1: I mean, a lot of this has to do with
Speaker 1: the metaverse. So this is uh it ended up being.
Speaker 1: If it goes through and has approved, this will be
Speaker 1: Microsoft's biggest deal ever, and it is a huge bet
Speaker 1: on gaming. Obviously, Microsoft already huge in gaming when you
Speaker 1: think about where they've bend forever with the Xbox and
Speaker 1: then Minecraft, and but where where things are going clearly,
Speaker 1: you know with Facebook's pivot to changing its name to
Speaker 1: to meta Um, you know, Microsoft definitely doesn't want to
Speaker 1: lose out on that, and in many ways actually may
Speaker 1: even have a leg up because of their their kind
Speaker 1: of history and gaming. Like you think about how how
Speaker 1: how gamers interact with with games, and it actually starts
Speaker 1: to look a lot like where the metaverse might might go.
Speaker 1: So so this is really an effort to claim that
Speaker 1: real estate would make them the third biggest gaming company
Speaker 1: in the world if it's approved, um so, so I
Speaker 1: think this is an aggressive move and shows how seriously
Speaker 1: people are taking um Facebook's pivot into the metaverse. It's
Speaker 1: still i think unclear to a lot of people though,
Speaker 1: And I think when you think about the metaverse, the
Speaker 1: way you can imagine it and the way a lot
Speaker 1: of people describe it is it starts with something with gaming,
Speaker 1: But how does it go pass gam angel and and
Speaker 1: move into something that you know would be used for productivity,
Speaker 1: which Microsoft for years has really prided itself on, right
Speaker 1: being the productivity solution. Yeah, we we don't know yet.
Speaker 1: It's too early because so much of where where the
Speaker 1: metaverse is going, what it looks like it is yet
Speaker 1: to be you know created. Um It's just it seems like, uh,
Speaker 1: this virtual land that could have sort of infinite potential
Speaker 1: and like anything that you wanted to create their hood.
Speaker 1: But but you're right, you know Microsoft's history, um uh
Speaker 1: in the productivity space in the office suite obviously that
Speaker 1: is like part of what they do. You could see
Speaker 1: a future where you know, your your avatar, we're all
Speaker 1: meeting as avatars and having this conversation in the metaverse. UM.
Speaker 1: Perhaps Microsoft has some ways to get there sooner because
Speaker 1: in the short term, you know, all the kind of
Speaker 1: the the ideas that we're seeing, you know, it's sort
Speaker 1: of Torso esque UM avatars. So so I think one
Speaker 1: of the big unlocks is whether or not a company
Speaker 1: can get to a version of of that virtual world
Speaker 1: that looks much more similar to what we're used to.
Speaker 1: And obviously, you know, gaming has been very much on
Speaker 1: the forefront of of unlocking what that reality could look like.
Speaker 1: I gotta get to another story that's in the magazine
Speaker 1: about the Ponzi schemer on the Pacific tell Us about
Speaker 1: Gina Champion Kane. So this is just a story that UM,
Speaker 1: we had never heard of her, you know, and she
Speaker 1: was a really prom developer entrepreneur in San Diego, UM
Speaker 1: and not sort of a normal city that we talked
Speaker 1: about a lot um, but she was just this force
Speaker 1: down there UM over the past decade UM, and it
Speaker 1: came out coming out of the financial crisis, kind of
Speaker 1: came out of nowhere to kind of put together this
Speaker 1: um little burgeoning empire that on paper looked big, but
Speaker 1: it turns out she was running this Ponty scheme. UM
Speaker 1: that defrauded friends and investors out of hundreds of millions
Speaker 1: of dollars. She was convicted um and is now serving
Speaker 1: out her sentence. But it was just one of those
Speaker 1: ones that locally everyone in San Diego knew about this story,
Speaker 1: and nationally it didn't ever crack that sort of bigger story.
Speaker 1: So Chris Pomorsky, with an amazing tell um telling everything
Speaker 1: about Jina Champion came which we think is probably um
Speaker 1: in the post Bertie made off Landscape. She's probably the
Speaker 1: biggest female Ponzi schemer we've ever seen. That's a big deal.
Speaker 1: Four million dollars joel Uh. Nobody, no other woman in
Speaker 1: history has has been accused or convicted of a Ponzi
Speaker 1: scheme that large. So the secret to how this all
Speaker 1: ran was this um escrow account, and elements of this
Speaker 1: are are still actually um in court UM. But this
Speaker 1: escrow account was somepany called Chicago Title. And one of
Speaker 1: the ways that she was able to do this was
Speaker 1: by um Uh doing this little scheme with over liquor licenses.
Speaker 1: And I think it was because it was it looked
Speaker 1: like a really good um Uh investment opportunity. So a
Speaker 1: lot of sophisticated investors, including private equity, were you know,
Speaker 1: allured by this um untapped potential. And she really was
Speaker 1: able to capitalize on that. Uh. And that's why, regardless
Speaker 1: of whether or not she was a woman, it was just,
Speaker 1: you know, like an amazing Ponzi scheme that for for
Speaker 1: years went undetected until finally at all unraveled. All right,
Speaker 1: so who should player in the streaming series? You know
Speaker 1: this one? Well? You know, the interesting part of this
Speaker 1: story is like the in the climax, you know, she
Speaker 1: um she says that, you know, she wants to make
Speaker 1: make everyone whole, that all her victims, meaning of them
Speaker 1: again where her friends? And she even went so far
Speaker 1: as to say, you know, you know, when I sell
Speaker 1: the right Stone life story, maybe you know Demmi Moore
Speaker 1: would would maybe play me since you know, she looked
Speaker 1: like me, just in case you were wondering, right, big
Speaker 1: thank you to Business Week editor Joel Weber. We're gonna
Speaker 1: have more from this week's issue Joel just a little
Speaker 1: bit later on, including more on that cover story with
Speaker 1: Janet Paskin. Coming up next, the head of a b
Speaker 1: InBev on aggressive sustainability goals and the economic challenges facing
Speaker 1: the world's biggest brewer. This is Bloomberg. This is Bloomberg
Speaker 1: Business Week with Carol Masser and Berg Quick takes Tim
Speaker 1: Stinovik from Bloomberg Radio. This week, Deloitte to SHAMASO was
Speaker 1: out with a new survey, and it found that more
Speaker 1: than percent of topics X surveyed said that climate change
Speaker 1: had already negatively affected their businesses and him only had
Speaker 1: implemented some of the most common tools across their firms
Speaker 1: to address the challenge. It's basically taking goals and turning
Speaker 1: it into impact. They have the goals, but it's hard
Speaker 1: to actually take action and have an impact, right, there's
Speaker 1: still that disconnect there. That research it was the foundation
Speaker 1: for a Bloomberg Live event that looked at how the
Speaker 1: C suite is reconciling climate change ambitions with actual impact.
Speaker 1: One company that's been all in non sustainability for years, though,
Speaker 1: is the world's biggest brewer, A b in bad Yeah,
Speaker 1: they've seen everything firsthand and and taken action for as
Speaker 1: you said, many years. As part of the Virtual Forum,
Speaker 1: I caught up with Michelle du Carris. He became CEO
Speaker 1: of A b InBev just last summer, we talked about
Speaker 1: the challenges facing his company in the current environment and
Speaker 1: whether it's sustainability goals are within reach. I've got to
Speaker 1: say they're actually hitting those goals ahead of time. That
Speaker 1: is the impact that we can have as a company.
Speaker 1: That we dined the walls of the company, then there
Speaker 1: is this extended impact on what we like to call
Speaker 1: the ecosystem of a bi that has farmers, that has
Speaker 1: the retailers, and I can talk to you about the
Speaker 1: impact on the retailers as well. And then there is
Speaker 1: a much bigger impact because when you think about us
Speaker 1: a hundred and sixty four thousand employees, we have two
Speaker 1: point five billion consumers. The real large scale impact and
Speaker 1: influence they come when we have our brands that connect
Speaker 1: much water consumers every day. And if we can bring
Speaker 1: the farmers, the retailers and the consumers to play a role,
Speaker 1: then they scale and the reach that they can have
Speaker 1: gets magnified. Right, So we are converting all our operations
Speaker 1: to be renewable energy, but we do have two hundred
Speaker 1: and fifty factors. There's a lot, but there are only
Speaker 1: two d fifty factors globally now. But wise they got
Speaker 1: into the middle of the energy and is using renewable
Speaker 1: energy as a broker to influence retailers that are more
Speaker 1: than six million retailers globally to go renewable energy as
Speaker 1: all they cannot afford to buy renewable energy by themselves.
Speaker 1: But but wise it is now acting as a broker
Speaker 1: with no profits to buy bulk energy and do the
Speaker 1: distribution to our retailers and our consumers. They always play
Speaker 1: a role. We do this with water with water Dot
Speaker 1: arm where we help women across the globe to have
Speaker 1: water available very low cost. That water Dot organ in
Speaker 1: Stellartois work together to provide in their impacting he which
Speaker 1: amount of people globally and now our brands are doing
Speaker 1: always with phone calls, heat and there, renewable energy, water,
Speaker 1: organic agriculture and then you multiply the effect because you
Speaker 1: have the consumers into the the equation as well. And
Speaker 1: this is very impact. It's good for business. So tell
Speaker 1: me a little bit about what you think, Michelle, your
Speaker 1: targets are for this year. As you said, you guys
Speaker 1: have laid out hundred in terms of sustainability missions. You
Speaker 1: know you're hitting some of this ahead of it, like
Speaker 1: when it comes to energy. Um, what about your targets
Speaker 1: for this year? And I do wonder we're still in
Speaker 1: a pandemic. I'm at home. Um, you know, it's still
Speaker 1: kind of a world where we take a step forward
Speaker 1: and maybe half a step backward. What are your targets
Speaker 1: in terms of sustainability for this year and what might
Speaker 1: be some of the obstacles that make it a little tougher.
Speaker 1: We have our five goals, and we like to set
Speaker 1: mid term goals and long term goals. And the midterm
Speaker 1: goals are whether you really make progress right and they
Speaker 1: are very measurable. And we have water and empowering farmers
Speaker 1: to be digitally empowered and more productive, and circular packaging.
Speaker 1: Those are the big four goals that we have. We
Speaker 1: love talking to someone like you because you have such
Speaker 1: a global view and you're seeing what's going on the
Speaker 1: consumer when you look at the outlook, you know, is
Speaker 1: there anything that worries you about you know, you having
Speaker 1: to kind of focus on that more, whether it's the
Speaker 1: consumer not holding up this year, the global economy slowing down,
Speaker 1: you know, global bankers making a policy mistake that complicates
Speaker 1: you know, what you're trying to do here when it
Speaker 1: comes to your sustainability initiatives. Essentially, I want to know
Speaker 1: what you think about the global outlook now. I think
Speaker 1: that we are definitely moving into a better period after
Speaker 1: all these disruptions in COVID. I think that then, for fortunately,
Speaker 1: we are not dead yet because you know that some
Speaker 1: countries are getting our war macron uh and as you
Speaker 1: get the wave of for macrome, some more disruptions in
Speaker 1: supply chain will happen. I think that this will continue
Speaker 1: to be a topic this year, and more so in
Speaker 1: the first half of the year, while in the second
Speaker 1: half of the year things will be better. But it's
Speaker 1: not going to be fixed at all these years, so
Speaker 1: supply chain disruptions will continue to be part of our conversation.
Speaker 1: It's going to be more in the first half than
Speaker 1: in the second. The second big issue is inflation. I
Speaker 1: think that inflation is an issue globally. It's not going
Speaker 1: to be away very quick. We are still in the
Speaker 1: middle of the wave and that has an impact in
Speaker 1: consumer purchase power and this is everywhere. But of course
Speaker 1: the more consumers are under pressure in developing and emerging countries,
Speaker 1: the more this will be a disruption. And then I
Speaker 1: think that the third point that's gonna be for second
Speaker 1: semester is once everything settles down, we will see that
Speaker 1: this difference between people in emerging developed countries and developing
Speaker 1: emerging countries will be different the post COVID and we
Speaker 1: will need to benefit from productive it. We will need
Speaker 1: to benefit from the technology step up that we had
Speaker 1: during COVID, so we can close this gap. But I
Speaker 1: see like a tail of two different stories in the
Speaker 1: after COVID, this so called elephant type of economy right
Speaker 1: where the developed mature countries we will accelerate further, while
Speaker 1: the developing countries will need first to correct that rejected
Speaker 1: and then later re accelerate. But is supplied change disruptions,
Speaker 1: it's inflation. And then the two stories of the mature
Speaker 1: and developing countries that we need to have different actions.
Speaker 1: After that was Michelle du karras CEO of a b
Speaker 1: in BEV. You can catch the entire conversation by checking
Speaker 1: out Bloomberg Live dot com and searching for Bloomberg Climate
Speaker 1: Resilience still ahead on Bloomberg Business Week. One year into
Speaker 1: Joe Biden's presidential term, his policy towards China, it's still
Speaker 1: taking shape. Why the administration's fondness for the status quo
Speaker 1: could hurt Democrats come November. This is Bloomberg Broadcasting from
Speaker 1: the financial capital of the World, Bloomberg Eleve in Rio
Speaker 1: in New York to Washington, d C. Bloomberg to Boston,
Speaker 1: Bloomberg one oh six one does San Francisco, Bloomberg nine
Speaker 1: six to the country Sirius XM Chamber one ninety and
Speaker 1: around the globe the Bloomberg Business and Bloomberg Radio dot Com.
Speaker 1: This is Bloomberg Business Week with Carol Messer and Bloomberg
Speaker 1: Quick Takes. Tim Stenovan on Bloomberg Radio. Answer uncertain uncertain.
Speaker 1: I'd like to be able to be in a physician
Speaker 1: where I can say they're meeting the commitments war the
Speaker 1: commitments can be able to lift some of it, but
Speaker 1: we're not there yet. That's President Biden. Earlier this week,
Speaker 1: he held a press conference marking his first year in office,
Speaker 1: talking about the successes and challenges and priorities that included
Speaker 1: the U S relationship with China and whether it's time
Speaker 1: to lift some of those terror of some Beijing. As
Speaker 1: for now, they're going to stay in place. In the
Speaker 1: current issue of Bloomberg Business Week, Bloomberg News White House
Speaker 1: reporter Jenny Leonard writes about how one year in the
Speaker 1: president finds himself boxed in on China, largely because his
Speaker 1: policy so far has resembled that of his predecessor. It
Speaker 1: does look a lot like you know, where Trump left office,
Speaker 1: and a lot of Democrats fear that that's sort of
Speaker 1: a weakness going into the midterm elections because China, of course,
Speaker 1: is something that energizes with voters. Of course, it takes
Speaker 1: a backseat to COVID and the economy right now. Uh,
Speaker 1: but Biden hasn't really in the first year in office,
Speaker 1: put his own stamp on China policy. And even his
Speaker 1: allies say, hey, you know, I think you I think
Speaker 1: we're we know what you're hinting at wanting to do,
Speaker 1: but we don't really know for sure, So why don't
Speaker 1: you tell us? Um. The Biden administration has been meticulously
Speaker 1: reviewing sort of what they inherited, right, if you guys
Speaker 1: remember the trade war sort of ended with the Phase
Speaker 1: one deal inherited that those negotiations are still ongoing. Uh.
Speaker 1: The Chinese have fallen short on their commitments, which we
Speaker 1: knew going into this administration. UM, and there's really no
Speaker 1: timeline for when those negotiations should result in any sort
Speaker 1: of outcomes. So um to sum it up, I would say,
Speaker 1: you know, they really need to hit the gas to
Speaker 1: to show something in the mid terms because Democrats are
Speaker 1: getting a little anti that Republicans sends a little weakness here. China,
Speaker 1: we know, so important to global companies, But what's the
Speaker 1: right balance when it's safe to say world leaders, US
Speaker 1: leaders don't agree with Chinese social policies, but they also
Speaker 1: don't want to lose access to the massive market potential
Speaker 1: that continues to be out there. So what is the
Speaker 1: right policy with China? You hit the nail on the
Speaker 1: head there on exactly what you know any government or
Speaker 1: any U S government is trying to balance and where
Speaker 1: the different sort of voices come in when the different
Speaker 1: principles from agencies are discussing it, right, So you you
Speaker 1: would have you know, in thinking back to the Trump administration,
Speaker 1: you would of course have you know the more HACKISHENDVERSH sides.
Speaker 1: You know, Treasury, U SCR, Commerce, all these different entities
Speaker 1: that here from different stakeholders. And I think the Biden
Speaker 1: administration is hearing exactly the same things. Even if China
Speaker 1: has become more and more difficult to deal with, even
Speaker 1: as supposedly, you know, there's less interest in investing in China.
Speaker 1: We're still seeing how interplined the economies are. And I
Speaker 1: think you've seen at least the Commerce Secretary be very local,
Speaker 1: uh in this Biden administration saying decoupling is not an option,
Speaker 1: that is not something that is possible, that is not
Speaker 1: something that's desirable. If anything, we need to slow that
Speaker 1: down China as much as we can, but we need
Speaker 1: to run faster. And so that's been the Biden administration's focus,
Speaker 1: you know, getting the can Rescue Plan pass getting the
Speaker 1: infrastructure plan passed, and you know, of course now working
Speaker 1: on their third big plan, the Build Back Better Plan,
Speaker 1: which installed UM. So there isn't really anything in the
Speaker 1: immediate term, and definitely nothing that they can show in
Speaker 1: the biladal sense where they say, hey, we're competing with
Speaker 1: China in a smarter way. Jenny, we got to talk
Speaker 1: about the politics of this. How are Republicans though, using
Speaker 1: the president's policy towards China, the administration's policy towards China,
Speaker 1: as a way to criticize him. So I think um
Speaker 1: Republicans are are definitely you know, seizing the moment that
Speaker 1: Biden for now, and they might prove us wrong, you know,
Speaker 1: in two months, but for now, Biden has adopted and
Speaker 1: kept in place Trump's policies, which, of course, uh you remember,
Speaker 1: the Republican Congress has pushed him there. There's a lot
Speaker 1: of you know, China Hawks in Congress that are maybe
Speaker 1: gearing up for presidential runs themselves in two that are
Speaker 1: running for re election to their Senate seats or House
Speaker 1: seats in two Uh So they feel emboldened knowing that
Speaker 1: the Biden administration is sort of boxed in leaving in
Speaker 1: place the policies that you know, they sort of pushed
Speaker 1: the Trump administration to go for. Everyone knows that, you know,
Speaker 1: taking off pars will probably leave Biden even more vulnerable
Speaker 1: to criticism from Republicans. But adding more tariffs to it,
Speaker 1: if that is your enforcement tool, is maybe not something
Speaker 1: they want to go down. It's it's not really a
Speaker 1: past they want to you know, go down. And so
Speaker 1: Republicans see this current reality for Biden and you know,
Speaker 1: probably enjoying watching him through don't grab his way out
Speaker 1: of this box, finding his way out of the box
Speaker 1: that's going to be tricky. That was Bloomberg News White
Speaker 1: House reporter Jenny Leonard. You're listening to Bloomberg Business Week.
Speaker 1: Coming up next, Cisco CEO Chuck Robbins on how his
Speaker 1: company is adapting to rising cost pressures and leveraging technology
Speaker 1: to meet increasing demand for hybrid work. This is Bloomberg.
Speaker 1: You're listening to Bloomberg Business Week with Carol Messer and
Speaker 1: Bloomberg Quick Takes. Tim Stinovich from Bloomberg Radio. Alright, so
Speaker 1: earning season is underway. You know that we've heard all right,
Speaker 1: we're either in one, looking forward to one, or coming
Speaker 1: out of one. Um. We did hear from the big
Speaker 1: banks over the past week or so, a couple of airlines,
Speaker 1: Netflix as well. One of the things, Tim, we really
Speaker 1: love about quarterly updates is that we hear from top
Speaker 1: executives the c suite about the health of the economy
Speaker 1: and we get their respective outlooks. Yeah, we also got
Speaker 1: that this week, Carol from the Bloomberg Year Ahead Summit.
Speaker 1: You actually caught up with Chuck Roberts, the chairman and
Speaker 1: CEO of Cisco, to talk all about what to expect
Speaker 1: when it comes to the world of technology. In two
Speaker 1: it was a really fun conversation. Chuck is seven years
Speaker 1: in s CEO of Cisco, and in this excerpt he
Speaker 1: shares his thoughts on the economy, the hybrid work model,
Speaker 1: and of course the ongoing pandemic. We went into one
Speaker 1: with high expectations and unfortunately we we came to realize
Speaker 1: to your point earlier when we were chatting, when you
Speaker 1: think you were moving on, we'll get we'll get surprised
Speaker 1: and and realize how little is in our control at
Speaker 1: the end of the day. But I think this year,
Speaker 1: you know, we're hopeful that that oh macron is is
Speaker 1: the signal that we're getting close to the end. Uh
Speaker 1: and uh. You know, when you listen to the medical experts,
Speaker 1: they at least insinuated that may be the case. Obviously
Speaker 1: there's a risk of other variants. But I think people
Speaker 1: are ready, and it's I think they've been ready as
Speaker 1: we all are. And as much as we love this
Speaker 1: technology and we're so proud of what it's been able
Speaker 1: to do to keep the world running and keep people productive,
Speaker 1: I think people are dying to get back and spend
Speaker 1: time together and be in person. What do you think
Speaker 1: in terms of the general macro outlook. How does it feel,
Speaker 1: you know what we've been talking about. I'm sure you
Speaker 1: guys have to. You have certainly on some of the
Speaker 1: earnings calls about supply chain problems and being able to access,
Speaker 1: you know, all the materials that you need. How does
Speaker 1: it feel and does the economy feel like it'll be
Speaker 1: growing but maybe not as as rapid as we'd like.
Speaker 1: It's so hard to predict because I think if you
Speaker 1: go back to the March of most all of us
Speaker 1: thought that as we went into a global pandemic that
Speaker 1: the economy would suffer, and we saw just the opposite
Speaker 1: over the last two years. And so there's a couple
Speaker 1: of things I think they are going on. Number One,
Speaker 1: the year of year comparisons will just make it very
Speaker 1: difficult because one was such a robust year. And then
Speaker 1: I think the obviously the FIT is going to move
Speaker 1: and begin to raise rates, which will have some impact
Speaker 1: on the economy as well. But I think that you know,
Speaker 1: the investment cycle that that companies are are ah in
Speaker 1: the middle of, and how they're thinking about technology investments
Speaker 1: and how they're thinking about their future. It seems to
Speaker 1: be a pretty robust investment environment that we see in
Speaker 1: particularly in our space, we see some big long term
Speaker 1: trends that that we think will continue to be tail winds.
Speaker 1: We may see some ups and downs because of temporary
Speaker 1: macro issues, but I think long term will be fine.
Speaker 1: Cause pressures though, inflation, labor shortages, that's still part of two. Unfortunately,
Speaker 1: Unfortunately that's true. And you know, as as so many
Speaker 1: of us have said, some of that stuff is going
Speaker 1: to be transient, but a lot of it's not. I mean,
Speaker 1: wage inflation doesn't go back. I mean, you know, I
Speaker 1: joke with our team, I can't remember an employee when
Speaker 1: things get you know, when when inflation subsides, they come
Speaker 1: and say, you know, I'd like to get part of
Speaker 1: my salary back. So I mean, whatever we're having to
Speaker 1: do on that front, we'll we'll stay with us forever.
Speaker 1: But you know, the good news is that what we've
Speaker 1: learned around hybrid work and what's possible where people can live,
Speaker 1: it gives us the ability to tap into lots of
Speaker 1: different geographies and hire people where they are uh and
Speaker 1: uh and actually get exposure to much greater talent pools.
Speaker 1: So I've talked us about hybrid work. You guys, it's
Speaker 1: just I've been doing it pre pandemic, and so have
Speaker 1: a lot of firms in the technology industry. There is
Speaker 1: a huge debate out there still uh and you guys
Speaker 1: have certainly seen the benefits of everybody need to be connected.
Speaker 1: I'm working at home again? Does that continue? Is that
Speaker 1: with us? Is that one of those long term trends.
Speaker 1: It ain't going away. It's not going away. And I
Speaker 1: think you know, we're going from to a certain extent,
Speaker 1: We're going from this great resignation to a great experiment.
Speaker 1: So there's these variations of hybrid work that everybody is
Speaker 1: trying to embrace. And you know, we have two aspects.
Speaker 1: Number one, what are we doing as an organization and
Speaker 1: but also the technology that we build that are actually
Speaker 1: that's actually enabling our customers to deliver whatever version of
Speaker 1: hybrid work they would like to deliver on. But to
Speaker 1: your point, we had ten of our workforce that worked
Speaker 1: from home of the time before the pandemic, and I
Speaker 1: think that the way we're approaching it is we're leaving
Speaker 1: it to the team. So we're not having any sort
Speaker 1: of mandated return to office policy. Will we will let
Speaker 1: the teams know when the offices are open so you
Speaker 1: can return to them. But as an example, if there's
Speaker 1: a team of eight or ten engineers and they believe
Speaker 1: that being together in person two or three days a
Speaker 1: week is beneficial, they'll make that decision and then they'll
Speaker 1: choose the days that they want to be in the
Speaker 1: office together. And we think that's a better way than
Speaker 1: just a random Hey, we want everybody in the office
Speaker 1: two days. Just it's just not all that logical to me.
Speaker 1: But we'll see how it plays out and we'll see
Speaker 1: which of these models actually begins to emerge. But we
Speaker 1: think it's We think the approach we're taking gives flexibility.
Speaker 1: Gives our employees flexibility. Uh, you know, many of them
Speaker 1: can live wherever they like. Obviously there's some jobs that
Speaker 1: are gonna be required to in a certain geography, but
Speaker 1: we think it will just continue to contribute to the
Speaker 1: culture that we tried to build. Yeah, we're definitely seeing
Speaker 1: Americans and people all over the world kind of being
Speaker 1: able to move around. I am also curious in terms
Speaker 1: of innovation. This is one of the things we talked
Speaker 1: about during the pandemic, and I'm thinking about we're looking
Speaker 1: at the year ahead and technology. I think there were
Speaker 1: folks saying, We'll wait a minute, would Zoom have been
Speaker 1: created if we were in a pandemic environment where people
Speaker 1: weren't together maybe in a room? Well, what would you
Speaker 1: say for a company that's been, you know, on hybrid working,
Speaker 1: you know, for for years, what happens to innovation and
Speaker 1: disruption and being able to figure out new ways of
Speaker 1: doing things? I have to say I was amazed, uh
Speaker 1: during the pandemic, at the level of innovation that we
Speaker 1: were able to drive and that many companies have been
Speaker 1: able to drive. I knew we could be productive because
Speaker 1: we build a technology, we do it, we use it.
Speaker 1: So I wasn't all that concerned about that, but I
Speaker 1: really was worried about how much innovation are we going
Speaker 1: to be able to drive? With our engineering teams, you know,
Speaker 1: spread apart, And they did an amazing job, and so
Speaker 1: many companies did an amazing job. And so I think
Speaker 1: the great news is that government leaders around the world
Speaker 1: c e O s, c xos all experienced this technology
Speaker 1: up close and personal in ways that they hadn't in
Speaker 1: the past. A right, most CEOs didn't do a lot
Speaker 1: of video meetings, and and now I have my peers
Speaker 1: who are saying I can't imagine a world where I
Speaker 1: take a twelve hour flight for one meeting and then
Speaker 1: come back. It's just not gonna happen. And so I
Speaker 1: think they realized that this technology has an incredible power. Uh.
Speaker 1: No one expected the world to remain as productive as
Speaker 1: we were during this time, which says the technology is
Speaker 1: is really powerful. And I think that after having experienced
Speaker 1: it up close and personal, I think they're much more
Speaker 1: open to looking at how do we accelerate the use
Speaker 1: of technology across the various aspects of our businesses which
Speaker 1: continue to lead to different uh, you know, the need
Speaker 1: for innovation and creative thinking, which I think is happening
Speaker 1: at an accelerated pace. So I meant to say congratulations
Speaker 1: because I believe this is your fifth year as CEO
Speaker 1: of Cisco, and I do think is that right? Seven? Seventh?
Speaker 1: Oh forgive me, forgive me? Okay, So seven. So when
Speaker 1: you look back at that tenure um and you think
Speaker 1: about the things that you prioritize or things that you
Speaker 1: might have said, I'm not sure if that's going to
Speaker 1: be a big trend. Cloud. You were one of those
Speaker 1: folks that identified it when maybe some were questioning it.
Speaker 1: You know, when you look back and then look ahead, Um,
Speaker 1: one of the things are you most proud about in
Speaker 1: terms of the time you've been there and those trends
Speaker 1: that you're like, I wasn't so sure, but it did
Speaker 1: turn out to be very significant. And then as we
Speaker 1: look ahead those things that we are questioning in technology
Speaker 1: but that you think we should be paying attention to. Well,
Speaker 1: So I think that early on you mentioned cloud, there
Speaker 1: was a belief that cloud was going to be, uh
Speaker 1: the downfall of our company, and I think I am
Speaker 1: proud that we embraced it and didn't try to fight
Speaker 1: it and didn't try to commence our customers that that
Speaker 1: wasn't the strategy they should employ. We actually embraced it
Speaker 1: and looked at what does it do to our portfolio?
Speaker 1: How do we need to evolve our our products to
Speaker 1: actually enable our customers to more and more effectively use
Speaker 1: the cloud and sas applications and all the things that
Speaker 1: they're trying to do. So I'm really proud of that.
Speaker 1: I'm incredibly proud of the team that we had working
Speaker 1: on this next generation silicon technology that we've been building.
Speaker 1: And no one really understands this because it's not a
Speaker 1: consumer product, but our team spent over five years building
Speaker 1: this next generation of silicon that are now powering the
Speaker 1: Internet of the future as well as the next generation
Speaker 1: cloud infrastructure at a much lower power consumption than they
Speaker 1: have in the past, so the ability to deliver higher
Speaker 1: performance and at the same time help them achieve some
Speaker 1: sustainability goals and things of that. I'm really proud of
Speaker 1: what they've accomplished there. I think our teams have I
Speaker 1: think the culture that we have really built over the
Speaker 1: last several years. We've always had a great culture, but
Speaker 1: I really think it has blossomed. Uh and uh it's
Speaker 1: it's resulted in us being, you know, number one global
Speaker 1: workplace two years in a row. We're actually number two
Speaker 1: this year. But I'm still proud of what the teams
Speaker 1: have done. And as you look to the future, I
Speaker 1: think that this year it's I'm most interested in the
Speaker 1: human aspect of dealing with this new world that we're
Speaker 1: going to operate in, because over the last two years,
Speaker 1: that's been one of the biggest things we've had to
Speaker 1: evolve with our leaders is thinking about how do you
Speaker 1: lead people who are now working from home with children
Speaker 1: that they're going to school in the next room with
Speaker 1: elderly parents who are staying with them, who don't have
Speaker 1: the ability to operate in a normal way that they
Speaker 1: have in the past. And this was a big challenge
Speaker 1: that we all had to work through. And I think
Speaker 1: now as we get into this hybrid work model, I
Speaker 1: think the culture, you're the people, the leadership, how we
Speaker 1: deal our employees is going to be actually one of
Speaker 1: the biggest challenges. I think the technology is actually the
Speaker 1: easy part. That's check Robbins, chairman and CEO of Cisco
Speaker 1: at this week's Bloomberg The Year Ahead Summit. Catch that
Speaker 1: entire conversation in others just head to Bloomberg Live dot com.
Speaker 1: And that wraps up the first hour of the weekend
Speaker 1: edition of Bloomberg Business Week from Bloomberg Radio. I'm Carol
Speaker 1: Masser and I'm Tim Stanavick. Ahead in our next hour,
Speaker 1: how an online authentication company called I d Me became
Speaker 1: the government's digital gatekeeper. Are Bloomberg Pursuits team also takes
Speaker 1: us inside New York's most exclusive private clubs and on
Speaker 1: a Caribbean excursion that you will definitely want to add
Speaker 1: to your bucket list. I've already been there jealous you
Speaker 1: should be. And coming up next our cover story the Olympics.
Speaker 1: They are back in Beijing after only fourteen years, but
Speaker 1: things look a lot different this time around, especially the
Speaker 1: global balance power. This is Bloomberg. This is Bloomberg Business
Speaker 1: Week inside from the reporters and editors who bring you
Speaker 1: America's most trust to business magazine, plus global business, finance
Speaker 1: and tech news as it happened Sloomberg Business Week with
Speaker 1: Carol Messer and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. Hi,
Speaker 1: I'm Carol Masser and on tap in our second hour
Speaker 1: of the weekend edition of Bloomberg Business Week. A little
Speaker 1: known fraud prevention company trying to become the digital intermediary
Speaker 1: between the government and its citizens. We're talking about you
Speaker 1: and me and everybody else that's out there. And also
Speaker 1: we've got to gaze into the future of work with
Speaker 1: the team from Bloomberg Beta plus the epitome of exclusive
Speaker 1: from our Pursuits team inside some of the Big Apple's
Speaker 1: most elite social clubs. And then we go overseas to
Speaker 1: a gem in the Caribbean. Sign me up, all right,
Speaker 1: first up this hour, this week's global cover story. It
Speaker 1: comes from this week's remarks in the magazine. It's about
Speaker 1: the Winter Olympics in Beijing, just around the corner of
Speaker 1: those games, and how China has climbed to near the
Speaker 1: top of the global economic hierarchy in just fourteen years
Speaker 1: since it last hosted the Games. It feels like it
Speaker 1: was yesterday day, but it was a few years ago. Yeah,
Speaker 1: it really does feel like it wasn't that long ago. Well,
Speaker 1: the story is from John Lou and Janet Paskin. Janet
Speaker 1: is our senior editor based in Hong Kong, and she's
Speaker 1: here to tell us why the Chinese capital looks a
Speaker 1: lot different than it did back in two thousand and eight.
Speaker 1: I gotta say I love, first of all, the cover
Speaker 1: of the magazine. Um, there's a lot at stake for
Speaker 1: President g at this point, because I mean, the balance
Speaker 1: of power is shifted in terms of China's role right
Speaker 1: in in everything geopolitics and the global economy. But I
Speaker 1: feel like it also comes at a tough time, you know,
Speaker 1: in terms of their fighting COVID. There's a lot going
Speaker 1: on here. There is a lot going on. This is
Speaker 1: also the year UM in which she will try to
Speaker 1: secure a third term, which is pretty historic um as,
Speaker 1: so he wants this year to be extraordinary for China.
Speaker 1: That's really important for him, and the Olympics are part
Speaker 1: of that. COVID fighting COVID is part of that too,
Speaker 1: and the pandemic and these games are really going to
Speaker 1: pose a challenge. Well what does extraordinary look like? Because
Speaker 1: obviously Beijing was chosen as the site for Olympics long
Speaker 1: before we knew about the pandemic. So so how is
Speaker 1: the definition of extraordinary change and how does she still
Speaker 1: pull us off given the pandemic. I think it's going
Speaker 1: to be tough. What we know is that they have
Speaker 1: UM institute extraordinary COVID containment measures. UM there's a limited
Speaker 1: number of flights that are allowed into Beijing, so you
Speaker 1: have athletes coming in on very special chartered planes. They
Speaker 1: are immediately whipped into effectively a bubble where that comprises
Speaker 1: where they stay, where they compete, where they eat, what
Speaker 1: they eat. There's no mingling, there's no nada. So they're
Speaker 1: really going to try to almost hermetically seal off the games.
Speaker 1: You know, one thing that's interesting, I think in your
Speaker 1: stories that you do get to where Beijing was in
Speaker 1: two thousand eight versus where they are today. Very different,
Speaker 1: and at that point it looked like they wanted to
Speaker 1: be part of much more you know, Western democracy, right,
Speaker 1: And I think you write in your story about how
Speaker 1: the IOC, the International Olympic Committee, you know, thought that
Speaker 1: by giving these games right to China would bring them
Speaker 1: more into the fold of that Western democracy. Today it's
Speaker 1: like China is doing its own form of whatever they
Speaker 1: want to call it in terms of democracy, right, and
Speaker 1: they're saying this is this is who we are. That's
Speaker 1: a right. Um. At the time, you know, China was
Speaker 1: still on a path of opening. It's hard to remember
Speaker 1: this now, but ahead of the two Don eight Games,
Speaker 1: there were a lot of concerns about China's human rights record,
Speaker 1: and China sort of China entertained those conversations. They unblocked
Speaker 1: websites during the games, including Amnesty International, which were really
Speaker 1: critical of its um record on human rights. That's not
Speaker 1: happening now. What I love some of the people that
Speaker 1: you talked to and stuff sided in the stories that
Speaker 1: you they do see themselves as a form of democracy
Speaker 1: and one that works. And it comes at a time
Speaker 1: when we're kind of looking at our democracy here in
Speaker 1: the United States and being like, well, it's got some problems.
Speaker 1: That's the argument that China would make, right, That's that's
Speaker 1: how they've gone on. Then they have gone on the offensive,
Speaker 1: and that way not saying you know, they're saying, you know,
Speaker 1: we have a consultative democracy. We have a meritocracy, right
Speaker 1: we do. We don't have freedom of press, and we
Speaker 1: don't have one man, one vote, but we have this
Speaker 1: other thing that is also democratic. And in China they
Speaker 1: say that that's better. So Jenna, help us look beyond
Speaker 1: beyond the Olympics, because according to Bloomberg Economics, China could
Speaker 1: overtake the United States is the number one economy in
Speaker 1: the world less than a decade from now. How does
Speaker 1: that happen? You know, it's hard to look beyond COVID,
Speaker 1: is the honest truth, because when you look at how
Speaker 1: China has done in the last couple of years and
Speaker 1: really the growth in its economy and this amazing recovery
Speaker 1: that they've been able to effect during in the pandemic
Speaker 1: while everybody else has been in the dull drums. A
Speaker 1: lot of that is due to this COVID zero policy
Speaker 1: that they've had, where they have zero tolerance for any infection.
Speaker 1: That's kept people going to work, It's kept factories running.
Speaker 1: It has really minimized disruption to the role that China
Speaker 1: plays as kind of the factory of the world. They
Speaker 1: are sticking with that policy, but it is getting harder
Speaker 1: for them to do that, and that could really affect
Speaker 1: their economy in a way that we haven't quite seen.
Speaker 1: So I think it is I think that this is
Speaker 1: going to be a critical critical year for China, for
Speaker 1: for the Olympics, for the COVID zero policy, for its economy, um,
Speaker 1: and so I think it's hard to look past this,
Speaker 1: to be perfectly honest, I remember two thousand eight watching
Speaker 1: those Olympics and was blown away just by the fireworks
Speaker 1: and the opening ceremony. Seriously, that was huge, an amount
Speaker 1: of people like it just reminded me how giant China is.
Speaker 1: But the China then and the China today are very different.
Speaker 1: I'm thinking about our listeners are audience, what do you
Speaker 1: think they need to take away from your observations in
Speaker 1: your reporting. China isn't interested particularly in playing by global rules,
Speaker 1: are in conforming to Western norm um. It feels it
Speaker 1: has developed a narrative of national superiority, self reliance. Um,
Speaker 1: and that is that's the China that you're going to
Speaker 1: see on display during the games. Are big. Thank you
Speaker 1: to Bloomberg new senior editor Janet Paskin joining us from
Speaker 1: Hong Kong. Coming up next, the Innovations that will make
Speaker 1: Business work Better. You're listening to Bloomberg Business Week. This
Speaker 1: is Bloomberg. This is Bloomberg Business Week with Carol Masser
Speaker 1: and Bloomberg Quick Takes. Tim Spinovik from Boomberg Radio. I
Speaker 1: gotta see Tim what I always love about our company.
Speaker 1: I love a lot of different things. I love the
Speaker 1: people first and foremost, but I also love the different
Speaker 1: aspects of the businesses that everybody at Bloomberg works in,
Speaker 1: and being able to tap their perspectives and pick their
Speaker 1: brains about what they are seeing. It ends up really
Speaker 1: giving certainly me a wide and deep view of our world,
Speaker 1: which is why we loved recently catching up with Karen Klin.
Speaker 1: She's founder Bloomberg Beta. Bloomberg Beta is Bloomberg's venture capital firm.
Speaker 1: It invest in early stage tech companies that make businesses
Speaker 1: work better. Karen previously led SoftBank's team that reviewed all
Speaker 1: new investments during the period when Soft Bank invested in
Speaker 1: the likes of BuzzFeed, Seed Round an expert when it
Speaker 1: comes to the startup scene, bloom a Quick Take co
Speaker 1: host and bloem a cross asset reported Katie Greifeld and
Speaker 1: I caught up with Karen to talk about how the
Speaker 1: pandemic has only accelerated existing trends related to how we
Speaker 1: do our jobs. Physical space was more of a dependency
Speaker 1: and we had to find alternatives. So it's been fascinating
Speaker 1: to see how work is changing now that we to
Speaker 1: find new alternatives and strengthen some of the things that
Speaker 1: we were doing before related to distributed teams and working remotely.
Speaker 1: And so what does that translate to into two? I mean,
Speaker 1: it feels like this pandemic is never ending. That remote
Speaker 1: work uh moth people like it. But also, I mean,
Speaker 1: you've seen so many companies around Wall Street and beyond
Speaker 1: having to delay return to office plans. How does that
Speaker 1: translate into a sort of venture capital theme. There's a
Speaker 1: bunch of ways that it's affecting us. I mean, we're
Speaker 1: seeing it certainly around certain areas like learning, right, Like
Speaker 1: how do you figure out what you're supposed to do
Speaker 1: with one's kids right, should they be in school? Should
Speaker 1: we emphasize and move more towards remote types of learning?
Speaker 1: So there's been huge growth and education. Similarly, around digital health,
Speaker 1: we had to find solutions because we couldn't necessarily go
Speaker 1: to visit our doctors physically. So that's those two have
Speaker 1: been areas where we've seen a bunch of opportunities. And
Speaker 1: then just naturally what's happening in the workplace is changing
Speaker 1: as well, because it used to be very easy where
Speaker 1: you could pop over to somebody's desk and ask them
Speaker 1: how they're doing, and now there has to be and
Speaker 1: one of the things we love about Bloomberg goes we
Speaker 1: as you were talking about earlier, is you'd be in
Speaker 1: the pantry and you'd be able to bump into colleagues
Speaker 1: and get updates and there'll be all sorts of serendipity
Speaker 1: that would happen, and we just don't have that now,
Speaker 1: so we need to turn to online tools and examples
Speaker 1: of such I can you know, give you a couple
Speaker 1: of them that we've seen, and we like the products
Speaker 1: so much we ended up investing. And it's things like Donut,
Speaker 1: which creates a water cooler so that there's more of
Speaker 1: an opportunity to get to know the personal side of
Speaker 1: what your colleagues have happening, as well as just to
Speaker 1: check in, which is also extremely useful during this time. Well,
Speaker 1: what you said, Karen to about serendipity, because I do
Speaker 1: think about right, that is so much part of our
Speaker 1: Bloomberg culture. You're run into somebody from a different division,
Speaker 1: a different part of the business, and it's like, oh, wait,
Speaker 1: we should be doing this right, and that's how things happen.
Speaker 1: I mean, what's happening um in this space in terms
Speaker 1: of innovation disruption? Do you are Are you at all
Speaker 1: a bit concerned that some of that might slow down?
Speaker 1: Although it feels like the pandemic sped up a lot
Speaker 1: of innovation, But because we're not because we're often having
Speaker 1: to meet with people virtually, that maybe some of that
Speaker 1: serendipity is lost in this environment. There's definitely a benefit
Speaker 1: to seeing people in person and just being able to
Speaker 1: read some of the reactions and responses and and around
Speaker 1: collaborative work such as brainstorming. We haven't yet necessarily correct
Speaker 1: the code on how to do some of those well.
Speaker 1: But the other thing that we're seeing is we're just
Speaker 1: all getting inundated. There's just too many messages, alerts, notifications,
Speaker 1: and it's very hard to follow what's happening and keep
Speaker 1: keep organized. And so there's been a proliferation of tools
Speaker 1: that have emerged there too. Like we there's a company
Speaker 1: that we like out of North Carolina, UH that is
Speaker 1: called Wrangle, And what it does is it allows people
Speaker 1: to since we're all living in slack and teams, it
Speaker 1: allows us to stay in some of those chat rooms
Speaker 1: and be able to approve vendor requests or pass speeds
Speaker 1: onto different divisions within the company. So there's there's certainly
Speaker 1: arise in different productivity tools to ensure that some of
Speaker 1: the things that we used to be able to pop
Speaker 1: over to somebody's desk and learn about still gets done.
Speaker 1: Karen tell us a bit more about some of the
Speaker 1: companies that you guys e Bloomberg by to have invested in.
Speaker 1: When it comes to how we work, one of the
Speaker 1: areas I'm particularly excited about right now is around culture.
Speaker 1: It just because we're spread out, our homes are becoming
Speaker 1: our workplaces. It's just so important for leadership to be
Speaker 1: much more intentional around that. And we've heard a lot
Speaker 1: of talk about this great resignation. I actually think it's
Speaker 1: an opportunity for the best leaders to upgrade their talent
Speaker 1: and that that's the way they should be looking at it.
Speaker 1: And so there are a bunch of tools and technologies
Speaker 1: that can kind of help us keep in better touch
Speaker 1: with our our employees and know what's going on. And
Speaker 1: it might be around you know, corporate training so that
Speaker 1: people feel valued and can develop the skills they need.
Speaker 1: And we have a company we invested in called code
Speaker 1: Academy that's just getting sold to skill Soft because it
Speaker 1: helps people learn how to code uh in a much
Speaker 1: more seamless, seamless kind of way. You know, degree does
Speaker 1: corporate education training. And so there's some along the training part.
Speaker 1: I think we're going to see a lot more. There's
Speaker 1: certainly have been some around mental health, and you know,
Speaker 1: it's now becoming more okay just because to talk about it.
Speaker 1: And so companies are are going to be offering a
Speaker 1: lot more resources to make sure the well being of
Speaker 1: their employees work, um, if they want to retain those employees.
Speaker 1: So I'm eager to see that transition. One of the
Speaker 1: other things that maybe not even in the culture realm,
Speaker 1: that I think is going to also pop up is
Speaker 1: because we are working in different places. There are even
Speaker 1: greater security vulnerabilities happening, and so we're going to continue
Speaker 1: to see a lot of movement around security. Um. We
Speaker 1: have a company called Flashpoint, New York based, and six
Speaker 1: years ago they were a small startup. Now they're buying
Speaker 1: risk Based, which is a big deal that they're able to,
Speaker 1: you know, buy another meaningful company and continue to make
Speaker 1: us all safeter and in particular it's doing it around
Speaker 1: the log for j channel Lunges. I think it's going
Speaker 1: to be a lot more buttoned up with that they're
Speaker 1: combined offering. That's Karen Klein, founder of Bloomberg Beta. She
Speaker 1: spoke with Carol as well as my co host on
Speaker 1: Bloomberg Quick Take Stock Katie Greifeld. Still to come on
Speaker 1: Bloomberg Business Week. A company called I d Me is
Speaker 1: trying to control and commercialize something very personal to all Americans,
Speaker 1: their identity. This is Bloomberg. These are the sounds of
Speaker 1: a dinner, a dinner that almost didn't happen. Broadcasting from
Speaker 1: the financial capital of the world, Bloomberg eleven Rio in
Speaker 1: New York to Washington, d C. Bloomberg to Boston, Bloomberg
Speaker 1: one oh six one to San Francisco, Bloomberg nine six
Speaker 1: to the Country, Sirius XM Chene and around the globe,
Speaker 1: the Bloomberg Business and Bloomberg Radio dot Com. This is
Speaker 1: Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes
Speaker 1: Tim Stenovan on Bloomberg Radio. Tim ever heard of ID not?
Speaker 1: I gotta be honest with you, not before reading this story. Well,
Speaker 1: I gotta say You're not alone. I hadn't heard of
Speaker 1: it either, And yet maybe we all should be putting
Speaker 1: it on our radar because this little known fraud prevention
Speaker 1: company is trying to become the digital intermediary between the
Speaker 1: government and all of us. The online authentication company has
Speaker 1: become a sort of digital gatekeeper for many Americans, and
Speaker 1: its grip is only getting tighter. The story from Bloomberg
Speaker 1: New Senior economics writer Sean don And and our Seattle
Speaker 1: Bureau chief Dina Bass is featured in this week's issue
Speaker 1: of the magazine. Sean joined us along with Bloomberg busess
Speaker 1: Week editor Joe Webber, to help shed light on the
Speaker 1: company and its military veteran co founder, Blake Hall. They
Speaker 1: are about a little over a decade old. It was
Speaker 1: created by two veterans who were at Harvard Business School together,
Speaker 1: a guy called Blake Hall and the guy called Matt Thompson.
Speaker 1: And originally it was to try and set up a
Speaker 1: kind of marketplace targeting veterans. And they quickly ran into
Speaker 1: this issue of how do we verify that people have
Speaker 1: served and very quickly discovered that actually the software that
Speaker 1: they had which allowed veterans to verify their identity was
Speaker 1: actually the most powerful part of their business, and began
Speaker 1: focusing on on that. And you fast forward to and
Speaker 1: and the pandemic, and UM I d ME as as
Speaker 1: as they're called, were hired by By the end of
Speaker 1: the pandemic, it was twenty seven states to try and
Speaker 1: verify the identity of people who were applying for unemployment benefits,
Speaker 1: you know. And I feel like that was such a big,
Speaker 1: big trend. Hey, Joel, come on in on this. Joe
Speaker 1: Weber is the editor Bloomberg Business Week magazine. I do
Speaker 1: feel like when all those benefits are coming out, we
Speaker 1: were finding out about problems in this system, and companies
Speaker 1: like this one, well, that's right, and and I d
Speaker 1: ME really helped solve this problem. You know, this interface
Speaker 1: between government agencies and sort of the digital the digital
Speaker 1: you I guess you could could think of it UM.
Speaker 1: And it really caught my attention. And and was this
Speaker 1: number that UM I d me put it into the ether,
Speaker 1: which was this four billion dollars of fraud UM. And
Speaker 1: the moment that that was really introduced UM from from
Speaker 1: the company, I remember Sean just being like, well, that's
Speaker 1: a really big number. And so that kind of set
Speaker 1: off like our interest in it because we no one
Speaker 1: had really been able to to actually connect dots to
Speaker 1: to anything that that big. And and boy it was big.
Speaker 1: And Sean will take it back over to you because
Speaker 1: that four hundred billion number, how real is it? Yeah?
Speaker 1: So I mean what we're really interesting is the CEO
Speaker 1: Blake Hall, came out with assessment that essentially half of
Speaker 1: all unemployment benefits that have been paid out by Washington
Speaker 1: had been stolen by fraud sters. He was billing it
Speaker 1: as the biggest cyber heist UH in American history UH
Speaker 1: at the time, and at the time I was looking
Speaker 1: that he came out with that, I was doing some
Speaker 1: reporting on the unemployment system and people who were struggling
Speaker 1: to get the benefits that that they were owed at
Speaker 1: the time. And one of the things I kept hearing
Speaker 1: from people was that they were running into problems getting
Speaker 1: through I d me s um verification and and essentially
Speaker 1: validating that they were who they said they were, and
Speaker 1: that a huge number of a of of claims were
Speaker 1: being held up because of this no system. So I
Speaker 1: I kind of immediately or fairly quickly got in touch
Speaker 1: with Joel and and some of my other editors and said, hey,
Speaker 1: we really should be digging into this uh more deeply
Speaker 1: and kind of interrogating this a bit more because and
Speaker 1: then you know, you scratched the service little more, and
Speaker 1: you discovered that I d me actually last summer signed
Speaker 1: a contract with the I r S to help UH
Speaker 1: delivered the child tax credit payments that went out, and
Speaker 1: so that if you set up an online account with
Speaker 1: the I r S, you have to use id ME.
Speaker 1: Now they also have an account with the Social Security Administration.
Speaker 1: They also do work with the Veterans Affairs Department, which
Speaker 1: means veterans who are seeking medical care sometimes have to
Speaker 1: set up I d me account. Altogether, now, I d
Speaker 1: says it has sixty eight million registered users. That's one
Speaker 1: in four American adults who, whether they know it or not,
Speaker 1: have an id ME account where it's sometimes verified their
Speaker 1: identity there. And it's becoming this kind of gatekeeper to
Speaker 1: government services and benefits. And we had the stress test
Speaker 1: in the pandemic with what happened in the unemployment system,
Speaker 1: and well I d ME says rightly that they stopped
Speaker 1: a lot of fraud and so on. They also had
Speaker 1: a lot of problems associated with their software that raised
Speaker 1: a lot of questions about who we should allow to
Speaker 1: be the kind of gatekeeper to government services and should
Speaker 1: it be a for profit private company. That's Bloomberg Senior
Speaker 1: economics writer Sean Donnin. You're listening to Bloomberg Business Week.
Speaker 1: Coming up the finer things you've come to expect from
Speaker 1: our team at Bloomberg Pursuits. We're gonna go inside the
Speaker 1: top social clubs in New York and beyond, and then
Speaker 1: we're gonna take you to one of Carol's favorite places
Speaker 1: in the world on a mission to make it one
Speaker 1: of your favorite places. Yeah, but you don't want too
Speaker 1: many people going, that's true. Don't listen to this story. Wait,
Speaker 1: listen to this story. Don't listen to the story that's
Speaker 1: coming up next. This is Bloomberg. You're listening to Bloomberg
Speaker 1: Business Week with Carol Messer and Bloomberg Quick Takes Tim
Speaker 1: Stinovik from Bloomberg Radio. Social clubs they are steeped in
Speaker 1: history and they're having a renaissance today amid the pandemic.
Speaker 1: There are several new London style private social clubs in
Speaker 1: New York City, and the ones that were already here, Tim,
Speaker 1: they're expanding. The reasons for this growth are more nuanced
Speaker 1: than just networking, though, Carol, So over the last couple
Speaker 1: of years, people they're going out less, and people with
Speaker 1: the means to do so they want to go to
Speaker 1: a known quantity into places where they know that they're
Speaker 1: going to have a good time. Yeah, it makes sense. Well,
Speaker 1: here tell us more about what the Big Apple socially
Speaker 1: really do behind closed doors. Is Bloomberg Pursuits Arts columnist
Speaker 1: James Tarmy. James, you guys always have the fun story. So,
Speaker 1: all right, what's going on here? Because it does sound
Speaker 1: like they're on the up swing. Yeah, they are, and
Speaker 1: they were on the upswing even before COVID, And you know,
Speaker 1: there's there's a real distinction to be made between the
Speaker 1: extant members clubs of New York City, like the Knickerbocker
Speaker 1: in the Metropolitan, the Union Club. These are all clubs
Speaker 1: that were founded in the nineteenth century in the model
Speaker 1: of a British gentleman's club. It's a place where you
Speaker 1: kind of hang out. It's an alternative to being at home.
Speaker 1: You read the paper, you drink, you have dinner, and
Speaker 1: it's very kind of funny, duddy. You know. These comes
Speaker 1: still today require people to wear blazers and ties and
Speaker 1: you can't get in otherwise. And I don't know if
Speaker 1: you guys have ever been to, but the food is inedible.
Speaker 1: I know, what's the deal with that? Um? I you know, honestly,
Speaker 1: I it's like they don't want you to eat the
Speaker 1: meals there. Well, that are the people who are eating
Speaker 1: the meals don't have a sense of taste anymore and
Speaker 1: don't care. But the point is that there's a new
Speaker 1: generation of clubs that are coming in that are that
Speaker 1: that's really nothing like the old generation. And this is
Speaker 1: what my article is about. So we're talking Costas Cipriani,
Speaker 1: Zero Bond, Soho House, which has been around for years,
Speaker 1: and some others as well. What sort of sets these
Speaker 1: clubs apart from the old fuddy duddy ones that that
Speaker 1: you were referring to, right, yeah, exactly right, you know
Speaker 1: these are these are places first of all, that place
Speaker 1: a huge emphasis on their culinary offerings, their places where, um,
Speaker 1: you know, you can be a lot more informal. Let's say,
Speaker 1: you know that you don't need to have a reptile
Speaker 1: and low forest to get in. Um. They are places
Speaker 1: alas yeah, I don't even know. If you don't know,
Speaker 1: you can't afford it, Carola. Um. You know, I think
Speaker 1: this new generation distinguishes itself, primarily, UM by trying to
Speaker 1: create uh you know, and this is from their own
Speaker 1: marking language, but trying to kind of create a community
Speaker 1: of people who still want there to be some sort
Speaker 1: of um barrier to entrance, let's say, But it's not
Speaker 1: the same set of criteria that um, these older clubs have.
Speaker 1: So the core club, which I actually um kind of
Speaker 1: has has not yet the newest version of which has
Speaker 1: not yet come out. Um it will be ready in September,
Speaker 1: is a place where you know, they want captains of
Speaker 1: industry to be meeting with captains of culture, meeting with
Speaker 1: you know, I mean, it's a very kind of high
Speaker 1: caliber group of people, but it's not necessarily people who
Speaker 1: are who are sort of sitting around UM by by
Speaker 1: the fire sort of situation, smoking jackets and lowering. There
Speaker 1: is the dollar initiation. That's what I wanted to talk to.
Speaker 1: I feel like the fees are all over the place.
Speaker 1: Some of them seem fairly affordable, and some of them
Speaker 1: are like wait what right, Well, so this is this
Speaker 1: is the thing. I mean, they are across the board,
Speaker 1: very very different, but they're also offering very different things.
Speaker 1: So the amand Club, which has this UM kind of
Speaker 1: famously reported hundred dollar initiation fee, it's actually UM an
Speaker 1: intergenerational things. So first of all, it's it's per family.
Speaker 1: You get to pass it down to the generations. It's
Speaker 1: like it's not like the kids or grandkids need to
Speaker 1: UM pay anything. Once you have it, you have it.
Speaker 1: And the amand Club obviously has a physical location, as
Speaker 1: we report in UM the article in Business Week, UH
Speaker 1: their new New York hotel. But it's part of the
Speaker 1: outgrowth of a kind of membership rewards program where there's
Speaker 1: concerges and there's many opportunities for people in this membership
Speaker 1: program in various amount resorts around the world that UM
Speaker 1: are not available to other people. Is there really demand
Speaker 1: for all of this? Well, you know, this is the
Speaker 1: this is the multimillion dollar question. Soho House UM, which
Speaker 1: is now publicly treated company UM, says that they added UM.
Speaker 1: They they keep adding tons of members UM. You know,
Speaker 1: in mid UM they had roughly a hundred and twenty
Speaker 1: thousand members UM by the end of the fourth I
Speaker 1: believe by the end of so six months later they
Speaker 1: had added something like nineteen thousand members UM. Uh. That's
Speaker 1: that's that's rough UM. But you know there are lots
Speaker 1: of people globally who want to join. The question is
Speaker 1: for places like the Core club, which have a much
Speaker 1: higher initiation fee, much higher annual barships, are there enough
Speaker 1: people who want to join this pretty specific place and UM?
Speaker 1: As I say in my people, the argument for it
Speaker 1: before COVID was that UM places like Core are basically
Speaker 1: trying to serve as a port of call for a
Speaker 1: certain member of the elite. All right, our thanks to
Speaker 1: James Tarmy, it's a great wead in pursuits from socializing
Speaker 1: now with lots of others at clubs to a quiet
Speaker 1: and luxurious Caribbean. I, like I said, this is my
Speaker 1: prefern mode. Let's bring in travel editor Nikki ex Stein,
Speaker 1: fresh off a trip from one of my favorite places
Speaker 1: on Earth and Guilla in the Eastern Caribbean. I have
Speaker 1: to say, Nikki, I almost didn't want to talk about
Speaker 1: this with you, because this is truly one of my
Speaker 1: favorite places. Went there the first time thirty years ago.
Speaker 1: But what I love about it is that it's such
Speaker 1: a quiet island. I think you are in the majority
Speaker 1: in saying that in terms of people who know ang
Speaker 1: are right. It's like just amazing that's kept secret. And
Speaker 1: everyone that I met on the island, it's so funny
Speaker 1: how to story, just like yours. They've been going there
Speaker 1: for decades, maybe even since they were little kids. Um,
Speaker 1: they go back again and again, maybe every single year.
Speaker 1: People have this amazing connection to this tiny island. It's
Speaker 1: the size of Manhattan and has only fourteen thousand people
Speaker 1: on it um and it's just so full of incredible
Speaker 1: things to see and do. Maybe now more than ever
Speaker 1: does it stay like that though. I mean one point
Speaker 1: that you make in in the piece, Nikki, by the way,
Speaker 1: really tough job. Okay, you know you weren't with us
Speaker 1: last week I think or the week before, because you
Speaker 1: were literally, you know, I don't want to say on vacation,
Speaker 1: but you were at a place where people go on vacations.
Speaker 1: You were working. Okay. The price I pay is that
Speaker 1: I sometimes eat like three dinners a night, So I
Speaker 1: feel so bad for you. How much of this has
Speaker 1: to do with this idea that there are no cruise
Speaker 1: ships there? I mean, that's that's huge, it's pretty bad.
Speaker 1: So there's no large cruise ships. Some very very small,
Speaker 1: like hundred person cruise ships can into the harbor and
Speaker 1: then tender in. But they don't even have a marina
Speaker 1: for cruise ships. And that's that's all by design. The
Speaker 1: William and Gwillian Tourism Ministry has a very specific vision
Speaker 1: for how they manage tourism on the island, which is
Speaker 1: to keep prices relatively high. The average hotel price in
Speaker 1: terms of the quality hotels on the island is around
Speaker 1: a thousand dollars a night, and to keep crowd sparse
Speaker 1: and um, this is really what helps the island retain
Speaker 1: that specialness, is that it's not overrun, it's undeveloped, it's
Speaker 1: very tranquil, Um. The beaches are completely pristine, and the
Speaker 1: people who go there make a commitment to go there.
Speaker 1: You have to take at least two different plans, like
Speaker 1: you can't take a direct light twin Will unless you've
Speaker 1: got a private jet. Um. It's it's really a commitment. Um.
Speaker 1: And that's kind of what makes it special. Yeah. I agree.
Speaker 1: And and it's there's something about you know, the resorts there,
Speaker 1: it's they're really gorgeous. But I have to also say
Speaker 1: that I went there the first time for my honeymoon,
Speaker 1: and it was in September Ber It was hurricane season,
Speaker 1: so much of the Caribbean was shut down and they're like,
Speaker 1: do you want to try this place called Aguilla? And
Speaker 1: we're like okay, and so we went. But the beaches
Speaker 1: are the most beautiful that I've ever seen. Yeah, I
Speaker 1: was blown away. I've seen some pretty spectacular beaches in
Speaker 1: my lifetime, but particularly so. I stated a new resort
Speaker 1: called Aurora Anguilla, which is really pushing the luxury quotient
Speaker 1: on the island. And that's saying something. This is a
Speaker 1: high bar already, but they brought in a culinary team
Speaker 1: from eleven Madison Park. Um, it's a big deal. What
Speaker 1: they're doing down there. And they're located on a little
Speaker 1: beach called Rendezvous Bay, and it is one of the
Speaker 1: most beautiful beaches I've seen anywhere. No surprise, it's been
Speaker 1: rated one of the best beaches in the Caribbean by
Speaker 1: basically every publication in the world. So you know, well, Nicky,
Speaker 1: what are they What are they doing differently in terms
Speaker 1: of because there are you give a nice overview of
Speaker 1: some of the resorts there. What is this new resort
Speaker 1: doing that maybe sets it apart? Well? Really, you know,
Speaker 1: Anguilla has always has always had a strong pride in
Speaker 1: its food scene, but I found it to be a
Speaker 1: little bit patchy. There's there's great places, and there's not
Speaker 1: as great places like anywhere else. Um. I think what
Speaker 1: Aurora has done is really raised the caliber of that
Speaker 1: food scene to a totally new place by bringing in
Speaker 1: these incredible chefs from New York who are building the
Speaker 1: first kind of prefix style menu on the island. On
Speaker 1: a beautiful little beach side patio. You can listen to
Speaker 1: the waves crash and while you have this like phenomenally
Speaker 1: artistically plated meal. Um. And all of the restaurants are
Speaker 1: run by the same eleven Madison Park team, so the
Speaker 1: caliber of their food is a real knockout. Well, NICKI,
Speaker 1: I wish that story would have come out a couple
Speaker 1: of weeks ago. Would have saved me a lot of
Speaker 1: time in agony in my own research when it comes
Speaker 1: to travel insurance had other great installment of Bloomberg pursuits
Speaker 1: this week are big thanks to arts columnist James Tarmy
Speaker 1: and travel editor Nikki Eckstein for their time. Don't tell James,
Speaker 1: but I'm skipping the social claps and all them all
Speaker 1: about those experiences too, and that reps up the weekend
Speaker 1: edition of Bloomberg Business Week from Bloomberg Radio. Thanks so
Speaker 1: much for joining us. I'm Carol Masser and I'm Tim Stanovk.
Speaker 1: Be sure to tune into Bloomberg Business Week Monday through Friday,
Speaker 1: starting at two pm Wall Street Time on Bloomberg Radio.
Speaker 1: You can also watch our daily broadcast on YouTube just
Speaker 1: search Bloomberg Global News. Also check out our Bloomberg Business
Speaker 1: Week podcast. You can find it at Bloomberg dot com, Apple,
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Speaker 1: the Bloomberg Terminal. You can also see me on Bloomberg
Speaker 1: Quick Take available on bloomberg dot com, slash qt, and
Speaker 1: streaming platforms like Roku, Apple TV, Samsung TV and more.
Speaker 1: Have a great weekend everyone, stay safe. See and Anguilla.
Speaker 1: This is Bloomberg