Good morning.
Some takeaways from Day 2 of the live Fortune CEO Initiative meeting in Washington:
“Efficiency” was the watchword of business for the last half century; “resiliency” may be the watchword for the next.
The CEOs talked of the need to prepare for disruptions due to pandemics, supply chain bottlenecks, labor shortages, and climate change. “It’s glocalization,” said Siemens U.S. CEO Barbara Humpton. “We have the digital tools available now to innovate globally, and then use the tools available to us to make things locally.” Simon Segars, CEO of chip designer Arm, said semiconductors “is a cyclical industry, but this is the most extreme cycle we have ever seen, and it will take years” to bring on new capacity.
Business has taken the lead in the climate debate, and wants the government to act.
BCG global chair Rich Lesser and Santander executive chair Ana Patricia Botín, who were in Glasgow for the climate conference, said the level of business activity was unprecedented. Stanley Black & Decker CEO Jim Loree said, “We are going to ask all our key suppliers to sign up for science-based targets. We have thousands of them. If company after company starts to push their supply base, we will get the momentum.”
But while business is prepared to move, the CEOs agreed government action was necessary to move far enough and fast enough.
Human capital is now the prime source of business value, and needs more focus from business and government.
“The number one constraint in running our business these days is the availability of talent,” said Deloitte U.S. CEO Joe Ucuzoglu. Senator John Hickenlooper said efforts to reskill the U.S. work force have reached “an inflection point.”
China will remain a great opportunity and a great threat for business.
“The relationship hasn’t been this bad since 1972,” said Amy Celico of Albright Stonebridge Group. “The real challenge is that the governments and political figures within the countries have a zero sum view of each other,” said former trade ambassador Susan Schwab. But Senator Mark Warner said the effort to build an industrial policy to compete with China is one of the few issues that can drive bipartisan action in Congress.
COVID is not going away.
“I think by March, April, May, we will have a fully vaccine-resistant variant. The probability of us seeing a vaccine-resistant strain is very high. This is just how viruses work,” said Mark Dybul, CEO, Enochian BioSciences.
You can read more from the conference here.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
Pfizer antiviral
After previously insisting it could produce enough of the stuff through contract manufacturing, Pfizer has made the surprise move of authorizing generic versions of its new COVID-19 antiviral treatment, a lá Merck. The deal covers poor countries; richer countries will have to pay a lot more for their pills. Pfizer has also now submitted the antiviral (which is no substitute for vaccination, kids) for emergency authorization by the U.S. Food and Drug Administration. The Biden administration is reportedly planning to buy enough doses to treat 10 million patients. Fortune
Amazon vs Visa
Amazon has started telling its customers in the U.K. that they will soon no longer be able to use Visa credit cards issued in the country on the e-commerce platform, because of high fees. Visa debit cards and foreign-issued Visa credit cards will still be usable, as will credit cards from Mastercard and Amex. Visa: "We are very disappointed that Amazon is threatening to restrict consumer choice in the future. When consumer choice is limited, nobody wins." Bloomberg
Hong Kong
The Hong Kong flag carrier Cathay Pacific may ask its pilots to live outside Hong Kong for several months, due to the harshness of its COVID-19 quarantine policy (well, harsh unless you're Jamie Dimon or Nicole Kidman). Financial Times
Experimental nuclear
A Bill Gates-backed experimental nuclear power project will be built in Wyoming, near a soon-to-close coal plant. TerraPower's Natrium plant will feature a sodium-cooled fast reactor (natrium is the Latin name for sodium, and a synonym for it in many languages) and molten salt energy storage, which the company says will make it safer and cheaper to operate. (Critics say liquid sodium carries risks of its own, as it can catch fire when exposed to air or water, and Gates may be on the wrong track here.) Fortune
AROUND THE WATER COOLER
Methane surprise
Scientists recently figured out how to spot methane emissions from space, and guess what they found: "super-emitters" around the world are belching out masses of the stuff, and in many cases their emissions are not accounted for in official inventories. Think leaky pipelines, oil and gas fields, landfills and so on. Methane is a far more potent greenhouse gas than carbon dioxide is, so this is bad news for those touting gas as a transitional energy source while we shift from coal to renewables. Space.com
Next trillion
Google's next (and third) $1 trillion in value will come from its mainstay, search, according to CEO Sundar Pichai. Of course, he meant an evolution of search, as people increasingly ask spoken questions of the service. Fortune
Chinese crypto
Changpeng "CZ" Zhao, the CEO of cryptocurrency exchange Binance, does not "see any way that China users can continue to use crypto platforms like us in any reasonable fashion," thanks to Beijing's very effective crackdown on the sector. And that crackdown is intensifying: yesterday the Chinese authorities indicated they were going to close any loopholes through which holdout miners are continuing operations in the country. Fortune
Fighting deforestation
The EU may ban imports of beef, soy, palm oil, coffee, cacao and timber from areas that are at risk of deforestation. These six products representing 19% of the EU's commodity imports, and the ban (if it passes) would be "sending a clear message to major supermarkets and agricultural commodities traders: one of the largest economies in the world won’t accept agricultural products linked to deforestation," said Nico Muzi, Europe director of the NGO Mighty Earth. Financial Times
This edition of CEO Daily was edited by David Meyer.
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