Indo-Pacific Economic Framework for Prosperity (IPEF) Focuses on Supply Chains

The last few years have 
brought up a number of 
supply chain issues.

Supply chains are important and that comes from the development of treaties, agreements, and other understandings of how to conduct business. With the many different supply chain issues that have arisen over the past few years there is no wonder there is an attempt to improve these pathways. There will be a level of coordination among a number of nations to help improve access to certain resources for all of them.

Consider that manufacturing and nation building requires a level of consistent and steady supplies. Geopolitical issues, COVID, and canal blockage have taught us that certain materials and supplies might better be secured through more manageable networks. (I wrote a few pieces a while ago Adaptive Supply Chains, Clusters and Networks, Supply Chain Integration,  DC Exports)

You may also be interested in the purposes of supply chain enhancements....

The White House states "..revitalize U.S. manufacturing, facilitating the steady supply of the materials, components, and inputs that U.S. companies rely on to compete effectively on the world stage."(Department of Commerce, 2023, para 5)  

Read Substantial Conclusion of Negotiations on Landmark IPEF Supply Chain Agreement

The report further goes on to say the activities of the IPEF are in line with future industry investments, "$400 billion of new private sector investment in major manufacturing projects in sectors like clean energy, semiconductor fabrication, and biotechnology, since President Biden took office. This has resulted in nearly 800,000 new manufacturing jobs and the most robust manufacturing growth since the 1950s."(US Dept. of Commerce, 2023, para 17).

Supply chains can impact our businesses and the competitive position of those businesses. Furthermore, improved supply chains develop resource obtainment and overall adaptability to keep those supply chains functionable. We have learned that disruptions create economic chaos. As an additional point, when supply chains become efficient they also impact the root costs of other aspects of the economy. Export infrastructure is fundamental to strong supply chains.

 IPEF Met in Detroit to discuss to discuss Pillars I, III, IV. You may read more about the three pillars in Press Statement for the Trade Pillar, Clean Economy Pillar, and Fair Economy Pillar (Department of Commerce, 2023).

Pillar I (Trade)

Pillar III (Clean Economy)

Pillar IV (Fair Economy)

Department of Commerce, (May 27th, 2023). Substantial Conclusion of Negotiations on Landmark IPEF Supply Chain Agreement. [Press Release]. https://www.commerce.gov/news/press-releases/2023/05/substantial-conclusion-negotiations-landmark-ipef-supply-chain

Department of Commerce (May 27th, 2023). Press Statement for the Trade Pillar, Clean Economy Pillar, and Fair Economy Pillar. [Press Release] https://www.commerce.gov/news/press-releases/2023/05/press-statement-trade-pillar-clean-economy-pillar-and-fair-economy

Russia and Belarus Giving Away Nukes: How the Business Climate Changes

As we think about the supply chain interruptions that have occurred the past few years we begin to see this split continue to grow around geopolitical issues. Russia has transferred nuclear weapons to Belarus and that is a sign of escalation. As expected, it is condemned. The business climate will change because of these escalatory situations that create new business risks. For the most part, this is expected.

Personally, I think we should be reducing these nuclear stocks across the globe. Spreading them out to other countries creates inherent risks for management. The article below indicates that these weapons are being traded for loyalty (At least that is what I understand.). Its a concerning gesture and if life has taught man anything loyalty that is bought is fleeting. 

It looks like an unwarranted and political based escalation because it is Russia that invaded Ukraine and not the other way around. Everyone seems to have respected Russian territory thus far so there is no threat of this magnitude to justify nuclear dissemination. Perhaps this conflict creates an excuse to redraw the red curtain. 

We as American people will need to think about our competitive capacity and make the changes needed to ensure we maintain a top advanced position. It is more about defensive capability and economic health. We maximize our options when we are in our most competitive state. Whether these situations eventually subside or not, it makes sense to get involved in self-growth.

What kind of business impact might we expect?

1. Supply chain issues between pro communism and pro capitalism.

2. Data theft and hacking will increase.

3. As U.S. adjusts we might see industry strategy changes.

4. Some materials might be more difficult to get forcing either new product designs and/or new mineral sourcing.

5. Defense industry will get a boost. That would include suppliers.

6. In the U.S. we probably would see more collaboration as more important issues take precedence. 

7. Some investment adjustments are likely to occur.

When these things happen and it appears hazardous then it is expected nations will become concerned and adjust.

A scary article....

Lukashenko offers nuclear weapons to nations willing ‘to join the Union State of Russia and Belarus’

Memorial Day 2023

Today is a day of remembrance. We went through a lot of sacrifices as a nation and lost a lot to have those freedoms. Today, I'm going to attend one of the memorial services. 

Tentative Debt Agreement Obtained for U.S. Government Funding and Debt

This is good news. That doesn't mean that we don't have a problem and more work to do to balance the budget but a big hurdle in stability was found. Not everyone is going to be happy but its a start. 

Flowers and Dolphins from Shelter Island

There are few things in life that are as beautiful as flower and exciting as watching dolphins jumping out of the water. While we seem to get into the bustle of things quickly sometimes it is beneficial to start one's day with a little of the simple pleasures of life. 

Defrauding Research Funding: electromagnetic analysis scientists learn values the hard way!

Ethics in science is very important because we want our resources being used for exactly what they are expected to be used for. It is important to remember that fraud and cheating end up costing the rest of society some serious money. Those are resources that can be used in other places to solve other national problems. Researchers should always seek to maintain a higher standard of integrity. 

Grants are important for funding new innovative research and it is necessary to have some level of oversight to ensure the money is being spent accurately. What I find interesting about this is that despite their high education it didn't seem to impact their values. I wonder how they thought at some point someone isn't going to ask about these expenses. 

While, depending on study design and department need, there could be use for things like cameras or a other few pieces of equipment I would doubt the private hunting club would make that list. 

"$200,000 in personal expenses on Fraley’s PCard, including, two four-wheelers and a trailer, two Sony 52-inch flat-screen televisions, Apple computers, iPads, OtterBox protective cases, iPods, Kindle E-readers, Leica and Nikon digital cameras, video cameras, a mini micro pinhole video camcorder pen, a night vision monocular, two pairs of binoculars, Bose headphones, a 3D printer, sports watches with heart-rate monitors, sunglasses, materials used to perform private consulting contracts, computer monitors and solar panels for a private hunting club, a personal video network for home use, and an uninterruptible power supply for a tennis ball machine."

When I have worked with grants typically you would be required to submit budget updates and outline many of these expenses prior to approval. However, in normal large research grants you may have other expenses that come up that are not initially planned so cash equivalent resources are often needed. Stealing on this level would seem sort of obvious you are going to get caught. 

Notice they also engaged in violation of the consulting policy and used private labs for personal gain. It appears they were on a roll with the self enrichment. Either way, its a good catch.

Former chief scientist for GTRI pleads guilty to conspiring to defraud Georgia Tech and the CIA

Morgan Stanley Predicts Soft Landing Economy 2023 (A Few Thoughts....)

Morgan Stanley came out with a few insights this year. A Soft Landing for the U.S. Economy?

Key Takeaways:

• Morgan Stanley Research believes the U.S economy can achieve a “soft landing,” which means slowing economic growth while avoiding a recession. 
• The U.S. housing cycle, income and spending trends, a stable labor market and receding inflation point to a positive outcome. 
• However, banking-sector turmoil and a resulting credit squeeze still pose some recession risk.

A few thoughts.....

This is year is interesting because we are a few years past COVID but about at the point where companies have implemented long-term strategies post-Pandemic that include a more online Digital Era approach. Unemployment is low, interest is high but declining, investment market is rising, and the risk of recession is declining. My biggest focus is whether there will be a growth spurt toward the end of 23' and beginning of 24'. There was an economic boon after COVID which would indicate the theory was sort of correct on that front but now it is nearly 3 years later so that is a different story. A small recession might be expected but unless something odd happens we should see some growth. If lucky significant growth.

The other question that I keep in the back of my head is whether or not we are actually going through an economic platform shift?  (I don't know, its possible just like the printing press) If so we would have a fast ramp up of technology and innovation as fundamentals tied to new infrastructure coming online (i.e. Digital Era Renaissance. 2023/4 would be sort of where we see whole new lines of technology come out. Its not immediate but over a short period of time.). There is some indication of this in the increase in AI, EV. online education, fiber optics, cell phones, semiconductors, etc... Just like how the Internet produced significant wealth, the digital era will better blend these two planes of commerce to create faster innovation (i.e. small electric commuter carts, stronger space travel with new batteries, or new fuels. I still like the idea of electric molectular solar propulsion.  I'm being a little silly about it. Sorry. 😓 )

The other things that might be of interest is how the numbers act under different economic assumptions of the digital versus physical world assumptions of the Industrial Era. They use different assumptions and therefore there are going to be adjustments in how these numbers represent digital items versus physical items. Basically, many of these theories would need to be tweaked and adjusted as well as the development of whole new economic theories tied to the age. The theories must change when technology creates new human behavioral patterns of buying, interacting, and engage with the environment. (I'm sorry I'm a little out there in left field but who knows what we find. Most theories are only partially correct. That is why we debate them.)