As the world grapples with the grotesque killing of Washington Post journalist Jamal Khashoggi in the Saudi Arabian consulate in Turkey, business leaders worldwide are carefully navigating their relationships with Saudi Arabia.

While some had been optimistic that Mohammed bin Salman represented a relatively progressive face for the notoriously opaque Sunni powerhouse, what looks to be the crown prince’s intimate direction of the abduction and murder of Khashoggi has roiled the diplomatic and business world.

The crisis represents the many ways that Saudi Arabia has straddled its repressive reputation with its recognition that as a rentier state, its existential justification as an absolute monarchy depends on oil money payouts to its citizens. Concerned about the sustainability of this model, bin Salman has made efforts to combat high rates of unemployment, spur creativity, and diversify Saudi Arabia’s economy. The most notable and publicized of these efforts is Saudi Vision 2030, which includes the Public Investment Fund—Saudi Arabia’s sovereign wealth fund.

The plan involves using oil money to garner influence in a different way—through taking stakes in and buying from prominent companies around the world, often in the United States. Saudi Arabia has invested billions in American companies, including WeWork and Uber, via SoftBank, the Japanese multinational holding conglomerate. In fact, Saudi Arabia has invested $45 billion in SoftBank’s Vision Fund.

One outgrown of Saudi Vision 20130, the Future Investment Initiative is set to begin Tuesday. But featured attendees, including JPMorgan’s CEO Jamie Dimon, Blackrock CEO Larry Fink, Uber CEO Dara Khosrowshahi, US Treasury Secretary Steven Mnuchin, and IMF Director Christine Lagarde, have pulled out of the summit in the wake of Khashoggi’s murder and Saudi Arabia’s blatantly inconsistent cover up.

But business leaders pulling out of the conference may ultimately amount to just a slap on the wrist, with the conference enough of a throwaway that publicly withdrawing is the lowest-risk way for companies to manage optics without substantively threatening business as usual. Similar to President Trump’s public lament that distancing the United States from Saudi Arabia isn’t worth the billions of dollars at stake, American companies have mostly avoided making more than symbolic gestures.

With so much at stake, it’s hard to imagine that companies will sever ties. Nonetheless, the Kingdom must reckon with the question that defines it: at what point do payouts stop working?

Khashoggi Dead, Saudi Arabia Faced with its Existential Question

Nearly three years after Volkswagen Group’s (VW) exposure in the notorious “Dieselgate” scandal, the company seems to have rebounded strongly and done away with the bitter taste that the colossal dupe gave consumers. In 2015, regulators discovered that VW had fitted approximately 482,000 cars in the US and 11 million more worldwide with a “defeat device.” The device triggered upon smog inspection of the car and artificially limited emissions during tests, but cars would then emit 40-50 times that amount when driven on the road.

VW indeed felt the sting for its actions; in the months following the scandal, various automobile trend sites showed that interest in VW cars – particularly those with diesel engines – had dropped precipitously. Sales, especially VW’s diesel automobiles, declined somewhat as well.

However, Volkswagen has somehow managed to rapidly overcome this PR nightmare, which included a hefty $25 billion corporate sanction. In the wake of Dieselgate, VW has made strategically crucial decisions that, even now, look like they are paying off handsomely.

VW’s first key move was to assign Scott Keogh as CEO of VW Group North America. In the world of Audi, Keogh is considered somewhat of a legend. Keogh joined Audi of America in 2006 as its chief marketing officer and eventually became its president two years later. Audi had been seriously struggling to penetrate the US market, but Keogh helped nearly triple Audi’s sales across the country during his tenure.

More significantly, however, is VW’s $48 billion investment into a line of affordable electric vehicles under the slogan of “Electric for All.” For a company known for lingering on its obsession with diesel and other fuel-based engines, VW has taken a sharp turn towards the electric vehicle world. Indeed, the company’s massive investment raises questions. Is this just a stunt to overcome the PR nightmare and make the public disassociate VW with notions of dirty emissions? Volkswagen AG CEO, Matthias Muller, has voiced a rather strong opinion saying that he still sees an impending revolution back to diesel vehicles.

Whatever the merits of these claims may be, VW is taking some concrete steps to prove that it’s ready to compete in the world of electric vehicles. It recently displayed its futuristic Audi e-Tron in San Francisco, demonstrating that the company can capitalize on its exterior design while also transitioning to electricity. The company is even requiring its mangers to drive EVs. It projects to make 25% of its sales of vehicles through EVs by 2025, a forecast which would mean about 2-3 million EVs by that time.

While the company’s success in the long run in this area is far from certain, VW undoubtedly has the right pieces in play. It has phenomenal personnel that it’s introducing in strategic avenues, plentiful niche enthusiasts under its Porsche and Lamborghini brands, and the capital to make a strong entrance into the EV world.  The very scandal that seemed to put VW on the brink of disaster may actually have been the forceful push that the company needed towards EVs in order to compete in the rapidly changing auto industry.

Dieselgate and Volkswagen’s Reemergence

President Trump recently announced an intention to direct the Environmental Protection Agency to lift a summertime prohibition on 15% ethanol gasoline. Trump announced the plan shortly before a campaign rally in Iowa — the largest ethanol-producing state in the country.

Ethanol is a biofuel created primarily from corn. Currently, gasoline containing 10% ethanol is sold year-round in fuel stations across the country. Congress has also approved the sale of 15% ethanol blends for vehicles with model years 2001 and newer. However, the Clean Air Act prohibits retailers from selling E15 from June 1 to September 15 because of environmental concerns. This has long vexed farmers who blame the seasonal prohibition for low corn prices.

Trump’s proposal faces opposition from environmental advocacy groups and oil suppliers who stand to lose profits if demand for ethanol increases. Environmental activists like the Sierra Club argue that the use of E15 during the warmer months of the year will lead to increased greenhouse gas and smog emissions. The American Petroleum Institute contends that the measure endangers consumers because most household vehicles are not equipped to safely use E15. Senators from oil-producing states, including Republicans, sent a letter urging the president to reconsider.

The plan sets the stage for a potential legal showdown about the interpretation of the Clean Air Act. The Act prohibits the summertime sale of gasoline blends that vaporize into the atmosphere at a rate above a certain threshold. The statute allows the EPA to issue waivers for 10% ethanol gasoline, but the EPA has yet to apply such a waiver to 15% ethanol blends. Trump’s proposal directs the EPA to promulgate a rule that would allow the agency to issue E15 waivers.

Opponents of the proposal argue that the EPA lacks the authority to extend E15 waivers without congressional approval. Although the EPA previously stated that it did not have such authority, the agency is confident that it could implement the president’s order. Newly minted Supreme Court Justices Gorsuch and Kavanaugh could be pivotal votes in the event of a legal challenge.

President Trump’s announcement comes just a month before the midterm elections. Political analysts have called it a clear attempt to aid incumbent Republicans in farmer states. Trump may also be trying to restore support among voters that felt scorned by retaliatory tariffs on American crops as part of the president’s trade war with China.

Good News for Corn Farmers

SoftBank Group Corp. is a holding company that manages its group companies and provides information technology and telecommunication services as one of the world’s largest public companies. One of SoftBank’s many goals is its Vision Fund, which seeks to raise $100 billion in an effort to “invest in businesses and foundational platforms” that it believes will advance innovative technology. Many investors have committed to helping SoftBank reach its goal, but the most lucrative investment has come from Saudi Arabia, totaling $45 billion. However, the recent disappearance of journalist Jamal Khashoggi, when he entered the Saudi Consulate in Istanbul earlier this month, has caused SoftBank shares to tumble.

As the facts surrounding Khashoggi’s disappearance and apparent death unravel, SoftBank is placed in a predicament: start-ups may not want to receive Vision Fund money, or SoftBank may lose its largest investor. Yet, it is important to note that the business world is not concerned about SoftBank; rather, these businesses’ concerns are with Saudi Arabia and its possible ties to Khashoggi’s disappearance and other human rights abuses. These concerns have materialized as several top executives and sponsors from JPMorgan Chase, BlackRock, Mastercard, Fox Business Network, Uber, and Ford have withdrawn from attending an investment conference in Saudi Arabia.

The executives and sponsors that distanced themselves from Saudi Arabia have been labeled as “America’s New Diplomats.” Although President Trump stated that he would consider “very severe” measures against Saudi Arabia if it is found responsible, some have questioned his response. They note that President Trump has “not called for or appeared to support an independent US investigation, or an international one under the auspices of the United Nations.” Additionally, while it is possible that Secretary of State Mike Pompeo gave Saudi Arabia a stern message in private during his meeting in Riyadh this week, others question whether his optics of smiles in public were wrong.

Ultimately, we must ask whose responsibility it is to challenge possible human rights abuses; is it the business sector’s, politicians’, or the legal system’s responsibility? While some may view business executives as the new diplomats by standing firm against Saudi Arabia, it is important to note that executives are not diplomats since they still share substantial ties with Saudi Arabia. As for politicians, if countries follow the U.S.’ example of tip-toeing around Saudi Arabia’s human rights abuses, will the message ever become clear? Lastly, while executives and politicians discuss what to do next, does that leave legal action off the table until they have decided what course of action to take, or is it up to individuals and groups, such as the United Nations, to act and pressure these organizations?

Soft Bank and Saudi Arabia, More than Just Money

The massive Walt Disney (DIS.N) media and entertainment empire is home to Pixar, Mickey Mouse, the Marvel movies, and the famed Star Wars franchise. The company also owns ABC and ESPN. In June 2018, Disney proposed a $71.3 billion bid to acquire another powerful media conglomerate, Rupert Murdoch’s Twenty-First Century Fox. Fox is the source of countless successful TV shows and box-office hits, including The Simpsons, The Shape of Water, Avatar, and X-Men. It is also home to a vast array of network and sports television, including Fox News, the NFL Sports Network, National Geographic, and over 300 international channels.

Unsurprisingly, Disney’s proposed $71.3 billion acquisition of Twenty-First Century Fox has raised antitrust concerns. The Justice Department, which is responsible for the investigation of antitrust cases, took a hit on June 12, 2018 due to a defeat in court while attempting to block the merger of AT&T and Time Warner. The U.S. District Court’s “blistering” decision criticized the Justice Department’s arguments as out of touch with the reality of today’s constantly evolving media landscape. Notably, the two parties to the AT&T-Time Warner merger operate in “different rungs in the media industry supply chain,” a fact which serves to mitigate the antitrust issue of harm to competition. However, the Fox acquisition is arguably a different beast, as it places Disney in a position of box-office “clout unmatched by any other traditional movie maker.”

Nonetheless, the Justice Department’s resounding defeat in district court may have forced it into a position more amenable toward corporate media acquisitions. As such, on June 27, 2018, the Justice Department approved Disney’s purchase of Fox under a settlement that requires Disney to sell Fox’s 22 regional sports networks.

The “clout” Disney will possess through the acquisition of Fox is perhaps one reason why the European Commission, the EU’s politically independent executive arm, has been slower to dismiss the antitrust issue. In response to the EU’s continued concerns, on October 12, 2018 Disney offered concessions via a proposal to the EU competition enforcer. The Commission will decide whether to approve the proposal by November 6, 2018. Although the details have not yet been released as to what the concessions may include, Fox President Peter Rice confirmed the deal is on-track to close in the first half of 2019, pending approval from the EU.

If the EU decides in favor of the acquisition, Disney’s $71.3 billion purchase of Fox will radically change the power distribution in media and entertainment.

Walt Disney On-Track to Acquire Twenty-First Century Fox, Pending EU Approval

On Monday, October 15^th, Sears filed for Chapter 11 bankruptcy with a plan to close 142 of its 700 stores by the end of the year. Though many view the downfall of the retailer as inevitable in the age of e-commerce, the bankruptcy proceedings have revealed the flawed financial engineering that led Sears to its demise.

Eddie Lampert acquired Sears in 2005 for $11 billion when he engineered the merger of Sears and Kmart. Once hailed as a financial genius for his early success betting on AutoZone, Lampert’s poor decision-making drove Sears to bankruptcy. Lampert neglected the inventory and appearance of Sears and Kmart stores and instead focused on cutting costs and implementing a half-hearted digital makeover. Further, Lampert sold valuable Sears brands and carved out hundreds of stores into a separate real estate trust. Piece by piece, he siphoned away the valuable aspects of Sears’ business and left the in-store experience to rot.

Under the bankruptcy plan, Lampert has stepped down as CEO and will be replaced by a three-person executive committee. A bankruptcy judge approved $300 million in financing to keep Sears in business through the holidays. In addition, the company announced that Lampert’s hedge fund, ESL, is offering Sears an additional $300 million in loans. As Sears’ largest creditor, Lampert is positioned to control the company again if it emerges from bankruptcy protection. Even if Sears liquidates, Lampert’s holdings in Sears’ real estate will be worth hundreds of millions of dollars.

Under Lampert’s leadership, billions of dollars of shareholder and creditor money has been lost, thousands of jobs taken away, and one of America’s iconic businesses shuttered.

Financial Engineering Failure- Sears Files for Bankruptcy

In the last year, data privacy has become a significant issue of public interest. In 2017, the Equifax breach compromised credit information for 143 million Americans. In 2018, Cambridge Analytica was revealed to have obtained data of up to 87 million Americans to psychographically target voters. Often, there is a misunderstanding regarding the difference between the two. The Equifax breach was what is commonly understood as a hack, where bad actors gained unauthorized access to data. On the other hand, Cambridge Analytica obtained data through Facebook, not a bug. Cambridge Analytica collected data on individuals and their friends through a feature provided by Facebook to software developers.

Companies like Facebook and Google are experts in monitoring the everyday usage of their platforms and monetizing the data collected. Shoshana Zuboff, retired professor of Harvard Business School, describes this business model as surveillance capitalism, where companies monitor the everyday use of a product or service to predict and modify human behavior and generate revenue. The data collected from likes, searches, and views allows Facebook and Google to draw insights and categorize individuals based on characteristics that third parties want to target. Facebook and Google have generated billions of dollars in revenue through this business model. Zuboff further asserts that surveillance capitalism has shifted privacy rights and choice of what remains private and what is monetized from the individual to tech giants.

As the conversation on data privacy in the US continues, companies with core business models of monetizing user data will face greater scrutiny. As wearables and smart home devices gain in popularity, the variety and quantity of data collected will also grow. Third parties potentially can gain insights into the homes and bodies of individuals that were not available before. Although the majority of third parties will use the new data to better market goods and services to consumers, the same data can allow bad actors to target individuals without their knowledge and modify behavior with more precision for non-commercial purposes like influencing voters.

Governments are starting to recognize this problem but mainly through a commercial lens. Europe enacted the General Data Protection Regulation (GDPR) and California recently passed the California Consumer Privacy Act (CCPA). These laws include new rights for individuals such as the right to erase their data and the right to say no to the sale of their data. However, surveillance capitalism is still a fundamental problem. As long as businesses rely on monetizing user data, there will be opportunities for bad actors to abuse platforms through legitimate features to predict and modify behavior. It is yet to be determined at what point Americans will cease to value tech products and services over the loss of data privacy and choice.

Surveillance Capitalism, it’s a feature not a bug

Corporations from their inception have been construed as a nexus of stakeholders, including employees and consumers. They are given the blessing of the State to pursue a commercial, yet publicly necessary enterprise. Nevertheless, that view of corporations has given way to a more transactional model wherein employees, in exchange for their wage, have ceded their right to exercise their natural stake in their employer. Since the 1970s, a concerted attack on unions and a grand bargain between management and shareholders has meant that even employees who do care to exercise a say in the direction of their company have had their voices drowned out.

But, in the tech industry, a tight labor market where talent attracts a high premium, workers are starting to raise their voices in a way that employees in other industries haven’t. For example, tech workers have started to push back against working on projects they believe are unethical. The New York Times highlights the case of Dr. Jack Poulson, a research scientist for Google who ultimately quit after discovering the company was working on a search engine that would comply with China’s strict censorship requirements. For companies like Google, Facebook, and  Amazon, a significant burden of ethical deliberation has fallen on tech workers to determine how to exercise their power to achieve a moral, sustainable future for their industry.

Organizations, such as the Tech Workers Coalition, have tried to build an alliance among engineers and more precarious contract workers in order to exert pressure on managers and shareholders to pursue projects more in line with the employees’ and companies’ declared values. Nevertheless, even for this privileged class of workers, the deck is still stacked against them. For one, organizing is much harder than ever before, especially in an industry that champions individualism and a take-it-or-leave-it approach with employees who disagree. It also remains unclear whether tech workers should form unions or innovate forms of partnership more suited for an increasingly service-based economy.

There may also be a role for policy in empowering tech workers and others to exercise their voice in partnership with business owners. For example, organizations, such as the Oakland-based Sustainable Economies Law Center, are working to champion worker-owned cooperatives as a future corporate model. Furthermore, Senator Warren has been advocating for more German-style codetermination as a solution while the Labour Party of the UK has been advocating that a third of company board seats must be reserved for employees.

Some employers may view tech workers raising their voices as an insurrection, but in the broader historical narrative of what corporations are and the purposes they serve as legal instruments, we’re merely seeing a return to the norm. Or, perhaps we may see a more harmonious vision of stakeholder sovereignty, employees, managers, and shareholders alike, in a time replete with moral quandaries.

Tech Workers Learn to Say No to Unethical Projects

We are currently perched on the precipice of a biomedical revolution. In the coming years, RNA interference (RNAi) will fundamentally reshape the pharmaceutical landscape. RNAi may help effectively eliminate many of the world’s most resilient viruses, curing some of the most intractable diseases on the planet—everything from Hepatitis B to HIV may be completely neutralized.

RNAi works by destroying flawed protein-building instructions caused by viruses that corrupt DNA. Proteins perform a variety of important functions in the body—some proteins help break down food; others transport oxygen around the body; still others help regulate blood-sugar levels. These various proteins are constantly being produced in the body’s cells, and DNA helps cells know which proteins to produce and when to produce them.

DNA is essentially a master-list of instructions stored within every cell; it is the all-encompassing recipe book containing the steps for making every possible protein. Cells regularly copy small segments of DNA—like photocopying excerpts from a large list of instructions—and ship the appropriate excerpts to millions of ribosomes, which function as the protein-builders within the cell. Upon receiving these instructions, the ribosomes get to work, constructing the appropriate proteins. In short, the cell is like a factory—DNA is the factory’s instruction manual, containing steps for all production processes; ribosomes are the workers, toiling away on the assembly line. This well-oiled factory performs extremely well, until a virus intervenes.

DNA viruses, such as Hepatitis B and HPV, breach cells and corrupt DNA—effectively rewriting portions of the instruction manual and sending flawed protein-building instructions to ribosomes. This is where RNAi—the aforementioned biomedical breakthrough—can save the day. RNAi can selectively intercept and destroy these flawed instructions before they reach the cell’s ribosomes. Using RNAi, all DNA viruses (from Hepatitis B to HPV to Herpes) could potentially be stopped in their tracks.

Less than 20 years ago, the legitimacy of this treatment was widely questioned, with scientific literature lamenting that RNAi “has had only limited success” and concluding that “the long-term potential of [RNAi] has yet to be determined.” However, skepticism and dismay were replaced by profound optimism just a few months ago, when the FDA approved the first-ever commercial RNAi drug: Patisiran. This marked the first major step towards making RNAi a staple tool in our medical arsenal. Indeed, the “landmark approval” was described as “one that will surely rewrite pharmacology textbooks”. The second—and arguably even more important—step came just last week, when Johnson & Johnson signed a deal with Arrowhead Pharmaceuticals, Inc. to develop and market another RNAi drug.

Arrowhead is developing an RNAi therapy specifically targeted towards curing Hepatitis B. Johnson & Johnson has purchased the rights to develop and market Arrowhead’s proprietary drug. But these development rights came at a hefty price—Johnson & Johnson will pay $3.7 billion over the course of the deal. Even for a large company like Johnson & Johnson, this deal is massive in scale; to put things in perspective, Johnson & Johnson only earns about $800 million per quarter in revenue from treating infectious diseases. The deal with Arrowhead will therefore cost Johnson & Johnson the equivalent of its entire annual infectious disease treatment revenue.

If companies are willing to invest this much, they must expect RNAi to dominate disease treatment—they are banking on the industry-shattering potential of RNAi. This means a world without DNA viruses draws ever closer, and the implications are profound for every field and discipline. For the economy, this means a stronger, healthier workforce producing and demanding a larger quantity of commodities. For the environment, this in turn means greater pressure on scarce natural resources. Widespread usage of RNAi is also certain to bring a plethora of complex new legal problems, from IP and licensing issues to medical malpractice suits. RNAi thus seems poised to radically transform not only the medical landscape, but potentially every aspect of human society.

Johnson & Johnson Deal Signals Industry-Shattering Potential of RNAi

India’s already fast-growing economy could be supercharged by female entrepreneurship. Currently, only about 27% of women are pursuing a career or looking for work in India. The country could add up to $770 billion to the economy by addressing that gender inequality.

India’s government launched several programs to help women succeed in the world of startups. For example, the government introduced a startup-oriented loan program as part of Startup India.

The technology giants aren’t far behind the Indian government. Both Facebook and Google have recognized the role that Indian women could play in the tech boom. The companies have organized programs to support Indian women who want to launch their own startups.

However, merely investing in female-run startups won’t be enough to create the culture shift necessary for women’s entrepreneurship. The initiatives organized by private corporations as well as the Indian government will allow women to get their foot in the door, but they will not hold those doors open. It can be incredibly difficult for women to penetrate the market in a country where relatively few women work outside of the home. Indian women have the tremendous opportunity to re-write the world of startups, but it won’t be easy.

As Laurel Thatcher Ulrich said, “Well-behaved women seldom make history.” So, let’s hope that Indian women are ready to cast aside their manners to become the tech rebels that future generations need them to be.

Can India Become a Hub