Wednesday, April 19, 2023

The rise of ‘reglobalization’

Bloomberg New Economy Daily

Today we're coming to you from Powerscourt near Dublin at the Bloomberg New Economy Gateway Europe conference.

Hello from Ireland. I'm Erik Schatzker, editorial director of Bloomberg New Economy. We're holding Bloomberg's first New Economy event in Europe this week, and it couldn't be timelier.

As war continues to rage in Ukraine, a massive leak of top-secret US intelligence has shocked its allies, undercut trust and raised new questions about Europe's role in a divided world. Simultaneously, businesses in the UK and across the continent are still navigating the confusing and uncertain outcomes of Brexit; the financial industry has been shaken by bank failures on both sides of the Atlantic; and debate is swirling over the need (or not) to regulate the extraordinary feats of generative artificial intelligence.

Our Gateway program tackles all of these issues head-on. We built this conference around the theme of "Reglobalization." Why? Because the world isn't deglobalizing: trade is as essential as ever to the world economy. The supply chains that bottlenecked during the first years of the pandemic aren't being dismantled, they're being reengineered for resiliency.

Some of that is admittedly defensive. Companies such as Apple Inc., Microsoft Corp. and Foxconn are trying to reduce their overwhelming dependence on China by shifting some production to other countries. But some of these efforts are decidedly offensive. In both the US and Europe, governments are offering hundreds of billions of dollars in subsidies to lure clean-tech developers and semiconductor manufacturers while banning the sale of advanced chips and related equipment to China. India meanwhile has earmarked almost 20% of its 2023 national budget for capital investments.

Employees work on an assembly line in the mobile phone plant of Rising Stars Mobile India Pvt., a unit of Foxconn Technology Co., in Sriperumbudur, Tamil Nadu, India. Photographer: Bloomberg

The strategy appears to be working, at least in the US. Since the August passage of both President Joe Biden's Chips and Science Act and his massive, climate-heavy Inflation Reduction Act, companies have committed more than $200 billion to large-scale manufacturing and pledged to create 82,000 jobs, according to an analysis by the Financial Times. Taiwan Semiconductor Manufacturing Co. and South Korea's LG Energy Solution are two of the foreign multinationals making multibillion-dollar investments.

The European Union, seeking to double its share of semiconductor output to 20% by 2030, has a competing piece of legislation, the European Chips Act, as well as its own package of green funding in the Net-Zero Industry Act. And, still reeling from the shortages caused by Russia's invasion of Ukraine, the EU also has proposed a Critical Raw Materials Act to safeguard supplies in strategic areas such as carbon reduction, digitization, aerospace and defense.

Ireland, one of Europe's top financial hubs and high-value manufacturing centers, stands to benefit from these efforts. It's one of the reasons this is where we chose to convene Gateway Europe.

It will be years before we know how dramatic "reglobalization" becomes. However, the early signs point to a future of heightened tensions and intensified rivalries. Already, China has begun retaliating against Western restrictions with sanctions aimed at US defense contractors and an investigation of memory-chip maker Micron Technology Inc. It's also considering new curbs on exports of processes and raw materials critical to renewable-energy systems and the automotive industry.

In his October address to the Chinese Communist Party congress, President Xi Jinping said, "We will ensure the security of food, energy, and resources as well as key industrial and supply chains." The stakes couldn't be higher.

US President Joe Biden, left, is greeted by Leo Varadkar, Ireland's prime minister, as Biden arrives at Dublin Castle on April 13. Photographer: Chris J. Ratcliffe/Bloomberg

At Gateway Europe, you'll find answers to the questions these issues raise in panel discussions and one-on-one conversations featuring a distinguished group of speakers from the public and private sectors. Notably, on April 20, Leo Varadkar, who as Taoiseach serves as Ireland's prime minister, will speak at 11:20 a.m., and Ana Brnabić, prime minister of Serbia, will speak at 2:15 p.m. (all times BST, 5 hours ahead of New York).

Here's a link to the full program. You can watch it live on bloomberg.com starting at 9 a.m. BST today, 4 a.m. ET.

The following is a program guide using the five editorial pillars—finance, commerce, sustainability, resilience and security—we at Bloomberg New Economy use to organize our thinking and structure our content.

Finance

April 19

9:10 a.m. —  Spotlight on European Banking. Andrea Orcel, Group CEO and Head of Italy, UniCredit SPA

11:40 a.m. — What Silicon Valley Bank's Failure Means for the Innovation Ecosystem. Elodie Dupuy, Founder and Managing Partner, Full In Partners; Stephanie Galantine Heller, Managing Partner and Cofounder, Bootstrap Europe.

3:25 p.m. — The Policymakers View. Pablo Hernández de Cos, Governor, Bank of Spain.

April 20

11:55 a.m. — In Conversation with Philipp Hildebrand. Philipp Hildebrand, Vice Chairman, BlackRock Inc.

3:05 p.m. — Out of the Rubble: Can Crypto Make a Comeback? Teana Baker-Taylor, VP of Policy and Regulatory Strategy (EU/UK), Circle; Marcel Kasumovich, Deputy CIO, Coinbase Asset Management; Matt Sekerke, President, Ndogenous.

Commerce

April 19

9:30 a.m. — Reglobalization: The Transformation of Trade and Supply Chains. Pam Cheng, Executive VP, Global Operations and IT, Chief Sustainability Officer, AstraZeneca; Shannon K. O'Neil, VP and Senior Fellow, Council on Foreign Relations; Denis Redonnet, Deputy Director General and Chief Trade Enforcement Officer, Directorate General for Trade, European Commission.

10:50 a.m. — Navigating Europe's New Business Landscape. Kristine Braden, Head of Europe, Citi, and CEO, Citibank Europe; Declan Kelleher, Senior Advisor, APCO Worldwide; Michael O'Leary, CEO, Ryanair Holdings Plc.

11:20 a.m. — Into the Metaverse. Peggy Johnson, CEO, Magic Leap.

2:15 p.m. — Spotlight on AI. Lila Ibrahim, COO, DeepMind; Eva Maydell, Member of the European Parliament and ITRE Rapporteur on the AI Act.

3:45 p.m. — World Trade–Forging the Future. Frank Ryan, Chairman, IDA Ireland.

April 20

9:35 a.m. — The Brussels Effect: Regulating the World. Anu Bradford, Henry L. Moses Professor of Law and International Organization, Columbia University Law School; Helen Dixon, Commissioner for Data Protection, Ireland.

Sustainability

April 19

2:45 p.m. — Sky's the Limit: Where Aviation is Headed Next. Rachael Everard, Head of Sustainability, Rolls-Royce Plc; Val Miftakhov, Founder and CEO, ZeroAvia; Rachel Muncrief, Deputy Director, International Council on Clean Transportation; Willie Walsh, Director General, International Air Transport Association.

April 20

10:15 a.m. — The Green-Energy Gold Rush. Daniel Agostini, Head of Energy and Climate Policies, Enel Group; Marjut Falkstedt, CEO, European Investment Fund; Ann Mettler, VP, Europe, Breakthrough Energy.

Resilience

April 19

10:00 a.m. — Wouldn't It be Fab: Can Europe be a Semiconductor Giant? Kurt Sievers, President and CEO, NXP Semiconductors NV.

April 20

2:35 p.m. — Building a Thriving Knowledge Economy. Amir Marandi, Co-Founder and CEO, Zaver; Elizabeth Rossiello, CEO and Founder, AZA Finance; David Sneddon, VP, Google.

Security

April 20

9:10 a.m. — Europe's Role in a Divided World. Kim Darroch, Member of the UK House of Lords; Kolinda Grabar-Kitarović, Former President, Republic of Croatia.

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