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Here's What's Coming Up at Day Two of the New Economy Forum

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What the Brexit deal means for business, markets and the economy

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Prime Minister Theresa May said Wednesday that her cabinet supported the deal, but she must still push it through a divided parliament. If she does, executives and investors will at long last have a road map.
“This is a decisive step which enables us to move on and finalize the deal in the days ahead,” May told reporters following a marathon cabinet meeting. “It is a decision that is firmly in the national interest.”
Here’s what the deal would mean for business, markets and the economy.
Companies in Britain and the European Union have spent months preparing for a chaotic Brexit. Their biggest fear is a scenario where the United Kingdom crashes out of the European Union, leading to new trade barriers.
That risk hasn’t been completely eliminated and companies remain cautious. Still, business groups including the British Retail Consortium welcomed news of a potential deal.
“It is vital that we avoid the cliff edge of no deal in March 2019 as this could immediately lead to consumers facing higher prices and reduced availability of many everyday products,” said Helen Dickinson, the industry group’s chief executive.
Key manufacturing firms also cheered the emergence of a deal.
“My gut feeling is we need to get behind it and we need to make this deal work. What we need is certainty,” Juergen Maier, UK CEO of German engineering giant Siemens (SIEGY), told BBC Radio.
The deal includes a transition period during which most trading rules for companies in Britain will remain the same. A joint declaration published Wednesday said that agreement had been reached on a close relationship on trade in financial services, and broad cooperation on transportation and energy.
But businesses have also been warned to prepare for a scenario where the deal falls through.
“We still urge business to continue preparing for both a deal and no deal scenario until the deal is ratified,” said Andrew Gray, head of Brexit at PwC.
One more problem: The deal only covers the divorce terms, and doesn’t give businesses much clarity about a future trading relationship between the United Kingdom and its biggest trading partner following the transition.
The joint declaration said that negotiations had been “particularly challenging” on how future trade in goods would be conducted.
Judgment day for Brexit as Theresa May awaits Cabinet verdict
The pound has been volatile since Brits voted to leave the European Union in June 2016, and it’s still trading almost 14% lower than on the day of the referendum.
Analysts said it would strengthen following a deal.
“If the deal as described in the press were to pass into law, both [the pound] and [the euro] would benefit,” Kit Juckes, a strategist at Societe Generale, wrote in a note to clients.
Is Brexit done now? Of course it isn'tIs Brexit done now? Of course it isn't
Kallum Pickering, a senior economist at Berenberg bank, said the pound would likely jump higher in two stages, along with government bond yields and shares in companies that do business in Britain.
He expects the first increase to happen after the UK parliament approves the divorce deal, which could happen in December, and the second to occur over the following year as investors update their outlook for the United Kingdom.
If a deal can’t be struck and Britain crashes out of the bloc, S&P estimates the pound will slump 15% against the dollar.
Economists say a Brexit deal would boost the beleaguered UK economy.
“While the long-term risks to UK potential growth from Brexit loom large, the prospect of a deal presents considerable upside potential for the UK economy over the medium-term,” Pickering said.
Berenberg estimates that a deal would lift economic growth to 2% in 2019, from 1.3% this year.
The UK economy slowed sharply following the Brexit vote, but it has avoided slumping into recession. Investment also slumped dramatically.
A chaotic Brexit, without a deal, could sink the economy into a prolonged recession, S&P warned last month.

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Global slowdown: 3 of the top 4 economies are suffering

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The economies of Germany and Japan shrank in the third quarter, according to data published Wednesday, providing a sharp contrast to another quarter of strong US growth. In China, there are signs of a deepening economic malaise.
The reasons for the weak performance are varied, and economists believe that both Germany and Japan will dodge recessions by returning to growth soon. But the data underscore the major challenges faced by many of the world’s largest economies.
China is buying fewer cars. GM and VW are feeling the pain
Germany’s economy shrank for the first time since 2015 in the third quarter. It was hit by new auto emissions testing procedures that slowed car sales and a decline in exports, partly due to the US-China trade war.
The car certification bottleneck is expected to ease, but economists say export growth could weaken further because of reduced demand from major trading partners such as Turkey, Russia and China.
Japan is much more accustomed to economic stagnation, and even recessions, but the outlook there is brighter. Its lackluster third quarter was caused by natural disasters, and economists expect consumer spending to spike this quarter ahead of a planned sales tax hike next October.
Japan's economy has a $5 trillion problemJapan's economy has a $5 trillion problem
In China, the world’s second largest economy, new data Wednesday revealed weaker consumption growth, subdued confidence and disappointing credit growth. Economists expect the government to ramp up stimulus measures to mitigate the effects of a trade war with the United States.
“We believe the worse is yet to come, with growth slowing faster into spring 2019,” Ting Lu, chief China economist at investment bank Nomura, wrote in a research note.
And despite the prospect of a rebound in Germany and Japan before the end of this year, the global economy is also heading for a weaker 2019.
Forget the trade war, China's economy has other big problemsForget the trade war, China's economy has other big problems
The International Monetary Fund expects global growth to slow to 2.5% in 2019 from 2.9% this year.
Risks clouding the global outlook include the trade war and the impact of US interest rate hikes on emerging markets. Italy, which is locked in a standoff with the European Union over government spending, could spark another crisis in Europe.
A container delivery truck drives past stacked piles of shipping containers at the Port of Long Beach.A container delivery truck drives past stacked piles of shipping containers at the Port of Long Beach.

‘Significant slowdown’ in the cards

“We’re not thinking it will be anything like [the financial crisis], but there might be a significant slowdown next year. It’s very possible,” said Andrew Kenningham, chief global economist at Capital Economics. “We think the IMF is too optimistic.”
Some of the risk is already reflected in markets. On Tuesday, fears over weaker global demand helped push US oil prices down 7%, and major stocks indexes are 5% to 7% off their peaks.
One big question is which countries might serve as growth engines in 2019.
Oil nosedives 7%, its biggest plunge in three yearsOil nosedives 7%, its biggest plunge in three years
India’s economic growth has accelerated this year, hitting 8.2% in the most recent quarter. But as one of the world’s biggest energy importers, it has felt the pain of higher oil prices this year. The rupee is one of the world’s worst performing currencies in 2018, and that has further stoked inflation.
The United States could also move into the slow lane next year as the effects of tax cuts fade.
“We think the United States will slow quite significantly,” said Kenningham. “The fiscal stimulus is temporary and the Fed is raising interest rates.”

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Moving Toward A Decentralized Gig Economy Of Health Data

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PexelsPexels

The phrase “coin-operated” evokes the image of a vending machine dispensing snacks or drinks. You put coins in and make a selection; the machine whirs and makes funny noises, and voila! The vending machine delivers your favorite drink or snack. In economic terms, a transaction occurred, and value was exchanged.

In my previous ventures, the phrase “coin-operated” had an entirely different connotation. We would label salespeople as coin-operated if they were only motivated by money. Even though some of us believed that being coin-operated was a positive and a valuable trait in a sales professional, there were others who took offense to the term because they thought it was derogatory, made assumptions about sales professionals’ motivations and minimized the value they brought to the enterprise.

To be fair, at some level we are all coin-operated. We all do things that are only motivated by money. So why label sales professionals as such?

More interestingly, the phrase “coin-operated” takes on a whole different meaning in the context of today’s gig economy. The Uber driver offers to drive people around in their own car because they are primarily motivated to make money, even though you may hear something like, “I like meeting new people and talking to them.” Take the financial incentive away, and softer motivations begin to erode.

Furthermore, the gig economy is fueling the need to consume services on demand and with instant gratification. New platforms and business models have emerged to fulfill this demand from both sides of this marketplace. In the new gig economy, everyone who delivers anything of value, whether it is a ride or a room, is coin-operated.

The Gig Economy

Think about it. We are all participants in a gig economy.

If you have ever hailed a ride from Uber, you have participated in the gig economy. If you have ever taken pictures of your condo and offered it up to Airbnb guests, you have participated in the gig economy.

In a gig economy, temporary, flexible transactions are the norm. There are no long-term loyalties to Yellow Cab or a hotel brand like Marriott.

A Decentralized Gig Economy

In a decentralized gig economy, the notion of centralization starts to wither away. Trust is delegated to decentralized technologies like blockchain with a nominal transaction fee to support the decentralized network technology. In a decentralized gig economy, intermediaries like Uber and Airbnb start to get disintermediated.

Now think of data as a digital asset in the context of a decentralized gig economy. Our very notion of who owns data, who is selling data, who is purchasing data, who is controlling access to data and who is providing data services must evolve and transform. New value chains will be created, and who makes money from what part of the value chain will shift and look very different than the current norm. Will behemoths like Facebook and Google continue to dominate and devour the value chain of a data marketplace?

A Decentralized Health Data Gig Economy

As soon as we start treating our health data as a digital asset, it is really not that big of a leap from gig economy to a decentralized health data gig economy. People are saying data is the new oil. If that is true, it is also true that health data is the new jet fuel. Arguably, health data is more valuable than data on our browsing or shopping habits.

When it comes to health care, technologies like blockchain can make renting or buying and selling health data much easier, even enabling microtransactions between parties, cutting out middlemen and pushing power to the edges.

In a decentralized health data gig economy, everyone is a producer of health data.

According to Scientific American, a health data marketplace operating in the shadows exists today, and transactions worth billions of dollars are happening already. Data brokers buy our health data from pharmacies, labs, hospitals and clinics and sell it to pharmaceutical companies that design marketing campaigns and contract research organizations (CROs) that conduct clinical trials and research.

It is a B2B marketplace where the individual who is the source of health data is cut out of the value chain.

Will consumers bundle their health data and rent or sell it if there is enough money in it? Will pharmaceutical companies and CROs want to conduct highly targeted surveys or clinical trials so as to reduce time for new drugs to reach market, ease patient recruitment or increase participant retention with better engagement? Will pharmaceutical companies and CROs offer rewards and incentives that can be cashed in or redeemed instantly? Because participants in a gig economy are used to wanting things on demand and with instant gratification.

In addition to blockchain technology, in order for a decentralized gig economy of health data to come to fruition, perhaps it will require all of us to be coin-operated. Pharmaceutical companies and CROs will have to partake willingly in microtransactions where we are the owners and custodians of our data.

Additionally, I believe a modification of HIPAA — which provides data privacy and security provisions for safeguarding our medical information — will be needed so that the only way pharmaceutical companies and CROs could buy health data would be directly from us, with our consent. Lawmakers must pass legislation prohibiting pharmacies, hospitals, labs and clinics from selling our data.

Billions of dollars are at stake, as well as the future of a decentralized health data gig economy and marketplace.

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