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Economy

Varcoe: New year will ring in renewed optimism for Alberta economy – Calgary Herald

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Sunrise lights up the towers of the downtown Calgary skyline on Monday, December 16, 2019. Gavin Young/Postmedia


Here’s a small pick-me-up heading into a new year — two banks are projecting modest economic growth returning to Alberta in 2020 after a lethargic performance this year.

The improved outlook comes as oil prices have broken through US$60 a barrel in recent days, their highest point in three months.

TD Economics released a report this week forecasting Alberta’s gross domestic product will expand by 1.8 per cent next year, more than double the tepid rate over the past 12 months.

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Similarly, a new RBC outlook projects the provincial economy will increase by 1.7 per cent in 2020 after “puny” growth this year.

“A good part of it is the fact 2019 was so sluggish. It’s a little bit of a comeback story,” RBC senior economist Robert Hogue said in an interview.

“By no means are we saying Alberta is out of the woods, but I think (there) will be more incremental improvements.”

There are still plenty of reasons to be cautious, however. The latest employment report saw 18,200 fewer jobs in November and the unemployment rate jumped up to 7.2 per cent.

Investment levels remain low, retail spending is down from a year earlier and drilling activity is off from 2018 levels.

But there have been recent improvements in areas such as energy prices and the outlook for global trade in 2020. While some local businesses have been cutting staff, other firms — such as in the technology area — are thriving and hiring.

Benevity, a Calgary-based firm that provides clients around the world with employee engagement software that facilitates giving and volunteering, is expanding quickly and will exit the year with about 650 employees.

“We continue to be quite bullish on our prospects,” CEO Bryan de Lottinville said Thursday.

“For us, a lot of the challenge is hiring people. I think we hired 240 people this year and are looking for probably another 175 or so next year.”


Bryan de Lottinville, president and CEO of Benevity, in the firm’s Calgary office.

Ted Rhodes /

Calgary Herald

In its economic outlook, TD said the province’s steps to ease government-mandated oil production quotas, “alongside a modest rebound in investment, are expected to underpin growth” next year.

As well, oil prices are headed in the right direction for the province.

Since OPEC and its partners decided earlier this month to deepen production cuts, crude prices have increased, with West Texas Intermediate crude for January delivery closing Thursday above US$61 a barrel on the New York Mercantile Exchange.

TD expects benchmark U.S. oil prices will keep trading in the range of $55 to $60 a barrel next year.

While the jobless rate remains high and employment gains will be modest in Alberta — at just 0.7 per cent next year, according to TD — some bright spots exist.

The construction of two massive petrochemical complexes in Alberta’s Industrial Heartland area is continuing. Housing starts are “gradually turning the corner, with modest gains in sales and prices anticipated” over the next few years, the report states.

“2019 was pretty lacklustre and we’ve seen that in a lot of indicators. Our 2020 forecast calls for a modest rebound,” TD economist Omar Abdelrahman said in an interview Thursday.

For its part, RBC predicts energy, manufacturing and construction, as well as the labour market, will improve in 2020.

Incremental gains in pipeline take-away capacity should help ease the transportation bottlenecks and see capital investment begin to pick up.

“Alberta’s recovery has been frustratingly slow, but 2020 promises to kick things into a higher gear,” the RBC forecast states.

The key test for Alberta in the coming year will be on the investment and jobs fronts.

ATB Financial is forecasting only 0.9 per cent economic growth for next year. It assumes worries about when additional pipeline capacity is built will act as a constraint, keeping investment levels soft.

Yet, as ATB economists pointed out Thursday in a blog, there are some signs headway is being made in the economy.

Progress continues on the Line 3 replacement project in the U.S. and the Trans Mountain pipeline expansion, OPEC cuts mean “the threat of another global oil glut is being held in check, at least for now,” while fears of a global recession and trade war are diminishing.

“There are some positive stories out there,” Ken Kobly of the Alberta Chambers of Commerce said last week.

“We are so used to hearing about all of the big things that are not doing well or not happening, and that sort of drowns out some of the small gains that we are making.”


An aerial view of construction progress on the terminal and tank farm on Burnaby Mountain for Trans Mountain’s pipeline expansion as of November, 2019. Handout courtesy of Trans Mountain.

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Newcomers continue to move into the city and the total number of people employed in Calgary sat at 877,000 last month, up almost 34,000 from a year ago.

Some companies are succeeding in this tough environment. For example, payments technology firm Helcim expects to add about 25 people next year and is moving into a new downtown office.

“We are excited about our outlook,” said Helcim CEO Nicolas Beique.

“Next year is when some big changes are coming to our organization that we think will fuel a lot more growth.”

At Benevity, much of its work is for international clients, but de Lottinville also feels a little more optimistic than last year about the prospects for the provincial economy.

“We have to create more narrative around the successful companies that are scaling (up) in a diversified context, whether those are in the energy sector or elsewhere. If all you hear is doom and gloom, you will be communicating that,” he said.

“Our clients, some of the local ones, are optimistic that most of the real challenges are behind us and they’re trying not to look backward, but look forward.”

A new year is coming soon. Hopefully, so is a new direction for the Alberta economy.

Chris Varcoe is a Calgary Herald columnist.

cvarcoe@postmedia.com

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The Crypto Bull Run Is Igniting The Web3 Creator Economy – Forbes

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Protection and monetization of digital IP has long been one of the most promising areas for Web3 disruption, offering to better protect IP while returning more value to creators. Development to date has focused on leveraging the capabilities of NFTs to introduce digital scarcity while using smart contracts to better enforce the distribution of royalties. Nevertheless, it’s fair to say that no solution has yet proven compelling enough to attract significant adoption from the established creator economy, which was reported by Goldman Sachs
GS
in 2023 to be worth around $250 billion.

The bear market of the last two years has undoubtedly played a part, with Crunchbase stating that funding for Web3 projects “cratered” by 74% year over year in 2023, making it more difficult for projects to advance their roadmaps.

However, over the same period, a new threat to the creator economy has emerged: The growing prevalence of AI-based tools. With a new bull market now underway, has the moment arrived for Web3 creator tools?

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A Sea Change For Creators

AI is a double-edged sword that has the potential to both make and break the burgeoning creator economy. Generative AI paves the way for a new wave of creators and modes of creation; however, the human ramifications could be significant. Traditional creators, including the New York Times
NYT
, are already mounting lawsuits over the unfair use of their work to train algorithms. Plus, there’s the impending risk that human creativity could get drowned out by a wave of AI-generated content.

There’s also the question of monetization. Each successive wave of digitalization tends to strip value from creators, leading to concerns that the rise of AI will further erode the ability of creatives to monetize their work.

While many are still debating the scale of the AI threat, creators are seeking any solution to better protect their work and future earning opportunities, while regulators and policy hawks are keen to see more transparency in AI-generated content. The fact that this is an election year in dozens of countries where AI-based content is already playing a headline role also adds a political and democratic imperative to the equation.

Reigniting The Web3 Creator Fire

The new bull market in crypto is now giving fresh impetus to projects and investors who understand the opportunity for Web3-based creator tools but have been waiting for the right time to move into the market. Korea’s largest VC firm, Hashed, recently put the creator economy and protection of intellectual property at the top of its 2024 call for startups, and the theme will be central to this year’s Korean Blockchain Week (KBW). The flagship KBW: Impact conference event is organized by FACTBLOCK and co-hosted by Hashed.

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I reached out to Simon Kim, CEO and Managing Partner at Hashed, who shared, “We foresee that integrating content into Web3-based creator applications will enhance user retention and drive sustainable growth, fundamentally transforming the overall user experience. The progression of AI technology will be a catalyst in accelerating this trend, further bridging the gap between innovative content creation and blockchain technology. Blockchain is a pivotal force in redefining the landscape of content creation, offering novel pathways for IP management and monetization.”

Even AI Creators Need A Hand

Along with names such as a16z and Paris Hilton’s VC fund, Hashed also participated in last year’s $54 million round for Story Protocol, one of the standout successes in an otherwise flat funding year. Story Protocol is a “programmable IP layer” that aims to simplify the enforcement of rights, allow creative remixing, and streamline the monetization process for both original and subsequent creations while minimizing the operational barriers that often hinder the creative industry.

Perhaps somewhat paradoxically, the project recently made headlines thanks to a partnership that will allow user-generated AI models created on Ritual to be recorded and accredited to their creators with each use.

However, competition to capture the Web3 opportunity for the creator economy is rapidly heating up across the space.

In December, Web3 gaming giant Animoca Brands confirmed the company’s commitment to supporting the creator economy and advancing Web3 over the coming year. Although primarily known for its game portfolio, Animoca also operates an ed-tech platform that enables co-publishing rights for educational content, allowing creators to distribute monetized content directly to students. The CEO highlighted the lack of control and monetization opportunities for creators in the Web2 space.

From Piracy To IP Protection

Many might remember Limewire, perhaps best known as the scourge of noughties musicians. In 2007, the Electronic Frontier Foundation estimated that it was on one in three computers to obtain pirated MP3 files. However, the project recently launched a Web3 creator studio on Polygon
MATIC
, initially focused on imagery but with plans to expand to music and audio files.

Users can access a range of AI tools to manipulate files or create new works. All creations are minted as an NFT
NFT
on the Polygon blockchain, while royalties are paid out automatically based on the use or sale of the content. Ultimately, Limewire could go from being a facilitator of pirated music to a monetization tool for musicians: Quite the redemption arc, particularly so in this new era when the Web2 streaming model has evolved to hurt musicians’ revenues.

However, some are taking the royalty payments a layer deeper to mitigate future protocol risk. Projects including Enjin and Rarible have embedded royalty payment functionality into the blockchain programming itself, meaning that its application-agnostic and royalty payments should continue uninterrupted for as long as the blockchain is in operation.

As these developments are still in their infancy, it will be intriguing to see how they are received by a creator economy that’s grappling with the full impact of AI tools. However, the combined factors of a new bull market, AI’s opportunities and challenges, and the chance to better monetize and protect IP amid declining revenues on Web2 platforms mean that the timing for Web3 creator tools to make a strategic market entry could not be better.

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Economy

Britain's economy went into recession last year, official figures confirm – The Globe and Mail

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People walk over London Bridge, in London, on Oct. 25, 2023.SUSANNAH IRELAND/Reuters

Britain’s economy entered a shallow recession last year, official figures confirmed on Thursday, leaving Prime Minister Rishi Sunak with a challenge to reassure voters that the economy is safe with him before an election expected later this year.

Gross domestic product shrank by 0.1 per cent in the third quarter and by 0.3 per cent in the fourth, unchanged from preliminary estimates, the Office for National Statistics (ONS) said on Thursday.

The figures will be disappointing for Mr. Sunak, who has been accused by the opposition Labour Party – far ahead in opinion polls – of overseeing “Rishi’s recession.”

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“The weak starting point for GDP this year means calendar-year growth in 2024 is likely to be limited to less than 1 per cent,” said Martin Beck, chief economic adviser at EY ITEM Club.

“However, an acceleration in momentum this year remains on the cards.”

Britain’s economy has shown signs of starting 2024 on a stronger footing, with monthly GDP growth of 0.2 per cent in January, and unofficial surveys suggesting growth continued in February and March.

Tax cuts announced by finance minister Jeremy Hunt and expectations of interest-rate cuts are likely to help the economy in 2024.

However, Britain remains one of the slowest countries to recover from the effects of the COVID-19 pandemic. At the end of last year, its economy was just 1 per cent bigger than in late 2019, with only Germany faring worse among Group of Seven nations.

The economy grew just 0.1 per cent in all of 2023, its weakest performance since 2009, excluding the peak-pandemic year of 2020.

GDP per person, which has not grown since early 2022, fell by 0.6 per cent in the fourth quarter and 0.7 per cent across 2023.

Sterling was little changed against the dollar and the euro after the data release.

The Bank of England (BOE) has said inflation is moving toward the point where it can start cutting rates. It expects the economy to grow by just 0.25 per cent this year, although official budget forecasters expect a 0.8-per-cent expansion.

BOE policy maker Jonathan Haskel said in an interview reported in Thursday’s Financial Times that rate cuts were “a long way off,” despite dropping his advocacy of a rise at last week’s meeting.

Thursday’s figures from the ONS also showed 0.7 per cent growth in households’ real disposable income, flat in the previous quarter.

Thomas Pugh, an economist at consulting firm RSM, said the increase could prompt consumers to increase their spending and support the economy.

“Consumer confidence has been improving gradually over the last year … as the impact of rising real wages filters through into people’s pockets, even though consumers remain cautious overall,” Mr. Pugh said.

Britain’s current account deficit totalled £21.18-billion ($36.21-billion) in the fourth quarter, slightly narrower than a forecast of £21.4-billion ($36.6-billion) shortfall in a Reuters poll of economists, and equivalent to 3.1 per cent of GDP, up from 2.7 per cent in the third quarter.

The underlying current account deficit, which strips out volatile trade in precious metals, expanded to 3.9 per cent of GDP.

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How will a shrinking population affect the global economy? – Al Jazeera English

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Falling fertility rates could bring about a transformational demographic shift over the next 25 years.

It has been described as a demographic catastrophe.

The Lancet medical journal warns that a majority of countries do not have a high enough fertility rate to sustain their population size by the end of the century.

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The rate of the decline is uneven, with some developing nations seeing a baby boom.

The shift could have far-reaching social and economic impacts.

Enormous population growth since the industrial revolution has put enormous pressure on the planet’s limited resources.

So, how does the drop in births affect the economy?

And regulators in the United States and the European Union crack down on tech monopolies.

The gender gap in tech narrows.

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