Bloomberg Businessweek Weekend - January 21st, 2022

edition of Bloomberg Business Week. Another busy week full of financial market volatility, tech stock selling off, and then of course you had President by marking his first year in office. And even after a nearly two our press conference on Wednesday, the administration's plans and goals when it comes to China, well, they're still largely unclear. We're gonna get into that with our White House team. And speaking of China, the Winter Olympics,

they're just around the corner. Beijing is in a very different place than it was the last time it hosted the games back in two thousand eight. That's the subject of our global cover story. We'll also check in with a pair of CEOs from two global giants, Cisco and a B InBev. Chuck Robbins and Michelle Dukeris weigh in

on the outlook and challenges ahead. All of that to and let's kick things off with an overview of this week's new issue of Bloomberg Business Week, editor Joel Webber joining us now, and Joel, we're gonna start with some news right in technology, massive deal Microsoft set to buy video GameMaker Activision, Blizzard, Serifire and Dina Bass covering that story. I mean, a lot of this has to do with the metaverse. So this is uh it ended up being.

If it goes through and has approved, this will be Microsoft's biggest deal ever, and it is a huge bet on gaming. Obviously, Microsoft already huge in gaming when you think about where they've bend forever with the Xbox and then Minecraft, and but where where things are going clearly, you know with Facebook's pivot to changing its name to to meta Um, you know, Microsoft definitely doesn't want to lose out on that, and in many ways actually may even have a leg up because of their their kind

of history and gaming. Like you think about how how how gamers interact with with games, and it actually starts to look a lot like where the metaverse might might go. So so this is really an effort to claim that real estate would make them the third biggest gaming company in the world if it's approved, um so, so I think this is an aggressive move and shows how seriously

people are taking um Facebook's pivot into the metaverse. It's still i think unclear to a lot of people though, And I think when you think about the metaverse, the way you can imagine it and the way a lot of people describe it is it starts with something with gaming, But how does it go pass gam angel and and move into something that you know would be used for productivity, which Microsoft for years has really prided itself on, right being the productivity solution. Yeah, we we don't know yet.

It's too early because so much of where where the metaverse is going, what it looks like it is yet to be you know created. Um It's just it seems like, uh, this virtual land that could have sort of infinite potential and like anything that you wanted to create their hood. But but you're right, you know Microsoft's history, um uh in the productivity space in the office suite obviously that is like part of what they do. You could see a future where you know, your your avatar, we're all

meeting as avatars and having this conversation in the metaverse. UM. Perhaps Microsoft has some ways to get there sooner because in the short term, you know, all the kind of the the ideas that we're seeing, you know, it's sort of Torso esque UM avatars. So so I think one of the big unlocks is whether or not a company can get to a version of of that virtual world that looks much more similar to what we're used to.

And obviously, you know, gaming has been very much on the forefront of of unlocking what that reality could look like. I gotta get to another story that's in the magazine about the Ponzi schemer on the Pacific tell Us about

Gina Champion Kane. So this is just a story that UM, we had never heard of her, you know, and she was a really prom developer entrepreneur in San Diego, UM and not sort of a normal city that we talked about a lot um, but she was just this force down there UM over the past decade UM, and it came out coming out of the financial crisis, kind of came out of nowhere to kind of put together this um little burgeoning empire that on paper looked big, but

it turns out she was running this Ponty scheme. UM that defrauded friends and investors out of hundreds of millions of dollars. She was convicted um and is now serving out her sentence. But it was just one of those ones that locally everyone in San Diego knew about this story, and nationally it didn't ever crack that sort of bigger story. So Chris Pomorsky, with an amazing tell um telling everything about Jina Champion came which we think is probably um

in the post Bertie made off Landscape. She's probably the biggest female Ponzi schemer we've ever seen. That's a big deal. Four million dollars joel Uh. Nobody, no other woman in history has has been accused or convicted of a Ponzi scheme that large. So the secret to how this all ran was this um escrow account, and elements of this are are still actually um in court UM. But this

escrow account was somepany called Chicago Title. And one of the ways that she was able to do this was by um Uh doing this little scheme with over liquor licenses. And I think it was because it was it looked like a really good um Uh investment opportunity. So a lot of sophisticated investors, including private equity, were you know, allured by this um untapped potential. And she really was

able to capitalize on that. Uh. And that's why, regardless of whether or not she was a woman, it was just, you know, like an amazing Ponzi scheme that for for years went undetected until finally at all unraveled. All right, so who should player in the streaming series? You know this one? Well? You know, the interesting part of this story is like the in the climax, you know, she um she says that, you know, she wants to make make everyone whole, that all her victims, meaning of them

again where her friends? And she even went so far as to say, you know, you know, when I sell the right Stone life story, maybe you know Demmi Moore would would maybe play me since you know, she looked like me, just in case you were wondering, right, big thank you to Business Week editor Joel Weber. We're gonna have more from this week's issue Joel just a little bit later on, including more on that cover story with

Janet Paskin. Coming up next, the head of a b InBev on aggressive sustainability goals and the economic challenges facing the world's biggest brewer. This is Bloomberg. This is Bloomberg Business Week with Carol Masser and Berg Quick takes Tim

Stinovik from Bloomberg Radio. This week, Deloitte to SHAMASO was out with a new survey, and it found that more than percent of topics X surveyed said that climate change had already negatively affected their businesses and him only had implemented some of the most common tools across their firms to address the challenge. It's basically taking goals and turning it into impact. They have the goals, but it's hard to actually take action and have an impact, right, there's

still that disconnect there. That research it was the foundation for a Bloomberg Live event that looked at how the C suite is reconciling climate change ambitions with actual impact. One company that's been all in non sustainability for years, though, is the world's biggest brewer, A b in bad Yeah, they've seen everything firsthand and and taken action for as you said, many years. As part of the Virtual Forum,

I caught up with Michelle du Carris. He became CEO of A b InBev just last summer, we talked about the challenges facing his company in the current environment and whether it's sustainability goals are within reach. I've got to say they're actually hitting those goals ahead of time. That is the impact that we can have as a company.

That we dined the walls of the company, then there is this extended impact on what we like to call the ecosystem of a bi that has farmers, that has the retailers, and I can talk to you about the impact on the retailers as well. And then there is a much bigger impact because when you think about us a hundred and sixty four thousand employees, we have two point five billion consumers. The real large scale impact and influence they come when we have our brands that connect

much water consumers every day. And if we can bring the farmers, the retailers and the consumers to play a role, then they scale and the reach that they can have gets magnified. Right, So we are converting all our operations to be renewable energy, but we do have two hundred and fifty factors. There's a lot, but there are only

two d fifty factors globally now. But wise they got into the middle of the energy and is using renewable energy as a broker to influence retailers that are more than six million retailers globally to go renewable energy as all they cannot afford to buy renewable energy by themselves. But but wise it is now acting as a broker with no profits to buy bulk energy and do the distribution to our retailers and our consumers. They always play

a role. We do this with water with water Dot arm where we help women across the globe to have water available very low cost. That water Dot organ in Stellartois work together to provide in their impacting he which amount of people globally and now our brands are doing always with phone calls, heat and there, renewable energy, water, organic agriculture and then you multiply the effect because you have the consumers into the the equation as well. And

this is very impact. It's good for business. So tell me a little bit about what you think, Michelle, your targets are for this year. As you said, you guys have laid out hundred in terms of sustainability missions. You know you're hitting some of this ahead of it, like when it comes to energy. Um, what about your targets for this year? And I do wonder we're still in a pandemic. I'm at home. Um, you know, it's still kind of a world where we take a step forward

and maybe half a step backward. What are your targets in terms of sustainability for this year and what might be some of the obstacles that make it a little tougher. We have our five goals, and we like to set mid term goals and long term goals. And the midterm goals are whether you really make progress right and they are very measurable. And we have water and empowering farmers to be digitally empowered and more productive, and circular packaging.

Those are the big four goals that we have. We love talking to someone like you because you have such a global view and you're seeing what's going on the consumer when you look at the outlook, you know, is there anything that worries you about you know, you having to kind of focus on that more, whether it's the consumer not holding up this year, the global economy slowing down, you know, global bankers making a policy mistake that complicates you know, what you're trying to do here when it

comes to your sustainability initiatives. Essentially, I want to know what you think about the global outlook now. I think that we are definitely moving into a better period after all these disruptions in COVID. I think that then, for fortunately, we are not dead yet because you know that some countries are getting our war macron uh and as you get the wave of for macrome, some more disruptions in

supply chain will happen. I think that this will continue to be a topic this year, and more so in the first half of the year, while in the second half of the year things will be better. But it's not going to be fixed at all these years, so supply chain disruptions will continue to be part of our conversation. It's going to be more in the first half than in the second. The second big issue is inflation. I think that inflation is an issue globally. It's not going

to be away very quick. We are still in the middle of the wave and that has an impact in consumer purchase power and this is everywhere. But of course the more consumers are under pressure in developing and emerging countries,

the more this will be a disruption. And then I think that the third point that's gonna be for second semester is once everything settles down, we will see that this difference between people in emerging developed countries and developing emerging countries will be different the post COVID and we will need to benefit from productive it. We will need to benefit from the technology step up that we had

during COVID, so we can close this gap. But I see like a tail of two different stories in the after COVID, this so called elephant type of economy right where the developed mature countries we will accelerate further, while the developing countries will need first to correct that rejected and then later re accelerate. But is supplied change disruptions, it's inflation. And then the two stories of the mature and developing countries that we need to have different actions.

After that was Michelle du karras CEO of a b in BEV. You can catch the entire conversation by checking out Bloomberg Live dot com and searching for Bloomberg Climate Resilience still ahead on Bloomberg Business Week. One year into Joe Biden's presidential term, his policy towards China, it's still taking shape. Why the administration's fondness for the status quo

could hurt Democrats come November. This is Bloomberg Broadcasting from the financial capital of the World, Bloomberg Eleve in Rio in New York to Washington, d C. Bloomberg to Boston, Bloomberg one oh six one does San Francisco, Bloomberg nine six to the country Sirius XM Chamber one ninety and around the globe the Bloomberg Business and Bloomberg Radio dot Com. This is Bloomberg Business Week with Carol Messer and Bloomberg

Quick Takes. Tim Stenovan on Bloomberg Radio. Answer uncertain uncertain. I'd like to be able to be in a physician where I can say they're meeting the commitments war the commitments can be able to lift some of it, but we're not there yet. That's President Biden. Earlier this week, he held a press conference marking his first year in office, talking about the successes and challenges and priorities that included the U S relationship with China and whether it's time

to lift some of those terror of some Beijing. As for now, they're going to stay in place. In the current issue of Bloomberg Business Week, Bloomberg News White House reporter Jenny Leonard writes about how one year in the president finds himself boxed in on China, largely because his

policy so far has resembled that of his predecessor. It does look a lot like you know, where Trump left office, and a lot of Democrats fear that that's sort of a weakness going into the midterm elections because China, of course, is something that energizes with voters. Of course, it takes a backseat to COVID and the economy right now. Uh, but Biden hasn't really in the first year in office,

put his own stamp on China policy. And even his allies say, hey, you know, I think you I think we're we know what you're hinting at wanting to do, but we don't really know for sure, So why don't you tell us? Um. The Biden administration has been meticulously reviewing sort of what they inherited, right, if you guys remember the trade war sort of ended with the Phase one deal inherited that those negotiations are still ongoing. Uh. The Chinese have fallen short on their commitments, which we

knew going into this administration. UM, and there's really no timeline for when those negotiations should result in any sort of outcomes. So um to sum it up, I would say, you know, they really need to hit the gas to to show something in the mid terms because Democrats are

getting a little anti that Republicans sends a little weakness here. China, we know, so important to global companies, But what's the right balance when it's safe to say world leaders, US leaders don't agree with Chinese social policies, but they also don't want to lose access to the massive market potential that continues to be out there. So what is the

right policy with China? You hit the nail on the head there on exactly what you know any government or any U S government is trying to balance and where the different sort of voices come in when the different principles from agencies are discussing it, right, So you you would have you know, in thinking back to the Trump administration, you would of course have you know the more HACKISHENDVERSH sides. You know, Treasury, U SCR, Commerce, all these different entities

that here from different stakeholders. And I think the Biden administration is hearing exactly the same things. Even if China has become more and more difficult to deal with, even as supposedly, you know, there's less interest in investing in China. We're still seeing how interplined the economies are. And I think you've seen at least the Commerce Secretary be very local, uh in this Biden administration saying decoupling is not an option, that is not something that is possible, that is not

something that's desirable. If anything, we need to slow that down China as much as we can, but we need to run faster. And so that's been the Biden administration's focus, you know, getting the can Rescue Plan pass getting the infrastructure plan passed, and you know, of course now working on their third big plan, the Build Back Better Plan,

which installed UM. So there isn't really anything in the immediate term, and definitely nothing that they can show in the biladal sense where they say, hey, we're competing with China in a smarter way. Jenny, we got to talk about the politics of this. How are Republicans though, using the president's policy towards China, the administration's policy towards China,

as a way to criticize him. So I think um Republicans are are definitely you know, seizing the moment that Biden for now, and they might prove us wrong, you know, in two months, but for now, Biden has adopted and kept in place Trump's policies, which, of course, uh you remember,

the Republican Congress has pushed him there. There's a lot of you know, China Hawks in Congress that are maybe gearing up for presidential runs themselves in two that are running for re election to their Senate seats or House seats in two Uh So they feel emboldened knowing that the Biden administration is sort of boxed in leaving in place the policies that you know, they sort of pushed

the Trump administration to go for. Everyone knows that, you know, taking off pars will probably leave Biden even more vulnerable to criticism from Republicans. But adding more tariffs to it, if that is your enforcement tool, is maybe not something they want to go down. It's it's not really a

past they want to you know, go down. And so Republicans see this current reality for Biden and you know, probably enjoying watching him through don't grab his way out of this box, finding his way out of the box that's going to be tricky. That was Bloomberg News White House reporter Jenny Leonard. You're listening to Bloomberg Business Week. Coming up next, Cisco CEO Chuck Robbins on how his company is adapting to rising cost pressures and leveraging technology

to meet increasing demand for hybrid work. This is Bloomberg. You're listening to Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes. Tim Stinovich from Bloomberg Radio. Alright, so earning season is underway. You know that we've heard all right, we're either in one, looking forward to one, or coming out of one. Um. We did hear from the big banks over the past week or so, a couple of airlines,

Netflix as well. One of the things, Tim, we really love about quarterly updates is that we hear from top executives the c suite about the health of the economy and we get their respective outlooks. Yeah, we also got that this week, Carol from the Bloomberg Year Ahead Summit. You actually caught up with Chuck Roberts, the chairman and CEO of Cisco, to talk all about what to expect when it comes to the world of technology. In two

it was a really fun conversation. Chuck is seven years in s CEO of Cisco, and in this excerpt he shares his thoughts on the economy, the hybrid work model, and of course the ongoing pandemic. We went into one with high expectations and unfortunately we we came to realize to your point earlier when we were chatting, when you think you were moving on, we'll get we'll get surprised and and realize how little is in our control at

the end of the day. But I think this year, you know, we're hopeful that that oh macron is is the signal that we're getting close to the end. Uh and uh. You know, when you listen to the medical experts, they at least insinuated that may be the case. Obviously there's a risk of other variants. But I think people are ready, and it's I think they've been ready as

we all are. And as much as we love this technology and we're so proud of what it's been able to do to keep the world running and keep people productive, I think people are dying to get back and spend time together and be in person. What do you think in terms of the general macro outlook. How does it feel, you know what we've been talking about. I'm sure you guys have to. You have certainly on some of the earnings calls about supply chain problems and being able to access,

you know, all the materials that you need. How does it feel and does the economy feel like it'll be growing but maybe not as as rapid as we'd like. It's so hard to predict because I think if you go back to the March of most all of us thought that as we went into a global pandemic that the economy would suffer, and we saw just the opposite over the last two years. And so there's a couple of things I think they are going on. Number One, the year of year comparisons will just make it very

difficult because one was such a robust year. And then I think the obviously the FIT is going to move and begin to raise rates, which will have some impact on the economy as well. But I think that you know, the investment cycle that that companies are are ah in the middle of, and how they're thinking about technology investments

and how they're thinking about their future. It seems to be a pretty robust investment environment that we see in particularly in our space, we see some big long term trends that that we think will continue to be tail winds. We may see some ups and downs because of temporary macro issues, but I think long term will be fine. Cause pressures though, inflation, labor shortages, that's still part of two. Unfortunately,

Unfortunately that's true. And you know, as as so many of us have said, some of that stuff is going to be transient, but a lot of it's not. I mean, wage inflation doesn't go back. I mean, you know, I joke with our team, I can't remember an employee when things get you know, when when inflation subsides, they come and say, you know, I'd like to get part of my salary back. So I mean, whatever we're having to do on that front, we'll we'll stay with us forever.

But you know, the good news is that what we've learned around hybrid work and what's possible where people can live, it gives us the ability to tap into lots of different geographies and hire people where they are uh and uh and actually get exposure to much greater talent pools. So I've talked us about hybrid work. You guys, it's just I've been doing it pre pandemic, and so have

a lot of firms in the technology industry. There is a huge debate out there still uh and you guys have certainly seen the benefits of everybody need to be connected. I'm working at home again? Does that continue? Is that with us? Is that one of those long term trends. It ain't going away. It's not going away. And I think you know, we're going from to a certain extent, We're going from this great resignation to a great experiment. So there's these variations of hybrid work that everybody is

trying to embrace. And you know, we have two aspects. Number one, what are we doing as an organization and but also the technology that we build that are actually that's actually enabling our customers to deliver whatever version of hybrid work they would like to deliver on. But to your point, we had ten of our workforce that worked from home of the time before the pandemic, and I think that the way we're approaching it is we're leaving it to the team. So we're not having any sort

of mandated return to office policy. Will we will let the teams know when the offices are open so you can return to them. But as an example, if there's a team of eight or ten engineers and they believe that being together in person two or three days a week is beneficial, they'll make that decision and then they'll choose the days that they want to be in the office together. And we think that's a better way than just a random Hey, we want everybody in the office

two days. Just it's just not all that logical to me. But we'll see how it plays out and we'll see which of these models actually begins to emerge. But we think it's We think the approach we're taking gives flexibility. Gives our employees flexibility. Uh, you know, many of them can live wherever they like. Obviously there's some jobs that are gonna be required to in a certain geography, but we think it will just continue to contribute to the

culture that we tried to build. Yeah, we're definitely seeing Americans and people all over the world kind of being able to move around. I am also curious in terms of innovation. This is one of the things we talked about during the pandemic, and I'm thinking about we're looking at the year ahead and technology. I think there were folks saying, We'll wait a minute, would Zoom have been created if we were in a pandemic environment where people

weren't together maybe in a room? Well, what would you say for a company that's been, you know, on hybrid working, you know, for for years, what happens to innovation and disruption and being able to figure out new ways of doing things? I have to say I was amazed, uh during the pandemic, at the level of innovation that we were able to drive and that many companies have been able to drive. I knew we could be productive because we build a technology, we do it, we use it.

So I wasn't all that concerned about that, but I really was worried about how much innovation are we going to be able to drive? With our engineering teams, you know, spread apart, And they did an amazing job, and so many companies did an amazing job. And so I think the great news is that government leaders around the world c e O s, c xos all experienced this technology up close and personal in ways that they hadn't in

the past. A right, most CEOs didn't do a lot of video meetings, and and now I have my peers who are saying I can't imagine a world where I take a twelve hour flight for one meeting and then come back. It's just not gonna happen. And so I think they realized that this technology has an incredible power. Uh. No one expected the world to remain as productive as we were during this time, which says the technology is

is really powerful. And I think that after having experienced it up close and personal, I think they're much more open to looking at how do we accelerate the use of technology across the various aspects of our businesses which continue to lead to different uh, you know, the need for innovation and creative thinking, which I think is happening at an accelerated pace. So I meant to say congratulations because I believe this is your fifth year as CEO

of Cisco, and I do think is that right? Seven? Seventh? Oh forgive me, forgive me? Okay, So seven. So when you look back at that tenure um and you think about the things that you prioritize or things that you might have said, I'm not sure if that's going to be a big trend. Cloud. You were one of those folks that identified it when maybe some were questioning it.

You know, when you look back and then look ahead, Um, one of the things are you most proud about in terms of the time you've been there and those trends that you're like, I wasn't so sure, but it did turn out to be very significant. And then as we look ahead those things that we are questioning in technology

but that you think we should be paying attention to. Well, So I think that early on you mentioned cloud, there was a belief that cloud was going to be, uh the downfall of our company, and I think I am proud that we embraced it and didn't try to fight it and didn't try to commence our customers that that wasn't the strategy they should employ. We actually embraced it and looked at what does it do to our portfolio?

How do we need to evolve our our products to actually enable our customers to more and more effectively use the cloud and sas applications and all the things that they're trying to do. So I'm really proud of that. I'm incredibly proud of the team that we had working on this next generation silicon technology that we've been building.

And no one really understands this because it's not a consumer product, but our team spent over five years building this next generation of silicon that are now powering the Internet of the future as well as the next generation cloud infrastructure at a much lower power consumption than they have in the past, so the ability to deliver higher performance and at the same time help them achieve some sustainability goals and things of that. I'm really proud of

what they've accomplished there. I think our teams have I think the culture that we have really built over the last several years. We've always had a great culture, but I really think it has blossomed. Uh and uh it's it's resulted in us being, you know, number one global workplace two years in a row. We're actually number two this year. But I'm still proud of what the teams

have done. And as you look to the future, I think that this year it's I'm most interested in the human aspect of dealing with this new world that we're going to operate in, because over the last two years, that's been one of the biggest things we've had to evolve with our leaders is thinking about how do you lead people who are now working from home with children that they're going to school in the next room with elderly parents who are staying with them, who don't have

the ability to operate in a normal way that they have in the past. And this was a big challenge that we all had to work through. And I think now as we get into this hybrid work model, I think the culture, you're the people, the leadership, how we deal our employees is going to be actually one of the biggest challenges. I think the technology is actually the easy part. That's check Robbins, chairman and CEO of Cisco

at this week's Bloomberg The Year Ahead Summit. Catch that entire conversation in others just head to Bloomberg Live dot com. And that wraps up the first hour of the weekend edition of Bloomberg Business Week from Bloomberg Radio. I'm Carol Masser and I'm Tim Stanavick. Ahead in our next hour, how an online authentication company called I d Me became

the government's digital gatekeeper. Are Bloomberg Pursuits team also takes us inside New York's most exclusive private clubs and on a Caribbean excursion that you will definitely want to add to your bucket list. I've already been there jealous you should be. And coming up next our cover story the Olympics. They are back in Beijing after only fourteen years, but things look a lot different this time around, especially the

global balance power. This is Bloomberg. This is Bloomberg Business Week inside from the reporters and editors who bring you America's most trust to business magazine, plus global business, finance and tech news as it happened Sloomberg Business Week with Carol Messer and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. Hi, I'm Carol Masser and on tap in our second hour

of the weekend edition of Bloomberg Business Week. A little known fraud prevention company trying to become the digital intermediary between the government and its citizens. We're talking about you and me and everybody else that's out there. And also we've got to gaze into the future of work with the team from Bloomberg Beta plus the epitome of exclusive from our Pursuits team inside some of the Big Apple's most elite social clubs. And then we go overseas to

a gem in the Caribbean. Sign me up, all right, first up this hour, this week's global cover story. It comes from this week's remarks in the magazine. It's about the Winter Olympics in Beijing, just around the corner of those games, and how China has climbed to near the top of the global economic hierarchy in just fourteen years since it last hosted the Games. It feels like it was yesterday day, but it was a few years ago. Yeah, it really does feel like it wasn't that long ago. Well,

the story is from John Lou and Janet Paskin. Janet is our senior editor based in Hong Kong, and she's here to tell us why the Chinese capital looks a lot different than it did back in two thousand and eight. I gotta say I love, first of all, the cover of the magazine. Um, there's a lot at stake for President g at this point, because I mean, the balance of power is shifted in terms of China's role right

in in everything geopolitics and the global economy. But I feel like it also comes at a tough time, you know, in terms of their fighting COVID. There's a lot going on here. There is a lot going on. This is also the year UM in which she will try to secure a third term, which is pretty historic um as, so he wants this year to be extraordinary for China. That's really important for him, and the Olympics are part

of that. COVID fighting COVID is part of that too, and the pandemic and these games are really going to pose a challenge. Well what does extraordinary look like? Because obviously Beijing was chosen as the site for Olympics long before we knew about the pandemic. So so how is the definition of extraordinary change and how does she still pull us off given the pandemic. I think it's going to be tough. What we know is that they have

UM institute extraordinary COVID containment measures. UM there's a limited number of flights that are allowed into Beijing, so you have athletes coming in on very special chartered planes. They are immediately whipped into effectively a bubble where that comprises where they stay, where they compete, where they eat, what they eat. There's no mingling, there's no nada. So they're really going to try to almost hermetically seal off the games.

You know, one thing that's interesting, I think in your stories that you do get to where Beijing was in two thousand eight versus where they are today. Very different, and at that point it looked like they wanted to be part of much more you know, Western democracy, right, And I think you write in your story about how the IOC, the International Olympic Committee, you know, thought that by giving these games right to China would bring them

more into the fold of that Western democracy. Today it's like China is doing its own form of whatever they want to call it in terms of democracy, right, and they're saying this is this is who we are. That's a right. Um. At the time, you know, China was still on a path of opening. It's hard to remember this now, but ahead of the two Don eight Games, there were a lot of concerns about China's human rights record,

and China sort of China entertained those conversations. They unblocked websites during the games, including Amnesty International, which were really critical of its um record on human rights. That's not happening now. What I love some of the people that you talked to and stuff sided in the stories that you they do see themselves as a form of democracy

and one that works. And it comes at a time when we're kind of looking at our democracy here in the United States and being like, well, it's got some problems. That's the argument that China would make, right, That's that's how they've gone on. Then they have gone on the offensive, and that way not saying you know, they're saying, you know, we have a consultative democracy. We have a meritocracy, right we do. We don't have freedom of press, and we don't have one man, one vote, but we have this

other thing that is also democratic. And in China they say that that's better. So Jenna, help us look beyond beyond the Olympics, because according to Bloomberg Economics, China could overtake the United States is the number one economy in the world less than a decade from now. How does

that happen? You know, it's hard to look beyond COVID, is the honest truth, because when you look at how China has done in the last couple of years and really the growth in its economy and this amazing recovery that they've been able to effect during in the pandemic while everybody else has been in the dull drums. A lot of that is due to this COVID zero policy that they've had, where they have zero tolerance for any infection. That's kept people going to work, It's kept factories running.

It has really minimized disruption to the role that China plays as kind of the factory of the world. They are sticking with that policy, but it is getting harder for them to do that, and that could really affect their economy in a way that we haven't quite seen.

So I think it is I think that this is going to be a critical critical year for China, for for the Olympics, for the COVID zero policy, for its economy, um, and so I think it's hard to look past this, to be perfectly honest, I remember two thousand eight watching those Olympics and was blown away just by the fireworks and the opening ceremony. Seriously, that was huge, an amount of people like it just reminded me how giant China is. But the China then and the China today are very different.

I'm thinking about our listeners are audience, what do you think they need to take away from your observations in your reporting. China isn't interested particularly in playing by global rules, are in conforming to Western norm um. It feels it has developed a narrative of national superiority, self reliance. Um, and that is that's the China that you're going to see on display during the games. Are big. Thank you to Bloomberg new senior editor Janet Paskin joining us from

Hong Kong. Coming up next, the Innovations that will make Business work Better. You're listening to Bloomberg Business Week. This is Bloomberg. This is Bloomberg Business Week with Carol Masser and Bloomberg Quick Takes. Tim Spinovik from Boomberg Radio. I gotta see Tim what I always love about our company.

I love a lot of different things. I love the people first and foremost, but I also love the different aspects of the businesses that everybody at Bloomberg works in, and being able to tap their perspectives and pick their brains about what they are seeing. It ends up really giving certainly me a wide and deep view of our world, which is why we loved recently catching up with Karen Klin. She's founder Bloomberg Beta. Bloomberg Beta is Bloomberg's venture capital firm.

It invest in early stage tech companies that make businesses work better. Karen previously led SoftBank's team that reviewed all new investments during the period when Soft Bank invested in the likes of BuzzFeed, Seed Round an expert when it comes to the startup scene, bloom a Quick Take co host and bloem a cross asset reported Katie Greifeld and I caught up with Karen to talk about how the pandemic has only accelerated existing trends related to how we

do our jobs. Physical space was more of a dependency and we had to find alternatives. So it's been fascinating to see how work is changing now that we to find new alternatives and strengthen some of the things that we were doing before related to distributed teams and working remotely. And so what does that translate to into two? I mean, it feels like this pandemic is never ending. That remote

work uh moth people like it. But also, I mean, you've seen so many companies around Wall Street and beyond having to delay return to office plans. How does that translate into a sort of venture capital theme. There's a bunch of ways that it's affecting us. I mean, we're seeing it certainly around certain areas like learning, right, Like how do you figure out what you're supposed to do

with one's kids right, should they be in school? Should we emphasize and move more towards remote types of learning? So there's been huge growth and education. Similarly, around digital health, we had to find solutions because we couldn't necessarily go to visit our doctors physically. So that's those two have

been areas where we've seen a bunch of opportunities. And then just naturally what's happening in the workplace is changing as well, because it used to be very easy where you could pop over to somebody's desk and ask them how they're doing, and now there has to be and one of the things we love about Bloomberg goes we as you were talking about earlier, is you'd be in the pantry and you'd be able to bump into colleagues and get updates and there'll be all sorts of serendipity

that would happen, and we just don't have that now, so we need to turn to online tools and examples of such I can you know, give you a couple of them that we've seen, and we like the products so much we ended up investing. And it's things like Donut, which creates a water cooler so that there's more of an opportunity to get to know the personal side of what your colleagues have happening, as well as just to

check in, which is also extremely useful during this time. Well, what you said, Karen to about serendipity, because I do think about right, that is so much part of our Bloomberg culture. You're run into somebody from a different division, a different part of the business, and it's like, oh, wait, we should be doing this right, and that's how things happen. I mean, what's happening um in this space in terms

of innovation disruption? Do you are Are you at all a bit concerned that some of that might slow down? Although it feels like the pandemic sped up a lot of innovation, But because we're not because we're often having to meet with people virtually, that maybe some of that serendipity is lost in this environment. There's definitely a benefit to seeing people in person and just being able to read some of the reactions and responses and and around

collaborative work such as brainstorming. We haven't yet necessarily correct the code on how to do some of those well. But the other thing that we're seeing is we're just all getting inundated. There's just too many messages, alerts, notifications, and it's very hard to follow what's happening and keep keep organized. And so there's been a proliferation of tools

that have emerged there too. Like we there's a company that we like out of North Carolina, UH that is called Wrangle, And what it does is it allows people to since we're all living in slack and teams, it allows us to stay in some of those chat rooms and be able to approve vendor requests or pass speeds

onto different divisions within the company. So there's there's certainly arise in different productivity tools to ensure that some of the things that we used to be able to pop over to somebody's desk and learn about still gets done. Karen tell us a bit more about some of the companies that you guys e Bloomberg by to have invested in. When it comes to how we work, one of the areas I'm particularly excited about right now is around culture. It just because we're spread out, our homes are becoming

our workplaces. It's just so important for leadership to be much more intentional around that. And we've heard a lot of talk about this great resignation. I actually think it's an opportunity for the best leaders to upgrade their talent and that that's the way they should be looking at it. And so there are a bunch of tools and technologies that can kind of help us keep in better touch

with our our employees and know what's going on. And it might be around you know, corporate training so that people feel valued and can develop the skills they need. And we have a company we invested in called code Academy that's just getting sold to skill Soft because it helps people learn how to code uh in a much more seamless, seamless kind of way. You know, degree does corporate education training. And so there's some along the training part.

I think we're going to see a lot more. There's certainly have been some around mental health, and you know, it's now becoming more okay just because to talk about it. And so companies are are going to be offering a lot more resources to make sure the well being of their employees work, um, if they want to retain those employees. So I'm eager to see that transition. One of the other things that maybe not even in the culture realm, that I think is going to also pop up is

because we are working in different places. There are even greater security vulnerabilities happening, and so we're going to continue to see a lot of movement around security. Um. We have a company called Flashpoint, New York based, and six years ago they were a small startup. Now they're buying risk Based, which is a big deal that they're able to, you know, buy another meaningful company and continue to make us all safeter and in particular it's doing it around

the log for j channel Lunges. I think it's going to be a lot more buttoned up with that they're combined offering. That's Karen Klein, founder of Bloomberg Beta. She spoke with Carol as well as my co host on Bloomberg Quick Take Stock Katie Greifeld. Still to come on Bloomberg Business Week. A company called I d Me is trying to control and commercialize something very personal to all Americans, their identity. This is Bloomberg. These are the sounds of

a dinner, a dinner that almost didn't happen. Broadcasting from the financial capital of the world, Bloomberg eleven Rio in New York to Washington, d C. Bloomberg to Boston, Bloomberg one oh six one to San Francisco, Bloomberg nine six to the Country, Sirius XM Chene and around the globe, the Bloomberg Business and Bloomberg Radio dot Com. This is Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes Tim Stenovan on Bloomberg Radio. Tim ever heard of ID not?

I gotta be honest with you, not before reading this story. Well, I gotta say You're not alone. I hadn't heard of it either, And yet maybe we all should be putting it on our radar because this little known fraud prevention company is trying to become the digital intermediary between the government and all of us. The online authentication company has become a sort of digital gatekeeper for many Americans, and

its grip is only getting tighter. The story from Bloomberg New Senior economics writer Sean don And and our Seattle Bureau chief Dina Bass is featured in this week's issue of the magazine. Sean joined us along with Bloomberg busess Week editor Joe Webber, to help shed light on the company and its military veteran co founder, Blake Hall. They

are about a little over a decade old. It was created by two veterans who were at Harvard Business School together, a guy called Blake Hall and the guy called Matt Thompson. And originally it was to try and set up a

kind of marketplace targeting veterans. And they quickly ran into this issue of how do we verify that people have served and very quickly discovered that actually the software that they had which allowed veterans to verify their identity was actually the most powerful part of their business, and began

focusing on on that. And you fast forward to and and the pandemic, and UM I d ME as as as they're called, were hired by By the end of the pandemic, it was twenty seven states to try and verify the identity of people who were applying for unemployment benefits, you know. And I feel like that was such a big, big trend. Hey, Joel, come on in on this. Joe

Weber is the editor Bloomberg Business Week magazine. I do feel like when all those benefits are coming out, we were finding out about problems in this system, and companies like this one, well, that's right, and and I d ME really helped solve this problem. You know, this interface between government agencies and sort of the digital the digital you I guess you could could think of it UM. And it really caught my attention. And and was this number that UM I d me put it into the ether,

which was this four billion dollars of fraud UM. And the moment that that was really introduced UM from from the company, I remember Sean just being like, well, that's a really big number. And so that kind of set off like our interest in it because we no one had really been able to to actually connect dots to to anything that that big. And and boy it was big. And Sean will take it back over to you because that four hundred billion number, how real is it? Yeah?

So I mean what we're really interesting is the CEO Blake Hall, came out with assessment that essentially half of all unemployment benefits that have been paid out by Washington had been stolen by fraud sters. He was billing it as the biggest cyber heist UH in American history UH at the time, and at the time I was looking that he came out with that, I was doing some reporting on the unemployment system and people who were struggling to get the benefits that that they were owed at

the time. And one of the things I kept hearing from people was that they were running into problems getting through I d me s um verification and and essentially validating that they were who they said they were, and that a huge number of a of of claims were

being held up because of this no system. So I I kind of immediately or fairly quickly got in touch with Joel and and some of my other editors and said, hey, we really should be digging into this uh more deeply and kind of interrogating this a bit more because and then you know, you scratched the service little more, and you discovered that I d me actually last summer signed a contract with the I r S to help UH delivered the child tax credit payments that went out, and

so that if you set up an online account with the I r S, you have to use id ME. Now they also have an account with the Social Security Administration. They also do work with the Veterans Affairs Department, which means veterans who are seeking medical care sometimes have to set up I d me account. Altogether, now, I d says it has sixty eight million registered users. That's one in four American adults who, whether they know it or not, have an id ME account where it's sometimes verified their

identity there. And it's becoming this kind of gatekeeper to government services and benefits. And we had the stress test in the pandemic with what happened in the unemployment system, and well I d ME says rightly that they stopped a lot of fraud and so on. They also had a lot of problems associated with their software that raised a lot of questions about who we should allow to be the kind of gatekeeper to government services and should it be a for profit private company. That's Bloomberg Senior

economics writer Sean Donnin. You're listening to Bloomberg Business Week. Coming up the finer things you've come to expect from our team at Bloomberg Pursuits. We're gonna go inside the top social clubs in New York and beyond, and then we're gonna take you to one of Carol's favorite places in the world on a mission to make it one of your favorite places. Yeah, but you don't want too many people going, that's true. Don't listen to this story. Wait,

listen to this story. Don't listen to the story that's coming up next. This is Bloomberg. You're listening to Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes Tim Stinovik from Bloomberg Radio. Social clubs they are steeped in history and they're having a renaissance today amid the pandemic. There are several new London style private social clubs in New York City, and the ones that were already here, Tim,

they're expanding. The reasons for this growth are more nuanced than just networking, though, Carol, So over the last couple of years, people they're going out less, and people with the means to do so they want to go to a known quantity into places where they know that they're going to have a good time. Yeah, it makes sense. Well, here tell us more about what the Big Apple socially really do behind closed doors. Is Bloomberg Pursuits Arts columnist

James Tarmy. James, you guys always have the fun story. So, all right, what's going on here? Because it does sound like they're on the up swing. Yeah, they are, and they were on the upswing even before COVID, And you know, there's there's a real distinction to be made between the extant members clubs of New York City, like the Knickerbocker in the Metropolitan, the Union Club. These are all clubs that were founded in the nineteenth century in the model

of a British gentleman's club. It's a place where you kind of hang out. It's an alternative to being at home. You read the paper, you drink, you have dinner, and it's very kind of funny, duddy. You know. These comes still today require people to wear blazers and ties and you can't get in otherwise. And I don't know if you guys have ever been to, but the food is inedible. I know, what's the deal with that? Um? I you know, honestly, I it's like they don't want you to eat the

meals there. Well, that are the people who are eating the meals don't have a sense of taste anymore and don't care. But the point is that there's a new generation of clubs that are coming in that are that that's really nothing like the old generation. And this is what my article is about. So we're talking Costas Cipriani, Zero Bond, Soho House, which has been around for years,

and some others as well. What sort of sets these clubs apart from the old fuddy duddy ones that that you were referring to, right, yeah, exactly right, you know these are these are places first of all, that place a huge emphasis on their culinary offerings, their places where, um, you know, you can be a lot more informal. Let's say, you know that you don't need to have a reptile and low forest to get in. Um. They are places alas yeah, I don't even know. If you don't know,

you can't afford it, Carola. Um. You know, I think this new generation distinguishes itself, primarily, UM by trying to create uh you know, and this is from their own marking language, but trying to kind of create a community of people who still want there to be some sort of um barrier to entrance, let's say, But it's not the same set of criteria that um, these older clubs have. So the core club, which I actually um kind of has has not yet the newest version of which has

not yet come out. Um it will be ready in September, is a place where you know, they want captains of industry to be meeting with captains of culture, meeting with you know, I mean, it's a very kind of high caliber group of people, but it's not necessarily people who are who are sort of sitting around UM by by the fire sort of situation, smoking jackets and lowering. There is the dollar initiation. That's what I wanted to talk to. I feel like the fees are all over the place.

Some of them seem fairly affordable, and some of them are like wait what right, Well, so this is this is the thing. I mean, they are across the board, very very different, but they're also offering very different things. So the amand Club, which has this UM kind of famously reported hundred dollar initiation fee, it's actually UM an intergenerational things. So first of all, it's it's per family. You get to pass it down to the generations. It's like it's not like the kids or grandkids need to

UM pay anything. Once you have it, you have it. And the amand Club obviously has a physical location, as we report in UM the article in Business Week, UH their new New York hotel. But it's part of the outgrowth of a kind of membership rewards program where there's concerges and there's many opportunities for people in this membership program in various amount resorts around the world that UM are not available to other people. Is there really demand for all of this? Well, you know, this is the

this is the multimillion dollar question. Soho House UM, which is now publicly treated company UM, says that they added UM. They they keep adding tons of members UM. You know, in mid UM they had roughly a hundred and twenty thousand members UM by the end of the fourth I believe by the end of so six months later they had added something like nineteen thousand members UM. Uh. That's that's that's rough UM. But you know there are lots

of people globally who want to join. The question is for places like the Core club, which have a much higher initiation fee, much higher annual barships, are there enough people who want to join this pretty specific place and UM? As I say in my people, the argument for it before COVID was that UM places like Core are basically trying to serve as a port of call for a

certain member of the elite. All right, our thanks to James Tarmy, it's a great wead in pursuits from socializing now with lots of others at clubs to a quiet and luxurious Caribbean. I, like I said, this is my prefern mode. Let's bring in travel editor Nikki ex Stein, fresh off a trip from one of my favorite places on Earth and Guilla in the Eastern Caribbean. I have to say, Nikki, I almost didn't want to talk about this with you, because this is truly one of my

favorite places. Went there the first time thirty years ago. But what I love about it is that it's such a quiet island. I think you are in the majority in saying that in terms of people who know ang are right. It's like just amazing that's kept secret. And everyone that I met on the island, it's so funny how to story, just like yours. They've been going there for decades, maybe even since they were little kids. Um, they go back again and again, maybe every single year.

People have this amazing connection to this tiny island. It's the size of Manhattan and has only fourteen thousand people on it um and it's just so full of incredible things to see and do. Maybe now more than ever does it stay like that though. I mean one point that you make in in the piece, Nikki, by the way,

really tough job. Okay, you know you weren't with us last week I think or the week before, because you were literally, you know, I don't want to say on vacation, but you were at a place where people go on vacations. You were working. Okay. The price I pay is that I sometimes eat like three dinners a night, So I feel so bad for you. How much of this has to do with this idea that there are no cruise ships there? I mean, that's that's huge, it's pretty bad.

So there's no large cruise ships. Some very very small, like hundred person cruise ships can into the harbor and then tender in. But they don't even have a marina for cruise ships. And that's that's all by design. The William and Gwillian Tourism Ministry has a very specific vision for how they manage tourism on the island, which is

to keep prices relatively high. The average hotel price in terms of the quality hotels on the island is around a thousand dollars a night, and to keep crowd sparse and um, this is really what helps the island retain that specialness, is that it's not overrun, it's undeveloped, it's very tranquil, Um. The beaches are completely pristine, and the people who go there make a commitment to go there.

You have to take at least two different plans, like you can't take a direct light twin Will unless you've got a private jet. Um. It's it's really a commitment. Um. And that's kind of what makes it special. Yeah. I agree. And and it's there's something about you know, the resorts there, it's they're really gorgeous. But I have to also say that I went there the first time for my honeymoon, and it was in September Ber It was hurricane season, so much of the Caribbean was shut down and they're like,

do you want to try this place called Aguilla? And we're like okay, and so we went. But the beaches are the most beautiful that I've ever seen. Yeah, I was blown away. I've seen some pretty spectacular beaches in my lifetime, but particularly so. I stated a new resort called Aurora Anguilla, which is really pushing the luxury quotient on the island. And that's saying something. This is a high bar already, but they brought in a culinary team from eleven Madison Park. Um, it's a big deal. What

they're doing down there. And they're located on a little beach called Rendezvous Bay, and it is one of the most beautiful beaches I've seen anywhere. No surprise, it's been rated one of the best beaches in the Caribbean by basically every publication in the world. So you know, well, Nicky, what are they What are they doing differently in terms of because there are you give a nice overview of some of the resorts there. What is this new resort

doing that maybe sets it apart? Well? Really, you know, Anguilla has always has always had a strong pride in its food scene, but I found it to be a little bit patchy. There's there's great places, and there's not as great places like anywhere else. Um. I think what Aurora has done is really raised the caliber of that food scene to a totally new place by bringing in these incredible chefs from New York who are building the first kind of prefix style menu on the island. On

a beautiful little beach side patio. You can listen to the waves crash and while you have this like phenomenally artistically plated meal. Um. And all of the restaurants are run by the same eleven Madison Park team, so the caliber of their food is a real knockout. Well, NICKI, I wish that story would have come out a couple

of weeks ago. Would have saved me a lot of time in agony in my own research when it comes to travel insurance had other great installment of Bloomberg pursuits this week are big thanks to arts columnist James Tarmy and travel editor Nikki Eckstein for their time. Don't tell James, but I'm skipping the social claps and all them all about those experiences too, and that reps up the weekend edition of Bloomberg Business Week from Bloomberg Radio. Thanks so

much for joining us. I'm Carol Masser and I'm Tim Stanovk. Be sure to tune into Bloomberg Business Week Monday through Friday, starting at two pm Wall Street Time on Bloomberg Radio. You can also watch our daily broadcast on YouTube just search Bloomberg Global News. Also check out our Bloomberg Business Week podcast. You can find it at Bloomberg dot com, Apple, or wherever you get your podcasts. Bloomberg Business Week is available on newsstands now at Bloomberg dot com and on

the Bloomberg Terminal. You can also see me on Bloomberg Quick Take available on bloomberg dot com, slash qt, and streaming platforms like Roku, Apple TV, Samsung TV and more. Have a great weekend everyone, stay safe. See and Anguilla. This is Bloomberg