The Futures - No. 09

From Quantumrun

Jun 13, 2023

TLDR: In this issue

The Quantumrun team shares actionable trend insights about genetically modified crops and our uninsurable future due to climate change.

Future signals to watch

Startups are prioritizing hourly and gig workers during a period when employers are finding it challenging to staff these types of positions at current wage rates.
NVIDIA is at the forefront of developing more efficient processors to train expansive language models for AI, a competition that will only intensify as AI applications increase.
Governments can facilitate the growth and development of the biomedical and health sector by supplying guidelines, funding, and essential infrastructure.
Globally, Norway has the highest number of electric vehicles (EVs) per person and charging stations per EV.
Novo Nordisk, the producer of weight-loss drugs Ozempic and Wegovy, has reported encouraging outcomes from clinical trials for a pill version of its popular drugs.
Not just Japan, South Korea, and Italy, but now Brazil, Mexico, and Thailand also serve as primary examples of aging nations.
NATO member Finland is providing valuable insights into agile combat employment (ACE), a term rapidly gaining traction among Western air forces.

Are GMOs the next geopolitical disruptor?

Source: Bloomberg / Artist: Joe Melhuish

Brazil has given the green light for the growth and distribution of genetically modified wheat that is resilient to drought and capable of being grown in tropical climates. This move marks a significant endorsement for a once-controversial crop. The appeal of genetically modified organisms (GMOs) is increasing across South America, particularly amid concerns about the global food supply (triggered by the Russia-Ukraine war) and the prevalent dry weather conditions.

Wheat, due to its versatility, has been humanity's top crop since time immemorial, hence the success of wheat-producing nations and cultures vs. non-wheat producers. Before the end of the 2020s, Brazil could become a net exporter of wheat thanks to this new wheat strain, which promises productivity comparable to that of the Great Plains in the US. However, there may be high input costs due to Brazil’s low-fertility land.

This new wheat strain can significantly disrupt the existing global power dynamics in the long term. If the strain proves successful, it could enable tropical regions to grow their wheat, increasing food security without reliance on international trade. This shift could also diminish the power imbalance between the global North and South that has existed throughout history due to food production imbalances. According to the Food and Agriculture Organization, in 2021, more than half of the world’s population affected by hunger were in Asia, and over one-third were in Africa.

Actionable trend insights as genetically modified crops gain traction

For entrepreneurs: The growing public comfort with GMO crops can open funding opportunities to develop GMO products for specialized markets. Likewise, GMO crops and foods can be developed as feed for lab-grown meats or specialized for indoor farming operations.
For corporate innovators: Agricultural corporations can use GM crops to enhance national supply chain efficiency. For instance, an increasing variety of crops can be genetically modified to grow faster, yield more per acre, resist pests and diseases, and most importantly, be engineered to grow in atypical climates. For example, being able to grow tropical fruits in temperate climates and temperate cereals in tropical climates could potentially increase the range of foods that can be grown in any given country, improving a nation’s food security and reducing import costs.
For public sector innovators: The public sector can use GM crops to improve food security and public health. For example, crops can be genetically modified to be more nutritious (such as Golden Rice, engineered to contain more Vitamin A). These crops can be used in public health initiatives to combat malnutrition and related health problems. Additionally, GM crops that are more resistant to environmental stresses can contribute to food security in regions prone to droughts, floods, or pests.

Trending research reports from the world wide web

The rebound from the COVID-19 pandemic and the reaction to the worldwide energy crisis have significantly spurred global investment in clean energy.
The percentage of clients who preferred virtual consultations as their primary channel for receiving investment management advice surged from 12 percent in 2021 to 46 percent in 2023.
As of 2023, the average digital nomad is a 34-year-old, single, white male who loves coffee and makes USD $85,000 annually.
iLib lists over 3,000 most popular AI websites based on monthly traffic. OpenAI has 9.9 billion monthly visits so far.

Climate change is making insurance impossible

In the face of intensifying climate risks, State Farm and Allstate, two of California's largest insurers, have announced they will no longer issue new policies for personal and business property in the state. While keeping existing policyholders, they cited rising construction costs, increasing catastrophe exposure, and a challenging reinsurance market as reasons for their decision. With State Farm accounting for 20 percent of California's home insurance policies and 13 percent of commercial policies, their withdrawal signals a significant shift.

This move follows a warning from California Insurance Commissioner Ricardo Lara that the insurance industry must consider long-term climate risks. The cumulative effects of rising real estate prices, climate change impacts, and human activity intensifying climate threats have increased the cost and magnitude of losses, prompting insurers to adjust their coverage strategies. Meanwhile, construction costs are escalating due to new disaster-resistant building codes and lingering supply chain disruptions.

Globally, insurance firms are pouring millions into research to grasp the risks stemming from severe weather incidents tied to climate change. Should climate change lead to a higher frequency of these incidents, residents living in high-risk zones may face significant increases in their insurance premiums. In New Zealand, a growing trend is the individual calculation of premiums for each house, leading to neighboring properties being charged different premiums based on their respective flood and earthquake damage risks.

Actionable trend insights as climate change make certain areas uninsurable

For entrepreneurs: As traditional insurance models might not cover areas at high risk due to climate change, this could open doors for innovative entrepreneurs to develop new risk management models. For instance, they could create microinsurance products targeting these specific zones, where premiums are pooled from a vast number of people to pay for the losses of a few. Alternatively, entrepreneurs could develop parametric insurance products that pay out when specific pre-agreed parameters are met, like a certain flood level or wind speed.
For corporate innovators: Corporations, especially in the construction, engineering, and technology sectors, can invest further into developing climate-resilient infrastructure. This development might include flood-resistant urban designs, heat-resistant materials, or new forms of renewable energy that can withstand harsh conditions. They can also invest in services like predictive analytics for climate risk, remote sensing technology for monitoring environmental changes, and disaster risk reduction and management consulting.
For public sector innovators: The public sector can prioritize investment in sustainable and resilient urban planning. Such investments may involve constructing sea walls, expanding wetlands to absorb excess water, implementing green infrastructure such as rooftop gardens, and improving the overall design of cities to make them more resistant to extreme weather events. At the same time, governments can restrict further urban expansion into high-risk regions, as well as work on climate change mitigation efforts, like investing in renewable energy and pushing policies to reduce greenhouse gas emissions.

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Outside curiosities

Accessory dwelling units (ADUs), sometimes called "granny flats," "backyard homes," "in-law suites," or "backyard cottages," might help solve the housing crisis in many of the world's most expensive cities.
The world’s largest captive crocodile (located in Australia) turns 120 and is giving scientists clues on long life.
Researchers from the Shark Lab at California State University have deployed drones to analyze the behavior of young white sharks and how close they swim up to humans. (It's pretty close but still safe.)