1 New era for third largest democracy, Indonesia (Karishma Vaswani on BBC) After a heated election, Joko Widodo has been declared president of the world’s third-largest democracy. But what does a Jokowi presidency mean for Indonesia? Many say it is his quintessential “man of the people” image that helped him get elected. “If nothing else, that will be the single most important achievement of his presidency,” said Dharsono Hartono, an Indonesian businessman. “He’s made it possible for us to say to our kids – look at Jokowi – he used to sell furniture and grew up near a slum – and now he’s our president. Now anyone can be president.”
It’s not an achievement to be taken lightly. Only members of the political and military elite have been elected as presidents in this country. Mr Widodo is the first leader from outside the establishment to be elected to the highest office in the land. It is because of some of his promises that Mr Widodo has won many fans across the country. His random spot checks on government offices and his “blusukans” (unannounced visits to slum areas) have made him a hero amongst Indonesia’s poor.
High on the list of Mr Widodo’s priorities will be to handle Indonesia’s economy – South East Asia’s largest – and to tackle the politically-sensitive issue of fuel subsidies. Indonesia spends around $20b every year subsidising fuel for its citizens, making its petrol amongst the cheapest in the world. Mr Widodo has promised to phase out these subsidies but that’s not going to be easy. Similar efforts by previous presidents have proved messy and chaotic, resulting in nationwide street protests.
Mr Widodo will also have to steer a slowing economy back to good health. Indonesia has been suffering from the end of the commodity boom – which means that it’s no longer making as much money as it did when coal prices were sky high. He’s also got to reach out to foreign investors to help rebuild confidence in South East Asia’s largest economy. There’s no denying that Jokowi is a hero for many Indonesians who see him as the panacea to all their ills. His biggest challenge, however, will be living up to those expectations.
2 Technology and recession polarize work world (Claire Cain Miller in The New York Times) The American work force has been growing polarized for decades. On one end, there are highly skilled jobs like writing software or performing surgery, and on the other are service jobs like child care and cutting hair. The jobs in the middle, meanwhile, such as factory work, sales and bookkeeping, are shrinking — one of the reasons for the economy’s slow climb out of the recession.
Where did those jobs go? Part of the answer lies in Silicon Valley. A new working paper from the National Bureau of Economic Research shows how the recession accelerated the displacement of these midwage jobs. As technology now encroaches on jobs that people assumed would always belong to humans, it is useful to consider those most affected by the job displacement so far: the young, the less educated and men.
Young people and those with only a high school diploma are much more likely to be unemployed and replaced by a machine. And to the authors’ surprise, men are more vulnerable than women. The changing demographics in the US play a small role in the loss of midwage jobs, as do policies related to offshoring, unions and the minimum wage. But the study found that two-thirds of the decline in routine jobs is explained by a drop in the number of unemployed people who can get these jobs, and an increase in the number of people who had these jobs and lost them.
The line between jobs that are considered routine and able to be done by a machine and those that require a human brain is a blurry one and becoming blurrier, said Erik Brynjolfsson and Andrew McAfee of MIT, authors of “The Second Machine Age.” Already, machines are learning to do certain jobs that once seemed confined to humans, from elder care to wealth management to art. The question is what will happen if these jobs also disappear.
3 Netflix subscribers, earnings soar (San Francisco Chronicle) Netflix’s second-quarter earnings more than doubled as new episodes from one of its hit series helped the Internet video service surpass 50 million worldwide subscribers for the first time.
The gains include an additional 570,000 US subscribers, slightly more than Netflix’s management predicted. The quarter is typically the company’s slowest of the year, as people spend more time outdoors instead of watching video. Netflix’s stock rose $4.65 to $456.60 in extended trading. The shares have surged by 23 percent this year.
The Internet video service’s vast library includes thousands of previously released movies and shows already shown on traditional TV networks. Netflix Inc. ended June with 36.2 million subscribers in the US and 13.8 million customers in roughly 40 other countries. The company expects to add another 3.7 million worldwide subscribers in the current quarter ending in September. It also plans to start selling its Internet video service in six more European countries in September, including Germany and France.
As Netflix’s video-streaming service steadily grows, the DVD-by-mail rental business that once was the company’s foundation is slowly crumbling. Netflix earned $71 million, or $1.15 per share, during the April-June period. That compared to income of $29.5 million, or 49 cents per share, at the same time last year. Revenue climbed 25 percent from last year to $1.3 billion, matching analyst projections.
4 iPad sales slump hits Apple shares (Juliette Garside in The Guardian) Sales of the iPad have slumped to half their pre-Christmas high, with signs that demand for Apple’s tablet computer may be in permanent decline. Despite a forecast-busting $7.7bn profit, the computing firm’s shares dipped in after-hours trading as sales of its tablet fell to 13.3m from their all-time high of 26m in the quarter to December.
Despite its adoption by thousands of businesses, schools and government agencies, the 9% year-on-year fall in units sold prompted speculation that Apple has reached “peak iPad”. “If somebody had forecast this two years ago, it would have been seen as a fever dream,” said Terro Kuittinen at social media consultancy Magid Associates. While many phone owners still regard the latest iPhone as a status symbol, it appears tablet buyers are less concerned with replacing their iPad every one or two years.
The slump means Apple is now largely dependent on the iPhone, which sold 35.2m units, up 13% on the same period last year, to fuel growth. Revenues came in at $37.4bn for the June quarter, within the company’s guided range, and Apple said revenues would be between $37bn and $40bn in the September quarter.
Having reached $705 two years ago (a stock split in June reduced the value of the shares by a factor of seven), the shares slumped to under $500 as Apple dropped plans to launch a TV and Samsung gained momentum in smartphones.