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C A R B O N M O N I T O R C I T I E S 2.0: T R A C K I N G U R B A N E M I S S I O N S I N N E A R R E A L T I M E M a r c h 2 0 2 4 © 2024 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its ...

January 27, 2025 03:14 PM GMT Tech Bytes | Asia Pacific M Idea A world-class AI model for just $6M DeepSeek R1 has demonstrated that cutting-edge AI capabilities can be achieved with significantly less hardware, defying conventional expectations of computing power requirements. Whether it's a one-off achievement or a sign of things to come, it is reshaping how we think about AI development. What's new? Chinese startup DeepSeek recently achieved frontier AI performance at a fraction of the cost with a model ...

Industry Overview - Large language models (LLMs) have gained significant global interest due to their ability to generate human-like responses and perform time-saving tasks, positioning them as a potential pathway to general artificial intelligence (GAI) [2] - The pursuit of GAI through LLMs has attracted billions of dollars in investment, particularly from private sector companies in the US and Europe, overshadowing research on alternative approaches [3] - China adopts a state-driven, diversified AI development strategy, investing in LLMs while simultaneously exploring alternative GAI pathways, including brain-inspired approaches [4] Investment and Development - US and European companies dominate LLM research, with significant investments in models like OpenAI's GPT, Google's Gemini, and Meta's Llama, despite known limitations such as high costs, power consumption, and unreliable outputs [3][8] - China's approach includes state-sponsored research to integrate values into AI, ensuring alignment with national and societal needs, while also exploring brain-inspired and embodied intelligence models [4][5] - The Chinese government supports a multifaceted AI development plan, including LLMs, brain-inspired models, and embodied intelligence, with significant resources allocated to alternative GAI pathways [9][24] Critiques of LLMs - LLMs face criticism for their inability to achieve true reasoning, understanding, and generalization, with persistent issues such as hallucinations, lack of common sense, and high computational demands [12][15] - Chinese scientists express skepticism about LLMs as a sole path to GAI, emphasizing the need for models that are embodied, brain-inspired, and capable of real-time environmental interaction [16][18][19] - Research highlights that increasing model complexity alone may not overcome LLMs' fundamental limitations, with concerns about the lack of qualitative improvements despite scaling [15][20] Alternative Approaches - China is actively pursuing alternative GAI pathways, including brain-inspired models, embodied intelligence, and hybrid human-machine systems, supported by government policies and research initiatives [24][26] - Chinese researchers are developing spiking neural networks, brain-computer interfaces, and other biologically inspired models to address LLMs' shortcomings and achieve more human-like intelligence [21][27] - The Beijing government has issued plans to promote embodied AI, focusing on real-time environmental interaction and humanoid robotics, as part of a broader strategy to diversify AI research [24] Academic and Research Contributions - Chinese academic institutions and companies, such as Tsinghua University, Peking University, and the Chinese Academy of Sciences, are leading research in alternative GAI models, with significant publications in brain-inspired and embodied intelligence [27][32] - Research papers from Chinese scientists address LLM deficits, proposing solutions such as modular systems, brain-inspired algorithms, and rigorous testing standards to improve reasoning and reduce hallucinations [30][31] - Prominent Chinese AI researchers, including Tang Jie, Zhang Yaqin, and Zhu Songchun, advocate for integrating statistical models with brain-inspired and embodied approaches to achieve GAI [18][19][20] Strategic Implications - China's diversified AI research portfolio contrasts with the US and Europe's focus on LLMs, potentially giving China a strategic advantage in the race to achieve GAI [39][43] - The Chinese government's emphasis on value-driven AI and alternative pathways reflects concerns about the uncontrollability of large statistical models and the need for AI systems that align with national values [44][46] - China's strategic investments in non-LLM-based AI approaches, similar to its success in photovoltaics and electric vehicles, could position it as a global leader in GAI development [40][43]

Industry Investment Rating - The report does not explicitly provide an industry investment rating, but it highlights significant gender-based disparities in financial access and capital allocation, suggesting potential investment opportunities in addressing these gaps [5][6] Core Findings - Female-managed firms are equally likely to apply for credit as male-managed firms but receive lower credit amounts, indicating intensive margin credit constraints [5][6] - Female-managed firms demonstrate a 15% higher average return on capital compared to male-managed firms, suggesting potential capital misallocation [6] - Gender disparities in credit access are more pronounced in countries with restrictive social and cultural norms [17][18] Data and Methodology - The study uses firm-level data from the World Bank Enterprise Surveys (WBES) for 61 countries, focusing on formal firms with 5+ employees in the manufacturing sector [21] - Gender disparities are analyzed using both extensive (credit application, rejection rates) and intensive (loan amounts) margins [41] - Countries are classified as more or less traditional based on social perceptions about women's roles, using data from the World Values Survey (WVS) [24] Gender Gaps in Financial Access - Female-managed firms are less likely to have their credit applications rejected and more likely to have open credit lines compared to male-managed firms [51] - However, female-managed firms receive 39% lower loan amounts on average, with the disparity being more severe (52% lower) in traditional countries [53] - These disparities are not explained by differences in risk profiles, profitability, or productivity between female and male-managed firms [56] Capital Misallocation - Female-managed firms show a 15% higher average return on capital, indicating potential capital misallocation, particularly in traditional countries [68] - The higher return on capital for female-managed firms suggests they could benefit from increased access to credit to align with male-managed firms' performance [68] - Capital misallocation is more pronounced in firms that apply for and receive credit, especially in traditional countries [71] Policy Implications - The findings suggest the need for gender-inclusive financial products and services to address the specific constraints faced by female entrepreneurs [91] - Enhancing access to markets and technology for female-led firms could improve their sales per worker and overall performance [92] - Legal and regulatory reforms, along with gender intelligence training for financial intermediaries, could help reduce capital misallocation and improve credit access for women-led businesses [94]

Industry Investment Rating - The report does not explicitly provide an investment rating for the industry, but it emphasizes the growing importance of cross-border power grid interconnections and regional electricity markets as key enablers for the sustainable energy transition [17][18][19] Core Report Insights - The report highlights the multifaceted drivers of cross-border power trade, including economic value, enhanced power supply security, and climate change mitigation [19] - It underscores the importance of both physical (hard) and regulatory/operational (soft) infrastructure for successful regional power system integration [20][23] - The report identifies political commitment and financing as the two fundamental challenges to achieving deeper regional power grid integration [28][169] Summary by Section Executive Summary - The report aims to provide a foundational guide for integrating power grids and markets across borders, particularly in developing and emerging economies [17] - It emphasizes the economic, security, and environmental benefits of cross-border power trade, including cost savings, improved reliability, and reduced carbon emissions [19][20] - The report outlines five core building blocks for successful integration: interconnection infrastructure, planning and investment coordination, technical and operational coordination, commercial arrangements and market design, and institutional architecture [22][23] Power Trade Across Borders - Infrastructure connectivity, particularly power grid interconnections, is recognized as pivotal for sustainable development and shared prosperity [33] - Cross-border power trade enables countries with electricity surpluses to export power, while energy-deficient countries can improve access to reliable and affordable electricity [35] - The report highlights the potential for grid interconnection on a larger scale, connecting regions with different time zones and weather patterns to better utilize variable renewable energy (VRE) [36] Evolution of the Power Grid and Market Integration - Power system integration has evolved from bilateral grid interconnections to regional power pools and market-based trading [43] - Integration levels range from early-stage (limited coordination) to shallow integration (some coordination) and deep integration (well-developed institutions and competitive markets) [44][46] - The report provides examples of regional power pools at different integration levels, such as the Southern African Power Pool (SAPP) and the European Union's internal energy market [45][46] Drivers of Cross-Border Power Integration - The primary drivers of regional power system integration include economic efficiencies, power supply security, and climate change mitigation [67] - Economic benefits are derived from lower operating costs, economies of scale, and revenue opportunities from electricity exports [72] - Cross-border power trade enhances supply security by aggregating diverse energy resources and balancing supply and demand across regions [74] - Grid interconnections play a critical role in integrating larger shares of renewable energy and reducing carbon emissions [81][82] Building Blocks of Regional Grid Interconnections and Electricity Markets - Successful regional integration requires both physical infrastructure (transmission lines, substations) and enabling soft infrastructure (regulatory, operational, and market frameworks) [87][90] - Planning and investment coordination are essential to optimize generation and transmission investments across participating countries [108][109] - Technical and operational coordination, including grid codes and interconnector capacity allocation, are critical for efficient and reliable power system integration [125][130] - Commercial arrangements and market design, such as transitioning from bilateral trading to regional markets, are key to enhancing cost efficiency and competitiveness [137][140] Challenges of the Power Grid and Market Integration - Political commitment and cooperation are fundamental to overcoming challenges in cross-border grid integration, particularly in regions with complex political dynamics [170][171] - Financing cross-border interconnection projects is more challenging than financing renewable projects due to long lead times, revenue uncertainty, and regulatory complexities [176][177] - Developing countries face additional challenges, including limited domestic transmission infrastructure and difficulties in accessing affordable financing [179] Looking Ahead - Addressing the challenges of power grid integration requires greater partnerships, cooperation, and coordination among governments and the private sector [183] - The report emphasizes the need for global and regional initiatives to foster political commitment, build trust, and prioritize transnational benefits [184] - Scaling up financing for cross-border infrastructure, including concessional financing and innovative mechanisms like green bonds, is critical for advancing regional power grid integration [189][190]

Industry Investment Rating - The report does not explicitly provide an investment rating for the industry, but it highlights India's significant economic potential and challenges [2][3][4] Core Viewpoints - India's economic growth is driven by its demographic dividend, urbanization, and infrastructure investments, positioning it as a potential global economic powerhouse [2][4][13] - The services sector is the main contributor to India's GDP growth, while the manufacturing sector faces structural challenges [10][50][51] - India's labor market is characterized by high informal employment, low female participation, and a skills mismatch, which hinder inclusive growth [35][43][44] - Infrastructure development is a key growth catalyst, with significant investments in transportation, energy, and urban infrastructure [30][31][32] Economic Foundations and Growth Catalysts - India's services sector accounts for roughly 50% of its gross value added (GVA), with industries like IT, financial services, and telecommunications driving growth [10][11] - Domestic consumption is a primary driver of India's economy, accounting for 60% of GDP, while exports play a smaller role at 22% of GDP [12] - India's demographic dividend, with a median age of 28 years and a large working-age population, is a key driver of future growth [14][15][16] - Urbanization is transforming India's economic landscape, with urban centers like Mumbai, Delhi, and Bangalore becoming innovation hubs [21][22][23] - The expansion of India's middle class, expected to reach 60% of the population by 2047, is driving consumption across various sectors [26][27][28] Obstacles and Challenges - India's labor market faces structural issues, including high unemployment (8.4%), low female participation (33%), and a dominance of informal employment (88.8%) [35][37][42] - The manufacturing sector's share of GVA has declined to 12.8%, hindered by low R&D investment, regulatory complexity, and infrastructure deficits [51][55][56] - Regional disparities and social inequalities further complicate India's labor market challenges, limiting access to stable employment opportunities [47][48][49] - India's stagnant FDI inflows (0.8% of GDP in 2023) reflect limited integration into global value chains and regulatory inefficiencies [60][61] Strategic Recommendations for Businesses - Companies should engage in strategic workforce planning to address skills mismatches and capitalize on India's demographic dividend [72][73][74] - Adapting to local markets, including consumer preferences and regulatory environments, is crucial for success in India [75] - Operational excellence, including AI-driven transformation and continuous performance improvement, is essential for profitability in the Indian market [76] Conclusion - India has significant potential to become a global manufacturing hub, but it must address challenges related to land, labor, and law to sustain robust growth [65][66][67] - Policy reforms in land acquisition, labor laws, and bureaucratic efficiency are critical for India's industrial development [68][69][70]

Industry Overview - PFAS, known as "forever chemicals," are ubiquitous synthetic chemicals used since the 1940s for their unique properties like water and oil repellency, resistance to extreme conditions, and durability [3] - Approximately 250 out of thousands of PFAS types have commercial significance and are found in a wide range of products, including textiles, food packaging, electronics, and medical devices [3][8] - PFAS are persistent in the environment and have been linked to serious health issues such as cancer, high cholesterol, and liver damage, raising global concerns since the early 2000s [4] Regulatory Landscape - The EU has added three groups of PFAS to its Substances of Very High Concern (SVHC) list between 2019 and 2023, with a proposal to regulate them as a group submitted in January 2023 [7] - Several European countries are pushing for greater transparency and decisive regulatory action, potentially leading to a near-total ban on PFAS in Europe [5][7] - In the US, states like California, New York, and Maine are implementing significant measures, including disclosure requirements and plans for a complete ban on non-essential PFAS by 2030 [13] Legal and Market Challenges - Legal challenges are increasing, with companies like Chemours and 3M facing lawsuits and settlements related to PFAS contamination [11][12] - 3M announced plans to phase out all PFAS production by the end of 2025, impacting over $1 billion in annual revenue [14] - The Investor Initiative on Hazardous Chemicals (IIHC), with over 60 global asset managers, is urging companies to phase out hazardous chemicals, including PFAS [15] Opportunities and Innovations - Growing regulatory pressure is driving innovation, with companies developing PFAS-free alternatives and cleaner business models [16] - Brands like Norrøna and Patagonia have adopted PFAS-free water-repellent technologies, setting new standards for sustainable practices [16] - Research initiatives, such as those by TNO and SERDP, are working on PFAS-free firefighting foams and alternatives for electronics and semiconductors [21] Essential vs Non-Essential Use - Essential use cases, such as medical devices and semiconductors, may receive longer timelines for transitioning away from PFAS, while non-essential uses like consumer goods face stricter deadlines [19][23] - Companies in non-essential PFAS applications, such as IKEA, are already shifting toward alternatives, with over 50% of EU PFAS production tied to non-essential uses like apparel and food packaging [26][27] Strategic Actions for Companies - Companies must assess PFAS exposure in their portfolios, monitor legislation, and invest in alternative materials to mitigate risks and gain competitive advantages [33][34] - Developing a comprehensive PFAS strategy, including product recalls and information sharing, is critical for timely and adequate responses [29][32] - Proactive measures, such as identifying existing technologies and collaborating with research teams, can position companies for success in a PFAS-restricted future [34]

Industry Overview - Digital health technologies, including digital applications, data, and information systems, are transforming healthcare by improving patient experience, operational efficiency, and creating new business models [1] - Regulatory sandboxes are important tools for promoting innovation in highly regulated sectors like digital health, allowing innovators to test new products and services in controlled environments [4] - The use of regulatory sandboxes in digital health is growing globally, with benefits for innovators, patients, governments, and regulators [6] Benefits of Regulatory Sandboxes - Innovators gain access to funding, markets, and regulatory guidance, reducing risks and increasing confidence in their products [8] - Patients benefit from early access to innovative, regulated products at potentially lower costs, with increased transparency and trust [8] - Governments and regulators can better understand the risks and benefits of new technologies, improve regulations, and promote innovation [8] Key Characteristics of Regulatory Sandboxes - Regulatory sandboxes are time-bound, with specific focus areas and regulatory waivers within legal limits [10] - They aim to develop evidence on the effects of innovations and provide insights into future regulation [10] - The AAA model of regulation (Advisory, Adaptive, Anticipatory) is used to characterize different objectives of regulatory sandboxes [12] Global Implementation of Regulatory Sandboxes - The UK has been a pioneer in using regulatory sandboxes across multiple sectors, including healthcare [21] - Singapore ran a regulatory sandbox for telemedicine and mobile medicine from 2018 to 2021 [21] - Malaysia's National Technology and Innovation Sandbox has supported 26% of approved applications in the medical and healthcare sectors [21] - India's National Digital Health Mission Sandbox helps integrate innovations into the national digital health ecosystem [21] Steps to Create a Regulatory Sandbox - Define the leadership model, typically involving the Ministry of Health and other relevant ministries [27] - Identify the problems to be addressed and the relevant emerging technologies [30] - Conduct regulatory mapping to identify applicable laws, regulations, norms, and standards [31] - Identify entities involved in monitoring and evaluating the sandbox, including data protection agencies and health regulators [32] - Build capacity and provide training for all entities involved in the sandbox [38] - Establish working groups to coordinate the design, implementation, and monitoring of the sandbox [40] - Define a risk model to identify possible effects and establish contingency plans [41] - Set eligibility and selection criteria for innovators, focusing on novelty, development stage, and regulatory interest [42] - Design the sandbox with specific objectives, including duration, admission windows, and exit options [45] - Publish plans for public consultation before launching the sandbox [52] - Launch and implement the sandbox, allowing innovators to submit applications [53] - Monitor, evaluate, and learn from the sandbox, publishing exit and final reports [58] Key Success Factors and Challenges - Regulatory sandboxes require significant resources, ranging from $25,000 to $1 million [68] - A well-functioning sandbox needs to meet existing market demand and have a mature digital health market [70] - Challenges include predicting potential risks, resource intensity, cross-sectoral innovations, and limited evidence of effectiveness [77] Design Elements of Regulatory Sandboxes - Eligibility: Defines who can participate in the sandbox [47] - Governance: Defines the internal operating structure and roles [47] - Timing: Includes duration of admission windows and testing periods [47] - Test restrictions: Limits the scope, scale, and conduct of the sandbox test [47] - Exit options: Includes individual test outcomes and program-level KPIs [47]

Industry Overview - The report focuses on the education sector, specifically primary education in low- and middle-income countries (LMICs), analyzing the relationship between teaching quality and student learning outcomes [8][12] - The study leverages data from the World Bank's Global Education Policy Dashboard (GEPD), which covers 13 education systems across LMICs, including countries like Ethiopia, Pakistan, Peru, and Sierra Leone [33][34] - The report highlights the persistent learning crisis in LMICs, with 57% of children in these countries unable to read and understand a simple text by age 10, and even higher rates in Sub-Saharan Africa (86%) [12][13] Key Findings on Teaching and Learning - Teacher pedagogical skills, as measured by the Teach Primary tool, are positively correlated with student learning outcomes, particularly in literacy [8][21] - Teachers with better content knowledge, especially in mathematics, significantly improve student performance, with a 1-standard-deviation increase in teacher content knowledge leading to a 0.2 standard deviation increase in student learning [24][25] - Teaching practices that foster student engagement, such as play-based and child-centered approaches, are highly predictive of better literacy outcomes [8][62] Teacher Support and Quality - Teachers in LMICs often lack adequate support, with only 33% of teachers having a bachelor's degree and 23% holding a master's degree [39] - Teacher absence rates are high, with students receiving only about half of the scheduled teaching time due to teacher absenteeism, significantly impacting learning outcomes [28] - Effective teacher support systems, such as practical training, mentoring, and feedback, are crucial for improving pedagogical practices and student learning [14][71] Policy Implications - The report emphasizes the importance of structured pedagogy and practical teacher training programs to improve teaching quality and student learning outcomes [21][71] - Instructional leadership, including classroom observations and feedback, is critical for identifying and addressing teaching challenges, yet only 58% of teachers report discussing observation results and 54% receive feedback [73] - Policies should focus on improving teacher recruitment standards, providing in-service training, and ensuring that teachers have access to necessary resources and support [75][76] Data and Methodology - The GEPD uses a combination of school surveys, teacher assessments, and classroom observations to provide a holistic view of the education system [29][30] - The study employs machine learning models, including Conditional Inference Forest (CIF) and Random Forest (RF), to identify key variables predictive of student learning outcomes [85][87] - The PLAY tool, developed to measure student engagement in learning, was applied in three countries (Ethiopia, Peru, and Sierra Leone) to assess the impact of playful learning practices on student outcomes [63][64]