AI is at the centre of the 2021 "new normal", of automated, robotic and contactless processes that will be aimed at protecting the world from future outbreaks. This new reality will as well further increase the speed of its adoption in various fields.
To succeed, AI needs to be democratised, i.e. made usable by a wider set of users. This will ensure expansion of the talent base able to service and use AI-driven ecosystems.
To facilitate the performance, scalability, interpretability, and reliability of AI models, a robust AI engineering strategy will be needed, making the technology a part of the mainstream IT process rather than a set of specialised and isolated projects.
Ability of AI-based systems to structure unstructured data will boost the implementation of robotics systems across all sectors. In manufacturing, AI will allow companies that design and build products to aggregate, intelligently transform, and contextually present product and process data from manufacturing lines throughout their supply chains.
It might well be that in 2021 quantum computing will find its first compelling AI application, which will allow for the commercialisation of the quantum AI segment.
The increase in remote work will drive the adoption of automated speech recognition capabilities, particularly in customer contact centres. Also, applications of face recognition technology will see an explosion in 2021 for strong authentication in a growing range of internal and customerfacing applications. The regulatory sensitivity of this technology, however, as well as the legal risks, will only grow for the foreseeable future. Due to this, responsible AI is emerging to deal with trust, transparency, ethics, fairness, interpretability, and compliance issues.
Despite some advanced AI-related projects being realised in Cypriot universities, as a state Cyprus is only making its first steps in the field. The government approved the National Artificial Intelligence strategy in January 2020. The priority areas of the strategy are the following:
• Cultivating talent, skills, and lifelong learning
• Increasing the competitiveness of businesses through support initiatives towards research and innovation and maximising opportunities for networking and partnerships
• Improving the quality of public services through the use of digital and AIrelated applications
• Creating national data areas
• Developing ethical and reliable AI. The document is an important first step, as was the establishment of the Deputy Ministry of Research, Innovation and Digital Strategy in March 2020. Unfortunately, in practical terms little has been done for AI-related innovation in 2020. Will Cyprus start walking the talk in 2021?
Source: gartner.com, weforum.org, financesonline.com, zdnet.com, knowledge4policy.ec.europa.eu
There has been only limited progress made in countries that have implemented a partial lockdown this winter. This means that unless the widespread distribution of the vaccine begins, we do not forecast an appreciable decline in new cases without a full lockdown.
FORECAST FOR 2021
1. The vaccines being developed and now deployed by Pfizer/BioNTech, Moderna, and Astra Zeneca/Oxford appear to be the best hope of combatting the pandemic in the short term. We cannot say for certain if there are longer-term adverse impacts from the vaccine, or whether the virus will mutate or not. But as a public health response, this is presently the only rational hope for a return-to-normal scenario.
2. We do not believe enough of the vaccines will be distributed within 2021 to make a significant difference in terms of returning to “normality”. Still, this is the first step to a recovery, assuming the vaccine works and the virus does not mutate.
3. We know that the virus spreads through aerosol and liquid distribution. Therefore, we can understand that prudent policy measures against its spread include personal distancing; using face masks and possibly gloves; avoiding crowded spaces and spaces such as restaurants where being without a mask is impossible. We can infer that cities which are more congested in terms of public transport, large building blocks, frequently-used elevators and escalators, and enclosed spaces with poor fresh air circulation are all environments where the virus can spread rapidly.
4. Given (2) and (3), we believe that the first 5 months of 2021 will see high incidents of new cases, absent a real lockdown. We do not believe the partial lockdowns are effective because the rate of
5. New hope will return around MayJune as the summer season kicks in again. However, the continuing problems seen mean that tourism destination countries such as Cyprus or Greece will be lucky to receive more than 35-40% of 2019 arrivals. This is still well below break-even capacity. Nevertheless, the summer of 2021 offers the first hope of a resumption of normal life, at least for a limited time.
6. The long disruption in normal business operations means that many more enterprises will close in the first half of 2021. The only mitigation against this will be further public spending.
7. Operations in October – December 2021 will depend on the progress of vaccine distribution and public health measures still in place. We do believe that maintaining strict measures will be politically impossible given population fatigue. We will probably hit a Fourth Wave then.
8. From the summer of 2021 onwards, the focus will increasingly return to public debt and macroeconomic stability, and the economic progress of at-risk countries such as the United States, Greece, Italy, France, and others will be re-assessed with a new eye. There should be, hopefully, a strong growth resurgence in Q2 and Q3 2021 to avoid threats of a serious public debt meltdown. The long-term trends, however, are unpalatable.
Philipp Ammerman
Financial consultant, Director Navigator Consulting Group Ltd
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In January 2020, one year ago, we met the first six members of our Club in the beautiful Artima restaurant in Limassol. The innovative idea of the Club was to have private lunches and dinners in order to introduce to each other 6 people from 6 different industries each time. We also made sure that people at the table were of at least three different nationalities as we wanted to create a truly international spirit. Since that first lunch, the Business Club has had many other meetings, formal and informal.
In January 2021 we celebrate our first anniversary. This is an important milestone in the life of any organisation. The first year shows whether the concept was designed well, whether the action plan was correct, whether the members of this organisation are happy with its activities and leadership.
THE CLUB
This entity is served to be a private club with the aim to provide a platform for leaders of the international business community of Cyprus to meet on a regular basis, arrange events, workshops, presentations, get-togethers, seminars, conferences. Together, we brainstorm innovative ideas and solutions, discuss inventions and progress on current and forthcoming developments, gain insight about the business community and news both about Cyprus and internationally.
MEMBERS
Each member is invited to join personally by the President of the Club. The Club accepts 6 members per month from 6 different spheres of business. Only owners, founders, chairpersons, or CEOs are accepted as members of the Club.
ACTIVITIES
• Business and social events.
• Networking with local and international business leaders.
• Presentations on current research and developments as well as on any “hot” subjects which are of concern to the business community.
• Q&A sessions with key people such as ministers and mayors, representatives of the public and business sectors, experts in different areas, municipal and local organisations, tax and economic advisors.
• Get-together breakfasts, lunches, and dinners.
• Speeches by renowned speakers.
• Workshops and seminars.
• Leadership and entrepreneurship inspirational meetings.
• Gourmet or “evening-with-style” events, with outstanding guests.
THE CLUB’S BODIES
ECONOMIC DIPLOMACY COUNCIL
The Council aims to discuss the strategic and priority directions of the Cyprus economic foreign and local policy, on the improvement of the system of representation of Cyprus economic interests abroad and communication with thousands of successful businesspeople who reside and do business in Cyprus. Both Cyprus state authorities and local businesspeople participate in the Council’s meetings to ensure a constructive dialogue, better coordination and implementation of the economic state policy. The Economic Diplomacy Council members join forces to analyse and reduce market access obstacles, open up new opportunities, have fruitful dialogue on all relevant issues.
ENTREPRENEURS COMMITTEE
This committee brings together private business owners, investors, startup founders in order to exchange experience, brainstorm on new ideas and projects, offer constant support on developments of new and existing businesses. The Entrepreneurs Committee focuses on consulting and supporting smaller businesses and startups so they have more scope for professional growth.
WOMEN-IN-BUSINESS PARTNERSHIP
This International Association of Female Business Leaders will support and encourage businesswomen, as well as create opportunities for cooperation through the Club’s networking events.
HOW TO BECOME A MEMBER
If you know the Club’s founder Natalia Kardash personally, email her directly on: Этот адрес электронной почты защищён от спам-ботов. У вас должен быть включен JavaScript для просмотра.. Otherwise please request more information and membership options from Veronica Kyriakou, the Club’s Director of Strategic Communications, on: Этот адрес электронной почты защищён от спам-ботов. У вас должен быть включен JavaScript для просмотра..
According to the Financial Mirror there are three industries that could revitalise the Cypriot economy in 2021 and beyond.
ECOMMERCE AND ONLINE SERVICES
In Cyprus, over 79% of the population now use the internet, but only 31% of Cypriots made online purchases in 2019 according to the latest data. As a result, web-based trading remains a relatively small industry in Cyprus, but this means the sector is prime for growth. In 2021, expect businesses to embrace eCommerce, this can help them attract new customers, enter business in new markets, and cut costs.
MANUFACTURING
Manufacturing now accounts for over 5% of Cyprus’ GDP. But, although the manufacturing industry is already a key driver of the Cypriot economy, its impact is only set to increase over the next decade, with experts believing that manufacturing could account for 15% of the economy by 2030. Now the government has put incentives in place for investments and provided state funding for research-oriented products. So, expect huge investments in the manufacturing sector in 2021.
INFORMATION AND COMMUNICATIONS TECHNOLOGY (ICT)
The Cypriot government believes that ICT could be incredibly useful for increasing productivity and fuelling economic growth in the country. As a result, the government is investing huge sums of money in tech startups as part of the 2019-2023 national strategy on Research and Innovation known as "Innovate Cyprus". The fintech market in particular is vibrant in Cyprus, with cloud solutions particularly gaining traction. Recently, Cyta, epic, Primetel and Cablenet all began to offer cloud computing services. Although 2020 was a tough year for the Cypriot economy, there are plenty of reasons why investors and business owners should be optimistic for 2021 and beyond.
Cryptocurrencies will likely continue to settle into stable products, niches and uses, becoming a viable alternative to many fiat currencies. Successful Business spoke to Vladimir Vishnevskiy, the Director and co-founder of St. Gotthard Fund Management that specialises in asset management including cryptocurrency investments, for his thoughts and forecasts on the future of this market.
Why is cryptocurrency market capitalisation growing? Why do most people underestimate the importance of cryptocurrencies?
I think what we see today is a result of several factors that are currently present. One factor I would highlight is the macroeconomic situation in the world right now. With low rates and trust in government institutions arguably at an all-time low, as a result of unprecedented money printing that we have seen since the pandemic started in the US and Europe, I think the world is beginning to prepare for inflation in the longer term. This will inevitably be reflected in the price of real assets, not just classic ones like gold and real estate but also in cryptocurrencies.
It is a question of supply and demand. The fiat currencies, the ones that are issued by the central banks by just pressing a button, may soon be in oversupply. We believe that the whole monetary system that we went through in the past 40 years since the inflationary era in the 1970s, was the result of central bank independence. Whenever inflation went up, central banks raised interest rates in order to contain it. Since the global financial crisis, the supply of fiat currencies has been growing by approximately 12% per annum for more than 12 years. This is why alternative stores of value (gold, real estate, and bitcoin) are now being looked at.
On top of this, another factor that we consider key is the intergenerational wealth transfer. Just recently, there has been a survey showing that the younger generation in their 40s and 50s, who are now inheriting a lot of wealth from the Baby Boomer generation, are much more likely to invest part of their portfolio into this asset class because they see more value in it than in traditional assets like gold.
Lastly, the supply and demand relationship within the crypto sector itself has changed. This year we witnessed the “halvening” that happened in May: since then, every time a bitcoin is mined, the miner gets only half the reward compared to the period before. That obviously changes the supply significantly. At the same time, we have seen a large increase in demand because traditional on-ramps such as PayPal have embraced cryptocurrencies, and now close to 350 million of PayPal users have easy access to bitcoin through their mobiles. All of this leads to upward pressure on prices.
Why have you created the fund, and how can people benefit from participating in your activities?
The fund itself was created because our Cyprus investment office recognised a problem. Due to the negative interest rates in the Eurozone right now, we see that there are not enough investable instruments available to investors looking for a decent yield. Bank deposits do not yield anything. If one wants to invest EUR and receive a yield of 5-6%, then CCC-rated bonds (high-risk) would need to be purchased. Our company has been investing in cryptocurrencies for a while and we recognised that there was a solution within the space. From our viewpoint, investing in junk bonds is not that dissimilar a risk profile to crypto projects. Of course, the latter are riskier, but you have more upside if the project works out, and at the end of the day both are just businesses run by people. People who invested in digital projects like Facebook at an early stage did very well. The risk/ reward ratio of investing in those projects is better. So, what we wanted to provide is a simple and traditional way where people can safely invest in cryptocurrencies. Our fund only accepts euros and you do not need to buy and store cryptocurrencies, as we take care of that. More than 80% of the assets in our fund are held in secure custody which means that we not only offer a nice return and yield in terms of dividends that we may have but it is done with security in mind. Moreover, the risk is insured by a top insurance institution.
How can we make money? We have two main drivers we focus on. First is yield, so we only look at assets where a passive income-generating strategy can be implemented so that we can pay out dividends twice a year. Second is valuation; we rely on a team of highly experienced industry professionals to select projects with solid growth potential. Our investors believe in the cryptocurrency asset class as a longterm investment. They are also interested in receiving passive income as they cannot obtain it from other traditional assets anymore. Crypto assets can offer a big upside from what we have been seeing during the last 2-3 months. Gains of 100% or 200% are very much possible. This is impossible for fixed-income investments. In real terms, that is, after adjusting for inflation, if you have your money in fixed income, then most likely you are going to lose money. Assets going up in price and at the same time offering a yield are tempting for investors because they offer a less volatile risk profile than pure crypto exposure. Through the distribution of dividends every six months, in effect we are reducing the volatility of the investment. The fund will pay out its first dividend in January 2021. It has just reached an all-year high, by the way.
What is the minimum amount of investment in the fund?
€100,000.
Is there any guaranteed income? What percentage would you pay as a minimum guarantee?
There is no guarantee. Our aim is to pay out above 5% per annum (in EUR!) as a dividend, while offering our investors full participation in the growth of the crypto market capitalisation. Our fee structure is the classic 2/20, meaning a 2% management fee and a 20% performance fee with a 5% hurdle and a high watermark.
What is the investment horizon needed for an investor to invest their money, and when can they withdraw their funds if required?
The recommended investment horizon is 3 years and longer because the cryptocurrency ecosystem is still very young. The difference between our fund and many other funds is that it is liquid. Every month the investors can buy in and sell out.
Looking ahead, what is your forecast regarding cryptocurrencies over the next 12 months?
In the past two years, there has been a great deal of behind-the-scenes investment into this space from the corporate world, such as big U.S., European and Asian venture funds, especially into industry infrastructure and security. The result has been that in 2020, companies such as Square and PayPal now offer bitcoin to their customers. At the same time, big asset managers like Fidelity and smaller hedge fund managers have been supporting and buying bitcoin because they are now comfortable with the industry infrastructure available. We think that over the next 12 months, this trend will likely continue.
Calendar-based forecasts are difficult, but it would suffice to say we are very positive on the whole cryptocurrency complex. As we speak, the market capitalisation of crypto is $700 billion, and bitcoin makes up more than 60% of that. This is a very small number in relative terms. The biggest stocks from developed markets are worth considerably more. If you compare cryptocurrencies to gold, about $11 trillion worth of gold has been mined to date. This shows you the proportions that we’re talking about. The value of cryptocurrencies could rise fivefold from where we stand right now, and it would still be worth less than half that of gold.
St. Gotthard Global Fund SPC – Digital Asset Income & Growth SP
The investment objective of the Fund is to provide investors with a regular cashflow by investing predominantly in a portfolio of worldwide income-generating digital assets, with a portfolio target yield above that of traditional financial assets.
We bring to your attention an editorial article published in January issue of SUCCESSFUL BUSINESS magazine. The magazine is published on a quarterly basis since 2011.
This year is special for our magazine. We will celebrate our 10th anniversary in April. This issue is also special: for the first time in the publication's history we publish an issue in English only. It is addressed not only to the Russian business community, but to the wider expat business community of Cyprus.
VESTNIK KIPRA is known as a bridge between Russians and Cypriots. 25 years ago the first Russian-language newspaper was launched on the island: the Russian words “Vestnik Kipra” mean “Cyprus Messenger”. Our www.vkcyprus.com is the only Russian-language daily publication in Cyprus; together with our online platform, we have also kept a newspaper as a digest of the most important and interesting news and articles that we publish online on a daily basis.
The SUCCESSFUL BUSINESS Magazine was created to help the Russian-speaking businesspeople learn more about conducting business in Cyprus, new laws and regulations, analytics, forecasts, opinions, and professional analysis. Time has shown that this magazine has played an important role in the life of the business community.
We decided to publish an issue in English for two reasons. First, the issue is devoted to new technologies. In Cyprus, people of different nationalities are engaged in this sphere. We aimed to provide an opportunity to each of them to read our articles and interviews. The second reason is to expand our readership in our landmark year: we are celebrating our 10th anniversary in 2021 and we wanted to deliver a copy of our magazine that can be read by any business person on this island: Cypriot, Russian, German, Lebanese, British… anyone who lives and works here.
There is as well a digital edition of SUCCESSFUL BUSINESS. You may visit www.sb-cyprus.com to read all the articles we have in this issue. The website used to be “Russian-only”; as of January 2021, there is also a dedicated section in English.
In 2021, we also celebrate the first anniversary of the SUCCESSFUL BUSINESS Leaders’ Club. The first meeting of this club that unites business owners of different nationalities was organised in January 2020. Last year was difficult, that is why the Club’s online and offline activities were even more important for building new partnerships and extension of our members’ business network. You may read more about this club at the end of the magazine and get in touch if you share our values and goals and would like to be part of the Leaders’ Club activities.
On behalf of the entire Successful Business Magazine team, I would like to wish you all a productive and successful year 2021 and to share the following quote by Michael Jordan: “Obstacles don’t have to stop you. If you run into a wall, don’t turn around and give up. Figure out how to climb it, go through it, or work around it.”
I would like to conclude this editorial with an ancient wisdom, one of many by Epictetus: “The greater the difficulty, the more glory in surmounting it. Skillful pilots gain their reputation from storms and tempests.”
Editorial Board:
Andrey Pavelko
Natalia Kardash
Igor Nossonov
Andrey Korneev
Кипр наравне с Португалией, Грецией, Мальтой, Испанией и Италией пострадает от сокращения туристических потоков. А вместе с Испанией, Италией, Францией и Грецией остров рискует столкнуться с банкротством малого бизнеса и ростом безработицы. Эти выводы содержатся в исследовании экономической ситуации в Еврозоне под названием «Негативные перспективы 2021 года, вызванные высокой экономической и финансовой неопределенностью», проведенном международным рейтинговым агентством Moody’s.
Рейтинговое агентство также предупреждает об опасности, которую таит в себе отказ от государственных субсидий до начала реального улучшения ситуации. С другой стороны, если меры господдержки продлятся слишком долго, это может замедлить рост экономики в отдельно взятых секторах и увеличить количество так называемых компаний-зомби (то есть фирм, требующих постоянных финансовых вливаний для продолжения деятельности). «Этот риск актуален для тех стран, которые реализуют щедрые программы поддержки занятости, как Голландия, Германия и Франция», — сказано в исследовании.
Также агентство Moody’s предупреждает Кипр, Италию, Испанию, Португалию, Францию и Бельгию о кредитных рисках. Очевидно, что страны с большим госдолгом еще до пандемии сталкивались с препятствиями для роста экономики, считают эксперты. В такой ситуации малым экономикам типа кипрской будет немного проще, чем крупным. Важных финансово-экономических последствий пандемии стоит ждать во второй половине 2021 года, заключают исследователи.
Карантин всерьез может ударить по 25 000 предприятиям малого и среднего бизнеса и по 100 000 сотрудников. Несомненно, самый сильный удар от нынешних мер придется на сектор розничной торговли. На Кипре оптово-розничная торговля это самый крупный сектор по объему добавленной стоимости — 1,948 млрд евро в 2017 году, и по занятости (в секторе работают 67 471 сотрудников или 16,6% всей рабочей силы страны). В розничной торговле трудятся 38 303 человека или 9,4% всех работающих на Кипре жителей и действуют 9 438 компаний. Доля государственных доходов от розничной торговли составляет 12%. Для сравнения, в секторе гостиничного и ресторанного бизнеса заняты 47 134 человека, это второй по размерам сектор экономики. В отелях острова работают 21 659 человек. В ресторанном бизнесе заняты 25 475 человек.
Тем временем
Представители предпринимательского сообщества написали открытое письмо президенту Никосу Анастасиадису. В нем они попросили увеличить число сотрудников, которым разрешено физически присутствовать на рабочем месте, с 15% до 25%, а также отменить максимальный лимит в 20 человек.
Письмо подписали руководители Федерации работодателей и промышленников, Торгово-промышленной палаты Кипра, Ассоциации сертифицированных бухгалтеров и Кипрской судоходной палаты. Они утверждают, что 25% рабочей силы — это тот минимум, который необходим для нормального продолжения работы предприятий. «Мы отчаянно призываем вас одобрить физическое присутствие на каждом предприятии до 25% сотрудников, не устанавливая максимального количества. Это минимальный процент, который может обеспечить удовлетворительную работу пострадавших объектов. Строгое выполнение протоколов будет гарантировать эффективность антивирусных мер на рабочем месте», — сказано в письме. Авторы письма приводят в пример Грецию, где разрешенное количество работников составляет 50%.
2021 is the year to expect the unexpected. While many trends of the previous years will continue, their path may deviate pressured by unpredicted developments that Covid-19 is causing on the global markets. Let’s have a look at what role vaccine rollouts will be playing in the year ahead, how technology will keep on evolving, and why the new ‘remote’ life will be driving the changes.
VACCINE ECONOMY
The key factor defining how life will be through 2021 is the vaccination against Covid-19. Mass inoculation is, for the time being, the only realistic mean to reduce the need for job- and businessdestroying lockdowns. Led by the UK, the US, Russia and China, the countries around the world are gradually starting their vaccination programmes, but the logistics and distribution remain challenging, especially in remote areas and in low- and middle-income settings.
According to a World Bank Group survey in June 2020, most Cypriot companies did not expect to be hiring their full staff back in the next nine months; now this prospect has been pushed even further into the future. Since the start of a vaccination programme, Cyprus, as well as the majority of the European countries, will need at least six months to see some signs of recovery. The forecasts are that industry will lead the growth, followed by the financial sector. Consumption, on the other hand, will be picking up slower than other sectors, which may inhibit overcoming the economic slowdown.
The EU is likely to have vaccinated 50% of the population no earlier than by May, and may have reached the 70% mark by autumn – assuming that people en masse are convinced about vaccines’ effectiveness and safety, and agree to a jab. This dynamics is important for Cyprus, as a large part of its economy depends on tourism. The country needs people coming from abroad, especially from the EU and the UK, to support local business, but it also needs to protect its population from the disease.
For Cyprus, there is a vaccination programme in place since the end of 2020. As of December 2020, the country ordered around 1.8 million doses, from Oxford/ AstraZeneca, Pfizer/BioNTech and Johnson & Johnson’s Janssen. Negotiations are underway with Sanofi/GSK, Curevac and Moderna. While securing the delivery of the vaccines is an important step, managing the programme will be a challenge for the government in terms of organising the locations for administration, preparing medical staff, launching the necessary IT infrastructure, etc.
According to OECD, if a vaccine is deployed fast, this would boost confidence, spending, and the global GDP growth in 2022. If vaccination proves challenging, the containment measures would be prolonged and uncertainty would deepen. This would further raise the risk of bankruptcies and job losses, limit consumer spending and business investment. Substantial repricing could occur in financial markets, reflecting greater risk aversion. This would weaken global growth, particularly in 2021.
A vaccine has never arrived in the middle of a pandemic before, so there is no historical data for solid predictions. One can be sure, however, that any economic indicators as well as asset prices are tightly linked with either success or failure of the vaccination programme. Any kind of deviation or setback poses a risk of a quick downside for stock markets and house prices.
To be continued
AI is at the centre of the 2021 "new normal", of automated, robotic and contactless processes that will be aimed at protecting the world from future outbreaks. This new reality will as well further increase the speed of its adoption in various fields.
To succeed, AI needs to be democratised, i.e. made usable by a wider set of users. This will ensure expansion of the talent base able to service and use AI-driven ecosystems.
To facilitate the performance, scalability, interpretability, and reliability of AI models, a robust AI engineering strategy will be needed, making the technology a part of the mainstream IT process rather than a set of specialised and isolated projects.
Ability of AI-based systems to structure unstructured data will boost the implementation of robotics systems across all sectors. In manufacturing, AI will allow companies that design and build products to aggregate, intelligently transform, and contextually present product and process data from manufacturing lines throughout their supply chains.
It might well be that in 2021 quantum computing will find its first compelling AI application, which will allow for the commercialisation of the quantum AI segment.
The increase in remote work will drive the adoption of automated speech recognition capabilities, particularly in customer contact centres. Also, applications of face recognition technology will see an explosion in 2021 for strong authentication in a growing range of internal and customerfacing applications. The regulatory sensitivity of this technology, however, as well as the legal risks, will only grow for the foreseeable future. Due to this, responsible AI is emerging to deal with trust, transparency, ethics, fairness, interpretability, and compliance issues.
Despite some advanced AI-related projects being realised in Cypriot universities, as a state Cyprus is only making its first steps in the field. The government approved the National Artificial Intelligence strategy in January 2020. The priority areas of the strategy are the following:
• Cultivating talent, skills, and lifelong learning
• Increasing the competitiveness of businesses through support initiatives towards research and innovation and maximising opportunities for networking and partnerships
• Improving the quality of public services through the use of digital and AIrelated applications
• Creating national data areas
• Developing ethical and reliable AI. The document is an important first step, as was the establishment of the Deputy Ministry of Research, Innovation and Digital Strategy in March 2020. Unfortunately, in practical terms little has been done for AI-related innovation in 2020. Will Cyprus start walking the talk in 2021?
Source: gartner.com, weforum.org, financesonline.com, zdnet.com, knowledge4policy.ec.europa.eu
There has been only limited progress made in countries that have implemented a partial lockdown this winter. This means that unless the widespread distribution of the vaccine begins, we do not forecast an appreciable decline in new cases without a full lockdown.
FORECAST FOR 2021
1. The vaccines being developed and now deployed by Pfizer/BioNTech, Moderna, and Astra Zeneca/Oxford appear to be the best hope of combatting the pandemic in the short term. We cannot say for certain if there are longer-term adverse impacts from the vaccine, or whether the virus will mutate or not. But as a public health response, this is presently the only rational hope for a return-to-normal scenario.
2. We do not believe enough of the vaccines will be distributed within 2021 to make a significant difference in terms of returning to “normality”. Still, this is the first step to a recovery, assuming the vaccine works and the virus does not mutate.
3. We know that the virus spreads through aerosol and liquid distribution. Therefore, we can understand that prudent policy measures against its spread include personal distancing; using face masks and possibly gloves; avoiding crowded spaces and spaces such as restaurants where being without a mask is impossible. We can infer that cities which are more congested in terms of public transport, large building blocks, frequently-used elevators and escalators, and enclosed spaces with poor fresh air circulation are all environments where the virus can spread rapidly.
4. Given (2) and (3), we believe that the first 5 months of 2021 will see high incidents of new cases, absent a real lockdown. We do not believe the partial lockdowns are effective because the rate of
5. New hope will return around MayJune as the summer season kicks in again. However, the continuing problems seen mean that tourism destination countries such as Cyprus or Greece will be lucky to receive more than 35-40% of 2019 arrivals. This is still well below break-even capacity. Nevertheless, the summer of 2021 offers the first hope of a resumption of normal life, at least for a limited time.
6. The long disruption in normal business operations means that many more enterprises will close in the first half of 2021. The only mitigation against this will be further public spending.
7. Operations in October – December 2021 will depend on the progress of vaccine distribution and public health measures still in place. We do believe that maintaining strict measures will be politically impossible given population fatigue. We will probably hit a Fourth Wave then.
8. From the summer of 2021 onwards, the focus will increasingly return to public debt and macroeconomic stability, and the economic progress of at-risk countries such as the United States, Greece, Italy, France, and others will be re-assessed with a new eye. There should be, hopefully, a strong growth resurgence in Q2 and Q3 2021 to avoid threats of a serious public debt meltdown. The long-term trends, however, are unpalatable.
Philipp Ammerman
Financial consultant, Director Navigator Consulting Group Ltd
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