Here are our editors’ picks of some of the best reads available to Globe Unlimited subscribers this week.
Tech innovation slows to a crawl
The technology sector may be embarking on its very own Great Stagnation, says Scott Barlow in ROB Insight. The low-hanging fruits of innovation in the Internet age appear to have been plucked, according to economics professor Tyler Cowen, and progress from now will proceed much more slowly. Recent merger activity reflects this perspective, as companies pull in their horns amid lacklustre sales rather than invest in future growth.
Blame it on the weather
Canada’s property and casualty insurers are being battered by the costs of catastrophic weather events that have swollen losses to about $1-billion a year and crimped profits, writes Jacqueline Nelson in Streetwise. In response to the need to improve risk-management strategies, companies are considering products such as catastrophe bonds, which shield insurers from some of the risk of big payouts resulting from severe weather events.
Can Sears slash ‘n’ grow approach work?
While Sears Canada’s CEO was tasked with turning around the faltering retail chain, the head of parent Sears Holdings has been on a spree of asset sales and store closings in both Canada and the U.S. That incongruency was thrown into sharp relief this week when Sears Canada CEO Calvin McDonald left the retailer halfway through his three-year turnaround plan. It’s not your typical approach to gaining market share, David Parkinson points out in ROB Insight, and Sears’ uphill battle will be that much steeper as more U.S. retailers head north and the competition gets even stiffer.
Why would BMO backstop a BlackBerry buyout?
Given the state of the troubled tech company, you might think Fairfax Financial would find it difficult to secure financing. But it doesn’t always come down to just the numbers, as Tim Kiladze explains in Streetwise. Fairfax has a longstanding relationship with the bank, from leading bond offerings to shepherding M&A deals to taking the lead on arranging credit facilities. And relationships such as these breed loyalty.
National regulator? The West doesn’t want in
Ottawa’s most recent appeal to establish a national securities regulator is falling on deaf ears in Alberta. The voluntary membership scheme was aimed at addressing concerns that the province would have to cede its constitutionally-guaranteed authority, but Alberta says it’s still not interested. In ROB Insight Jeffrey Jones explains the reasons behind the long-running resistance to the idea and how one piece of Canada’s East-West divide persists despite a federal Conservative government sympathetic to the ambitions of the province.