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Smart factories could add between $1.5 trillion to $2.2 trillion to the global economy per year by 2023, according to a new report released Tuesday.

Called “Smart Factories @ Scale”, the report was produced by the Capgemini Research Institute. It surveyed one thousand executives from firms that have “smart factory initiatives.”

Capgemini described smart factories as leveraging “digital platforms and technologies” in order to gain “significant improvements in productivity, quality, flexibility and service.”

In a statement accompanying the report’s publication, Capgemini said the financial boost would be realized through “productivity gains, improvements in quality and market share, along with customer services.”

The study highlights several shifts in the sector that have occurred over the last few years. In 2019, for instance, it finds that 68% of organizations “had ongoing smart factory projects” compared to just 43% in 2017.

The importance of 5G – the fifth generation of mobile networks – is noted too: the report states it is “set to become a key enabler of smart factory initiatives” because its features give manufacturers the chance to “introduce or enhance real-time and highly reliable applications.”

There is room for improvement, however. The report says that three main challenges are preventing progress: the “deployment and integration of digital platforms and technologies”; cybersecurity and data readiness; and the development of “hybrid and soft skills.”

When it comes to smart factory adoption, China, Germany and Japan lead the way with South Korea, the U.S. and France following on behind.

“A factory is a complex and living ecosystem where production systems efficiency is the next frontier rather than labor productivity,” Jean-Pierre Petit, Capgemini’s director of digital manufacturing, said in a statement Tuesday.

“Secure data, real- time interactions and virtual-physical loopbacks will make the difference,” Petit added. “To unlock the promise of the smart factory, organizations need to design and implement a strong governance program and develop a culture of data-driven operations.”

As technology develops, the way that industry operates is indeed changing. Around the world, firms are turning to robotics and automated technologies to streamline operations.

These include Amazon Robotics, which was set up in 2003. A wholly-owned subsidiary of tech giant Amazon, it automates the business’ fulfilment centers using a range of technology such as machine learning, depth sensing and autonomous mobile robots.

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Mnuchin says there’s no deadlines for ‘phase two’ trade deal



Steven Mnuchin, U.S. Treasury secretary, speaks during a press briefing at the White House in Washington, D.C., U.S., on Monday, July 15, 2019.

Al Drago | Bloomberg | Getty Images

There is no deadline for the “phase two” China deal, U.S. Treasury Secretary Steven Mnuchin said while speaking at a CNBC panel during the World Economic in Davos, Switzerland on Wednesday.

“As it relates to phase 2, I would say there’s no deadlines,” Mnuchin told CNBC’s Geoff Cutmore. “So the first issue we’re very focused on the next 30 days is implementing phase 1.”

The secretary added that the deal can be concluded before or after the U.S. election in November, suggesting there was no rush to get it done before the vote.

“There’s also, as part of this, a real implementation office as part of enforcement, and we’ll start on phase 2,” the secretary added. “If we get that done before the election, great — if it takes longer, that’s fine.”

The comment comes just a day after Mnuchin told press that the long-anticipated trade deal may not remove all of the American tariffs imposed on China.

The U.S. and China officially signed the first phase of the trade deal last week in Washington, D.C. after 22 months of tit-for-tat tariffs and negotiations.

This is a breaking news story, please check back later for more.

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Trump claims the EU has ‘no choice’ but to agree a new trade deal



The European Union has “no choice” but to negotiate a new trade deal with the U.S., President Donald Trump told CNBC on Wednesday.

The president met with European Commission President Ursula von der Leyen at the World Economic Forum in Davos, Switzerland on Tuesday, and told CNBC’s Joe Kernen that the pair had a “great talk.”

Amid ongoing trade negotiations, Trump has threatened to slap tariffs on European cars in a bid to strong-arm EU leaders. In yesterday’s meeting, he claimed to have told von der Leyen that absent a trade deal, he would need to “take action” in the form of “very high tariffs on their cars and other things.”

Trump said that Europe has been “very tough to deal with” and had “taken advantage” of the U.S., but suggested that the bloc now has “no choice” but to make a deal.

“We’ve had a tremendous deficit for many, many years — over $150 billion with Europe,” he said, adding that he would be “very surprised” if he did have to implement the tariffs.

The U.S. goods and services trade deficit with the EU was $109 billion in 2018, according to the Office of the U.S. Trade Representative.

U.S. exports of Goods and Services to the EU supported an estimated 2.6 million jobs in 2015, the latest available data, according to the U.S. Department of Commerce.

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Russia pinning ‘a lot of hopes’ on relationship reset with the US



Russia’s President Vladimir Putin and U.S. President Donald Trump walk during the G20 leaders summit in Osaka, Japan, June 28, 2019.

Kevin Lamarque | Reuters

Despite the awkwardness of President Donald Trump‘s impeachment trial and a dispute over Russia’s mega gas pipeline to Europe that could shut out U.S. natural gas imports, chief executives in the country are hopeful that Moscow and Washington could reset relations this year.

That hope stems from an apparent rapprochement between Russia and its immediate neighbors in Ukraine and Europe, coupled with an increasing weariness among most western nations regarding the continuation of sanctions on Russia for its 2014 annexation of Crimea from Ukraine.

President Vladimir Putin’s announcement of constitutional reforms last week, which many hope will revamp Russia’s economy, have also added to optimism regarding political and economic change in the country.

Russian CEOs told CNBC at the World Economic Forum in Davos that they hoped Putin’s reforms, that hand more power to Russia’s parliament and led to the installation of a new technocrat Prime Minister Mikhail Mishustin, can lead to improvements not only to Russia but to its relations with other global powers, especially the U.S.

“I very much hope that it would also lead to changes in relations (with the U.S.) but the problem is that this is a two-way street,” Herman Gref, the chief executive and chairman of Sberbank, told CNBC Tuesday.

“So it is also about trust, a lot would depend on the U.S. elections. So if the relations between the leaders (of our two countries) are based on mutual trust nothing would stand in the way of such a reset. We pin a lot of hopes on such a reset and businesses need it badly,” he told CNBC in Davos, Switzerland.

US-Russia relations

Recently, relations have also been strained over Russia’s Nord Stream 2 gas pipeline to Germany. The U.S. sees the pipeline as a way for Russia, already the predominant natural gas supplier to Europe, to cement its control on the region’s energy market. Many see the U.S.’ objections to the pipeline as coming from the fact that it wants to increase its own liquefied natural gas (LNG) exports to Europe, however. Nonetheless, the U.S. president gave the green light to sanctions on the pipeline in December.

Arguing that those kinds of restrictions were “politically motivated” and unhelpful, Kirill Dmitriev, the chief executive of Russia’s $10 billion sovereign wealth fund RDIF, told CNBC that 2020 could still be a good year to reset U.S.-Russia relations.

“We actually believe that this year could be a good year to improve relations with the U.S. Frankly, we can solve lots of anti-terrorism fighting together, we can do lots of things together so, of course, there will be lots of geopolitical and political attacks inside the U.S. but we believe the backdrop is good to improve Russia-U.S. relations this year.”

Dmitriev said there were signs of a rapprochement between Russia and its neighbor Ukraine after several years of frosty relations following Moscow’s annexation of Crimea and its support for a pro-Russian uprising in the east of the country. That action led to a protracted conflict in the region and thousands of deaths and peace talks have only recently re-started between Russia and Ukraine, brokered by France and Germany.

“Europe already has given lots of signs that it wants to reconcile with Russia and we see lots of progress on Ukraine and Mr Zelensky (Ukraine’s president) wants to have some compromises with Russia so we believe that that creates a very positive geopolitical backdrop,” Dmitriev noted.

General optimism was tempered by Andrey Kostin, the chairman and president of Russia’s second-largest lender VTB Bank.

He told CNBC Tuesday that the 2020 U.S. election — and the thorny issue of Trump’s impeachment trial (the president is accused of abuse of power although he denies wrongdoing) — could prevent Putin and the U.S. president from ironing out problems in the relationship.

“I think the big obstacle is the domestic problem in America, because I don’t think Mr Trump can hardly talk to Mr Putin while there’s impeachment (inquiry) in America,” Kostin said. “So we just wait and see.”

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