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  • Clare McAndrew On Why the Art Market’s Future Lies Beyond the $10 Million Sale

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    The founder of Arts Economics discusses how globalization, new wealth demographics and online sales are reshaping the balance of power in the art world. Paul McCarthy, Courtesy of Arts Economics

    Clare McAndrew, featured on this year’s Art Power Index, has done what many thought impossible: she quantified the art market. As the founder of Arts Economics and author of the annual Art Basel and UBS Art Market Report, McAndrew has become the industry’s de facto oracle, translating the art world’s opaque dynamics into data points, patterns and insights. When her report lands each spring, its results ripple across the market—from charting the health of global sales, identifying emerging regions and revealing the settlement behind the numbers.

    Over two decades, McAndrew has redefined how the art trade understands itself, applying the rigor of economics to a sector often governed by instinct and perception. Her analyses have shown how concentrated wealth, demographic change and globalization have remodeled the market’s power structures, and how resilience increasingly comes from its peripheries, not its peaks.

    This past year was a pivotal one for the global art economy, marked by softening sales at the top end, a surge of activity in the sub-$50,000 segment and a generational shift driven by Gen Z and women collectors. New technologies, direct-to-artist sales and global diversification are transforming the market’s infrastructure, she reports, while also questioning how the boundaries of art are defined as luxury goods and collectibles enter the fold. McAndrew has emerged as an economist who helps markets evolve by revealing how confidence, perception and access shape value in ways that pure data cannot.

    What do you see as the most transformative shift in the art world power dynamics over the past year, and how has it impacted your own work or strategy?

    Sales in the art market for many years have been driven by an intense focus on a very small number of artists at the high end, which has escalated their prices, while creating higher barriers to entry for new artists and a winner-take-all type market scenario, where the works of the most famous artists are demanded the most, while emerging artists and the galleries and businesses that support them find it harder to generate sales and build careers. Alongside this, as most of what the mainstream media reports on is the multi-million dollar sums paid for this very small number of artists’ works, new buyers are led to believe that the art market is out of their reach, and that you can only get a quality work of art if you have a budget of over $1 million or so, when in fact there are so many other less publicized artists and works available at much lower prices.

    These really high-priced sales were critical in driving the recovery of the market from the pandemic, particularly sales of ultra-contemporary and contemporary art, which outperformed other segments by a significant margin. However, a significant shift over the last year is that these are the two areas that have now slowed down the most. The segment of artworks sold for over $10 million has softened both in terms of volumes and value, and some of the bigger businesses have come under more pressure than some of the smaller ones. While this might not radically transform the market’s power dynamics overnight, it has at least shifted the focus away from that very narrow high end and the tiny share of artists it supports. Although some of the recent narrative around the market has been negative—focusing on a lack of eight- and nine-digit sales—there have actually been a growing number of transactions taking place, albeit at lower price levels, which is a positive development. 

    As the art market and industry continue to evolve, what role do you believe technology, globalization and changing collector demographics will play in reshaping traditional power structures?

    My latest report on global collecting highlights the increasingly significant presence of female artists in the market and the growing influence of women as collectors, facilitated in part by shifts in the distribution and growth of wealth. Our research also uncovered the growing dominance of young Gen Z collectors, who were the most active across many of the fine art and collectibles segments. As wealth shifts towards these segments (including large vertical and horizontal transfers of inherited wealth), their preferences will become more dominant and how they want to buy and engage with the market will have a greater impact. 

    In terms of globalization, one of the key factors supporting the current size and ongoing development of the market is its increasingly global infrastructure, with sales of art literally all around the world and the emergence of a number of new art markets developing over the last 20 years in Asia, the Middle East, Africa and other regions. The global distribution of the art market has altered substantially.

    From the 1960s, when Paris lost its central position in the art market, the U.S. dominated sales alongside the U.K., with London and New York accounting for at least three-quarters of the market during the 1980s and 1990s. One of the biggest changes came around 2004/2005 when China emerged as a global player, and with a huge boom in sales there while the rest of the world was suffering in the fallout from the Global Financial Crisis (GFC), making it (temporarily) the biggest market in the world in 2011 (albeit by a small margin). This was made all the more remarkable by the fact that until the death of Mao in 1976, it had been illegal to even own or exchange works of art in China. This injection of sales and the much more global nature of the art market have really protected its aggregate value from downside risks and helped it bounce back much quicker from crises and recessions.

    In the market recession in the early 1990s, when it was so solely dominated by the U.S and Europe, it took almost 15 years for the market to get back on its feet, but post-GFC and post-Covid, the bounce back has been much quicker as sales are diversified across so many different regions and segments. 

    Looking ahead, what unrealized opportunity or unmet need in the art ecosystem are you most excited to tackle in the coming year, and what will it take to make that vision a reality?

    There are so many interesting questions to look into about where the market is going, but from a methodological point of view, for my research, one of them I’m trying to focus on going forward relates to defining the boundaries of the market.

    I have concentrated most of my research on the traditional art businesses (auction houses and dealers), but there are now a lot more agents involved in the market—artists are selling more directly, with disintermediation enabled through social media and online selling, collectors selling directly to each other, plus other platforms and agents outside of galleries and auction houses. How we account for and measure these sales will become increasingly important in understanding the activity in the sector as a whole, especially when we’re trying to assess its economic and social impact.

    There are also continuing changes in what’s being sold in the “art” market, with an expanding range of collectibles and luxury products being sold by dealers and at auction houses, or even within “art”—new digital mediums and channels for accessing these works. The traditional mediums still dominate by value for now, but that could change in the future, and how we measure and expand those boundaries will be a continuing focus for my research in collaboration with academics and experts in the art market over the next few years.

    What inspired you to want to bring greater transparency and reliability to a field often described as opaque, mysterious or relationship-driven?

    When I first started out, my earliest reports focused on artists, looking at ways they could build better careers (or even just earn a viable income) and how government policies might help or hold them back. I uncovered early in this research that one of the best ways for them to succeed financially was to have a healthy and active market for their work, so my research pivoted to the art trade.

    It became clear from working with dealers and auction houses that when they were approaching governments asking for help or changes in regulations to boost the trade, the first questions they would get asked were things like how big is the market, and how many people does it employ. There was a glaring lack of  any of this objective industry benchmarking data to answer those questions, which inspired me to try to fill those gaps.

    While there is some good, large-scale public data on auctions and exhibitions, many of the transactions in the market are private, so we have to use a very mixed methodological approach, relying heavily on surveys, sentiment testing and other qualitative research methods (alongside quantitative analysis) to build a better picture of the market.

    I have increasingly embraced the importance of more qualitative methods and subjective expertise, which is quite different than when I  came out of academia and believed that quants, data and econometric modelling could solve most of the market’s problems. All of the metrics and analytical tools that have been developed in the last decade or two in the art market are very useful, as is the increasing amount of data available, but their practical applications in guiding specific decisions have real limits, especially for collectors. There is still nothing really to replace the much more subjective advice you might get from an artist or dealer or advisor to guide the choice of one work over another, so expertise and relationships are still important.

    After years of analyzing cycles of boom, correction and resilience, what have you learned about how confidence and optimism—or lack thereof—shape the art market differently than traditional financial markets?

    Confidence is critical in the art market, and it relates to one of its most important features—that it is essentially supply-driven. Even if there is really strong demand around, there will only ever be a limited number of total works available on the market at any particular point in time, for all deceased artists, but for living artists too, where there are limits on how much they can really “make to order” in the short run. Rather than being driven by the costs of production or  the availability of inputs, art prices are driven by their scarcity value—the factor that increases their relative price based on their low or fixed supply. And because of this scarcity in the market, prices for certain works can catapult up to really high levels when they come onto the market, as buyers try to grasp the really limited opportunities to acquire them.

    Things like commodities are traded virtually every second, but in the art market, it’s much slower, and many works have a long market cycle. It can be 20 to 40 years before a work appears again, and some never do. The fact that opportunities to purchase certain works are so limited adds to the scarcity value, and works that are fresh to market or have been kept in private collections for years, for example, can spark a frenzy of interest and generate huge prices when they come up for sale. Increased supply (works coming up for sale) can have a positive, upward effect on prices (and the value of aggregated sales), which is obviously very different from other asset markets where increases in supply drive prices downward. 

    What this means is that vendor confidence and optimism about the market is key—how potential sellers view the state of the market and whether or not they should put works up for sale really often determines what happens as much as or more than prevailing demand.

    On the secondary art market, supply is often generated by some exogenous event (like one of the famous “d’s”—divorce, disaster, death or debt), but where there’s a choice on the timing of the sale, it will often be down to perceptions of the strength of the market. The market can literally talk itself in and out of cycles to some extent.

    The top end of the art market is increasingly polarised, with a very small number of artists capturing a large share of value. What risks does this concentration pose for the long-term resilience of the broader market?

    This has been an ongoing issue in the market with an intense focus on a very small number of artists at the high end, which has driven up their prices, while creating higher barriers to entry for new artists and a winner-take-all type market scenario. One way to reduce risk and search and validation costs for those buyers unfamiliar with the market is to only purchase well-recognized works or those by really famous artists.

    By doing that, you’re basically relying on the established preferences of previously successful buyers who have already bought that artist’s work, reducing their risks and insecurities about relying on your own taste in making the right choice. Collectively, these risk-reducing techniques tend to reinforce the “superstar phenomenon” in the art market, whereby the works of the most famous artists (living or dead) are demanded the most and achieve by far the highest prices in the market, while emerging artists face ever higher hurdles in gaining entry. This isn’t new, and it’s not only in the art market.

    In the 1980s, American economist Sherwin Rosen pioneered the study of the economics of superstars and believed that some superstar artists or ‘masters’ reached their position justly because they were more talented, but the differences in their talent versus those less successful were much less than the differences in success. He also felt that some were, in fact, no more talented than their less-recognized peers, but their greater success was driven by the need of consumers for common tastes and culture or to “consume as others are consuming.” The problem associated with the superstar ethos in the art market is not just that it drives up prices, but also that it can deprive other artists of the opportunity to work by concentrating demand.

    Alongside this, a lot of the media focus on art is just on the multi-million dollar sums paid for a very small number of artists,  so a lot of new buyers can think that the art market is out of their reach, and that you can only get a quality work of art if you have a budget of over $1 million or so, when in fact there’s a huge range of prices and great works available at much lower levels. 

    I have been looking, in my research, on collecting at the parallel issue in the infrastructure of wealth. In the art market, like other luxury goods, discretionary purchasing power is enabled by greater wealth,  and that in turn empowers growth in sales. Over the last couple of years, more wealth has been concentrated in the top 1 percent of society and greater wealth inequality is often linked to stronger purchasing in luxury markets across regions and over time. A higher concentration of wealth in the top percentiles has been a key factor driving strong sales and rising prices at the top of the art market in the past.

    While this is most obviously linked to more purchasing by the wealthiest in society, who are more active in luxury markets, inequality can also shift demand in lower wealth tiers. In some cases, more unequal societies can create heightened status competition and anxiety as people become more sensitive to their position in the social and economic hierarchy. This can lead to greater ‘conspicuous consumption’ among those in lower-wealth tiers too, as people try to keep up, or bridge the gap, by imitating the lux spending habits of the wealthy. While this can boost sales in the lower end of art and other luxury markets, it has a range of potentially negative complications, not least being more consumer borrowing and debt accumulation.

    As inequality becomes more pronounced, it can also lead to giving up, rather than keeping up, if the perception of upward mobility seems less hopeful or just less attractive. In the extreme, increases in inequality could endanger the market’s potential for long-term development. If consumers in wealth tiers below the very top engage less—or never even start collecting—the market could narrow further and value concentrate more at the top, and this is a segment that recent years have shown to be highly susceptible to wider risks and growth limitations.

    On a positive note, while the aggregate figures show that the market has declined by value for two years, the most positive developments have been the growth of sales at the lower and more affordable ends of the market, with the number of artworks sold for prices in the sub-$50,000 expanding, and evidence of success by both dealers and auction houses in reaching new buyers, giving the market a broader and more diversified base for sales. This doesn’t really get focused on, though, in the press, which tends to only look at the big figures, which are so skewed by the tiny, narrow high end.

    With the rise of digital channels, new collectible categories and luxury products entering the ‘art’ market—and younger collectors looking beyond traditional fine art, do you have plans to adapt your research and reporting frameworks to capture these newer forms of value and transaction?

    Yes, I’m going to be starting new research on the secondary collectibles market that I’m hoping to publish in 2026. It’s a huge market and there’s strong evidence of an expansion in interest in this area over the last few years,  especially with young collectors. In my recent research on HNW collectors,  about 60 percent of their spending by value over the last year was on fine art, and 40 percent was on collectibles. For Gen Z collectors, just over half of the average spend was collectibles, and their levels were more than five times any other generation group on things like collectible luxury handbags and sneakers.  

    While some of the diversification in spending might be a reaction to the uncertain environment we’ve been in, it’s also part of a longer-term shift in what people buy, but also how they access the market. Within the art market, we’ve seen a big advance in digital sales following the pandemic, with e-commerce increasing from 9 percent of total sales by value in 2019 to 25 percent in 2020. Although this did settle back a little, the change seems to be more permanent, with a share of 18 percent last year, below the peak, but still double the share of 2019 or any year prior to that. It’s interesting as this is coming alongside greater art fair attendance and gallery exhibition visits compared to prior to the pandemic, so while collectors still want to visit exhibitions and see works in person, when targeting a specific work to purchase, they have become increasingly comfortable with doing so online.

    Online channels are key entry points to the market for new buyers too. They have been consistently identified as the main source of new buyers for auction houses, and almost half of the sales dealers made online in 2024 were to new buyers. The expansion of the volume of transactions over the last few years has been facilitated by greater reach through e-commerce, despite the fact that the highest-value sales remained offline.

    Outside the traditional art market, there are also more sales taking place directly with artists,  on artist-based platforms and between other private agents. Dealers are still the most used channels for buying art in the surveys we conducted on HNW collectors, but there was a big gain in direct sales with artists, with over a third having bought directly from the online, through social media or through a visit to their studios. 

    Clare McAndrew On Why the Art Market’s Future Lies Beyond the $10 Million Sale

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  • Nostalgia Is Not a Strategy: Rethinking Competitiveness in 2026

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    In a world of geopolitical rivalry, supply-chain vulnerability and rising costs, competitiveness has become a strategic balancing act. Unsplash+

    Competitiveness is not a new concept. It is likely embedded in our DNA, much like other fundamental instincts such as cooperation, survival, reproduction and mobility. What has changed over time is its geographical scope: once local, then national, competitiveness has now become global. That shift has fundamentally transformed how we understand prosperity, business, work and everyday life.

    At its core, competitiveness is the ability to solve problems better than others. “Better” may mean cheaper, faster or, most importantly, with greater added value for the user. Competitiveness applies to everyone. A plumber is competitive if he fixes your sink quickly and reliably; a doctor if she cures you efficiently; a company if it consistently creates value and earns a profit. Historically, competitiveness was constrained by geography. A local plumber could not repair a sink in Beijing. But globalization has changed that equation. Today, even small, locally rooted companies may be tempted—or forced—to compete far beyond their original markets. Within a few decades, barriers to trade, communication and capital flows have fallen dramatically, opening global markets to firms of all sizes and origins. 

    The golden age of competitiveness

    The era of openness can be dated quite precisely. It began on December 18, 1978, when Deng Xiaoping announced China’s open-door policy. That decision triggered a four-decade-long expansion of the global economy that lasted until the Covid-19 pandemic struck. During this period, unique in human history, it became possible to travel, communicate, invest and conduct business in virtually every country. 

    For companies, access to previously closed markets meant the possibility of supplementing an export strategy with direct investments. Such a change also implied greater knowledge of local markets, legislation, government policies, customers and value systems. Globalization rewarded scale, specialization and efficiency. 

    This period of openness also promoted multilateralism. Conflicts, at least in principle, were managed through international institutions rather than unilateral force. As President Reagan once observed, “Peace is not the absence of conflict, but the ability to cope with conflict by peaceful means.” 

    Vulnerability steps in

    While this period delivered remarkable economic growth, it also produced structural vulnerabilities. Globalization encouraged specialization and, in turn, specialization created dependency. Certain nations came to dominate strategic minerals, key technologies or critical manufacturing capacities that could not easily be replaced.  

    China’s trade surplus has exceeded $1 trillion. This has been driven by expanding exports in critical minerals such as rare earths, renewable energy technologies like solar and wind, biotechnology and automobiles. For example, in 2001, China began investing in electric vehicle technologies, aiming to enhance competitiveness in an area where it struggled to match the U.S., Germany and Japan in traditional internal combustion engine and hybrid vehicle manufacturing. In 2009, with the support of financial subsidies from the Chinese government, fewer than 500 electric vehicles were sold. However, by 2022, following over $29 billion in tax breaks and subsidies since 2009, China sold more than 6 million EVs, accounting for over half of the global EV market. Projections suggest that by 2025, China will have sold well over 11 million electric vehicles. 

    With domestic consumption accounting for just 39 percent of China’s GDP, compared to roughly 70 percent in the U.S. and Europe, exports, in part, fill the production gap. The result is mounting international trade tension.  

    The empires strike back

    Today, the U.S., China and Europe together account for over 60 percent of global GDP. What’s more, they are also political, technological and military powers. In 2025, the U.S. and China account for nearly half of global defense spending. Military procurement has become one of the fast-growing business sectors worldwide, rising by 9 percent to a total of $2.7 trillion in 2024.  

    Thus, the empires are back. As Henry Kissinger wrote in his book Diplomacy, “Empires are not interested in an international system; they want to be the international system.” Multilateralism is under strain, and geopolitical confrontation is increasingly replacing cooperative governance.

    The politicization of conflict

    The proliferation of tariffs and industrial policies is rightly alarming. However, these tools often mask another reality: access to markets is threatened. Or at least it is subject to political interference. “Geo-economy” is the new policy. It means transforming economic strength into political and diplomatic goals.

    In the past, conflicts between nations largely centered around employment and economic fairness, and were resolved within multilateral frameworks such as the World Trade Organization. Today, international disputes increasingly invoke national security. The recent cases involving Huawei and TikTok in the U.S. illustrate this shift. When security is invoked, debate becomes more emotional, less evidence-based and firmly sovereign. Each nation claims the final say. 

    How does a fractured world economy function?

    A fractured economy does not imply deglobalization. The world economy will remain interconnected, but its rules will no longer be universal. For example, transaction platforms such as SWIFT for payments or global credit card networks may no longer be universally accepted. Instead, countries will increasingly develop parallel institutions to retain control. 

    At the same time, multilateral institutions have not disappeared, and some will continue to operate to the greatest extent possible. According to the World Trade Organization, a majority of global trade still operates under multilateral agreements. Despite pressure from the U.S., non-American trade accounts for 86 percent of global commerce. 

    Alternatively, bilateral agreements continue to expand rapidly, either between economic blocs, such as the European Union and Mercosur, or between countries. China continues to forge bilateral agreements, notably with many nations in the Global South.

    Between multilateralism and bilateralism lies a third model: ad hoc coalitions. These involve limited groups of countries aligning around defense policy, economic strategy or shared values. Examples include Europe’s SAFE program and the Coalition of the Willing, which bring together countries concerned about military security in Europe. Their aim is to make decisions and implement them quickly without being hampered by the need for broad consensus. 

    What strategies for companies in 2026?

    Navigating this environment is extraordinarily complex. Companies must contend with several layers of political interference, market disruptions and profound technological change, from teh electrification of the economy to the rise of A.I. Nevertheless, four strategic axes are emerging for 2026. 

    Diversification. Companies are reducing excessive dependence on a limited number of suppliers, markets or customers. It is a quiet revolution taking place under the radar, but with a profound impact on nations and companies alike. China is redirecting its business towards Europe and the Global South while companies worldwide seek alternative energy and technology partners. Managing vulnerability has become a strategic imperative. 

    Resilience. The world will not stop interfering with corporate strategies. Thus, even if the future is more unpredictable, decisions must still be made, often under uncertainty and risk. Resilience is the capacity to adapt quickly as conditions change. As Carl von Clausewitz noted, “Strategy is the evolution of a central idea through continually changing circumstances.”

    Reliability. In a fractured economy, a company’s competitiveness also depends on strengthening confidence in its relationships with business partners. When the environment is in turmoil, a few things, precisely, should not change. Trust is one of them. Reliability implies transparency and efficiency. The ease of doing business is critical. As Peter Drucker said: “There is nothing so useless as doing efficiently something that nobody needs.”

    Pricing power. In 2026, operating costs will inevitably rise. Political barriers and national priorities leave limited room for cost reduction. Price increases often become unavoidable. Competitiveness, then, depends on a firm’s ability to convince customers that value justifies price. Warren Buffett’s advice remains apt: “Price is what you pay; value is what you get.” 

    Optimism for 2026?

    Business leaders must remain optimistic—whether by choice or necessity. Their primary role is to solve problems and motivate people toward success. Nostalgia, however comforting, is not a strategy. The world of 2026 will not return to a reassuring past. Nor does it have to be worse. It will simply be different. When Mark Twain was asked what he thought after listening to an opera by Richard Wagner, he replied: “It’s not as bad as it sounds.” 

    That, perhaps, is the most realistic mindset for planning 2026. 

    Stephane Garelli is Professor Emeritus at IMD and the University of Lausanne, the founder of the World Competitiveness Center, and a former managing director of the World Economic Forum and the Davos Annual Meetings. His latest book, World Competitiveness: Rewriting the Rules of Global Prosperity is published by Wiley.

    Nostalgia Is Not a Strategy: Rethinking Competitiveness in 2026

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    Stéphane Garelli

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  • Cyber Sovereignty at Risk: How Geopolitics Are Shaping Canada’s Digital Security

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    From ransomware to quantum disruption, Canada must take urgent steps to defend its institutions and build long-term cyber capacity. Observer Labs

    This Q&A is part of Observer’s Expert Insights series, where industry leaders, innovators and strategists distill years of experience into direct, practical takeaways and deliver clarity on the issues shaping their industries. At a moment when cyber threats are escalating alongside geopolitical tensions, Canada finds itself at a crossroads: how to defend its digital infrastructure, protect its economy and maintain global competitiveness while preserving the values of an open, democratic society.

    Judith Borts, senior director of the Rogers Cybersecure Catalyst at Toronto Metropolitan University, sits at the intersection of policy, security and economic strategy. With a career spanning provincial economic development, national innovation policy and cross-sector collaboration, Borts has become one of Canada’s most vocal advocates for treating cybersecurity not as a niche technical specialty but as a shared societal responsibility—one that will determine the country’s digital sovereignty in the years ahead.

    Her work at the Catalyst focuses on building the talent, partnerships and operational capacity Canada needs to withstand increasingly sophisticated attacks. But it’s her policy background that gives her a panoramic view of what’s at stake. Canada, she argues, can no longer afford a reactive approach to cyber risk. Nation-state adversaries, criminal networks and A.I.-accelerated threats are moving faster than traditional governance models can respond, and the downstream costs to Canadians are already enormous.

    Borts outlines where Canada is falling behind global peers, what a truly unified national cyber strategy would require and why talent development may ultimately matter more than any single technological breakthrough. She also offers a candid look at the sectors most vulnerable today, the policies needed to strengthen resilience and how emerging technologies like A.I. and quantum computing will reshape the country’s digital future. Canada’s prosperity increasingly depends on something once viewed as purely defensive: a secure and trusted digital ecosystem.

    With global alliances shifting and the U.S. pulling back from international cooperation, how are these geopolitical tensions directly reshaping Canada’s cybersecurity priorities and its role in intelligence-sharing networks?

    Even as global alliances shift, intelligence sharing through networks like the Five Eyes, G7 and NATO remains strong. That’s not really where Canada’s biggest challenge is. What we really need to zero in on is building our own sovereign defence and resilience—including in the cyber and digital domains—so we can protect ourselves, respond quickly when threats come up and recover safely and securely.

    Cyberattacks today can come from anywhere (foreign governments, organized groups or even individuals), and they pose real risks to Canadian institutions, businesses and citizens. Our national security and defence strategies need to reflect that reality. We need to invest more in homegrown talent and innovation, from cybersecurity research to advances in A.I. and quantum technologies, so that Canada can stay ahead of the curve. It’s not about losing trust in our allies; it’s about maintaining our strong relationships while also making sure we have the strength and resilience to stand on our own when it matters most.

    Which Canadian sectors are most exposed to cyber risk, and how prepared are they to defend against the sophisticated attacks we’re seeing today?

    Every sector in Canada, as well as around the world, is exposed to cyber risk. Healthcare continues to face some of the most visible and alarming threats. Ransomware attacks have forced hospitals to cancel surgeries and even shut down emergency systems, putting patient safety directly at risk. The energy sector is another major target. And what used to be mainly about stealing data has now shifted to attempts to interfere with the systems that keep our power grid running. As our digital and physical infrastructure becomes more connected, those risks multiply and even a single successful attack can throw essential services across the country into chaos.

    Canada’s economy is powered by small and medium-sized businesses, which make up about 99 percent of all companies in the country and account for more than half of the country’s GDP. These companies are increasingly being targeted but often lack the specialized staff, training and resources to respond effectively. Plus, the impacts of a ransomware attack on an SMB’s bottom line can be massive. 

    We’re seeing progress in some areas, but these are still isolated efforts. Real national cybersecurity and resilience mean a coordinated approach, one that brings strong security standards together with real investment in education, innovation and long-term capacity building. That’s how we keep Canada’s economy secure and competitive in the years ahead.

    What specific policy mechanisms are needed to create a unified national cyber strategy that also respects Canada’s diverse regional priorities?

    A top-down approach alone won’t keep up with how fast threats evolve or be able to address the practical needs of all regions. Real resilience comes from bringing federal, provincial and local efforts together so we can build safe and secure communities, share information faster, respond in real time and build trust across sectors.

    We also need to make it easier for Canadian businesses to operate securely, both at home and abroad. That means creating a more harmonized and less fragmented set of cyber standards and compliance requirements, so companies aren’t forced to navigate a maze of conflicting rules across jurisdictions. Taking a more unified approach that integrates leading global approaches and consistent standards would help Canada stay internationally competitive while keeping our digital ecosystem strong and secure.

    In a nutshell, the federal government should set the national vision and provide the framework and tools while empowering local governments, organizations and innovators to adapt that framework to their realities. When everyone works from the same playbook, security can become part of how we do business—not a barrier to it.

    As cyber threats evolve, is Canada keeping pace with peers like the U.S. and the E.U. in building defensive capabilities, or are governance gaps holding it back?

    It’s an exciting time for cybersecurity in Canada, but the truth is we’re not yet keeping pace with our peers. The United States invests close to $800 billion or 3.5 percent of GDP annually in research and development, while Canada spends less than 2 percent of ours, and only a fraction of that goes toward cyber and defense innovation. That gap matters. The European Union, meanwhile, approaches cybersecurity not just as a security issue but as a pillar of economic resilience, seeing digital protection and competitiveness as two sides of the same coin. 

    Canada has world-leading talent in cybersecurity, A.I. and quantum. We are also building a strong foundation with proposed legislation like the Critical Cyber Systems Protection Act (Bill C-8) and a growing base of innovation, but we need to move faster—connecting our federal, provincial and municipal strategies, strengthening our talent pipeline and investing in homegrown technology. If we treat cybersecurity as both national defence and economic opportunity, we can close the gap and position Canada as a real leader in the digital future.

    What are the most critical lessons from recent high-profile cyberattacks, and how should they guide efforts to build systemic resilience?

    If there’s one thing recent cyberattacks have taught us, it’s that we need to wake up. No one is really paying attention to how serious this has become. We’re seeing massive fraud and data theft happening quietly, every day, and too often the response is weak at best. The impacts are not only felt at the victim’s level; the burden of the costs to Canadians is enormous, and we’re all paying for this. 

    And still, people aren’t changing their passwords, companies still skip basic protections like multi-factor authentication, and we’ve normalized the idea that our data will be stolen eventually. That has to change.

    There’s a common mantra in the cyber community that when it comes to cyber threats: ‘it’s not if, but when.’ But the lesson isn’t that attacks are inevitable. It’s that we need to take preventative action and prepare for potential threats. Complacency is our biggest weakness. 

    We can’t treat cybersecurity as background noise while we rush to adopt new technologies like A.I. A.I. can make systems smarter, but it also makes cyber threats faster, more targeted and harder to detect. At the same time, many organizations are adopting A.I. without fully addressing the very real risks that come with it. Every organization embracing A.I. should be asking: Are we doing this in a way that keeps us secure and our clients/customers safe?

    True resilience isn’t about specific actions by a cyber team; it’s about how fast and effectively we respond and how seriously we take the responsibility to protect ourselves in the first place.

    What role should partnerships between universities, public institutions, government, private industry and Canadian tech companies play in building national cyber resilience?

    No single group can solve Canada’s cybersecurity challenges on its own—the threats are too complex, the digital infrastructure is too vast and diverse and the stakes are too high. True resilience depends on everyone working together: universities driving research and developing talent, government providing intelligence, guidance and coordination, industry building secure systems and helping to generate specialized talent and Canadian tech companies pushing innovation forward.

    But collaboration can’t just happen in boardrooms or policy papers: we also have to meet Canadians where they are. Digital resilience and cyber awareness are no longer specialized skills; they are now basic workplace essentials. Everyone, regardless of their role, needs to understand how to protect information, manage digital tools responsibly, and remain vigilant to evolving threats. If we’re going to reach everyone, it means finding more creative and practical ways to weave cyber awareness and digital resilience into everyday life, whether that’s through local community programs, small business training or more accessible education. 

    When universities, public institutions, government, and industry connect directly with Canadians, cybersecurity stops being an abstract concept and becomes something everyone can take part in.

    That whole-of-society approach is no longer optional. It’s literally the foundation of our national resilience.

    How does developing a skilled and diverse cybersecurity workforce contribute to Canada’s digital sovereignty and long-term competitiveness?

    When we talk about securing Canada’s digital future, the real advantage isn’t just in technology; it’s in people. We need Canadians to protect what matters to Canada and build a robust digital infrastructure that we can rely on to keep our economy and country growing in the face of mounting threats.  This requires a trustworthy and capable workforce. At the Catalyst, we have no delusions about the impacts of A.I. on cybersecurity work. The key question is: what does a skilled cybersecurity workforce look like in the age of A.I.?

    We are hyper-focused on creating not only skilled cybersecurity professionals, but also helping those in other organizational roles across different sectors to better understand the cybersecurity challenges they are facing while maintaining a keen eye on emerging technologies such as A.I. and quantum computing. Through our programs, we’re building job-ready professionals who can address the human, organizational and technical issues of cybersecurity. 

    But in an era where A.I. can automate certain technical functions, the real challenge—and opportunity—is in ensuring that we have an agile workforce and that we educate and support individuals in exercising judgment, creativity, critical thinking, contextual understanding and ethical reasoning that machines can’t replicate. 

    It’s like asking how you maintain a community of great writers when A.I. can draft a paragraph for you: the value shifts to insight, empathy, strategy and human perspective.

    How can Canada’s cyber strategy link security, innovation and economic growth?

    For too long, we’ve talked about cybersecurity as a purely defensive measure. Many still view it as just the cost of doing business. The truth is, in the modern economy, cybersecurity is an investment, and resilience is one of our biggest competitive advantages. It’s the bedrock of national prosperity and our ticket to maintaining our position as a serious player on the global stage.

    Think about it: when we create an environment built on digital trust, with infrastructure that is both robust and secure, everything else follows. It’s what gives international partners the confidence to invest here, and it’s what gives our own innovators in critical sectors like finance, healthcare and technology the secure launchpad they need to bring their best ideas to life. 

    So, the critical question is, how do you intentionally build that kind of environment? It doesn’t happen by accident, and it can’t rest solely on a policy or a plan. It only comes about through action.

    By combining smart government policies and strong intellectual property and patent protections with real incentives for our businesses, we stop treating cybersecurity as a problem to be solved and start seeing it for what it is: a massive opportunity to build our next generation of tech leaders and secure Canada’s role as an innovator.

    How will emerging technologies such as A.I. and quantum computing reshape Canada’s cybersecurity landscape, and what must be done now to ensure a secure, sovereign, and competitive digital ecosystem by 2030?

    A.I. is rewriting the cybersecurity landscape, and quantum computing won’t be far behind. Each one presents both huge opportunities and serious threats. As these technologies start to converge, we will see incredible new possibilities and potential, but also significant power to cause real damage if we’re not prepared.

    A.I. is now an arms race. For every advanced risk detection model we create, our adversaries are using A.I. to launch attacks. And quantum computing is the horizon. This will threaten most of the common encryption used today. 

    This new reality demands a strategic change, including what the industry calls the “shift-left approach.” Traditionally, security testing happened at the end of a project, just before the software was released. Shift-left flips that model by pushing security earlier in the development cycle—essentially “shifting” it to the left on the project timeline. 

    For example, instead of waiting until a new system is fully built to check for vulnerabilities, developers should build security into the design on day one, and then test for risks at each step. This approach comes from modern software engineering, but it’s now essential for cybersecurity: if emerging technologies like A.I. aren’t built with security-by-design, we’re already behind. 

    Ultimately, by investing in talent, targeting the best in R&D, and investing in an innovative ecosystem, Canada can make sure we’re not just reacting to technological change but we are leading the change. 

    Cyber Sovereignty at Risk: How Geopolitics Are Shaping Canada’s Digital Security

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    Judith Borts

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  • The Cost of Limiting Shareholder Voice: How New Restrictions Threaten Economic Growth

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    Restricting shareholder proposals undermines the checks and balances that protect markets, innovation and social responsibility. Unsplash+

    Illegal child marriages. Coerced sterilization. Debt bondage. Until recently, shareholders had the right to raise such human rights concerns through formal proposals to corporate boards, a right protected by the Securities and Exchange Commission (SEC) for nearly a century. Recent regulatory and interpretive changes, however, are creating new challenges for this fundamental avenue for accountability.

    The sugar cane industry, for example, has become emblematic of harmful supply chain practices, involving some of the most visible and widely reported examples of concerning business practices. Companies including Pepsi, Coca-Cola and Mondelez have faced investigations into alleged labor abuses, including debt bondage. At Pepsi’s 2025 annual meeting, shareholders sought to submit a proposal requesting a report on the company’s efforts to address human rights violations in its supply chain. The company excluded the proposal, citing SEC staff’s revised interpretation of Rule 14a-8, outlined in Staff Legal Bulletin 14M (SLB14M). 

    SLB14M provides guidance on the application of Rule 14a-8, which allows eligible shareholders to submit proposals for inclusion in a company’s proxy statement. The bulletin also specifies circumstances under which companies may exclude these proposals. Citing that revised interpretation, Pepsi argued that the reported abuses occurred in franchise operations (which are “expected” to follow a code of conduct), not in Pepsi’s direct supply chain, and that the franchise sales were not “significantly related” to Pepsi’s business. Essentially, Pepsi claimed that the source of the ingredients sold under its brand did not materially affect its own business because the company itself did not purchase them. The SEC agreed with Pepsi, preventing shareholders from voting on the proposal. 

    Pepsi did not dispute reports that its products sold in India were allegedly made with sugar obtained through a supply chain linked to debt bondage and coerced hysterectomies. Instead, the company contended that these issues were unlikely to materially impact its operations. According to the SEC’s interpretation, shareholders may only make proposals with significant financial implications for the company itself, no matter the broader social or environmental consequences.

    While SEC rules often shift with administrations, this case reflects a larger trend: a narrowing of shareholder voice. Several recent developments illustrate the pattern:

    Collectively, these developments constrain shareholders’ capacity to influence corporate behavior towards more sustainable or ethical practices. Critics of shareholder engagement argue that investors should focus solely on financial returns, treating social and environmental considerations as irrelevant. This is a false dichotomy on two levels. First, environmental and human rights issues often carry real financial risks. Second, systemic harm—from environmental degradation to inequality—affects the broader economy and threatens the diversified portfolios and returns of investors.

    The economic opportunity in sustainable business practices

    The sugar supply chain demonstrates both the risks and opportunities for companies and investors. Brands derive tremendous value from reputation. The perception that Pepsi products are linked to labor abuses can erode consumer trust and is a significant concern for the company. Addressing these issues presents an opportunity to safeguard brand equity and strengthen customer loyalty. For shareholders, engagement extends beyond a single company’s prospects. Human rights and sustainability issues influence global economic conditions, which in turn impact the returns of diversified investors. By encouraging companies to adopt responsible practices, shareholders can help stabilize markets, support GDP growth and mitigate systemic risk. 

    The path forward: strengthening market-based solutions

    Notably, this regulatory shift is occurring under a Republican-controlled administration and Congress, which has historically advocated for private property rights. Policymakers should ensure that proposal mechanisms remain consistent with free-market principles, enabling investors to allocate capital efficiently and hold companies accountable. If financial market rules are being revised, it should not be forgotten that the strength of our economy is based on a free capital market, which allows investors to fund a broad array of enterprises that create authentic value over the long term. 

    Limiting shareholder voice affects far more than greenhouse gas emissions and DEI. It alters the balance of power in capital markets, shifting decision-making from investors to executives and politicians. Investors are losing the power to push back when corporate executives risk the future of the company or the economy to boost profits. And this doesn’t just harm investors. This means our markets will become less effective allocators of capital, as decisions are made by unrestrained executives driven by short-term incentives or politicians swayed by political maneuvering, rather than by a commitment to the integrity of capital markets. 

    The innovation opportunity

    Recent SEC actions show the practical consequences. In March, SEC staff allowed Wells Fargo to exclude a proposal on workers’ rights and collective bargaining, a proposal that observers note likely would have been allowed a few months prior. Limiting shareholder engagement reduces opportunities for market-driven innovation in workforce development, climate solutions and sustainable growth strategies. Climate issues illustrate the stakes vividly. Analysts project that unchecked greenhouse gas emissions could reduce global GDP by 50 percent between 2070 and 2090. Economic modeling suggests that decisive global climate action could lead to a $43 trillion gain in net present value to the global economy by 2070. Investor engagement can accelerate the transition to cleaner energy and sustainable business models, creating economic opportunities while mitigating systemic risks. Ignoring investors’ voices on these matters rejects the role that capital has played in creating the economic engine of the U.S. economy.

    Workers depending on 401(k) plans, such as those in the American Airlines plan, could face real financial consequences if investor oversight is curtailed. Estimates suggest that the current trajectory of emissions could depress the entire equities market by up to 40 percent. The fossil fuel industry’s shortsightedness and the current administration’s policies are exacerbating the environmental crisis and creating economic and retirement instabilities. 

    Limiting shareholder voice threatens far more than individual investors. It weakens the very mechanisms that keep U.S. markets dynamic, resilient and capable of driving long-term growth. The muzzling of investors is part of a larger story: environmental data is being scrubbed from federal websites, critical scientific inquiry is being stalled and dissenters are being penalized. Historically, U.S. markets and democracy alike have relied on open debate and the free flow of information. Undermining shareholder oversight is part of a broader erosion of transparency that threatens both markets and the very norms that underpin a free society. Shareholder input is not a political preference but a market stabilizer, an innovation driver and a critical check on corporate governance. Preserving this function is essential to sustaining the economy, the integrity of capital markets and the broader social and environmental systems on which long-term prosperity depends. 

    The Cost of Limiting Shareholder Voice: How New Restrictions Threaten Economic Growth

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    Rick Alexander

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