FUTURE POS SIBIL ITIES REPORT ñ ï ñ ï - United Nations

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FUTUREPOSSIBILITIESREPORT 2020

3ContentsContentsForeword by H.E. Mohammad Al Gergawi, UAE Minister of Cabinet Affairs4Foreword by H.E. Fabrizio Hochschild, Under-Secretary-General of the United Nations5Executive Summary7Acknowledgments111. Future Possibilities: A New Approach to Development13Why future possibilities matter for development14Systemic change requires transformational policies152. Six Global Transformations20The Exabyte Economy: Hyperconnected devices, data and people26The Wellbeing Economy: Redefining health31The Net Zero Economy: Scalable low carbon solutions35The Circular Economy: Waste not, want not41The BioGrowth Economy: New agriculture and biomaterials46The Experience Economy: From ownership to usership503. Leveraging Future Possibilities55Core capacities55National development strategies based on future possibilities574. Conclusion: Building Back Better62Appendix: Methodology66

4ForewordForewordby H.E. Mohammad Al GergawiUAE Minister of Cabinet AffairsHuman ingenuity is the single most vital resource in the world, and in the ageof global interdependence the need for solutions that drive economic growthwhile contributing to human prosperity and wellbeing have never been aspressing. As we look to the future, we as humanity have a unique opportunityto reset the way we produce, consume, socialize and interact. The FuturePossibilities Report aims to contribute to this debate by shining a light on howcountries can leverage global trends for truly sustainable development, andharness the potential of the Fourth Industrial Revolution.The UAE Government has greatly benefited from the vision and wisdomof our leadership to prioritize, invest in and focus on the future. We arehonoured to be listed among the strongest countries in COVID response, andare focusing our efforts on the path to the next normal as that foresight andfuture orientation is all the more important now. The Future Possibilities Reportprovides a positive, opportunity-focussed approach for achieving systemicchange, with a view to providing tools for all nations to shift their focus tothe future. By focussing on opportunities that achieve the twin objective offinancial returns while contributing to human and sustainable development, itsuggests a pragmatic approach for countries for the next normal, and for themuch needed Great Reset.It is our privilege to launch this report as a contribution to the globaldebate about the future we want in the context of the commemoration ofthe 75th Anniversary of the United Nations, and the efforts of the SecretaryGeneral Antonio Guterres to lay the groundwork for the UN we all need atthe time of its centennial in 2045. We welcome all countries to join us on thisimportant endeavour and hope that it will provide a valuable resource forstakeholders as they seek to redesign models, approaches and systems onwhich our societies are based for the next normal.

5ForewordForewordby H.E. Fabrizio HochschildUnder-Secretary-General and Special Adviser to the Secretary-General for theCommemoration of the United Nations’ 75th AnniversaryAfter the devastation of World War II in the preamble of the UN Charter worldleaders stated that the use of “international machinery for the promotion ofeconomic and social advancement of all peoples” was an essential meansof securing peace, upholding human rights and ensuring social progress.They demonstrated exemplary foresight and thanks to their commitment tosolidarity succeeding generations grew up in periods of unprecedented peace.Employing our international machinery for the promotion of economic andsocial advancement of all peoples is now more urgent than ever in order toovercome the devastating effect of COVID19. While the vision of the Charteris still relevant, our “international machinery” and the commitment to it, areimperiled and in need of serious attention. The machinery of multilateralismhas come under assault from old foes such as unchecked nationalism andbig-power politics. It also faces new challenges for which yesterday’s designno longer works so well. The grave dangers of climate change, demographicshifts, growing inequality and the digital revolution can only be managed bystates working effectively together and yet too often we see a diminished willto compromise and cooperate and a retraction from our multilateral system.COVID19 has laid bare the fault lines and has exacerbated many negativemegatrends, widening the divide between rich and poor, between haves andhave-nots, between those who have access to work, healthcare, education ordigital technologies and those who have not. Now more than ever, we needa functioning and effective international machinery that produces innovativesolutions to these global trends and ensures we build back better and secure aviable future for those who come after us.Against the backdrop of growing international challenges and diminishingglobal solidarity the Secretary General of the United Nations decided to markthe 75th anniversary nota as a celebration but as a moment of forward looking

6Forewordreflection around the three critical questions of our time: What is the futurewe want for the world ? What do we see as the biggest threats to that futureand how can the world come together better to address these threats anddeliver on our aspirations? The global dialogue around these questions bringstogether peoples across the world from all walks of life. It is facilitated by theenergy and resolve of many Member States of the United Nations such as theUnited Arab Emirates.This Future Possibilities Report lays out a powerful and important set ofpolicy initiatives for building back better after COVID19. It contributes to thedebate by exploring how countries can actually leverage these global trendsfor economic growth as well as human and sustainable development. In doingso it adds a welcome voice to the global dialogue and provides for urgentoiling of the international machinery.I thank the government of the UAE for its support for UN75 and for thevaluable contribution that the Future Possibilities Report provides to us all.

7Executive SummaryExecutive SummaryWhat are the possibilities of tomorrow, and how can countries leveragethem to reset their economies in the post-COVID world? The FuturePossibilities 2020 Report sets out to answer that question by identifying sixtransformational trends that are creating possibilities, and the factors thatexplain a country’s capacity to take advantage of those possibilities for thebenefit of society.The COVID crisis of 2020 has made it palpable that it is no longer enoughfor government policies to aim to boost the productivity of the economy asa whole. The link between productivity and economic growth is weakeningand, in many countries, growth is becoming less of a priority relative to issuessuch as climate change and income inequality. More importantly, the COVIDpandemic has highlighted that efficiency can stand in the way of resilienceneeded for human security. Countries instead need to identify a goal—whether improved health or food security, better connectivity, or greater useof renewable energy sources—and define transformational public policiesthat create conditions for businesses to innovate and lead globally in findingsolutions.History shows that it is possible for countries and cities to shape theirfuture development by leveraging global trends: examples include Denmarkestablishing world-leading expertise in wind power and the UAE capitalising onglobal trade patterns to become a logistics hub. While some global trends dopresent risks that must be mitigated, psychological research suggests that amore positive outlook makes people more resilient in times of change.As countries start thinking about the post-COVID world, we hope thatthe Future Possibilities Report will encourage governments, businesses andsocietal stakeholders to think differently about development. By providing apractical approach, the report can help them to identify the trends to prioritise,and to work together to create ecosystems that will support the developmentof new business models, products and services. It will also support theprocess of rebuilding in engaging with a positive, possibilities-focused futureperspective.

8Executive Summary Future Possibilities: Total expectedvalue by 2025Transformational trends: drivers of possibilitiesTransformationalTrendsValue(USD)The Report analyses how countries can leverage possibilities emerging fromsix transformational trends for their future economic growth and societalExabyte Economy 8 trillionwellbeing. The trends were selected because of their systemic and globalWellbeing Economy 7 trillionnature and because they are expected to generate significant possibilities in aNet Zero Economy 2.3 trillionCircular Economy 4.5 trillionBioGrowth Economy 1 trillionExperience Economy 6.5 trillionwide range of sectors over the next 5-10 years (see table).The six transformational trends presented in the Future PossibilitiesReport emerge from a combination of new business models, technologiesand changes in attitudes and behaviours. They are based on a set of crosscutting structural trends: ageing populations, the reengineering of urban life,rising global mobility, the influence of younger generations, changing globaltrade patterns, diversifying investment flows, the expanding middle class inemerging economies, and growing interest in measures of progress other thanGDP growth.The Exabyte Economy: Hyperconnected devices, data and peopleAs computing power and storage become cheaper and more efficient,and 5G technology is rolled out, future rises in connectivity will be drivenmore by devices than people. The resulting flow of data will further improvethe capacity of AI-based systems to optimise processes and services anddisrupt business models across a range of sectors. The Exabyte Economycould deliver possibilities with an estimated total economic value of up toUSD 8 trillion by 2025.The Wellbeing Economy: Redefining healthInterest in physical and mental wellbeing is already huge and is set to growconsiderably as new approaches to wellbeing are embedded at individual,organisational and community level. There will be multiple opportunities inthis sector, particularly in high-income but also middle- and lower-incomecountries. The combined value of Wellbeing possibilities, includingpreventative health, self-improvement coaching, organisational andeducational programmes, fitness, diet, health and beauty, travel and realestate, could reach USD 7 trillion within a few years.The Net Zero Economy: Scalable low-carbon solutionsEmerging markets and data processing are increasing demand for energy,while countries are setting targets to reduce carbon emissions in greaternumbers. Innovation in technologies, investment models and markets can beexpected from battery technologies, electric vehicles, energy-efficient buildingsand hydrogen-powered fuel cells. Growing demand for renewable energy

9Executive Summary could yield over USD 2.3 trillion of possibilities by the mid-2020s.The Circular Economy: Waste not, want notGrowing public awareness of the need to reduce environmental impact willcontinue to open up new possibilities across value chains based on optimisingthe use of resources and reducing waste. The circular economy, recyclingand upcycling will become more mainstream as new technological solutionsbecome available. By some estimates, leveraging the Circular Economy couldopen market possibilities totalling up to USD 4.5 trillion.The BioGrowth Economy: New agriculture and biomaterialsArguably the lowest-profile of the six transformational trends, theBioGrowth Economy is still set to open new market possibilities in some ofthe biggest global sectors. Rapid progress in biomaterials, plant science andsynthetic biology will lead to breakthroughs in areas such as biodegradablematerials, resilient crops, fuel refining from agricultural waste and animalprotein substitutes. BioGrowth-related possibilities could be worth USD 1trillion by 2025.The Experience Economy: From ownership to usershipThe desire to “experience”, rather than to consume, is trickling down fromhigh-end markets to mass markets. Chatbots will increasingly enable servicepersonalisation, and 3D printing will expand opportunities to customiseproducts. “Experience tourism” accounts for a growing share of the globaltravel market, and virtual reality is becoming more sophisticated andaffordable. Together these trends could build an Experience Economy worthup to USD 6.5 trillion by 2025.Transformational policies to drive changeHow can countries make these possibilities happen? They need to put intoplace transformational policies in each of the above future economies andacross a range of cross cutting policy areas, which we call core capacities. Thecore capacities are: Government vision to develop and implement a long-term strategyproviding strong directionality to align the efforts of diverse stakeholders. Advanced technology to enable new ideas to be developed and adapted,particularly solid ICT infrastructure and widespread digital skills. Innovation which includes both R&D and entrepreneurship reflectinginvestment in basic and applied science, research institutions and a culture

10Executive Summary of creativity. Talent to enable labour market transitions to be navigated, includingattractiveness to outside talent and education that develops soft skills. Business friendliness in the shape of rule of law, absence of corruption,minimal red tape, access to finance, trust and social capital. Market dynamics that drive investment, with market size creating scopefor economies of scale, improving efficiency and deploying new solutions.How can stakeholders use the Report?Governments can use the Report to help them define a vision that commandswide societal support, select which trends to focus on, and develop andimplement action plans. Businesses can use the Report to inform investmentdecisions, identify other stakeholders to work with, engage with governmentsand advocate for transformational public policies.

11Acknowledgments AcknowledgmentsThe Future Possibilities Report 2020 is published under the auspices inIn addition to the Advisory Board members, we also thank ourpartnership with the UN75. The Report was prepared by the Centennialinterviewees and those that provided written contributions:Lab at the Prime Minister’s Office of the United Arab Emirates inpartnership with Horizon Group, Switzerland. The team consisted ofRomán Arjona, Chief Economist, Directorate-General for Research andLubna Alnatour from the Centennial Lab and Sophien Hanouz, SatuInnovation, European Commission, Brussels, BelgiumKauhanen, Judit Kozenkow, Harry Langer, Ilaria Marchese, MicheleMartin Bruncko, Managing Partner, Steam Capital, London, UKPetochi, Jacek Szanduła, Sheana Tambourgi and Andrew Wright fromKristel van der Elst, Director General, Policy Horizons, Ottawa, CanadaHorizon Group.Sándor Fülöp, Former Commissioner of Future Generations, Governmentof Hungary, Budapest, HungaryThe report was developed under the general direction of Atraf Shehab,Wolfgang Lehmacher, Senior Supply Chain Executive, Hong Kong SARCEO of Centennial Lab, United Arab Emirates, in partnership withTiffany Misrahi, Director of Policy, World Travel & Tourism Council,Margareta Drzeniek, Managing Partner at Horizon Group.London, UKRandall Krantz, Process Designer and Facilitator, The Value Web, Geneva,The report would not have been possible without the leadership andSwitzerlandguidance of H.E. Ohood Al Roumi, Minister of State for Government andBernice Lee, Executive Director, Hoffmann Centre for SustainableFuture Development, UAE.Resource Economy, Chatham House, London, UKAlexey Prazdnichnykh, Managing Director, Eurasia CompetitivenessWe are grateful to all the people who helped us make this ReportInstitute, Antwerp, Belgiumpossible, and who provided comments and support at different stagesJodie Roussell, Group Head Smart Grid, Planair SA, Geneva, Switzerlandof the research and production process. In particular, we wish toLutfey Siddiqi, Visiting Professor-in-Practice, London School of Economicsacknowledge:and Political Science, London, UKAttila Turos, Senior Advisor, The Fourth Sector Group, The Hague, theThe Advisory BoardNetherlandsChantal-Line Carpentier, Chief, New York Office, UNCTAD, New York,USAWe also wish to thank the attendees of the workshop held on 11 AprilSoumitra Dutta, Professor of Management and Former Founding Dean2019 at the Royal Institution, London, UK:at Cornell SC Johnson College of Business, Cornell University, New York,USARolf Alter, Economist and Senior Fellow, Hertie School of Government;Julio Hector Estrada, Independent Policy and Finance Advisor, formerAndrew Bishop, Partner & Global Head of Policy Research, Signum GlobalMinister of Finance and presidential candidate, GuatemalaAdvisors; Mark Malloch Brown, Chairman, SGO Group; Anne LouiseHugo Hollanders, Economist and Senior Researcher at MaastrichtBurnett, Manager, Centre for Global Finance & Technology, ImperialUniversity, UNU-MERIT, Maastricht, the NetherlandsCollege Business School; Piers Cumberlege, Chair, Straightview, SándorEnrico Giovannini, Professor of Economics, University of Rome, formerFülöp, Former Commissioner of Future Generations, Government ofMinister of Labour, ItalyHungary; Ian Goldin, Professor, University of Oxford, Mais Haddadin Finn,Jackie Hunter, CEO, Benevolent.AI, London, UKStrategic Advisor, Topan AG; Richard Ian Kitney, Professor of BioMedicalBruno Lanvin, Executive Director, Global Indices, INSEAD, Fontainebleau,Systems Engineering, Imperial College; Chris Langdon, Author, ThinkingFrancethe Unthinkable; Wolfgang Lehmacher, Senior Supply Chain Executive;David Schlesinger, Founder and Managing Director, Tripod Advisors,Andrew Likierman, Professor of Management Practice in Accounting,Hong Kong, China; Former Chairman Reuters China, and Editor-in-Chief,London Business School; Irene Mia, Global Editorial Director, EconomistReuters, London, UKIntelligence Unit; Tiffany Misrahi, Director of Policy, World Travel &Atraf Shehab, CEO, Centennial Lab, UAE.Tourism Council; Johannes Nutinen, Head of Radical Strategy Team,Arun Sundararajan, Professor of Business, NYU Stern, New York, USADemos Helsinki; Pan Pan, Founder, Pantèra Ventures; Marco MariaJames Zhan, Director, Investment and Enterprise Division, UNCTAD,Pedrazzo, Head of Strategy, Carlo Ratti Associati and MIT SenseableGeneva, SwitzerlandCity Lab; Anand Phanse, Chief Financial Officer, Billon Group; Lucien

12Acknowledgments Randazzese, Director, Innovation Strategy and Policy, SRI International;Frederik Cyrus Roeder, Managing Director, Consumer Choice Center;Jodie Roussel, Group Head Smart Grid, Planair SA; Jeffrey Saunders,Partner, Behavioural Strategy; and Jakob von Uexkull, Founder, WorldFuture Council.We would like to thank Eurasia Competitiveness Institute and The LatinAmerican Center for Competitiveness and Sustainable Development atINCAE Business School for their valuable partnership.We would additionally like to acknowledge and thank the teamsof Qualtrics, Dynata, and LeadCap Ventures for their support andcontribution to the survey and data research.www.horizon-group.ch

131. Future Possibilities: A New Approach to Development1. FuturePossibilities: ANew Approach toDevelopmentThe COVID 19 crisis has laid bare many shortcomings of our current economicmodels that are focussed on efficiency and financial returns. It gave rise to aplethora of calls for systemic change to ensure better outcomes for societyand human wellbeing. However, models that spell out practically how suchsystemic change can be achieved at the country level are scarce. The FuturePossibilities Report offers a practical approach for countries to achieve growthand systemic change by leveraging possibilities offered by transformationaltrends.In the same way that businesses leverage market trends, countries’long-term success depends on their capacity to strategically leveragetransformational global trends. Those megatrends—such as the advancingtechnologies, transition to low carbon economy, focus on sustainability orsmarter use of resources—are transforming industries, economies andsocieties and give rise to countless possibilities for improved growth andsocietal wellbeing. By leveraging these trends, countries can improve theireconomic as well as societal outcomes.There are many examples of countries and cities that have leveragedglobal transformations to alter their development path. China’s 1980sreforms enabled it to ride the wave of globalisation. Liberalisation of financialmarkets made London a global hub. India and the US, in particular, seized theopportunities created by the emergence of the Internet.Realising possibilities associated with global trends could accelerateprogress at scale, but only if the right conditions are in place. Governmentpolicymakers and business leaders can build capacity to leverage trends byrecognising them, investing in them, and putting in place transformation

141. Future Possibilities: A New Approach to Development policies that enable all actors in their societies to take advantage of thepossibilities they present.By highlighting the potential to capitalise on new growth possibilities, theReport aims to improve understanding of what elements of transformationalpolicies countries need to put in place and how to create the necessarycapacity to leverage trends. It aims to shift the global conversation from arisk-based view of transformational trends towards a positive, possibilityfocused perspective that recognises global megatrends as an engine foradvancing socioeconomic development. This perspective is particularlyimportant when we think about the post-COVID world.In Part 1, we explain why countries have been moving away fromtraditional economic policies that target GDP growth and assume trickledown effects, to focus on a wider range of social and environmentalobjectives. In Part 2, we discuss how transformational trends drivepossibilities. In Part 3, we analyse how governments and businesses can usethe framework to drive change.Why future possibilities matter for developmentTraditionally, policies aimed at enhancing economic productivity as a whole,such as providing the right business environment, improving governance,liberalising trade, supporting innovation, ensuring equitable access toeducation and building infrastructure. All these goals remain important, butproductivity is no longer seen as sufficient to compete in the increasinglyfast-paced global race.1 By finding ways to leverage transformational trends,countries can depart from this logic and leapfrog to higher, inclusive andsustainable growth.Recent successes offer some pointers. For example, in the last fewdecades, the United Arab Emirates has leveraged its geographic position tobecome a logistics hub, building the infrastructure and creating the enablingThe Future Possibilities2020 Report setsout to answer thequestion: What are thepossibilities in the postCOVID world and howcan countries leveragethem?environment to benefit from globalisation and Asia’s growing role in trade.Denmark, meanwhile, has established itself as a frontrunner in renewableenergies. In particular, it has invested in research and development to harnesspower from wind—an abundant resource, given its expanse of coastline.As concern about climate change increased global interest in renewables,Denmark was well-placed to take advantage—the wind power industry nowmakes up 6.7% of Danish exports, and employs over 30,000 people.2Similarly, economic growth alone cannot deliver the desired societaloutcomes. The Washington Consensus assumed that liberalisation wouldboost economies in general, and societal benefits would follow. Today, citizens

151. Future Possibilities: A New Approach to Development Box 1: From glass half-empty to glass half-full – Apositive approach towards the futurebusiness models, products and services. Apositive narrative—with messages aboutobjectives and outcomes that speak to theneeds of organisations and individuals—isResearch in psychology and neurosciencePaul Romer, who said, “What the theory ofmore likely than a risk-based outlook tosuggests that optimism—as a state ofendogenous technological progress supportsengage and build support for leveragingmind, rather than a character trait—makesis conditional optimism, not complacenttrend-related possibilities.people more ready to act in times of change.optimism. Instead of suggesting that we canBeing able to leverage change—notPositive expectations have been linkedrelax because policy choices don’t matter, itbeing left behind by global transformations,to greater investment in tasks expectedsuggests to the contrary that policy choicesbut turning them into an advantage—to yield future rewards.1 Innovators andare even more important than traditionalrequires a complex system of institutions,entrepreneurs are more optimistic thantheory suggests.”measures and actions. Hence, it is worthwhileaverage. Research suggests that optimismGovernments need to identify andamong an organisation’s employees is acommunicate how trends will creategood indicator of positive organisationalfuture growth possibilities to engageoutcomes. This way of thinking is also findingstakeholders in envisioning and creating theway into economic policy, as identified bytransformational policies that support newexamining commonalities among successfulcountries.1Kappes & Sharot, 2015expect socio-economic policies to directly and explicitly address societal goals,be it in terms of food security, health, climate change, decent jobs or incomeinequality. Each of these challenges is complex, requiring changes not only inpolicies and regulations but also in behaviours and systems.Last but not least, the recession context which we are currentlyexperiencing, makes systemic change more difficult. The financial pressurescompanies, individuals and governments experience limit risk taking, which isinherent in systemic change and put pressure on short term results. As a resulta positive, opportunity-focussed approach is more likely to gather support ofdifferent stakeholders. Moreover, new research suggests that a more positiveapproach is likely to result in better outcomes, as discussed in Box 1.Systemic change requires transformational policiesThrough case studies on selected countries (see boxes 2, 3 and 4), workshops,expert contributions and in-depth, structured interviews, our researchidentified a set of characteristics common to countries that have demonstratedsuccessful growth and increased wellbeing. In this context, successful growthmeans growth that improves living standards and societal wellbeing andcohesion. To achieve this type of growth, countries need to attract investmentin sectors of opportunity, generate employment and offer an entrepreneurialenvironment, among other factors.In the past, many countries have implemented industrial policies thataimed to identify and nurture national champions or key industries through

161. Future Possibilities: A New Approach to Development PHOTO BY SUNGHUN KIM ON UNSPLASHBox 2: Republic of Korea’s long-term strategy for “GreenGrowth”private equity funding all promote thegreening of industry. The development ofgreen technology is expected to increaseproductivity and strengthen the country’sIn 2008, Republic of Korea’s President Leecomprehensive policy framework with threerole as a world leader in climate changeMyung-bak identified low-carbon greenmain objectives: (1) to promote eco-friendlymitigation technology.growth as a new long-term national vision,new growth engines, (2) to enhance people’sin recognition of the fact that the country’squality of life, and (3) to contribute tothe Four Major Rivers Restoration Project,economic growth was slowing as the globalinternational efforts to fight climate change.which aims to increase water security,financial crisis took hold. As climate changeAs part of these efforts the Green Growthcontrol flooding and protect ecosystemswas already having an impact on the KoreanInstitute with offices in Soul, Abu Dhabi andby restoring the Han, Nakdong, Geumpeninsula, air pollution, depletion of naturalJakarta was also created.and Yeongsan rivers. New constructionsresources and fossil fuel dependency wereKorea’s latest Five-Year Plan, coveringSpecific green growth initiatives includehave already proved to be effective againstamong the challenges Korea needed to2019-2023, continues to implement therecent typhoons. It is estimated that thisaddress.strategy through specific budget indicationslong-term project could create 340,000 jobsand detailed tasks for ministries andand generate 40 trillion KRW of economicthe Green New Deal and set up an inter-related entities. Around 2% of country’sbenefits.ministerial body, the Presidential CommitteeGDP is devoted to the strategy, largelyon Green Growth, to develop a multi-drawn from the central governmentsector approach. It created the Nationalbudget. Tax incentives, subsidies andStrategy for Green Growth (2009-2050), aexemptions, loan programmes and greenIn 2009, the government launchedReferencesUNESCAP, 2011 Jones & Yoo, 2011OEDCD, 2011Jung Cha, Shim, & Kim, 2011

171. Future Possibilities: A New Approach to Development Box 3: Foresight in the European Unionrecommendations.EU foresight projects are funded byHorizon 2020, a seven-year research andEU policymakers use foresight exercises toThe EU distinguishes three types ofinnovation programme; the Joint Researchanticipate how future developments andforesight activities. Strategic foresight isCentre, employing scientists to provideemerging technologies could give rise toused in developing proposals for researchindependent advice; and the Europeannew demands

Jul 20, 2020 · the 75th Anniversary of the United Nations, and the efforts of the Secretary- General Antonio Guterres to lay the groundwork for

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