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The dark side of loan guarantee programs for SMEs

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The dark side of loan guarantee programs for SMEs


money dark
Credit: Unsplash/CC0 Public Domain

There is always a downside. Even for loan guarantee programs for small businesses, launched during financial crises to stave off the drying up of credit, particularly likely in periods of recession. It turns out these programs also have negative effects on the labor market, as is argued in the paper “The Labor Markets Effects of Loan Guarantee Programs,” co-written by Jean-Noel Barrot (HEC Paris), Thorsten Martin, Julien Sauvagnat (both at the Bocconi University, Milan) and Boris Vallee (Harvard Business School).

The paper is published in the SSRN Electronic Journal.

The research study uses administrative microdata on French SMEs that made use of public loan guarantee programs from Bpifrance, a public investment bank that works with a network of French banks, in 2008–2009.

The study exploits geographic variations in the intensity of the loan guarantee program. In detail, thanks to the approach based on the discontinuity of regional borders, the authors of the paper estimate the causal impact of the program on the employment and wage trajectories of workers, comparing regions with different levels of exposure to the program, while at the same time taking local economic conditions and the characteristics of businesses into account.

The paper finds that the loan guarantee program significantly increased the employment and earnings of workers in beneficiary firms in the medium term (until 2015), leading to positive effects on aggregate employment and a reduction in unemployment benefits. However, the program also had some unwanted and unanticipated effects: it reduced the mobility of workers, especially highly skilled and in-demand workers, preventing them from moving to more productive companies, as usually happens when a recession hits. This effect is particularly relevant for high-paid workers employed in highly sought-after professions and who perform intellectual and non-routine work.

This labor misallocation effect resulted in a reduction in aggregate productivity and affected the trajectory of the post-recession economy, highlighting a trade-off between immediate employment benefits and long-term economic efficiency.

A cost-benefit analysis of the loan guarantee program highlights that the latter has brought positive revenues for the government, as well as savings on unemployment benefits, with an estimated positive impact of 270,000 jobs saved.

Given these findings, the study’s authors say loan guarantee programs can be effective tools for preserving jobs during economic downturns and can have cost-effective results by reducing unemployment benefits. However, they also show that such programs could hinder the natural reallocation of labor towards more productive enterprises, particularly affecting highly skilled workers.

Therefore, when designing loan guarantee programs, it is essential to consider mechanisms to support not only job retention but also labor mobility, to improve overall productivity and economic growth. Finding a balance between these goals can help achieve more sustainable economic outcomes. In general, such programs work best in areas with higher unemployment, where the workforce is not rigid and government budget constraints are more stringent.

More information:
Jean-Noel Barrot et al, Employment Effects of Alleviating Financing Frictions: Worker-Level Evidence from a Loan Guarantee Program, SSRN Electronic Journal (2019). DOI: 10.2139/ssrn.3409349

Provided by
Bocconi University


Citation:
The dark side of loan guarantee programs for SMEs (2024, June 25)
retrieved 25 June 2024
from https://phys.org/news/2024-06-dark-side-loan-smes.html

This document is subject to copyright. Apart from any fair dealing for the purpose of private study or research, no
part may be reproduced without the written permission. The content is provided for information purposes only.





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How a biocatalyst might boost the growth of microalgae

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How a biocatalyst might boost the growth of microalgae


How a biocatalyst might boost the growth of microalgae
Schematic model of how the activating effect Gln exerts on AMA2 activity might allow a direct crosstalk between C and N metabolism to optimize cell growth. Photosynthesis provides energy (ATP) and reductant (e) to assimilate inorganic nutrients (only CO2 and nitrate [NO3] are shown). Credit: Plant Direct (2024). DOI: 10.1002/pld3.609

Living organisms consist to a large extent of carbon (C) and nitrogen (N) compounds. These have to be taken in with food or, in the case of plants, produced through photosynthesis.

A previously mysterious extension of a starch-degrading enzyme in algae could be a kind of sensor to determine how much nitrogen is currently available. If there is plenty of it, the algal cells quickly release many building blocks for their growth.

The research team led by Dr. Anja Hemschemeier and Dr. Lisa Scholtysek from the Photobiotechnology Group at Ruhr University Bochum, Germany, report their new findings in the journal Plant Direct.

A starch-degrading biocatalyst as a nitrogen sensor

The optimal composition of a living cell is made up of a certain ratio of C and N, but the quantities of these elements in our diet and in the environment of plants and algae are usually not that perfectly balanced. Therefore, living organisms must tune their metabolism and chemical composition to the availability of these—and other—chemical building blocks.

In plant-like organisms, C-containing molecules that are not immediately utilized are stored as starch. Various types of biocatalysts—also termed enzymes—release C skeletons from starch when they are needed as building blocks or as energy source. One of these enzymes is alpha-amylase, which Hemschemeier’s research team investigated from the microalga Chlamydomonas reinhardtii.

In the process, the team made a surprising discovery. “The enzyme has an extension that is not needed for starch degradation,” explains Hemschemeier, who headed the study. “This protein part has already been discovered in a similar form in many different enzymes, where it usually regulates the function of the biocatalyst.

“Commonly, this protein part senses small compounds that play a role in the corresponding metabolic pathway, so that its speed can be adjusted and coordinated with other pathways.”

How a biocatalyst might boost the growth of microalgae
Anja Hemschemeier is investigating the detailed processes that take place in algae. Credit: RUB, Marquard

Lisa Scholtysek, lead author of the study, tested the effect of many different substances on the activity of this amylase. Finally, she identified one that noticeably increased the activity of the enzyme, namely the amino acid glutamine.

This N-containing compound is a building block of proteins. In many organisms, glutamine is also the first product of N assimilation and serves both as the primary N source and as a signal for how much N is available for biosynthetic pathways.

An alpha-amylase as growth booster?

To date, this combination of starch-degrading enzyme and glutamine sensor has not been described in literature. Still, based on bioinformatic analyses conducted by the researchers, many microalgae appear to possess this specific combination.

“Our research is still in its infancy,” says Hemschemeier. “So far, we have studied this effect only at the level of the isolated biocatalyst from Chlamydomonas. An important next step is to study it in living algae.”

However, the researchers have a hypothesis. “It is conceivable that this alpha-amylase registers when a lot of nitrogen is present. Then, it accelerates the release of C scaffolds from starch for the production of N- and C-containing cell components.” This could optimize cell growth when the algae encounter optimal conditions.

More information:
Lisa Scholtysek et al, The activation of Chlamydomonas reinhardtii alpha amylase 2 by glutamine requires its N‐terminal aspartate kinase–chorismate mutase–tyrA (ACT) domain, Plant Direct (2024). DOI: 10.1002/pld3.609

Citation:
How a biocatalyst might boost the growth of microalgae (2024, June 21)
retrieved 25 June 2024
from https://phys.org/news/2024-06-biocatalyst-boost-growth-microalgae.html

This document is subject to copyright. Apart from any fair dealing for the purpose of private study or research, no
part may be reproduced without the written permission. The content is provided for information purposes only.





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Thermoelectric devices may solve overheating issues in shrinking transistors, researchers say

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Thermoelectric devices may solve overheating issues in shrinking transistors, researchers say


A Ted Talk in thermo detection
Integrated TED for in-chip transient thermal management. Credit: Nature Communications (2024). DOI: 10.1038/s41467-024-48583-9

The electronics industry faces a new challenge. While transistors in computer chips are shrinking, the heat they produce is only increasing. Overheating can cause reduced circuit performance, increased leakage power or even the total breakdown of transistors.

A team of researchers from the University of Pittsburgh and Carnegie Mellon University propose locally embedded thermoelectric devices (TEDs) that can perform active cooling inside circuits. The research is published in the journal Nature Communications.

“Circuits like clock generators and arithmetic and logic units (ALU) create high-frequency heat fluxes with their peak hot spots occurring on the microprofessor,” explained Feng Xiong, associate professor of electrical and computer engineering at Pitt’s Swanson School of Engineering. “Cooling systems at the chip size are over designed and a more targeted strategy is necessary to dissipate heat in these hot spots.”

TED finds the hot spot

The only way to cool an object down is to remove the heat—or energy—from it. These circuits are generating heat at a really high frequency. With TED, this high frequency temperature variation can be totally eliminated.

TEDs remove heat from hot spots inside circuits to colder regions throughout the device using thermoelectric effects at the same frequency. Researchers proved their theory using experimental data from frequency domain thermal reflectance (FDTR) measurements made directly on an actively cooled thermoelectric device where the pump laser replicates the transient hot spot. The team used materials with high thermal conductivity, which theoretically improves cooling efficiency by a factor of 100 compared to conventional thermoelectric materials.

“We demonstrated a practical method to actively cancel the transient temperature variations on circuit elements with TEDs,” Feng said. “This result opens a new path to optimize the design of cooling systems for transient localized hot spots in integrated circuits.”

More information:
Yihan Liu et al, Thermoelectric active cooling for transient hot spots in microprocessors, Nature Communications (2024). DOI: 10.1038/s41467-024-48583-9

Citation:
Thermoelectric devices may solve overheating issues in shrinking transistors, researchers say (2024, June 12)
retrieved 25 June 2024
from https://techxplore.com/news/2024-06-thermoelectric-devices-overheating-issues-transistors.html

This document is subject to copyright. Apart from any fair dealing for the purpose of private study or research, no
part may be reproduced without the written permission. The content is provided for information purposes only.





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New method for orchestrating successful collaboration among robots relies on patience

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New method for orchestrating successful collaboration among robots relies on patience


Researchers create new method for orchestrating successful collaboration among robots
Heterogeneous multi-robot collaborative scheduling with dynamic subteaming. Credit: Human-Centered Robotics Lab @ UMass Amherst

New research from the University of Massachusetts Amherst shows that programming robots to create their own teams and voluntarily wait for their teammates results in faster task completion, with the potential to improve manufacturing, agriculture and warehouse automation.

This research was recognized as a finalist for Best Paper Award on Multi-Robot Systems at the IEEE International Conference on Robotics and Automation 2024.

“There’s a long history of debate on whether we want to build a single, powerful humanoid robot that can do all the jobs, or we have a team of robots that can collaborate,” says one of the study authors, Hao Zhang, associate professor in the UMass Amherst Manning College of Information and Computer Sciences and director of the Human-Centered Robotics Lab.

In a manufacturing setting, a robot team can be less expensive because it maximizes the capability of each robot. The challenge then becomes: how do you coordinate a diverse set of robots? Some may be fixed in place, others mobile; some can lift heavy materials, while others are suited to smaller tasks.

As a solution, Zhang and his team created a learning-based approach for scheduling robots called learning for voluntary waiting and subteaming (LVWS).

“Robots have big tasks, just like humans,” says Zhang. “For example, they have a large box that cannot be carried by a single robot. The scenario will need multiple robots to collaboratively work on that.”

The other behavior is voluntary waiting. “We want the robot to be able to actively wait because, if they just choose a greedy solution to always perform smaller tasks that are immediately available, sometimes the bigger task will never be executed,” Zhang explains.






Heterogeneous multi-robot collaborative scheduling with dynamic subteaming. Credit: Human-Centered Robotics Lab @ UMass Amherst

To test their LVWS approach, they gave six robots 18 tasks in a computer simulation and compared their LVWS approach to four other methods. In this computer model, there is a known, perfect solution for completing the scenario in the fastest amount of time.

The researchers ran the different models through the simulation and calculated how much worse each method was compared to this perfect solution, a measure known as suboptimality.

The comparison methods ranged from 11.8% to 23% suboptimal. The new LVWS method was 0.8% suboptimal. “So the solution is close to the best possible or theoretical solution,” says Williard Jose, an author on the paper and a doctoral student in computer science at the Human-Centered Robotics Lab.

How does making a robot wait make the whole team faster? Consider this scenario: You have three robots—two that can lift four pounds each and one that can lift 10 pounds. One of the small robots is busy with a different task and there is a seven-pound box that needs to be moved.

“Instead of that big robot performing that task, it would be more beneficial for the small robot to wait for the other small robot and then they do that big task together because that bigger robot’s resource is better suited to do a different large task,” says Jose.

If it’s possible to determine an optimal answer in the first place, why do robots even need a scheduler? “The issue with using that exact solution is to compute that it takes a really long time,” explains Jose. “With larger numbers of robots and tasks, it’s exponential. You can’t get the optimal solution in a reasonable amount of time.”

When looking at models using 100 tasks, where it is intractable to calculate an exact solution, they found that their method completed the tasks in 22 timesteps compared to 23.05 to 25.85 timesteps for the comparison models.

Zhang hopes this work will help further the progress of these teams of automated robots, particularly when the question of scale comes into play. For instance, he says that a single, humanoid robot may be a better fit in the small footprint of a single-family home, while multi-robot systems are better options for a large industry environment that requires specialized tasks.

More information:
Learning for Dynamic Subteaming and Voluntary Waiting in Heterogeneous Multi-Robot Collaborative Scheduling. hcrlab.gitlab.io/project/lvws/

Citation:
New method for orchestrating successful collaboration among robots relies on patience (2024, June 17)
retrieved 25 June 2024
from https://techxplore.com/news/2024-06-method-orchestrating-successful-collaboration-robots.html

This document is subject to copyright. Apart from any fair dealing for the purpose of private study or research, no
part may be reproduced without the written permission. The content is provided for information purposes only.





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