Monitors as units of political analysis
After some considerable time over the past few months spent staring at pixels and wrangling workflows, the Two Lanterns Platform is ready to go. I’m still offering consulting services (please don’t hesitate to get in touch if you need any!), but I’m happy to have this product that can enable much more work than I - or any one consulting firm - could ever fit into a day.
Right now I want to introduce the central feature of the platform: the monitor.
What’s the problem in political risk?
In a series previewing the platform, I discussed three key problems affecting political risk:
It’s a long-tail industry, with a lot of questions on topics that have very narrow audiences (eg, “what are the implications of the RCEP for my plans to expand manufacturing in Vietnam by 2030?”).
Each question deals with uncertainty. Because we’re forecasting, there’s no single repository of easy answers we can look for.
The business model is tough. Matching the right expert with the right question is costly, especially when you often don’t know who’s looking for what.
To those, I want to add two other problems coming from how political risk is usually delivered, in subscriptions or reports.
Subscriptions
Something like the Weekly Latin America Macro Digest, can be a great way to deliver regular updates on an area of interest and they’re popular throughout the industry. They help consultants ensure a steady stream of revenue and clients know they’ll receive regular updates.
But there is a downside. As anyone who has worked on a subscription service knows, you have to feed the beast. Every day or week, you need to publish something, even if nothing important is happening.
For subscribers, they receive a mountain of content that they need to find what they need.
Reports
A bespoke report is the opposite. They’re commissioned once, when you need them, on the topic you want. They can be useful and timely, but what happens if the world changes?
What if you send to your client a 100-page report about Australian policy on climate that’s taken six months and $150,000, and then the next day the Prime Minister has been replaced.
There will still be a lot of the report that’s useful, to be sure, but the client is probably going to be disappointed that so much effort is so quickly somewhat obsolete.
Of course, I am not saying that subscriptions or reports aren’t worth buying. They’re tried and true ways to deliver analysis to clients for a reason.
Subscriptions keep you up to date and have low transaction costs; reports allow the client to find out exactly what they want. But they do leave a gap.
The benefits of a monitor
Let’s say a tech firm wants to track AI regulations in European Union member states. They have a few options, none of which are wholly satisfactory:
Subscribe to a European political risk product, even though 99% of the content won’t be on AI regulations at the member state level.
Subscribe to 27 different newsletters about each member state and have to read a novel every week
Commission a report and hope it doesn’t go stale quickly
Ask their own staff to do it, which allows them to include proprietary information, but at the expense of spending time they might not have.
Monitors on the Two Lanterns Platform are designed for situations like this. They track an issue, providing updates on that specific issue, can be glanced over when there’s nothing happening, but catch your attention when a deeper focus is needed, and you only pay for what you need.
What do we monitor?
Analyzing politics is, in effect, analyzing a basket of questions about one particular country or region (with knowing which questions to ask also a key part of the job).
In the example above, the tech firm is tracking AI regulations in the EU, but, really, they’re asking “Will EU Member State X pass a new AI regulation?” and replicating that question for every country.
If we are following US politics, we’re publishing every day about US politics in chunks like “Will the COVID-19 relief bill pass?”, “Will Donald Trump continue to be the leader of the Republican Party?”, “Will the US join the Trans-Pacific Partnership?” For British analysts, it’s “What’s the future of the EU-UK relationship?”, “Will Labour win the next election?”, and so on.
These types of questions, the fundamental units of political coverage, are at the core of monitors. Each monitor asks one question and keeps you up to date with what the likely answer will be.
In the below screenshot, I’m tracking whether the $1.9t COVID-19 relief bill will pass and whether Lega will lead the Italian government in 2021.
Now, these are two odd questions to put together. But that’s the point.
If all I care about in politics are these two questions, it’s hard for me to find good analysis on them in the same place in the current market. A US-focused subscription wouldn’t cover Italy; an Italy-focused report wouldn’t cover the US; anything I buy that covers both Italy and the US might cost more than I’m willing to pay. A report may be quickly out of date since both are relatively fast-moving situations.
By disaggregating the world of political risk into discrete questions, we allow clients to mix and match exactly what they need.
We also allow consultants to tap into wider markets - everyone who is interested in a question you can answer rather than everyone who’s interested in the whole country / region / sector you cover.
How to use a monitor
We have a full walkthrough of setting up a monitor here.
The purpose of monitors
Monitors were chosen as the foundation product for this platform because they are a dramatically underutilized technique for covering political issues.
By breaking down analysis into granular questions, they allow targeted analysis on long-tail issues.
By tracking issues over time, they reflect that many political stories don’t happen only when it’s convenient to publish.
By allowing for collaboration between internal and external experts, they increase the knowledge available in each product.
By having one place where a company can see all their political risk questions visually, and by letting each monitor act like a clearinghouse for their own work, they increase productivity.
By letting consultants monetize their insights on an issue, they help ensure that the work they’re already doing staying on top of events can be compensated.
Monitors, of course, are not the be-all-end-all of political risk. But they can be a big help to making this area easier to manage.
Please get in touch for more information about them and sign up to the Two Lanterns Platform to create your own.