Sex cells: the modern fertility business

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Hello and welcome to The Intelligence on Economist Radio. I'm your host, Jason Palmer. Every weekday, we provide a fresh perspective on the events shaping your world. Piracy off East Africa has subsided, thanks to a coordinated international response. But a flare-up off the coast of West Africa isn't receiving the same attention from governments or even from the shipping companies that are at risk. And our correspondent tries out a training simulation for armed police. It didn't go well. It's hard to measure how much these exercises reduce shootings, but they do reveal the nuance behind split-second life-or-death decisions. First up, though— the first baby ever born using in vitro fertilization turned 41 this summer.

Without IVF, I wouldn't be here. My sons wouldn't be here. There'd be 6 to 8 million of us not here. The hope and joy for people to have families is amazing.

Louise Brown, who is now herself a mother of two, says her own mother would be astonished at how far the technology has come. Yet fertility remains one of the least understood areas of medicine. Clinics nevertheless often present it as an exact science. And demand is growing. Europe and America are the largest markets, with places such as China catching up. With the potential for recession-proof demand and large profit margins, investment has been flooding into femtech, and clinics are finding ways to expand their clientele.

The fertility sector has always played on hope, the hope to have babies, but now it increasingly also plays on fear, the fear that one might wait too long with trying for a baby or that you might struggle to have one.

Sasha Nauta is The Economist's public policy editor.

By playing on that second emotion, fear, there's a whole host of new business opportunities that fertility experts and their investors are honing in on.

How do you mean they're playing on fear?

So as couples move up the average age when they start to have families, particularly in the West, there is a fear, not completely irrational, that it might be harder to conceive. The fertility sector can be broken up into 3 pieces. The first and most mature is IVF clinics, or rather clinics that help people with infertility problems. But there's a second sector that's emerging, or part of the sector, and that is aimed at people before that stage. That's fertility preservation clinics, particularly aimed at freezing women's eggs. And that plays on this idea of, okay, well, you're in your mid to late 20s and you're just taking precautions. Putting your eggs, you know, on ice whilst they're at their best. And then there's a third part of the business that is starting to emerge, and that's one step even before one might walk into an egg freezing clinic and say, I want to put my eggs on ice. And that's fertility trackers or fertility tests, where for a couple of hundred bucks you can order a test that you can do at home, and they'll send you a report giving you some sort of indication—opinions differ on how useful these tests are—but, you know, of your fertile health to keep a tap on on, you know, a part of medicine that is really very opaque and that most of us know very, very little about indeed.

So talk me through a bit of the, the science behind these treatments and how that's developed over the past few decades.

So it's 40 years now since the first live IVF birth, and on the one hand, an awful lot has changed, particularly in the adoption of treatments like IVF. But on the other hand, The most honest doctors in this field will tell you that there's still far more that they don't know about how babies are made than they do know. Whereas, of course, on the business side, where we've seen a lot of private equity and venture capital money going in, there is a tendency to overmarket certainty. Again, going back to hope and fear, the hope that you can buy yourself certainty in what is ultimately an uncertain and still very poorly understood process.

So how are people in the fertility sector then turning all of this into business opportunities?

So the most traditional part of the fertility sector, the IVF clinics, are primarily just looking at growing their customer base, which means expanding their network. And there's an awful lot of merging of little clinics together going on at the moment as well, which is why there's so much private equity money pouring into the business. And secondly, they are increasingly peddling a lot of add-on products to IVF, some of which have real potential, most of which are still very unproven and slightly dubious, but nevertheless, that is a good way of making extra money as a clinic. In the newer bits, particularly egg freezing clinics that we were talking about earlier, you see quite a different approach. So they're not after a 38-year-old who's got to the end of the road and is desperate for a baby. They are after a 28-year-old who isn't at all thinking about babies and in fact doesn't want to be confronted with them. And so if you go into one of these clinics or studios, they're designed to have a very different feel. They feel more like a spa, like a wellness experience. It's easy to forget that you're coming there for surgery, which is ultimately what egg retrieval is, and they play very much on the, you know, women empowerment theme of taking control of your destiny.

In terms of marketing, you're suggesting that some of the things that are being sold, or indeed upsold to the clients, are medically unproven technologies with big promises behind them. How do these businesses get away with that?

I think these businesses get away with it because we know so very little about fertility and infertility. So do they, but they know a little bit more. And I think as anything where there is an asymmetry in information between the business and the potential client. The customer is in quite a vulnerable position, particularly when it's something as delicate as the wish to have children. To be clear, I'm not saying that all these products are clearly a con. Some of them have real potential, but what they need is more honesty about the limitations of what this may or may not buy you.

Much of this discussion has been about eggs, basically. Well, what about sperm? What about sperm?

Indeed, we're all brought up with the idea that infertility is usually a female issue, and if women wait too long with becoming mothers, then they won't be able to have children. But increasingly, we're learning more and more about the role of sperm in making babies, and that not every man is sort of Hugh Hefner and can have children until he's, you know, 70 or 80. And a bunch of businesses are actually startups, I should say, in all honesty, are playing into this. So they're sort of The mirror image of the egg freezing clinic is the sperm freezing clinic. And there are a few who, for a couple of hundred bucks, will send you a kit at home and will send you a report. Some will even send you a video of your swimmers and will then, again, for money, obviously, store it for you for whenever the time is right.

So where do you see all of this going? What does the future of fertility and indeed the fertility industry look like to you?

There's quite a bit of mis-selling of products which will inevitably lead to disappointment. So people who are freezing their eggs now who are under the impression that they can defrost them exactly at the moment that they will want a baby and that a baby will magically appear will be sorely disappointed, or at least a large share of them will, because that's just not the certainty that you will get. But beyond all that, I'm still on the optimistic side of, well, there's money pouring in. There's a lot of research going on. There's a lot of development happening. I'm carefully hopeful, if that makes sense.

Sasha, thank you very much for your time. Thanks, Jason.

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It used to be that the oceans around Somalia were notorious.

Pirates are disrupting vital trade routes and kidnapping tourists. Ransoms have risen massively from a few hundred thousand dollars to about $5 million.

Somalis are sick and tired of being sick and tired.

We had enough of lawlessness, violence, and chaos.

The area seethed with pirates. Gangs would hijack entire ships and their crews, haul them back to the shores of their lawless state, and ransom them. In 2011, they were making an average of almost $5 million a ship. But now it's a new sea that strikes fear into the hearts of sailors and insurance companies, the Gulf of Guinea on West Africa's southern coast.

It's now the world's most pirate-infested sea.

Aman Rizvi has been reporting in the area for The Economist.

So last year there were 72 attacks between Ivory Coast and Cameroon, and this number is almost triple what it was 4 years ago.

Last week, 10 Turkish sailors were released nearly a month after being kidnapped by pirates in the Gulf of Guinea. They had been working on a container ship heading from Nigeria to Ivory Coast. So, Amin, why is it that West African piracy is on the rise?

It's been around for a couple of decades now, and it's kind of had these crests and troughs. It's gone up and down. But the latest spike is worse, both in terms of its scale and in terms of severity. So in the past, West African pirates used to commandeer the occasional oil tanker. They take it off the coast. Siphon some oil off. But in 2014, when the oil price fell, they started copying the tactics of Somali pirates, and instead they kidnapped people. So last year, some estimates suggest that they kidnapped 193 people. And these pirates, they operate near the Niger Delta, which is lawless, and it's full of these gangs and separatist groups. Some of these groups have cult-like names, like the Vikings. They're given weapons by politicians to do their nefarious activities on land, and they then sort of repurpose those weapons to carry out piracy, kidnapping for ransom at sea.

And so they've kind of taken over the mantle of piracy from the Somali pirates. Are the Somali pirates still active? Are they still threatening their part of the ocean?

Not really at the moment. So the scale of the problem, I think back at the peak of when Somali piracy was at its worst around 2011, 2012-ish, the scale of the problem and the weakness of the Somali state, which really couldn't do anything, forced shipping companies and foreign governments to take drastic action against them. So Western and international navies were patrolling the waters off Somalia. Western countries provided aid for coast guards, and private security companies also proliferated, 'cause the shipping companies themselves decided that they wanted to have armed guards aboard to deter the pirates. This was all very expensive, of course, it cost billions, but it broadly worked. So the Somali pirates are still there. They occasionally sort of go offshore, they probe, but the number of actual attacks they commit or the number of attacks they attempt is maybe, has dropped to maybe 0 or 1 a year.

So what are the West Africans doing about their spike in piracy? Can they learn anything from the efforts to tackle Somali piracy?

Sure, I think there are things that they could learn from it, but at the moment, I think neither the shipping companies nor the government is really doing the best job of tackling this that they could be doing. So when I was in Lagos, for instance, in the port, a lot of shipping companies had appeared to have taken measures to protect their ships from piracy. There's a manual out there called Best Management Practices, and some of them had sort of seemed to be following it. They had razor wires built about around their ships. Some of them had dummies that looked like lookouts. But even these efforts were really shoddy. So, I mean, this razor wire, it looks impressive, but if you've got one gap in the razor wire, it's rendered useless. And most of these ships had multiple gaps in the razor wire. Their own security was pretty shoddy. And I think that this shoddiness is also typical of the Nigerian government's approach. When the Navy actually intercepts a ship, they're quite effective. But a lot of people I spoke to in the shipping industry, they think that pirates may be in cahoots with some officials. They mention incidents in which the pirates flee before the Navy arrives, or where the pirates know exactly how many people are on the ship, and they can only have gotten this from inside information. And I think, yeah, politicians themselves also don't take it quite so seriously. So Nigeria still hasn't made piracy a specific criminal offense. There's a bill that is meant to do this, but it's been languishing in Parliament. And pirates captured by the Navy, no one really knows what happens to them since none of them have been prosecuted. They're often, I think, quietly released. That's what I've been told. And I mean, this is striking because even Somalia has managed to prosecute around 300 pirates.

What would the shipping companies prefer? What would the people affected by this who are at risk of violence from the pirates, what would they opt for?

So I think the problem with the shipping companies' approach is that they want the government to take care of this. For instance, BIMCO, which is the largest international association representing shipowners, they want a Somali-style approach. They want the EU, America, and China to deploy in the Gulf of Guinea. They also want to be able to deploy private armed guards in Nigerian waters, which for now they're not allowed to do. They can only hire guards from the Nigerian Navy. But I think the problem with the shipping company's approach is that these things aren't very likely. Nigeria, for all its flaws, isn't Somalia. Nigeria is a functional state, and it wouldn't want foreign navies and these mercenary guards just swimming around their waters, because then I think they see themselves as a much more serious state than Somalia. The problem with piracy in Nigeria, though, is unlike, say, Somalia or Southeast Asia, which are on major shipping shipping lanes. Nigeria isn't. Most of the ships passing through the Gulf of Guinea are going to and from West Africa, and so it's unlikely that the EU or America or China would want to deploy navies there and foot the bill themselves anyway. And I mean, the other problem is that the ransoms that Nigerian pirates charge, it's much lower than that of the Somali pirates. I mean, it's still a sizable amount of money, it's six figures, but the Somali pirates would have charged millions of dollars. They stole the ship itself. But with Nigerian piracy, shipping companies, they're sometimes reluctant to do more themselves because I think many of them see these relatively low ransoms as just a cost of doing business.

I mean, how does that land with the crews of these ships who are in harm's way? They're seeing governments that aren't doing anything and employers who in turn are also not doing anything.

The crews are the people who bear the heaviest toll of piracy. I spoke to the Nigerian Seafarers Welfare Board who talked about sailors with post-traumatic stress disorder. The crews have been through this. Some of them suffer from depression and anxiety afterwards. And I think it's quite dispiriting to them to know that the risks to them are simply priced in, that insurance is cheap and ransoms are seen as a cost of doing business, and that both the Nigerian government, international governments, and shipping companies aren't doing enough to take this problem seriously. Increasingly, sailors are reluctant to actually work in the Gulf of Guinea. Many ships in the past didn't have internet, so sailors couldn't communicate with each other. But now with social media, the seafarers are more aware of the risks. Some crew members are reluctant to go. Some governments of countries that contribute a lot of seafarers are also worried about this. The Indian government, for example, said earlier this year that it doesn't want its citizens working as seafarers in the Gulf of Guinea. So hopefully, gradually, that pressure on shipping companies can finally force companies, governments in the region, international governments to actually take this problem more seriously.

Aman, thank you very much for your time.

Thank you.

We were pulled over to the side of the road because we had been following a red pickup truck, and my partner ran the license plate and realized that there were some outstanding warrants for the driver of the pickup truck.

So we pulled over the car. Jon Fassmann is The Economist's Washington correspondent. He recently participated in a simulated experience of what it would be like as a police officer responding to a dangerous traffic stop.

And the driver got out, my partner got out of the car and explained that he had to come with us. The guy was getting very agitated, he had his daughter in the car, he said he'd come with us as soon as he dropped his daughter off at her mother's house.

Officers train in these environments so it'll be easier for them to make good decisions in the real world.

And my partner said, "No, you know, we've been through that already, you gotta come right now." And he was getting increasingly angry, you could hear the girl from the truck start to yell at us not to take her daddy away. And then the door to the truck opened and the girl got out, probably 10 or 11 years old, carrying a long rifle and pointing it at my partner. This was one of the scenarios that they put me through on what's called the FATS machine, F-A-T-S, which stands for Firearms Training Simulator. And it is a machine designed to train policemen how to deal with a person with a weapon.

It's hoped their use will also help critics understand firsthand why it's so easy for police officers to make deadly mistakes.

These machines are widely used. There are about 3,800 agencies in the US that use them, as well as police forces and military forces in Canada, Britain, Singapore, and Australia.

And how does it work? This is kind of like a shoot-'em-up video game kind of thing?

It sort of operates like a very high-end video game. You have a scenario that unfolds before you. There are 500 stories. The guy who's running the training can adapt the scenarios as it goes along depending on what the officer in training did. Some of them can be a little more harrowing. There is an active hospital shooter that you sort of get a call and you hear gunshots and you go upstairs and you see someone with a long gun just, just blowing people away in a hospital hallway. There was one I did with a, with a high school girl carrying a knife and threatening her boyfriend. You're standing there, you're holding a service weapon, a real, a real gun, but loaded with compressed air rather than bullets, and then you're being evaluated on how you respond to the situation. So it's not just You know, whether you shoot or don't shoot, but as you approach someone who is carrying something, how long do you wait before you see if that thing in his hand is a hairbrush or a handgun? It's designed to train police officers to when they have to use deadly force, but also how to de-escalate.

As to that response, do you think it helps train police and military forces better? Are they better in these situations, do you think?

I struggle to think of a way that you could sort of evaluate empirically how effective they are. Because the goals are fairly disparate, right? They're to teach police when and how and under what circumstances they may use deadly force, but they're also there to help police figure out how to de-escalate. So I suppose a measure of success would be, does a jurisdiction that uses these machines have fewer bad shootings, that is, fewer avoidable shootings, than a jurisdiction that didn't? But even there, just because every situation unfolds so differently, I struggle to think of a valid sort of control group and a valid way to evaluate that evidence.

But all told, you think that these training programs are worth it?

I can't see that they do any harm. Over the past 5 years, especially since the death of Michael Brown and the rise of Black Lives Matter, there's been an increased scrutiny on police use of force, as there should be. What this machine does, in addition to training police, is you can put journalists and police critics through their paces on it too. For me, it was an eye-opener because it showed me at a visceral level just how quickly life-and-death situations unfolded, how little time you have to make decisions. My time on the simulator finished disastrously. I am the father of an 11-year-old, and I got my partner killed because I could not shoot the little girl, even when she was raising her weapon. I just couldn't bring myself to do it. The man who ran the training for the Newark police force said that they had brought in some police critics who came out with a new understanding of just how difficult a job police have in those situations. Now, that doesn't mean he'll reach different conclusions than he has already reached, but it does mean that you have an appreciation for nuances on the police side that, as a civilian, are really hard to come by.

John, thank you very much for your time. Anytime. That's all for this episode of The Intelligence. If you like us, give us a rating on Apple Podcasts, and you can subscribe to The Economist at economist.com/radiooffer. 12 issues for $12 or 12 pounds. See you back here tomorrow.

Investing with Schwab is like spending a Saturday at a great farmers market. You can fill your reusable tote with a bit of everything. Maybe you go for some free-range self-directed investing. Or perhaps you pick up a few farm-fresh trades while you peruse. You can even get help from a dedicated advisor. That's full-service wealth management. Mix, match, and change your mind whenever you want. Because at Schwab, you can invest your way. No matter your goals or appetite for investing, Schwab has everything you need, all in one place. Visit schwab.com to learn more.