Extractive summaries of and key takeaways from the articles curated from TOP TEN BUSINESS MAGAZINES to promote informed business decision-making | Week 281 |January 27-February 2, 2023
How the world economy could avoid recession
The Economist | January 24, 2023
Last year markets had a terrible time. So far 2023 looks different. Many indices, including the Euro Stoxx 600, Hong Kong’s Hang Seng and a broad measure of emerging-market share prices, have seen their best start to the year in decades. America’s S&P 500 is up by 5%. Since reaching its peak in October, the trade-weighted value of the dollar has fallen by 7%, a sign that fear about the global economy is ebbing. Even bitcoin has had a good year. Not long ago it felt as though a global recession was nailed on. Now optimism is re-emerging.
Forecasters are in part responding to real-time economic data. Despite talk of a global recession since at least last February, when Russia invaded Ukraine, these have held up better than expected. Consider a weekly estimate of GDP from the OECD, a group of mostly rich countries which account for about 60% of global output. It is hardly booming, but in mid-January few countries were struggling. Nevertheless, it is too soon to know if the threat of inflation has passed.
Two factors explain why the global economy has held up better than expected: energy prices and private-sector finances. Last year the cost of fuel in the rich world rose by well over 20%—and by 60% or more in parts of Europe. Economists expected prices to remain high in 2023, crushing energy-intensive sectors such as heavy industry. They were wrong. Helped by unseasonably warm weather, companies have proved unexpectedly flexible when it comes to dealing with high costs.
The strength of private-sector finances has also made a difference. The Economist’s best guess is that families in the G7 are sitting on “excess” savings—i.e., those above and beyond what you would expect them to have accumulated in normal times—of around $3trn (or about 10% of annual consumer spending), accumulated through a combination of pandemic stimulus and lower outlays in 2020-21. As a result, although companies’ quarterly earnings in America suggest spending is faltering, it is not falling off a cliff. Consumers can weather higher prices and a higher cost of credit. Businesses, meanwhile, are still sitting on large cash piles. China is another reason for cheer. Although removing domestic COVID-19 restrictions slowed the economy in December, as people hid from the virus, scrapping “zero-covid” will ultimately raise global demand for goods and services. The pessimistic case, however, remains strong.
3 key takeaways from the article
- Last year markets had a terrible time. So far 2023 looks different. Many indices, including the Euro Stoxx 600, Hong Kong’s Hang Seng and a broad measure of emerging-market share prices, have seen their best start to the year in decades. America’s S&P 500 is p by 5%.
- Forecasters are in part responding to real-time economic data. Despite talk of a global recession since at least last February, when Russia invaded Ukraine, these have held up better than expected.
- Two factors explain why the global economy has held up better than expected: reduced energy prices and the private sector’s strong finances. China is another reason for cheer. The pessimistic case, however, remains strong.
Topics: Global Economy, Inflation, Recession, Interest Rate
The US Hasn’t Noticed That China-Made Cars Are Taking Over the World
By Tom Hancock | Bloomberg Businessweek | January 26, 2023
As China’s auto brands woo more and more foreign customers the nation is poised to become the world’s No. 2 exporter of passenger vehicles, a milestone that could reshape the global auto industry and spark new tensions with trading partners and rivals. Overseas shipments of cars made in China have tripled since 2020 to reach more than 2.5 million last year, according to data from the China Passenger Car Association. That’s only a whisker (about 60,000 units) behind Germany, whose exports have fallen in recent years. China’s numbers, behind Japan but ahead of the US and South Korea, herald the emergence of a formidable rival to the established auto giants.
Chinese brands are now market leaders in the Middle East and Latin America. In Europe, the China-made vehicles sold are mostly electric models from Tesla Inc. and Chinese-owned former European brands such as Volvo and MG, and European brands like Dacia Spring or the BMW iX3, which is produced exclusively in China. A raft of homegrown marques like BYD Co. and Nio Inc. are ascending as well, with ambitions to dominate the world of new-energy vehicles. The surge in car exports has largely gone unnoticed in the US, partly because it happened during the coronavirus pandemic and partly because Chinese carmakers are mostly focused on Europe, Asia and Latin America.
By shifting to more complex and sophisticated products for competitive, highly regulated markets, Chinese companies are moving up the value chain in manufacturing—a key driver of growth that transformed the once-struggling communist economy into today’s quasi-capitalist $18 trillion juggernaut. Indeed, the Economic Complexity Index compiled by the Growth Lab at Harvard University, which analyzes the range of products a country exports, ranks China 17th in the world, a rise from 24th a decade ago.
Thanks to increasing automation and resulting standardization, new auto plants in China have the highest levels of robot usage in the world— concerns of failed safety tests are now history. As quality improved over the past decade, Chinese cars started acing European safety tests. China’s tough curbs on air pollution have also helped most of its cars meet European emissions standards.
Having demonstrated that it’s a reliable manufacturing hub for industry majors, China has been leading the charge on the next frontier: EVs. Local carmakers have found the electric platform relatively easy to master compared with the complex internal combustion engine.
3 key takeaways from the article
- As China’s auto brands woo more and more foreign customers the nation is poised to become the world’s No. 2 exporter of passenger vehicles, a milestone that could reshape the global auto industry and spark new tensions with trading partners and rivals.
- By shifting to more complex and sophisticated products for competitive, highly regulated markets, Chinese companies are moving up the value chain in manufacturing—a key driver of growth that transformed the once-struggling communist economy into today’s quasi-capitalist $18 trillion juggernaut.
- As quality improved over the past decade, Chinese cars started acing European safety tests. China’s tough curbs on air pollution have also helped most of its cars meet European emissions standards.
Topics: Global Auto Industry, Competition, China, Electric Vehicles
How AI-generated text is poisoning the internet
By Melissa Heikkilä | MIT Technology Review | December 20, 2022
2022 has been a wild year for AI. If you’ve spent much time online, you’ve probably bumped into images generated by AI systems like DALL-E 2 or Stable Diffusion, or jokes, essays, or other text written by ChatGPT, the latest incarnation of OpenAI’s large language model GPT-3.
Sometimes it’s obvious when a picture or a piece of text has been created by an AI. But increasingly, the output these models generate can easily fool us into thinking it was made by a human. And large language models in particular are confident bullshitters: they create text that sounds correct but in fact may be full of falsehoods.
While that doesn’t matter if it’s just a bit of fun, it can have serious consequences if AI models are used to offer unfiltered health advice or provide other forms of important information. AI systems could also make it stupidly easy to produce reams of misinformation, abuse, and spam, distorting the information we consume and even our sense of reality. It could be particularly worrying around elections, for example. The proliferation of these easily accessible large language models raises an important question: How will we know whether what we read online is written by a human or a machine? But there is a more serious long-term implication. We may be witnessing, in real time, the birth of a snowball of bullshit.
Large language models are trained on data sets that are built by scraping the internet for text, including all the toxic, silly, false, malicious things humans have written online. The finished AI models regurgitate these falsehoods as fact, and their output is spread everywhere online. Tech companies scrape the internet again, scooping up AI-written text that they use to train bigger, more convincing models, which humans can use to generate even more nonsense before it is scraped again and again, ad nauseam.
This problem—AI feeding on itself and producing increasingly polluted output—extends to images. “The internet is now forever contaminated with images made by AI
3 key takeaways from the article
- 2022 has been a wild year for AI. If you’ve spent much time online, you’ve probably bumped into images generated by AI systems like DALL-E 2 or Stable Diffusion, or jokes, essays, or other text written by ChatGPT, the latest incarnation of OpenAI’s large language model GPT-3. Sometimes it’s obvious when a picture or a piece of text has been created by an AI. But increasingly, the output these models generate can easily fool us into thinking it was made by a human.
- The proliferation of these easily accessible large language models raises an important question: How will we know whether what we read online is written by a human or a machine?
- But there is a more serious long-term implication. We may be witnessing, in real-time, the birth of a snowball of bullshit.
Topics: Technology, Artificial Intelligence, Creativity
What is the future of work?
McKinsey & Company | January 23, 2023
While no one can predict the future with absolute certainty, it’s clear that the world of work is changing, just as the world itself is. Looking ahead at how work will shift, along with trends affecting the workforce and workplaces, can help you or your organization prepare for what’s next.
To map the future of work at the highest levels, the McKinsey Global Institute considers potential labor demand, the mix of occupations, and workforce skills that will be needed for those jobs. The analysis looks at eight countries with diverse economic and labor market models, which together account for nearly half the world’s population and over 60 percent of its GDP. Some of the main findings are:
- One in 16 workers may have to switch occupations by 2030. That’s more than 100 million workers across the eight economies studied—and the pandemic accelerated expected workforce transitions.
- Job growth will be more concentrated in high-skill jobs (for example, in healthcare or science, technology, engineering, and math [STEM] fields), while middle- and low-skill jobs (such as food service, production work, or office support roles) will decline.
- A few job categories could see more growth than others. The rise of e-commerce created demand for warehouse workers; investments in the green economy could increase the need for wind turbine technicians; aging populations in many advanced economies will increase demand for nurses, home health aides, and hearing-aid technicians; and teachers and training instructors will also continue to find work over the coming decade.
- But other types of jobs may be at risk: for example, there may be a need for fewer clerks, and robotics used to process routine paperwork may lessen demand for some office workers.
The future of work was shifting even before COVID-19 upended lives and livelihoods. But the pandemic accelerated three broad trends that will continue to reshape work as the effects of the crisis recede:
- Remote work and virtual meetings are likely to continue, although less intensely than at the pandemic’s peak.
- E-commerce soared, growing at two to five times the pre-COVID-19 rate, and other kinds of virtual transactions such as telemedicine, online banking, and streaming entertainment took off. And shifts to digital transactions also propelled growth in delivery, transportation, and warehouse jobs.
- The pandemic propelled faster adoption of digital technologies, including automation and AI. Companies used them to control costs or mitigate uncertainty; they also deployed these technologies in warehouses, grocery stores, call centers, and manufacturing sites to either reduce workplace density or deal with surging demand for items.
3 key takeaways from the article
- No one can predict the future with absolute certainty. Looking ahead at how work will shift, along with trends affecting the workforce and workplaces, can help you or your organization prepare for what’s next.
- To map the future of work at the highest levels, the McKinsey Global Institute considers potential labor demand, the mix of occupations, and workforce skills that will be needed for those jobs. Major findings are: one in 16 workers may have to switch occupations by 2030; and job growth will be more concentrated in high-skill jobs.
- Three broad trends that will continue to reshape work as the effects of the crisis recede: remote work and virtual meetings are likely to continue, soaring e-commerce, and pandemic propelled faster adoption of digital technologies.
Topics: Employment, Skills, Technology, Future Jobs
Cultivating the Four Kinds of Creativity
By Gabriella Rosen Kellerman and Martin E.P. Seligman | Harvard Business Review Magazine | January–February 2023 Issue
One island of stability in the sea of conversation about the future of work is the conviction that our jobs will become increasingly creative. The World Economic Forum, McKinsey, and nearly every major think tank seem aligned around this hypothesis, offering heaps of data to support it. The trend is not just about the delegation of rote tasks to automation; it’s also about the accelerating pace of change and the increasing complexity of business, which demand original responses to novel challenges far more frequently than ever before. Although the science of creativity is young compared with other areas of psychology and cognitive neuroscience, our growing understanding of it points to new directions for creative development. In this article the authors offer a typology that breaks creative thinking into four types
Integration. Integration may be local—stitching together a few concepts—or sweeping: a grand unifying theory. Consider the Apple iPhone. Its designers’ success lay in recognizing that when tools such as cameras, phones, and music players are digitized, they are all capturing, storing, retrieving, and transmitting data in the same way, through semiconductors and liquid crystal displays; therefore, they could be combined in a single device—perhaps the most powerful tool now at our disposal.
Splitting. The opposite kind of creative thinking is splitting, and the history of science is full of examples. One of the greatest manufacturing innovations of all time—the assembly line—involved splitting. Before the Industrial Revolution, one craftsperson might oversee the production of a good from start to finish.
Figure-Ground Reversal. The term “figure-ground reversal” comes from the study of vision and refers to our ability to shift focus from the foreground to the background to produce a radically different picture. The well-known black-and-white silhouette of two faces in profile—or a vase in the middle—demonstrates how our minds can toggle back and forth between the two. We see figure-ground reversal all the time in industry, too. Amazon Web Services was developed in response to Amazon’s need to scale up its infrastructure.
Distal Thinking. Distal thinking involves imagining things as very different from the present. Many a creative genius has been characterized as someone who envisioned a radically new future that the rest of us initially couldn’t see. Sometimes innovators think so far ahead that the market isn’t ready for their ideas.
3 key takeaways from the article
- One island of stability in the sea of conversation about the future of work is the conviction that our jobs will become increasingly creative.
- The trend is not just about the delegation of rote tasks to automation; it’s also about the accelerating pace of change and the increasing complexity of business, which demand original responses to novel challenges far more frequently than ever before.
- Creative thinking can be classified into four types: integration, or showing that two things that appear different are the same; splitting, or seeing how things that look the same are actually different or more usefully divided into parts; figure-ground reversal, or realizing that what is crucial is not in the foreground but in the background; and distal thinking, which involves imagining things that are very different from the here and now.
Topics: Creativity, Innovation
How Brands In Competitive Categories Can Stand Out From The Crowd
By Jia Wertz | Forbes | January 30, 2023
Most digital-age consumers don’t have to venture far from their Instagram feeds to understand the immense product competition in the marketplace. A simple scroll introduces us to a slew of new products to solve problems that we didn’t even know existed. Particularly for verticals with growing demand, it can be difficult to stand out in a sea of content. And the impact of COVID-19 has created new market demand in several categories, including health and fitness verticals that are seen to stave off illness and support mental and emotional wellbeing.
Meanwhile, market discovery has never been easier. Thanks to platforms like Instagram and TikTok, brands can seamlessly target and educate consumers. However, getting consumers past the discovery phase to purchase and beyond is a challenge that many digital marketers face. Some tips for doing just that are:
- Lean Into Your Differentiators. When you’re in a popular space, it’s important to focus on your differentiators. While product details such as benefits and price are common differentiators, in today’s marketplace, differentiators can also be related to value-signals like green packaging or corporate social responsibility.
- Consider Your Full Funnel. A common mistake of product marketers, regardless of their industry, is not to think through their sales funnel holistically. While it can be easy to capture a consumer’s attention for a few moments on social media to make them aware of your product, taking them from awareness to action often requires more focused effort. Digital marketers can plan for this. Analytics and targeting on social media are sophisticated, so be sure to take advantage of them by targeting consumers at different phases of the customer journey. Finally, don’t forget to keep your consumer’s actual product experience in mind, and engage them post-purchase to keep them coming back for more.
- Give Content Creators Power. Influencer marketing is a popular vehicle for discovery online. Many brands utilize influencers to tout the benefits of their products, but not all influencer marketing campaigns are created equal. The most effective influencer marketing campaigns ring authentic to the creators’ audiences. When it’s obvious that content creators are using products organically, an endorsement has much stronger word-of-mouth-style marketing appeal.
3 key takeaways from the article
- Most digital-age consumers don’t have to venture far from their Instagram feeds to understand the immense product competition in the marketplace.
- Navigating a crowded content landscape can be daunting in highly competitive categories; however, a little digital marketing savvy goes a long way to making your product a standout.
- By keeping messaging simple and focused on differentiators, considering how to engage consumers throughout the purchase path, and being intentional about relationships with content creators, brands will be able to capitalize on growing demand.
Topics: Strategy, Marketing, Social Media, E-commerce
Five Ways to Make Your One-On-One Meetings More Effective
By Jessica Wisdom | MIT Sloan Management Review | January 30, 2023
In the rush of day-to-day responsibilities and deadlines, pausing for a regular one-on-one meeting can feel like a waste of time. And for many, it not only feels unnecessary but also painful and stilted. Unfortunately, things can go wrong without these regular touch points. People who don’t have one-on-ones with their managers are more likely to leave their organizations. And although skipping these meetings might give some time back to managers, they are more likely to miss out on opportunities to build trust and alignment within their teams. So, what can managers do to make regular check-ins more effective? Five science-backed steps that can help managers structure their one-on-ones with reports and team members so that people will feel energized rather than drained by these meetings are:
- Meet more often. In a recent survey of 350 managers and individual contributors, employees who said they have one-on-ones at least once a week reported feeling better about these meetings than employees who have them less frequently. Having a predictable cadence of connection points can help reduce negative feelings, such as fear or anxiety, that might come up when meeting with one’s boss.
- Align on what you both want to get out of these meetings. Employees with highly rated managers were more than three times as likely than those with poorly rated managers to say that their supervisors show that they care and take the time to get to know them.
- Encourage two-way agenda-setting. Conversation topics associated with six elements of effective management could be: feedback, recognition, structure, development, mission alignment, and personal connection. The alignment of manager and his/her direct reports on these topics may vary. The following questions may help: What’s going well? Where can I help? What are your top priorities these days? Is there anything new or upcoming you’d like to put on my radar? How are you feeling outside of work?
- Focus on outcomes, not process. When discussing a project with a direct report, process-focused questions can come across as micromanaging and don’t ensure a successful outcome.
- Follow up. There’s nothing more frustrating for a direct report than discussing an issue or opportunity with a manager who never follows through after the initial conversation. Managers should take notes, review them after the meeting, and complete any action items stemming from the conversation before the next weekly meeting. Managers expect this from direct reports but need to hold themselves accountable as well.
3 key takeaways from the article
- In the rush of day-to-day responsibilities and deadlines, pausing for a regular one-on-one meeting can feel like a waste of time. And for many, it not only feels unnecessary but also painful and stilted. Unfortunately, things can go wrong without these regular touch points.
- People who don’t have one-on-ones with their managers are more likely to leave their organizations.
- Five science-backed steps that can help managers structure their one-on-ones with reports and team members so that people will feel energized rather than drained by these meetings are: meet more often, align on what you both want to get out of these meetings, encourage two-way agenda-setting, focus on outcomes, not process, and follow-up.
Topics: Communications, Organizational Behavior, Teams, Performance Management
How to Master Social-Media Marketing in 2023Strategies for small-business owners to stay ahead of the curve.
By Carlos Gil | Inc Magazine | February 1, 2023
As we move into 2023, here are a few key tips for small-business owners to master social- media marketing:
- Know your audience. It’s crucial to research and understand your audience to create a social-media strategy that is tailored to its interests and needs. This will not only help you reach more potential customers but also increase engagement with your current ones. One way to do this is by conducting market research. Additionally, use social-media analytics tools to track engagement, reach, and conversions. This will give you a better understanding of what’s working and what’s not, allowing you to make data-driven decisions.
- Be strategic. Have a clear understanding of your goals and objectives for using social media. Whether you aim to improve customer service, promote your brand in your local community, or drive sales, it’s essential to start with a specific goal in mind. It’s equally important to be strategic in your approach and not waste time on platforms that don’t align with your target audience or objectives.
- Create a content strategy. This strategy should be tailored to align with your overall business goals and should include a mix of content types, including text posts, images, videos, and live streams. Have a content calendar in place that outlines when and what types of content you’ll be sharing on your social-media channels. You can leverage tools like Canva or Adobe Spark to create visually appealing designs and infographics that can help increase engagement and make your posts stand out.
- Utilize automation tools. Tools such as Hootsuite, Buffer, and Sprout Social allow you to schedule your posts in advance, track analytics, and monitor mentions and engagement all in one place.
- Engage with your audience. Responding to comments and messages promptly not only shows that you value their input and feedback, it also helps to increase brand loyalty and trust. Using tools like polls and surveys can help you gain valuable insights about your audience’s preferences and needs, which can inform your content strategy and product offerings.
- Use influencer marketing. For small businesses with limited marketing budgets, utilizing your own customers or clients as influencers can be a cost-effective way to make influencer marketing work for your business.
- Invest in paid advertising.
- Measure your results.
Key takeaway from the article
As we move into 2023, a few key tips for small-business owners to master social- media marketing are: know your audience by doing research on a regular basis, be strategic about your goals for social media marketing which should be in line with your overall objectives, create a content strategy by using text, visual and audio, utilize automation tools to save your time for more strategic tasks, engage with your audience by responding to their emails and queries, use influencer marketing those could be the customers of a small business, invest in paid advertising, and measure your results.
Topics: Startups, Entrepreneurship, Social Media, Marketing, Technology
5 Sales and Marketing Trends for 2023 You Must Know
By Murali Neth | Entrepreneur Magazine | January 27, 2023
The world of sales and marketing is constantly changing, so staying on top of the latest trends is important. Five sales and marketing trends for 2023 that you need to be aware of are:
- The rise of augmented reality. Augmented reality (AR) is quickly becoming one of the essential tools in the sales and marketing toolkit. AR technology allows users to interact with digital content in the real world, allowing for a more immersive and personalized experience. As consumer behaviors continue to evolve, the ability to provide a unique and interactive experience will become increasingly important. AR will allow businesses to engage their customers on a deeper level than ever before while also giving them a chance to create experiences tailored to each user’s needs.
- The power of personalization. Personalization involves creating a customer experience that is tailored specifically to an individual’s needs and preferences. This can include customizing product recommendations, providing targeted content, and sending relevant offers. Personalization is made possible by advances in technology and analytics. With the right technology, marketers can track customer behavior across multiple channels and platforms, enabling them to understand customer interests and tailor their messaging accordingly.
- The emergence of micro-influencers. Micro-influencers are quickly becoming the go-to source for many brands looking to market their products and services. Micro-influencers are everyday people with a large social media following who create content related to a brand or product. They are typically more relatable and trustworthy than celebrities or influencers with millions of followers, as they often have a more personal connection with their audience.
- The importance of employee advocacy. As how we communicate and engage with our customers evolves, businesses need to leverage their employees to amplify their message. Studies have shown that employee-generated content is trusted more than any other source, so businesses should take advantage of this powerful tool.
- The growth of visual content. Visuals are a powerful way to communicate a message quickly and effectively and are becoming increasingly important for marketing and sales teams. Visuals can be used in many different ways to promote products and services, from creating promotional videos and graphics to using imagery in social media posts and website banners. As technology evolves, so does the ability to create more engaging visual content. Companies are now utilizing virtual reality, augmented reality and 3D graphics to create immersive visuals that help customers better understand the products they’re buying.
2 key takeaways from the article
- The world of sales and marketing is constantly changing, so staying on top of the latest trends is important.
- Five sales and marketing trends for 2023 that you need to be aware of are: the rise of augmented reality allowing for a more immersive and personalized experience; the power of personalization to create a customer experience that is tailored specifically to an individual’s needs and preferences; the emergence of micro-influencers who are everyday people with a large social media following who create content related to a brand or product; the importance of employee advocacy to amplify product or organizational message; and the growth of visual content to communicate a message quickly and effectively.
Topics: Entrepreneurship, Marketing, Social Media