Extractive summaries of and key takeaways from the articles curated from TOP TEN BUSINESS MAGAZINES to promote informed business decision-making | Week 282 |February 3-9, 2023
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Shaping Section : Ideas and forces shaping economies and industries
The AI boom: lessons from history
The Economist | February 2, 2023
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It can take a little imagination to see how some innovations might change an economy. Not so with the latest AI tools. It is easy—from a writer’s perspective, uncomfortably so—to think of contexts in which something like Chatgpt, a clever chatbot which has taken the web by storm since its release in November, could either dramatically boost a human worker’s productivity or replace them outright. The GPT in its name stands for “generative pre-trained transformer”, which is a particular kind of language model. It might well stand for general-purpose technology: an earth-shaking sort of innovation which stands to boost productivity across a wide-range of industries and occupations, in the manner of steam engines, electricity and computing. The economic revolutions powered by those earlier GPTS can give us some idea how powerful AI might transform economies in the years ahead.
The first lesson from history is that even the most powerful new tech takes time to change an economy. The gap between innovation and economic impact is in part because of fine-tuning. Capital constraints can also slow deployment. More recent work emphasises the time required to accumulate what is known as intangible capital, or the basic know-how needed to make effective use of new tech. Indeed, Erik Brynjolfsson of Stanford University, Daniel Rock of the Massachusetts Institute of Technology and Chad Syverson of the University of Chicago suggest a disruptive new technology may be associated with a “productivity J-curve”. Measured productivity growth may actually decline in the years or decades after a new technology appears, as firms and workers divert time and resources to studying the tech and designing business processes around it. Only later as these investments bear fruit does the J surge upward. The authors reckon that ai-related investments in intangible capital may already be depressing productivity growth, albeit not yet by very much.
Of course for many people, questions about the effects of AI on growth take a back seat to concerns about consequences for workers. Here, history’s messages are mixed. AI might well augment the productivity of workers of all different skill levels, even writers. Yet what that means for an occupation as a whole depends on whether improved productivity and lower costs lead to a big jump in demand or only a minor one. There is a chance that powerful AI will break the historic mould.
3 key takeaways from the article
- Chatgpt, a clever chatbot which has taken the web by storm since its release in November, could either dramatically boost a human worker’s productivity or replace them outright.
- The GPT in its name stands for “generative pre-trained transformer”, which is a particular kind of language model. It might well stand for general-purpose technology: an earth-shaking sort of innovation which stands to boost productivity across a wide-range of industries and occupations, in the manner of steam engines, electricity, and computing.
- The economic revolutions powered by those earlier GPTS can give us some idea how powerful AI might transform economies in the years ahead. The first lesson from history is that even the most powerful new tech takes time to change an economy. The effects of AI on growth take a back seat to concerns about consequences for workers. Here, history’s messages are mixed.
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Topics: Technology, Artificial Intelligence, Economy
Busting three myths about materials and renewable energy
By Casey Crownhart | MIT Technology Review | February 2, 2023
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The MythBusters, a popular TV show, came out 20 years ago last week, so in honor of the occasion, the author tries to bust some myths on the materials we need to fight climate change.
Myth #1: We don’t have enough materials to build what we need to fight climate change. To keep things relatively simple, the author focused on the two industries with the highest emissions today: electricity generation and transportation. Together, they make up nearly three-quarters of the world’s greenhouse-gas emissions. In order to cut emissions in these sectors, we need to build a lot of new infrastructure, especially new ways of generating electricity and batteries that can store it. So how much material are we looking at here? Pretty much any construction requires some combination of steel, aluminum, and probably copper. According to a new study, in order to meet climate goals we’ll need a lot of each of those just to build infrastructure to generate electricity. Between now and 2050, demand could total up to 1.96 billion metric tons of steel, 241 million metric tons of aluminum, and 82 million metric tons of copper. That sounds like a lot, and it is. But if you compare those numbers with the known reserves on the planet that we can access economically, it’s a small fraction. And annual production won’t have to grow by more than 20% for supply of any of these materials to meet demand. Nevertheless, it’s a slightly different story when it comes to more specialty ingredients, like the rare-earth metals in wind turbine engines, the polysilicon in solar panels, or the cobalt and lithium in batteries. But in every case, the planet has plenty of reserves of the materials we need.
Myth #2: All that mining will be worse for the climate and environment than fossil fuels. When it comes to emissions, the story is pretty simple: we’ll generate emissions while we build new energy infrastructure, but we’ll avoid a lot more by not burning fossil fuels. At most, we could generate up to 29 billion metric tons of greenhouse-gas emissions building renewable-energy infrastructure. That’s less than one year’s worth of the world’s emissions from fossil fuels today. As for sheer mass of mining needed for fossil fuels and for renewable energy, about 7.5 billion metric tons of coal were mined in 2021. Estimates for the maximum amount of materials we’ll need annually to build low-emissions energy infrastructure top out at about 200 million metric tons, including all the cement, aluminum, steel, and even glass that needs to be produced.
Myth #3: Renewable and low-carbon energy are “clean” and beyond reproach. Even though renewable energy is necessary to combat climate change, there are some major challenges that come along with the transition away from fossil fuels. That includes potential harms from mining and processing the materials used to build these new technologies.
3 key takeaways from the article
- The article tries to bust some myths about the materials we need to fight climate change.
- Myth #1: We don’t have enough materials to build what we need to fight climate change. The truth is in order to meet climate goals we need a small fraction of known reserves of steel, aluminum, and copper on the planet that we can access economically.
- Myth #2: All that mining will be worse for the climate and environment than fossil fuels. The reality is we’ll generate emissions while we build new energy infrastructure, but we’ll avoid a lot more by not burning fossil fuels. Myth #3: Renewable and low-carbon energy are “clean” and beyond reproach. Even though renewable energy is necessary to combat climate change, there are some major challenges that come along with the transition away from fossil fuels.
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Topics: Environment, Technology, Climate Change
The China imperative for multinational companies
By Jonathan Woetzel et al., | McKinsey & Company | January 15, 2023
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Over the past 30 years, multinational companies (MNCs) have enjoyed an increasingly open world. Taking advantage of a unipolar globe with relatively free flows of capital, trade, and ideas, MNCs tapped capital from wherever they chose, built businesses optimized for global supply and global demand, and served increasingly globalized customers. That may no longer be possible. In a world reshaped by the coronavirus pandemic, rising geopolitical tensions, renewed inflationary pressures, and war, MNCs must reassess, reevaluate, and reconfigure their businesses for a new era. And China is where some of the most dramatic reconfiguration may take place.
The reconfiguration will not be easy. The sheer size and complexity of the Chinese market may mean that notions of outright decoupling are simplistic; furthermore, we continue to live in a world connected by those global flows of capital, trade, and ideas. As the authors describe in a new paper from the McKinsey Global Institute, MNCs face a much more difficult imperative: maintaining access to China’s upsides while managing increasingly complex risks. It is a challenge that will define the next era for MNCs, and those that solve it will be tomorrow’s winners.
China and MNCs built a mutually beneficial relationship during the past few decades. But MNCs have started reappraising their relationship with China. The reappraisal may seem surprising, given that MNCs’ opportunities in China remain large. But China also presents MNCs with unique risks. Rising tensions with the United States and Europe and the fastest aging population among the emerging economies are the two major sources of risk.
MNCs, hence, are now seriously asking themselves if they have the right strategies to succeed in China. In fact, many are losing ground as the gap widens between the highest- and lowest-performing. In addition, local companies in China are competing with the MNCs more fiercely for market share in many industries.
In this context, MNCs are rethinking their China strategies. Their most pressing question can be put bluntly: stay or leave? The answer depends on at least two more questions. First, what is at stake? For example, China accounts for 25 to 40 percent of the global market in some sectors, such as cars, luxury consumer goods, and industrial equipment; can companies in those sectors afford to miss out on the China market? Second, how can MNCs derisk business in China? In the following six areas, they will face a spectrum of choices that define the China imperative: capital and ownership; supply chains; innovation; branding; talent; and technology and data.
The MNCs that succeed in a rapidly changing China will be those that choose wisely in those six areas. The challenge is formidable, but the opportunity is significant.
3 key takeaways from the article
- China and MNCs built a mutually beneficial relationship during the past few decades. But MNCs have started reappraising their relationship with China. The reappraisal may seem surprising, given that MNCs’ opportunities in China remain large. But China also presents MNCs with unique risks.
- In this context, MNCs are rethinking their China strategies. Their most pressing question can be put bluntly: stay or leave? The answer depends on at least two more questions. First, what is at stake? Second, how can MNCs derisk business in China?
- In the following six areas, MNCs will face a spectrum of choices that define the China imperative: capital and ownership; supply chains; innovation; branding; talent; and technology and data.
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Topics: China, MNCs, Global Economy
‘AI First’ To Last: How Google Fell Behind In The AI Boom
By Richard Nieva and Alex Konrad | Forbes Magazine | February 8, 2023
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In 2016, a few months after becoming CEO of Google, Sundar Pichai made a sweeping proclamation: Google, whose name had become synonymous with search, would now be an “AI-first” company. Announced at Google’s massive I/O developer conference, it was his first major order of business after taking the company reins. What AI-first meant, exactly, was murky, but the stakes were not. Two years earlier, Amazon had blindsided Google by releasing its voice assistant Alexa.
Seven years later, Google finds itself in a similar position, again beaten to market in a field it should have dominated. But this time it’s worse: The usurper is OpenAI, a comparatively small San Francisco startup, and not a deep-pocketed giant like Amazon. The product is ChatGPT, a bot that can generate sitcom plots, resignation letters, lines of code, and other text on almost any subject conceivable as if written by a human—and it was built using a technological breakthrough Google itself had pioneered years ago. The bot, released in November, has captured the public’s imagination, despite Google announcing a similar technology called LaMDA two years ago.
What’s worse, Google’s chief search engine rival, Microsoft, is nourishing OpenAI with $10 billion and on Tuesday announced a new version of Bing with AI chat features even more advanced than ChatGPT—a potentially existential move for the future of internet search. During his keynote, Microsoft CEO Satya Nadella proclaimed a “new day” for search.
Google didn’t set out to be the vulnerable freight tanker in these uncharted waters. But a fraught history in AI and big innovations, including scandals around its AI ethics research, major backlash after the launch of a freakishly human-sounding AI called Duplex, and a persistent brain drain of AI talent has left it lurching to play catchup. To take back its AI mantle, Google may have to change the very nature of what it means to ‘google’ something.
3 key takeaways from the article
- In 2016, a few months after becoming CEO of Google, Sundar Pichai made a sweeping proclamation: Google would now be an “AI-first” company. Two years earlier, Amazon had blindsided Google by releasing its voice assistant Alexa. Seven years later, Google finds itself in a similar position, again beaten to market in a field it should have dominated. But this time it’s worse: The usurper is OpenAI, a comparatively small San Francisco startup, and not a deep-pocketed giant like Amazon.
- Google’s fraught history in AI and big innovations, including scandals around its AI ethics research, major backlash after the launch of a freakishly human-sounding AI called Duplex, and a persistent brain drain of AI talent has left it lurching to play catchup.
- What’s worse, Google’s chief search engine rival, Microsoft, is nourishing OpenAI with $10 billion.
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Topics: Technology, Artificial Intelligence, Google, Amazon, Microsoft
Strategy & Business Model Section
5 Ways You Should Be Using Technology to Unlock Growth (and Stay Afloat) This Year
By Peter Coppinger | Entrepreneur Magazine | February 8, 2023
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With the changing world of work, your team’s already feeling the pressure — or, more likely, they’ve been feeling it for the past so many years: managing multiple projects at once with higher client expectations and shorter deadlines and trying to strike a balance between productivity and burnout, all while making your wildest agency dreams come true. But, this year, the thing that will separate who survives and who thrives will come down to one word: technology. More precisely in the following five ways:
- Get super organized with checklist templates. One of the biggest mistakes agencies make is not getting organized because they’re so busy. The best agencies get hyper-organized by using checklists for everything. You should be using them for onboarding, training, off-boarding, setting up new clients, invoicing and for your everyday projects. Using project management platforms is the easiest way to integrate checklists into every function of your business to protect your team from missing important deadlines or overlooking vital steps of your processes.
- Make better, data-backed decisions with time tracking. It’s the bane of every agency worker’s existence, but to stay out of the red, you need to know exactly how your team is spending every working minute and which projects and clients are most profitable. To keep your tech stack economical and streamlined, consider looking for a time-tracking app that works with the software platforms you’re already using. When you better understand where your team is spending their time, you can make better resource decisions for all, leading to better business outcomes.
- Put an end to manual invoicing and cost tracking. Look for invoicing and cost-tracking software to create invoices based on your team’s time sheets. Small but effective adjustments like this (with the help of tech) will go a long way toward improving your agency’s efficiency, so you can focus on growing.
- Survey customers with smart software. Lean on affordable NPS (Net Promoter Score) to help you create quick and easy-to-use surveys to measure customer satisfaction and loyalty and provide actionable feedback to help you grow your business.
- Centralize communication for better collaboration between teams and clients. Even if you don’t feel the communication strain early on, things will surely come to a head when your agency reaches 20 to 30 employees. Centralizing your internal and client communications in a project management platform is one of the best ways agencies differentiate themselves in a competitive market and set themselves up for growth.
2 key takeaways from the article
- With the changing world of work, your team’s already feeling the pressure — or, more likely, they’ve been feeling it for the past so many years: managing multiple projects at once with higher client expectations and shorter deadlines and trying to strike a balance between productivity and burnout, all while making your wildest agency dreams come true.
- But, this year, the thing that will separate who survives and who thrives will come down to one word: technology. More precisely in the following five ways: get super organized with checklist templates; make better, data-backed decisions with time tracking app; put an end to manual invoicing and cost tracking; survey customers with smart software; and centralize communication for better collaboration between teams and clients.
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Topics: Entrepreneurship, Growth Strategy, Technology
Leading & Managing Section
7 Small Ways to Be a More Inclusive Colleague
By Nikita and Grace Lordan | Harvard Business Review | February 02, 2023
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Helping to increase inclusivity at your workplace doesn’t necessarily require an extensive DEI campaign. It also doesn’t require you to be in a position of power. Each and every one of us can decide to be an inclusive colleague and take small actions every day to improve our workplace culture. By making small changes in your own behavior, you can generate disproportionate positive effects on your colleagues’ workplace experience. The following can help:
- Highlight others’ contributions. Visibility at work allows individuals to showcase their abilities, be known to decision-makers, and build relationships. Identify a highly competent colleague who may lack visibility and highlight their achievements by publicly acknowledging their contributions and encouraging them to speak and present in meetings.
- Use your pronouns. Including your pronouns when you introduce yourself at meetings is a small action that signals that you’re an ally to colleagues who may struggle to voice that they’re often referred to with pronouns they don’t identify with. It also normalizes the practice for your other colleagues.
- Use gender-inclusive language. Research has shown that using gender-inclusive language at work is associated with better well-being for employees. For example, using “people” instead of “guys” can make everyone feel included.
- Assess your vocabulary. Many common slang words have other connotations or origins and should be avoided. For example, the word “lame” is often used to describe something as boring or monotonous, but it was originally used to refer to individuals with impaired mobility. Actively assess your vocabulary for slang terms that alienate others.
- Celebrate with your colleagues. A diverse workplace is made up of people from various backgrounds who celebrate different festivities, be they religious or historic. Enabling others to celebrate these occasions and participate in organized events is a wonderful way to acknowledge individualism. Even better, celebrating these occasions along with your colleagues can go a long way toward making them feel accepted and boosting their morale, in addition to building psychological safety.
- Get creative about team bonding. While putting together team-bonding activities, factor in the availability and interest of all your team members. Ensuring that everyone gets to participate in as many team activities as possible will help the team truly bond and have fun together.
- Be curious. Schedule coffees and lunches with colleagues who have different backgrounds than you. Without being intrusive, take an interest in their lived experience inside and outside the office. Use what you learn to devise additional small actions to undertake as an inclusive colleague.
2 key takeaways from the article
- Helping to increase inclusivity at your workplace doesn’t necessarily require an extensive DEI campaign. It also doesn’t require you to be in a position of power. Each and every one of us can decide to be an inclusive colleague and take small actions every day to improve our workplace culture. By making small changes in your own behavior, you can generate disproportionate positive effects on your colleagues’ workplace experience.
- The key is to identify behavior changes that you can perform repeatedly and turn into habits so they become automatic: highlight others’ contributions, use your pronouns, use gender-inclusive language, assess your vocabulary, celebrate with your colleagues, get creative about team bonding, and be curious.
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Topics: Teams, Empathy, Inclusion, Diversity, Culture
Become a Better Problem Solver by Telling Better Stories
By Arnaud Chevallier et al., | MIT Sloan Management Review | Spring 2023 Magazine
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In the face of complex problems and strategic decisions, executives often choose the wrong problem to solve. To find better answers, it is necessary to ask better questions. This is called problem framing. Although executives are familiar with the concept of framing, in the authors’ work with them they have observed three recurring errors:
- Assuming everyone sees the same problem: This is hardly ever the case. In understanding the problem we overestimate the relevance of our experience and underappreciate what we don’t know. The French call this déformation professionnelle.
- Targeting the wrong problem. Even when someone makes a conscious effort to articulate the problem and not rely on instinct, they might frame it too narrowly or too broadly. An effective frame captures the essence of the problem. If it’s too narrow, it risks being ineffective by focusing on just one of the drivers. If it’s too broad, it risks stretching attention and resources across too many concerns, including ones that have little or no relevance.
- Pushing a single perspective. Having defined the challenge alone or with like-minded colleagues, problem solvers are often blindsided by objections from critical stakeholders — especially those whose support they had taken for granted.
Effective framing is more important and more difficult than it seems. A process is necessary. A two-part solution: Frame and reframe.
Research and the authors’ experience with executives show that using a basic story framework can help people make sense of complex information. Storytelling is not only useful for persuading others but also valuable for thinking through ambiguous information. Storytelling makes it possible to structure the complexity of a problem by summarizing the problem in the form of a single overarching question — a quest — that will lead to the solution. An effective quest has just three elements: a hero — the main protagonist, a treasure — the hero’s aspiration, and a dragon — the chief obstacle.
Research also suggests that a diversity of perspectives promotes a more exhaustive exploration of alternative solutions and positively affects the quality of decisions. Reframing can start with considering the initial approach to the problem and asking, “Why would this not be the best quest to undertake?” The answer may be that you’ve identified the wrong hero, treasure, or dragon.
3 key takeaways from the article
- In the face of complex problems and strategic decisions, executives often choose the wrong problem to solve. To find better answers, it is necessary to ask better questions – referred as problem framing.
- While framing three recurring errors are: assuming everyone sees the same problem, targeting the wrong problem, and pushing a single perspective.
- Using a basic story framework can help people make sense of complex information. Storytelling makes it possible to structure the complexity of a problem by summarizing the problem in the form of a single overarching question — a quest — that will lead to the solution. An effective quest has just three elements: a hero — the main protagonist, a treasure — the hero’s aspiration, and a dragon — the chief obstacle.
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Topics: Decision-making, Strategy, Biasness
Entrepreneurship Section
6 Ways Impatience is Slowing Your Business Down
By Tommy Mello | Inc Magazine | January 31, 2023
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So many people are not patient. They want things done fast. They chase after one shiny object after another. They quit when things get hard. But Success–big success–takes time. So take your time, slow down, and realize what could come if you plan for five to ten years instead of one. As you plan out your long-term vision, look out for these six signs of impatience that can be killers of your success:
- Too big, too soon. Before you even think about scaling, you need to nail the fundamentals and get some hands-on experience whether it is being the technician or marketing guy.
- No savings. If you don’t have enough money saved up, or if you have a lot of credit card debt, you won’t be able to survive tough times like a recession. That’s why it’s so important to have the financial discipline.
- No systems. If you left town for a month but were not allowed to look at your computer or phone, what would your business look like when you’re back? The answer usually is “it’s not good”. To build real wealth, you need to work on the business, not in the industry. Delegate to your team, as well as build systems and processes. Take some time out of your week to do all these, no matter how busy you are.
- Not continuously learning. You don’t have to figure things out from scratch. There are already people who have answers to your challenges. In other words, the key to every business problem is to find someone else that’s already solved it. Buy their book or course, or meet with them in person. And if you can, work for the best for free and learn how they plan their days and manage their business.
- Depreciating assets. Rather than reinvesting into their business and making their business more efficient, they go buy a fancy new car or motorcycle–things that go down in value vs. go up in value. They have no discipline. It doesn’t mean that you shouldn’t enjoy life when you can–you could just rent luxury assets vs. owning them, for example.
- Multiple businesses at once. As they start getting successful, a lot of people get distracted. They start a bar with a buddy, they flip houses, they invest in stocks…. in other words, they take money out of their core business, which slows down the growth. Even if they don’t work on multiple businesses, it’s common for leaders to pursue multiple priorities and get pulled into a million directions. Ask yourself, are you focused on the One Thing that will move your business forward? Your calendar doesn’t lie.
2 key takeaways from the article
- So many people are not patient. They want things done fast. They chase after one shiny object after another. They quit when things get hard. But Success–big success–takes time. So take your time, slow down, and realize what could come if you plan for five to ten years instead of one.
- As you plan out your long-term vision, look out for these six signs of impatience that can be killers of your success: too big, too soon, no savings, no systems, not continuously learning, depreciating assets, and multiple businesses at once.
(Copyright)
Topics: Startup, Entrepreneurship, Business
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