Weekly Business Insights

Given the advantages that highly skilled immigrants bring, you might think that countries would compete as vigorously to attract the best and brightest as companies do. Many governments say they want to lure the world’s top talent. China’s ruling party recently vowed to “improve the support mechanisms for recruiting talent from overseas”, perhaps by allowing foreign scientists permanent residence. In America Joe Biden’s administration has promised to streamline the process for admitting talented foreigners, especially those with skills in AI. Donald Trump has said that anyone who graduates from an American college should “automatically” get a green card (i.e., permanent residence).  

Yet few governments think systematically about luring talent, as a corporate recruiter would. Many have schemes to attract people with specific skills, in medicine or AI, say, but these are often piecemeal and bureaucratic. China’s “Thousand Talents” programme, which involved big cash gifts to lure academics from abroad, enrolled only 8,000 scientists and engineers between 2008 and 2018, mostly of Chinese origin. In many countries, far more political energy is expended keeping out the huddled masses than enticing the excellent. Indeed, though some governments fight fiercely for footloose talent, others actively harm their own cause. 

United Arab Emirates is much more open than USA.  Hence, although American universities are widely considered the world’s best, America has been losing market share to Australia and Canada over the past two decades.

To estimate how much footloose talent countries might gain if they were more open to it, The Economist analysed data from the Gallup World Poll. This is an annual survey of nearly 200,000 people from more than 150 countries and territories. Three big, rich, English-speaking countries are the most powerful magnets (see chart above). If there were no barriers to entry, 23m graduates would move to America, 17m to Canada and 9m to Australia.  At the other end of the scale, China and India would lose the largest number of graduates in absolute terms (14m and 12m respectively). In relative terms, however, places like Iran, Ecuador and the Democratic Republic of Congo would see the biggest net outflows. The uae would see only a modest inflow. A port in the desert is not inherently attractive—it is policy that makes it so.

Many things that make a country attractive are beyond a government’s control. Belgium cannot aspire to New Zealand’s scenic beauty, nor New Zealand to Belgium’s location. The most important pull factor—the quality of job opportunities—is hard to change in the short run.  Still, whatever their starting-point, there are plenty of things governments can do to make their countries more appealing to foreign talent. They can simplify the processes by which highly skilled workers enter the country, and foreign graduates of local universities enter the workplace. They can treat foreigners with respect. They can adapt to changes in global labour markets, such as the rise of digital nomads. And they can make it easier to build infrastructure to accommodate newcomers.  

The places that lure them best often have low taxes or a pleasant lifestyle and relatively easy entry requirements.  One problem with migrants is that they need somewhere to live. If lots of well-heeled ones arrive in a place where housing supply is limited, they can drive up prices, infuriating locals and creating a backlash.

Today’s energy system, encompassing both the production and consumption of energy resources, is massive and complex.  The system has been optimized over centuries, is deeply embedded in the global economy, and serves billions of people, if not yet all of humanity.   And it is high-performing. Energy can be dispatched relatively easily where and when it is needed because current fuels are energy-dense and easily transportable. Supply can be ramped up and down quickly.

For all its advantages, today’s system also has critical flaws. About two-thirds of energy is currently wasted.   And the system generates more than 85 percent of global emissions of carbon dioxide (CO2).

Companies and countries are now engaged in an effort to transition the energy system and reduce those emissions—and to do so in just a few decades. That is a big ask. In the digital age, we have become accustomed to lightning-fast transformations. TikTok took nine months and ChatGPT only two months to gain 100 million users.   But an energy system is a physical entity, and historical energy transitions have taken many decades or even centuries. Complicating the task of building a new low-emissions energy system is that it coincides with the need for it to continue to grow to expand access to energy for billions of people who still do not have it, thereby economically empowering them.

Real progress has been made, but the transition remains in its early stages. Thus far, deployment of low-emissions technologies is only at about 10 percent of the levels required by 2050 in most areas, and that has been in comparatively easy use cases. More demanding challenges are bound to emerge as the world confronts more difficult use cases across geographies.

Low-emissions technologies such as solar and wind power and electric vehicles (EVs) have advantageous properties and can be brought together to deliver high performance. But deploying them well and progressing the transition further requires understanding the physical realities of the energy transition—the “hard stuff.” Recognizing that the energy transition is first and foremost a physical transformation is a truth that can get lost in the abstraction of net-zero scenarios. But it is vital if the new energy system is to retain, or even improve on, the performance of the current one and secure an affordable, reliable, competitive path to net zero. 

The energy transition involves the physical transformation of seven deeply interlinked domains. The first is the power domain, which needs to reduce its own emissions and to scale dramatically to provide low-emissions energy to the three large consuming domains: mobility, industry, and buildings. The final three domains are enablers of the energy transition: raw materials, especially critical minerals; new fuels, such as hydrogen and other energy carriers; and carbon and energy reduction

Twenty-five interlinked physical challenges would need to be tackled to advance the transition are: Managing renewables variability; Scaling emerging power systems; Flexing power demand; Securing land for renewables; Connecting through grid expansion; Navigating nuclear and other clean firm energy; Driving BEVs beyond breakeven; Going the distance on BEV range; Loading up electric trucks; Charging up EVs; Refueling aviation and shipping; Furnacing low-emissions steel; Cementing change for construction; Cracking the challenge of plastics; Synthesizing low-emissions ammonia; Heating other industries;  Facing the cold with heat pumps; Bracing for winter peaks; Unearthing critical minerals; Harnessing hydrogen; Scaling hydrogen’s infrastructure; Managing biofuels footprint; Expanding energy efficiency; Capturing point-source carbon; and Capturing atmospheric carbon.

This research primarily uses the 2023 McKinsey Achieved Commitments scenario, not as a forecast, but to understand the physical challenges to overcome.   Under this scenario, billions of low-emissions assets—for instance, about one billion EVs, over 1.5 billion heat pumps, and about 35 terawatts of low-emissions power generation capacity—would need to be deployed by 2050 alongside scaling supporting infrastructure such as the grid, EV charging stations, and supply chains.

About half of energy-related CO2 emissions reduction depends on addressing the most demanding physical challenges. Examples are managing power systems with a large share of variable renewables, addressing range and payload challenges in electric trucks, finding alternative heat sources and feedstocks for producing industrial materials, and deploying hydrogen and carbon capture in these and other use cases.

The most demanding challenges share three features. First, some use cases lack established low-emissions technologies that can deliver the same performance as high-emissions ones. Second, the most demanding challenges depend on addressing other difficult ones, calling for a systemic approach. Finally, the sheer scale of the deployment required is tough, given constraints and the lack of a track record.

Understanding these physical challenges can enable CEOs and policy-makers to navigate a successful transition. They can determine where to play offense to capture viable opportunities today, where to anticipate and address bottlenecks, and how best to tackle the most demanding challenges through a blend of innovation and system reconfiguration.

With a bit of luck and the right genes, the babies born today (referred as you in this article) might see the next 125 years. How will this generation and the next generation of machines grow up together? MIT asked more than a dozen experts to imagine this joint future.  The following are key insights from their reflections.

Just about all of them agreed on how to frame the past: Computing shrank from giant shared industrial mainframes to personal desktop devices to electronic shrapnel so small it’s ambient in the environment. Previously controlled at arm’s length through punch card, keyboard, or mouse, computing became wearable, moving onto—and very recently into—the body. In our time, eye or brain implants are only for medical aid; in your time, who knows?

Present day to 2034 | Age 0 to 10 | When you were born, your family surrounded you with “smart” things: rockers, monitors, lamps that play lullabies.  But not a single expert name-checked those as your first exposure to technology. Instead, they mentioned your parents’ phone or smart watch.  It helps introduce you to a world of animate objects.  You are the child of millennials and Gen Z—digital natives, the first influencers. So as you grow, cameras are ubiquitous. You see yourself onscreen and learn to smile or wave to the people on the other side. Your grandparents read to you on FaceTime; you photobomb Zoom meetings. As you get older, you’ll realize that images of yourself are a kind of social currency. Your primary school will certainly have computers, though we’re not sure how educators will balance real-world and onscreen instruction, a pedagogical debate today. But baby, school is where our experts think you will meet your first intelligent agent, in the form of a tutor or coach. Your AI tutor might guide you through activities that combine physical tasks with augmented-­reality instruction—a sort of middle ground. Learning will be increasingly self-­directed.  Technologies that isolate kids worries the experts.

2040 | Age 16 | By the time you turn 16, you’ll likely still live in a world shaped by cars: highways, suburbs, climate change. But some parts of car culture may be changing. Electric chargers might be supplanting gas stations. And just as an intelligent agent assisted in your schooling, now one will drive with you—and probably for you.  Experts imagine it being integrated with other kinds of agents—the future versions of Alexa or Google Home.  And when your car dies, the digital agent inside the car does not.  You can actually take the soul of it from vehicle to vehicle. So as you upgrade, it’s not like you cut off that relationship.  It moves with you. Because it’s grown with you.

2049 | Age 25 | By your mid-20s, the agents in your life know an awful lot about you. Maybe they are, indeed, a single entity that follows you across devices and offers help where you need it. At this point, the place where you need the most help is your social life.  AI could be a dating coach. You agree to meet up with a (real) person online, and “you have the AI in a corner saying ‘Hey, maybe you should say this,’ or ‘Don’t forget this.’ Almost like a little nudge.”  Virtual first dates might solve one of our present-day conundrums: Apps make searching for matches easier, but you get sparse—and perhaps inaccurate—info about those people. How do you know who’s worth meeting in real life? Building virtual dating into the app could be “an appealing feature for a lot of daters who want to meet people but aren’t sure about a large initial time investment.”

2059 | Age 35 | By now, you’ve probably settled into domestic life—but it might not look much like the home you grew up in. We shouldn’t imagine a home of the future. Rather we would call it a room of the future, because it will be the place for everything—work, school, play. This trend was hastened by the covid pandemic.  Your place will probably be small if you live in a big city. The uncertainties of climate change and transportation costs mean we can’t build cities infinitely outward.  The home will finally be a machine for living in.

2074 | Age 50 | Now you are at the peak of your career. For professions heading toward AI automation, you may be the “human in the loop” who oversees a machine doing its tasks. In our time, augmented reality is slowly catching on as a tool for workers whose jobs require physical presence and tangible objects. But experts worry that once the last baby boomers retire, their technical expertise will go with them. Perhaps they can leave behind a legacy of training simulations. 9-to-5 workday, which is crumbling in our time, might be totally atomized into work-from-home fluidity or earn-as-you-go gig work.

2099 | Age 75 | By the time you retire, families may be smaller, with more older people living solo.   Well, sort of. Chaiwoo Lee, a research scientist at the MIT AgeLab, thinks that in 75 years, your home will be a kind of roommate—“someone who cohabitates that space with you,” she says. “It reacts to your feelings, maybe understands you.” 

2149 | Age 125 | We hope that your final years will not be lonely or painful.   Faraway loved ones can visit by digital double, or send love through smart textiles: imagine a scarf that glows or warms when someone is thinking of you, or an on-skin device that simulates the touch of their hand. If you are very ill, you can escape into a soothing virtual world.  There is perhaps one last thing to try. It’s another AI. You curate this one yourself, using a lifetime of digital ephemera: your videos, texts, social media posts. It’s a hologram, and it hangs out with your loved ones to comfort them when you’re gone. Perhaps it even serves as your burial marker. “It is a little cool to think of cemeteries in the future that are literally haunted by motion-activated holograms.

Today 24% of U.S.-based companies spend more than 40% of their total marketing budget on influencers, according to an Influencer Marketing Hub report.   With so much money being invested in influencers, you would expect businesses to know exactly what impact they have on sales.

But research by Bocconi University’s Maximilian Beichert and colleagues has found that most companies that rely on influencers with high numbers of followers are missing out. They studied secondary sales data on 1,881,533 global purchases and conducted three field studies across Europe looking at hundreds of paid influencer endorsements. They discovered that nano influencers, those with fewer than 10,000 followers, yield a remarkable average return of more than $1,000 on a $50 investment. Conversely, macro influencers, those with more than 100,000 followers, command a hefty price tag of well over $1,000, on average, but deliver a return of only $6,000.  Beichert offers the following four tips on how to get the best results from influencer campaigns:

1. Determine your goals before choosing an influencer. Celebrity posts do a great job of getting eyeballs. However, unless your product goes viral, chances are good that you won’t know what happens after people see the posts.  If you want your influencer-marketing expenditures to lead to sales directly and measurably, you should consider the entire influencer-marketing funnel, which the researchers describe as having four distinct tiers: an influencer’s total following (audience), an influencer’s followers who see the sponsored post (impressions), engagement with the sponsored post (likes, comments, and replies), and revenue generated by the post. 
2. Collect performance data at the point of purchase. Regardless of what kind of influencer you’re using, you’ll want to be able to directly tie a sponsored post to purchases. That can be done via voucher codes, tracking links, and even unique toll-free numbers.
3. Use influencer-marketing platforms whenever possible. For brands that can’t afford an influencer-marketing platform, Beichert recommends contacting nano influencers through old-fashioned direct messages. “You’ll typically experience a better working relationship with nano influencers,” he explains. “They’ll work harder to promote the product, they’ll be more inclined than celebrity influencers to use tracking links and coupon codes to help prove ROI, and in many cases they’ll seem more authentically interested in your products.”
4. To increase sales, opt for authenticity instead of awareness. The slow pace and high cost of working with macro influencers isn’t the only reason nano influencers are better. Beichert argues that engagement between them and their audience is what really drives purchases. Nano influencers are more likely to discuss the products they promote with their followers. Textual analyses conducted by the researchers also reveal that nano influencers use more personal and authentic language when describing products than macro influencers do.

Product management is one of the fastest-growing roles in business, having gained increased scope and importance in Silicon Valley. While product managers used to be hired almost exclusively by technology companies, they are now being recruited in growing numbers by service-oriented businesses as well.  

Recognizing the challenges of low margins and challenging scalability, turning services into products can be a lucrative pursuit, but it is fraught with operational and organizational challenges. Leaders of professional services firms must consider several difficult questions about whether their service offerings can and should be productized and for which customer segments, and how to transform a service-oriented business into a product-oriented one.  Answering these questions will set up business leaders with a five-step productization road map.

1. Assess the Product Potential.  Every professional service involves a series of activities or tasks executed by the service provider in collaboration with the client.  For each activity, the service provider should define two criteria:  Frequency and Cognitive complexity.  The more frequent the activity, the richer the data available to train algorithms that will automate the process and the greater the potential productivity improvement that can be realized by substituting human effort with automation.  The more complex and mission-critical an activity is, the more difficult it is to automate and delegate to an algorithm. 
2. Decide the Optimal Productization Level.  We can estimate the optimal productization level by assessing the level of engagement that customers want for various activities and factoring in the supply-side potential assessed earlier.
3. Define the Offering Portfolio.  Customers’ preferences for human engagement could vary from “do it for me” high-touch option, a “do it with me” medium-touch option, or a “do it myself” low-touch option. The more diverse the customers are in their preference for touch, the more differentiated the offering portfolio will need to be.
4. Build the Product Capabilities.  Productization of services requires three capabilities:  Domain expertise to understand process workflows.  Proprietary data to train AI algorithms.  Technology platforms for automating processes and harnessing AI/generative AI.
5. Lead the Transformation.  Turning services into products involves a difficult business transformation. To lead the transformation, business leaders must be aware of the challenges and should proactively adopt strategies and tactics to overcome them.  The dominant culture and mindset of professional services firms can be one major roadblock to transformation.   To develop new product management capabilities and a new team. The final challenge is the redesign of the business model.

If even the idea of negotiating a job offer makes you nauseous, you’re not alone. According to Pew Research Center, 38% of workers reported feeling too uncomfortable to negotiate a job offer.  With the right strategies you can avoid common negotiation blunders and walk away with a job offer that makes you feel like your new employer sees your value. To know what to do, we must first explore what not to do. Here are the top 5 mistakes candidates make when negotiating a job offer, and how to sidestep them with the finesse of a seasoned professional.

1. Playing the “Let’s Get a Match” Game.   Employers are savvy, and if they sense that you’re treating their offer like a commodity, they might question your loyalty or long-term interest in the role. Worse yet, they could pull the offer altogether, leaving you empty-handed.  Instead focus on the job that’s the best fit for you, not just the one with the highest paycheck. When negotiating, emphasize your enthusiasm for the role and the company, and use any competing offers as quiet confidence rather than as leverage.
2. Going All-In on Salary Websites.  Salary websites can feel like a crystal ball into what you should be earning, but relying solely on these estimates is like trusting your horoscope to guide your career. Sure, they provide useful benchmarks, but they’re not the whole story.  Salary websites pull data from a variety of sources, and those numbers don’t always reflect the nuances of your specific role, industry, or location. If you walk into negotiations armed only with these figures, you might either undervalue yourself or come across as out of touch.  Instead use salary websites as a starting point, but also consider your unique value. Research industry-specific salary surveys, talk with anyone you may know who currently works there or has worked there in the past, network with professionals in your field, and consider the total compensation package—including benefits, bonuses, and growth opportunities—when negotiating.
3. Forgetting the Perks: Salary Isn’t Everything.   Focusing solely on salary can cause you to overlook other valuable benefits, such as extra vacation days, flexible working arrangements, fertility benefits (IVI, IFV, and egg freezing), mental health benefits, or professional development opportunities. Instead when negotiating, don’t just ask for more money—ask for a better deal. Consider negotiating for additional vacation days, remote work options, executive coaching, company stock, or a signing bonus.
4. Negotiating After Saying Yes: A Recipe for Disaster.  Once you’ve accepted an offer, you’ve set expectations. Attempting to renegotiate afterward can make you appear unreliable or even dishonest and could put your new job at risk before you even start.  What to Do Instead: Negotiate all aspects of the job offer before accepting. If you’re unsure about the offer, ask for some time to review it thoroughly. Once you’ve said yes, commit to it with confidence, knowing you’ve done your due diligence beforehand.
5. Disclosing Your Previous Salary: The Classic Blunder.  Disclosing your previous salary can severely limit your negotiating power. If your previous salary was below market rate, it could anchor the employer’s offer lower than what you deserve. Worse, your past salary has no bearing on the value you bring to this new role.  Politely decline to disclose your previous salary and shift the focus to the value you bring.

Effective communication is an absolute requirement for successfully starting or being highly productive in a business, but it doesn’t come naturally to many new venture founders and other business professionals. Communication is considered a social skill, and accountants and engineers, for example, are not known to be social butterflies.

John Spence, in his classic book Awesomely Simple, says that the single biggest problem he has to deal with in client companies worldwide is the lack of open, honest, robust, and courageous communication. He narrows down the problem to the following six aspects of communication to which the author agrees:

1. Honesty. This element is without question the most important in building strong communication in a business. The implementation is simple – just tell the truth all the time, every time. It’s a lot easier than trying to remember what you said the last time, and people notice quickly. Build a culture of truth, and others will follow your lead. 
2. Empathy. It is one thing to be honest; it is another thing to be brutally honest. Tell the truth in a frank and direct, yet respectful and empathetic, way. Shoot straight with people, but don’t shoot them between the eyes. Body language and sincerity are important here. 
3. Courage. You need the courage to put even the most difficult and challenging subjects on the table and lead the discussion. Don’t wait until tomorrow and hope the problem will go away. Courageous means that team members have the nerve and confidence to question authority, rather than dutifully fall in line behind a bad direction. 
4. Safety. If you want people to tell the truth, you have to make it safe for them. Here is where your actions speak louder than your words, and louder than any written policies. If you obliterate someone for telling you the truth, you will never hear the truth again. If you are caught in a lie once, you will never be believed again. 
5. Intellectual rigor. Although people should be safe, ideas should not be. In an intellectually rigorous culture, theories are tested, and people welcome, even encourage, critical examination of ideas and information, regardless of the source. The goal is for only the strongest ideas to survive. 
6. Transparency. The hallmark of great leaders and organizations is that they share as much information with all of their stakeholders as often as they possibly can, in multiple contexts. Yet many leaders will tell me that they are continually amazed to hear the common complaint “Why didn’t anybody tell me this was happening”. 

Spence says that the best way to improve your organizational communication levels is to improve your own interpersonal communication skills. Luckily, these are skills that can be taught and learned. It takes practice and hard work, but with time, it is possible to greatly improve.

The key skills for superior interpersonal communication are effective use of body language, focused listening, expert questioning, using multiple sensory modes, providing both logical and emotional arguments, and listening for ambiguous or emotionally loaded words.

The most nimble and successful leaders think differently, especially in the face of obstacles.  As any entrepreneur knows, learning how to overcome business challenges is a lifelong lesson. But it’s particularly applicable for founders from underserved backgrounds, as they often face barriers to accessing capital and other resources.

Recently, the author had the chance to sit down with 25 highly successful Black founders for JPMorgan Chase’s annual Black Founders Summit. During their time together, these industry titans discussed what it takes to become a strong leader, especially in the face of challenges.  Three key themes emerged, which according to the author can help every founder in every stage of growth and have been top of mind for him recently.

1. Successful founders are comfortable being uncomfortable.  Forging a new path as an entrepreneur isn’t easy work; sometimes, it will require some real internal work.  This can lead to feelings of imposter syndrome, where one feels out of place or as if they don’t deserve a seat at the table.  But to succeed in business, you have to approach the situation from a different vantage point and get comfortable being the “only” in the room. Whether you’re the only person who looks like you or the only person who believes in an idea, it’s important to not shy away from being uncomfortable, as the executive discussed.  Key takeaway is: It’s important to speak up in rooms where you’re uncomfortable, not only for the good of your business – as diversity of thought is good for overall strategy – but also to help pave the way for others from underrepresented backgrounds.  If you’re “the only” in a room, embrace the challenge. Don’t let it silence you.
2. They prioritize culture.  But how do you build that culture? The first step is hiring the right people. As any founder will tell you, your people are your company’s greatest asset. As a leader, you must set the tone for the culture and embody those values every day. Your team will see that and carry those values forward in every interaction with clients and stakeholders.  Equally important is building a team that represents a variety of backgrounds and perspectives. The data is clear on this point — diversity creates a competitive advantage for business of all shapes and sizes.  While there’s incredible value in hiring a team that shares different perspectives, it’s important they also have something in common: high emotional intelligence, or EQ.
3. The customer is at the center of everything they do.  You need to be relentless in exceeding client expectations and building long-term relationships. As a founder, you must keep your clients, customers, and the communities you serve at the center of everything you do, too.