tag:theconversation.com,2011:/nz/topics/business-34339/articlesBusiness – The Conversation2024-03-26T12:48:40Ztag:theconversation.com,2011:article/2223642024-03-26T12:48:40Z2024-03-26T12:48:40ZNot having job flexibility or security can leave workers feeling depressed, anxious and hopeless<figure><img src="https://images.theconversation.com/files/581106/original/file-20240311-22-aqasrx.jpg?ixlib=rb-1.1.0&rect=62%2C20%2C6934%2C4637&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Warehouse employees frequently lack control over their own schedules.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/photo/exhausted-warehouse-worker-royalty-free-image/1413866834">Andres Oliveira/E+ via Getty Images</a></span></figcaption></figure><p>When employees don’t have control over their work schedules, it’s not just morale that suffers – mental health takes a hit too. That’s <a href="https://doi.org/10.1001/jamanetworkopen.2024.3439">what my colleagues and I discovered</a> in a study recently published in the medical journal JAMA Network Open.</p>
<p>As a <a href="https://www.bu.edu/sph/profile/monica-wang/">public health expert</a>, I know that the way our jobs are designed can affect our well-being. Research has shown that flexibility, security and autonomy in the workplace are strong <a href="https://doi.org/10.1093/acrefore/9780190236557.013.15">determinants of health</a>.</p>
<p>To understand how powerful they are, my colleagues and I looked at the 2021 <a href="https://www.cdc.gov/nchs/nhis/about_nhis.htm">National Health Interview Survey</a>, a major data collection initiative run out of the <a href="https://www.cdc.gov/nchs/index.htm">National Center for Health Statistics</a>. We analyzed responses from 18,144 working adults across the U.S., teasing out how job flexibility and security may be linked with mental health.</p>
<p>The respondents were asked how easily they could change their work schedule to do things important to them or their family, whether their work schedule changed on a regular basis, and how far in advance they usually knew their schedules. They also rated their perceived risk of losing their job in the next 12 months.</p>
<p>We found that workers who had more flexible work arrangements were less likely to report feelings of depression, hopelessness and anxiety. Similarly, those with greater job security were at lower risk of mental health challenges. We also found that higher job security was linked with fewer instances of missing work over the past year.</p>
<h2>Why it matters</h2>
<p>The average full-time worker dedicates <a href="https://www.gettysburg.edu/news/stories?id=79db7b34-630c-4f49-ad32-4ab9ea48e72b">a third</a> of their lifetime waking hours to work. Given that fact, understanding how job design affects mental health is key to developing policies that bolster well-being.</p>
<p>It’s clear why employers should care: When workers aren’t feeling well mentally, they’re <a href="https://doi.org/10.1007/s40258-022-00761-w">less productive</a> and more likely to <a href="http://doi.org/10.1097/00043764-200104000-00010">miss work</a>. Their <a href="https://www.betterup.com/blog/mental-health-impedes-creativity">creativity</a>, <a href="https://doi.org/10.1080/02678373.2017.1304463">collaboration</a> and ability to <a href="https://www.who.int/news-room/fact-sheets/detail/mental-health-at-work#">meet job demands</a> also suffer, hurting the entire organization.</p>
<p>The impact of job-related stress extends beyond the workplace, affecting families, communities and health care systems. People grappling with work-related mental health challenges often require <a href="http://doi.org/10.1186/1471-244X-14-131">multiple forms of support</a>, such as access to counseling, medication and social services. Not addressing these needs comprehensively can cause <a href="http://doi.org/10.1001/jamahealthforum.2023.3535">serious long-term consequences</a>, including reduced quality of life and increased health care costs.</p>
<p>It’s important to note that the COVID-19 pandemic <a href="https://doi.org/10.1007/s40615-022-01284-9">worsened mental health disparities</a> and that individuals in lower-wage positions, front-line workers and people in marginalized communities continue to face <a href="http://doi.org/10.1111/1475-6773.14136">additional challenges</a>. In this context, understanding exactly how job and work design can affect people’s mental health is all the more important.</p>
<h2>What’s next</h2>
<p>My research team plans to examine how race and gender affect the links between job flexibility, job security and mental health.</p>
<p><a href="http://doi.org/10.1037/a0034016">Previous research</a> suggests that women and people of color experience <a href="http://doi.org/10.1037/a0034016">unique workplace stressors</a> that harm their mental well-being. For instance, women continue to face <a href="https://sgff-media.s3.amazonaws.com/sgff_r1eHetbDYb/Women+in+the+Workplace+2023_+Designed+Report.pdf">barriers to career advancement</a>, <a href="https://www.forbes.com/advisor/business/gender-pay-gap-statistics/#">unequal pay</a> and a <a href="https://doi.org/10.1007/s11205-018-2025-x">higher burden</a> of unpaid care work.</p>
<p>Similarly, employees of color often experience <a href="https://news.gallup.com/poll/328394/one-four-black-workers-report-discrimination-work.aspx">discrimination</a>, <a href="https://hbr.org/2022/05/research-the-real-time-impact-of-microaggressions">microaggressions</a> and <a href="https://www.urban.org/sites/default/files/publication/104761/racial-equity-and-job-quality.pdf">limited opportunities for professional growth</a> at work, all of which can harm <a href="https://milkeninstitute.org/sites/default/files/2023-04/racialequitybrief.pdf">mental health</a>. Understanding gender and racial differences will help researchers and organizations develop targeted interventions and policy recommendations.</p>
<p>Mental health challenges are far from rare: More than 50 million Americans, or nearly <a href="https://www.nimh.nih.gov/health/statistics/mental-illness">1 in 5 adults</a>, live with mental illness. By creating workplaces that <a href="https://doi.org/10.1177/08901171241233398">prioritize employee well-being</a> – through flexible work arrangements, supportive policies and access to mental health resources – organizations can help build a healthier society. </p>
<p><em>The <a href="https://theconversation.com/us/topics/research-brief-83231">Research Brief</a> is a short take on interesting academic work.</em></p><img src="https://counter.theconversation.com/content/222364/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Monica Wang does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The way jobs are structured affects employee mental health, an analysis of more than 18,000 workers shows.Monica Wang, Associate Professor of Public Health, Boston UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2228722024-03-21T12:23:26Z2024-03-21T12:23:26ZHow safe are your solar eclipse glasses? Cheap fakes from online marketplaces pose a threat, supply-chain experts say<figure><img src="https://images.theconversation.com/files/582258/original/file-20240315-20-z9c7t4.jpg?ixlib=rb-1.1.0&rect=59%2C7%2C4923%2C3287&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Don't trust. Verify.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/photo/woman-with-solar-glasses-looking-at-sun-royalty-free-image/82714690">Andrew Holt/The Image Bank via Getty Images</a></span></figcaption></figure><p>Americans from Maine to Texas are set for a rare treat on April 8, 2024, when a <a href="https://science.nasa.gov/eclipses/future-eclipses/eclipse-2024/where-when/">total solar eclipse</a> will be visible across much of the U.S. </p>
<p>In ancient times, eclipse-viewers thought they were watching the Sun be eaten by <a href="https://www.exploratorium.edu/eclipse/eclipse-stories-from-around-the-world">wolves</a>, a <a href="https://www.vox.com/culture/2017/8/18/16078886/total-solar-eclipse-folklore">dragon</a> or a <a href="https://www.livescience.com/53961-solar-eclipse-myths-and-superstitions.html">demon</a>.</p>
<p>Of course, we now know that the Sun isn’t really eaten during an eclipse. Instead, it does what it always does: rain ultraviolet rays on everything in its path. That’s why you should never look at a solar eclipse without protective eyewear. </p>
<p>But not just any eyewear will do. To make sure that you enjoy the total solar eclipse safely, the American Astronomical Society has specifically <a href="https://eclipse.aas.org/eye-safety/viewers-filters">warned against</a> buying eclipse glasses at the lowest price from online marketplaces like Amazon or eBay.</p>
<p>What gives? Why not save a buck on something you’ll use possibly just once for a few minutes?</p>
<p>It turns out there’s a very good reason: Deceptive counterfeit products have infiltrated retail supply chains. And some of them can pose a threat to your health.</p>
<h2>Invasion of the bogus products</h2>
<p><a href="https://scholar.google.com/citations?user=JMgbELkAAAAJ&hl=en">As experts in</a> <a href="https://scholar.google.com/citations?user=fbARgoUAAAAJ">supply-chain management</a>, we know that counterfeit products have become a growing problem in recent years.</p>
<p>While counterfeit products can be found at brick-and-mortar shops, they’re an especially big problem at online marketplaces. <a href="https://economictimes.indiatimes.com/tech/technology/amazon-removes-6-million-counterfeit-items-from-supply-chains/articleshow/99247317.cms?from=mdr">Amazon removed more than 6 million counterfeit items</a> from its supply chain in 2022 alone.</p>
<p>There are several reasons for this. First, our recent research shows that <a href="https://doi.org/10.1111/poms.13833">consumers often consider the reputation of an online retailer</a> while judging a product’s quality. Unscrupulous third-party sellers can take advantage of this fact by selling their wares through a reputable online marketplace. </p>
<p>Another complication arises from the fulfillment services offered by some marketplaces, such as Amazon, where third-party sellers directly send their merchandise to the online retailer’s warehouse for shipping and handling. These sorts of fulfillment services offer a little-known benefit to retailers: If a product is running out of stock, <a href="https://www.amazonsellers.attorney/blog/amazons-commingled-inventory-policy-risks-and-recommendations">they can “borrow” from a third-party seller’s inventory</a>. </p>
<p>Unfortunately, this also means that a consumer who agrees to buy from one retailer may actually receive merchandise – perhaps counterfeit – from a third-party seller. While there aren’t statistics showing how frequently this happens, <a href="https://www.ft.com/content/f6d85b96-359e-384d-a255-f60bf152e992">there’s evidence</a> it’s a significant problem. </p>
<p>Thankfully, customers are becoming more aware of counterfeit products and have increasingly pushed online retailers to separate inventories of authorized sellers of merchandise from those that aren’t. For instance, Amazon maintains a list of “<a href="https://www.thesellingguys.com/identifying-amazon-gated-restricted-brands-avoid-suspension/">gated</a>” brands, such as Asics and Under Armour, that require authorization before they can be sold. </p>
<p>But these protections don’t apply across the board. In fact, some counterfeit-prone brands, such as <a href="https://www.retaildive.com/news/birkenstock-pulls-products-from-amazon-over-counterfeiting-concerns/423027/#:%7E:text=Citing%2520concerns%2520over%2520counterfeiting%2520and,%252Dparty%2520Marketplace%252C%2520CNBC%2520reports.">Birkenstock</a>, refuse to sell their products through some online retailers entirely. That leaves an opening for counterfeiters, who tend to offer the lowest prices. </p>
<p>That’s why the American Astronomical Society recommends eclipse-watchers avoid buying protective glasses from the lowest-price sellers on online marketplaces. And we completely agree. After all, counterfeit sunglasses can be returned, but damage to your eyes is permanent. In 2017, one California man wearing counterfeit eclipse glasses was <a href="https://www.indystar.com/story/news/2017/08/29/eclipse-eyes-only-few-people-have-lasting-effects-staring-sun/609367001/">left with retina damage</a>.</p>
<h2>How to find safe solar eclipse glasses</h2>
<p>If you’re in the market for eclipse glasses, it’s not hard to get a safe pair. First, buying directly from one of the American Astronomical Society’s <a href="https://eclipse.aas.org/eye-safety/viewers-filters">approved list of brands and manufacturers</a> is the most reliable way. Unfortunately, many of them only sell cheaper, disposable solar eclipse viewers in bulk.</p>
<p>If you need a single pair, your next best option is to purchase one from a major brick-and-mortar chain retailer in person. Many organizations are also <a href="https://www.forbes.com/sites/jamiecartereurope/2024/03/01/where-to-get-free-solar-eclipse-glasses-for-aprils-event/?sh=3f3051ce102b">handing out free viewers</a>. If you take one, you should make sure it was made by a manufacturer on the American Astronomical Society’s list.</p>
<p>If you must buy from an online marketplace, look for evidence of manufacturer authorization. For instance, American Paper Optics – an American Astronomical Society-approved brand – maintains <a href="https://www.eclipseglasses.com/pages/amazon-approved-vendors">a list of Amazon sellers</a> approved for reselling their viewers. </p>
<p>What if you’ve already bought something from a no-name seller on Amazon? Let’s say you bought a pair of sunglasses, or eclipse glasses, with UV protection. It’s hard to verify UV protection properties. Sure, there are standards and certifications such as UV400 and <a href="https://www.iso.org/standard/59289.html">ISO 12312-2</a>, but as you have probably guessed, even those can be faked. For instance, you can easily buy entire rolls of UV400 stickers online. </p>
<p>Thankfully, most local opticians can <a href="https://www.allaboutvision.com/sunglasses/how-to-tell-if-have-uv-protection/">test your sunglasses’ UV protection properties in seconds</a>. In other words, when in doubt, verify.</p><img src="https://counter.theconversation.com/content/222872/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Don’t skimp on your eye safety.Yao "Henry" Jin, Associate Professor of Supply Chain Management, Miami UniversitySimone Peinkofer, Assistant Professor of Supply Chain Management, Michigan State UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2260182024-03-20T19:02:57Z2024-03-20T19:02:57ZCompanies vying for government contracts could soon have to meet gender targets. Will we finally see real progress?<figure><img src="https://images.theconversation.com/files/583045/original/file-20240320-16-fm9yug.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C4624%2C2666&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/businesswoman-standing-leading-business-presentation-female-681211267">Jacob Lund/Shutterstock</a></span></figcaption></figure><p>The Australian government wants to make sure its contracts – worth almost <a href="https://www.finance.gov.au/government/procurement">A$75 billion annually</a> – don’t just deliver taxpayers value for money, but also promote gender equity.</p>
<p>Under <a href="https://www.theguardian.com/society/2024/mar/07/labor-gender-equality-targets-government-contracts-katy-gallagher-national-press-club-speech">proposed procurement policy changes</a> announced earlier this month, large companies that wish to bid for government contracts will first have to meet some gender equality conditions.</p>
<p>How exactly will these measures work across Australia’s huge private sector, and what kind of an impact could they have?</p>
<h2>Not a new idea</h2>
<p>Federal tender processes – the way we try to award government contracts to the best possible providers – currently follow a set of <a href="https://www.finance.gov.au/government/procurement/commonwealth-procurement-rules">Commonwealth procurement rules</a>. </p>
<p>They must provide value for money, encourage competition and ensure that public funds are used in an “efficient, effective, economical and ethical” way.</p>
<p>Using tenders as a lever to achieve gender equality isn’t a new idea. It’s been recommended around the world, including by the <a href="https://www.oecd-ilibrary.org/docserver/5d8f6f76-en.pdf?expires=1710753868&id=id&accname=guest&checksum=FBD77B99061A635D9246913C75E5D286">OECD</a>, the <a href="https://www.adb.org/publications/gender-responsive-procurement-asia-pacific">Asian Development Bank</a>, and the <a href="https://blogs.worldbank.org/governance/gender-and-equality-public-procurement#:%7E:text=Only%201%25%20of%20the%20%2411,and%20costliness%20of%20procurement%20processes.">World Bank Group</a>. </p>
<p>The idea is for the government to use its “<a href="https://www.theguardian.com/society/2024/mar/07/labor-gender-equality-targets-government-contracts-katy-gallagher-national-press-club-speech">purchasing power</a>” to incentivise – and in effect pressure – companies to take bolder steps toward achieving gender equality. </p>
<p>It’s a way to make sure the government’s direct efforts to <a href="https://genderequality.gov.au/">promote gender equality</a> aren’t being contradicted or undone elsewhere in the ways taxpayers’ money gets spent.</p>
<h2>Existing requirements for Australian companies</h2>
<p>In Australia, companies with at least 100 staff are already required to report to the Workplace Gender Equality Agency (WGEA) on <a href="https://www.wgea.gov.au/pay-and-gender/6-gender-equality-indicators">six gender equality indicators</a>. These indicators cover: </p>
<ul>
<li>workforce composition</li>
<li>board composition</li>
<li>the gender pay gap </li>
<li>the availability of flexible working arrangements</li>
<li>employee consultation processes</li>
<li>policies on sexual harassment.</li>
</ul>
<p>Bidding for some government contracts also requires companies to prove their compliance with the WGEA’s reporting processes. This involves <a href="https://www.wgea.gov.au/reporting-guide/ge/eligibility-compliance#:%7E:text=For%20organisations%20that%20have%20reported,Insights'%20tab%20within%20the%20Portal">downloading a certificate</a> from the agency’s website. </p>
<p>Under the <a href="https://www.theguardian.com/society/2024/mar/07/labor-gender-equality-targets-government-contracts-katy-gallagher-national-press-club-speech">proposed changes</a>, large companies with more than 500 employees will have to go beyond just reporting their numbers. If they want to remain in the running for government contracts, they will need to set and achieve measurable targets for their organisation across at least three indicators. </p>
<p>As Senator Katy Gallagher, the minister for finance, women and public service, explained while <a href="https://ministers.pmc.gov.au/gallagher/2024/national-press-club-address-working-women-national-strategy-gender-equality">announcing the measures</a>: </p>
<blockquote>
<p>We in the government believe that shining a light on what’s actually happening in workplaces will put pressure on employers to rethink how they hire, promote and remunerate their staff.</p>
</blockquote>
<h2>Concerns about implementation</h2>
<p>There are concerns around the practicality, market effects and reach of such a large-scale procurement policy. But there’s reason for us to be optimistic that Australia’s proposed design goes some way to mitigate these concerns. </p>
<p><strong>1. Companies might not know how to conduct this analysis</strong></p>
<p>Some might say there’s a risk these new requirements will be overly burdensome for companies not already conducting this kind of analysis. Such companies may lack the resources and technical knowledge to undertake extra steps.</p>
<p>It’s a fair concern. <a href="https://www.oecd-ilibrary.org/docserver/5d8f6f76-en.pdf?expires=1710848416&id=id&accname=guest&checksum=4A37780D3D8773D8E00A60BEDF27F7F7">OECD research</a> shows that a lack of clarity around “what to do” is the main challenge with gender equality procurement practices globally.</p>
<p>But a key strength of Australia’s proposal is that it leverages existing data collection processes that companies have already invested in, not adding burdensome extra demands.</p>
<p>There’s evidence for the effectiveness of this approach at a state level. In a 2022 pilot, the Western Australian government introduced a new requirement that bidders for its contracts prove their compliance with WGEA’s existing reporting procedures. An <a href="https://www.wa.gov.au/government/document-collections/gender-equality-procurement#evaluation">evaluation</a> of the program found the new criteria made a big difference in sharpening businesses’ awareness and understanding of gender equality.</p>
<p>To further mitigate this risk, the Australian government can invest in providing informational guidance to businesses on what will be required of them. Victoria’s Commission for Gender Equality in the Public Sector has already done this for <a href="https://www.genderequalitycommission.vic.gov.au/applying-gender-impact-assessment-procurement-policy">state government tenders</a>.</p>
<p><strong>2. Less competition for tenders?</strong> </p>
<p>If an extra layer of requirements squeezes out potential contenders in the business community, there’s a risk it could lessen competition for government contracts. </p>
<p>Economists have good reason to worry that weaker competition could push up the price of the products and services on offer, a loss for taxpayer value. </p>
<p>But Victoria’s <a href="https://www.buyingfor.vic.gov.au/introduction-social-procurement-framework">social procurement framework</a> helps us navigate this concern, prompting us to consider the ways “value for money” can mean more than just getting the cheapest price. </p>
<p>A broader definition of “value” would include progress toward social goals that provide significant benefit to the community – such as women’s equality. </p>
<p>Gender equity practices themselves are an often overlooked source of extra value, through the broader ideas, innovation and skill sets that diversity brings. These measures mean that a new pool of businesses can join the competitive mix.</p>
<figure class="align-center ">
<img alt="woman wearing hardhat works on an engine" src="https://images.theconversation.com/files/583053/original/file-20240320-27-i05mki.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/583053/original/file-20240320-27-i05mki.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/583053/original/file-20240320-27-i05mki.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/583053/original/file-20240320-27-i05mki.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/583053/original/file-20240320-27-i05mki.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/583053/original/file-20240320-27-i05mki.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/583053/original/file-20240320-27-i05mki.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Gender equity policies have a tangible value, enriching the workforce with new ideas and skillsets.</span>
<span class="attribution"><a class="source" href="https://www.pexels.com/photo/woman-wears-yellow-hard-hat-holding-vehicle-part-1108101/">Chevanon Photography/Pexels</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<p><strong>3. Limited reach</strong> </p>
<p>For companies that don’t have to vie for government contracts, there’s a good chance these new measures won’t carry much weight. However, the government has other ways to put pressure on them. </p>
<p>Already, the WGEA has the power to publicly “<a href="https://www.wgea.gov.au/what-we-do/compliance-reporting/non-compliant-list">name and shame</a>” companies that don’t comply with legal requirements to submit their gender equality data. </p>
<p>Following the public spotlighting of companies with the biggest gender pay gaps, the “non-compliance” list calls out companies that aren’t even submitting their data at all.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/qantas-pays-women-37-less-telstra-and-bhp-20-fifty-years-after-equal-pay-laws-we-still-have-a-long-way-to-go-223870">QANTAS pays women 37% less, Telstra and BHP 20%. Fifty years after equal pay laws, we still have a long way to go</a>
</strong>
</em>
</p>
<hr>
<p>There are some widely known names on the <a href="https://www.wgea.gov.au/sites/default/files/documents/Employers-named-as-non-compliant-under-the-Workplace-Gender-Equality-Act-for-2022-2023-Gender-Equality-Reporting-March-2024.pdf">latest list</a>: General Motors, Manly Warringah Sea Eagles Club, Sofitel Sydney Wentworth, and several Melbourne-based McDonald’s stores.</p>
<p>It’s unclear just how much <a href="https://www.chathamhouse.org/sites/default/files/publications/research/Gender-smart%20Procurement%20-%2020.12.2017.pdf">being named on this list</a> – or being deemed ineligible for government contracts – matters to these companies, or to their customers and clients.</p>
<p>It’s these companies – slipping through the cracks and outside of the scope of government contracts – that we will still need to focus on.</p>
<p>Procurement is just one lever in a multi-pronged strategy to achieve gender equality. <a href="https://link.springer.com/article/10.1007/s11187-018-9997-4">Evaluations</a> suggest some procurement strategies are unlikely to boost women’s bidding success unless the <a href="https://www.tandfonline.com/doi/abs/10.1080/01446193.2019.1687923">other deeper barriers</a> that limit women’s involvement are also broken down. However, Australia’s existing investment in data collection means they could still be a powerful tool.</p><img src="https://counter.theconversation.com/content/226018/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Leonora Risse has undertaken research for WGEA and made a submission to the review of the Workplace Gender Equality Act. She serves as an Expert Panel Member on gender pay equity for the Fair Work Commission. She receives research funding from the Trawalla Foundation and the Women's Leadership Institute Australia. She is a member of the Economic Society of Australia and the Women in Economics Network.</span></em></p>Businesses with more than 500 employees will need to meet targets against at least three gender equality indicators.Leonora Risse, Associate Professor in Economics, University of CanberraLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2258572024-03-15T12:10:30Z2024-03-15T12:10:30ZWhy do airlines charge so much for checked bags? This obscure rule helps explain why<p>Five out of the six <a href="https://www.oag.com/blog/biggest-airlines-in-the-us">biggest U.S. airlines</a> have <a href="https://www.cnbc.com/2024/03/05/delta-is-the-latest-airline-to-raise-its-checked-bag-fee.html">raised their checked bag fees</a> since January 2024.</p>
<p>Take American Airlines. In 2023, it cost US$30 to check a standard bag in with the airline; <a href="https://www.usatoday.com/story/travel/airline-news/2024/02/20/american-airlines-bag-fees-mileage-earning/72669245007/">today, as of March 2024, it costs $40</a> at a U.S. airport – a whopping 33% increase.</p>
<p>As a <a href="https://www.bu.edu/questrom/">business school</a> <a href="https://www.bu.edu/questrom/profile/jay-zagorsky/">professor who studies travel</a>, I’m often asked why airlines alienate their customers with baggage fees instead of bundling all charges together. <a href="https://www.vox.com/2015/4/16/8431465/airlines-carry-on-bags">There are</a> <a href="https://www.usatoday.com/story/travel/columnist/2023/06/21/bag-fees-will-stay-a-while-cruising-altitude/70338849007/">many reasons</a>, but an important, often overlooked cause is buried in the U.S. tax code.</p>
<h2>A tax-law loophole</h2>
<p>Airlines pay the federal government <a href="https://www.ecfr.gov/current/title-26/chapter-I/subchapter-D/part-49/subpart-D">7.5% of the ticket price</a> when <a href="https://www.pwc.com/us/en/services/tax/library/aircraft-club-nov-2023-air-transport-excise-tax-rates-for-2024.html">flying people domestically, alongside other fees</a>. The airlines dislike these charges, with their <a href="https://www.airlines.org/dataset/government-imposed-taxes-on-air-transportation/">trade association arguing</a> that they boost the cost to the consumer of a typical air ticket by around one-fifth.</p>
<p>However, the U.S. Code of Federal Regulations <a href="https://www.ecfr.gov/current/title-26/chapter-I/subchapter-D/part-49/subpart-D/section-49.4261-8">specifically excludes baggage</a> from the 7.5% transportation tax as long as “the charge is separable from the payment for the transportation of a person and is shown in the exact amount.”</p>
<p>This means if an airline charges a combined $300 to fly you and a bag round-trip within the U.S., it owes $22.50 in tax. If the airline charges $220 to fly you plus separately charges $40 each way for the bag, then your total cost is the same — but the airline only owes the government $16.50 in taxes. Splitting out baggage charges saves the airline $6.</p>
<p>Now $6 might not seem like much, but it can add up. Last year, passengers took <a href="https://www.transtats.bts.gov/Data_Elements.aspx?Data=1">more than 800 million trips on major airlines</a>. Even if only a fraction of them check their bags, that means large savings for the industry.</p>
<p>How large? The government has <a href="https://www.bts.dot.gov/topics/airlines-and-airports/baggage-fees-airline-2023">tracked revenue from bag fees</a> for decades. In 2002, airlines charged passengers a total of $180 million to check bags, which worked out to around 33 cents per passenger. </p>
<p>Today, as any flyer can attest, bag fees are a lot higher. Airlines collected over 40 times more money in bag fees last year than they did in 2002.</p>
<p>When the full data is in for 2023, <a href="https://www.bts.dot.gov/baggage-fees">total bag fees</a> will likely top $7 billion, which is about $9 for the average domestic passenger. <a href="https://viewfromthewing.com/the-real-reason-airlines-charge-checked-bag-fees-and-its-not-what-you-think">By splitting out the cost of bags</a>, airlines avoided paying about half a billion dollars in taxes just last year.</p>
<p>In the two decades since 2002, flyers paid a total of about $70 billion in bag fees. This means separately charging for bags saved airlines about $5 billion in taxes.</p>
<p><iframe id="88MYD" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/88MYD/2/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
<p>It seems clear to me that tax savings are one driver of the unbundling of baggage fees because of a quirk in the law.</p>
<p>The U.S. government doesn’t apply the 7.5% tax to <a href="https://www.ecfr.gov/current/title-26/chapter-I/subchapter-D/part-49/subpart-D/section-49.4261-3">international flights that go more than 225 miles</a> beyond the nation’s borders. Instead, there are fixed <a href="https://www.airlines.org/dataset/government-imposed-taxes-on-air-transportation">international departure and arrival taxes</a>. This is why major airlines charge $35 to $40 <a href="https://www.aa.com/i18n/travel-info/baggage/checked-baggage-policy.jsp">for bags if you’re flying domestically</a>, but don’t charge a bag fee when you’re flying to Europe or Asia.</p>
<h2>Do travelers get anything for that money?</h2>
<p>This system raises an interesting question: Do baggage fees force airlines to be more careful with bags, since customers who pay more expect better service? To find out, I checked with the Bureau of Transportation Statistics, which has been <a href="https://www.bts.gov/content/mishandled-baggage-reports-filed-passengers-largest-us-air-carriersa">tracking lost luggage for decades</a>. </p>
<p>For many years, it calculated the number of mishandled-baggage reports per thousand airline passengers. The government’s data showed mishandled bags peaked in 2007 with about seven reports of lost or damaged luggage for every thousand passengers. That means you could expect your luggage to go on a different trip than the one you are taking about once every 140 or so flights. By 2018, that estimate had fallen to once every 350 flights.</p>
<p>In 2019, the government <a href="https://www.bts.gov/topics/airlines-and-airports/number-30a-technical-directive-mishandled-baggage-amended-effective-jan">changed how it tracks</a> mishandled bags, calculating figures based on the total number of bags checked, rather than the total number of passengers. The new data show about six bags per thousand checked get lost or damaged, which is less than 1% of checked bags. Unfortunately, the data doesn’t show improvement since 2019.</p>
<p>Is there anything that you can do about higher bag fees? Complaining to politicians probably won’t help. In 2010, two senators <a href="https://www.nj.com/business/2010/04/us_senators_present_bill_to_ba.html">tried to ban bag fees</a>, and their bill went nowhere.</p>
<p>Given that congressional action failed, there’s a simple way to avoid higher bag fees: <a href="https://www.cnn.com/travel/article/packing-expert-travel-world-handbag/index.html">travel light</a> and <a href="https://www.nytimes.com/2023/07/08/opinion/carry-on-packing-airlines-lost-luggage.html">don’t check any luggage</a>. It may sound tough not to have all your belongings when traveling, but it might be the best option as bag fees take off.</p><img src="https://counter.theconversation.com/content/225857/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jay L. Zagorsky does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The answer lies in the tax code.Jay L. Zagorsky, Associate Professor of Markets, Public Policy and Law, Boston UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2256102024-03-14T12:42:30Z2024-03-14T12:42:30ZWendy’s ‘surge pricing’ mess looks like a case study in stakeholder conflict<p>Just two words created a publicity nightmare for fast-food giant Wendy’s: <a href="https://theconversation.com/whats-dynamic-pricing-an-operations-management-scholar-explains-188265">dynamic pricing</a>.</p>
<p>In late February 2024, news broke that the chain was considering charging different prices at different times of day — a tactic usually associated with airlines and ride-hailing companies. As headlines like “<a href="https://www.foxbusiness.com/media/wendys-roll-uber-style-surge-pricing-menu-prices-fluctuating-based-demand">Wendy’s to roll out Uber-style surge-pricing</a>” flooded the news, #BoycottWendys trended on social media. Wendy’s rival Burger King quickly took advantage of the news with a “<a href="https://www.bk.com/terms">No urge to surge</a>” promotion.</p>
<p>The backlash put Wendy’s on the defensive.</p>
<p>Within days, Wendy’s said that <a href="https://www.wendys.com/blog/wendys-digital-news-update">it never intended to raise prices</a> at times of peak demand, Instead, it only intended to lower prices when store traffic was slow. It also announced a monthlong $1 burger deal that observers were <a href="https://www.foodandwine.com/wendys-march-madness-burger-deals-8604311">quick to connect</a> to the pricing fiasco. </p>
<p>It looked like a classic PR disaster – and as a <a href="https://scholar.google.com/citations?user=N1Fxik0AAAAJ&hl=en">professor of marketing</a>, I couldn’t turn away. How did this all go wrong?</p>
<h2>Divergent stakeholder interests, with a side of fries</h2>
<p>I suspect this burger brouhaha came down to a classic case of investors’ interests colliding with those of consumers.</p>
<p>The whole mess seems to have started on Feb. 15, 2024, when Wendy’s <a href="https://www.irwendys.com/news/news-details/2024/THE-WENDYS-COMPANY-REPORTS-FOURTH-QUARTER-AND-FULL-YEAR-2023-RESULTS/default.aspx">released its fourth-quarter earnings</a> and held a <a href="https://www.irwendys.com/events-and-presentations/event-details/2024/Preliminary-Date-Q4-2023-The-Wendys-Company-Earnings-2024-uusGd41PbC/default.aspx">conference call with investors</a>. </p>
<p>That day, Wendy’s announced a multimillion-dollar investment to roll out digital menu boards across all its U.S. stores. This investment would support “dynamic pricing and menu offerings,” according to a slide from the conference call. While presenting the slides, Wendy’s chief executive officer <a href="https://www.fool.com/earnings/call-transcripts/2024/02/15/wendys-wen-q4-2023-earnings-call-transcript/">said</a>, “Beginning as early as 2025, we will begin testing more enhanced features like dynamic pricing and day-part offerings along with AI-enabled dynamic pricing menu changes and suggestive selling.”</p>
<p>While some people argue that Wendy’s may have never meant to hike prices at all, I’m skeptical. Of course there’s nothing wrong with raising prices – companies would go out of business if they didn’t. The issue is how to frame the price hike. For example, Starbucks increased prices <a href="https://www.cbsnews.com/news/starbucks-prices-inflation/">three times</a> in just four months between October 2021 and February 2022. It blamed the hikes on inflation and didn’t face much of a backlash.</p>
<p>But no matter how you frame it, raising prices is a company action that benefits investors but not consumers. And while the dining public has been outraged by the whole affair, Wendy’s investors seem relatively unconcerned. Wendy’s stock price has remained <a href="https://finance.yahoo.com/quote/WEN/history">relatively stable</a> since Feb. 26, when the media picked up the story and boycott calls commenced.</p>
<figure>
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<figcaption><span class="caption">It’s a bad sign when your company’s pricing controversy makes it onto “Good Morning America.”</span></figcaption>
</figure>
<p>This asymmetry makes sense and is well documented in <a href="https://doi.org/10.1016/j.ijresmar.2018.06.001">academic research</a>. On average, investors are motivated by a company’s profits. Moves to raise revenue, such as hiking prices, make them happy. That’s why companies often announce those increases well before they put them into effect – not for the customers’ sake, but <a href="https://doi.org/10.1016/j.ijresmar.2018.06.001">for the investors’</a>.</p>
<p>Of course, higher prices feel different if you’re the one paying them. And consumers tend to believe sellers aren’t being fair when they set prices: They think sale prices are set much <a href="https://doi.org/10.1086/346244">higher than fair prices</a>, underestimate <a href="https://doi.org/10.1177/0092070304269953">the impact of inflation</a>, overattribute the cause of price increase to profit-seeking, and fail to consider company costs. Their backlash is both <a href="https://doi.org/10.1086/346244">economically rational and predictable</a>.</p>
<p>What also makes sense is Burger King trying to act like a typical rival – aiming to benefit from the backlash Wendy’s received.</p>
<h2>A needless food fight</h2>
<p>In my opinion, Wendy’s early announcement of its dynamic pricing was a serious mistake. Remember that its CEO said that Wendy’s would introduce dynamic pricing “as early as 2025.” That means it announced the news at least nine months before customers needed to hear about it. I assume Wendy’s did this because it wanted to impress its shareholders and boost its stock price.</p>
<p>In fact, the cynic in me wonders whether this incident was “staged” – that is, Wendy’s was testing the waters to see whether they could preannounce the price hike to impress shareholders, and then not actually implement the changes. </p>
<p>Indeed, research has shown that <a href="https://doi.org/10.1016/j.ijresmar.2018.06.001">companies often preannounce price increases</a> a few days to several months in advance, and may withdraw some of these preannouncements if they realize that the price hike may cause more damage than increase in revenue.</p>
<p>But either way, announcing a decision nine months in advance seems premature. And I haven’t seen any evidence that Wendy’s planned for customers to hear the news along with investors.</p>
<p>My advice is for executives to be astute in communicating price increases so consumers take the company’s perspective and don’t <a href="https://doi.org/10.1177/0092070304269953">view the hike as unfair</a>. That may mean avoiding terms that elicit hostile reactions, or <a href="https://doi.org/10.1016/j.ijresmar.2018.06.001">providing explanations</a> for their decisions, such as an increase in the cost of ingredients or employee salaries. Consumers who understand the reasons for a price hike may be more accommodating.</p>
<p>Interestingly, even after the Wendy’s wobble, other restaurants are reportedly <a href="https://www.wsj.com/business/hospitality/surge-pricing-is-coming-to-more-menus-near-you-66a245f3">considering increasing menu prices</a> during hours of high demand. I hope they learn from Wendy’s error and frame their price increases strategically.</p>
<p>Otherwise, they shouldn’t be surprised when competitors eat their lunch.</p><img src="https://counter.theconversation.com/content/225610/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Vivek Astvansh does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Sometimes, good news for investors is bad for consumers.Vivek Astvansh, Associate Professor of Quantitative Marketing and Analytics, McGill UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2240442024-03-13T12:28:20Z2024-03-13T12:28:20ZRobo-advisers are here – the pros and cons of using AI in investing<figure><img src="https://images.theconversation.com/files/580679/original/file-20240308-28-55toe3.jpg?ixlib=rb-1.1.0&rect=59%2C0%2C7951%2C4345&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">shutterstock</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/smart-businessman-hand-close-nft-financial-2074315681">thinkhubstudio/Shutterstock</a></span></figcaption></figure><p>Artificial intelligence (AI) is <a href="https://www.ft.com/content/6766a3bd-1cec-4e88-9f51-5ed93b39528c">shaking up</a> the way we invest our money. Gone are the days when complex tools were reserved for the wealthy or financial institutions. </p>
<p>AI-powered <a href="https://www.investopedia.com/best-robo-advisors-4693125">robo-advisers</a>, such as <a href="https://www.betterment.com/">Betterment</a> and <a href="https://investor.vanguard.com/advice/robo-advisor">Vanguard</a> in the US, and finance app <a href="https://www.revolut.com/en-HU/news/revolut_launches_robo_advisor_in_eea_to_automate_investing/">Revolut</a> in Europe, are now democratising investment. These tools are making professional financial insight and portfolio management available to everyone. But although there are plenty of advantages to using robo-advisers, there are downsides too. </p>
<p>Since the 1990s, <a href="https://arxiv.org/pdf/2104.05413.pdf">AI’s role</a> in this sector was typically confined to algorithmic trading and quantitative strategies. These rely on advanced mathematical models to predict stock market movements and trade at lightning speed, far exceeding the capabilities of human traders. </p>
<p>But that laid the groundwork for more advanced applications. And AI has now <a href="https://www.weforum.org/agenda/2017/09/robots-could-plan-your-retirement-financial-advice/">evolved</a> to handle data analysis, predict trends and personalise investment strategies. Unlike traditional investment tools, robo-advisers are more <a href="https://www2.deloitte.com/us/en/insights/industry/financial-services/financial-services-industry-predictions/2023/democratize-financial-services.html">accessible</a>, making them ideal for a new generation of investors. </p>
<p>A survey published in 2023 showed that there has been a particular <a href="https://www.investopedia.com/study-affluent-millennials-are-warming-up-to-robo-advisors-4770577">surge</a> in young people using robo-advisers. Some 31% of gen Zs (born after 2000) and 20% of millennials (born between 1980 and 2000) are using robo-advisers. </p>
<p>Another <a href="https://www.magnifymoney.com/news/robo-advisor-survey/">survey</a> from 2022 found that 63% of US consumers were open to using a robo-adviser to manage their investments. In fact, projections indicate that assets managed by robo-advisers will reach <a href="https://www.statista.com/outlook/fmo/wealth-management/digital-investment/robo-advisors/worldwide">US$1.8 trillion</a> (£1.4 trillion) globally in 2024. </p>
<p>This trend reflects not only changing investor preferences but also how the financial industry is adapting to technology.</p>
<h2>Tailored advice</h2>
<p>AI can <a href="https://www.ftadviser.com/your-industry/2023/07/17/can-generative-ai-truly-replace-a-financial-adviser/">tailor</a> investment advice to a person’s preferences. For example, for investors who want to prioritise ethical investing in environmental, social and governance stocks, AI can tailor a strategy without the need to pay for a financial adviser. </p>
<p>AI can <a href="https://www.sciencedirect.com/science/article/pii/S0275531923000077">analyse</a> news and social media to understand market trends and predict potential movements, offering insights into potential market movements. Portfolios built by robo-advisers may also be <a href="https://onlinelibrary.wiley.com/doi/full/10.1111/poms.14029">more resilient during market downturns</a>, effectively managing risk and protecting investments.</p>
<p>Robo-advisers can offer certain <a href="https://www.ft.com/content/6694bb4a-a585-496a-b7f3-d1841984f9b3">features</a> like reduced investment account minimums and lower fees, which make services more accessible than in the past. Other features such as <a href="https://corporatefinanceinstitute.com/resources/wealth-management/robo-advisors/">tax-loss harvesting</a>, a strategy of selling assets at a loss to reduce taxes, and <a href="https://corporatefinanceinstitute.com/resources/wealth-management/robo-advisors/">periodic rebalancing</a>, which involves adjusting the proportions of different types of investments, make professional investment advice accessible to a wider audience.</p>
<p>These types of innovations are particularly beneficial for people in underserved communities or with limited financial resources. This has the <a href="https://www.brookings.edu/articles/robo-advice-an-effective-tool-to-reduce-inequalities/">potential</a> to improve financial literacy through empowering people to make better financial decisions. </p>
<h2>AI’s multifaced role</h2>
<p>AI’s impact on investment fund management goes way beyond robo-advisers, however. Fund managers are using AI algorithms in a variety of ways. </p>
<p>In terms of data analysis, AI can sift through vast amounts of market data and historical trends to identify <a href="https://doi.org/10.1016/j.frl.2022.102941">ideal assets</a> and adjust portfolios in real time as markets fluctuate. AI is also used to <a href="https://www.sciencedirect.com/science/article/pii/S0378426621002466">improve risk management</a> by analysing complex data and making sophisticated decisions. </p>
<p>By using AI in this way, <a href="https://doi.org/10.1016/j.jedc.2022.104438">traders</a> can react and make faster decisions, which maximises efficiency. Other mundane tasks like <a href="https://ieeexplore.ieee.org/document/9315986">compliance monitoring</a> are increasingly automated by AI. This frees fund managers up to focus on more strategic decisions. </p>
<figure class="align-center ">
<img alt="A close up of a pair of hands holding a mobile phone with pound coins superimposed onto the foreground." src="https://images.theconversation.com/files/580727/original/file-20240308-24-xg6lqw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/580727/original/file-20240308-24-xg6lqw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=350&fit=crop&dpr=1 600w, https://images.theconversation.com/files/580727/original/file-20240308-24-xg6lqw.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=350&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/580727/original/file-20240308-24-xg6lqw.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=350&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/580727/original/file-20240308-24-xg6lqw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=440&fit=crop&dpr=1 754w, https://images.theconversation.com/files/580727/original/file-20240308-24-xg6lqw.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=440&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/580727/original/file-20240308-24-xg6lqw.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=440&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">While AI is democratising investing, that comes with challenges.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/double-exposure-uk-stock-graphic-close-792232471">Loch Earn/Shutterstock</a></span>
</figcaption>
</figure>
<h2>What are the disadvantages?</h2>
<p>One of the biggest concerns regarding AI in this sector is based on how having easy access to advanced investment tools may lead some people to overestimate their abilities and take too many financial risks. The sophisticated algorithms used by robo-investors can be opaque, which makes it <a href="https://www.lseg.com/en/insights/data-analytics/how-might-ai-impact-investment-management">difficult</a> for some investors to fully understand the potential risks involved. </p>
<p>Another concern is how the evolution of robo-advisers has outpaced the implementation of <a href="https://fastercapital.com/content/Regulatory-Compliance-in-B2B-Robo-Advisors--Navigating-the-Legal-Landscape.html#Challenges-and-Opportunities">laws and regulations</a>. That could expose investors to financial risks and a lack of legal protection. This is an issue yet to be adequately addressed by financial authorities. </p>
<p>Looking ahead, the future of investment probably lies in a hybrid model. Combining the precision and efficiency of AI with the experience and oversight of human investors is vital.</p>
<p>Ensuring that information is accessible and transparent will be crucial for <a href="https://www.turing.ac.uk/sites/default/files/2021-06/ati_ai_in_financial_services_lores.pdf">fostering</a> a more informed and responsible investment landscape. By harnessing the power of AI responsibly, we can create a financial future that benefits everyone.</p><img src="https://counter.theconversation.com/content/224044/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Robo-advisers and AI are making investing accessible to everyone, but there are also risks to consider.Laurence Jones, Lecturer in Finance, Bangor UniversityHeather He, Lecturer in Data Science/Analytics, Bangor UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2170552024-03-07T13:28:59Z2024-03-07T13:28:59ZHow Florida’s home insurance market became so dysfunctional, so fast<p>Imagine saving for years to buy your dream house, only to have <a href="https://www.insurancebusinessmag.com/us/news/property/homeowners-to-face-huge-premium-jump-as-insurers-seek-50-premium-hike-476805.aspx">surging property insurance costs</a> keep homeownership forever out of reach. </p>
<p>This is a common problem in Florida, where average insurance premiums cost homeowners an eye-watering <a href="https://www.newsnationnow.com/business/your-money/florida-home-insurance-prices">US$6,000 a year</a>. That’s <a href="https://www.npr.org/2023/10/26/1208590263/florida-homeowners-insurance-soaring-expensive">more than triple</a> the national average and about three times what Floridians paid on average for insurance premiums in 2018. </p>
<p>What’s more, several major insurance carriers have <a href="https://www.pnj.com/story/money/2023/07/12/florida-insurance-crisis-farmers-insurance-home-insurance-what-to-know/70407302007/">left the state</a> over the past year, leaving residents with <a href="https://www.bloomberg.com/news/articles/2023-08-10/hurricane-season-2023-florida-s-biggest-property-insurer-is-nonprofit-citizens?sref=Hjm5biAW">limited alternatives</a>.</p>
<p>As <a href="https://www.ju.edu/directory/latisha-nixon-jones.php">a law professor</a> who specializes in disaster preparedness and resilience, I think it’s important to understand what’s driving costs higher – not least because other states could soon face a similar predicament. </p>
<p>Three primary factors are driving the insurance challenge. First, natural disasters are becoming more common and costly. Second, <a href="https://www.investopedia.com/terms/r/reinsurance.asp">the price of reinsurance</a> is skyrocketing. And finally, Florida’s litigation-friendly environment compounds the issue by making it easy for customers to sue their insurers.</p>
<h2>Disasters, like sea levels, are on the rise</h2>
<p>With its location on the beautiful-yet-hurricane-prone Gulf of Mexico, Florida has long been vulnerable to the elements. Natural disasters cost the state <a href="https://edis.ifas.ufl.edu/publication/FE1075">$5 billion to $10 billion</a> every year, the federal government estimated in 2018, the last year for which data was available.</p>
<p>Yet that likely understates the case today, since disasters have only become bigger, more common and more expensive since then. For example, climate change has <a href="https://abcnews.go.com/US/climate-change-making-atlantic-hurricanes-strengthen-weak-major/story.">made oceans warmer</a>, which <a href="https://doi.org/10.1038/s41598-023-42669-y">research suggests</a> fuels stronger, more intense hurricanes. </p>
<p>As a result, Florida has experienced billion-dollar disasters an average of <a href="https://www.ncei.noaa.gov/access/billions/state-summary/FL">four times annually</a> over the past five years – up from about one each year in the 1980s.</p>
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<p>This surge in disasters doesn’t just put lives at risk; it also wreaks havoc with the insurance market, as carriers are inundated with claims from one catastrophe after another. This makes it harder for them to turn a profit or obtain reinsurance to protect their stakeholders.</p>
<h2>Why reinsurance matters</h2>
<p>Insurance companies, in essence, make money two ways. First, they <a href="https://doi.org/10.1038/s41562-021-01121-9">pool risk</a> among policyholders. Risk-pooling is the practice of taking similarly situated individuals or properties, grouping them together, and charging similar prices for insurance since they face the same risk.</p>
<p>Second, they reduce risk by acquiring reinsurance. Reinsurance acts as a safeguard for insurance companies – it’s essentially insurance for the insurers. Reinsurers pledge to cover a specified portion or type of insurance claim – for instance, catastrophic hurricanes – which provides a layer of financial protection.</p>
<p>The new era of climate disasters has thrown a wrench into the process. Reinsurance companies, grappling with a surge in claims due to more frequent and severe disasters, have found themselves forced to <a href="https://www.law.com/dailybusinessreview/2023/07/12/floridas-critical-reinsurance-market-improves-but-at-a-price/?slreturn=20231012224549">raise their premiums</a> for insurance carriers. Carriers, in turn, have passed the burden to policyholders.</p>
<p>To try to navigate these challenges, some companies have chosen to limit coverage for specific types of damage. For example, some insurance companies in Florida will no longer offer hurricane or flood coverage. And in extreme cases, insurance companies have withdrawn entirely from the state. </p>
<p>Understanding this complex relationship between insurers, reinsurers and policyholders is key to understanding the broader implications of the <a href="https://www.fox13news.com/news/florida-home-insurance-crisis-cost-price-premium-institute-rates">Florida insurance crisis</a>. It underscores the urgent need for comprehensive solutions and collaborative efforts to address evolving challenges in the insurance ecosystem.</p>
<h2>Learning from Florida … one way or another</h2>
<p>Florida isn’t taking all this sitting down. In December 2022, state lawmakers responded to growing property market instability by passing <a href="https://www.flsenate.gov/Session/Bill/2022A/2A">Senate Bill 2A</a>, a package of insurance reforms. </p>
<p>One major part was a rule change designed to discourage policyholders from suing their insurers. Previously, Florida law let insured individuals recover attorney fees if they secured any amount through litigation against their insurer. </p>
<p>The idea is that making this change will discourage needless lawsuits. However, my research as an <a href="https://engagedscholarship.csuohio.edu/clevstlrev/vol71/iss3/5/">environmental justice professor</a> shows that attempts to exclude attorneys from the negotiation process often lead to more expensive litigation and less access to justice.</p>
<p>The bill also restricts <a href="https://www.myfloridacfo.com/docs-sf/insurance-consumer-advocate-libraries/ica-documents/aob-consumer-protection-tips-brochure.pdf?sfvrsn=690bdde6_5">assignment of benefits</a>, a mechanism that permits third-party entities like roofing companies to negotiate with insurance companies on behalf of Florida residents. While assignment of benefits <a href="https://www.myfloridacfo.com/division/consumers/consumerprotections/assignmentofbenefits">increased advocacy</a>, it was also linked to skyrocketing claims costs.</p>
<p>The balancing act between providing ample opportunities and containing costs has <a href="https://floridaphoenix.com/2023/10/13/advocates-hailed-a-new-law-to-help-stabilize-fls-housing-crisis-but-implementation-has-been-rocky/">sparked debate</a> among justice advocates. Florida’s legislative response reflects an ongoing effort to strike an equilibrium, ensuring fairness and accessibility while addressing the challenges faced by both insurers and policyholders.</p>
<p>Florida’s actions to address the property insurance crisis raise a critical question: Will the state serve as a blueprint for disaster-prone regions, or act as a cautionary tale? After all, states such as California and Louisiana have also seen insurance companies withdrawing from their markets. Will their legislatures draw inspiration from Florida’s? </p>
<p>For now, it’s too early to tell: The policies have only been in place since the latest round of hurricanes. But in the meantime, the rest of the U.S. will be watching – especially policymakers who care about resilience, and those who want to make sure vulnerable populations don’t get the short end of the stick.</p><img src="https://counter.theconversation.com/content/217055/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Latisha Nixon-Jones does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Florida home insurance premiums have shot up threefold in just five years.Latisha Nixon-Jones, Associate Professor of Law, Jacksonville UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2235982024-02-16T13:19:53Z2024-02-16T13:19:53ZMexico is suing US gun-makers for arming its gangs − and a US court could award billions in damages<figure><img src="https://images.theconversation.com/files/575682/original/file-20240214-30-2tfucu.jpg?ixlib=rb-1.1.0&rect=45%2C13%2C4315%2C2857&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">A sign in Laredo, Texas, reminds motorists not to smuggle guns into Mexico.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/sign-warns-motorists-not-to-smuggle-weapons-or-ammunitions-news-photo/91474155">Gilles Mingasson/Getty Images</a></span></figcaption></figure><p>The government of Mexico is <a href="https://www.forbes.com/sites/siladityaray/2024/01/23/us-appeals-court-allows-mexicos-10-billion-lawsuit-against-us-gunmakers-to-proceed/?sh=7f16abcb3071">suing U.S. gun-makers</a> for their role in facilitating cross-border gun trafficking that has <a href="https://stopusarmstomexico.org/invisible-weapons-indelible-pain/">supercharged violent crime</a> in Mexico.</p>
<p><a href="https://www.courthousenews.com/wp-content/uploads/2021/08/mexico-smith-wesson-complaint.pdf">The lawsuit seeks US$10 billion</a> in damages and a court order to force the companies named in the lawsuit – including Smith & Wesson, Colt, Glock, Beretta and Ruger – to change the way they do business. In January, a federal appeals court in Boston <a href="https://tlblog.org/first-circuit-allows-some-of-mexicos-claims-against-gun-manufacturer-to-move-forward/">decided</a> that the industry’s immunity shield, which so far has protected gun-makers from civil liability, does not apply to Mexico’s lawsuit.</p>
<p>As <a href="https://scholar.google.com/citations?user=yQUI6yEAAAAJ&hl=en">a legal scholar</a> who has <a href="https://press.umich.edu/Books/S/Suing-the-Gun-Industry2">analyzed lawsuits</a> against the gun industry for more than 25 years, I believe this decision to allow Mexico’s lawsuit to proceed could be a game changer. To understand why, let’s begin with some background about the federal law that protects the gun industry from civil lawsuits.</p>
<h2>Gun industry immunity</h2>
<p>In 2005, Congress passed the <a href="https://www.law.cornell.edu/uscode/text/15/chapter-105">Protection of Lawful Commerce in Arms Act</a>, which prohibits lawsuits against firearm manufacturers and sellers for injuries arising from criminal misuse of a gun.</p>
<p>Importantly, <a href="https://dx.doi.org/10.2139/ssrn.4357413">there are limits</a> to this immunity shield. For example, it <a href="https://www.law.cornell.edu/uscode/text/15/7903">doesn’t protect</a> a manufacturer or seller who “knowingly violated a State or Federal statute <a href="https://theconversation.com/sandy-hook-lawsuit-court-victory-opens-crack-in-gun-maker-immunity-shield-113636">applicable to the sale or marketing</a>” of a firearm. <a href="https://www.courthousenews.com/wp-content/uploads/2021/08/mexico-smith-wesson-complaint.pdf">Mexico’s lawsuit</a> alleges that U.S. gun-makers aided and abetted illegal weapons sales to gun traffickers in violation of federal law.</p>
<h2>Mexico’s allegations</h2>
<p>Mexico claims that U.S. gun-makers engaged in “<a href="https://www.courthousenews.com/wp-content/uploads/2021/08/mexico-smith-wesson-complaint">deliberate efforts to create and maintain an illegal market for their weapons in Mexico</a>.”</p>
<p>According to the lawsuit, the manufacturers intentionally design their weapons to be attractive to criminal organizations in Mexico by including features such as easy conversion to fully automatic fire, compatibility with high-capacity magazines and removable serial numbers.</p>
<p>Mexico also points to industry marketing that promises buyers a tactical military experience for civilians. And Mexico alleges that manufacturers distribute their products to dealers whom they know serve as transit points for illegal gunrunning through illegal <a href="https://www.nssf.org/articles/beware-the-straw-purchase/">straw sales</a>, unlicensed sales at gun shows and online, and off-book sales disguised as inventory theft.</p>
<p>In short, Mexico claims that illegal gun trafficking isn’t just an unwanted byproduct of the industry’s design choices, marketing campaigns and distribution practices. Instead, according to the lawsuit, feeding demand for illegal weapons is central to the industry’s business model.</p>
<p>In response, <a href="https://perma.cc/RRT6-PVDZ">the gun-makers insist</a> that Mexico’s attempt to hold them legally responsible for the criminal activity of others is precisely the type of lawsuit that the federal immunity shield was designed to block. They argue that merely selling a product that someone later uses in a crime does not amount to a violation of federal law that would deprive a manufacturer of immunity. Additionally, the gun-makers assert that, even if Mexico’s lawsuit were not barred by the immunity law, they have no legal duty to prevent criminal violence that occurs outside the U.S. </p>
<h2>The next legal steps</h2>
<p>In January 2024, a federal appeals court in Massachusetts decided that Mexico’s allegations, if true, would deprive the gun-makers of immunity, and it <a href="https://tlblog.org/first-circuit-allows-some-of-mexicos-claims-against-gun-manufacturer-to-move-forward/">sent the case back to trial court</a>. Mexico now needs to produce evidence to prove its allegations that the industry is not only aware of but actively facilitates illegal gun trafficking. </p>
<p>Additionally, to win, Mexico will need to convince a Boston jury that the manufacturers’ design choices, marketing campaigns and distribution practices are closely enough connected to street crime in Mexico to consider the companies responsible for the problem. This is known as “<a href="https://www.law.cornell.edu/wex/proximate_cause">proximate cause</a>” in the law.</p>
<p>For their part, the gun-makers have asked the trial judge to <a href="https://www.reuters.com/world/us/gun-makers-ask-us-supreme-court-bar-mexicos-lawsuit-2024-02-09">put the case on hold</a> while they pursue an appeal to the U.S. Supreme Court. However, <a href="https://www.nytimes.com/2019/11/12/us/politics/supreme-court-sandy-hook-remington.html">the Supreme Court has been reluctant</a> to weigh in on gun industry cases until they have reached their conclusion in the lower courts, where most of them <a href="https://casetext.com/case/ileto-v-glock-inc-2">are dismissed</a> and a few <a href="https://apnews.com/article/sandy-hook-school-shooting-remington-settlement-e53b95d398ee9b838afc06275a4df403">have settled</a>. </p>
<h2>High stakes for the industry</h2>
<p>If Mexico does win at trial, its demand for $10 billion in damages could drive several of the nation’s largest firearm manufacturers into <a href="https://www.epiqglobal.com/en-us/resource-center/articles/when-mass-tort-meets-bankruptcy">bankruptcy</a>. Even if the case were to settle for much less, a victory by Mexico would provide a template for a wave of future lawsuits that could change the way the gun industry operates.</p>
<p>Similar theories about dangerous product designs, irresponsible marketing and reckless distribution practices in opioid litigation have transformed the pharmaceutical industry. Civil lawsuits have forced the drugmakers to <a href="https://www.nytimes.com/2020/12/08/business/mckinsey-opioids-oxycontin.html">take public responsibility</a> for a nationwide health crisis, <a href="https://doi.org/10.1007/s11606-021-06799-1">overhaul the way they do business</a> and <a href="https://www.opioidsettlementtracker.com/globalsettlementtracker">pay billions of dollars</a> in judgments and settlements.</p>
<p>Mexico’s lawsuit holds out the prospect that the gun industry could be next.</p><img src="https://counter.theconversation.com/content/223598/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Timothy D. Lytton has provided expert consulting services to law firms representing gun violence victims.</span></em></p>Mexico claims that US firearm manufacturers are fueling illegal cross-border gun trafficking and violent crime abroad.Timothy D. Lytton, Regents' Professor & Professor of Law, Georgia State UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2228832024-02-08T03:40:45Z2024-02-08T03:40:45ZSolving the supermarket: why Coles just hired US defence contractor Palantir<p>What does the Australian supermarket chain Coles have in common with the CIA? As of last week, both are clients of <a href="https://www.palantir.com/about/">Palantir Technologies</a>, a US tech company “focused on creating the world’s best user experience for working with data”.</p>
<p>In a three-year deal, Coles plans to deploy Palantir’s tools across more than 840 supermarkets to <a href="https://www.afr.com/world/north-america/coles-brings-in-pentagon-s-palantir-for-cost-cutting-20240202-p5f1tq">cut costs</a> and “redefine how we think about our workforce”. </p>
<p>The tech company, named after magical seeing stones from the Lord of the Rings, offers comprehensive software that collects, organises and visualises a client’s data in “<a href="https://hcommons.org/deposits/item/hc:34683/">one platform to rule them all</a>”. For an intelligence agency, Palantir’s tools might help <a href="https://www.youtube.com/watch?v=QIT4hv4tnek">identify a terror cell</a> through phone calls and financial transactions; in a healthcare organisation, they might find ways to save money by <a href="https://www.youtube.com/watch?v=tljWVIUbulg">shortening emergency department stays</a>.</p>
<p>For Coles, the <a href="https://www.businesswire.com/news/home/20240201306532/en/Palantir-Partners-with-One-of-Australia%E2%80%99s-Leading-Retailers">goal</a> is to “optimise its workforce” by analysing “over 10 billion rows of data, comprising each store, team member, shift and allocation across all intervals in a day, every day”. </p>
<p>The announcement is <a href="https://www.itnews.com.au/news/coles-to-run-palantir-analytics-suite-across-its-supermarkets-604698">linked</a> to Coles’ plan to save a billion dollars over the next four years, and follows a 2019 <a href="https://news.microsoft.com/en-au/features/coles-takes-trip-down-the-aisles-with-microsoft/">big data deal with Microsoft</a>, an effort to build <a href="https://www.afr.com/companies/retail/coles-faces-ocado-delivery-and-cost-blowout-20230818-p5dxik">robotic delivery centres</a>, and the introduction of <a href="https://www.news.com.au/finance/business/retail/experts-warn-about-customer-privacy-after-drastic-security-moves-by-supermarkets/news-story/66e0ee85491eacf49fe18e30ee49197e">customer-tracking cameras</a> and other high-tech security measures.</p>
<h2>The Palantir process</h2>
<p>What might this Palantir–Coles collaboration look like in practice? </p>
<p>Typically, Palantir first sends out “forward-deployed engineers” to begin work with an organisation’s data, which is often messy, incomplete and fragmented. These engineers work with different branches and stakeholders to bring the data together into a single compatible whole called “<a href="https://www.palantir.com/explore/platforms/foundry/ontology/">The Ontology</a>”, which contains all the information deemed relevant. </p>
<p>Then the data can be fed into Palantir’s platforms – in this case, customisable software called <a href="https://www.palantir.com/platforms/foundry/">Foundry</a> and the <a href="https://www.palantir.com/platforms/aip/">Artificial Intelligence Platform</a>.</p>
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Read more:
<a href="https://theconversation.com/how-tech-billionaires-visions-of-human-nature-shape-our-world-144016">How tech billionaires' visions of human nature shape our world</a>
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<p>The platforms let clients explore the data through <a href="https://betterprogramming.pub/palantir-foundry-the-data-operating-system-that-is-not-talked-about-enough-9fb1c98a6b3d">dense but user-friendly interfaces</a> populated by columns and rows, boxes and lines. The Artificial Intelligence Platform also brings ChatGPT-like language models into the mix. </p>
<p>Users might compare earnings between branches, flag a store that seems inefficient, or identify an upcoming period of high spending based on historic patterns. </p>
<p>All of this probably seems banal, or even boring. It’s certainly less overtly problematic than Palantir’s work with governments and law enforcement, which has been slammed for enabling <a href="https://slate.com/technology/2020/09/palantir-ice-deportation-immigrant-surveillance-big-data.html">data-driven deportation</a> or <a href="https://theintercept.com/2021/01/30/lapd-palantir-data-driven-policing/">racist policing</a>, and seen the company described as “<a href="https://slate.com/technology/2020/01/evil-list-tech-companies-dangerous-amazon-facebook-google-palantir.html">evil</a>”. </p>
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Read more:
<a href="https://theconversation.com/high-tech-surveillance-amplifies-police-bias-and-overreach-140225">High-tech surveillance amplifies police bias and overreach</a>
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<p>However, the deal doesn’t need to be overtly malevolent to be meaningful. A technology of surveillance and control is quietly <a href="https://www.routledge.com/Countering-the-Cloud-Thinking-With-and-Against-Data-Infrastructures/Munn/p/book/9781032374154">becoming infrastructure</a>, moving from front-page news to something ticking along silently in the background. In this sense, Palantir shifts from the visible to the operational, imperceptibly but powerfully shaping the lives and livelihoods of Australian supermarket employees and shoppers. </p>
<h2>Optimising the workforce</h2>
<p>We can briefly sketch out three implications of the deal.</p>
<p>First, by inking this deal, Coles frames itself as future-forward and logistically driven. Groceries and grocery-store labour become more data, just like the hedge funds, healthcare, or immigrants that other Palantir clients coordinate. </p>
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Read more:
<a href="https://theconversation.com/coles-and-woolworths-are-moving-to-robot-warehouses-and-on-demand-labour-as-home-deliveries-soar-166556">Coles and Woolworths are moving to robot warehouses and on-demand labour as home deliveries soar</a>
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<p>Supermarkets have been under fire over the past year for <a href="https://www.theguardian.com/business/2023/may/22/australias-big-supermarkets-increased-profit-margins-through-pandemic-and-cost-of-living-crisis-analysis-reveals">increasing profit margins</a> through a pandemic and cost-of-living crisis, and accused of <a href="https://www.theguardian.com/business/2023/jun/05/coles-woolworths-court-accused-of-underpaying-workers">underpaying workers</a>. </p>
<p>The Palantir deal continues this extractive trajectory. Rather than paying workers more or passing savings onto customers, Coles has chosen to invest millions in technology that will “address workforce-related spend” as part of a <a href="https://theshout.com.au/national-liquor-news/coles-ceo-outlines-strategies-for-christmas-and-beyond/">larger effort to cut costs</a> by a billion dollars over the next four years. Food (and the labour needed to grow, pack and ship it) is transformed from a human need to an optimisation problem. </p>
<h2>A walled garden</h2>
<p>Second, dependence. As <a href="https://meson.press/books/ferocious-logics/">my own research found</a>, Palantir clients tend to enjoy the all-encompassing data and new features but also become dependent on them. Data mounts up; new servers are needed; licensing fees are high but must be paid. </p>
<p>Much like Apple or Amazon, Palantir’s services excel at creating “vendor lock-in”, a perfect walled garden which clients find hard to leave. This pattern suggests that, over the next three years, Coles will increasingly depend on Silicon Valley technology to understand and manage its own business. A company that sells a quarter of Australia’s groceries may become operationally reliant on a US tech titan.</p>
<h2>A way of seeing</h2>
<p>Finally, vision. What Palantir sells is fundamentally a way of seeing. Its dashboards promise <a href="https://meson.press/books/ferocious-logics/">a God’s eye view</a> that can stretch across an entire organisation or zoom in to granular detail to locate that “needle in the haystack” insight. </p>
<p>The claim is that this data-driven view is a shortcut to <a href="https://www.tandfonline.com/doi/abs/10.1080/1472586X.2014.887268">total knowledge</a>, a way to map every operation, reveal every important element, and identify every inefficiency. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/574260/original/file-20240208-23-vimnk3.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A complex diagram illustrating the Palantir 'ontology' and how it can be used in an organisation." src="https://images.theconversation.com/files/574260/original/file-20240208-23-vimnk3.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/574260/original/file-20240208-23-vimnk3.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=398&fit=crop&dpr=1 600w, https://images.theconversation.com/files/574260/original/file-20240208-23-vimnk3.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=398&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/574260/original/file-20240208-23-vimnk3.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=398&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/574260/original/file-20240208-23-vimnk3.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=500&fit=crop&dpr=1 754w, https://images.theconversation.com/files/574260/original/file-20240208-23-vimnk3.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=500&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/574260/original/file-20240208-23-vimnk3.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=500&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Palantir promises a ‘total view’ of an organisation that allows full control and optimal decision-making.</span>
<span class="attribution"><a class="source" href="https://blog.palantir.com/connecting-ai-to-decisions-with-the-palantir-ontology-c73f7b0a1a72">Palantir</a></span>
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<p>Yet the data inevitably excludes significant social, financial and environmental information. The sweat of workers struggling to pack at pace, the belt-tightening of consumers struggling to make ends meet, and the struggle of farmers to survive unexpected climate impacts will go untracked. </p>
<p>Such details never appear on the platform – and if they’re not data, they don’t matter. Will Palantir’s data-driven myopia translate to how Coles views its workers and customers? </p>
<p>By placing Palantir at the heart of its operations, Coles quietly smuggles in several key assumptions: that food is a commodity to be optimised, that paying for labor is a risk rather than a responsibility, and that data can capture everything of importance. At a time of <a href="https://www.aph.gov.au/Parliamentary_Business/Committees/House/Agriculture/FoodsecurityinAustrali/Report/Chapter_7_-_Food_insecurity">increased food insecurity</a>, Australians should strongly question whether this is the direction one of our major grocery providers should take.</p><img src="https://counter.theconversation.com/content/222883/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Luke Munn does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Coles plans to ‘optimise its workforce’ with big data and AI tools from a controversial tech company.Luke Munn, Research Fellow, Digital Cultures & Societies, The University of QueenslandLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2180282024-02-06T13:30:14Z2024-02-06T13:30:14ZDriving the best possible bargain now isn’t the best long-term strategy, according to game theory<figure><img src="https://images.theconversation.com/files/572022/original/file-20240129-15-8tbwf2.jpg?ixlib=rb-1.1.0&rect=40%2C10%2C6669%2C4456&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">There is such a thing as a win-win deal.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/photo/employee-people-at-modern-office-royalty-free-image/1302423098">nortonrsx/iStock via Getty Images Plus</a></span></figcaption></figure><p>Conventional wisdom says that you should never leave money on the table when negotiating. But research in my field suggests this could be exactly the wrong approach. </p>
<p>There’s <a href="https://hbr.org/2019/09/a-new-approach-to-contracts">mounting evidence</a> that a short-term win at the bargaining table can mean a loss in terms of overall trust and cooperation. That can leave everyone – including the “winner” – worse off.</p>
<p>As a former executive, I’ve managed large contracts as both a buyer and a seller. Now, as a <a href="https://haslam.utk.edu/people/profile/kate-vitasek">business professor</a>, I study these trading partner relationships, exploring what works in practice. My work supports what economic theorists and social scientists have been <a href="https://doi.org/10.1111/j.1745-493X.2008.00051.x">arguing for years</a>: The best results come when people collaborate to create long-term value instead of fighting for short-term wins.</p>
<h2>What game are you playing?</h2>
<p>Research into art, science and practice of collaborative approaches dates <a href="https://press.princeton.edu/books/paperback/9780691130613/theory-of-games-and-economic-behavior">back to the 1940s</a> when the mathematician John von Neumann and economist Oskar Morgenstern used mathematical analysis to model competition and cooperation in living things. </p>
<p>Interest in collaborative approaches grew when researchers John Nash, John C. Harsanyi and Reinhard Selten won a <a href="https://www.nobelprize.org/prizes/economic-sciences/1994/summary/">Nobel Memorial Prize in Economic Sciences</a> in 1994. Their work inspired academics around the world to delve deeper into what’s known as <a href="https://plato.stanford.edu/entries/game-theory/">game theory</a>.</p>
<p>Game theory is the study of the outcome of strategic interactions among decision makers. By using rigorous statistical methods, researchers can model what happens when people choose to cooperate or choose to take an aggressive, power-based approach to negotiation.</p>
<p>Many business leaders are taught strategies focusing on <a href="https://online.hbs.edu/blog/post/shift-of-power-balance-in-business">using their power</a> and playing to win – often at the other party’s expense. In game theory, this is known as a <a href="https://www.merriam-webster.com/dictionary/zero-sum">zero-sum game</a>, and it’s an easy trap to fall into.</p>
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<p>But not every game has a clear winner or loser. In economics, a win-win game is called a nonzero-sum game. In this sort of situation, people aren’t fighting over whose slice of a pie will be larger. They’re working to grow the pie for everyone.</p>
<p>A second dimension of game theory is whether people are playing a one-shot or a repeated game. Think of a one-shot game as like going to the flea market: You probably won’t see your trading partner again, so if you’re a jerk to them, the risk of facing the consequences is low.</p>
<p>An interesting twist uncovered by studying repeated games is that when one party uses their power in a negotiation, it creates the urge for the other party to retaliate. </p>
<p>The University of Michigan’s Robert Axelrod, a mathematician turned game theorist, coined this a <a href="https://ee.stanford.edu/%7Ehellman/Breakthrough/book/pdfs/axelrod.pdf">“tit-for-tat” strategy</a>. His research, perhaps best known in the book “<a href="https://www.hachettebookgroup.com/titles/robert-axelrod/the-evolution-of-cooperation/9780465005642">The Evolution of Cooperation</a>,” uses statistics to show that when individuals cooperate, they come out better than when they don’t. </p>
<h2>The case for leaving money on the table</h2>
<p>Another Nobel laureate, American economist <a href="https://www.nobelprize.org/prizes/economic-sciences/2009/williamson/facts/">Oliver Williamson</a>, has offered negotiating <a href="https://www.vestedway.com/unpacking-oliver/">advice</a> that most would call a paradigm shift – and some, a heresy. </p>
<p>That advice? Always leave money on the table – especially when you’ll be returning to the same “game” again. Why? According to Williamson, it sends a powerful signal of trustworthiness and credibility to one’s negotiating partner when someone consciously chooses to cooperate and build trust. </p>
<p>The opposite approach leads to lost trust and what the Nobel laureate economist Oliver Hart calls “shading.” This is <a href="https://scholar.harvard.edu/files/hart/files/contractsasreferencepointsqje.pdf">a retaliatory behavior</a> that happens when a party isn’t getting the outcome it expected from a deal and feels the other party is to blame. </p>
<p>Simply put, noncollaborative approaches cause distrust and create friction, which adds transaction costs and inefficiencies.</p>
<p>The million-dollar question is whether collaborative approaches work in practice. And from my vantage point as a scholar, the answer is yes. In fields as diverse as <a href="https://www.vestedway.com/island-health/">health care</a> to <a href="https://www.vestedway.com/intel/">high-tech</a>, I see growing real-world evidence backing up the insights of game theory.</p>
<p>The lessons are simple yet profound: Playing a game together to achieve mutual interests is better than playing exclusively with self-interest in mind.</p><img src="https://counter.theconversation.com/content/218028/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Kate Vitasek works for the University of Tennessee where she studies and teaches organizations how to create win-win collaborative contracts. Her original research between 2003 and 2009 was funded by the United States Air Force.</span></em></p>‘Winning’ in negotiations isn’t always the best approach.Kate Vitasek, Professor of supply chain management, University of TennesseeLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2213612024-01-26T13:21:23Z2024-01-26T13:21:23ZIn the market for a car? Soon you’ll be able to buy a Hyundai on Amazon − and only a Hyundai<figure><img src="https://images.theconversation.com/files/569890/original/file-20240117-23-ch3k11.jpg?ixlib=rb-1.1.0&rect=32%2C6%2C4290%2C2870&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Hyundai and Amazon announced a big partnership in November 2023.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/amazon-vice-president-of-worldwide-corporate-business-news-photo/1786517255">Robyn Beck/AFP/Getty Images</a></span></figcaption></figure><p>This is the year you can finally buy a car on Amazon. Well, one kind. Eventually.</p>
<p>On Nov. 16, 2023, at the Los Angeles Auto Show, Amazon and Hyundai <a href="https://www.reuters.com/business/retail-consumer/amazon-sell-hyundai-vehicles-online-starting-2024-2023-11-16/">made a big announcement</a>: Starting <a href="https://www.autonews.com/retail/hyundai-will-sell-cars-amazon-2024">sometime in 2024</a>, a new pilot program would let shoppers not only browse Hyundai cars on Amazon.com but pay for them, too.</p>
<p>As a <a href="https://scholar.google.com/citations?user=N1Fxik0AAAAJ&hl=en">professor of marketing</a>, I followed this story closely. “Customers will be able to buy new vehicles directly on Amazon,” an executive for the online retail giant said during the announcement, <a href="https://www.youtube.com/watch?v=Qzhq1tShTMc&t=943s&ab_channel=HyundaiUSA%5D">drawing cheers</a> from the audience. </p>
<p>But that framing may be just a tiny bit too simplistic, I feel. The real story is more complex – and more interesting.</p>
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<h2>A visit to the digital showroom</h2>
<p>It’s still not yet possible for a regular person to buy a car on Amazon – I know, because I’ve tried. Amazon and Hyundai have not publicly announced the date the pilot will start, and they haven’t responded to my inquiries.</p>
<p>But in the meantime, you can still go some way toward getting your new hybrid via the online store.</p>
<p>Since 2018, <a href="https://www.hyundainews.com/en-us/releases/2575">Hyundai has operated an “electronic showroom”</a> on Amazon, which lets shoppers browse cars – and almost, but not quite, buy them.</p>
<p>Right now, if you open Amazon.com and search “Hyundai,” you’ll see Hyundai’s webpage on Amazon.com as the first search result. You may click on this webpage, enter your ZIP code, and see new Hyundais that are for sale at nearby participating dealers.</p>
<p>The current system lets you select model, trim and color, choose between financing and leasing, and estimate a monthly payment.</p>
<p>But as of this date – Jan. 26, 2024 – you can’t actually check out with a car in your cart. Instead, once you’ve chosen the car you want, Amazon will direct you to a local dealer so you can choose financing/leasing and pay for the car at the dealership.</p>
<p>What’s more, Amazon says that pricing details on the site are for illustration, and that “final pricing details are determined at Hyundai dealership.” In other words, Amazon provides car buyers with information, but it doesn’t let them actually buy a car.</p>
<p>As I explain below, adding the ability to check out would be a big deal. And that’s what Amazon has said it’s about to do.</p>
<h2>But wait: Why can’t I buy a car on Amazon already? I can buy everything else, right?</h2>
<p>In the U.S., states <a href="https://www.wispolitics.com/wp-content/uploads/2021/08/State-Laws-on-Direct-Sales.pdf">generally require</a> legacy automakers to sell their cars through franchised dealers. Some states have allowed makers of electric vehicles, such as Tesla, to sell directly to consumers. </p>
<p>To comply with the franchise dealership laws, Amazon can’t list vehicles for sale the way it lists, say, books or socks. Instead, it needs to partner with dealers.</p>
<p>So, Amazon’s plan is to expand its digital Hyundai showroom to include <a href="https://www.cata.info/news-and-announcements/13282581">18 Hyundai dealers in five states</a>. That will allow nearby buyers to not only browse their current inventory but also pay for a new vehicle.</p>
<p>That is, while a buyer will pay for a vehicle and choose financing or leasing options at Amazon, a local dealer will be the seller of record, with Amazon serving as a <a href="https://www.cnbc.com/2023/11/16/amazon-to-let-dealers-sell-cars-on-its-site-starting-with-hyundai.html">sales channel</a>.</p>
<p>By honoring franchise laws while spreading awareness of dealers’ inventory and providing shoppers a convenient way to buy new vehicles, Amazon has been remarkably clever.</p>
<p>And while this pilot will start with Hyundai, it likely won’t stop there. Amazon has said that at some point – it hasn’t announced when – it plans to expand the program to include other auto brands.</p>
<h2>How 2024 will change how we buy cars – a little</h2>
<p>So, if reports are to be believed, at some point in 2024, Amazon will let customers check out a Hyundai just like they check out a bottle of shampoo.</p>
<p>This could make a lot of people happy. It would tap into a growing segment of buyers who trust Amazon, prefer to complete paperwork online and don’t want to haggle with a dealer. It could also draw more buyers to participating dealers, boosting their sales.</p>
<p>But I’m skeptical that this “prime” opportunity will transform things, at least at first.</p>
<p>To start, Amazon will sell only new Hyundais. Buyers who want to compare a Hyundai with a rival model will be out of luck. Amazon also won’t sell used vehicles or allow trade-ins. That means a lot of consumer demand would be left unmet.</p>
<p>Auto dealers might also hesitate to work with Amazon. For one thing, they would miss the chance to form relationships with buyers – and the opportunity to upsell them.</p>
<p>But either way, it may not be long before you can add toiletries, kitchen supplies and a new Hyundai to your Amazon cart.</p><img src="https://counter.theconversation.com/content/221361/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Vivek Astvansh does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The ‘everything store’ doesn’t offer every type of car, at least not yet. But a pilot program could still be a step toward online auto sales.Vivek Astvansh, Associate Professor of Quantitative Marketing and Analytics, McGill UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2217172024-01-25T13:18:54Z2024-01-25T13:18:54ZCould a court really order the destruction of ChatGPT? The New York Times thinks so, and it may be right<figure><img src="https://images.theconversation.com/files/571252/original/file-20240124-29-abie1d.jpg?ixlib=rb-1.1.0&rect=7%2C44%2C4985%2C3196&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Old media, meet new.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/in-this-photo-illustration-the-new-york-times-logo-is-seen-news-photo/1894336797">Idrees Abbas/SOPA Images/LightRocket via Getty Images</a></span></figcaption></figure><p>On Dec. 27, 2023, The New York Times <a href="https://nytco-assets.nytimes.com/2023/12/NYT_Complaint_Dec2023.pdf">filed a lawsuit</a> against OpenAI alleging that the company committed willful copyright infringement through its generative AI tool ChatGPT. The Times claimed both that ChatGPT was unlawfully trained on vast amounts of text from its articles and that ChatGPT’s output contained language directly taken from its articles.</p>
<p>To remedy this, the Times asked for more than just money: It asked a federal court to order the “destruction” of ChatGPT.</p>
<p>If granted, this request would force OpenAI to delete its trained large language models, such as GPT-4, as well as its training data, which would prevent the company from rebuilding its technology. </p>
<p>This prospect is alarming to the <a href="https://www.theverge.com/2023/11/6/23948386/chatgpt-active-user-count-openai-developer-conference">100 million people</a> who use ChatGPT every week. And it raises two questions that interest me as a <a href="https://law.indiana.edu/about/people/details/marinotti-jo%C3%A3o.html">law professor</a>. First, can a federal court actually order the destruction of ChatGPT? And second, if it can, will it?</p>
<h2>Destruction in the court</h2>
<p>The answer to the first question is yes. Under <a href="https://www.law.cornell.edu/uscode/text/17/503">copyright law</a>, courts do have the power to issue destruction orders. </p>
<p>To understand why, consider vinyl records. Their <a href="https://www.theverge.com/2023/3/10/23633605/vinyl-records-surpasses-cd-music-sales-us-riaa">resurging popularity</a> has attracted <a href="https://fortune.com/2023/04/06/punk-rock-fan-uncovers-six-year-scam-that-sold-1-6-million-worth-of-counterfeit-vinyl-records-to-collectors/">counterfeiters who sell pirated records</a>. </p>
<p>If a record label sues a counterfeiter for copyright infringement and wins, what happens to the counterfeiter’s inventory? What happens to the master and stamper disks used to mass-produce the counterfeits, and the machinery used to create those disks in the first place?</p>
<p>To address these questions, copyright law grants courts the power to destroy infringing goods and the equipment used to create them. From the law’s perspective, there’s no legal use for a pirated vinyl record. There’s also no legitimate reason for a counterfeiter to keep a pirated master disk. Letting them keep these items would only enable more lawbreaking.</p>
<p>So in some cases, destruction is the only logical legal solution. And if a court decides ChatGPT is like an infringing good or pirating equipment, it could order that it be destroyed. In its complaint, the Times offered arguments that ChatGPT fits both analogies.</p>
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<p>Copyright law has never been used to destroy AI models, but OpenAI shouldn’t take solace in this fact. The law has been increasingly open to the idea of targeting AI. </p>
<p>Consider the Federal Trade Commission’s recent use of <a href="https://www.jdsupra.com/legalnews/ftc-coppa-settlement-requires-deletion-1217192">algorithmic disgorgement</a> as an example. The FTC has forced companies <a href="https://www.dwt.com/-/media/files/blogs/privacy-and-security-blog/2022/03/weight-watchers-kurbo-stipulated-order.pdf">such as WeightWatchers</a> to delete not only unlawfully collected data but also the algorithms and AI models trained on such data. </p>
<h2>Why ChatGPT will likely live another day</h2>
<p>It seems to be only a matter of time before copyright law is used to order the destruction of AI models and datasets. But I don’t think that’s going to happen in this case. Instead, I see three more likely outcomes.</p>
<p>The first and most straightforward is that the two parties could settle. In the case of a successful settlement, which <a href="https://www.washingtonpost.com/technology/2024/01/04/nyt-ai-copyright-lawsuit-fair-use">may be likely</a>, the lawsuit would be dismissed and no destruction would be ordered.</p>
<p>The second is that the court might side with OpenAI, agreeing that ChatGPT is protected by the copyright doctrine of “<a href="https://www.copyright.gov/fair-use/#:%7E:text=Fair%20use%20is%20a%20legal,protected%20works%20in%20certain%20circumstances.">fair use</a>.” If OpenAI can argue that ChatGPT is transformative and that its service does not provide a substitute for The New York Times’ content, it just might win. </p>
<p>The third possibility is that OpenAI loses but the law saves ChatGPT anyway. Courts can order destruction only if two requirements are met: First, destruction must not prevent lawful activities, and second, it must be “<a href="https://casetext.com/case/hounddog-prods-llc-v-empire-film-grp-inc">the only remedy</a>” that could prevent infringement. </p>
<p>That means OpenAI could save ChatGPT by proving either that ChatGPT has legitimate, noninfringing uses or that destroying it isn’t necessary to prevent further copyright violations. </p>
<p>Both outcomes seem possible, but for the sake of argument, imagine that the first requirement for destruction is met. The court could conclude that, because of the articles in ChatGPT’s training data, all uses infringe on the Times’ copyrights – an argument put forth in <a href="https://copyrightalliance.org/current-ai-copyright-cases-part-1/">various other lawsuits</a> against generative AI companies. </p>
<p>In this scenario, the court would issue an injunction ordering OpenAI to stop infringing on copyrights. Would OpenAI violate this order? Probably not. A single counterfeiter in a shady warehouse might try to get away with that, but that’s less likely with a <a href="https://www.reuters.com/technology/openai-talks-raise-new-funding-100-bln-valuation-bloomberg-news-2023-12-22/">US$100 billion company</a>.</p>
<p>Instead, it might try to retrain its AI models without using articles from the Times, or it might develop other software guardrails to prevent further problems. With these possibilities in mind, OpenAI would likely succeed on the second requirement, and the court wouldn’t order the destruction of ChatGPT. </p>
<p>Given all of these hurdles, I think it’s extremely unlikely that any court would order OpenAI to destroy ChatGPT and its training data. But developers should know that courts do have the power to destroy unlawful AI, and they seem increasingly willing to use it.</p><img src="https://counter.theconversation.com/content/221717/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>João Marinotti does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>It may seem extreme, but there’s a reason the law allows it.João Marinotti, Associate Professor of Law, Indiana UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2209212024-01-23T17:16:13Z2024-01-23T17:16:13ZMeat and dairy industry giants hold the plant power behind many vegan brands<p>“Cast a vote for a greener planet, lower food bills, better health and kindness to animals. And you don’t even have to wait for a general election,” states the global <a href="https://veganuary.com/">Veganuary</a> campaign that encourages people to eat plant-based throughout January. </p>
<p>Transforming the world’s food system through large-scale reduction in meat production is essential if we are to preserve the planet’s natural ecosystems. But I don’t believe Veganuary’s solution is the way to do that. </p>
<p>While the switch to eating vegan food may seem empowering, it places an unrealistic pressure upon consumers to drive the shift to plant-based foods. By failing to highlight the state-backed corporate power at the heart of the food system, Veganuary arguably disempowers its followers. </p>
<p>In collaboration with Charis Davis, MA student in development studies at SOAS University of London, I researched the ownership structure and marketing strategies of several plant-based food companies. We found that many brands that are celebrated for sustainable plant-based food production are owned by giant meat and dairy companies implicated in allegations of large-scale environmental destruction. </p>
<p>Take <a href="https://vivera.com/">Vivera</a>, a pioneer in plant-based food. The Dutch company produces a wide range of vegetarian and vegan food, such as vegan hot dogs, plant salmon fillets, Tex Mex strips and vegan steak. The Vivera website suggests that consumers should buy vegan products to “make a huge difference for human health and the wellbeing of the planet” and states that “you can improve the world with every bite you take by eating plant-based foods”.</p>
<p>However, Vivera’s online marketing and product packaging do not highlight to consumers that it is owned by JBS, the world’s largest meat producer. Every day <a href="https://www.iatp.org/documents/behind-curtain-jbs-net-zero-pledge">JBS’s global operations slaughter</a> 8.7 million birds, 92,600 hogs and 42,700 head of cattle, according to the Institute for Agriculture and Trade Policy, a US-based thinktank.</p>
<p>JBS’s purchase of Vivera in 2021 does not signify a move away from meat. Shortly after acquiring the plant-based food company, it announced plans to <a href="https://www.reuters.com/business/brazils-jbs-buy-plant-based-meat-company-vivera-341-mln-euros-filing-2021-04-19/">invest US$130 million</a> in two of its US beef processing plants, to increase cattle slaughtering capacity by around 300,000 a year. <a href="https://www.globalwitness.org/en/blog/big-beef-watch/">JBS</a> is the <a href="https://www.google.com/url?q=https://www.nytimes.com/2023/12/20/climate/amazon-deforestation-jbs.html&source=gmail-imap&ust=1705593311000000&usg=AOvVaw2DSZS3UHuMbEwdH97G0uqM">biggest purchaser</a> of cattle from the Amazon, and therefore a major contributor to deforestation. </p>
<p>Another case in point is Alpro. The well-known manufacturer of vegan dairy products was bought by Danone in 2017 <a href="https://www.reuters.com/business/retail-consumer/danone-switch-dairy-factory-plant-based-alpro-diets-shift-2021-11-17/">in response to the growing popularity of milk alternatives</a>. But the language on <a href="https://www.alpro.com/uk/good-for-the-planet/">Alpro’s website</a>, for example “doing your bit with every bite or sip”, seems at odds with <a href="https://www.danone.com/brands/dairy-plant-based-products/strategy-and-key-figures.html">Danone’s claims</a> to be the number one leading brand worldwide for fresh dairy products.</p>
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<img alt="Row of cows in shed eating from pile of food." src="https://images.theconversation.com/files/570914/original/file-20240123-15-41cscq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/570914/original/file-20240123-15-41cscq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/570914/original/file-20240123-15-41cscq.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/570914/original/file-20240123-15-41cscq.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/570914/original/file-20240123-15-41cscq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/570914/original/file-20240123-15-41cscq.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/570914/original/file-20240123-15-41cscq.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Some vegan dairy products are owned by traditional dairy producers.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/cows-on-farm-winter-dairy-cowshed-1895146129">SGr/Shutterstock</a></span>
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<p>Cow’s milk creates three times more greenhouse gas emissions, uses ten times as much land and twice as much freshwater than plant-based alternatives, according to calculations by the website <a href="https://ourworldindata.org/environmental-impact-milks">Our World in Data</a>. </p>
<p>While Danone is expanding into the plant-based market, this does not imply a retreat from its core dairy product lines. As one <a href="https://www.fooddive.com/news/danones-big-runway-for-growth-is-built-on-brand-relevance-n-america-ce/593897/">food industry newsletter</a> put it: “The company … is looking to cross-promote its plant-based and traditional dairy beverages to households where individuals dabble in both categories.”</p>
<p>Both cases exemplify a broader trend where giant meat and dairy-based conglomerates, including JBS and Danone, are buying up smaller plant-based food companies as part of their corporate expansion strategies, according to a 2022 <a href="https://www.ipes-food.org/pages/politicsofprotein">report by IPES-Food</a>, a coalition of food system experts. </p>
<p>At present, meat and dairy producers are supported by mega state subsidies. In the EU and US, livestock farmers receive about <a href="https://www.cell.com/one-earth/fulltext/S2590-3322(23)00347-0">1,000 times more</a> subsidies than plant-based and cultivated meat producers. </p>
<p>Yet Veganuary’s apolitical stance ignores the support the meat and dairy industries receive from rich-country governments. While the planet desperately needs a major shift away from meat production and consumption, mega food corporations probably won’t be the ones to lead the transition to a greener planet. </p>
<h2>How to support plant-based food production</h2>
<p>A significant step change would require governments to do at least three things. First, they should impose hefty fines upon and potentially confiscate the land of corporations that damage the environment through meat and dairy production. </p>
<p>Second, governments should reorient subsidies into plant-based food production instead of supporting agro-industrial meat production. Third, they should expand public welfare to help cash-strapped consumers to buy plant-based products. </p>
<p>Such moves may seem farfetched, but in the context of the existential threat of climate breakdown, they are arguably quite moderate. However, success requires strong political leadership, something that has been sidelined by Veganuary’s celebration of consumer power. </p>
<p>We urgently need to channel the growing public awareness of the environmental damage wrought by the current food system, through voting and large-scale social movements, into a political force that paves a way forward for genuinely climate-friendly diets.</p>
<p><em>In response to the issues raised by this article, a spokesperson for Danone said:
“At Danone, we stand by the fact that both dairy and plant-based foods can contribute to a healthy sustainable diet. With many more people choosing to diversify their food choices, our portfolio allows us to provide a wide range of dairy and plant-based options to best meet their different needs and inspire healthy and sustainable choices in both categories.”</em></p>
<p><em>Veganuary and JBS were both approached for comment but no response has been received.</em></p>
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<img alt="Imagine weekly climate newsletter" src="https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=600&fit=crop&dpr=1 600w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=600&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=600&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=754&fit=crop&dpr=1 754w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=754&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=754&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<p><strong><em>Don’t have time to read about climate change as much as you’d like?</em></strong>
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<p class="fine-print"><em><span>Benjamin Selwyn does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>A sustainable food system starts with a fairer corporate structure. It won’t simply come from a shift in consumer habits during Veganuary’s push for people to eat a more plant-based diet. Here’s why.Benjamin Selwyn, Professor of International Relations and International Development, Department of International Relations, University of SussexLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2213932024-01-22T13:29:16Z2024-01-22T13:29:16Z‘No cash accepted’ signs are bad news for millions of unbanked Americans<p>How many people don’t have a bank account? And just how difficult has it become to live without one?</p>
<p>These questions are becoming increasingly important as <a href="https://www.chicagotribune.com/business/ct-biz-cashless-backlash-20180710-story.html">more businesses refuse to take cash</a> <a href="https://www.wmtw.com/article/cashless-businesses-south-portland-come-under-fire/40450267">in cities across the U.S.</a> People without bank accounts are shut out from stores and restaurants that refuse to accept cash.</p>
<p>As it happens, a lot of people are still “unbanked”: <a href="https://www.fdic.gov/analysis/household-survey/2021report.pdf">roughly 6 million</a> in the U.S., the latest data shows, which is about the population of Wisconsin. And outside of the U.S., <a href="https://www.worldbank.org/en/publication/globalfindex/Data">more than a billion people</a> don’t have a bank account.</p>
<p><a href="https://www.bu.edu/questrom/profile/jay-zagorsky/">I am a business school professor</a> <a href="https://blogs.bu.edu/zagorsky/">who researches society’s transition</a> from cash to electronic payments. I <a href="https://www.govtech.com/workforce/data-seattle-area-becoming-increasingly-cashless">recently visited Seattle and was amazed</a> by the mixed signals I saw in many storefronts. Numerous shops had one sign proudly proclaiming how welcoming and inclusive they were — next to another sign saying “No cash accepted.” This tells people without bank accounts that they aren’t welcome.</p>
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<iframe width="440" height="260" src="https://www.youtube.com/embed/xHIMhUNyrAs?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
<figcaption><span class="caption">Not far from Seattle, Mount Rainier National Park stopped accepting cash in May 2023.</span></figcaption>
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<h2>Why not have a bank account?</h2>
<p>Why would someone want to avoid using banks? Every two years, the Federal Deposit Insurance Corporation surveys households about their connections to the banking system and asks people without bank accounts <a href="https://www.fdic.gov/analysis/household-survey/2021execsum.pdf">why they don’t have one</a>. People can respond with multiple answers. In 2021, the top reason — with over 40% of respondents choosing it — was that they didn’t have enough money to meet the minimum balance.</p>
<p>This is consistent with data showing that poorer households are less likely to have bank accounts. About one-quarter of those earning less than $15,000 a year are unbanked, the FDIC found. Among those earning more than $75,000 a year, almost every person surveyed had some type of bank account.</p>
<p>The second- and third-most common answers show that some people are skeptical of banks. Roughly one-third of survey respondents agreed that “Avoiding a bank gives more privacy,” while another one-third said they simply “don’t trust banks.”</p>
<p>Rounding out the top five reasons were costs of dealing with a bank. More than one-quarter of respondents felt bank account fees were too high, and about the same proportion felt fees were too unpredictable.</p>
<p>While many middle-class and wealthy people don’t pay directly for their bank accounts, fees can be costly for those who can’t maintain a minimum balance. A recent Bankrate survey <a href="https://www.bankrate.com/banking/checking/checking-account-survey/">shows basic monthly service fees</a> range between $5 and $15. Beyond these steady fees, <a href="https://www.fdic.gov/resources/consumers/consumer-news/2021-12.html">banks earn $4 to $5</a> each time people withdraw cash from an ATM or need services <a href="https://www.bankrate.com/banking/checking/what-is-a-cashiers-check/#fees-for-a-cashier-s-check">like getting cashier’s checks</a>. Unexpected bills can result in <a href="https://www.bankrate.com/banking/checking/checking-account-survey/#overdraft-fees">overdraft fees of about $25</a> each time an account is overdrawn.</p>
<h2>Being unbanked in America</h2>
<p>The FDIC calls people without a bank account “<a href="https://www.pbs.org/newshour/show/millions-of-unbanked-americans-lack-adequate-access-to-financial-services">the unbanked</a>.” People with a bank account but who primarily rely on alternative services such as check cashing outlets are called “<a href="https://guides.loc.gov/fintech/21st-century/unbanked-underbanked">the underbanked</a>.”</p>
<p>The latest FDIC data shows almost 6 million unbanked and 19 million underbanked U.S. households. Given that <a href="https://www.census.gov/content/dam/Census/library/visualizations/time-series/demo/families-and-households/hh-6.pdf">2.5 people live in the average household</a>, this means there are over 15 million people living in a home with no connection to banks, and 48 million more in homes with only a tenuous connection to banks.</p>
<p>Combining the two figures means roughly one out of every five people in the U.S. has little or no connection to banks or other financial institutions. That can leave them shut out from stores, restaurants, transportation and medical providers that don’t take cash.</p>
<p>The true number of unbanked people is likely higher than the FDIC estimates. The questions on being banked or unbanked are supplemental questions <a href="https://www.census.gov/programs-surveys/cps/about.html">added to a survey</a> given to people at their homes. This means it misses homeless people, transients without a permanent address and <a href="https://www.dhs.gov/immigration-statistics/population-estimates/unauthorized-resident">undocumented immigrants</a>. </p>
<p>These people are likely unbanked because you need a verified address and a government-issued tax-identification number <a href="https://www.federalreserve.gov/boarddocs/supmanual/bsa/bsa_p5.pdf">to get a bank account</a>. Given roughly <a href="https://www.npr.org/2023/12/22/1221006083/immigration-border-election-presidential">2.5 million migrants crossed the U.S.-Mexico border</a> in 2023 alone, there are millions more people in the cash-only economy than the FDIC estimates. </p>
<h2>How many people globally are unbanked?</h2>
<p>While the U.S. has relatively high rates of people with bank accounts, the picture is different in other parts of the world. The <a href="https://www.worldbank.org/en/topic/financialinclusion/overview">World Bank has created a database</a> that shows the percentage of each country’s population that has access to financial services. The World Bank’s definition of being banked is broader than the FDIC’s, since it includes anyone who uses a cellphone to send and receive money as having a bank account.</p>
<p>Overall, the World Bank estimates about <a href="https://www.worldbank.org/en/publication/globalfindex">one-quarter of the world’s adults</a> don’t have access to a bank or mobile-phone account. But that varies dramatically by region. In countries that use the Euro, almost everyone has a bank account, while in the Middle East and North Africa, only about half the population does.</p>
<p><iframe id="Yzxpv" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/Yzxpv/2/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
<h2>A more inclusive economy</h2>
<p>Many of us swipe our credit cards, tap our phones or insert a debit card to pay without thinking. However, there are at least 6 million people in the U.S. and almost <a href="https://ufa.worldbank.org/en/ufa">1.5 billion worldwide who are unbanked</a>.</p>
<p>When businesses stop accepting cash, the unbanked are forced to use payment methods like prepaid debit cards. However, these <a href="https://www.consumerfinance.gov/ask-cfpb/what-types-of-fees-do-prepaid-cards-typically-charge-en-2053/">prepaid cards are costly</a>. For example, Walmart, one of the largest U.S. retailers, <a href="https://www.walmartmoneycard.com/">offers a reloadable basic debit card</a>. The card <a href="https://www.investopedia.com/articles/personal-finance/112315/6-ways-load-your-walmart-money-card.asp">costs $1 to buy</a> and charges <a href="https://www.walmartmoneycard.com/helpcenter/getting-started/why-walmart-moneycard/how-can-i-waive-my-monthly-fee-for-walmart-moneycard">$6 per month in fees</a>, in addition to <a href="https://www.walmartmoneycard.com/helpcenter/adding-money/how-much-does-it-cost-to-use-walmart-rapid-reload">$3 each time someone wants to load the card with cash</a> at Walmart’s registers. Paying a minimum of $10 just to set up a debit card for a few purchases is a steep price.</p>
<p>The next time you see a sign in a shop or restaurant window stating “No cash accepted,” you’re really looking at a business excluding many unbanked and underbanked people. Insisting that all businesses accept cash is a simple way to ensure everyone is financially included in the modern economy.</p><img src="https://counter.theconversation.com/content/221393/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jay L. Zagorsky does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>A cashless economy is a less inclusive economy.Jay L. Zagorsky, Clinical Associate Professor of Markets, Public Policy and Law, Boston UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2175092024-01-22T13:28:26Z2024-01-22T13:28:26ZThink wine is a virtue, not a vice? Nutrition label information surprised many US consumers<figure><img src="https://images.theconversation.com/files/569115/original/file-20240112-21-1bz0bp.jpg?ixlib=rb-1.1.0&rect=56%2C85%2C9247%2C5164&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Decisions, decisions.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/photo/rear-view-of-young-asian-woman-grocery-shopping-for-royalty-free-image/1366189228?phrase=wine+store&adppopup=true">d3sign/Getty Images</a></span></figcaption></figure><p>When you reach for that bottle of wine this Valentine’s Day, do you know how healthy it is? Many people have a too-rosy view of the beverage and are surprised when confronted with the facts about it on a nutrition label, according to a study my co-author <a href="https://www.depts.ttu.edu/hs/hrm/velikova.php">Natalia Velikova</a> <a href="https://www.depts.ttu.edu/rawlsbusiness/people/faculty/marketing/deidre-popovich/index.php">and I</a> recently published in the <a href="https://doi.org/10.1108/JCM-09-2020-4101">Journal of Consumer Marketing</a>. </p>
<p>Our findings could have big implications for the wine industry, particularly as <a href="https://www.fooddive.com/news/alcohol-labeling-lawsuit/633347/">some groups in the U.S. are pushing</a> for wine to have mandatory nutrition labels.</p>
<p>Right now, people usually think of wine as <a href="https://doi.org/10.1287/mksc.17.4.317">a “virtue” rather than a “vice,”</a> thanks to popular beliefs about its <a href="https://www.health.harvard.edu/blog/is-red-wine-good-actually-for-your-heart-2018021913285#">health benefits</a> and news coverage of its antioxidant effects. But requiring nutrition labels, which are currently voluntary, could change those views. </p>
<p>In our experimental research, which included nearly 800 participants, we found that American consumers aren’t used to seeing nutrition information on wine labels, and most are surprised by what they read since they don’t associate wine with calories, carbohydrates and sugar. People who were prompted to read labels viewed wine as less healthy than they did beforehand, and they were less likely to buy it. </p>
<p>We also found that people are more surprised by the sugar content of sweeter wines, such as Moscato, than by the number of calories. Sweet wines, in particular, may contain more sugar than consumers realize.</p>
<h2>Why it matters</h2>
<p>The European Union recently <a href="https://www.wineenthusiast.com/culture/industry-news/new-eu-wine-label-regulations/">mandated nutrition labeling on wine</a>, sometimes in the form of <a href="https://www.decanter.com/learn/eu-wine-labelling-the-changes-explained-507553/">QR codes</a>, and industry analysts expect <a href="https://wineindustryadvisor.com/2023/02/24/ingredient-labels-are-coming-you-need-to-know">the U.S. will eventually follow suit</a>. The Treasury Department’s Alcohol and Tobacco Tax and Trade Bureau, which regulates wine production, has already <a href="https://www.cspinet.org/press-release/consumer-groups-obtain-ttb-commitment-issue-rulemakings-mandatory-alcohol-labeling">agreed to issue some preliminary rules</a> for mandatory ingredient labeling.</p>
<p>Nutrition labels don’t need to be bad news for the wine industry. Wine sales have <a href="https://www.svb.com/globalassets/trendsandinsights/reports/wine/svb-state-of-the-wine-industry-report-2023.pdf">recently declined</a> among those 60 and younger, and greater transparency in labeling could help rekindle young consumers’ interest. </p>
<p><a href="https://doi.org/10.1016/j.wep.2018.11.001">Millennial and Gen Z consumers</a> may especially appreciate clearer labels, since it could help them view wine as less mysterious and more accessible. It may also allow them to fit an occasional glass of wine into their personal health goals. Younger consumers might also be more interested in <a href="https://doi.org/10.1016/j.wep.2019.02.001">eliminating as many highly processed ingredients as possible</a> from their diets. </p>
<p>What’s more, there’s been a recent trend toward wine packaging including labels like “organic,” “biodynamic” and “sustainable,” which may appeal to consumers’ preferences for sustainability. These labels have less to do with nutrition than with manufacturers trying to appear eco-friendly — but makers of natural wine would likely benefit most from offering nutrition information to support their front-of-label claims.</p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/568090/original/file-20240106-28-sl6le5.jpg?ixlib=rb-1.1.0&rect=98%2C12%2C8120%2C5438&q=45&auto=format&w=1000&fit=clip"><img alt="In an over-the-shoulder photograph, a woman chooses between two bottles of wine at a liquor store." src="https://images.theconversation.com/files/568090/original/file-20240106-28-sl6le5.jpg?ixlib=rb-1.1.0&rect=98%2C12%2C8120%2C5438&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/568090/original/file-20240106-28-sl6le5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/568090/original/file-20240106-28-sl6le5.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/568090/original/file-20240106-28-sl6le5.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/568090/original/file-20240106-28-sl6le5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/568090/original/file-20240106-28-sl6le5.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/568090/original/file-20240106-28-sl6le5.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Americans generally view red wines as healthier than whites, research shows.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/photo/over-the-shoulder-view-of-woman-walking-through-royalty-free-image/1308615779">D3sign/Getty Images</a></span>
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<h2>What other research is being done</h2>
<p>German researchers have found that most consumers often overestimate calories in wine before viewing nutritional labels, and they <a href="https://doi.org/10.1016/j.wep.2019.02.001">don’t think the information is useful</a>. The researchers found that consumers often feel insecure and confused after reading wine ingredient information. Reviewing ingredient lists also made consumers less likely to view wine as a natural product. </p>
<p>On the manufacturer side, research shows that mandatory nutrition labeling would affect the wine industry in several ways — notably by <a href="https://doi.org/10.1016/j.wep.2019.05.002">increasing overhead costs</a> related to compliance, laboratory analyses and more challenging labeling processes. This could disproportionately hurt smaller wineries with fewer resources. </p>
<h2>What still isn’t known</h2>
<p>We still don’t know who is most likely to read and use nutrition labels on wine, but younger customers <a href="https://doi.org/10.1017/S1368980010003290">seem to be more interested</a> in food labels generally. Millennials report they are <a href="https://doi.org/10.1017/S1368980016002871">eating healthier</a> and <a href="https://www.physicalactivitycouncil.org/_files/ugd/286de6_292481f0e76443d4b0921fbb879f8cfc.pdf">exercising more</a> than previous generations.</p>
<p>And there’s still more to learn about how nutrition labels affect behavior. Studies have shown mixed results, but on the whole, labeling appears to make people <a href="https://doi.org/10.1016/j.amepre.2018.09.024">cut their calorie consumption</a> somewhat. Still, the U.S. put nutrition labels on foods in the 1990s, and that hasn’t stopped the <a href="https://www.cdc.gov/obesity/data/adult.html">obesity rate from rising</a>.</p><img src="https://counter.theconversation.com/content/217509/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Deidre Popovich does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>People may be surprised when they read a nutrition label on a bottle of wine. The industry should take note.Deidre Popovich, Associate Professor of Marketing, Texas Tech UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2212632024-01-18T13:29:47Z2024-01-18T13:29:47ZWhy did Alaska Airlines Flight 1282 have a sealed-off emergency exit in the first place? The answer comes down to money<figure><img src="https://images.theconversation.com/files/569625/original/file-20240116-29-1acz42.jpg?ixlib=rb-1.1.0&rect=90%2C38%2C8536%2C5703&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The door plug area of an Alaska Airlines Boeing 737 MAX 9 aircraft awaits inspection on Jan. 10, 2024. </span> <span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/BoeingEmergencyLanding/f0eebc33866f4efd9f75429155b4d229/photo">Lindsey Wasson/AP Photo</a></span></figcaption></figure><p>The aviation industry is still in shock from a <a href="https://www.nytimes.com/2024/01/07/us/alaska-airlines-boeing-passengers.html">near disaster</a> on Jan. 5, 2024, in which a 60-pound “door plug” blew out from a nearly new Boeing 737 MAX 9 in flight at 16,000 feet, leaving a gaping hole in the fuselage. </p>
<p>In response, <a href="https://apnews.com/article/alaska-airlines-portland-oregon-emergency-landing-b522e36ff228b5ea9a89ea13ee24f597">the Federal Aviation Administration grounded</a> all 737 MAX 9 planes with such plugs, and aviation authorities in other countries have <a href="https://www.reuters.com/world/asia-pacific/indonesia-temporarily-grounds-three-boeing-737-max-9-planes-transport-ministry-2024-01-08/">followed suit</a>. </p>
<p>The industry is watching closely. </p>
<p>A lot of news coverage has emphasized the <a href="https://www.nytimes.com/2024/01/09/opinion/alaska-airlines-safety.html">impressive safety record</a> of the global airline industry, particularly since an Alaska Airlines crew managed to land the plane with no fatalities. I commend the outstanding performance of airline employees, air traffic controllers and emergency responders who achieved this impressive feat.</p>
<p>However, as a former United Airlines pilot <a href="https://som.yale.edu/faculty-research/faculty-directory/amy-fraher">now lecturing in Yale University’s School of Management</a>, I believe the wrong questions are being asked about what happened on Alaska Airlines Flight 1282. As the <a href="https://www.ntsb.gov/investigations/Pages/DCA24MA063.aspx">National Transportation Safety Board</a> and numerous <a href="https://www.kgw.com/article/news/local/airplane-plug-door-door-plugs-explainer/283-2f5d3371-fec8-409c-86e4-88658d0acd02">news outlets</a> have explained, door plugs are commonly used to seal unused exits on commercial airliners. The question we need to ask is: Why wouldn’t an airline use all of an aircraft’s emergency exits? Wouldn’t that make passengers safer?</p>
<p>It’s all about money.</p>
<h2>Safety isn’t free</h2>
<p>Airlines have lots of expenses. Some, such as <a href="https://www.iata.org/en/publications/economics/fuel-monitor">jet fuel</a>, are easier to calculate. Others, such as emergency exits, are more opaque to travelers. </p>
<p>Believe it or not, every functioning emergency exit comes at a price for an airline. Each requires routine maintenance and frequent inspections – for example, to make sure that emergency evacuation slides work properly – and flight attendants must staff emergency exits during takeoff and landing for safety reasons.</p>
<p>In other words, every working exit comes with associated costs in salaries, health benefits, pension plans, training and related expenses. Sealing off an emergency exit cuts costs.</p>
<p>But is every one of those emergency exits crucial? From the U.S. government’s perspective, not necessarily.</p>
<h2>Why you get more emergency exits in Indonesia</h2>
<p>In the U.S., airlines must comply with federal aviation regulations, which dictate aircraft maintenance procedures and in-flight personnel assignments – and minimum standards for emergency exits.</p>
<p>The issue is that Boeing sells the same airplane to different airlines with different needs.</p>
<p>Boeing notes that its 737 MAX 9 can carry up to 220 passengers, which, under U.S. regulations, requires it be built with a specific number of emergency exits. This <a href="https://www.reuters.com/graphics/ALASKAAIR-BOEING/klvydkrlopg/">dense seating configuration</a> is common among lower-cost global airlines such as Jakarta-based Lion Air.</p>
<p>However, given Americans’ desire for legroom, most U.S. carriers are equipped with considerably fewer than 220 seats – and when there are <a href="https://www.reuters.com/graphics/ALASKAAIR-BOEING/klvydkrlopg/">fewer than 190</a> seats, the rules allow fewer emergency exits to be in service. The Alaska Airlines Max 9 had just <a href="https://www.reuters.com/graphics/ALASKAAIR-BOEING/klvydkrlopg/">178 seats</a>.</p>
<p>Under these conditions, the federal rules allow air carriers to disable these exits and plug the openings. That’s precisely what happened with Alaska Airlines Flight 1282 – and how “door plug” suddenly entered the American vernacular.</p>
<figure>
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<figcaption><span class="caption">A Portland-area science teacher found the missing door plug in his backyard.</span></figcaption>
</figure>
<p>Although this sort of workaround is authorized, it’s unclear to me that this is in the best interest of air safety. Wouldn’t it be better for the FAA to require that all exits are available for use in an emergency, regardless of aircraft seating capacity, even if it required some additional expense for airlines?</p>
<h2>A worrying safety record</h2>
<p>The 737 MAX is a plane of many firsts – not all of them positive.</p>
<p>The MAX is the latest addition to Boeing’s 737 family of aircraft. The 737 family has far eclipsed all rivals as the <a href="https://www.businessinsider.com/boeing-737-max-timeline-history-full-details-2019-9">most popular commercial airliner ever built</a>, with over 10,000 sold worldwide since its introduction in 1967.</p>
<p>Some carriers, such as Southwest Airlines in the United States and Ryanair in Ireland, fly only 737s; it’s a critical element of their low-cost business strategy. By flying just one type of aircraft, these airlines significantly improve scheduling flexibility while cutting maintenance and training costs.</p>
<p>That’s all to say that demand for the latest 737 was high. In 2017, when the FAA certified the 737 MAX safe for flight, Boeing <a href="https://boeing.mediaroom.com/2017-03-09-Boeing-737-MAX-8-Earns-FAA-Certification">had already received</a> more than 3,600 new orders from 83 customers. </p>
<p>But very shortly afterward, <a href="https://www.theguardian.com/business/2021/nov/11/boeing-full-responsibility-737-max-plane-crash-ethiopia-compensation">two crashes</a> that <a href="https://www.nbcnews.com/news/world/indonesia-report-finds-fatal-lion-air-jet-crash-due-boeing-n1071796">together killed 346 people</a> grounded the 737 MAX for nearly two years – another first as <a href="https://democrats-transportation.house.gov/committee-activity/boeing-737-max-investigation">the longest airline grounding in aviation history</a>. Destined to profit US$12 million on the sale of each $121 million MAX, there was <a href="https://www.businessinsider.in/heres-how-much-boeing-is-estimated-to-make-on-each-737-max-8-plane/articleshow/68399220.cms">significant incentive</a> for Boeing to press on with MAX development even though it had already proved to be a dangerously problematic aircraft design.</p>
<p>In 2020, <a href="https://www.oig.dot.gov/sites/default/files/FAA%20Boeing%20737%20MAX%20Return%20to%20Service%20Final%20Report%5E4.26.2023_revised.pdf">the FAA recertified the MAX as “safe for flight”</a>; by 2023, Boeing had logged more than 7,000 total orders for the MAX, <a href="https://www.boeing.com/commercial/orders-deliveries">far eclipsing</a> the sale of any other type of airliner. This fact alone ought to raise safety concerns. It may soon prove impossible to avoid flying on a 737 MAX, particularly in the U.S. domestic market. United, American, Southwest and Alaska airlines <a href="https://simpleflying.com/boeing-737-max-airlines/">all currently fly the MAX</a>. </p>
<p>When airplane parts and passengers’ cellphones are <a href="https://www.cbsnews.com/news/iphone-sucked-out-alaska-airlines-plane-fell-16000-feet-found-still-works/">raining from the sky</a>, it could be a sign that the industry needs to think harder about unintended costs – and consequences.</p><img src="https://counter.theconversation.com/content/221263/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Amy Fraher does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>A commercial pilot turned management expert and author of ‘The Next Crash: How Short-Term Profit Seeking Trumps Airline Safety,’ explains the economics behind the near-deadly disaster.Amy Fraher, Lecturer in Management, Yale UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2197252024-01-04T12:51:30Z2024-01-04T12:51:30ZHow subtle forms of misinformation affect what we buy and how much we trust brands<figure><img src="https://images.theconversation.com/files/566367/original/file-20231218-18-bq4prp.jpg?ixlib=rb-1.1.0&rect=42%2C0%2C4700%2C3123&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Both direct and indirect misinformation influence brand trust. </span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/motion-escalators-modern-shopping-mall-201174746">estherpoon/Shutterstock</a></span></figcaption></figure><p>Misinformation isn’t just blurring political lines anymore. It’s quietly infiltrating our shopping trolleys in subtle ways, shaping our decisions about what we buy and who we trust, as my research shows. </p>
<p>Spurred by political events, misinformation has garnered widespread media coverage and academic research. But most of the attention has been in the fields of <a href="https://www.aeaweb.org/articles?id=10.1257%2Fjep.31.2.211&fbclid=IwAR04My3aiycypMJKSI58e84gDvdrodsB9fqCycH9YfepWDDDwT--fZnVPvo;%20https://www.nyu.edu/about/news-publications/news/2019/january/fake-news-shared-by-very-few--but-those-over-65-more-likely-to-p.html">political science</a>, <a href="https://www.cell.com/trends/cognitive-sciences/fulltext/S1364-6613(21)00051-6?dgcid=raven_jbs_etoc_email">social psychology</a>, <a href="https://www.sciencedirect.com/science/article/pii/S0306457318306794">information technology</a> and <a href="https://www.tandfonline.com/doi/full/10.1080/21670811.2017.1360143">journalism studies</a>. </p>
<p>More recently though, misinformation has also gained traction among <a href="https://www.sciencedirect.com/science/article/abs/pii/S0148296320307852">marketing</a> and <a href="https://myscp.onlinelibrary.wiley.com/doi/abs/10.1002/jcpy.1288">consumer</a> experts. Much of that research has focused on the direct impacts of misinformation on brands and consumer attitudes, but a new perspective on the topic is now emerging.</p>
<p>What if the influence of misinformation extends beyond explicit attacks on brands? What if our choices as consumers are shaped not only by deliberate misinformation campaigns but also by subtle, indirect false information? </p>
<p>My own research has explored the dynamics of misinformation from a consumer standpoint. I have looked at how misinformation <a href="https://www.sciencedirect.com/science/article/abs/pii/S0148296320307852">spreads</a>, why people find it <a href="https://journals.sagepub.com/doi/full/10.1177/07439156221103860">credible</a> and what we can do to try to <a href="https://onlinelibrary.wiley.com/doi/full/10.1002/mar.21479">mitigate its spreading</a>. </p>
<p>However, my latest <a href="https://www.sciencedirect.com/science/article/pii/S2352250X23001616">study</a> looks at direct and indirect forms of misinformation and their consequences for brands and consumers. I have found that one of the major consequences of these types of misinformation is the erosion of trust.</p>
<h2>Direct and indirect misinformation</h2>
<p>Misinformation comes in direct and indirect forms. It can be direct when it purposefully targets brands or their products. Examples of direct misinformation include fabricated customer reviews or fake news campaigns targeting brands. </p>
<p>It was fake news that led to the <a href="https://www.nytimes.com/interactive/2016/12/10/business/media/pizzagate.html">“pizzagate” scandal</a> in 2016, for example. This involved unsubstantiated accusations of child abuse against prominent individuals linked to a Washington DC pizzeria. While last year, the brand Target was <a href="https://www.reuters.com/article/idUSL1N37S2U1/">falsely accused</a> of selling “satanic” children’s clothes on social media. </p>
<p>The consequences of direct misinformation can be far reaching, leading to a breakdown in brand trust. This erosion is particularly pronounced when misinformation originates from seemingly trustworthy sources, forcing brands into crisis management mode. </p>
<p>For example, in late 2022, Eli Lilly’s stock price fell by 4.37% after a <a href="https://www.washingtonpost.com/technology/2022/11/14/twitter-fake-eli-lilly/">fake Twitter</a> account impersonating the pharmaceutical company falsely announced that insulin would be given away for free. Investors were misled and the company was forced to issue multiple statements to regain their trust. </p>
<p>But beyond the realm of blatant brand attacks lies a subtler, less understood territory I call “indirect misinformation”. This type of misinformation doesn’t zero in on specific companies, but instead cloaks itself in issues like politics, social affairs or health issues.</p>
<p>The constant exposure to misinformation around issues like COVID-19 and politics can have a ripple effect. And my research, which reviewed the academic marketing literature on direct and indirect misinformation, argues that this constant barrage has the potential to impact consumer choices. </p>
<p>Consider the two distinct levels where these effects unfold for a company. At the brand level, reputable names may unwittingly find themselves entangled in disreputable fake news sites through <a href="https://journals.sagepub.com/doi/full/10.1177/0276146718755869">programmatic advertising</a>, in which automated technology is used to buy ad space on these websites. And while the misinformation itself might not directly impact brand trust, the association with dubious websites can cast a shadow over attitudes to brands. It can also <a href="https://journals.sagepub.com/doi/abs/10.1016/j.intmar.2018.09.001">impair</a> consumers’ intentions towards the brand. </p>
<p>Simultaneously, at the consumer level, the impact of indirect misinformation is profound. It breeds confusion, doubt and a general sense of vulnerability. Continuous exposure to misinformation is linked to <a href="https://misinforeview.hks.harvard.edu/article/misinformation-in-action-fake-news-exposure-is-linked-to-lower-trust-in-media-higher-trust-in-government-when-your-side-is-in-power/">decreased trust</a> in mainstream and traditional media brands, for example. </p>
<p>Consequently, people might become wary of all information sources and even fellow consumers. Subconsciously influenced by misinformation, they may make different purchase decisions and hold <a href="https://www.journals.uchicago.edu/doi/full/10.1086/708035">altered views</a> of brands and products.</p>
<h2>What can brands do?</h2>
<p>While the negative repercussions of direct misinformation on brand trust have been well documented, shining a light on the subtler impacts of indirect misinformation marks a crucial step forward. It not only opens new avenues for researchers but also serves as a warning to brands. It urges them to be more proactive in their approach to misinformation. </p>
<p>If indirect misinformation makes consumers mistrustful and sceptical, brands could take preemptive measures. Tailoring specific marketing communications to instil trust in brands, products and offers becomes paramount in a world where trust is continually under siege. Building and maintaining a reputation for trustworthiness is essential for companies.</p>
<p>As we navigate this terrain of hidden influences, the call for a more comprehensive understanding of misinformation’s multifaceted impacts also becomes clearer. Researchers, brands and consumers alike need to decode the hidden messages of misinformation. This could help to fortify the foundations of trust in an era where it has become a precious commodity.</p><img src="https://counter.theconversation.com/content/219725/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Giandomenico Di Domenico is affiliated with the International Panel on the Information Environment. </span></em></p>Trust in brands may be eroded as awareness of misinformation increases according to new research.Giandomenico Di Domenico, Lecturer in Marketing & Strategy, Cardiff UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2197762023-12-14T13:11:05Z2023-12-14T13:11:05Z4 business lessons from the Boston Tea Party<p>December 2023 marks the <a href="https://www.history.com/topics/american-revolution/boston-tea-party">250th anniversary of the Boston Tea Party</a>, one of the most famous events leading up to the Revolutionary War. On the night of Dec. 16, 1773, Colonists marched aboard <a href="https://nha.org/research/nantucket-history/history-topics/ships-of-the-boston-tea-party-eleanor-beaver-and-dartmouth/">three ships</a> and threw <a href="https://boston1775.blogspot.com/2009/12/how-much-tea-was-destroyed-in-boston.html">more than 90,000 pounds</a> of tea into Boston Harbor. No one died, and the only things injured were the tea leaves, but <a href="https://www.nps.gov/articles/000/boston-tea-party-in-real-time.htm">this event</a> helped precipitate a <a href="https://www.nps.gov/subjects/americanrevolution/index.htm">major war</a>.</p>
<p><a href="https://www.linkedin.com/in/jay-zagorsky-58a90825a/">I am</a> a <a href="https://www.bu.edu/questrom/">business school</a> professor who often drives by the <a href="https://www.bostonteapartyship.com/">Tea Party site</a> while taking his wife to work. Each time, I ponder the lessons this “party” has for people in business. Many aren’t obvious. Here are four that come to mind.</p>
<h2>1) Publicity is important</h2>
<p>There were <a href="https://www.csmonitor.com/Books/2012/0125/Beyond-Boston-9-tea-parties-you-probably-haven-t-heard-about/The-Philadelphia-Tea-Party">actually 10</a> “tea party” protests across the 13 Colonies in the late 1770s. However, only one ended up in the history books. The others, including a <a href="http://www.boston-tea-party.org/parties-summary.html">second one in Boston</a> just four months afterward, were largely forgotten. Getting the word out fast, which in those days was <a href="https://www.masshist.org/database/viewer.php?pid=2&old=1&mode=nav&ft=Coming%20of%20the%20American%20Revolution&item_id=442">done by newspaper</a>, is key. Otherwise, you can do a lot of work that will be ignored.</p>
<h2>2) Dramatic changes in the market can cause problems</h2>
<p>The volume of tea imports into the Colonies rose at a very fast rate in the four years leading up to the Boston Tea Party. They went from <a href="https://www2.census.gov/library/publications/1975/compendia/hist_stats_colonial-1970/hist_stats_colonial-1970p2-chZ.pdf">55 tons in 1770</a>, which was close to the amount dumped in the harbor, to 370 tons the year the tea was dumped. This was an increase of almost seven times. The population of the Colonies was about <a href="https://web.viu.ca/davies/H320/population.colonies.htm">2 million people in 1770</a> and didn’t expand much in that four-year period. <a href="http://businessmacroeconomics.com/">Basic economics tells us</a> this dramatic increase in supply without more customers meant the price of tea had to fall a lot.</p>
<p>We don’t know for sure the <a href="https://boston1775.blogspot.com/2006/12/who-threw-tea-into-boston-harbor.html">identities of the ringleaders</a> who convinced people to dump the tea. As a business school professor, I believe it’s clear that some protesters were <a href="https://www.history.com/news/10-things-you-may-not-know-about-the-boston-tea-party">protecting their commercial interests</a>. Shopkeepers, merchants and <a href="http://doi.org/10.1353/eam.2012.0014">smugglers who had stocks of tea</a> on hand didn’t want to see 90,000 more pounds of tea flooding the market. It would make them lose money. Dumping the tea in the harbor was a way of protecting their investment.</p>
<h2>3) Even relatively small dollar amounts make big impressions</h2>
<p>For all the fuss about the tea that was dumped, the damages weren’t huge. The British East India Company reported <a href="https://www.bostonteapartyship.com/boston-tea-party-damage">9,659 English pounds in damages</a>. That would be about 1.2 million pounds in today’s money, according to the <a href="https://www.bankofengland.co.uk/monetary-policy/inflation/inflation-calculator">Bank of England’s inflation calculator</a>. Using the current exchange rate of $1.26 to a British pound means the tea dumped cost about US$1.5 million.</p>
<p>To give you a rough idea of how small this is, last year the <a href="https://dataweb.usitc.gov/">U.S. imported</a> half a billion dollars’ worth of tea. In terms of my favorite British import, the destroyed tea was worth about the same price as three <a href="https://www.holmanmotorcars.com/rolls-royce-price-list/">Rolls-Royce Phantoms</a>.</p>
<h2>4) Timing matters … but it isn’t everything</h2>
<p>The Tea Party happened on a night when the <a href="https://allthingsliberty.com/2015/03/tides-and-tonnage-a-different-take-on-the-boston-tea-party/">tide was especially low</a>, with only 2 feet of water under the ships. Because the tide was so low, much of the tea didn’t get wet. Instead, it ended up in a giant pile, mostly dry, beside the boats. This meant the partygoers had to climb out of the boats and spend hours sloshing in the mud moving the tea into the water. </p>
<p>Given that the <a href="https://historyofmassachusetts.org/boston-tea-party-timeline/">tea arrived at the end of November</a>, they could have picked a time that would have made the job less difficult. Nonetheless, the revolutionaries weren’t deterred, since hard work can often overcome the worst timing.</p>
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<figcaption><span class="caption">The Tea Act of 1773 helped set the stage for the Revolutionary War.</span></figcaption>
</figure>
<p>When it comes down to it, history is more than just stories we tell children. The past contains many lessons for adults, including businesspeople. This incident, which played a key role in inciting the Revolutionary War that freed the American Colonies from British rule, is so much more than a <a href="https://www.cartoonstock.com/cartoon?searchID=CS202967">cartoon image of men dumping</a> chests of tea into Boston Harbor.</p><img src="https://counter.theconversation.com/content/219776/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jay L. Zagorsky does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Two and a half centuries later, some things haven’t changed.Jay L. Zagorsky, Clinical Associate Professor of Markets, Public Policy and Law, Boston UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2180622023-12-06T15:53:38Z2023-12-06T15:53:38ZRural communities are being left behind because of poor digital infrastructure, research shows<p>In an era where businesses and households depend on the internet for everything from marketing to banking and shopping, the lack of adequate digital access can be a significant hurdle. And our recent research shows that many <a href="https://research.aber.ac.uk/en/publications/the-socio-economic-impact-of-the-covid-19-pandemic-on-ceredigion-">homes</a> and <a href="https://research.aber.ac.uk/en/publications/the-economic-impact-of-the-covid-19-pandemic-on-ceredigion-busine">businesses</a> in the UK are being left stranded in the digital age.</p>
<p>Our two studies focused on a rural county in Wales, Ceredigion, where the lack of reliable digital infrastructure worsened the impacts of the pandemic on families and businesses. Poor digital accessibility and connectivity exacerbated the stress levels of families who were already having to juggle home schooling and working from home. </p>
<p>Similarly, businesses had to struggle with issues around internet provision, availability of effective digital infrastructure and digital proficiency while working and running businesses from home. </p>
<p>Our research involved two online surveys. One focused on households and the other on businesses and the self-employed between April and June 2021. The survey questions were designed to address the challenges and opportunities brought about by the pandemic. </p>
<p>Some important themes emerged in the responses we received to both surveys. These were insufficient digital accessibility and connectivity, lack of digital skills and training opportunities and the cost of broadband and mobile access.</p>
<h2>Household experiences</h2>
<p>Our research showed that 12% of homes did not have enough digital equipment for their needs during the pandemic and 76% of these included children who were being home schooled. Schools and some workplaces provided equipment in some instances, but 18% of households had to borrow equipment. </p>
<p>Despite that ability to borrow, many homes found themselves juggling equipment between homeworking adults and children learning online. Many pupils relied on small mobile devices to access lessons, while others lacked access to equipment like printers.</p>
<p>These problems were compounded in rural and remote areas, where slow broadband speeds and a lack of reliable mobile signal were cited as the biggest issues. Other issues included the cost of broadband and mobile access, the lack of digital skills or training opportunities to improve digital skills, poor customer service from broadband providers and issues with connectivity.</p>
<h2>Business and self-employed experiences</h2>
<p>The pandemic brought similar challenges to businesses. The closure of non-essential firms during the pandemic led to a <a href="https://www.oecd.org/coronavirus/policy-responses/e-commerce-in-the-time-of-covid-19-3a2b78e8/">surge</a> in e-commerce. Companies that could embrace online sales were able to continue operating despite lockdowns and restrictions. </p>
<p>But businesses that were slow to adopt e-commerce or lacked the necessary infrastructure struggled to adapt. In fact, our research found that 47% of businesses faced difficulties with digital access and connectivity during the pandemic. Some of the other issues faced by businesses included:</p>
<p>• a lack of reliable broadband or mobile (37%)</p>
<p>• slow broadband speed (29%)</p>
<p>• poor mobile signal (26%)</p>
<p>• lack of digital skills or access to training schemes (16%)</p>
<p>• the cost of access (13%)</p>
<p>People working from home in rural locations also had problems due to a lack of digital infrastructure, poor connectivity and a lack of digital skills. </p>
<h2>Bridging the gap</h2>
<p>In the future, an increased reliance on online work, education and public services, such as online health and welfare support, will further disadvantage those without adequate internet access. The digital divide is widening between those with higher incomes and those with lower incomes. </p>
<p>For example, households with higher incomes were <a href="https://www.scirp.org/reference/referencespapers?referenceid=3051117">more likely</a> to have had access to technology for home schooling and remote working during the pandemic, unlike those with lower incomes.</p>
<p>The gap in access to digital technology is often determined by location too. Remote and sparsely populated areas often lack adequate broadband and mobile signal coverage. Bridging this digital divide is crucial for economic growth, social inclusion and access to essential services. </p>
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Read more:
<a href="https://theconversation.com/how-teachers-supported-children-and-parents-through-covid-19-school-closures-181380">How teachers supported children and parents through COVID-19 school closures</a>
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<p>To address the digital divide, the UK and devolved governments need to invest in digital infrastructure in rural areas to ensure that everywhere has at least a minimum quality coverage. Local authorities could introduce schemes that enable people to gain access to cost-effective computer devices and internet access.</p>
<p>Expanding digital literacy and empowering businesses in rural areas is also crucial. Enhancing digital skills training would better prepare future generations for the digital world. </p>
<p>Additionally, businesses in rural areas require tailored support, such as funding for digital infrastructure upgrades, training opportunities and guidance on consumer privacy and protection, to enable their digital growth and sustainability.</p><img src="https://counter.theconversation.com/content/218062/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Aloysius Igboekwu currently volunteers for a Childcare charity as a Trustee. </span></em></p><p class="fine-print"><em><span>Maria Plotnikova and Sarah Lindop do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>New research reveals the digital divide that was exposed by the COVID pandemic.Aloysius Igboekwu, Senior Lecturer in Finance, Aberystwyth UniversityMaria Plotnikova, Lecturer in Economics, Aberystwyth UniversitySarah Lindop, Senior Lecturer in Finance, Aberystwyth UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2185852023-11-29T10:00:24Z2023-11-29T10:00:24ZGhana wants to restrict imports on 22 products – an economist explains how, why and what else must be done<p><em>Ghana’s Ministry of Trade and Industry has <a href="https://www.modernghana.com/news/1275386/licensing-regime-for-import-restrictions-archaic.html">tabled</a> in parliament a proposed ban or restrictions on imports of certain goods, including rice, sugar, poultry, fruit juices and animal intestines (tripe). The proposed legislation empowers the trade minister to issue licences to potential importers of goods. Critics of the policy say it will give too much power to the minister and create room for corruption. The Conversation Africa’s Godfred Akoto Boafo spoke to development economist <a href="https://theconversation.com/profiles/adu-owusu-sarkodie-774216">Adu Owusu Sarkodie</a> about the policy.</em></p>
<h2>What are import restrictions?</h2>
<p>These refer to the various schemes, mechanisms and regulations that a government can impose to restrict or limit the importation of goods and services. They come in different forms.</p>
<p><strong>Tariffs</strong>: These are taxes imposed on imported goods and services. They can be specific taxes (a fixed amount per unit) or ad valorem (a percentage of the value) or both. </p>
<p><strong>Quotas</strong>: This means a direct restriction on the quantity of a particular good that can be imported at a specified period of time. It is enforced by issuing licences to individuals or firms.</p>
<p><strong>Embargos and sanctions</strong>: This involves a ban on the importation of a particular good. Importing a banned good is illegal. </p>
<p><strong>Quality standards and technical barriers</strong>: A country can set stringent requirements that imported goods must meet.</p>
<p><strong>Local content requirements</strong>: In terms of this regulation a specified fraction of a final good must be produced domestically, either in physical units or in value terms.</p>
<p>The choice of a particular form of import restriction depends on the geopolitical, economic and social characteristics of the country.</p>
<h2>What role does it play as an economic strategy?</h2>
<p><strong>Protection of domestic and infant industries</strong>: Restrictions such as tariffs and quotas can raise the prices of imported goods and make domestic goods more <a href="https://corporatefinanceinstitute.com/resources/economics/protectionism/">competitive</a>. This can stimulate local producers to produce more, grow and develop.</p>
<p><strong>Revenue to the government</strong>: Import restrictions such as tariffs are a source of revenue for the government. </p>
<p><strong>Balance of payments and trade deficits management</strong>: Import restrictions help in correcting balance of payment issues and can reduce <a href="https://libertystreeteconomics.newyorkfed.org/2018/08/do-import-tariffs-help-reduce-trade-deficits/">trade deficits</a>. This can help countries achieve <a href="https://libertystreeteconomics.newyorkfed.org/2018/08/do-import-tariffs-help-reduce-trade-deficits/">economic gains</a> needed for long term growth and development.</p>
<p><strong>Environmental and health considerations</strong>: These restrictions can also help address <a href="https://idrc-crdi.ca/en/news/taxation-sugar-sweetened-beverages-win-win-ghanas-public-health-strategy#:%7E:text=The%20tax%20bill%20was%20approved,tea%2C%20sodas%20and%20energy%20drinks">environmental and health concerns</a>. </p>
<p>Excessive import restrictions can backfire, however, if foreign countries retaliate.</p>
<h2>Why is Ghana considering import restrictions?</h2>
<p>A number of reasons have led to this.</p>
<p><strong>Health concerns</strong>: There have been concerns about the <a href="https://www.ghanaweb.com/GhanaHomePage/business/Government-to-restrict-the-importation-of-rice-yemuadie-and-other-products-1884650">quality</a> of some of the imported food items and pharmaceuticals. </p>
<p><strong>Protection of domestic and infant industries</strong>: Cheap imports are leading to the collapse of <a href="https://mpra.ub.uni-muenchen.de/117982/1/Performan">domestic firms</a>. They are suffering from <a href="https://thebftonline.com/2023/11/27/govt-borrowing-risks-choking-private-sector/">high borrowing costs</a> and eroding capital as a result of inflation. The government can protect them by placing restrictions on some of these cheap imports. That will make them competitive, and save foreign exchange.</p>
<p><strong>Trade deficits and balance of payments support</strong>: These restrictions will reduce imports. All else being equal, they will improve the country’s trade balance and balance of payments. The government will have enough foreign exchange reserves and be able to finance its developmental agenda. </p>
<p><strong>Revenue to the government</strong>: One of the International Monetary Fund <a href="https://www.bloomberg.com/news/articles/2023-04-14/imf-director-says-ghana-has-taken-enough-pain-to-unlock-aid?embedded-checkout=true">conditions</a> for financial assistance to Ghana is that government must increase tax revenues. It can do this through tariffs. </p>
<p><strong>Stabilise the currency</strong>: These restrictions will reduce the amount of <a href="https://theconversation.com/ghanas-cedi-is-under-stress-some-long-medium-and-short-term-solutions-178063">foreign currency used for imports</a>. This increases the forex supply and helps to stabilise the currency.</p>
<h2>Have other African countries done this?</h2>
<p>The <a href="https://www.eac.int/">East African Community</a>, comprising Kenya, Rwanda, Burundi, Tanzania, Uganda, South Sudan and the Democractic Republic of Congo, has numerous import restrictions. These countries have a common external tariff on the cost, insurance and freight value of imports. And they ban some goods such as some pharmaceuticals, narcotic drugs, firearms and ammunition, explosives, pornography, genetically modified products and plastic bags.</p>
<p>South Africa, Botswana, Lesotho, Eswatini and Namibia as part of the <a href="https://www.sacu.int/">Southern African Customs Union</a> also administer a common external tariff on imports from other countries. They ban or have quotas on some goods such as narcotics and habit-forming drugs.</p>
<p>Nigeria has its own <a href="https://www.trade.gov/country-commercial-guides/nigeria-prohibited-and-restricted-imports">restrictions</a> on some products. These include rice, pork, beef, live or dead birds including frozen poultry, cocoa butter, spaghetti and some pharmaceuticals.</p>
<h2>What is the way forward?</h2>
<p>In addition to the import restrictions, the following recommendations could assist Ghana.</p>
<p><strong>Diversification of the economy</strong>: Ghana must support industries beyond traditional sectors like agriculture and mining. Investing in technology, innovation and value-added production can contribute to a more resilient economy. </p>
<p><strong>Investment in education and skills development</strong>: This can involve investments in science, technology, engineering and mathematics education to meet the demands of a modern and diverse economy.</p>
<p><strong>Infrastructure development</strong>: Invest in critical infrastructure such as roads, ports and energy to reduce transportation costs, enhance connectivity and attract investment.</p>
<p><strong>Promotion of export-oriented industries</strong>: By focusing on products and services that have demand in the international market, Ghana can boost its export earnings and improve its trade balance.</p>
<p><strong>Trade facilitation and ease of doing business</strong>: Simplify trade processes and make it easier to do business. Streamlining customs procedures, reducing bureaucratic hurdles, and enhancing the overall business environment can attract investments and promote economic growth.</p>
<p><strong>Enhanced agricultural productivity</strong>: Invest in research and development. Promote sustainable farming practices, introduce modern technologies and improve access to markets for farmers.</p>
<p><strong>Corruption mitigation</strong>: An environment of good governance can attract investments and build confidence in the business community.</p>
<p><strong>Continuous policy review</strong>: Economic policies must adapt to changing circumstances. Flexibility and responsiveness to economic conditions are crucial for effective governance.</p>
<p>Inward looking or import substitution strategies have been adopted by many countries at the early stages of their development. The critical question is how much to produce to meet demand, and what quality. All stakeholders must ensure production to meet demand while ensuring quality.</p><img src="https://counter.theconversation.com/content/218585/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Adu Owusu Sarkodie does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The policy is the latest strategy to grow Ghana’s weak industrial base.Adu Owusu Sarkodie, Lecturer, Department of Economics, University of GhanaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2182462023-11-29T02:20:49Z2023-11-29T02:20:49ZNew research shows how Indigenous-owned businesses are creating better outcomes for their employees<p>We are seeing more Indigenous businesses in Australia. This is important, given these businesses produce social impact, support Indigenous economic self-determination and maintain strong levels of Indigenous employment.</p>
<p>When we hear about Indigenous knowledge businesses, we often think about how this knowledge is presented within a business’ product or service, such as through art, tourism or clothing. What is less understood is the role Indigenous knowledge can play in the organisation and culture of a business, and the profound impact this can have.</p>
<p>There is still a <a href="https://theconversation.com/closing-the-first-nations-employment-gap-will-take-100-years-205290">stark gap</a> between Indigenous and non-Indigenous employment on a national level. It doesn’t help when non-Indigenous-owned businesses <a href="https://bcec.edu.au/publications/woort-koorliny-australian-indigenous-employment-index-2022/">continue to struggle</a> with hiring and retaining Indigenous employees.</p>
<p>But for Indigenous-owned businesses across <a href="https://onlinelibrary.wiley.com/doi/full/10.1002/ajs4.271">locations and industries</a>, employment remains strong. Research shows <a href="https://theconversation.com/indigenous-owned-businesses-are-key-to-closing-the-employment-gap-208579">36% of employees</a> within these businesses are Indigenous. </p>
<p>In <a href="https://onlinelibrary.wiley.com/doi/10.1002/ajs4.292">our new research</a>, we interviewed Indigenous business owners, managers and employees to explore how these businesses support strong levels of Indigenous employment. Our findings show a need for <em>all</em> Australian businesses to learn best practices from Indigenous businesses. </p>
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Read more:
<a href="https://theconversation.com/indigenous-owned-businesses-are-key-to-closing-the-employment-gap-208579">Indigenous-owned businesses are key to closing the employment gap</a>
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<h2>What are Indigenous businesses doing differently?</h2>
<p>Indigenous ways of <a href="https://www.assipj.com.au/southsea/wp-content/uploads/nom/15_Ways_of_knowing_being_and_doing_A_theoretical_framework_and_methods_for_indigenous_and%20indigenist_research.pdf">knowing, being and doing</a> can bring a holistic approach to business management and organisational culture. In our research, participants discussed how Indigenous businesses maintained a non-hierarchical approach to their business structure. This structure incorporated a diversity of perspectives, which better informed tailored and effective policy and practices. </p>
<p>This meant the specific perspectives, values, strengths and circumstances of a workforce could be reflected by the business. This goes against the one-size-fits-all approach to Indigenous employment and recruitment policies that non-Indigenous businesses often implement. </p>
<p>To be formally recognised as an Indigenous-owned business, a business must be <a href="https://supplynation.org.au/resources/faqs/faqs-indigenous-business/">at least 50% owned</a> by Indigenous people. </p>
<p>Most Indigenous businesses listed in Supply Nation, a national database of Indigenous businesses, are 100% Indigenous-owned. As such, these Indigenous businesses have Indigenous people in leadership roles. This is in contrast to non-Indigenous businesses that <a href="https://bcec.edu.au/publications/woort-koorliny-australian-indigenous-employment-index-2022/">struggle</a> with this.</p>
<p>Our research participants described <a href="https://indigenousgovernance.org.au/resources/">Indigenous governance</a> within businesses as collaborative, responsive and <a href="https://journals.sagepub.com/doi/10.1177/14744740211029287#:%7E:text=Relationality%20is%20a%20central%20concept,cultural%20foundations%20of%20Indigenous%20peoples'.">relational</a>. Through this, managers can be better attuned to their employees’ needs, values and circumstances. </p>
<p>This knowledge builds a foundation to inform specific workplace practices. For example, <a href="https://www.fairwork.gov.au/employment-conditions/flexibility-in-the-workplace">workplace flexibility</a> is often provided within Indigenous businesses, but <em>how</em> it is provided varies on the specific contexts of the workforce. </p>
<h2>Cultural competence is essential</h2>
<p><a href="https://link.springer.com/chapter/10.1007/978-981-15-5362-2_16?utm_source=getftr&utm_medium=getftr&utm_campaign=getftr_pilot">Cultural competence</a> refers to the ability to work effectively and respectfully with people of other cultures.</p>
<p>Cultural competence in the workplace is often considered as education. Our research participants described cultural competence as an action embedded into the practices of their organisations. They did not view cultural competence as a nicety, but an occupational health and safety necessity.</p>
<p>For example, Indigenous businesses are not only aware of cultural obligations or individual circumstances that impact their employees. These businesses often accommodate, support and draw on these things to inform their business practices. Indigenous employees said this meant their businesses understood, valued and supported them.</p>
<p>Employees also detailed stark differences in experiences of <a href="https://www.dca.org.au/research/gari-yala-speak-truth">racism</a> between Indigenous businesses and their former workplaces. Indigenous business owners and managers were more attuned to their experiences and more committed to addressing and eliminating racism in the workplace. </p>
<p>These are just some of the ways Indigenous businesses can provide a model for rethinking the organisational cultures of <a href="https://www.dca.org.au/research/gari-yala-speak-truth">non-Indigenous businesses</a>.</p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/closing-the-first-nations-employment-gap-will-take-100-years-205290">Closing the First Nations employment gap will take 100 years</a>
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<h2>Learning from Indigenous businesses</h2>
<p>Many organisations across Australia implement their own policies to increase Indigenous employment. Our research participants said many of these policies are heavily focused on “traditional” recruitment practices and policies. </p>
<p>This falsely presumes the supply of jobs is the sole problem. There are many factors affecting Indigenous people’s employment, which differ across the country. Approaches to Indigenous employment often don’t reflect this. </p>
<p>Indigenous businesses demonstrate there is no singular recruitment strategy, Reconciliation Action Plan, apprenticeship program or cultural competence training to improve levels of Indigenous employment. </p>
<p>For example, some Indigenous-owned businesses progress Indigenous employees from entry-level positions to management because they recognise the commitment, logistics and benefits of doing so. Simply creating an entry-level position where an employee does not progress cannot achieve the same outcome.</p>
<p>Strong Indigenous employment is not limited to Indigenous businesses in certain industries. This is why tailored practices are needed that reflect a diverse Indigenous workforce across the country. </p>
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<p>Restructuring organisational culture in Australian businesses isn’t only beneficial for Indigenous peoples. Values-driven workplaces invest in employees, support their cultures, maintain a safe work environment and create opportunities for those often excluded from employment. This benefits everyone. </p>
<p>Non-Indigenous institutions can learn from Indigenous businesses, not just to become better employers of Indigenous people, but to be better employers for all. </p>
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<p><em>This article is based on research undertaken at the Australian National University by Christian Eva, Jessica Harris, Kerry Bodle, Dennis Foley, Nina Nichols and Boyd Hunter.</em></p><img src="https://counter.theconversation.com/content/218246/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The research project that this article reports on is subject to funding from the National Indigenous Australians Agency (NIAA)</span></em></p><p class="fine-print"><em><span>Kerry Bodle works for Griffith University. The research project that this article reports on is subject to funding from the National Indigenous Australians Agency (NIAA)
</span></em></p>We interviewed Indigenous business owners, managers and employees to explore how these businesses support strong levels of Indigenous employment.Christian Eva, PhD Candidate and Research Officer, Australian National UniversityJessica Harris, Lecturer Department of Accounting, Finance and Economics, Griffith UniversityKerry Bodle, Associate Professor Department of Accounting, Finance and Economics, Griffith UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2180022023-11-20T13:18:30Z2023-11-20T13:18:30ZGood profits from bad news: How the Kennedy assassination helped make network TV news wealthy<figure><img src="https://images.theconversation.com/files/560217/original/file-20231117-28-k0daxt.jpg?ixlib=rb-1.1.0&rect=4%2C4%2C2983%2C2436&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">President John F. Kennedy is seen shortly before his assassination on Nov. 22, 1963.</span> <span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/TV-MemorableMoments/4239d513431b455cb8a35299340210b1/photo">Associated Press</a></span></figcaption></figure><p>In journalism, bad news sells. “If it bleeds, it leads” is a famous industry catchphrase, which explains why <a href="https://www.routledge.com/If-It-Bleeds-It-Leads-An-Anatomy-Of-Television-News/Kerbel/p/book/9780813398198">violent crime</a>, <a href="http://cup.columbia.edu/book/terrorism-and-the-media/9780231100151">war and terrorism</a>, and <a href="https://doi.org/10.1002/9781118841570.iejs0202">natural disasters</a> are ubiquitous on TV news.</p>
<p>The fact that journalists and their employers make money from troubling events is something researchers rarely explore. But even if it seems distasteful, the link between negative news and profit is important to understand. As <a href="https://cmj.umaine.edu/faculty-staff/michael-j-socolow/">a media historian</a>, I think studying <a href="https://doi.org/10.1080/00947679.2023.2195346">this topic</a> can shed light on <a href="http://doi.org/10.1007/s42761-021-00046-w">the forces</a> that <a href="https://doi.org/10.1038/s41562-023-01538-4">shape contemporary journalism</a>.</p>
<p>The assassination of John F. Kennedy 60 years ago offers a case study. After a gunman killed the president, television news offered wall-to-wall, nonstop coverage at considerable cost to the networks. This earned TV news a reputation for public-spiritedness that lasted decades.</p>
<p>This reputation – which may seem surprising now but was widely accepted at the time – obscured the fact that TV news would soon become enormously profitable. Those profits are due in part because awful news attracts big audiences – which remains the case today.</p>
<h2>The JFK assassination made Americans turn to TV news</h2>
<p>Shortly after Kennedy was assassinated in Dallas on Nov. 22, 1963, the TV networks demonstrated their sensitivity to the tragedy by canceling commercials and <a href="https://press.uchicago.edu/ucp/books/book/chicago/C/bo3641671.html">devoting all their airtime to the story</a> for several days. CBS President Frank Stanton would later call it “the longest uninterrupted story in the history of television.” At one point, 93% of all U.S. TVs were tuned into the coverage.</p>
<figure class="align-center ">
<img alt="In a black and white image, a young woman is seen crying in front of half a dozen televisions." src="https://images.theconversation.com/files/560213/original/file-20231117-23-37j1d6.jpg?ixlib=rb-1.1.0&rect=64%2C0%2C3163%2C4132&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/560213/original/file-20231117-23-37j1d6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=755&fit=crop&dpr=1 600w, https://images.theconversation.com/files/560213/original/file-20231117-23-37j1d6.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=755&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/560213/original/file-20231117-23-37j1d6.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=755&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/560213/original/file-20231117-23-37j1d6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=949&fit=crop&dpr=1 754w, https://images.theconversation.com/files/560213/original/file-20231117-23-37j1d6.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=949&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/560213/original/file-20231117-23-37j1d6.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=949&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">As televisions report news of the assassination of President John F. Kennedy, a woman weeps in a Sears department store in Levittown, Pa.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/as-televisions-in-the-background-report-news-of-the-news-photo/1396714258">Jack Rosen/Getty Images</a></span>
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<p>Estimates vary, but the networks’ decision to forgo ads <a href="https://www.latimes.com/entertainment-arts/business/story/2023-11-14/kennedy-assassination-60th-anniversary-tv-news-viewers-walter-cronkite">may have cost them as much as US$19 million</a> – which is $191 million in 2023 dollars. </p>
<p>For decades, the networks presented their assassination coverage as <a href="https://search.worldcat.org/title/42593182">the epitome of public service</a>. And over and over, network executives and journalists argued that TV news was uniquely protected from the economic pressures found elsewhere in broadcasting. </p>
<p>TV news in the early 1960s was “the loss leader that permitted NBC, CBS and ABC to justify the enormous profits made by their entertainment divisions,” ABC News’ <a href="https://www.washingtonpost.com/wp-dyn/content/article/2010/11/12/AR2010111206508_pf.html">Ted Koppel reminisced</a> in The Washington Post in 2010. He added, “It never occurred to the network brass that news programming could be profitable.”</p>
<p>The public-service narrative that took root in November 1963 ignored the fact that the huge audiences turning to TV news for information and comfort would soon become very lucrative. </p>
<h2>How TV news became a money machine</h2>
<p>Only two months before Kennedy’s assassination, in September 1963, the networks expanded their evening newscasts to 30 minutes. They had previously been 15 minutes, offering little more than headlines. The expanded newscasts <a href="https://doi.org/10.1177/1464884910379707">sold out all their advertising opportunities</a> immediately, as television news drew the predictable daily mass audiences that sponsors craved.</p>
<p>The Kennedy assassination coverage, combined with the expanded newscasts, significantly increased the commercial value of TV news. Throughout the 1960s, broadcast journalism began to mature into the most lucrative genre of programming on American television. </p>
<p>By the 1965-1966 television season, NBC’s “The Huntley-Brinkley Report” <a href="https://content.time.com/time/subscriber/article/0,33009,941023,00.html">generated $27 million in advertising a year</a>, making it the network’s most lucrative program – out-earning even “Bonanza,” the top entertainment show. “The CBS Evening News” was <a href="https://content.time.com/time/subscriber/article/0,33009,941023,00.html">drawing in $25.5 million</a> in advertising, making it the second-most profitable program on U.S. television. </p>
<p>Around this time, networks were telling regulators that they had sacrificed millions of dollars for public service through journalism. For example, <a href="https://babel.hathitrust.org/cgi/pt?id=uiug.30112068807905&seq=351&q1=a+direct+responsibility+to+the+public+in+news+and+public+affairs+which+is+not+necessarily+&start=1">in 1965 testimony</a> before the Federal Communications Commission, executives from ABC, CBS and NBC said their news divisions had loftier motives than simply making money. </p>
<p>But they were making money, and lots of it. By 1969, “Huntley-Brinkley” was <a href="https://doi.org/10.1080/00947679.2023.2195346">earning $34 million in advertising</a> on a production budget of $7.2 million, making the program – according to Fortune magazine – “the biggest source of revenue that the N.B.C. network has – bigger than ‘Laugh-In’ or ‘The Dean Martin Show.’” A decade earlier, “Huntley-Brinkley” had been making just $8 million in ad and sponsorship revenue.</p>
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<img alt="In a black-and-white photo, two news anchors, one smoking a pipe, are seen sitting in a broadcast studio at the Miami Beach Convention Center. In the background, conventioneers are seen milling around and a sign reads 'VICTORY IN 68'" src="https://images.theconversation.com/files/560230/original/file-20231118-19-whuibz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/560230/original/file-20231118-19-whuibz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=399&fit=crop&dpr=1 600w, https://images.theconversation.com/files/560230/original/file-20231118-19-whuibz.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=399&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/560230/original/file-20231118-19-whuibz.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=399&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/560230/original/file-20231118-19-whuibz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=501&fit=crop&dpr=1 754w, https://images.theconversation.com/files/560230/original/file-20231118-19-whuibz.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=501&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/560230/original/file-20231118-19-whuibz.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=501&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Chet Huntley and David Brinkley broadcast from the Republican National Convention in 1968.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/chet-huntley-and-david-brinkley-broadcasting-for-nbc-at-the-news-photo/1297996689">Ben Martin/Getty Images</a></span>
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<p>The networks didn’t tout their profits, though. Instead, they <a href="https://press.uchicago.edu/ucp/books/book/chicago/T/bo12345529.html">continually promoted their efforts</a> covering the Vietnam War, civil unrest and the assassinations of the 1960s as service in the public interest. They also claimed that news production cost them millions, and they <a href="https://doi.org/10.1177/1464884910379707">hid ad revenues</a> accrued by news programming elsewhere in their corporate budgets. Doing this gave them a leg up on regulatory privileges, such as station license renewals. </p>
<h2>The birth of modern TV news</h2>
<p>Ultimately, the chaotic, cacophonous and confusing decade of the 1960s would end up launching the hyper-commercial media world we live in today. Chasing sensational investigative stories, such as Watergate and the Iran-Contra arms-for-hostages scandal, would <a href="https://www.upi.com/Archives/1987/07/08/Oliver-North-draws-big-ratings/8772552715200/">generate higher ratings</a> and <a href="https://niemanreports.org/articles/the-transformation-of-network-news/">more advertising revenue</a>, and turn broadcast journalists into national celebrities. </p>
<p>The original values animating network broadcast journalism at its inception would surrender to more lucrative formats. “60 Minutes” – a CBS News production – eventually became the most valuable network-owned programming property <a href="https://books.google.com/books?id=n2c6DwAAQBAJ&newbks=1&newbks_redir=0&dq=Tell+Me+a+Story+60+Minutes&source=gbs_navlinks_s">in the history of American television</a>, and by the 1980s almost every local news station had <a href="https://www.wiley.com/en-us/News+is+People%3A+The+Rise+of+Local+TV+News+and+the+Fall+of+News+from+New+York-p-9780813812076">launched its own</a> “I-Team” investigations group.</p>
<p>Eventually, the professionalism that drew audiences to TV news in the wake of the Kennedy assassination in 1963 would be supplanted by audience growth strategies <a href="https://books.google.com/books?id=lyWiYgEACAAJ&dq=inauthor:%22Frank+N.+Magid+Associates%22&hl=en&newbks=1&newbks_redir=0&sa=X&ved=2ahUKEwilh7nH9suCAxXOFFkFHY1GDZEQ6AF6BAgBEAE">sold by TV news consultants</a>. Audience analytics, minute-by-minute engagement metrics and Q-scores calibrating anchor “likability” would <a href="https://penguinrandomhousehighereducation.com/book/?isbn=9780143113775">standardize formats and homogenize newsgathering</a> in the drive to maximize profits.</p>
<p>Yet through the decades, one constant remains: Bad news sells. It’s a media-industry truism whether we’d like to study it or not, and the news broadcasts airing today, 60 years after the events of November 1963, prove it.</p><img src="https://counter.theconversation.com/content/218002/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Michael J. Socolow does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The JFK assassination was a landmark event in TV news history.Michael J. Socolow, Professor of Communication and Journalism, University of MaineLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2162532023-11-08T13:37:55Z2023-11-08T13:37:55ZFresh water is a hidden challenge − and opportunity − for global supply chains<figure><img src="https://images.theconversation.com/files/558062/original/file-20231107-15-72zegz.jpg?ixlib=rb-1.1.0&rect=65%2C5%2C3928%2C2646&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Cargo ships wait at the entrance to the Panama Canal in late September.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/cargo-ships-wait-at-the-entrance-of-the-panama-canal-at-news-photo/1687928473">Luis Acosta/AFP via Getty Images</a></span></figcaption></figure><p>Reports of <a href="https://www.nytimes.com/2023/11/01/business/economy/panama-canal-drought-shipping.html">lengthy shipping delays</a> for vessels traveling through the Panama Canal this year have highlighted the critical but often overlooked role that fresh water plays across global supply chains. Drier than normal conditions in Panama, brought on by El Niño, have <a href="https://www.bbc.com/news/business-67281776">left the region drought-stricken</a> and water levels in the locks that feed the canal lower than normal. This has led to fewer ships being able to pass through the canal each day: only <a href="https://apnews.com/article/panama-canal-locks-reduction-31-ships-061ce1797cb9b0fb8ea7ab44ba04bdf1.html">31 ships</a> currently, compared with 36 to 38 under normal conditions. This means longer waits to move products through the canal and onto store shelves. </p>
<p>The slowdown at the Panama Canal shows how access to fresh water is key to the way goods are made and shipped, <a href="https://www.cnn.com/2023/08/26/economy/panama-canal-supply-chain/index.html">affecting everything</a> from the price of groceries to retail forecasts for the upcoming holiday shopping season. As a <a href="https://harbert.auburn.edu/directory/dustin-cole.html">professor of supply chain management</a>, I think businesses would be wise to pay closer attention to this issue.</p>
<p>But first, you might ask: What does fresh water have to do with ocean freight? Plenty, it turns out.</p>
<h2>Water, water everywhere, and not enough to share</h2>
<p>The Panama Canal is a freshwater connection between two oceans – not a saltwater link, as one might assume. A series of locks on each side of the canal raise cargo freighters nearly 100 feet to human-made lakes that extend across Panama’s isthmus and lower them down to sea level on the other side. </p>
<p>Each crossing by a ship requires <a href="https://1997-2001.state.gov/regions/wha/panama/991206_faqs.html">52 million gallons</a> of fresh water from lakes, rivers and streams across this small country. This creates a trade-off between preserving water for local needs and using it to allow ships to traverse the canal. Less water allocated to the canal means fewer ships can pass through.</p>
<p>This isn’t an isolated phenomenon. Periodic low water levels in the <a href="https://www.wsj.com/articles/mississippi-river-careens-from-floods-to-low-water-threatening-barge-traffic-a6d5758d">Mississippi River</a> and the <a href="https://www.reuters.com/business/low-water-hampers-rhine-river-shipping-germany-2023-06-19/">Rhine River</a> in Germany have impeded barge traffic for years, disrupting supply chains while stoking debate about how to divide limited amounts of fresh water. Recent plans by communities in northern Colorado to <a href="https://insideclimatenews.org/news/10092023/colorado-river-upstream-use-it-before-they-lose-it-2/">build their own reservoirs</a> on tributaries of the Colorado River highlight questions about who owns access to local waterways and how this resource is governed.</p>
<h2>An ancient challenge</h2>
<p>The need to manage water resources isn’t new, with complex water management systems <a href="https://education.nationalgeographic.org/resource/roman-aqueducts/">dating back to the Roman Empire</a> and <a href="https://eal.isas.illinois.edu/projects/ancient-water-management/">even earlier</a>. Humankind has made great progress on water management over the centuries, but in recent years the issue has often taken a back seat to other pressing environmental concerns such as global warming. </p>
<p>Water management is complicated by the fact that businesses and communities sometimes find themselves in conflict: Businesses want to use water for their operations, while communities want to preserve water supplies to ensure that residents’ basic needs are met. At the same time, communities also need the jobs and services that businesses provide. Examples such as the Panama Canal highlight this tension.</p>
<p>Balancing these seemingly contrary needs calls for a deeper look into how much water is used in the making of products people buy and use every day.</p>
<p>As my colleagues and I show in a recent journal article, <a href="https://doi.org/10.1111/poms.13923">water is an important component</a> of almost everything people buy. For example, roughly <a href="https://interestingengineering.com/science/industrial-activity-is-draining-the-world-of-fresh-water">2,600 gallons of water</a> goes into making the fabric for a single pair of jeans. From growing cotton for the fibers needed to manufacturing the denim and getting those jeans onto shelves at The Gap, more and more water is embedded into each pair as it moves through the supply chain. </p>
<p>Essentially, businesses use water to transport water embedded in virtually all products they sell. This is why businesses have more than purely altruistic reasons to address water-related problems: It isn’t just good for society but also their own operations. A lack of water can hamper production and disrupt the supply chains that businesses rely on.</p>
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<h2>Solutions for businesses</h2>
<p>There are a number of ways in which businesses can improve their water management to reduce their own consumption – and costs – while limiting their exposure to water risks.</p>
<p>First, companies should realize that not everything requires clean water. Wastewater from one process can be used for another that doesn’t require clean water. Similarly, not every process pollutes water, so reuse is easy for wastewater resulting from those processes, such as water used for cooling.</p>
<p>Second, firms can share wastewater between facilities for reuse, a concept called <a href="https://www.sciencedirect.com/topics/earth-and-planetary-sciences/industrial-ecology#">industrial ecology</a>. For example, nutrient-rich water from food production can be used for farm irrigation rather than being discharged.</p>
<p>And third, since water is an excellent medium for heat transfer, rather than trying to cool one area and heat another, companies can connect the systems. For example, global aluminum giant Novelis is deploying hot water used in the casting process at one of its plants in Europe to <a href="https://www.novelis.com/district-heating-with-casting-water/">heat a neighboring building</a>.</p>
<p>Opportunities abound for improving management of fresh water – one of our most precious resources. While stronger government regulations and expanded reporting requirements will help, decisions by businesses themselves can move that needle even more.</p>
<p>For those who do, their standing in the communities in which they operate will surely benefit – as will their bottom lines.</p><img src="https://counter.theconversation.com/content/216253/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Dustin Cole does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Smart water management isn’t just good for the earth. It’s good for business.Dustin Cole, Assistant Professor of Supply Chain Management, Auburn UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2145592023-11-06T13:34:05Z2023-11-06T13:34:05ZClimate change hits indebted businesses hardest, new research suggests<figure><img src="https://images.theconversation.com/files/556689/original/file-20231030-25-gfhibp.jpg?ixlib=rb-1.1.0&rect=297%2C1154%2C6833%2C3452&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Climate change leads to investment droughts, too. </span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/photo/businessman-with-umbrella-standing-on-cracked-earth-royalty-free-image/685394718">mgstudyo/E+/Getty Images</a></span></figcaption></figure><p>Climate change poses the biggest risks to the <a href="https://doi.org/10.1002/wcc.565">most vulnerable people</a>, and the same is true for businesses: Highly leveraged companies – those that have accumulated too much debt – are uniquely susceptible to climate shocks. That’s what we found in a forthcoming study in The Review of Corporate Finance that analyzed data from <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4541036">more than 2,500 U.S. publicly listed companies</a> over 16 years. </p>
<p>As professors who study <a href="https://www.bryant.edu/academics/faculty/kuang-huan">climate finance</a> and <a href="https://www.bryant.edu/academics/faculty/zheng-cathy">corporate governance</a>, we wanted to understand how climate change affects businesses, and how <a href="https://www.investopedia.com/terms/s/stakeholder.asp">stakeholders</a> – people who have a stake in a firm’s success, such as consumers, employees and investors – respond to it. </p>
<p>So we and our colleagues <a href="https://apps.ualberta.ca/directory/person/elghoul">Sadok El Ghoul</a> at the University of Alberta and <a href="https://sc.edu/study/colleges_schools/moore/directory/guedhami_omrane.php">Omrane Guedhami</a> at the University of South Carolina conducted a study to examine how climate risk affects indebted companies.</p>
<p>We found that climate change delivers a one-two punch to highly leveraged firms by intensifying the costs that stakeholders impose on them.</p>
<p>Consider consumers. Researchers know that climate change can push people to mix up their purchasing patterns – by buying greener products, for example, or by engaging in boycotts. And while evolving consumer preferences pose a challenge to all businesses, it’s harder for a company that’s deep in debt to adapt.</p>
<p>Our study suggested as much. Two years after facing intense climate change exposure, highly indebted firms saw sales growth fall by about 1.4% on average, we found. In monetary terms, that translates into an average US$59.7 million loss per company. </p>
<p>Climate change also worries investors, we found. Companies exposed to climate risk face the threat of financial and operational disruptions that may drain lenders’ funds, particularly for firms already burdened with high debt. By examining capital issuance within our sample of companies, we found that climate exposure reduced firms’ net debt issuance – meaning new debt minus retired debt – by around $457 million per firm on average. This is an additional hurdle for indebted businesses trying to raise money.</p>
<h2>Why it matters</h2>
<p>Researchers have long known that indebted companies are at greater risk of product failures and <a href="https://doi.org/10.1111/j.1540-6261.1994.tb00086.x">losing market share</a> <a href="https://doi.org/10.1016/S0304-405X(03)00070-9">when economic conditions go south</a>. Having too much debt can even force companies out of business, as some analysts contend <a href="https://www.washingtonpost.com/business/economy/analysts-toys-r-us-might-have-survived-if-it-did-not-have-to-deal-with-so-much-debt/2018/03/15/42752326-286a-11e8-874b-d517e912f125_story.html">happened with Toys R Us</a>. </p>
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<a href="https://images.theconversation.com/files/556917/original/file-20231031-25-psqa9x.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A STORE IS CLOSED sign is affixed to an automatic door at the entrance of a Toys R Us location." src="https://images.theconversation.com/files/556917/original/file-20231031-25-psqa9x.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/556917/original/file-20231031-25-psqa9x.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=399&fit=crop&dpr=1 600w, https://images.theconversation.com/files/556917/original/file-20231031-25-psqa9x.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=399&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/556917/original/file-20231031-25-psqa9x.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=399&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/556917/original/file-20231031-25-psqa9x.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=501&fit=crop&dpr=1 754w, https://images.theconversation.com/files/556917/original/file-20231031-25-psqa9x.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=501&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/556917/original/file-20231031-25-psqa9x.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=501&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">A shuttered Toys R Us store in Orlando, Fla.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/toys-r-us-store-that-was-shuttered-in-2018-is-seen-on-june-news-photo/1151373510?adppopup=true">Paul Hennessy/NurPhoto via Getty Images</a></span>
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<p>Our research suggests that climate change, which the World Economic Forum predicts will endanger <a href="http://www3.weforum.org/docs/WEF_Global_Risk_%20Report_2020.pdf">about 2% of global financial assets by 2100</a>, will push already shaky companies to the brink. It underscores the immense and asymmetric effects global warming will have on businesses – and the reality that the most vulnerable firms are set to endure the worst.</p>
<h2>What’s next</h2>
<p>Our study highlights the disproportionate impacts of climate change on financially fragile businesses. Moving forward, we plan to explore the influence of climate change on firms’ business behaviors, particularly in terms of their ethical conduct. </p>
<p>Regarding climate solutions, one of us (Huan Kuang) has shown how companies can use innovation to reduce their climate vulnerabilities. In <a href="http://dx.doi.org/10.2139/ssrn.4150960">a working paper</a> co-authored with <a href="https://www.isenberg.umass.edu/people/bing-liang">Bing Liang</a> of the University of Massachusetts Amherst, every 1% increase in climate-related innovation – as measured by patent data – was found to reduce firm-level carbon emissions growth by around 100,000 metric tons.</p>
<p>However, indebted firms may not rush to invest in new technologies without some prodding. That means policy incentives will be key to success, and further research is needed to determine what they should look like.</p>
<p>Climate change could also have more complicated economic effects than many people realize. For example, if it forces companies that aren’t viable out of business, that would be a good thing for the economy – at least in theory, as one of us (Ying Zheng) explored <a href="https://doi.org/10.1057/s41267-020-00309-x">in a recent paper</a> on a related subject.</p>
<p>Many questions remain unanswered, but it’s already clear that climate change will have important and multifaceted effects on the future of business. We encourage other researchers to investigate further.</p>
<p><em>The <a href="https://theconversation.com/us/topics/research-brief-83231">Research Brief</a> is a short take on interesting academic work.</em></p><img src="https://counter.theconversation.com/content/214559/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Global warming plus leverage equals a big mess for companies.Huan Kuang, Assistant Professor of Finance, Bryant UniversityYing (Cathy) Zheng, Associate Professor of Finance, Bryant UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2142682023-11-01T19:24:05Z2023-11-01T19:24:05ZGrandiose visions and arrested development: a new biography considers the contradictory life of Elon Musk<p>Elon Musk, the world’s richest man, has his fingers in many pies, none of them your standard Four and Twenty – space exploration, electric cars, AI and social media, among others. </p>
<p>He became a global leader in space exploration when NASA had virtually vacated the field, and his electric vehicle company Tesla, headquartered in the gas-guzzling United States, has by far the <a href="https://money.usnews.com/investing/articles/the-10-most-valuable-auto-companies-in-the-world">biggest market capitalisation of any car manufacturer in the world</a>, yet he has few formal qualifications in either field.</p>
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<p><em>Review: Elon Musk: A Biography – Walter Isaacson (Simon & Schuster)</em></p>
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<p>Many see Musk as a 21st-century idiot savant. Others, watching him reduce an important social media platform – Twitter – to cyber-rubble, think of him simply as an idiot. Maybe both are true, or maybe other readings of his life are true. Aged 52, Musk certainly merits a good, searching biography. </p>
<p>Walter Isaacson seems well credentialed for the task. He has written biographies of Henry Kissinger, Benjamin Franklin, Albert Einstein, Steve Jobs and Leonardo da Vinci that have won awards or become bestsellers, or both. </p>
<p>Isaacson began his working life as a journalist. He spent more than two decades at Time during the magazine’s heyday, rising to become editor in 1996. Since then, he has been chief executive of the CNN cable television network, headed the <a href="https://www.aspeninstitute.org/">Aspen Institute</a> (a longstanding non-profit think tank), become a professor of history at Tulane University, and done various jobs for both Republican and Democrat governments. </p>
<p>This year he was awarded the National Humanities Medal by US President Joe Biden.</p>
<p>Isaacson’s virtue as a biographer is his reporter’s ability to gather enormous amounts of material and quickly render it as a (generally) smooth and readable account of a life bursting with dramatic events. His project only began in 2021 and covers events up to <a href="https://edition.cnn.com/2023/04/20/world/spacex-starship-launch-thursday-scn/index.html">Space X’s unsuccessful Starship rocket launch in April 2023</a>.</p>
<p>Musk made himself available for numerous interviews. He gave Isaacson access to places and people at key moments, such as the purchase of Twitter (now known as X), and regularly emailed Isaacson at 3am with his thoughts – and thought bubbles.</p>
<p>Isaacson also interviewed 130 other people, and his labours have uncovered newsworthy information that has been widely reported – and, in one case, <a href="https://www.washingtonpost.com/books/2023/09/10/elon-musk-walter-isaacson-biography-review/">corrected</a> – since the book’s publication.</p>
<p>For instance, Isaacson builds on earlier reporting by the Washington Post to reveal the extent to which Musk’s Starlink satellite network has been crucial to the Ukrainian military’s ability to fight Russia’s invasion, providing them with continued access to the internet on the battlefield after the Russians destroyed access to other internet services. He shows how Musk was persuaded by the Russians to temporarily <a href="https://www.theguardian.com/technology/2023/sep/07/elon-musk-ordered-starlink-turned-off-ukraine-offensive-biography">cut off the Starlink access</a> after he believed their entreaties that any further victories by Ukraine would provoke nuclear war.</p>
<p>The implications of these remarkable revelations have been examined by the ABC’s Matt Bevan in a recent episode of his <a href="https://www.abc.net.au/listen/programs/if-youre-listening/should-elon-musk-have-stopped-ukraine-attacking-russia-/102929348">If You’re Listening</a> podcast. But even though Isaacson revealed this information, he does not pause to discuss it in any detail. That’s one of the shortcomings of this book.</p>
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Read more:
<a href="https://theconversation.com/starlink-satellites-are-leaking-signals-that-interfere-with-our-most-sensitive-radio-telescopes-215250">Starlink satellites are 'leaking' signals that interfere with our most sensitive radio telescopes</a>
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<h2>Lord of the Flies on steroids</h2>
<p>Perhaps seduced by Musk’s apparent candour or a publisher’s pressure to rush to print, Isaacson accepts his subject’s words without sufficient scepticism. For instance, Musk’s childhood experiences at a veldskool in 1970s South Africa read like Lord of the Flies on steroids. Bullying was the norm and children were encouraged to fight over meagre food rations. “Every few years, one of the kids would die,” writes Isaacson.</p>
<p>Really? Says who? Musk, apparently. No one from the school is listed in the source notes, to confirm or refute this account. Throughout the book, Musk comes off as a shameless self-dramatiser, but that doesn’t mean his biographer should succumb to it.</p>
<p>Isaacson is an adherent of the “grand man” school of history. He has written only one biography of a woman – the Nobel Prize-winning biochemist <a href="https://www.nobelprize.org/prizes/chemistry/2020/doudna/facts/">Jennifer Doudna</a>. He is far less interested in, or comfortable with, the role structures and systems play in shaping events.</p>
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<a href="https://images.theconversation.com/files/555695/original/file-20231024-19-l2isp1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/555695/original/file-20231024-19-l2isp1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/555695/original/file-20231024-19-l2isp1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=916&fit=crop&dpr=1 600w, https://images.theconversation.com/files/555695/original/file-20231024-19-l2isp1.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=916&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/555695/original/file-20231024-19-l2isp1.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=916&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/555695/original/file-20231024-19-l2isp1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1151&fit=crop&dpr=1 754w, https://images.theconversation.com/files/555695/original/file-20231024-19-l2isp1.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1151&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/555695/original/file-20231024-19-l2isp1.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1151&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<p>As <a href="https://www.newyorker.com/magazine/2023/09/18/elon-musk-walter-isaacson-book-review">Jill Lepore pointed out in the New Yorker</a>, Isaacson also has “an executive’s affinity for the <a href="https://www.investopedia.com/terms/c/c-suite.asp">C-suite</a>”, meaning he pays little attention to the people who work for Musk or the impact of his actions on their lives.</p>
<p>The core question driving the biography is: has Elon Musk had to be such an “asshole” (Isaacson’s term) to achieve what he has? Isaacson acknowledges it is much the same question he asked about Steve Jobs in his earlier biography of the Apple cofounder.</p>
<p>I lost count of the times the question, or a variation of it, was posed during the book’s 670 pages, but in classic Time-style both-sidesing, Isaacson keeps toggling between admonishing Musk for behaving like an “asshole” and admiring his ability to get results. He rarely if ever lifts his gaze beyond this binary, which means he ignores lessons learned from all those people, past and present, who have achieved things without treating people appallingly.</p>
<p>It also means achievements are seen solely through the prism of one person’s actions. In a perceptive article in Vox, <a href="https://www.vox.com/culture/23872485/elon-musk-walter-isaacson-biography-review">Constance Grady</a> reminds us that Musk’s determination to override safety concerns in Tesla factories has led to worker injury rates equivalent to those in a slaughterhouse. </p>
<p>Grady allows that Isaacson reports the increased injury rates, but notes his vagueness about exactly what kind of injuries occurred. Citing 2018 <a href="https://revealnews.org/article/tesla-says-its-factory-is-safer-but-it-left-injuries-off-the-books/">work by the Center for Investigative Reporting</a>, she reveals Tesla workers were “sliced by machinery, crushed by forklifts, burned in electrical explosions, and sprayed with molten metal”.</p>
<p>She also notes Isaacson downplaying the company’s experience of COVID-19. Musk, a fervent libertarian allergic to any form of regulation, kept the factory running during the global pandemic. Isaacson says “the factory experienced no serious COVID outbreak”, but Grady reports there were 450 positive cases.</p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/elon-musks-hardcore-management-style-a-case-study-in-what-not-to-do-194999">Elon Musk's 'hardcore' management style: a case study in what not to do</a>
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</p>
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<h2>From Twitter to X</h2>
<p>Musk has an immense work ethic and expects everyone working for him to share it. By relentlessly questioning all assumptions – “the laws of physics are unbreakable; everything else is a recommendation” – Musk and those working in his companies have indeed achieved a lot.</p>
<p>I am not really in any position to assess Musk’s contribution to space exploration, AI or car manufacturing. But I am willing to accept the evidence of Isaacson’s biography that they have been substantial – or, in the case of AI, promise to be. </p>
<p>I feel better able to assess Musk’s contribution to social media. Here, the evidence presented by Isaacson and many others is that Musk has damaged, perhaps irretrievably, Twitter – which he has renamed X, a letter of the alphabet to which he seems inordinately attached. Not only has he named one of his children X, he waves away the letter’s other connotations.</p>
<p>In 1999, Musk cofounded the online bank <a href="https://en.wikipedia.org/wiki/X.com_(bank)">X.com</a>. He soon learned there was another company aimed at revolutionising online transactions, PayPal, founded at around the same time by Peter Thiel, Max Levchin and Luke Nosek. </p>
<p>The companies merged in 2000, amid a classic Silicon Valley phallus-waving struggle over who had the idea first and who should take over whom. Levchin derided X.com as a “seedy site you would not talk about in polite company”. “If you want to take over the world’s financial system,” Musk rebutted, “then X is the better name.”</p>
<p>Musk lost the nomenclature war then, but realised his dream more than two decades later when he bought Twitter for <a href="https://www.nytimes.com/2022/10/27/technology/elon-musk-twitter-deal-complete.html">US$44 billion</a> and could call it whatever he liked.</p>
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<em>
<strong>
Read more:
<a href="https://theconversation.com/fallen-crypto-king-sam-bankman-fried-was-perfectly-positioned-to-make-a-religion-of-himself-213893">Fallen crypto king Sam Bankman-Fried was 'perfectly positioned to make a religion of himself'</a>
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<h2>Impulsive, determined, clueless</h2>
<p>The picture of Musk that emerges in Isaacson’s book is of an impulsive, utterly determined person who is genuinely talented as a physicist and businessperson, and genuinely clueless when it comes to human relationships. He either doesn’t get people or doesn’t care about them – or, more likely, both. </p>
<p>He dotes on his children, especially X (I guess you need to do something to compensate for naming a child after a letter), yet he is capable of breathtaking callousness and rank sexism. He whispered in his first wife’s ear on their wedding night that he was the alpha male in the relationship.</p>
<p>In 2021, Musk’s third wife, Shivon Zilis, was pregnant with twins conceived with Musk by in-vitro fertilisation, and was in a hospital in Texas experiencing complications. At the same time, and in the same hospital, a woman serving as a surrogate for Musk and his ex-wife, Claire Boucher – better known as the Canadian-born musician Grimes – was also experiencing pregnancy complications.</p>
<p>Zilis and Boucher, not to mention the surrogate, did not know about the other’s pregnancy. </p>
<p>As Isaacson drolly comments elsewhere in the book:</p>
<blockquote>
<p>Musk developed an aura that made him seem, at times, like an alien, as if his Mars mission were an aspiration to return home, and his desire to build humanoid robots were a quest for kinship.</p>
</blockquote>
<p>Musk is on record saying humanity is in danger of not having enough smart people and it is his duty to populate the planet with as many of them as possible. To date, he has 11 children. If that notion sounds disturbingly like eugenics, it is not something Isaacson reflects on as he studiously documents Musk’s chaotic love life.</p>
<p>Nor does he delay his rat-a-tat-tat narration of every twist and turn in Musk’s dramatic life to question his subject’s burning desire to make humanity a “multi-planet civilisation” by colonising Mars. Musk is obsessed with this goal because he is worried about the prospect of our planet being destroyed by the accelerating consequences of climate change. </p>
<p>A laudable ambition, no doubt. But neither he nor his biographer stops to ask: if humanity fails so badly that it destroys this world, why would you think it could make life better on another, already inhospitable planet?</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/556981/original/file-20231031-25-buzfds.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/556981/original/file-20231031-25-buzfds.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/556981/original/file-20231031-25-buzfds.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=105&fit=crop&dpr=1 600w, https://images.theconversation.com/files/556981/original/file-20231031-25-buzfds.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=105&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/556981/original/file-20231031-25-buzfds.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=105&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/556981/original/file-20231031-25-buzfds.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=132&fit=crop&dpr=1 754w, https://images.theconversation.com/files/556981/original/file-20231031-25-buzfds.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=132&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/556981/original/file-20231031-25-buzfds.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=132&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">The surface of Mars.</span>
<span class="attribution"><a class="source" href="https://commons.wikimedia.org/wiki/File:Mars_pathfinder_panorama_large.jpg">NASA/JPL, Public domain, via Wikimedia Commons</a></span>
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<h2>Startling achievements and childish petulance</h2>
<p>It is easy and tempting to poke fun at Musk. Perhaps this is because his personality combines grandiose visions with arrested development, startling achievements with childish petulance. His idea of dieting is to get hold of the diabetes medication Ozempic – the dieter’s drug du jour – begin an intermittent fasting regime, then make his first meal of the day a bacon-and-cheese burger and sweet-potato fries topped with a cookie-dough ice-cream milkshake. </p>
<p>Or do you remember how Musk responded in 2018 to a mild rebuke of his frenetic desire to play the hero rescuing children trapped in a cave in Thailand with a purpose-built mini-craft? That’s right, by <a href="https://www.theguardian.com/technology/2018/jul/15/elon-musk-british-diver-thai-cave-rescue-pedo-twitter">labelling one of the actual rescuers a “pedo guy”</a>.</p>
<p>But it is dangerously easy. Social media plays an important role in modern society. Whatever its benefits, and they are many, the algorithms embedded in social media platforms – by their owners, let’s not forget – neatly sidestep nuance and reason in debate, turbo-charge conflict and emotion, and play a role in the spread of misinformation and disinformation.</p>
<p>Musk is now the owner of one such social media platform. But since buying Twitter last year, he has not been able to bend it to his will. His mistake – perhaps fatal, according to Isaacson – appears to be that he sees it as a technology company, something he understands, when it is really an “advertising medium based on human emotions and relationships”, something he does not understand.</p>
<p>Musk proclaims himself a free-speech advocate, but he has already displayed flagrant biases. He allowed Ye (formerly Kanye West) to <a href="https://www.cnbc.com/2022/11/21/kanye-west-returns-to-twitter-after-restrictions-for-antisemitic-posts.html">tweet anti-Semitic remarks</a>. He tweeted a florid conspiracy theory about the savage <a href="https://edition.cnn.com/2023/01/27/politics/paul-pelosi-attack-video-release/index.html">attack on Paul Pelosi</a>, husband of the then speaker of the US House of Representatives, Nancy Pelosi. And he has asserted China’s repression of the Uyghurs was an issue that “<a href="https://campaignforuyghurs.org/cfu-denounces-elon-musks-deeply-troubling-comments-on-uyghur-genocide/">had two sides</a>” – perhaps because China was <a href="https://www.bbc.com/news/business-59863859">important to his car company, Tesla</a>.</p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/wrong-elon-musk-the-big-problem-with-free-speech-on-platforms-isnt-censorship-its-the-algorithms-182433">Wrong, Elon Musk: the big problem with free speech on platforms isn't censorship. It's the algorithms</a>
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<p>Musk has become obsessed by what he calls the “woke-mind virus”, which he believes is infecting social discourse. Whatever the excesses and blind spots of those on the progressive side of politics, Musk sees this virus almost everywhere. </p>
<p>A longtime devotee of comics and science fiction, he has increasingly given rein to his conspiratorial tendencies, as if he really thinks The Matrix trilogy was a documentary series. In one of his 3am tweets, Musk wrote: “My pronouns are Prosecute/Fauci”. As Isaacson trenchantly comments: </p>
<blockquote>
<p>It made little sense, wasn’t funny, and managed, in just five words, to mock
transgender people, conjure up conspiracies about the 81-year-old public health
official Anthony Fauci, scare off more advertisers, and create a new handful of
enemies who would now never buy Tesla.</p>
</blockquote>
<p>Nor does Musk’s belief in free speech extend to the social media postings of Twitter employees or their comments on internal Slack messaging. He trampled on the company’s internal culture of healthy dissent, peremptorily firing three dozen employees who had criticised the company.</p>
<p>His longstanding, largely successful mantra of getting things done cheaply and quickly, regardless of impediments, finally ran aground after he proposed <a href="https://www.nytimes.com/2023/02/26/technology/twitter-layoffs.html">cutting the company’s workforce by 75%</a>. </p>
<p>Just before Christmas last year he decided it was imperative to move all the company’s servers from Sacramento to Oregon as a way of saving money. Remember how presidential aspirant <a href="https://www.theguardian.com/us-news/2023/may/24/ron-desantis-2024-twitter-launch-tech-outage">Ron De Santis’ big live interview on X went horribly wrong</a> earlier this year? That was because of problems with the servers, writes Isaacson. </p>
<p>More recently, the drastic cutting of the site’s moderators led to <a href="https://www.cnbc.com/2023/10/09/x-formerly-twitter-amplifies-disinformation-amid-the-israel-hamas-conflict.html">floods of misinformation</a> following the attack on Israel by Hamas on October 7.</p>
<p>Musk has also begun to realise that advertising, which previously comprised 90% of Twitter’s revenue, is susceptible to public perceptions. It fell by more than half in the first six months of Musk’s ownership, according to Isaacson. </p>
<h2>Geopolitical implications</h2>
<p>As mentioned earlier, Musk has found himself playing a key role in a war with geopolitical implications. </p>
<p>Immediately before invading Ukraine in early 2022, <a href="https://www.reuters.com/world/europe/russia-behind-cyberattack-against-satellite-internet-modems-ukraine-eu-2022-05-10/">Russia launched a malware attack</a> that crippled the US satellite company providing internet service to Ukraine. Its deputy prime minister, Mykhailo Fedorov, reached out to Musk via Twitter, appealing for help.</p>
<p>Musk did, donating US$80 million worth of technology to Ukrainian forces, including Starlink’s <a href="https://www.space.com/ukraine-russia-war-spacex-starlink-satellite-internet">solar and battery kits</a>, which were able to defeat Russian efforts to jam them. </p>
<p>Musk’s intervention was widely praised, but in September 2022, when the Ukrainians planned to use Starlink to guide a drone attack on the Russian naval fleet at Sevastopol in Crimea, he refused to help. He had been listening to the Russian ambassador, who had reached out to him a few weeks before. </p>
<p>Russia had annexed Crimea in 2014 and the ambassador persuaded him not only of Russia’s inalienable right to Crimea, but of the prospect of nuclear war if the Ukrainians were allowed to try and retake it. He told Isaacson he had been studying foreign policy and military history: “Musk explained to me the details of Russian law and doctrine that decreed such a response.”</p>
<p>Has technology put an individual private citizen in such a position before? </p>
<p>Individual companies, such as the Krupp manufacturing company, notoriously played an important role in arming Nazi Germany. Individual media proprietors, such as Rupert Murdoch, have played a role in encouraging war, as when Murdoch’s media outlets overwhelmingly editorialised in favour of the United States invading Iraq in 2003.</p>
<p>The combination of new global communication technologies and decades of unwillingness by governments to find ways to regulate them adequately has now put one unelected citizen, as childishly impulsive as he is brilliant, in a rare position. </p>
<p>The question is not simply, is he equipped to make such decisions, but how and why has it come to this?</p><img src="https://counter.theconversation.com/content/214268/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Matthew Ricketson does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Some see Elon Musk as an idiot savant; others think of him simply as an idiot. How did an unelected citizen come to wield such power?Matthew Ricketson, Professor of Communication, Deakin UniversityLicensed as Creative Commons – attribution, no derivatives.