Introduction to AI Economics

Could ongoing economic turbulence – or a recession – result in even more widespread adoption of AI and AI agents as a cost-saving move? There’s a risk to business leaders thinking in the event of sour times they could simply lay off workers and swap in AI systems to replace them – such a choice could be extremely counterproductive.

The Challenge of Adopting AI

Cruelty of layoffs aside, the vast majority of businesses simply aren’t ready to simply adopt AI on a wholesale basis, said Phil Fersht, CEO of HFS Research, in a recent interview on Michael Krigman’s CXO Talk. The problem is, Fersht related, is most companies still don’t have the experience, skills and knowledge to implement AI in a smart and scalable way.

The Risk of "Weaponized AI"

Many companies are now “very aware of what they can do, but they’re still yet to have that burning-platform trigger to go do it,” he continued. "My concern is if we plunge into a deep recession, you’re gonna see some organizations literally come out and say, ‘We’re just gonna start relying a lot more on AI, and we’re gonna let people go.’" The risk with such a “weaponized AI,” Fersht explained, is “how advanced they are with embracing this. Are they prepared to do anything?”

Readiness to Adopt AI

In working with many enterprises, Fersht found “they’re not doing a lot.” Only about 15% of executives feel they are truly ready to adopt AI in a positive and intelligent way, his firm has found through surveys. They have “fairly integrated views of where they’re going; they have a strong culture of support, and they’re embracing this.” The majority of companies, he related, “are either still figuring it out or they’re not on the path. And this is just going to become more pronounced as we go through the next few months of macroeconomic turbulence.”

The AI-First Mindset

Fersht emphasized that executives aren’t consciously thinking about getting rid of people. “They’re actually thinking about, ‘How do we break from the past?’ Companies have much data, they don’t know what to do with it. They can’t join it up. They can’t make decisions on it.” Rather, the thinking is breaking away from legacy systems, to start to really build out the new with agentic systems. There is an “AI-first mindset” that is shaping future hiring and skill-acquisition plans. Companies “are now insisting before you hire any new staff, you need to show that this work can’t be done by AI. We’ve reached that point quite quickly."

Impact on Offshoring and Hiring

The impact on offshoring – previously seen as a way to avoid new hiring – is already tangible, he continued. “Now, C-suite directives are, ‘can we not do this with AI?’ The whole point of agents is really this ability for companies to grow and scale in a way that you don’t need to keep adding more and more people. You do a lot more with the people you have, and I think that’s the positive way to think about this.”

Threat and Opportunity

For people in business, there’s both threat and opportunity. “If you’re in a job where you can be effectively replicated and replaced, you kind of know that, and you need to figure out, ‘how do I continue to add value in an enterprise?’” The value for humans comes from collaboration, people skills and empathy. “If you can become a great person everybody likes to work with, and you become very thoughtful about what you do, and you start to collaborate beyond your existing area, you become very valuable to your company.”

Conclusion

In conclusion, while AI may seem like a threat to some, it also presents an opportunity for businesses and individuals to adapt and grow. By understanding the challenges and limitations of adopting AI, companies can make informed decisions about how to leverage this technology to their advantage. Ultimately, the key to success lies in finding a balance between the benefits of AI and the value of human skills and collaboration.

FAQs

Q: Will AI replace human workers in the event of a recession?
A: While some companies may consider replacing human workers with AI in the event of a recession, this approach can be counterproductive and is not a recommended solution.
Q: How many companies are ready to adopt AI?
A: According to Phil Fersht, only about 15% of executives feel they are truly ready to adopt AI in a positive and intelligent way.
Q: What skills are valuable in an AI-driven economy?
A: Skills such as collaboration, people skills, and empathy are valuable in an AI-driven economy, as they are difficult to replicate with AI.
Q: How is AI changing hiring and skill-acquisition plans?
A: Companies are now insisting that new staff hires demonstrate that their work cannot be done by AI, indicating a shift towards an AI-first mindset.

As we embark on the journey of “Future of work innovations”, the financial sector is witnessing a significant transformation. With the rise of blockchain and cryptocurrency, traditional banking is being disrupted, and a new era of financial transactions is unfolding. The future of finance is being redefined, and it’s essential to understand the implications of this shift.

Understanding Blockchain and Cryptocurrency

Blockchain technology is a decentralized, digital ledger that records transactions across a network of computers. It’s the underlying technology behind cryptocurrency, which is a digital or virtual currency that uses cryptography for security. The most well-known cryptocurrency is Bitcoin, but there are many others, such as Ethereum and Litecoin.

How Blockchain Works

Blockchain works by creating a network of nodes that verify and record transactions. Each node has a copy of the blockchain, which is updated in real-time. This decentralized approach eliminates the need for intermediaries, such as banks, and allows for peer-to-peer transactions. The blockchain is also transparent, secure, and immutable, making it an attractive solution for financial transactions.

Benefits of Cryptocurrency

Cryptocurrency offers several benefits, including lower transaction fees, faster transaction times, and increased security. It also provides an opportunity for financial inclusion, as anyone with an internet connection can participate in the cryptocurrency market. Additionally, cryptocurrency is not subject to the same regulations and restrictions as traditional fiat currency, making it an attractive option for those looking for more freedom in their financial transactions.

The Impact of Blockchain and Cryptocurrency on Traditional Banking

The rise of blockchain and cryptocurrency is having a significant impact on traditional banking. Many banks are investing in blockchain technology, and some are even launching their own cryptocurrencies. However, the decentralized nature of blockchain and cryptocurrency also poses a threat to traditional banking, as it eliminates the need for intermediaries and allows for peer-to-peer transactions.

Disintermediation

Disintermediation is the process of removing intermediaries from a transaction. In the context of blockchain and cryptocurrency, disintermediation refers to the elimination of banks and other financial institutions from the transaction process. This allows for faster, cheaper, and more secure transactions, which is a significant threat to traditional banking.

Decentralized Finance (DeFi)

Decentralized finance, or DeFi, refers to the use of blockchain and cryptocurrency to create decentralized financial systems. DeFi applications include lending, borrowing, and trading, and they operate without the need for intermediaries. DeFi has the potential to disrupt traditional banking by providing more efficient, secure, and transparent financial services.

Regulatory Environment

The regulatory environment for blockchain and cryptocurrency is still evolving. Many governments are struggling to understand the implications of these technologies and are working to develop regulations that balance innovation with protection for consumers. However, the lack of clear regulations is creating uncertainty and risk for investors and users.

Security and Risk

Security and risk are significant concerns in the blockchain and cryptocurrency space. The decentralized nature of these technologies makes them vulnerable to hacking and other forms of cyber attack. Additionally, the lack of clear regulations and the volatility of cryptocurrency markets create significant risk for investors.

International Cooperation

International cooperation is essential for developing a comprehensive regulatory framework for blockchain and cryptocurrency. Governments and regulatory bodies must work together to develop standards and guidelines that promote innovation while protecting consumers.

Future of Finance

The future of finance is being shaped by blockchain and cryptocurrency. These technologies have the potential to create more efficient, secure, and transparent financial systems. However, they also pose significant risks and challenges, and it’s essential to develop a comprehensive regulatory framework to promote innovation while protecting consumers.

Increased Efficiency

Blockchain and cryptocurrency have the potential to increase efficiency in financial transactions. They eliminate the need for intermediaries, reduce transaction times, and lower transaction fees. This increased efficiency can lead to cost savings and improved profitability for businesses and individuals.

Improved Security

Blockchain and cryptocurrency also have the potential to improve security in financial transactions. The decentralized nature of these technologies makes them more secure than traditional financial systems, which are vulnerable to hacking and other forms of cyber attack.

Conclusion

In conclusion, the future of finance is being disrupted by blockchain and cryptocurrency. These technologies have the potential to create more efficient, secure, and transparent financial systems. However, they also pose significant risks and challenges, and it’s essential to develop a comprehensive regulatory framework to promote innovation while protecting consumers. As we move forward, it’s essential to stay informed and adapt to the changing landscape of finance.

Frequently Asked Questions (FAQs)

What is blockchain technology?

Blockchain technology is a decentralized, digital ledger that records transactions across a network of computers. It’s the underlying technology behind cryptocurrency and has the potential to create more efficient, secure, and transparent financial systems.

What is cryptocurrency?

Cryptocurrency is a digital or virtual currency that uses cryptography for security. The most well-known cryptocurrency is Bitcoin, but there are many others, such as Ethereum and Litecoin.

How does blockchain work?

Blockchain works by creating a network of nodes that verify and record transactions. Each node has a copy of the blockchain, which is updated in real-time. This decentralized approach eliminates the need for intermediaries, such as banks, and allows for peer-to-peer transactions.

What are the benefits of cryptocurrency?

Cryptocurrency offers several benefits, including lower transaction fees, faster transaction times, and increased security. It also provides an opportunity for financial inclusion, as anyone with an internet connection can participate in the cryptocurrency market.

What is decentralized finance (DeFi)?

Decentralized finance, or DeFi, refers to the use of blockchain and cryptocurrency to create decentralized financial systems. DeFi applications include lending, borrowing, and trading, and they operate without the need for intermediaries.

What are the risks associated with blockchain and cryptocurrency?

The risks associated with blockchain and cryptocurrency include security risks, such as hacking and other forms of cyber attack, and market risks, such as volatility and lack of clear regulations.

How can I get involved in the blockchain and cryptocurrency space?

You can get involved in the blockchain and cryptocurrency space by investing in cryptocurrency, using blockchain-based applications, or developing your own blockchain-based projects. However, it’s essential to do your research and understand the risks and challenges associated with these technologies.

What is the future of finance?

The future of finance is being shaped by blockchain and cryptocurrency. These technologies have the potential to create more efficient, secure, and transparent financial systems. However, they also pose significant risks and challenges, and it’s essential to develop a comprehensive regulatory framework to promote innovation while protecting consumers.

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Introduction to the U.S.-China Tech Competition

The U.S.-China tech competition is about more than tariffs. The future of the Internet is at stake. China is not just exporting hardware—it is exporting laws, standards, and authoritarian control. China is promoting its vision of what cyberspace should look like, which clashes sharply with the U.S.’s vision for a free and open Internet. To do so, China is training other governments in its authoritarian ways. It is fiercely seeking to dominate the little-known international organizations that literally set the standards for global tech, ensuring that Chinese firms have a global edge. China is also exporting its Legal Great Wall, repressive laws related to China’s national security and cybersecurity. China is attempting to enforce those laws abroad—even in the U.S. The U.S. and the private sector must act to counter China’s legal warfare—and keep China from taking over the Internet.

China’s Competing Vision for Tech and Cyberspace

The U.S.’s conception of what the Internet should look like is vastly different than China’s. The latest U.S. National Security Strategy, released in 2022, endorses the UN Norms of Responsible State Behavior in Cyberspace as the “rules of the road” for cyberspace and says the U.S. will promote them together with partner and ally nations. These “UN Cyber Norms,” were created by a UN Group of Governmental Experts and affirmed by the UN General Assembly in 2021. The 11 basic norms specify that states should not attack critical infrastructure, respond to requests for assistance by those attacked, and cooperate with other states to stop crime and terrorism, and other rules designed to keep civilians safe from cyber conflict. As the Strategy says, the Norms affirm that “human rights apply online just as they do offline.” Project 2025 goes even further than non-binding norms. Project 2025 advocates for the State Department to work with allies on a binding framework of enforceable norms that would “draw clear lines of unacceptable conduct” in cyberspace.

China’s Promotion of Cyber Sovereignty

China promotes a different future for the Internet. China advocates “cyber sovereignty,” a concept first announced by Xi Jinping in 2015. Cyber sovereignty allows states full control over Internet governance within their borders—to include censorship and surveillance. According to Adam Segal, a former senior cyber official in the Biden administration, the key goals of cyber sovereignty are tight control over domestic information, technological dominance, and influence over global cyber governance.

China’s Partnerships and Trainings

China has partnered with Russia and others to advance its vision of cyber sovereignty. China supports a Russia-led competing initiative in the UN designed to undermine the U.S.-backed Group of Governmental Experts. China also sells surveillance and censorship technology to other states and teaches them to use it. China’s National Computer Emergency Response Center (CERT) has partnerships with at least 274 other CERTs in 81 countries and territories and has signed 33 cybersecurity cooperation memoranda. These partnerships may include favorable trade and financing terms and intelligence-sharing agreements, may give China visibility into software vulnerabilities worldwide, and can provide access for China-based hackers. China has also held trainings and academies for foreign government and business officials. Data is scant, but China trained officials from at least 36 countries in 2017-2018 alone. 437 Southeast Asian government officials attended one such training at the Baise Executive Leadership Academy—on how to “guide public opinion online.”

How China Is Rewriting Global Tech Rules

China has also sought to dominate international standards-making bodies. The International Standards Organization, International Telecommunications Union, and other standards-making bodies are unknown to most—but they quietly make it possible for the world to work together. For example, the ISO ensures things like credit cards fit in ATMs, A4 paper fits in printers, and your personal data stays secure online. The ITU makes sure your phone connects internationally, your TV does not lose signal, and satellites do not crash into each other. These organizations shape everything from the screws in your furniture to the 5G signal on your phone. And they will set AI standards that will affect virtually all the tech you touch.

China’s Influence in International Standards-Making Bodies

China is trying to use international standards-making bodies to influence every technological choice you make. China’s representation in multilateral technical bodies has grown by 250% in the past 10-15 years. China now chairs or co-chairs more technical committees of the ISO than any other country. It has disproportionate representation in working groups at the ISO and ITU. ITU leadership increasingly features China-backed representatives advancing cyber sovereignty. Can you imagine a world in which the only cell phones that could make calls were made in China? China can—and it is trying to set the standards so that its own tech will dominate the future.

How the U.S. Can Stop China From Taking Over the Internet and Dominating Global Tech

The U.S. and its allies and partners must treat China’s legal warfare ("lawfare") and “normfare” as a strategic threat. They must invest in a binding legal framework to protect a free and open Internet. The U.S. must also work closely with the private sector and advocate for the interests of U.S. businesses. Private sector lawsuits against China and Chinese tech firms can challenge and weaken China’s influence over tech standards. The U.S. must also work with allies to educate countries about the risks of Chinese tech, and to provide low-cost alternatives to the repressive technologies that China is selling to the developing world.

Conclusion

Tech tariffs are just the tip of the iceberg. China is trying to rewrite the rules that shape our lives on and offline. The U.S. and the private sector must act decisively to stop China’s world-wide web of authoritarianism from ensnaring us all.

FAQs

Q: What is the main goal of China’s cyber sovereignty concept?
A: The main goal of China’s cyber sovereignty concept is to allow states full control over Internet governance within their borders, including censorship and surveillance.
Q: How is China promoting its vision of cyber sovereignty?
A: China is promoting its vision of cyber sovereignty by partnering with other countries, selling surveillance and censorship technology, and providing trainings and academies for foreign government and business officials.
Q: What is the role of international standards-making bodies in the U.S.-China tech competition?
A: International standards-making bodies, such as the ISO and ITU, play a crucial role in shaping global tech standards, and China is seeking to dominate these bodies to influence every technological choice made worldwide.
Q: How can the U.S. stop China from taking over the Internet and dominating global tech?
A: The U.S. can stop China by treating China’s legal warfare and "normfare" as a strategic threat, investing in a binding legal framework to protect a free and open Internet, and working closely with the private sector and allies to educate countries about the risks of Chinese tech and provide low-cost alternatives.