Hello dear readers!

Great to see you again, and for those with little ones, congratulations on the start of the school year.

While we may be in what are traditionally known as the dog days of summer, this month has been anything but. From planes in Ukraine to Presidential debates in the US to historic mugshots, we have it all.

Back in our world, I’m excited at the chance to share with you some interesting takes on what’s going on in the world of business and work.

This issue, we look at the concerning mega-growth of big business, what leadership looks like in an AI-driven workplace, and a roundup of the things I’m reading, watching, listening to, and thinking about.

Let’s get started!

Industry Highlights: How Big is Too Big?

Big business is on the rise.

Over the last several decades, large corporations have taken a larger and larger slice of the pie in every industry. The New York Times reports that more than 97% of all corporate assets and 80% of revenues belong to the top 1% of companies.

Anyone who’s ever played Monopoly knows corporate concentration does leave a lasting impact on the system. Companies can lower wages, increase prices, and dilute product quality without fear of customer attrition. In real terms, some economists believe that this lack of meaningful competition can cost the typical American household over $5,000 per year.

Take internet and cell phone companies, for example. US customers pay far more for these services than in many other countries, but they don’t have a choice. Even if your provider’s signal is spotty or its customer service is poor, odds are you won’t have many other options in your area.

More pointedly, there seems to be a trend in recent years for reduced churn among big companies, as well as exploding profits. In May, the Los Angeles Times reported corporate profits are up nearly 600 percent since 2000.

These signs have rung alarm bells for the Biden administration, which began a campaign of trust-busting at levels we haven’t seen since Teddy Roosevelt more than a century ago.

The Biden administration appointed monopoly critic Lina Khan to lead the Federal Trade Commission, and she quickly got to work blocking big mergers.

Or at least, she’s attempted to. The FTC has recently experienced setbacks as they were rebuffed in their efforts to block several big acquisitions, including one between Meta and VR fitness app company Within Unlimited, and Microsoft’s purchase of video game behemoth Activision Blizzard.

That last one is particularly interesting because the UK’s Competitions and Markets Authority blocked the Microsoft/Activision deal, and it was only allowed to pass after Microsoft rejigged it and sold off streaming rights to French video game publisher Ubisoft.

While on the surface, it looks as though mega corps may have nefarious designs, some economists say that’s not necessarily the case.

A recent Economist article suggests that while certain sectors like hospitals—which studies show have increased prices and decreased quality—have been affected by higher levels of market concentration, low churn and increased corporate profits don’t necessarily reduce consumer value.

And yes, corporate profits are on the rise, but the numbers don’t look quite so staggering when considering lower tax rates and growing global footprints.

They’ve also potentially peaked. The Economist reports that the S&P 500 American blue chips index has lost ground year-on-year for the third quarter in a row.

Equally as encouraging is the fact that more businesses are cropping up in most sectors. The past few years have seen an influx of startups, which experts attribute to virtual-only business models that increase the talent pool and decrease brick and mortar operating costs.

There’s no guarantee that these new companies will have the force to disrupt the industry—as a matter of fact, one Economist columnist thinks startups have a harder road ahead of them than ever—but if the rising amount of venture capital investments (which aren’t as high as 2021 but near-equal to those in ‘19 and ‘20) are any indicator, there’s a fair amount of confidence in the little guy.

And really, who doesn’t love a good underdog story?

The Future of Work: Reskilling in the Age of AI

It’s already pretty clear that generative AI isn’t just a flash in the pan.

A recent McKinsey report shows a third of organizations are already using AI tools in at least one function of their business, and the Nielsen Norman Group found AI has already resulted in a 14 percent increase in completed customer service inquiries, a 59 percent increase in the number of documents read, and a whopping 126 percent increase in code programs completed per week.

Compare this to the fact that US average productivity growth has clocked in around 1 percent in the 10 years leading up to the pandemic—and since dropped.

The surprising part of this, as a recent article in the Harvard Business Review points out, is that sophisticated knowledge-based work—research, coding, and writing—have historically been impervious to innovation or disruption. In other words, a line-level coder’s job was extremely safe.

Not so much anymore.

If employers aren’t interested in showing their loyal workers the door en masse—a June Challenger, Gray, & Christmas report attributed nearly 4,000 layoffs to AI implementation—they need to start thinking about how they are going to reskill and upskill workers.

Some companies are getting ahead of the curve. A January BCG report found that leading companies intended to spend up to 1.5 percent of their annual budgets on learning and skill building.

But experts said that’s probably not enough to defray the impending AI revolution. Author and industry disruption specialist Charlene Li wrote in her LinkedIn newsletter last week that some executives have been reluctant to acknowledge the impact generative AI will have on their business.

She gave the example of the journalism industry in the early 2000s, where journalism industry heads were adamant the coming of the internet wouldn’t affect how newspapers operated. Two decades later, newspaper reporter positions have been cut in half, and over 2,500 publications have shuttered.

This mindset has to change. In a recent episode of the HBR video series, “The New World of Work,” Harvard Business School professor Karim Lakhani said change and change management are skills that are no longer optional for modern organizations—and their leaders.

HBR states that reskilling is going to take a village, and in order to do so effectively, leaders must ensure the right mindset and behaviors exist among employees and managers alike.

Several of the most important tasks include understanding supply and demand, effective recruiting and evaluating, shaping the mindset of middle managers, building skills in the flow of work, and matching and integrating reskilled employees.

A big ask to be sure, but it’s not all doom and gloom. IBM CEO Avnid Krishna told Barron’s he felt confident that AI will create far more jobs than it cuts.

So yes, AI will likely change the faces of most industries, but it will be a great boon for those who get future-focused and adapt.

You might say it’s not the AI revolution, but the reskilling revolution that’s on its way.

The Supply Aside: What I’m Reading, Watching, Listening to, and Thinking About Re: Supply Chain, Work, and Beyond

📕 Read - Hidden Genius by Polina Marinova Pompliano

I’ve been a fan of Polina Marinova Pompliano’s newsletter, The Profile, which takes a deep dive into what makes highly successful people tick. Her new book, Hidden Genius: The secret ways of thinking that power the world’s most successful people takes that same idea and encapsulates the concepts into a new form. Pompliano writes that the highest performers don’t use tricks or hacks to achieve success—they use mental frameworks that fundamentally change the way they see the world. An inspiring read for anyone looking to learn what distinguishes the good from the truly great.

What Else I’m Reading:

• Nvidia’s Q2 earnings prove it’s the big winner in the generative AI boom—Tech Crunch—A new computing era has begun, and Nvidia’s Q2 earnings prove there’s lots of money to be made selling the picks and shovels of the generative AI boom.

• Chicago Blames Car Makers as Thieves Livestream Thefts—Bloomberg—The Windy City has sued both Kia and Hyundai for failing to include anti theft components in their vehicles, which have led to a rash of thefts across the city being filmed on TikTok.

• The search for winners in the new battery era—Financial Times—Car manufacturers, mining companies, and battery developers are all trying to carve a space in the world of next-generation batteries, forming a series of alliances while placing technological bets.

📺 Watch - Painkiller

Normally I’m all for documentaries when it comes to retelling true events, but Painkiller, a fictional look at the rise of the opioid epidemic on Netflix, is truly remarkable. It’s told from the perspective of survivors, victims, villains, of the nation’s battle against Oxycontin. It’s got an aggressive, frenzied pace that makes you feel like you’re in the action yourself.

👂 Listen - All In Podcast

One thing I like about the All In Podcast is that despite these guys being absolute powerhouses of the business world, they don’t just relegate their conversation to Wall Street. On this recent episode of the pod, the quartet examines the cultural significance of Oliver Anthony’s breakout song, “Rich Men North of Richmond” and its ties to Americans’ struggles with upward mobility.

💡 Think - Bitcoin on the Rise Again?

I’m thinking about how the shifting tide of global sentiment towards Bitcoin continues to grow. Previously seen as a renegade technology, met with skepticism by many nations, the crypto-giant is no longer a stranger to discussions around economic planning. The latest country to plow ahead is Oman. Their recent $1.1 billion dive into Bitcoin mining echoes a similar sentiment of El Salvador and Bhutan. There’s no more observing the wave—these countries want to participate actively.

The mass exodus of mining from China in 2021 reshaped the crypto landscape, positioning the US (read: Texas) at the forefront. With sovereign states openly recognizing Bitcoin's potential, we're witnessing an evolution from apprehension to acknowledgment to adaptation.

Or not. Regardless, one thing is for sure: It's here to stay.

Charts of the Week

Quote of the Week

Tweets of the Week

Finally...

Thanks so much for reading. I’d love to know what you think about this issue and how I can make it more useful to you.

If you have suggestions or topics you’re interested in seeing me address, shoot me an email at [email protected]!

Want more?

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Happy reading this weekend!

-- Naseem