More Than Just Data: Holiday Shopping if Upon Us, It's an All of the Above Economy, and SI and AI Do Not Mix.
In the category of truly random thoughts…I wonder what Charles Darwin would think about our current world.
Evolution and adaptation has been a key part of humans ending up at the top of the food chain, but up until the last 100 years, the changes in the world around us tended to be moving at a much slower pace. Adaptation would typically happen over multiple generations, and more radical changes tended to be much smaller in scope and effect than what we are seeing in today’s technology changes.
Many big inventions or changes took multiple generations to truly affect most people. Irrigation, the compass, electricity etc all had massive effects on our world and the evolution of humans but the changes were not overnight. Even modern technology changes such as the computer took decades to go from invention to near universal use. Now, we are faced with changes that are relatively overnight, and humans are not great at adapting this quickly. There seems to be an irony in the fact that humans are quicker to create than they are to adapt. Further, the demographics of leadership in most of our countries are over-indexed on older generations.
Artificial Intelligence (AI) is the latest example of this jump in technology with humans barely keeping pace. This is not just about the crazy couple weeks at ChatGPT, but more about how people as a whole are handling this change. Many individuals (and the companies they work for) are taking methodical approaches to the new technology and determining how to use AI to help make their work more efficient and remove some of the mundane tasks that are causing issues. Others are taking a less measured approach and are focused more on how to maximize their own bottom line by moving as much work as possible to AI systems regardless of quality or potential pitfalls. People just looking to make a few bucks is hardly a new phenomenon, but the scale of this approach to new technology is at an unprecedented scale and has clear ramifications on our world as a whole.
The human inability to fully comprehend implications and unforeseen consequences is not new, but coupled with the rapid changes in technology these shortcomings are causing more problems than in the past. The introduction of the printing press revolutionized communication as did social media, both of these means of communication had pitfalls, but the effects on the level of information available, the spread of misinformation, and the erosion of privacy went from affecting some people to global changes.
This is not to say that technology and advancement are bad - far from it. The relationship between technological progress and human adaptation forms a dynamic relationship that shapes the course of our future. As we move into an era likely to be defined by the power of AI, biotechnology, and quantum computing, the challenge will not just be the gap between innovation and adaptation but our inability to be willing to think through - and deal with - the unintended consequences.
I have faith in human adaptation to what comes next. However, the jury is still out on those who are supposed to be taking a long term view of these changes and implementing smart policies to enhance the positive while minimizing the potential negative outcomes.
As always, here is some of the data that caught our eye this week.
1)??? 2022+18-37=?
We are a week or more into the holiday shopping season (unless you were putting up Christmas decorations the second Halloween was over) and the big question for many retailers is: how is this season going to go? The economic numbers are overall solid, but sentiment is not matching the results on paper. Given this juxtaposition, it is not surprising that consumers are reporting a mixed set of results. Overall, 36% of American consumers report that they will be spending about the same amount of money this year compared to 2022. A little less than 3 in 10 (28%) are reporting that they are planning on spending more than last year, including 11% who say they will be spending a lot more. On the other hand, 37% say they will be spending less this go around, including 23% who say they will be spending a lot less.
The hypothesis was that people who are feeling less financially secure would be saying that they would be spending less and those who are feeling good would be spending more. While there is some connection between these two measurements, it is not close to a universal truth. What is also interesting is that the view people hold on how well they are doing in 2023 compared to 2022 is a better predictor of their holiday shopping plans, than a consumer’s prediction of how well the economy will be performing in 2024.
2)??? 199,000 = ?
This morning, the November jobs numbers were released by the Bureau of Labor Statistics. It showed that 199,000 jobs were added in November, unemployment dropped from 3.9% to 3.7%, and wages are up 4.3% year over year. According to economists, this is a sign of both a soft landing and a sign of weakness, or it could possibly predict an economic expansion in 2024. Not sure why it is surprising that consumers are a little fuzzy on how they should be feeling when the people who study these numbers for a living can’t agree on what they mean.
In the same study mentioned above, we found that about 20% of Americans are feeling positive about this year and next. Just under 50% are feeling meh about 2023 but positive about 2024 and 27% are feeling negative about both this year and next.
3)??? SI +AI =? -2 + -20%
If you grew up in a time where Sports Illustrated was a preeminent publication for the coverage of sports, the recent news about the use of AI in articles might be a little shocking. For those who have no idea what I am talking about, I highly recommend reading about this blunder of epic proportions. The real short version is that Sports Illustrated has been using a content creation company for some of their articles. The Arena Group (the operator of Sports Illustrated) says they were told that all articles were being written by humans, but this turns out to not be the case.
Based on this information, so far it seems like the vendor is more at fault here, but when you read the article that started this whole issue, it is hard not to place a lot of blame on the publisher itself. The best line in the article (a review of volleyballs) has to be, “volleyball can be a little tricky to get into, especially without an actual ball to practice with.” Feels like maybe the editors were not exactly on top of things.
Unsurprisingly, the Arena Group has lost about 20% of its stock value.
We hope you enjoyed this week’s edition and, as always, we look forward to your thoughts and hearing what stories caught your eye this week.