October '24 Edition

Three Ideas is a regular-ish update from Penta to friends and clients on what we're reading, thinking, and working on. This month, we examine the signals of end of the pandemic, candidates' pre-election ideological shifts, and the state of the EU economy.

Officially post-pandemic.

As we move further from the pandemic, several markers confirm a return to normalcy. On college campuses this fall, no students who began during the pandemic remain (assuming a four-year program), marking a cultural shift back to traditional college life. Global unemployment rates are lower than pre-pandemic levels, and coffee shops are bustling again as workers return to the office at pre-pandemic levels. The Federal Reserve has shifted from emergency interventions to stabilizing interest rates and providing a "soft landing" for the U.S. economy, reflecting a more predictable economic outlook.?

Flexible ideology at the finish line.

The surface of the U.S. presidential campaign is the usual mud-slinging, but under the surface, we've seen a break from the more classic ideological debates of old from both the Democratic and Republican parties, and perhaps a movement towards vice signaling. As Trump argues to cap credit card fees and endorses legal pot, Harris is bragging that not only does she own a gun, but she'd use it if someone breaks into her house. With the one guarantee at the end of this campaign being a new administration, it's becoming harder to predict what their administrations will look like in practice.

Slipping behind in the EU.

Mario Draghi's recent economic report on the European economy highlights Europe's declining productivity and competitiveness, namely in tech innovation, digital transformation, and clean energy. The growing gap with the U.S. has been getting attention, and the Draghi report called out regulatory concerns, not only affecting international trade but broader AI adoption as well. The trend has been in the making for decades and will present interesting challenges and opportunities for global companies.

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Best,

Matt McDonald