Arvind's Newsletter

1.India cannot become developed economy by 2047 without boosting employment, says World Bank economist

Given current rates of growth, the government aspires India to join the league of developed nations by 2047. But it appears there is a fly in the ointment. The World Bank’s chief economist for South Asia Franziska Ohnsorge points out that in a no reform scenario this will not happen. 

“In a new report titled Jobs for Resilence, the World Bank said on Tuesday that in the 2010s, India’s employment growth was exceptionally weak compared to other emerging markets and developing economies.

Between 2000 and 2022, the employment ratio in India declined by more than in any other south Asian country, except Nepal. The employment ratio refers to the labour force currently employed against the total working-age population of a region.

Overall during 2000-’23, employment growth was well below the average working-age population growth and the employment ratio declined,” the report said.

“Ohnsorge called this a “missed opportunity”. She said: “It’s almost like the demographic dividend is being squandered.”

However,the gig economy in India is experiencing a significant surge, marked by an 184% increase in white-collar gig jobs compared to the previous year, a report by hiring platform Foundit said, as reported in Business Standard. Over the same period, there has been a 21% increase in the gig workforce, with the information technology (IT) sector leading the charge in this gig economy expansion. The contribution of IT software to the gig economy has almost doubled, skyrocketing from 22% in March 2023 to a commanding 46% in March 2024.

2.Google considers charging for AI-powered search in big change to business model, reported Financial Times

The proposed revamp to its cash cow search engine would mark the first time the company has put any of its core product behind a paywall, and shows it is still grappling with a technology that threatens its advertising business, almost a year and a half after the debut of ChatGPT.

Google is looking at options including adding certain AI-powered search features to its premium subscription services, which already offer access to its new Gemini AI assistant in Gmail and Docs, according to three people with knowledge of its plans.

Google’s traditional search engine would remain free of charge, while ads would continue to appear alongside search results even for subscribers.

Google reported $175bn in revenue from search and related ads last year, more than half its total sales, posing a conundrum for the company over how to embrace the latest AI innovations while preserving its biggest profit driver.

Meanwhile, Google poached a senior OpenAI executive, part of a growing “talent war” between artificial intelligence companies. 

The hire itself is intended to make Google an attractive place for engineers to work: Logan Kilpatrick was OpenAI’s head of “developer relations,” and said he wanted to “make it the best home for developers.” 

3.Amazon is ditching plans to eliminate the checkout process in grocery stores. 

Instead of relying on cashiers, the tech giant’s “Just Walk Out” program used cameras to detect what shoppers grabbed from the shelves, and charged their Amazon account when they left the store. Amazon has struggled to take a large chunk of the grocery store market; Bloomberg noted the checkout technology “alienated some shoppers”, who were put off by … the feeling that Amazon had turned a visit to the grocery store into a high-tech vending machine.” The system was also much more reliant on humans: About 1,000 people in India were tasked with manually reviewing most of the sales, The Information reported.

4.GE finally splits into three

 In 2021, General Electric announced it would split itself in three, ending one of the longest-running myths in corporate American history: that GE’s magic improved everything it touched. It spun off its healthcare arm last year, and the final split happened this morning, when its energy business started trading under its new name, Vernova — a very modern corporate portmanteau for a new age.

GE at its height was a titan that touched nearly every part of the economy. It produced refrigerators, X-ray machines, jet engines and wind turbines; it financed car loans and credit cards; and it influenced culture through its ownership of NBC and Universal studio. It has shed many of those businesses, along with jobs and back-breaking debt, under CEO Larry Culp, who was brought in after a string of disastrous deals and financial mismanagement washed out his two predecessors and reshaped the legacy of GE’s most famous CEO, Jack Welch.

Its remaining parts — healthcare, energy, and its legacy aerospace business, which still trades under the GE ticker — are worth about a third of Welch’s empire at its peak.

5.Why great AI produces lazy humans

There is a story that a student of Jean-Paul Sartre once came up to the French philosopher and asked, “What should I do, professor? Should I join the French resistance or stay home to care for my mother?” Sartre refused to answer the question. He gave him no moral guidance whatsoever. 

Sartre knew that if he told the boy what to do, the boy would surrender his own moral agency. He would go along with Sartre’s position rather than give it the reflection it deserved. Sartre’s point has a modern twist. As Ethan Mollick, puts it in this article, when humans were given AI to do certain tasks, they “blindly followed the AI recommendations” without engaging their critical faculties.

The article is adapted from his new book, “ Co-Intelligence: Living and Working with AI”

6.Transition from coca to cacao: Colombia’s government launched a campaign to help coca growers transition to cultivating cacao, as the price of the bean soared to historic highs. 

Demand for cacao — the source ingredient for chocolate — has jumped as climate change and El Niño, a warm-weather pattern, have disrupted output in West Africa, which typically accounts for 80% of global production. The shortfall has pushed prices to 150% above last year levels. Meanwhile a global cocaine glut has sent coca prices crashing. 

Besides driving economic growth, Colombian producers’ shift to growing cacao could ease violence across South America: A rise in coca production is largely responsible for having turned once-peaceful Ecuador and Perú into some of the most violent countries in the world.