Category: economics

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Peak AI

Many scholars, economists and politicians have predicted peak oil production before and were wrong in the estimate of the timing of the turning point. At the occasion of the Frankfurt book fair #fbm26, the sector’s coming to grips with the use of AI is all over the place. AI is the elephant in the room which threatens jobs and complete business models, but also creates new opportunities. On the Global Stage on 2026-10-7 the panel on innovation and experimentation in publishing discussed the issues based on first experiences. When I asked Chat-GPT for an opinion on, whether one of the presenters gave a realistic assessment of the potential of AI in publishing, it came up with a rather  sobering statement (see below). “Yes — the overall approach is realistic, but the slide makes it sound easier and more universal than it actually is.” A great opportunity for AI consulting to the sector subject to rapid change (again). Maybe the AI knows from my track record of prompts that I am a social scientist and favor critical thinking. Pleasing me, it ends by a suggestion that indirectly AI is less universal than is currently the dominant opinion. We might see a reckoning of AI that it (hopes) for its own sake, to be less universal than what the hype suggests. Peak AI could guarantee sufficient margins to survive comfortably, just like other not-so-social or not-so-sustainable sectors and technologies. 

AI on AI - it is not so universal 2026-10
AI on AI – it is not so universal 2026-10
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Legal illegal business

The world of business has to be quite well defined in order to make the borders between legal and illegal practices clear, transparent and enforceable. You name the business or trade and then check the rules governing it. For pharmaceutical products we have rather strict regulations, but smuggling across borders can be a challenge to national customs if online commerce can easily circumvent national controls. Trading on ebay in small amounts is not defined as a tax registered trade, if it is below certain amounts. However, this might be difficult to control and legal rules are at times tough to enforce. The construction sector has been closely scrutinized for illegal practices and sketchy applications of regulations with regard to health and safety of employees. Regulations can be a pain, but they have contributed to safe lives in many instances. (Image: construction of “Scheune” (barn) in Berlin 2026-9, future center of Kulturforum). 

Kulturforum construction 2026-9

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Leadership art or craft

In an English translation of a book on leadership we read: “Leadership is an art of creating a world that others would love to be part of.” (Pinnow, 2011 p. vii and ch 3). “Kunst” in German translates as “art”, but also in the sense of craft (Kunsthandwerk). We have seen “art” leadership which consisted in change management more like window dressing or just showing off a nicer logo for an organization. The crafted leadership has a whole toolbox at its disposal from which to choose according to necessities. Gardening maybe considered similar to leadership and management. You may create a piece of art that others would love to be part of, but you need craftsmanship, water management skills to nurture nature. 

Gardening skills and water management 2026 Berlin

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Rural urban interrelationship

Cities are no isolated microcosms. They rely on being delivered a huge range of products. Cities have been markets, hubs or platforms for exchange with their surroundings, neighboring communities as well as distant ones. Historically, quite many cities have built walls to limit access and strictly regulated access. In the 21st century with low levels of fertility, the demographic pressure to leave the countryside for jobs is less pressing, but many regions face the shrinkage of the countryside’s population. The interrelationship between the urban centers and the rural surroundings has to be studied and addressed due to the far-reaching consequences for both. Transportation into cities needs public infrastructure which can handle the necessary flows and exchanges of people and products. For too many decades we have focused on an either/or cleavage of an apparent dichotomy of urban versus rural. It is about time to correct this bias and take the rural-urban interdependence more systematically into account. 

uri urban rural interrelationship in food and drink

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VCs shun SA

Venture Capitalists have an eye on long-term safety of investments. Political upheavals, unrest or instability can deter investments as much as risks to the safety of the workforce. The abbreviation “SA” in Germany has at least 2 meanings. (1) Historically, it refers to the “Sturmabteilung”, which was important in the rise of the Fascist movement and Nazi-terror in the 1920s, 1930s. Foreign investors were right to shun away from investments during the rise of the Fascists in Germany as a total loss of the investment was to be expected. (2) In 2026-8 the abbreviation “SA” in Germany stands also for “Saxony-Anhalt”, one of the Federal States of Eastern Germany, formerly the GDR between 1949-1990.
The “Wallstreet Journal”, which is read by many international investors showed on its title page of WSJ 2026-9-7 a report by Bertrand Benoit on the disastrous election in Saxony-Anhalt giving the extreme right-wing party AfD close to an absolute majority of votes. The abandoned investment by Intel into a chip-production near the capital of SA, Magdeburg, has been in retrospect a rather wise investment decision. The internationality of the employees, who build and operate such plants, might have contributed to them feeling rather unsafe in a hostile environment towards foreign workers.

intel processor logo

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Climate Anxiety

The events of several wildfires and a too hot summer in 2026 have raised the level of anxiety related to climate change for many people. From the field of economics we know that the fear of an economic recession can be as bad for the economy as a statistical economic downturn. The anxiety about climate related bad events can trigger or worsen symptoms of depression. The research by Zacher and Kühner (2026) shows that psychological evidence supports this hypothesis. The 1 year follow-up clarified, that the opposite direction of causality is not supported by the data analysis. A pre-existing depression is not worsening due to climate change. The consequence of these results is that the total number of persons with depression is likely to increase with an additional source of depression, for example after experiencing a wildfire. Oceans are warming and the number of injuries on beaches due to poisoning from algae or medusaes (jellyfish) become more frequent as well. Lots of sources for increasing climate related anxieties. In the economic costs of global warming and climate change we frame this as second round effects of climate change.

young curious boy touching jellyfish on beach

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Fountain of youth

The fountain of youth is such an old dream of humans that we are no longer surprised to witness perpetual reincarnations of the same theme again and again. The painting by Cranach the elder (1646) “Fountain of youth” (image below, Gemäldegalerie Berlin) sets the scene for what has become a billion dollar business nowadays. Whereas the old dream was about rejuvenation and cure from disabling diseases, we have become a bit more moderate in ambition to be happy about a halt to aging. Promises are reiterated and made in building on an army of influencers who push many remedies that lack rigorous scientific tests. Two studies published open access in “The Lancet Healthy Longevity” (Witham, McDonald 2026 and Duremdes Nava et al. 2026) provide evidence that in case of obesity and diabetes there are no easy or quick fixes available yet. Healthy longevity still relies mainly on lifestyle (changes), more exercise and careful nutrition rather than additional medication. Medium and long-term consequences of inactivity and unhealthy diets are to easily disregarded or their value discounted. How much are you willing to pay for an additional year of healthy living at age 30 or 70? Simple economics, but quite a successful business model as well.

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Productive organizational energy

Productive organizational energy is more than the sum of individual efforts. Only if you manage to align the productivity of all employees and managers towards the same objectives, you are likely to reap the full benefits of productive organizational energy. The scientific literature is quite clear in this regard. The authors Vogel, Raes and Bruch (2026) highlighted the need to investigate current as well as anticipated Productive organizational energy using a tool called the “energy pattern explorer”. Through the repeated measurement it is possible to learn about trajectories which can be related to leadership styles, external and internal influences as well as to evaluate detailed leadership activities in more detail. Once in office, many leaders no longer deem it necessary to check or evaluate their decision-making processes, although the baseline measures should be taken at that time or before departure of the previous chief executive. About time to take productive organizational energy seriously to mobilize the energy of the many rather than the usual one man show.

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Fuel fertilizer food

The state of world affairs can be summarized in relation to these 3 factors. Fuel, fertilizer and food are the subjects of the hotly debated or even contested resources. From a United Nations perspective the progress in human and economic development hinges on these 3 key issues. The logical order of the Fuel, fertilizer food triad starts with the costs of fuels or energy more generally and leads to the production and distribution of fertilizer across energythe world. This chain of supply determines the quantity of food available to feed the world. Russia‘s war on Ukraine territory has made this logical sequence obvious again. Millions of people were suffering due to the fuel, fertilizer and food shortages due to excessive price hikes. If we add speculatove rent seeking to this we have a scenario where the global South is suffering due to political contests and wars in the North including the Middle East. The current governance structure of the United Nations is largely unable to address this triad adequately. Fair processes of decision-making, control and implementation are crucial in this respect to ensure that all regions independent of economic spending power at sufficiently represented at the international negotiations about fundamental resources. Minimum levels of provision are necessary, even if not sufficient, conditions for our humanitarian responsibilities.  

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Berlin moves it

Yes, we like to move it. Investment in infrastructure follows a long-term economic rationale. In urban areas space is a scarce and, therefore, an expensive resource. In order to use the current space for mobility more efficiently, the use of a longer tram or train is an effective way to increase capacities. Rather than to increase the frequency, which is no longer possible without safety risks, a longer vehicle allows to bring more, and more diverse, passengers on board (kinderwagen and wheelchairs included).
It is a long-term objective to make urban areas liveable for all ages. Tramways which allow a low or, better, no barrier to entry is a necessary condition in this respect. The new “Urbanliner” in Berlin (image below) offers such essentials of access and urban mobility. A single tram is 50m long with 88 seats and 215 standing persons in larger corridors. 300 tram passengers can be compared to about 12 average length cars with at best 15-20 passengers.
A consensus of “how best to move it” in cities pays off in the long-term. Planning has to start about a decade before delivery and needs to survive political cycles going back and forth.