Category: economics

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All electric now

The shift over to the “All electric society” is easiest in sunny states like California in the USA, Africa or Southern Europe. For other regions of the globe not only the production of energy through the sun is a bit less abundant, but the storage of the sun’s energy production for deferred use is the next challenge. Countries of the globe near the equator have to balance 12 hours daylight with 12 hours night, countries far from the equator have to balance additionally more long-term between short winter days and long summer light.
Different energy storage solutions have to be envisaged.
On a daily basis or even weekly basis, battery energy storage systems (BESS) can do the trick. These systems become more costly for high capacity, longer duration storage. Battery size and price quickly become an issue. The number of electric vehicles (EVs) that have this more intelligent BESS is rising. This makes it possible to eventually use this storage capacity, if your car is sitting around your home or office for most of the time anyway. To make the “all electric society” function 24 hours, energy storage has to be planned at the same time as production and consumption patterns. The all electric prosumer will be the de-central “pro-store-sumer” in the 21st century.

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Work and Time

The link between work and time has been evolving as a major element of social progress over centuries. In what younger generations seem to take for granted, <40 hours week, paid time off-work. 4-5 days per week to name only the major ones, has been the result of huge struggles and hustles driven by employees and their trade unions to achieve such milestones. The current debate to get employees back into offices and/or to work longer hours again, is also in the end a debate about work and time. The advantage of working from home consists among other factors in saving a lot of valuable time and stress from commute to work. This unaccounted time to go to work has become a major health hazard even in an apparently comfortable company subsidized car or any other means of transportation. The traffic jams of so-called rush hours, when in fact everybody is slowed down, are a serious health hazard usually ignored by employers. However, these hours are a major part of the work-life-time balance of employees. In many negotiations and collective bargaining about working time this is the big elephant in the room rarely addressed.

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Green trade flows

The statistics on trade flows reported by the UN Department of Economic and Social Affairs have a comprehensive data base in the background. The descriptive inspection of the raw data on trade flows comprising solar panels, batteries and electric vehicles shows a stark imbalance of how future-proof the trade between countries is. The New York Times (David Gelles et al. 2025-6-30) has put this information into an impressive graphical design to show the magnitude of the imbalance of how China trades in green products with the world and how the USA is losing out on future-proof low carbon emission trade. Despite the fact that China is still heavily emitting CO2 today due to burning coal for electrical power, the investments at home and trade with the world is moving into the opposite direction. We have seen many of these industries at risk in Europe, like solar panel production, batteries and increasingly electric vehicles, without the western countries getting organized to address crucial business and economic challenges. Falling behind in these industries and trade will shift global balances in the near future. Renovation through innovation is more promising than holding on for another decade to inefficient and more polluting energy sources. Repairs of homes and buildings have long lasting effects, which we can, nevertheless, change today.

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Ultimate Step

Reports in the New York Times, The Guardian and Le Monde in recent weeks have brought to our attention that there are shocking ultimate steps undertaken by several employees of public services. In the case of the British post office a decade long inquiry has uncovered that 13 suicides of employees occurred after they had falsely been accused of fraud. A long time ago in France Telecom a series of suicides was also attributed to a harsh personnel policy. The Office of Public Finances (DGFiP) is confronted with a series of suicides in 20025 of 12 employees who apparently made the ultimate step to put an end to their life. Not all is to be blamed on the enterprises or public services concerned, however, they failed or omitted attempts to prevent the ultimate steps. Initiatives like peer listeners as anonymous contact points or access to psychological counseling are necessary parts of a responsible human resource practice, even if it might not be a sufficient condition to avoid the ultimate step in some instances. In many cases employees go far beyond their mental capacities in terms of commitment to their work, they should not be left alone in case of severe consequences.
Burn-out, for example, needs to be tackled as part of the responsibility of enterprises and public services alike. It is highly unfair to put the costs of psychological consequences on the shoulders of families and the state. Investigations into toxic leadership styles and the current revival of “workaholic” work ethos will have serious negative consequences for families and society as whole again.

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Learning by using

Is learning by using different from learning by doing? In an economic model to test the employment/unemployment impact of AI in the USA, Wang & Wong (2025) suggest an important impact of employees’ productivity due to learning by using AI. In terms of the traditional language of economics the employees who use AI in their work shall have comparative advantage to those who don’t.
In a model of job search in the economy there is the additional possibility, similarly to robots previously, that certain tasks maybe influenced by the, more or less, plausible threat of an employer to replace the employee by training an AI system to perform the tasks. The credibility and acceptability of such threats are likely to impact wage claims and unemployment risks. All these effects do not happen instantaneously, but evolve over time with varying speed. Hence, calculations of effects have high error margins. The resulting model yields oscillations of “labor productivity, wages and unemployment with multiple steady states in the long run”.
Learning by using seems to be a good description of what occurs at the micro level (the employee) and at the macro level of an economic sector or the economy as a whole. Society may guide the use cases of AI just as much as the business case to use AI, for example in the creative industries as infringements of copyrights may occur on a massive scale. However, learning by using is not free of risks to society at large. Just like allowing people to use automotive vehicles has lead and still leads to thousands of deaths annually, learning by using produces external costs. Overall, this is another case for a benefit/cost analysis for businesses, the economy and society.

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Pepper and Nao

We have seen many persons that became somehow emotionally touched when addressed by Pepper or Nao. These 2 versions of a humanoid robot have served for thousands of persons as the first welcoming moving information desk. I have been guided through museums (DTM, Berlin) and exhibitions by this robot guide with a friendly outlook. Beyond those experiences there is a lesson in industrial policy to be learned from this innovative French humanoid robot. The start-up enterprise was founded as early as 2005. With a substantial funding of ½ billion € from Softbank the enterprise could develop robots for the fields of personal companionship, education, restaurant services or personal care for the elderly.
We have seen the robots at international fairs in several countries, but the prohibitive costs have limited the rapid spread of the robots to broader applications. Subsequently, the decline of the enterprise, or not reaching financial targets fast enough, caused the loss of financial support for the enterprise. In 2025, Aldebaran filed for bankruptcy and the patents will be sold to the best offers. The employees received generous packages of departure and will most likely find rapidly jobs in other robotics, IT or AI related fields.
The loss is probably greatest for the persons who were serviced by Pepper or Nao in elderly homes or the Swiss hospitals, as spare parts or updates will no longer be available. The humanoid robot story is yet another case where the social, economic and financial context of technology is overriding the technological innovation process.

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Social promise

In the beginning and middle of the 2020s the social promise to younger generations has been broken. The latest figures from the USA reveal that 2 million students (WSJ 2025-6-25 A3) who have financed their studies and potential social mobility by taking out a substantial loan are very likely to default on their credits. This observation was less a surprise to labor market analysts as the stalling of student hiring in many countries has happened for several years now. The more surprising finding is that the Wall Street Journal 2025-6-25 has been reporting on this. Banks or universities who are highly exposed to this kind of risk will themselves become downgraded for their credit rating. Higher interests for universities means higher fees and higher student loans eventually. The social promise to reach higher status and earnings through higher education as the social promise of the meritocratic society becomes an illusion. Investors in student housing might also find the sector less juicy for them. Students and their parents were taken hostage by an excessive commercialization and commodification od education. Lifelong learning is a still a promising route to revitalize the social promise.

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Fertility Fecundity

The scientific debate around changes in fertility has focused on social, economic and cultural factors to explain the drop in total fertility rates in OECD countries. The baby boom years of the 1950s and early 1960s had come to an end following the spread of new forms of birth control like contraception from the late 1960s onwards. The trend is very obvious and yet, the explanations of the trend might lack a more profound analysis of fecundity in addition to the socio-economic explanations. Shakkebaek et al. (2025) point for example to the little known effects of environmental (pollution) factors on the biological reproduction capability of humans (men and women).
Additionally, psycho-social factors like “the German Angst” fear about future developments in many social and economic fields might have direct effects, but also indirect effects on human biology. We know still very little about such feedback loops or feedback effects. We are more convinced, than we actually have hard evidence, that the BSP, SPB or PSB (B=Bio, S=Social, P=Psycho) spheres are interwoven, but an ambitious research agenda is called for to enlighten the issue. The big invisible elephant in the room might be environmental issues that enter into the fertility equations more than we have expected for many years. A nice working hypothesis for an ambitious and overdue research agenda.

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AI Workday

Our workdays have seen considerable changes throughout the last few days. The home office boom has allowed employees to work for extended hours from home. The there is an abundant literature on the effects of home office work on well-being or the work-life balance. Productivity gains could be reaped by employers and a better work-life balance was a lasting advantage for employees.
The increased use of AI specific to some occupations has introduced a new form of added  productivity for some occupations or professions, AI as complementarity, whereas other occupations suffered a higher risk of being substituted by AI applications.
Based on time diary data, the study by Wei Jiang et al. (2025) reports that users of AI have longer work time and reduced leisure time. Competitive labor markets increase the pressure to put in even higher hours of work. Nerds, just like workaholics, are likely to be drawn into excessive hours of work with increased health risks. Enterprises and consumers appear to be gaining more than the employees, who are at a higher risk of loosing out on their work-life balance over time.

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Travel Trumped

The travel and tourism sector of the U.S economy takes quite a hit from Trump‘s anti Canada and Europe tariffs and rhetoric. The Wall Street Journal (2025-6-3) reports data until May 2025  which show a 6% decline in international air travel and a 12% reduction in air arrivals from Europe (reference same period last year). Canadians seem to reduce their travels to the US as well, hitting many regions just across the long joint border. Airline bookings are an early warning indicator, but the more drastic figures are to be expected from the loss of spending tourists do not dispense in the US any more. Additionally, sizeable shares of US tourists travel to other countries due to the disgusting Trump rhetoric and spend their holiday budgets elsewhere. Trump‘s tariffs has focused a lot on redressing the trade balance of goods, but the balance of services like in tourism is worsening day by day now. The political economy of tariffs has multiple feedback effects which are quite hard to predict.

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Paris Gare

Train stations in metropolitan inner cities are hot spots of traffic and mobility. The number of people passing through these exchanges are impressive. Public transport systems are continuously put to the test of their capacity to handle passengers who want to get from A to B the fastest way possible. In Paris the RER lines, metro and buses to a great job in handling the affluence of passengers. The comparatively small number of passengers arriving and departing nyy taxi, however, still take a disproportionate amount of space. That’s part of the differentiation or inequality of mobility in Paris. Person‘s in need of assistance should have special access to central points of mobility like train stations. Everybody else could rely on shared modes of transportation otherwise the millions of inhabitants will not be able to get around in a comfortable way.

 

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Retirement Recruitment

The debate that later retirement of seniors reduces the hiring of youth has received new attention. Paul Mohnen published a paper on the “retirement slowdown on the US youth labor market” , which demonstrates this “crowding out effect”. Moreover, the recruitment of middle aged workers is also affected, as job changes slowed down for these age groups. The surprising finding is that higher skilled youth suffers the largest reduction in employment opportunities and become “pulled” into lower skilled jobs as jo offers for lower skilled persons remained high during the observation periods (until 2017!). This evidence suggests that the well-documented firm-level effect of fewer retirement means less recruitment holds also for society as a whole. Knowing that recruitment during a recession affects young workers more than persons already in employment, the macro level effects in 2025 will be rather unfavorable for young labor market entrants. (Image Frans Hals 1625, Odessa Museum in Berlin exhibition 2025).

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Robot repairs

Robots have been used mostly in industry for assembling, transport or sorting tasks. There is also a role in disassembling to enhance circularity. To repair electric or mechanic devices there is an enhanced version needed which starts with a diagnosis of the problem. Algorithms can sort out promising from dead end routes of repairs. However, the recognition of objects into things that can be repaired and those without repair potential is a worthwhile assistance. Beyond the economic and ecological rationale for repairs, there is an emotional or nostalgic sense to it as well. Maybe, from a life course perspective any object related to the teenager years of a person qualify for nostalgic value. Even simple robots or AI-assisted objects may qualify for this in future. Artificial friends will be like tamagotchis in need of repairs.

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Humanoid services

In the shadow of AI enhanced chatbots, agentic AI and generative Ai, the developers make considerable progress in robotics. The humanoid versions like from Persona AI will surround us in months, or maybe a few years from today. Investors believe it is rather sooner than later. There are many use cases for humanoids that may take over dangerous, hazardous or unhealthy tasks from humans. But even simple tasks like carrying home most of our shopping could be done for us by humanoids that follow you around the shopping mall and home. This would be a kind of personal assistant. I even thought of my humanoid robot to walk my dog on some occasions on the usual trail. 

Welcoming visitors at the doorstep could be another function to delegate in offices or even in private homes, although as a sociologist I would recommend to carefully check the sorting algorithm(s) applied to avoid unpleasant situations. The administration of medication might be another option, if only we could trust that the correct dosage would be applied. 

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Berlin building

Yes, 35 years after re-unification Berlin is still building at lots of places. The boom years of building hotels for tourists, offices for ministries, which were moving from Bonn to Berlin, is now followed by a „surprising“ need to have sufficient vacancies in private housing. Berlin is still growing in terms of population and, of course, this creates additional upward pressure on the housing market with particularly high increases on the rental market. In order to achieve a narrowing of the gap between demand and supply, Berlin is building higher as well as digging deeper into its sandy ground. In such huge open spaces near Südkreuz it is then feasible to explore and later exploit geothermal energy for years to come. Maybe it is not a surprise that apparently a Texas (USA) based investor has bought the ground and builds in Berlin. Drilling in Berlin for energy from underneath is a worthwhile business. Hence, drill baby drill has a new Berlin meaning to it. 

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Permanently anxious

„There’s a set of forces that want us to be permanently anxious“, is the phrase chosen by Tony Cokes in the exhibit just outside the „Palais Populaire“ in Berlin in 2025-5. International politics and the economic upheaval caused by Trump’s tariffs contribute to the already existing other sources of anxiety like nuclear energy and warfare. Global warming causing more extreme weather events add more man-made reasons for anxiety. The next generations will have to foot the bills we have left to them unpaid. Our current shortsightedness increases anxieties which previous generations have not known of a similar kind or in that combination. 

Community building and solidarity are ways to overcome such overwhelming anxieties. Supranational organizations like the European Union have an even stronger role to play to reassure its people with credible signs of solidarity. We are not alone in the struggle to overcome the anxiety that is creeping up around us. We are certainly stronger together than individually dealing with unspecified fears. „We shall overcome …“

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Technology maturation

Technology has its own time of maturation. The time for wind power generation was quite lengthy compared to some innovation cycles in information technologies. Maybe, due to the fact that large wind turbines had only big enterprises or public monopolies as potential clients who were already heavily invested in even bigger nuclear energy projects caused the slow pace of development of this technology. In Germany just like in Denmark, Sweden and the USA the first larger research projects took off in the mid or late 1970s. The technology is explained by Erich Hau in a comprehensive way including the early days like the « Growian » test wind turbine in Germany (extract of image below). Despite the fact that major engineering difficulties were overcome already in the early 80s, the economic and legal challenges took much longer to resolve. Nowadays, we have an additional case of energy sovereignty to add to the cost-effectiveness of power generation from winds offshore and onshore. In the coming years we are likely to see more and more decentral power generation from wind on roof tops or small poles to complement solar energy during cloudy but windy weather or at night. Just like the sunshine we shall praise the windy days for their power generation potential.

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Labour Day Berlin 2025

In 2025 Labour Day Parade in Berlin started again on Karl-Marx-Allee to the destination at the “Rotes Rathaus”, the red brick City Hall of Berlin. The slogan: “Mach dich stark mit uns” (engl. empower yourself with us) refers to the building up of force by members of the trade union movement in growing bigger again. Solidarity in crisis is currently tested again in each collective bargaining and negotiations at the local, sectoral, regional, national and European level. However, on the 1st of May the parade obviously has the political part with the speeches, but also the family party atmosphere towards the end at the Neptun fountain at Alexanderplatz. Large crowds come out in Berlin and the organizers of the DGB and the police do a great job to ensure a safe and enjoyable demonstration in the heart of Berlin. More impressions on the mobilizing event here. Images from Berlin Labour Day 2025.

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Robot assistant

Adjustment processes on the labour market take their time. This means that care workers are in short supply in most countries of the OECD. Engineers as well. There are so many robots, care robots I mean, still to develop that the shortage of engineers give little hope that we shall have affordable solutions in this area for the next few years. The issue is mainly about integrating and enhancing already existing solutions. If you are a mechanical engineer you can put together motorised mechanical pieces, small motorised electric devices and, for example, small infrared emitting and receiving devises.
All this is child’s play these days (see image below). The assembling of a small Robot assistant that follows movements or can escape from a small labyrinth makes such simple structures transparent for learners and users. There is nothing magical about it, just adding together small pieces and the electronic devices to steer the movements. The learning tool from KOSMOS has been on the market for 5 years. It is a helpful device to explain basics through hands-on experience. The limits of robotics equally become more evident. Our own health and safety is concerned with larger devices cohabiting with us. A robot assistant can take on easy tasks like to follow me through my living space in old age carrying a mobile phone, keys or an emergency device. More sophisticated tasks need more sensors and AI to train the most needed and best routines. For many years this needs our input and our control as well as supervision of such devices. Most robots will operate as assistants with us in the driving seat or the boss.
This is yet another element of the “all electric society“. We are moving towards the use of more electronics assisting us from year to year.

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Dysprosium 66

Dysprosium figures as Nr. 66 in the periodic table (short: Dy). This metal was given this Greek name, which translates to “hard to get”. Although more common than gold on earth, Dysprosium is part of the so-called rare earths on earth. Since it is very temperature resistant before becoming fluid and at the same time having good isolation properties, for example against radiation in combination with lead, the nuclear energy industry has a definite use case.
Additionally, wind turbines, electric vehicles and some smart phones use these characteristics of the metal only known to us since the late 19th century.
The major exploitation happens in China and, therefore, the recent tariffs have complicated the trading. Prices tend to rise and products that contain Dysprosium are likely to become more expensive. However, there is the other side of the coin, which means recycling and reuse of Dysprosium is also more interesting to companies. Hence, the price increase will likely enhance circularity of the metal from obsolete products into newer ones. In this respect it is good news that smartphones receive longer updates of their operating systems and security as of 2025-6-20 in the EU. This will also reduce the amount of rare earths needed in the production of the rapidly changing technical specifications of smart phones and tablets. Repairing the devices makes more economic sense before “programmed” obsolescence.
(Image: extract from Willem van der Vliet (attributed), The money counter. early 17th century, Brussels MRBAB).

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Marx Home

The home of an influential philosopher, economist and political scientist is not easily presented like a home of a musician, a composer or an author. However, the home of Karl Marx in Trier on the Moselle river succeeds to present the biographical links of growing up in a historic city, the bourgeois upbringing of the young Marx and his formation as an independent and even revolutionary thinker of the economy and society. In 2025 the home is a museum supported by the Friedrich Ebert Foudation with a great online guide and access to additional scientific material. For authors like Karl Marx it is always of interest to follow not only the origin and evolution of the thought process, but also the shifts in the reception of his writings by subsequent generations. This part of the exhibition and an audio guide (downloadable as App).

In 2025 with an apparently ruthless capitalism at work in the biggest economy of the globe, the reminder that the economy is best to be understood as a political economy, which focuses on self-interest and profitable business deals, we find in Karl Marx still a worthwhile reminder of economic development even in the 21st century. The note-taking and studies in Exile in London are well documented in the tiny home and museum. Studying the misery of exploitation in supply chains and international commerce remains a topic of continuing interest as well. 

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Retirement Plans

There are debates about the best organization of retirement. The major fault lines lie between public pension systems and systems that are built based on mainly private provision. Retirement plans in either system are subject to constraints. The recent stock market turbulence has increased the amount of uncertainty people face who invested in 401K plans in the US. Some had to take an unannounced hit to their retirement savings due to the loss after Trump’s back and forth policies on tariffs (OECD Pension Outlook). High volatility of stock market prices creates an additional constraint that you are less inclined to retire when your retirement investments have overall a reduced value. You are a bit at the mercy of capital markets even in your retirement decision, irrespective of the difficulty to predict what your retirement funds will yield as returns. Quite an important lesson to keep in mind when comparing retirement systems in OECD countries. It has been all too easy to blame public pension systems for maybe lower short term interests on pension savings. Being subject to an American president concerning your retirement plans is probably not what many countries would like to have. Trump’s choices on tariffs may have consequences we did not expect to affect us so directly.

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Tariffs Trade Deficits

US Tariffs target the US trade deficits across the globe. For a start on the topic it is helpful to take a look at the data. The US bureau of census publishes this time series regularly. Currently, you can compare monthly or annual data across countries from 1985 to 2025. The worsening of the trade balance is obvious just looking into some examples like trade with the EU, China, Japan, South Korea or Switzerland. we might calculate some rough indicators of trade deficits of the US with countries by the size of the country, which would make Switzerland look really bad relative to many much more populous countries. This probably explains why Switzerland is threatened by higher tariffs than the EU. However, this hints towards the “hidden” agenda of tariffs on countries. The major targets are multinational companies that produce in countries outside the US and particularly in those with low corporate taxes, like Ireland and Switzerland. Importing products from such countries worsened the US trade balance over decades.

Another factor to study more precisely is the sectoral pattern driving the trade deficits with countries. Exports in for example health-related products have soared due to Covid-19 pandemic starting in 2019. Where did the US buy face masks, ventilators, medicines and pharmaceuticals?  These countries will now also be penalized by higher tariffs. The tariffs topic is a complex interconnected business issue, which is not solved by blunt measures. The real danger is that with each month trust in US will erode further. For decades this has been an underestimated currency of international business. Eroding trust is likely to be the major fallout of the tariff and trade deficit nexus. It takes decades to build, but can be destroyed within a few days or weeks. (Image: Mont des arts Brussels February 2024, celebration of surrealism).

 

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Value destruction

The destruction of economic values as they are embedded in quotations on national and international stock exchanges has reached levels after the US tariffs announcements of unprecedented levels. Only the banking crisis had reached similar levels and bursting speculation bubbles. Whereas professional investors might have seen this coming, the normal small investors who had hoped for a positive effect of Trump’s economic policies on shareholder values, which occurred right after the election has been wiped off already. For those people who rely on stock market investments for their pensions have to digest heavy losses now. The second round effects of reduced consumption of pensioners who have lost 10% of their retirement savings will further aggravate the situation for this group of people. Paired with higher expected inflation the economy will be forced into a recession caused by Trump’s tariff announcements and enactments. As this will lower prices of oil and gas as well as other raw materials, his electoral base of tycoons following a « drill baby drill » device experience also losses. A lot of damage all around him leaves millions of people in the US with losses to digest. Probably even more across the world, particularly in the poorest countries of the world. Such a real world macroeconomic experiment is like playing poker on a global scale. However, many countries may build new alliances that may wither the storm better than Trump anticipated. Hence, the game of poker will reenter economic textbooks again in addition to game theory and maybe chess strategies. (Image winter sunset).

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Rich richer

The US economy under Biden had continued to make Americans richer. In an article by Talmon Joseph Smith in the New York Times from 2025-4-3 p. 7 the puzzle that Americans have grown richer, but don’t feel it, has been well explained. The large share of households owning their homes albeit with mortgages from low interest periods have witnessed their increased wealth. However, inflation is eating into their cash available for daily purchases. With another round of tariffs and additional inflationary pressure caused by those, the average person or household doesn’t fell much better off than some years ago. Economic anxiety and our preference for loss aversion or loss avoidance make us react with consumption restrictions to prepare for increased risks as well increased uncertainty about the directions of the whole economy and our very private wealth and consumption patterns. How and when the US economy will get back on track remains to be seen. Higher uncertainty usually reduces investments and with increasing interest rates again the economic recovery might be protracted. The NYT p.7 cites business owners with statements like “we’re not putting our foot on the brake, but we’re taking our foot off the gas.” Betrayel of working class people due to rising unemployment after 3 years of very low unemployment is likely to widen wealth gaps in the US population even further. The rich will get richer, but at high costs to the population as a whole. (Image: ceiling painting in Petit Palais, Paris).

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Tariffs trumped

Economists are used to differentiate between micro-and macro-level effects of tariffs. For each buyer of a car, import tariffs raise expectations about prices for a product. Many consumers will then decide to buy lower quality at the same price or postpone buying a new or replacement product for some time. For cars it might mean that many people will then decide to buy rather later than sooner. If thousands of people do so, the market will fall into recession overall and it will take months or years to come back to the same or a higher level. A political economy perspective has taught us that eager politicians are in favor of a short recession immediately after an election which increases the chances of re-election once the economy gets back to normal or catches up on lost growth. 

The US under Trump apparently gambles with such an economic rationale. Short term inflation is already rising, interest rates stay high before the upheaval caused by tariffs starts to settle. 

There is, however, another alternative mechanism at work as well. Thorstein Veblen long ago hinted towards what is not called in economics the Veblen effect. Some fancy cars for example can raise prices well above others because of their cleaving image. Just because they get even more expensive the buyers of such products gain additional attention as part of a social class which does not have to care much about their additional spending. The consequences of tariffs will most likely widen the gap between those saving dearly and those able to splash out cash despite increased tariffs. The most felt consequences, therefore, will be on social inequality within the US (compare WSJ 2025-4-24 A2 by Juliet Chung, “Richest of Rich Gain §1 Trillion”).

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Bricks and algorithms

Construction as an economic sector has suffered for decades from skill shortages. The PWC study on skill needs in construction and management of digitalization in this sector shows various deficiencies. Labor demand in excess of own training efforts in the related professions is further increasing in coming years. Migrants from across the world have come to Europe to fill the skill shortages and willingness to work in the sector. Population aging increases demand for adaptions of housing and tertiarization of the economy asked for new office space and adaptation of existing ones. 

The skills involved in construction have also evolved. Digitalization and understanding of new technology needs of modern housing increased the level of cognitive skills in the sector enormously. “just let the liquid concrete flow” will no longer suffice. Environmental obligations, renewable energy and design issues had an impact on the sector. 

Many enterprises in this sector have trailed other sectors to adopt strategies like digital pairs of a building or connected manufacturing of facilities with data sharing and compatible software. All this led to the fact that younger employees or university graduates (m/f/d) have preferred other sectors. IT development and applications are interesting and challenging in this sector as well. Logistic arrangements a formidable task as well. 

The claim of too much bureaucracy is just an excuse for lacking digitalization of the sector. Years ago we stated that every task you carry out more than once can be automized. With AI in construction digitalization starts with each singular case as a learning occasion for humans and algorithms supporting us.

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La défense Végétale

Greening a metal and concrete block and buildings is a big challenge. The logic of unrealistic growth and big business has left liabilities for future generations. More vegetation in inner cities is part of our responsibility towards future generations. Therefore, urban planning has started in Paris to get rid of concrete walls and floors.

Eventually the district might have a more human touch which attracts citizens and new businesses and services. The adaptation of the infrastructure to facilitate mobility with bicycles and secured pedestrian paths has started but will take a lot of time before people adopt again these more healthy modes of transport. The big boulevards reserved for polluting transport is no longer adequate in combination with residential living spaces.

It will take a change of a whole generation to accomplish such a fundamental change. The reduced demand for office space due to more employees choosing to work from home contributes to such a change as well. Many other cities go ahead with similar changes (Copenhagen, Berlin). In combination with the „All electric society“ there are fundamental changes at work which will make inner cities more attractive again. Ease of clean transportation and other infrastructure for urban lifestyles ensures that cities remain strong points of attraction. They keep pulling people from nearby and far away towards them, if we like it or not.

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La Défense reframed

  1. The whole new business area „La Défense“ was a huge investment project with international speculators highly motivated to reap the benefits of a business location just next to Paris, which at best would even feel a little bit like being „intra muros“. However, being at La Défense you see „L’Arc de triomphe“ only quite far away and you don’t really get the impression that you are in Paris. The high rising buildings around there originally gave god reasons for expensive office space. Few residents spaces made the area uncomfortable in the evenings after office hours. After 2025 most office spaces no longer are attractive for businesses and lack behind environmental standards of the 2020s.  Many projects attempt to renovate the former office space into residential buildings with a considerable loss in the value of previous office space. For people working in the multiple shopping centers there this might be a feasible option if the rent is not excessively high. Students in transit through Paris might find this attractive as well. Families, however lack an adequate infrastructure as this area was built for an outdated business center and business model where families were believed to obstruct business efficiency. As the project developers have written off their investments over 25 years society can clean up the remaining space and repair. It will be another medium term project to re-create a convivial environment and community there as before the overriding device was make money there and run to a more human and diverse space.
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Hands-on AI

The use of AI in translation and to streamline texts and preparation of communication has become a common experience. The applications in medical fields are less well known. Scans and checking of skin cancer could be a game changer for many who live far away from the next medical doctor. AI assisted brain surgery is another issue, but a very specialized application. The interface of AI and robotics might be another game changer as such applications where you train the robot with for example weight lifting and transportation charges can contribute to alleviate human skeletons. Handheld devices can guide the robot and data from sensors will complement the learning of the tasks through assistance from AI. Applications are manifold and we have not even seen the most promising ones. The application potential in warfare are particularly troublesome as humans do not necessarily enter into the concern of AI-assisted weaponry. In the social sphere trust is a crucial behavioral and ethical concern. These issues AI can only learn from us. Any attempts to do without human input and control is doomed to fail. We are not indispensable yet, we are simply turning more and more into responsible, supervisory roles. 

(Image: Acatech exhibition with hands-on AI applications, Berlin in collaboration with IQZ and DTM, German museum of technology.)