Philippa Kaur

THE CHINESE government was caught off-guard in October last year when America hit it with tough export controls on high-powered semiconductors. Communist leaders in Beijing took months to formulate a firm response. Today China appears far more prepared to fight the simmering war over the future of technology. A recent strengthening of those American chip controls by President Joe Biden’s administration was matched just three days later, on October 20th, with new restrictions on exports of Chinese graphite.America’s latest volley, which restricts the types of chips that can be sold to China, has been anticipated for weeks. Its original controls curtailed sales to Chinese entities of the cutting-edge chips used in the development of artificial intelligence (AI). This included the A100 chip made by Nvidia, a Californian chipmaker. But the restrictions, known as “foreign direct product rules” (FDPRs), still allowed Chinese companies to buy less powerful integrated circuits. With ingenuity, many such chips could be strung together to produce greater processing power. A recent home-grown chip that popped up in mobile phones made by Huawei, a Chinese telecoms giant first blacklisted by America in 2019, has fuelled concern in Washington that China was finding ways around the rules. To forestall more Huawei-like surprises, the latest FDPRs target broader performance measures, making it more difficult to combine punier parts into a more powerful whole. Chinese companies can no longer, for instance, buy Nvidia’s less advanced A800 and H800 chips as replacements for A100s.This time China did not drag its feet. The ministry of commerce introduced licences for exports of high-grade graphite products from December 1st. The grey material may seem dull compared with powerful microprocessors. But it is commonly used in anodes of lithium-ion batteries. This makes it critical to many countries’ decarbonisation plans. And, because Chinese firms refine about 90% of the world’s graphite, it gives China leverage.For several years China has been testing out the use of graphite as an economic weapon. Starting in 2020, after a small diplomatic row with Sweden, Chinese companies have been quietly prevented from selling graphite to partners there. Some insiders suspected that the informal ban was aimed at holding back the development of green technologies in Sweden. The latest restrictions are much broader and more formal than those piecemeal ones. Unlike an all-out export ban, mandatory exports licensing does not completely undermine the domestic graphite industry, which sells a lot abroad. It also allows the authorities to target buyers as it pleases. The tool has become China’s weapon of choice in the economic war with America. Similar measures were applied in August to gallium and germanium. China controls 80% of the world’s supply of the two metals, which are used in chipmaking. Gallium, in particular, shows promise in next-generation semiconductors. Foreign buyers of Chinese products are not the only collateral damage in the escalating economic conflict. On October 19th the Japanese government said that a businessman working for a Japanese firm who was detained in March had been formally arrested on spy charges. Three days later Chinese state media said that Foxconn, a Taiwanese company that assembles iPhones, was being investigated for possible tax and land-use violations. Executives at WPP, a British advertising firm, were recently detained too. The Chinese government appears to be preparing for further escalation. According to Reuters, a news service, state-affiliated researchers have been looking for ways round the types of sanctions imposed by the West on Russia after its invasion of Ukraine. This is said to include building a global network of companies that can dodge sanctions and issuing gold-backed bonds in order to remain connected to the global economy, even if America tries to sever China’s commercial ties to the rest of the world. China’s leaders clearly envision darker days ahead. ■ More

The venue will be picturesque: a 19th-century pile north of London that during the second world war was home to Alan Turing, his code-breaking crew and the first programmable digital computer. The attendees will be an elite bunch of 100 world leaders and tech executives. And the question they will strive to answer is epochal: how to ensure that artificial intelligence neither becomes a tool of unchecked malfeasance nor turns against humanity.The “AI Safety Summit”, which the British government is hosting on November 1st and 2nd at Bletchley Park, appears destined for the history books. And it may indeed one day be seen as the first time global power-brokers sat down to discuss seriously what to do about a technology that may change the world. As Jonathan Black, one of the organisers, observed, in contrast with other big policy debates, such as climate change, “there is a lot of political will to do something, but it is not clear what.”Efforts to rein in AI abound. Negotiations in Brussels entered a pivotal stage on October 25th as officials grappled to finalise the European Union’s ambitious AI act by the end of the year. In the days leading up to Britain’s summit or shortly thereafter, the White House is expected to issue an executive order on AI. The G7 club of rich democracies will this autumn start drafting a code of conduct for AI firms. China, for its part, on October 18th unveiled a “Global AI Governance Initiative”.The momentum stems from an unusual political economy. Incentives to act, and act together, are strong. For starters, AI is truly a global technology. Large language models (LLMs), which power eerily humanlike services such as ChatGPT, travel easily. Some can be run on a laptop. It is of little use to tighten the screws on AI in some countries if they remain loose in others. Voters may be in favour. More than half of Americans “are more concerned than excited” about the use of AI, according to polling by the Pew Research Centre.The Beijing effectRegulatory rivalry is adding more urgency. Europe’s AI act is intended in part to cement the bloc’s role as the setter of global digital standards. The White House would love to forestall such a “Brussels effect”. Neither the EU nor America wants to be outdone by China, which has already adopted several AI laws. They were cross with the British government for inviting China to the summit—never mind that without it, any regulatory regime would not be truly global. (China may actually show up, even if its interest is less to protect humanity than the Communist Party.)Another driver of AI-rulemaking diplomacy is even more surprising: the model-makers themselves. In the past the technology industry mostly opposed regulation. Now giants such as Alphabet and Microsoft, and AI darlings like Anthropic and OpenAI, which created ChatGPT, lobby for it. Companies fret that unbridled competition will push them to act recklessly by releasing models that could easily be abused or start developing minds of their own. That would really land them in hot water.The will to act is there, in other words. What is not there is “anything approaching consensus as to what the problems are that we need to govern, let alone how it is that we ought to govern them”, says Henry Farrell of Johns Hopkins University. Three debates stand out. What should the world worry about? What should any rules target? And how should they be enforced?Start with the goals of regulation. These are hard to set because AI is evolving rapidly. Hardly a day passes without a startup coming up with something new. Even the developers of LLMs cannot say for sure what capabilities these will exhibit. This makes it crucial to have tests that can gauge how risky they might be—something that is still more art than science. Without such “evals” (short for evaluations), it will be hard to check whether a model is complying with any rules.Tech companies may back regulation, but want it to be narrow and target only extreme risks. At a Senate hearing in Washington in July, Dario Amodei, Anthropic’s chief executive, warned that AI models will in a few years be able to provide all the information needed to build bioweapons, enabling “many more actors to carry out large scale biological attacks”. Similar dire forecasts are being made about cyber-weapons. Earlier this month Gary Gensler, chairman of America’s Securities and Exchange Commission, predicted that an AI-engineered financial crisis was “nearly unavoidable” without swift intervention.Others argue that these speculative risks distract from other threats, such as undermining the democratic process. At an earlier Senate hearing Gary Marcus, a noted AI sceptic, opened his testimony with a snippet of breaking news written by GPT-4, OpenAI’s top model. It convincingly alleged that parts of Congress were “secretly manipulated by extraterrestrial entities”. “We should all be deeply worried,” Mr Marcus argued, “about systems that can fluently confabulate.”The debate over what exactly to regulate will be no easier to resolve. Tech firms mostly suggest limiting scrutiny to the most powerful “frontier” models. Microsoft, among others, has called for a licensing regime requiring firms to register models that exceed certain performance thresholds. Other proposals include controlling the sale of powerful chips used to train LLMs and mandating that cloud-computing firms inform authorities when customers train frontier models.Most firms also agree it is models’ applications, rather than the models themselves, that ought to be regulated. Office software? Light touch. Health-care AI? Stringent rules. Facial recognition in public spaces? Probably a no-go. The advantage of such use-based regulation is that existing laws would mostly suffice. The AI developers warn that broader and more intrusive rules would slow down innovation.Until last year America, Britain and the EU seemed to agree on this risk-based approach. The breathtaking rise of LLMs since the launch of ChatGPT a year ago is giving them second thoughts. The EU is now wondering whether the models themselves need to be overseen, after all. The European Parliament wants model-makers to test LLMs for potential impact on everything from human health to human rights. It insists on getting information about the data on which the models are trained. Canada has a harder-edged “Artificial Intelligence and Data Act” in its parliamentary works. Brazil is discussing something similar. In America, President Joe Biden’s forthcoming executive order is also expected to include some tougher rules. Even Britain may revisit its hands-off approach.These harder regulations would be a change from non-binding codes of conduct, which have hitherto been the preferred approach. Last summer the White House negotiated a set of “voluntary commitments”, which 15 model makers have now signed. The firms agreed to have their models internally and externally tested before release and to share information about how they manage AI risks.Then there is the question of who should do the regulating. America and Britain think existing government agencies can do most of the job. The EU wants to create a new regulatory body. Internationally, a few tech executives now call for the creation of something akin to the Intergovernmental Panel on Climate Change (IPCC), which the UN tasks with keeping abreast of the latest research into climate change and with developing ways to gauge its impact.Given all these open questions, it comes as no surprise that the organisers of the London summit do not sound that ambitious. It should mainly be thought of as “a conversation”, says Mr Black, the organiser. Still, the not-so-secret hope is that it will yield a few tangible results, in particular on day two when only 20 or so of the most important corporate and world leaders remain in the room. They could yet endorse the White House’s voluntary commitments and recommend the creation of an IPCC for AI or even globalising Britain’s existing “Frontier AI Taskforce”.Such an outcome would count as a success for Britain’s government. It would also speed up the more official efforts at global AI governance, such as the G7’s code of conduct. As such, it would be a useful first step. It will not be the last. ■ More

MANAGERS DO NOT make for obvious objects of compassion. It is hard to feel sorry for the bossy office lead, let alone the big-shot chief executive, who pockets millions of dollars a year in compensation. Yet their lot deserves scrutiny and even some sympathy. From the corner office to the middle manager’s cubicle, the many demands on their time are intensifying.A recent survey of workers in 23 countries by Adecco Group, a recruitment and outsourcing firm, found that 68% of the 16,000 managers in the sample suffered burnout in the past 12 months, compared with 60% for non-managers, and up from 43% the year before. “I feel like I jumped on a treadmill where someone controls both the incline and the speed,” says one big-tech executive with a sigh. Plenty of his peers echo the sentiment. Managers increasingly require literal stamina: recruiters report that companies often ask candidates for executive positions how often they exercise.That is a problem not just for the haggard individuals, but also for their employers and, given the mushrooming of management jobs in recent decades, whole economies. Today America has 19m managers, 60% more than in 2000. One in five employees at American companies manages others.As firms in knowledge industries automate routine tasks and rely on the same digital tools—Amazon Web Services, Gmail, Microsoft office software, Salesforce customer-relationship programs—it is increasingly better management, rather than investments in technology, that can give them a competitive edge. Poor management can blunt it, by dampening productivity and increasing staff turnover. According to a Gallup survey conducted in 2015 around half of Americans who left a previous job did so because of a bad manager. Last year McKinsey, a consultancy, found that a similar share of job-leavers said they did not feel valued by their managers.The importance of good management, then, is rising. At the same time, the environment in which managers do their job is undergoing changes of its own. This new landscape rewards some skills more and some less than in the past. As a result, your manager tomorrow will not look the same as your parents’ did.Until the early 2000s, remembers Christoph Schweizer, boss of BCG, a consultancy, “CEOs were superheroes”: larger than life, seldom wrong, never in doubt. For all manner of executive, “the highest compliment was ‘brilliant’,” says Hubert Joly, who used to run Best Buy, an electronics retailer, and now teaches at Harvard Business School (HBS). Intellect still matters, of course. A study of Swedish bosses found that the typical head of a large firm was in the top 17% of the population by IQ. But across all layers of management, the emphasis has gradually shifted towards softer social skills, such as clear communication, ability to build trust and willingness to show vulnerability. Executives, including CEOs, need to be comfortable with ambiguity, and happy to delegate even the strategic responsibilities that they would once have hogged, observes Nitin Nohria, a former dean of HBS. (Mr Nohria is also chairman of Exor, which part-owns The Economist’s parent company.)image: The EconomistDavid Deming of Harvard University has found that the number of jobs that require social interaction is rising faster than average, as are wages for such roles. A study of executive job listings, by Raffaella Sadun of HBS and colleagues, found that between 2000 and 2017 descriptions mentioning social skills rose by nearly 30%. Those singling out an ability to manage financial and material resources declined by 40% (see chart 1). The most common goals requested by companies who employ management coaches for their managers on EZRA, Adecco’s coaching platform, include communication, emotional intelligence, building trust and collaboration. One of the hottest courses at Stanford University’s Graduate School of Business is “Touchy Feely”, which teaches students to assess how they come across to others.Social skills are increasingly sought after because they enable better co-ordination of people, goals and resources. And 21st-century business requires more such co-ordination than ever. Managers once used to supervise individuals performing repetitive tasks. Today they increasingly oversee professionals, often working in teams and engaged in complicated projects with outcomes that are harder to measure with any precision. The world outside the firm is becoming more complex, too. All this means that, as Mr Deming remarks, “it takes more time to converge on a decision.” A good manager, whose main role boils down to that of co-ordinator, can cut this time. This ability to get disparate people and goals to coalesce smoothly is thus at a premium, especially relative to purely intellectual and technical skills.One thing making co-ordination harder is an otherwise welcome development—greater workforce diversity. For much of the 20th century in America the manager and the managed were the same white men. “You used to run mini-mes,” says Nicholas Bloom of Stanford University. That, as Ms Sadun explains, meant managers could be assumed to possess an implicit “theory of mind” of their underlings—an intuitive understanding of how they thought and felt about the world.image: The EconomistThis is, thankfully, no longer a safe assumption. In America, women make up 42% of managers, up from 38.5% in 2010. Between 2013 and 2022 the share of non-whites in managerial posts has risen from 14% to more than 18% (see chart 2). Both women and non-whites are still underrepresented in such roles, relative to their share of America’s population; non-white employees in particular are still likelier than their white colleagues to say that they left a job because they didn’t feel they belonged at their companies. But progress is undeniable. Diversity has, says Mr Nohria, “caught up with us”.The problem for managers, be they women or men, white or not, is that putting yourself in your subordinates’ shoes is no longer automatic. Because you cannot assume you know what others are thinking, you need keen social “antennae”, Mr Nohria explains. Hybrid work, where managers in Mr Bloom’s words, “adjudicate private lives” through decisions about work from home, makes this task even more delicate.Like diversity, the post-pandemic spread of remote work brings benefits while raising co-ordination costs. Running a workforce virtually imposes what organisational scholars call “management overhead”. Even when the network connection is not patchy and people do not forget to unmute themselves, virtual meetings strip out lots of important signals, such as eye-contact and gestures. They are more tiring; one study found that people speak more loudly on Zoom than in face-to-face meetings.And they are taking up more and more of managers’ time. A study by Microsoft of 31,000 corporate users of its 365 office software in 31 countries found that in March 2023 the average person participated in three times as many Teams video-conferencing meetings and calls than in February 2020. In roughly the same period the typical user sent 32% more chat messages.The number of unscheduled calls rose by 8% between 2020 and 2022, to 64% of all Teams meetings. Some 60% of such encounters are now under 15 minutes. Shorter activities probably mean more interruptions, says Ms Sadun. Two in three workers in the Microsoft study complained that they did not have enough uninterrupted focus time during the workday. “Work has become more staccato,” sums up Jared Spataro, who oversaw the research at Microsoft. That, Ms Sadun adds, imposes a heavy cognitive cost—and may explain some of the troubling burnout numbers.Focus is scarcer for executives, too, including CEOs. When Ms Sadun and her colleagues looked at how 1,100 bosses in six countries spent their time, they discovered that only a quarter of their working days involved being alone, and some of that me time was taken up by writing emails. A long-running study of 27 leading chief executives’ time use by Mr Nohria and Michael Porter found that bosses often used long-haul travel to think. The post-pandemic decline in business trips means there is less of this time to recoup. If the composition of executives’ working hours reflects the relative value of the things those hours consume, then co-ordination activities outweigh those that include thinking about strategy.A final thing that could further lift the premium for social skills relative to intellectual ones is technology. Ever since ChatGPT, an artificially intelligent chatbot developed by a startup called OpenAI, took the world by storm a year ago, progress in AI appears to have kicked up a notch. AI boosters argue that machines can take on some of the tasks that would in the past have required “brilliance”, to echo Mr Joly. The comparative value of the sort of non-artificial intelligence required to perform them may decline. OpenAI’s boss, Sam Altman, went so far as to declare that the cost of intelligence is “going to be on a path towards near-zero”.image: The EconomistIt is unclear when—if ever—AI will live up to such bold forecasts. But it is likely to have at least some effect on the practice of management and the competences required for it. Fully 70% of respondents told the Adecco survey that they are already using “generative” AI at work. Mr Spataro of Microsoft (which has a large stake in OpenAI) observes that managers are generative AI’s most effective users. “They treat it as the newest member of the team, and delegate tasks to it.” The tasks they offload are not just routine administrative ones. Nearly 80% of respondents in Microsoft’s study said they would be comfortable using AI for analytical work; three-quarters said the same of creative work.None of this is to say that managers are about to become clueless empaths. Indeed, many still seek old-school markers of good management. Managers on Adecco’s EZRA coaching platform are much likelier than their employers to ask for advice on shaping strategy, individual development and articulating ambition, and much less likely to pick emotional intelligence, trust-building and collaboration (see chart 3). Possibly more popular still than Stanford’s “Touchy Feely” course is another called “Paths to Power”, in essence a how-to guide for aspiring Machiavellian princes.These competing priorities may help explain why so many managers are feeling overwhelmed. The new model of management—which favours social aptitude and co-ordination skills—is taking hold before the old one—which rewarded expertise and intellect—has loosened its grip. Amid all this managers are, in the words of Denis Machuel, chief executive of Adecco Group, “lost in translation”. The quicker they find themselves, the better: for them and their employers alike. ■ More

If you were asked to imagine a manager, you might well conjure up someone comically boring, desk-bound and monotonal. Now do the same for a leader. You may well be picturing someone delivering a rousing speech. A horse may be involved. You almost certainly have different types in mind. There is indeed a distinction between managers and leaders, but it should not be overdone.Various attempts have been made to pin down the differences between the two, but they boil down to the same thing. Managers, according to an influential article by Abraham Zaleznik in the Harvard Business Review in 1977, value order; leaders are tolerant of chaos. A later article in the same publication, by John Kotter, described management as a problem-solving discipline, in which planning and budgeting creates predictability. Leadership, in contrast, is about the embrace of change and inspiring people to brave the unknown. Warren Bennis, an American academic who made leadership studies respectable, reckoned that a manager administers and a leader innovates.Some of these definitions might be a tad arbitrary but they can be useful nonetheless. Too many firms promote employees into management roles because that is the only way for them to get on in their careers. But some people are much more suited to the ethos of management, as we explore in our new podcast, “Boss Class”. They are more focused on process; they like the idea of spreadsheets, orderliness and supporting others to do good work. Shopify, an e-commerce firm, has created separate career paths for managers and developers with these differences in motivation in mind.The difference between managing and leading is not just a matter of semantics. Research by Oriana Bandiera of the London School of Economics and her co-authors looked at the diaries of 1,114 CEOs in six countries, and categorised their behaviours into two types.On their definitions, “leaders” have more meetings with other C-suite executives, and more interactions with multiple people inside and outside the company. “Managers” spend more time with employees involved in operational activities and have more one-to-one meetings. Leaders communicate and co-ordinate; managers drill downwards and focus on individuals. The research suggested that firms that are run by leaders perform better than those run by managers.But pointing to the differences between managers and leaders can also be unhelpful, for two reasons. The first is that being a leader seems so much sexier than being a manager. That is partly because leadership qualities are associated with seniority. As people scale the corporate ladder, they go on leadership courses, join leadership teams and start sentences with phrases like “as a leader”. It is also because these two archetypes are not created equal. Would you rather be the person who likes to do budgeting or the one who holds others in thrall? The type that likes the status quo or the one that wants to change the world? “It takes neither genius nor heroism to be a manager,” wrote Zaleznik. No wonder there are feted programmes for young global leaders but not for young global managers.The capacity to inspire others and to head into uncharted waters does become more salient the higher you rise. But management skill does not become less important. Dr Bandiera and her co-authors concluded that although CEOs who displayed the behaviour of leaders were associated with better firm performance overall, different firms may require different types of bosses. Some would be better off with “manager” CEOs. And firm performance is independently correlated with other things, too, including the quality of management practices.The second unhelpful by-product of the debate about managers and leaders is that it tends to separate people into one camp or the other. In fact, bosses must combine the qualities of leader and manager. Just as it is hard to motivate people if you are highly efficient but have the inspirational qualities of feta cheese, so it is not much use laying out ambitious visions for the future if you don’t have a clue how to make them reality. You need to turn the dial back and forth—from strategy to execution, change to order, passion to process, leader to manager. ■ More

Luck plays a big and often unacknowledged part in career success, starting in the womb. Warren Buffett has talked of winning the “ovarian lottery” by being born in America when he was, and being wired in a way that pays off in a market economy. Good looks are associated with higher pay and a greater chance of being called to interview in hiring processes. Your experience of discrimination will reflect your circumstances of birth.The early way-stations in a career are often marked by chance: a particularly encouraging boss, say, or an assignment that leads you off in an unexpected but defining direction. Luck can affect the pathways of the most rational-minded professions. A paper published in 2022 by Qi Ge of Vassar College and Stephen Wu of Hamilton College found that economists with harder-to-pronounce names, including within ethnic groups, were less likely to be placed into academic jobs or get tenure-track positions.Names can work against economists in other ways. Another study, by Liran Einav of Stanford University and Leeat Yariv, now of Princeton University, found that faculty with earlier surname initials were more likely to receive tenure at top departments, an effect they put down to the fact that authors of economics papers tend to be listed alphabetically.Performing well can be due to luck, not talent. In financial markets, asset managers who shine in one period often lose their lustre in the next. The rise of passive investing reflects the fact that few stockpickers are able persistently to outperform the overall market. The history of the oil industry is shot through with stories of unexpected discoveries. A recent paper by Alexei Milkov and William Navidi of the Colorado School of Mines found that 90% of industry practitioners believe that luck affects the outcome of exploration projects. The authors’ analysis of 50 years of drilling on the Norwegian Continental Shelf concluded that the differences in success rates between individual firms were random.There is a long-running debate about whether luck affects executives’ pay. A recent paper by Martina Andreani and Lakshmanan Shivakumar of London Business School and Atif Ellahie of the University of Utah suggests that it does. The academics looked at the impact of a big corporate-tax cut in America in 2017, an event which resulted in large one-off tax gains and losses for firms that were based on past transactions and that could not be attributed to managers’ skills. They found that larger windfall gains led to higher pay for CEOs of less scrutinised firms; tax losses did not seem to affect their earnings. Lucky things.Just as some people blindly believe that merit determines success, so it is possible to get too hung up on the role of chance. CEOs may well be rewarded for luck but slogging to the top of companies involves talent and hard work. Although some have argued that entrepreneurs are simply people fortunate enough to have a large appetite for risk, skill does matter. A paper from 2006 by Paul Gompers of Harvard University and his co-authors showed that founders of one successful company have a higher chance of succeeding in their next venture than entrepreneurs who previously failed. Better technology and greater expertise reduce the role of chance; the average success rates in oil exploration, for example, have gone up over time.But if luck does play a more important role in outcomes than is often acknowledged, what does that mean? For individuals, it suggests you should increase the chances that chance will work in your favour. Partners at Y Combinator, a startup accelerator, encourage founders to apply to their programmes by talking about increasing the “surface area of luck”: putting yourself in situations where you may be rejected is a way of giving luck more opportunity to strike.An awareness of the role that luck plays ought to affect the behaviour of managers, too. Portfolio thinking reduces the role of luck: Messrs Milkov and Navidi make the point that the probability of striking it lucky in oil exploration goes up if firms complete numerous independent wells. If luck can mean a bad decision has a good result, or vice versa, managers should learn to assess the success of an initiative on the basis of process as well as outcome.And if the difference between skill and luck becomes discernible over time, then reward people on consistency of performance, not one-off highs. Mr Buffett might have had a slice of luck at the outset, but a lifetime of investing success suggests he has maximised it.■Read more from Bartleby, our columnist on management and work:Trialling the two-day workweek (Oct 12th)How to make hot-desking work (Oct 5th)What if Hollywood blockbusters were remade as workplace dramas? (Sep 28th)Also: How the Bartleby column got its name More

Indian plutocracy can seem set in stone. The top two spots in the annual rich list compiled by Hurun, which tracks such things, invariably go to the Ambani and Adani clans. This year is no different. Mukesh Ambani came in first, with a fortune of $98bn. He displaced Gautam Adani, a rival industrialist and last year’s winner, whose riches clocked in at $58bn. Peer lower down the ranking, though, and the story is one of change. First, the ranks of India’s ultra-wealthy are growing. Hurun’s lastest list identifies 1,319 fortunes of $120m or more (its benchmark for inclusion). That is 216 more than last year. The main sources of affluence are not what you might consider the traditional routes to riches, such as industry, finance and information technology. Instead they are consumer goods, materials and health care. Alkem Laboratories, a maker of generic drugs, helped elevate 11 people onto the list, the most of any company. Asian Paints lifted ten, Tube Investments of India, which expanded from producing bicycle parts to various other components, eight, and Pidilite Industries, a maker of adhesives, seven. The demography and geography of Indian wealth is broadening, too. The 20-year-old founder of Zepto, a delivery firm, makes an appearance, as does, for the first time, the 94-year-old founder of Precision Wires India, a maker of electrical cabling. Most of India’s rich still hail from Mumbai (328), Delhi (199) and Bangalore (100), India’s commercial, political and tech capitals, respectively. But 21 other cities made the cut this year, bringing the total number of places plutocrats call home to 95. And although plenty of rich Indians are still based abroad, most of the new money is at home. Most of it is also the product of the real economy rather than of financial engineering. Only one private-equity baron made the list—Manish Kejriwal, founder of Kedaara Capital, and his family is worth $360m. The biggest rewards in India still accrue to the builders rather than to the moneymen. ■To stay on top of the biggest stories in business and technology, sign up to the Bottom Line, our weekly subscriber-only newsletter. More

IN THE 1950s the oil market was in the gift of the “Seven Sisters”. These giant Western firms controlled 85% of global crude reserves, as well as the entire production process, from the well to the pump. They fixed prices and divvied up markets between themselves. Trading oil outside of the clan was virtually impossible. By the 1970s that dominance was cracked wide open. Arab oil embargoes, nationalisation of oil production in the Persian Gulf and the arrival of buccaneering trading houses such as Glencore, Vitol and Trafigura saw the Sisters lose their sway. By 1979, the independent traders were responsible for trading two-fifths of the world’s oil.image: The EconomistThe world is in turmoil again—and not only because the conflict between Israel and Hamas is at risk of escalating dangerously. Russia’s war in Ukraine, geopolitical tensions between the West and China, and fitful global efforts to arrest climate change are all injecting volatility into oil markets (see chart 1). Gross profits of commodity traders, which thrive in uncertain times, increased 60% in 2022, to $115bn, according to Oliver Wyman, a consultancy. Yet this time it is not the upstarts that have been muscling in. It is the descendants of the Seven Sisters and their fellow oil giants, which see trading as an ever-bigger part of their future.The companies do not like to talk about this part of their business. Their traders’ profits are hidden away in other parts of the organisation. Chief executives bat away prying questions. Opening the books, they say, risks giving away too much information to competitors. But conversations with analysts and industry insiders paint a picture of large and sophisticated operations—and ones that are growing, both in size and in sophistication.In February ExxonMobil, America’s mightiest supermajor, which abandoned large-scale trading two decades ago, announced it was giving it another go. The Gulf countries’ state-run oil giants are game, too: Saudi Aramco, Abu Dhabi National Oil Company and QatarEnergy are expanding their trading desks in a bid to keep up with the supermajors. But it is Europe’s oil giants whose trading ambitions are the most vaulting.image: The EconomistBP, Shell and TotalEnergies have been silently expanding their trading desks since the early 2000s, says Jorge Léon of Rystad Energy, a consultancy. In the first half of 2023 trading generated a combined $20bn of gross profit for the three companies, estimates Bernstein, a research firm. That was two-thirds more than in the same period in 2019 (see chart 2), and one-fifth of their total gross earnings, up from one-seventh four years ago. Oliver Wyman estimates that the headcount of traders at the world’s largest private-sector oil firms swelled by 46% between 2016 and 2022. Most of that is attributable to Europe’s big three. Each of these traders also generates one and a half times more profit than seven years ago.Today BP employs 3,000 traders worldwide. Shell’s traders are also thought to number thousands and TotalEnergies’ perhaps 800. That is almost certainly more than the (equally coy) independent traders such as Trafigura and Vitol, whose head counts are, respectively, estimated at around 1,200 and 450 (judging by the disclosed number of employees who are shareholders in the firms). It is probably no coincidence that BP’s head of trading, Carol Howle, is a frontrunner for the British company’s top job, recently vacated by Bernard Looney.The supermajors’ trading desks are likely to stay busy for a while, because the world’s energy markets look unlikely to calm down. As Saad Rahim of Trafigura puts it, “We are moving away from a world of commodity cycles to a world of commodity spikes.” And such a world is the trader’s dream.One reason for the heightened volatility is intensifying geopolitical strife. The conflict between Israel and the Palestinians is just the latest example. Another is the war in Ukraine. When last year Russia stopped pumping its gas west after the EU imposed sanctions on it in the wake of its aggression, demand for liquefied natural gas (LNG) rocketed. The European supermajors’ trading arms were among those rushing to fill the gap, making a fortune in the process. They raked in a combined $15bn from trading LNG last year, accounting for around two-fifths of their trading profits, according to Bernstein.This could be just the beginning. A recent report from McKinsey, a consultancy, models a scenario in which regional trade blocs for hydrocarbons emerge. Russian fuel would flow east to China, India and Turkey rather than west to Europe. At the same time, China is trying to prise the Gulf’s powerful producers away from America and its allies. All that is creating vast arbitrage opportunities for traders.Another reason to expect persistent volatility is climate change. A combination of increasing temperatures, rising sea levels and extreme weather will disrupt supply of fossil fuels with greater regularity. In 2021 a cold snap in Texas knocked out close to 40% of oil production in America for about two weeks. Around 30% of oil and gas reserves around the world are at a “high risk” of similar climate disruption, according to Verisk Maplecroft, a risk consultancy.Then there is the energy transition, which is meant to avert even worse climate extremes. In the long run, a greener energy system will in all likelihood be less volatile than today’s fossil-fuel-based one. It will be more distributed and thus less concentrated in the hands of a few producers in unstable parts of the world. But the path from now to a climate-friendlier future is riven with uncertainty.Some governments and activist shareholders are pressing oil companies, especially in Europe, to reduce their fossil-fuel wagers. Rystad Energy reckons that partly as a result, global investment in oil and gas production will reach $540bn this year, down by 35% from its peak in 2014. Demand for oil, meanwhile, continues to rise. “That creates stress in the system,” says Roland Rechtsteiner of McKinsey.Future tradersThis presents opportunities for traders, and not just in oil. Mr Rechtsteiner notes that heavy investment in renewables without a simultaneous increase in transmission capacity also causes bottlenecks. In Britain, Italy and Spain more than 150-gigawatts’-worth of wind and solar power, equivalent to 83% of the three countries’ total existing renewables capacity, cannot come online because their grids cannot handle it, says BloombergNEF, a research firm. Traders cannot build grids, but they can help ease gridlock by helping channel resources to their most profitable use.Europe’s three oil supermajors are already dealing in electric power and carbon credits, as well as a lot more gas, which as the least grubby of fossil fuels is considered essential to the energy transition. Last year they had twice as many traders transacting such things than they did in 2016. Ernst Frankl of Oliver Wyman estimates that gross profits they generated rose from $6bn to $30bn over that period. Other green commodities may come next. David Knipe, a former head of trading at BP now at Bain, a consultancy, expects some of the majors to start trading lithium, a metal used in battery-making. If the hydrogen economy takes off, as many oil giants hope, that will offer another thing not just to produce, but also to buy and sell. ■To stay on top of the biggest stories in business and technology, sign up to the Bottom Line, our weekly subscriber-only newsletter. 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Purveyors of chipmaking tools seldom attract attention. Yet many investors’ heads turned on October 13th, when Canon unveiled a new piece of kit. It is easy to see why. The Japanese company, which makes optical equipment, claims that its “nanoimprint” lithography machine can etch the very smallest transistors used in the most advanced microchips. Such feats have hitherto been the preserve of ASML, a Dutch manufacturer of lithographic tools. Canon hopes to eat further into ASML’s business by eventually cranking out two-nanometre chips.The possibility of breaking ASML’s stranglehold on the supply chain for cutting-edge chips is intriguing. The firm has long enjoyed the biggest monopoly in the concentrated semiconductor industry. The world’s three biggest chip manufacturers—Intel, Samsung and TSMC—depend entirely on its extreme-ultraviolet (EUV) technology to produce the cutting-edge microprocessors that go into smartphones and the powerful data-centre servers on which the computing cloud lives.ASML’s EUV rigs use high-powered lasers to etch electrical blueprints onto circular silicon discs. Canon’s alternative, by contrast, directly stamps chip designs on such wafers using a patterned mould. In theory, this allows it to make more detailed patterns. And because it involves fewer steps and avoids the need for expensive lasers and supersmooth mirrors, it could be much cheaper than EUV lithography. ASML’s share price dipped by more than 2% and Canon’s rose by nearly as much on the nanoimprint news.In practice, Canon has its work cut out. Dylan Patel of SemiAnalysis, a semiconductor-research firm, points out that nanoimprint lithography is prone to defects because of the precision required to align wafers and moulds. The technique is also not yet effective in dealing with complex chip designs, including for processors used in artificial-intelligence models, that involve many layers of chemical deposits. Mr Patel predicts that Canon’s tool will be used for making parts of memory chips, which have fewer layers, rather than for advanced “logic” chips, which process information rather than store it.Even if Canon can overcome all these technical hurdles, chipmakers may be loth to replace their EUV kit with its machines. Chip fabrication plants (fabs for short) are highly standardised in order to minimise the share of chips that turn out faulty. Since ASML has long been the only game in town for cutting-edge chips, that standardisation means that fabs are being designed around its machines, which are the size of a double-decker bus. The fabs that chipmakers are currently busy putting up around the world will not suddenly switch to nanoimprint lithography. It may take five years for Canon’s tools to be used in mass production, thinks Gaurav Gupta of Gartner, a research firm, and only once they have proved themselves.One place where Canon could make headway more quickly is China. Since 2019 Chinese companies have been prevented by America’s export controls from buying ASML’s EUV machines, since they all rely on bits and bobs of American origin. It has also struggled to develop lithography machines of its own. The current American restrictions do not, however, explicitly cover nanoimprint technology. That leaves Canon free to sell it to customers across the Sea of Japan—at least for the time being and perhaps for longer. It is unclear whether the Japanese firm’s machines include enough American know-how to ever fall under America’s anti-Chinese strictures. Probably no necks craned more at Canon’s announcement than those of national-security hawks in Washington and Beijing. ■To stay on top of the biggest stories in business and technology, sign up to the Bottom Line, our weekly subscriber-only newsletter. More