Philippa Kaur

Even people who love their jobs have a few gripes. Even people who excel at their work have their share of worries. The office environment makes it hard to concentrate; their colleagues are annoying beyond belief; their career path within the organisation is not obvious. There are aspects of the workplace, like “reply all” email threads and any kind of role-playing, which are completely beyond redemption. This column is here to administer the balm of consolation for some of work’s recurring irritations. Listen to this story. Enjoy more audio and podcasts on More

On average, women earn less than men. Much of this is because of the jobs they perform, by choice or social expectation; these are often worse-paid than typical male occupations. Some, as when women’s pay is lower for the same position, is the result of discrimination. Before the covid-19 pandemic, the gap between median male and female wages was at least edging down. The Economist’s glass-ceiling index of female workplace empowerment, published each year on March 8th, international women’s day, shows that this salutary trend reversed in 2021 in some of the mostly rich members of the OECD, including Britain and Canada (see chart, and economist.com/glassceiling for the full index).One explanation is a hangover from the pandemic. When hotels, restaurants and shops shut their doors amid lockdowns, their workers’ wages suffered disproportionately. And those workers were disproportionately women. If so, the widening pay gap may have been a blip: demand from employers in these sectors has been hot since economies began to reopen. Americans working in leisure and hospitality have seen their earnings grow faster than those toiling in more male-dominated industries such as transport over the past year or so. The return to the pre-pandemic trend will be helped by women’s gains at the other end of the income spectrum. In 2022 the share of board members across the OECD who were women crept over 30% for the first time. MSCI now expects parity by 2038, four years earlier than previous estimates. Only 64 out of 3,000 or so big companies in the research firm’s global stock index had a female-majority board. But that was double the number in 2021 and includes giants like Citigroup and Shell. Analysis just published by Moody’s, a credit-rating agency, shows that such firms in North America have consistently higher credit ratings. Disentangling cause and effect is not easy. Empowering women ought to be.To stay on top of the biggest stories in business and technology, sign up to the Bottom Line, our weekly subscriber-only newsletter. More

Don’t feel bad if MSC, the Mediterranean Shipping Company, is the biggest ocean-going carrier you have never heard of. It is meant to be that way. Its founder, Gianluigi Aponte, is a publicity-shy Italian billionaire, based in Switzerland, a country with no maritime borders and a culture of secrecy as deep as the ocean. His firm has taken the seafaring world by stealth. Born in 1970 with a single vessel trading between Somalia and southern Italy, msc last year overtook A.P. Moller-Maersk to become the world’s biggest container-shipping company. Yet its culture of silence remains. When its CEO, Soren Toft, spoke at a shipping jamboree in Long Beach this month, he revealed next to nothing. “We’re not going to make [talking in public] a habit,” he said gruffly. Listen to this story. Enjoy more audio and podcasts on More

AMERICAN-FOOTBALL fans munching potato crisps at Super Bowl parties last month were treated to an unexpected television commercial. In it, a woman magically switched between chic but cheap outfits as she scrolled through a mobile shopping app called Temu. The accompanying jingle—“I feel so rich; I feel like a billionaire”—refers to the sensation of wealth brought about by the endless choice and rock-bottom prices for Temu’s clothes. Since its launch last September Temu has become the most-downloaded app for iPhones. That is quite a feat for a young brand based in Boston. It is all the more impressive because Temu hails from China.This is a critical moment for Chinese companies in the West. On the one hand, Chinese brands have never been more popular in America. Just behind Temu in American iPhone downloads are CapCut, a video-editor, and TikTok, the short-clip time sink. Shein, a fashion retailer, ranks above Spotify and Amazon. This year it may pull off one of the world’s biggest initial public offerings (IPO) in New York.At the same time, Western suspicions of Chinese business are mounting, together with intensifying geopolitical tensions and mistrust between China and the West. America has banned Huawei, a Chinese maker of telecoms gear, at home and crushed its efforts to capture lucrative Western markets. On March 6th it was reported that Germany’s government was about to bar mobile operators from using Huawei kit and replace installed Chinese equipment. TikTok may be in for similarly harsh treatment. Several countries, led by America, are discussing full bans on TikTok over concerns about the Chinese government using the platform for anti-Western propaganda or to gobble up Western users’ personal data (TikTok denies both these accusations). For ambitious Chinese businesses eyeing wealthy Western consumers this presents a conundrum: how do you do business in places where you are increasingly unwelcome? Companies like Shein, Temu and the beleaguered TikTok are all coming up with answers that have a lot in common. Whether they pull it off will determine the fate of Chinese commerce in the West.China Inc began making a mark on global markets in the 1980s as foreign companies poured investments into Chinese factories which then shipped cheap goods to the West. Consumers would buy these almost exclusively through retailers such as Walmart or from Western brands that source products from Chinese factories. Then, in the mid-2000s, Chinese companies began building a presence in foreign markets. Until Uncle Sam clipped its wings, Huawei was selling its own networking kit and handsets across the West. Other Chinese champions such as Haier, a home-appliance maker, bought and nurtured Western brands (GE’s white-goods division, in Haier’s case). Between 2011 and 2021 Chinese firms acquired nearly $90bn-worth of foreign retail and consumer brands, according to Refinitiv, a data company. Many of the targets were Western.In recent years, however, the dealmaking has slowed. In 2022 Chinese companies spent just $400m on foreign brands. The authorities in Beijing have grown warier of capital flight even as Western governments have become more hostile to such transactions, often blocking them. Chinese brands seeking to build a Western presence have had little joy. Lenovo, a Chinese firm that in 2004 acquired IBM’s personal-computer division, has captured a mediocre 15% of America’s PC market, far behind HP and Dell, which together control more than half of it. Xiaomi, which in 2021 overtook Apple to become to world’s second-biggest smartphone-maker, has been unable to crack America. The latest wave of global Chinese brands have taken a different approach. Many initially eyed the domestic market, before the covid-19 pandemic and China’s draconian response to it forced them to look abroad for growth, says Jim Fields, a marketer who works with Chinese brands in America. Companies such as Shein, Temu and TikTok may grab the headlines but hundreds of Chinese firms have been making similar inroads in America, Europe and Japan—using similar strategies.The first of these is not to flaunt their Chineseness. The Economist has reviewed dozens of companies’ websites and found that most could easily pass for a Western brand. Their names sound English: BettyCora produces press-on nails; Snapmakers makes 3D printers. Almost none acknowledges their country of origin. One young entrepreneur who is currently planning the launch of his own brand in America says there has been a long-standing prejudice against Chinese-made goods in developed markets. This perception is linked to the first wave of cheap factory wares in the 1980s. Increased hate crimes against people of Asian descent in America in recent years has not encouraged companies to come out as Chinese. Most people hoping to start such businesses will avoid references to China if possible, the entrepreneur says.The second commonly shared characteristic is the use of clever technology to beat Western competitors on service and price. Many Chinese firms use their own websites and mobile apps to sell directly to customers instead of relying on American retailers. That spares them from losing margin to the retailers. It also gives them access to data on consumer trends, allowing them to respond quickly to shifts in demand—or even, using sophisticated analytics, predict these changes and boost supply before consumers place their orders. This “on-demand manufacturing” has allowed Shein to triple its American revenues between 2020 and 2022, to over $20bn. Its app attracts 30m monthly users in America. Hundreds of Chinese companies are now experimenting with this model in the American marketplace. Halara, a newish women’s-apparel retailer, gets around 1.5m digital visitors monthly to its app. Newchic, a rival, attracts 1.7m. The Chinese firms’ ability to understand their customers through data analytics is a big advantage in developed markets, says Xin Cheng of Bain & Company, a consultancy. The companies’ savvy use of technology and supply chains allows them to limit their non-Chinese assets—their third shared strategy. Being asset-light appeals to investors, notes Zou Ping, of 36Kr, a Chinese research firm. It helps cut costs while also reducing the risk of assets being stranded should Western politicians turn up the pressure. For many Chinese brands, their only Western assets are their customer-facing websites and apps. Although it recently opened a distribution centre in Indiana, Shein ships most of its goods directly from China to customers in America bypassing warehouses. Its Boston base notwithstanding, Temu reportedly has no plans to use warehouses in America, let alone factories. Naturehike, a camping-goods maker, has expanded rapidly across the West and Japan without employing a single person outside China. Instead, says Wang Fangfang, the company’s spokeswoman, it is boosting its on-demand manufacturing capacity so that it can better understand its customers from afar. In February CATL agreed to furnish its electric-vehicle batteries to Ford by licensing its patents to the American carmaker rather than building its own factory in America. The most dramatic way in which some Chinese companies are trying to guard themselves against a Western backlash, as well as Communist Party meddling in their Western business, is by distancing their governance structures from China. The first big name to pursue this strategy was ByteDance, TikTok’s parent company. From the start, it kept TikTok’s popular Chinese sister app, Douyin, completely separate from the version used in the rest of the world (which in turn cannot be used in China). Then TikTok moved its headquarters to Singapore and tried to distance itself from decision-making at ByteDance’s headquarters in Beijing. Now it reportedly wants to create an American subsidiary tasked with safeguarding the app, which would report to an outside board of directors rather than ByteDance. ByteDance itself stresses that it is domiciled in the Cayman Islands, not China. Seeing that none of this has fully satisfied Western regulators, other Chinese companies are going further still. Last year Shein also decamped to Singapore, from Guangzhou. The city-state is now its legal and operational home. Add its planned New York listing and its executives almost bristle when you call their firm Chinese. More businesses seem likely to adopt a version of this model. The success of these strategies is difficult to gauge. Export figures from China do not differentiate between Chinese brands and goods produced for Western companies. Many packages are sent via express courier and are not counted as exports. But it is clear that, in some niche areas at least, Chinese brands are taking significant market share in the West. Anker, an electronics company, has become one of America’s biggest purveyors of phone chargers and power banks. In 2021 about half its $1.8bn in global revenues came from North America; less than 4% came from China. Several Chinese makers of robot vacuum cleaners and other smart appliances are now cited as top global sellers alongside American and German companies. One such firm, Roborock, had foreign sales of $500m in 2021, accounting for 58% of its total revenues, up from 14% just two years earlier. Its main market is America. Several Chinese companies, such as EcoFlow, are poised to dominate the market for household power banks in America.Investors are bullish. Shein’s IPO could be a blockbuster. Late last year Hidden Hill Capital, a Singaporean fund, raised nearly $500m in partnership with TPG, an American private-equity titan, to invest in the companies backing the supply chains of future global brands. Some of the entrepreneurs behind these success stories nevertheless worry about their businesses’ prospects. One concern is overcoming the “Made in China” label, which has historically not screamed quality. This fear is compounded by fake or shoddily made me-too products, which can hurt the reputation of Chinese companies that have invested in research and development. Two years ago Amazon banned 600 Chinese brands on concerns that they were churning out fake reviews of their own wares. It is the deteriorating Sino-American relations that cause the Chinese bosses the most sleepless nights. For many of them, TikTok is the bellwether. In January the firm said it would set up a data centre in America to store American users’ data and give American authorities access to its algorithms; on March 6th the Wall Street Journal reported that it is pursuing a similar arrangement in Europe. Despite such assurances, a committee in America’s House of Representatives has advanced legislation that would let President Joe Biden ban the app. If Beijing and Washington continue to grow apart, which seems likely, American politicians may take aim at other Chinese apps, especially those that collect data on shopping habits—which is to say most of the consumer-facing ones. That would turn their technological strength into a geopolitical weakness. Facing up to that threat will require a whole other level of commercial ingenuity. ■ More

“I think we might exceed a one-to-one ratio of humanoid robots to humans,” Elon Musk declared on March 1st. Coming from the self-styled technoking of Tesla, it was not so much a prediction as a promise. Mr Musk’s car company is developing one such artificially intelligent automaton, codenamed Optimus, for use at home and in the factory. His remarks, made during Tesla’s investor day, were accompanied by a video of Optimus walking around apparently unassisted. Given that Mr Musk did not elaborate how—or when—you get from a promotional clip to an army of more than 8bn robots, this might all smack of science-fiction. But he has waded into a very real debate about the future of work. For certain forms of AI-enabled automation are fast becoming science fact. Since November ChatGPT, an AI conversationalist, has dazzled users with its passable impression of a human interlocutor. Other “generative” AIs have been conjuring up similarly human-like texts, images and sounds by analysing reams of data on the internet. Last month the boss of IBM, a computing giant, forecast that AI will do away with much white-collar clerical work. On March 6th Microsoft announced the launch of a suite of AI “co-pilots” for workers in jobs ranging from sales and marketing to supply-chain management. Excitable observers murmur about a looming job apocalypse. Fears over the job-displacing effects of technology are, of course, nothing new. In early 19th-century Britain, Luddites burned factory machines. The term “automation” first rose to prominence as the adoption of wartime innovations in mechanisation sparked a wave of panic over mass joblessness in the 1950s (see chart 1). In 1978 James Callaghan, Britain’s prime minister, greeted the breakthrough technology of his era—the microprocessor—with a government inquiry into its job-killing potential. Ten years ago Carl Frey and Michael Osborne of Oxford University published a blockbuster paper, since cited over 5,000 times, claiming that 47% of the tasks American workers perform could be automated away “over the next decade or two”. Now even the techno-optimistic Mr Musk wonders what it would mean for robots to outnumber humans: “It’s not even clear what an economy is at that point.” Although Messrs Frey and Osborne still have a few years to be proved right, and Mr Musk can be safely ignored for the time being, the earlier fears about job-killing technology never materialised. On the contrary, labour markets across the rich world are historically tight—and getting structurally tighter as societies age. There are currently two vacancies for every unemployed American, the highest rate on record. America’s manufacturing and hospitality sectors report labour shortages of 500,000 and 800,000 respectively (as measured by the gap between job openings and unemployed workers whose last job was in the sector in question). The immediate problem for advanced economies is, then, not too much automation but too little. It is exacerbated by the fact that, for large businesses, automating has been hard to get right in practice. It is likely to prove no easier with the latest buzzy AIs.Rage for the machineMechanical arms on a factory floor performing repetitive tasks such as welding, drilling or moving an object have been around for decades. Robot usage historically centred on the car industry, whose heavy parts and large batches with limited variety are ideally suited to the machines. The electronics industry, with its need for precise but repetitive movements, was also an early adopter. More recently the list of industries embracing robots has widened, observes Jeff Burnstein, president of the Association for Advancing Automation, an American industry group. Advances in computer vision have made robots more dexterous, notes Sami Atiya, who runs the robotics business of ABB, a Swiss industrial firm. Lightweight “collaborative robots” now work side-by-side with humans rather than in cages, and autonomous vehicles ferry objects from one spot to another in factories and warehouses. At the same time, robot prices have tumbled. The average price of an industrial robot fell from $69,000 in 2005 to $27,000 in 2017, according to Ark Invest, an asset manager. Last December ABB opened a 67,000-square-metre “mega factory‘‘ in Shanghai where robots make other robots. Installation costs have come down, too, with newer “no code” systems requiring no programming expertise, notes Susanne Bieller, general secretary of the International Federation of Robotics (IFR), another industry group. As a result of better technology and lower prices, the global stock of industrial robots grew from 1m in 2011 to nearly 3.5m in 2021 (see chart 2). Sales at Fanuc, a big Japanese robot-maker, rose by 17% last quarter, year on year; those of Keyence, a Japanese firm that acts as an automation consultant to the world’s factories, shot up by 24%. Though down from the frothy peaks of 2021, when bosses sought alternatives to human workforces incapacitated by covid-19, robot-makers’ share prices remain a fifth higher than before the pandemic (see chart 3). For all that growth, however, absolute levels of adoption remain low, especially in the West. According to the IFR, even South Korean firms, by far the world’s keenest robot-adopters, employ ten manufacturing workers for every industrial robot—a long way from Mr Musk’s vision. In America, China, Europe and Japan the figure is 25-40 to one. The $25bn that, according to consultants at BCG, the world spent on industrial robots in 2020 was less than 1% of global capital expenditure (excluding the energy and mining sectors). People spent more on sex toys. The long lifetimes of industrial kit limit how quickly older, dumber machines can be replaced with cleverer new ones, notes Rainer Brehm, who runs the factory-automation unit of Siemens, a German industrial giant. And most menial jobs in advanced economies these days are anyway in the services industries, where tasks are harder to automate (see chart 4). The human body, with its joints and digits, is a marvel of versatility with 244 planes of motion. A typical robot has six such “degrees of freedom”, notes Kim Povlsen, boss of Universal Robots, a manufacturer. The automation of office work has been similarly halting, for similar reasons of legacy systems and corporate inertia. In theory, digitisation should make it possible to remove most human involvement from routine tasks like ordering inventory, paying suppliers or totting up accounts. In practice, most businesses born before the digital era use a tangle of outdated and incompatible systems, notes Cathy Tornbohm of Gartner, a research firm. Rather than shell out on IT consultants to come and untangle the thicket, many firms prefer to outsource the menial office work to low-cost countries like India or the Philippines. IDC, another research firm, More

StartupS in India, as elsewhere, are in trouble. Venture-capital (VC) investments in January were down by 80%, year on year, according to Inc42, an online publication. Many of the reasons are familiar, too: money is no longer free; local banks pay more on deposits; once-hot business models like food delivery or online learning have not lived up to expectations; and crashing valuations are undermining the credibility of the market. Now Indian firms face another, idiosyncratic hurdle. Listen to this story. Enjoy more audio and podcasts on More

Hype and absurdity go together. As excitement about the next big thing builds, people fall over themselves to get on board. A year and a half ago, the metaverse was the future. Companies appointed chief metaverse officers, and futurologists burbled about web 3.0. The idea has not gone away. Colombia held its first court case in the metaverse last month (imagine a video game called Wii Justice and you get the picture). But the excitement has evaporated, at least for now. Microsoft disbanded its industrial metaverse team last month; the career prospects of chief metaverse officers are more virtual than even they would like.Listen to this story. Enjoy more audio and podcasts on More

Paul Ingram, who manages a ranch in rural Texas, is not the type you would normally associate with a weight-loss fad. But a year ago he finally got fed up with lugging his 320lb (145kg) frame around all day in the heat. His family has a history of heart disease. As a result of covid-19, he had become painfully aware of the risks of obesity. His efforts to lose weight through diet and exercise had gone nowhere. “I needed some help.” So his doctor, a family friend, suggested he use an injectable drug from Novo Nordisk, a Danish drugmaker, that is approved for type-2 diabetes but, as a fringe benefit, helps with weight loss, too. To start off, the price, at about $1,000 a month, was out of Mr Ingram’s reach. Because he didn’t suffer from diabetes, his insurer wouldn’t cover it. Then he discovered an online Canadian pharmacy that shipped it to him for $350 a month. Since using it, he has shed 60lb. When he goes to the gym and picks up two 30lb barbells, he thinks, “I used to carry this much more weight around on me all day long.” It’s life-changing, he reckons—he eats less, exercises more and his doctor is “tickled to death”. “It blows me away that insurers don’t want to pay for it.” The drug he uses, Ozempic, is now a meme. But it is about more than just “skinny pen” jabs for starlets. In America alone, 110m people like Mr Ingram, many on low incomes, suffer from obesity. They need help getting into shape. Novo Nordisk is their new port of call. It has been a wild ride. Following Ozempic’s serendipitous success, the firm’s newest potential blockbuster, Wegovy, was the first drug in years that America’s Food and Drug Administration (FDA) approved for obesity. This has meant some insurers cover it. For the past two years the company, which turns 100 in 2023, has traded like a growth stock, doubling in value to $326bn on hopes that overlapping diabetes and obesity drugs could become the biggest-selling class of pharmaceuticals ever. It is forecast to divide most of the market with Eli Lilly, an American firm, whose diabetes drug, Mounjaro, may win FDA approval for obesity this year. It is a race like that for the covid-19 vaccine. The combined market capitalisation of Novo Nordisk and Eli Lilly easily eclipses that of AstraZeneca, Moderna and Pfizer put together.In the eyes of some pundits, Novo has flubbed its lead. It underestimated demand, mishandled supply and let this slow down its ambitions to roll out Wegovy in Europe. Its boss, Lars Jorgensen, admits to some mistakes. But on balance, Novo deserves credit. A hesitant response to an unprecedented surge in demand is not the gravest of shortcomings. In the pandemic many firms, from e-merchants and carmakers to gunsmiths, struggled with demand shocks. Rather than lament Novo’s performance, learn from it. Its efforts to tackle obesity provide some golden rules on how to cope in the midst of a boom. The first thing to remember is knowing your onions. Analysts have long complained that Novo’s focus on diabetes-related illnesses make it the least diversified big pharma firm in Europe. But that is orthodoxy gone mad. One of the beauties of the firm, whose founders first made insulin in Denmark in the 1920s, is specialisation. In 1990 Michael Porter, a management guru, called Denmark’s insulin-exporting prowess one of its big competitive advantages. That industrial focus gave Novo a head start on obesity. For decades it toiled in the wilderness, while its rivals concluded obesity drugs were neither effective nor safe. But once it discovered that the GLP-1 medicines it used for diabetes, if made longer acting, could lead to at least 15% weight loss, it doubled down. Besides obesity, it hopes to use GLP-1-related drugs to help treat heart disease and other related illnesses. Its success is testimony to the virtue of innovating in adjacent, highly specialised businesses, rather than creating something from scratch. The second lesson is: know your real market. Novo was at first caught out because demand for obesity drugs spiked far sooner than that for its other drugs typically do, quickly depleting inventories. That deprived some patients of badly needed drugs, as influencers were using TikTok and other social-media apps to pep up demand. This served as a reminder of the dangerous distractions of the hype cycle. So now the firm is going back to basics. It is focusing on customers with a body-mass index (BMI) over 30, like Mr Ingram. It is working with doctors to ensure that they prescribe the drug correctly. And it has set about convincing insurers and health authorities to pay for obesity treatments. Third, keep control of capacity. As demand surged, one of the filling sites Novo had contracted in Europe malfunctioned. Mr Jorgensen says the situation is improving. It already has two more filling sites coming on stream, and in 2023 it intends to double capital spending for the second year in a row. But it should not overreact. Companies as clever as Amazon learned during the pandemic that excessive faith in a “new normal” leads to overcapacity. Many, including the e-commerce titan, have since shed people and property. The factories in America and Denmark where Novo makes the active ingredients for its medicines take five years to get up and running, at a cost of up to $2.5bn. That gives it a generous head start. Even with the obesity market’s huge promise, it is better to advance steadily than to rush. Skinny pens, fat profits Last, plan for the long haul. Profits are booming, which delights investors. But many of those who need obesity drugs are unable to afford them. According to a survey by Jefferies, an investment bank, Americans who earn less than $15,000 a year have the highest BMIs. Novo has every right to reap rewards for its innovations. Insurers may cover most of the costs. But to avoid a political backlash, it is important that those who need them most can access them. In order for obesity drugs to extend to other diseases, such as cardiovascular ones, it will be crucial to maintain goodwill. Like diabetes, obesity may be the start of another 100-year business. ■Read more from Schumpeter, our columnist on global business:It’s time for Alphabet to spin off YouTube (Feb 23rd)AI-wielding tech firms are giving a new shape to modern warfare (Feb 16th)What would Joseph Schumpeter have made of Apple? (Feb 9th) More