What does Jeremy Hunt’s Autumn Statement hold for UK business and what will it do for the economy? How is global trade affected by conflict and geopolitical uncertainty? And can companies play a role in making sure artificial intelligence is safe, or is the world heading for a Terminator-style melt down?
Mark Kennedy, partner and member of Mazars’ group executive board, alongside George Lagarias, Mazars’ chief economist, offer their analysis of global trends to Board Agenda’s Gavin Hinks in this episode of Macro Memo.
What does Jeremy Hunt’s Autumn Statement hold for UK business and what will it do for the economy? How is global trade affected by conflict and geopolitical uncertainty? And can companies play a role in making sure artificial intelligence is safe, or is the world heading for a Terminator-style melt down?
Mark Kennedy, partner and member of Mazars’ group executive board, alongside George Lagarias, Mazars’ chief economist, offer their analysis of global trends to Board Agenda’s Gavin Hinks in this episode of Macro Memo.
Welcome to Macro Memo, a Board Agenda podcast exploring the impact of macroeconomic and geopolitics on business with Mark Kennedy, George Lagarius, and hosted by Gavin Hinks. To access thousands of articles, guides, reports, and our upcoming events, sign up or log in at boardagenda.com. That's boardagenda.com
This episode is brought to you by Mazars, the international audit, tax, and advisory firm, helping businesses around the world, operate and grow with confidence.
Hello, and welcome to the macro memo, a podcast covering All Things macroeconomic and their impact on business from experts, Mark Kennedy and George Lagarius.
George and Mark are our macro maestro pairing from professional services firm, Mazars. And of course, me, not forget me the not so expert Gavin Hinks master of ceremonies only.
We're here to help you spot the big issues affecting trade and business, perhaps make you a bit of a know at all at your next team meeting or board gathering.
Mark, George, I'm feeling very pessimistic at the moment. I work up feeling quite bearish. And I wonder coming to you first, Mark, you're there in Dublin. Are you feeling bullish or bearish with the macro environment at the moment?
That's good question. I'm feeling globally macro bearish. I'm afraid. And I think the fundamentals that we're looking at are pretty tricky, and that the governments and businesses have haven't got a huge amount of room to maneuver. In quite a quite an uncertain environment. So overall, I'm pretty bearish.
Back in Dublin, I'm a little bit more bullish because we seem to have found a corner at the market that's going not so badly. And of course, you can always tuck yourself away in a Dublin pub. There is that. There is that.
It's the time you refer as well. Definitely. Definitely, George. How about you? They're in Athens, bullish or bearish?
Obviously, in the global environment, could be could have been a lot better. You know, we have a global economic slowdown, so definitely more on the bearish side.
Having said that, we're not nearly as bad as we thought we would be you know, maybe six months ago. So, yes, of course, things are slowing down, and we haven't still seen the end of of this particular downturn, but seeing where we are and where we could have been.
I'm fairly embarrassed, but I'm an optimistic bear. Well, that's, bearish with a bit of bullishness on the horizon, hopefully, for you there in Athens.
Now this week, we've got a packed show for you. We're looking ahead to the UK's Autumn statement, and what chancellor Jeremy hunt might do there. We're gonna consider some, the impact of geopolitical uncertainty and the major conflicts around the world, and their effect on trade and supply chains. And we'll look at the role of companies in regulating artificial intelligence and helping us avoid a full terminator meltdown on mankind.
First, regular feature postcards coming to you, Mark, in Dublin, where have you been And what did you learn in recent weeks?
So my my little postcard this time is, last week was school holiday season, so myself and my family went to Paris for a few days. And as you do, you have to attend a meeting or two.
So I discovered that Paris is littered with cafes, which are set up for people to drop in and To their business, you can get a private room. You can get a pretty decent sized meeting room, make your phone calls or whatever your video calls in a private setting. And it's really, really efficient. It costs, as far as I could see, on average, about five euros an hour for this service.
There's much coffee and snacks if you want. Now this was the important point that struck me was. I got home and started reading about WeWork, filing for bankruptcy.
And it's just interesting to see we've had a very significant change post COVID, and you're seeing small business is really taking advantage of this in a huge city with a great business tradition, and a massive business model that was designed to do the same thing in a more corporate way, failing. And I think there's something in that. It's interesting as well back here in Ireland our government has actually invested in this concept. You can find the same sort of setup in every small town all over the country so people can do their work life and have a good balance. And it's just an interesting observation and where we've landed after a few years.
You can trust the French to make things much more comfortable, even work. Can't you. Yes. Yeah. Yeah. Coffee's better too. Yes. Indeed.
George, how's the coffee in Athens? And where's your postcard from? So my postcard, as you would imagine, is from Athens. A tourist trap, which I happen to inhabit regularly.
It's, you know, it's it's interesting because obviously, on on the face of it, we're not the country we were ten years ago when the crisis broke out.
You know, since then, we we've lost a third of our GDP, but in the past few years, reforms have been happening, and we have been outperforming economically, many other, European peers. But we we here know it and we can feel it that this is all very tentative, our debt to GDP is a hundred and seventy seven percent. It's, it's more than, South Sudan, for example.
And, this is all very tentative because it sort of depends on continued support from the EU. And also possibly for for that to to happen on an ongoing basis, the youth have to have a firmer structure around the euro.
Both of which are tentative. They may or they may not come to to pass. So, you know, we are much better, but we're still in, holding our breath mode. So does your postcard involve a a cheery wish you were here?
From Athens at the moment, economically speaking. Well, we we we wish we wish you were all here because, it's it's pretty much tourism that keeps the economy going. So the the more of you, the merrier well, I I'm online right now booking my ticket. We'll see you there soon, George.
Now to our first segment, in this show, twenty second of November, sees Jeremy Hunt deliver his autumn statement or mini budget as it's sometimes called at a time when he's perhaps caught between wanting to be generous of the country ahead of a possible general election and managing a high debt burden.
The figures out recently show that the UK economy has flat lined. George is quite a conundrum for Jeremy Hunt as he approaches his budget speech.
Well, we we say that, but look, At the end of at the end of the day, he cannot be very generous. The last prime minister during a, you know, mini budget autumn statement tried to be very generous to to the country with tax breaks and all that, became the shortest leave prime minister in the modern history the UK, apart from a few people who just died in office.
And, so he can't be because a) the markets are watching, and b) more important because, even if he were to be generous, an independent central bank would then have to counterbalance this with even higher interest rates, okay, which would directly hit mortgage holders.
So the long and short of it is they may want to be, generous but they can not with interest payment rising because let's not forget a lot of the UK debt is in, inflation linked, bonds. So as long as inflation remains high, interest payments are very high. Okay. So you can add more debt to to that because that's how you'd pay, you know, fiscally.
That's how you'd pay for it. Jeremy Hunt can't take that kind of political risk any of pushing up interest rates. Again after all the recent speculation that they're they're they've now stopped rising. Yeah.
No. I I think in, you know, in terms of indicating more on the interest rate side, I'm not sure that that's available. I I think overall, he's in a very difficult spot. I wouldn't like to be sitting in his seat.
I mean, You've got all of the economic indicators suggesting that the UK is stuck in a pattern.
It's not it's not in recession, but it's stuck in a pattern. Like, and let's be fair. Like, a lot of major economies, and it's a combination of inflation seems to be stuck at the level We've landed whatever that is, six, seven percent. Wage growth is is also kind of embedded into the economy in a particular way.
And you've got your your borrowing costs as George has said.
And there's there's not much wriggle room for him to do too much that's that's friendly in terms of his his upcoming statement.
And GDP of course flat, as you said at the start of the segment. The, the question I've been kind of mulling over is is whether he's going to find space to do things which are business friendly because in this kind of environment, Really, the job of government should be to try and create in the economy movement that creates space for investment allows businesses to get on what they're good at doing and hopefully through that drive more employment and and get us back on the right track. And you know, there are some indications out there that he's looking at a number of things. I mean, it would be very positive even if we can't put it into play, to do something other capital allowances front end in the the scheme that was announced, previously in terms of the accelerated hundred percent capital allowances If we could indicate when they that might, move on.
There's opportunities, I think, under the EIS and VCT schemes, and there's some talk in on the back of Bletchley Park probably very telling me about putting in place incentives to support investment in AI.
Those are kind of things which maybe won't pounds shillings or pence impact immediately or can be faced, but they do create a sense of forward momentum for businesses. My worry is that tis going to be a very political budget. And in fact, whatever capacity he has, that he'd be under pressure to do things which is voter friendly rather than business friendly. And if you go down that route, I think, you know, again, people are flagging questions about things like inheritance tax and so on.
Which might be good on the doorstep, but aren't gonna help the British economy move out of the current cycle that we we seem to be in.
So George, a political budget! It must be very tempting for, Jeremy Hunt to do something like that. He must be under a lot of pressure from a government that's way down in the polls at the moment.
Well, it's easy put pressure on people when you're not the one responsible for the budget strings, and certainly nobody wants the role of the grumpy Paymaster, which is the, you know, ungracious role Jeremy now has. But as I've said, I don't think that, he has much of a choice, and let us not forget how the prime minister Rishi Sunak became the prime minister it was when he warned that the Lizz Truss budget was way too generous and how markets would react.
So, you know, it would be a very old thing for him to do the think he warned against one year later.
So again, I don't think there is much of a choice. There's going to be you know, more complaints, from from the party to to be sure. There's going to be some interesting, PM, Q, questions.
But, you know, at at the end of the day, there's only so much he can do.
And that is true for most countries.
The only country that can afford to do, you know, more fiscal is the country with the global reserve currency. They're doing it and they're the only ones doing it. And in fact, that's helped the global economy stay afloat.
Now I'm talking about the US, of course. I mean, I suppose the tension in the Tory party is always the same thing. It's a a kind of attachment to cutting taxes, but, Hunt stuck with this issue of enormous debt burden Yes. And look, I mean, I haven't lived my life over here. I'm not the best person to to really understand the in intricacies of the Tory party and and the view there.
As George has said, I think he's in a kind of a bind I think and the other thing is if I understand it correctly, this is his last goal. He's he's, not planning to stand at the next election. So I think he'd want to finish his career as as chancellor by doing a sensible budget for the economy at the and maybe he licked more some of those pressures in the parity from that perspective.
But, then I'm not I'm not the expert on tory politics, I'm afraid. What are the chances of corporate tax rate, Mark? Coming down. I mean, I can't see it.
And I I thought you might ask, well, What would you really like to see if I was, based in the UK running a business? I would like to see something in that direction. I think other economies have shown that you can run quite a successful position in balancing the revenues that the state needs from corporation tax with a carefully managed, tax level, tax rate. And I think that's something that the UK economy may think of.
And previous Tory leaders have suggested strongly that they would pursue. So I mean, it's it's a possibility, but I can't see it. I mean, if I was to think of another thing that I'd love to see him do is do, its something on the green tax measures and try and really counterweight some of the the negative perspective because a a reasonable view is can only be that the UK has done exceptionally well in pursuing the green agenda and has created institutional frameworks and pushed ahead with that. And I think there's an opportunity maybe again for and and perhaps the chancellor can do that. He can, on either corporation tax or on some people that signal future measures that would start to have an impact which would be very positive.
George, green tax measures might look a little incoherent given Rishi Sunak has changed his stance on tackling climate measures at quite the accelerated rate that Britain aimed for. What what would your preferred tax measures be in the altered statement. I would prefer for things to remain, unchanged.
I would prefer to see frameworks changing you know, in terms of, pension, the pension system, R & D relief, all that. You know, you could make changes on the on the edges, on the fringes, or you could make changes to frameworks.
But I would like to see much change because if, if, for example, he would, back the trend and and impose more taxes you know, that would be devastating for an economy teetering at the edge of of, recession.
If he were to surprise us all and be very generous with this budget, then he would invite the reaction of the central bank. So he can't win. That's why I'm saying, you know, This is the budget that's this should be an uninteresting budget, but, it may hold some surprises in terms of frameworks and, you know, on the fringes, but nothing very short term that's going to alleviate people's pressures. Mark, to finish up there, it it seems like it's a choice between doing the rational and something that might seem slightly irrational in terms of the economy.
I I and I look, I mean, I I tend to agree I was nodding as as George speaking, I don't think he is what trigger room, and I think he'll do very little. In fact, I don't expect a big swing in in any of the topics we've talked about.
And I think he will do the rational. I think he's there because he's a kind of safe pair of hands in many ways.
So what I'm guessing we'll see, and that is is something pretty modest in terms of a kind of sense of giveaway or whatever, I really do hope he takes the opportunity to make some statements about what could happen in the future and and, you know, take some of those initiatives that we've touched on. I mean, George mentioned R & D relief another good example and say, even if we can't do it today, we'd like to do it a at a point, give an indication of time scale, and also give an indication of what needs to happen for that to happen. I think that will help businesses plan ahead, and it's the business budget element is what I'm most focused on in that regard. Help business plan ahead and presumably calm the markets as well. Yes. Absolutely.
Which given the, recent history here in the UK is, very, very important indeed. True. And, it I suppose he is coming off, you know, the last match wasn't great. So the next one hopefully will be better.
Right. Now it's time for us to move on. Our next issue on our, on our agenda is, the major conflicts around the world. And the impact they may be having on economies, but more pressing are possibly the impact on supply chains. George, if I can come to you first to have the conflicts and geopolitical uncertainty had a noticeable, a noticeable effect on the global economy?
Well, yes. Obviously, and, you know, primarily, that was the, the issues in Eastern Europe and Ukraine last, last year, they have had a significant impact of both the energy supply chains and food supply chains.
And, also, they they definitely boosted global inflation in, February twenty twenty to.
Now some of the, you know, latest conflicts not yet and not so much they have caused obviously political consternation around the world, but not in terms of supply chains. Look, in terms of supply chain, the elephant is in the room is is is not war.
It is, the movement away from China as the heart of, the global supply chain and movement into other countries potentially such as India. You know, whatever discussion we have, this is ninety five percent of the supply chain discussion we should be having.
And that is a longer term trend. It's happening, but obviously, Rome wasn't built in the day. Global supply chains weren't built in the day either. And this will take a long time, and it going to be an arduous process and an inflationary process, and it might or might not work.
Because, you know, putting China where India where China was, is a difficult proposition. They're very different countries.
Okay. So, the point is that You know, this sort of, geoeconomic tension build up, especially when it comes to to supply chains, is more what we're looking at is Asia, more than we should be looking at Europe and the Mediterranean.
Mark, how is business responding? Is it is it bought into that to strategic change, China to India. I I I think well, whether it's all China through India. I know it's a bigger question than Georgia probably be better place to to give a view on that.
But I think, yes, businesses are generally reacting to the, the environment and I suppose just before getting into that. I mean, it is important. You know, we are talking about conflict and war here, and it's an awful subject to have to talk about you know, in the human tragedy element, we we shouldn't affect we shouldn't forget in that. It's just, you know, there's a backdrop to this, which is absolutely off On a business side, I think, you know, the large corporate community are, they move slowly.
They're big tankers, but certainly. You are starting to see large multinationals refocus, whether that's China to India, whether that's near shoring things, you know, we have offices as you know all around the world, you know, say our, you know, our partners in Mexico and in countries like that are seeing a lot of activity from US firms that are maybe going back into supply routes that they had left, are are we using less So you are seeing a definite a definite realignment in that regard.
I think the other two things that that kind of strike you is the the in the background to all of this, we've clearly got an international sanctions regime that is is continuing to impose limitations of parameters on how businesses work. And that's become more and more complex. So, I mean, it was particularly notable in Europe in the context of of Ukraine.
But it is, it's become I I suppose a a day to day issue for a lot of businesses and has a real impact in terms of how decisions are made. And I think when you move out to smaller businesses, at the end of the day, and George touched on this, this is really a cost issue in many ways. The costs of doing business are escalating.
Whether it's because of direct trade that you're doing or the indirect impacts on the people you are buying and selling, bike prom and selling tube. So, you know, it it it's definitely having an impact from that perspective. Georgia cost issue for small business But big business, are they making the moves from, the standpoint of resilience or, or are they also gaining, cost benefits from, slowly but surely shifting their strategic focus.
I think I think both look, the cost benefit is is probably not not as much.
Important in this because they're, you know, both low cost countries. If anything, cost should be overall higher, simply because India does not have the infrastructure, that China has.
Okay.
Going to India is a less at at least now is a less efficient place, you know, maybe it's going to be a more efficient place in ten years, but right now is a less efficient place. So The reason for this move is purely geopolitical.
They want to to make sure that their technology, IP, intellectual, technological intellectual property remains, you know, private, they want to to make sure that, they can operate undisturbed, and they want to make sure that because all these businesses, they also have home countries in which they're operating. They want to to make sure that their decisions are in line with those of the political leadership.
You know, if the political leadership says, well, we need to depend less on China, and Apple goes in built more factories in China, that would be, an issue and will cause some backlash in, in other areas of the business.
So, you know, okay, we do live in the area. Well, the corporation is as mighty as the state.
But the state still has some power to wield.
I think that's a really interesting point, Mark, because if we if we look back to recent history, this realignment became emphasized under Donald Trump when he was president of the US.
But Joe Biden hasn't changed the policy in any way. To any great extent.
We're coming up to another presidential election.
We don't there's no chance of any change. In that realignment post the next election. Is there?
No. I wouldn't think so. I think, you know, the the and I I suppose I said at the start that I started this segment that the, you know, turning around large corporates is is difficult. They're big tankers in the sea.
Added so there'll be no there'll be no pressure on whoever is the next US president. To change this. I think the big US companies have adopted a particular line, they mimic as I say, making market specific decisions, but I think we will be in this position for quite a while.
But I think there's a there's a kind of a a psychological aspect to this for those who do a lot of work, say, and advising companies and strategy and and so on, you know, At the end of the day, even the largest corporates are driven not just on economic rations and people are making decisions. And in an uncertain environment, you will go to safe ground. And you try and make the that that is permanent to position as possible because that's a good business sense. And I think, you know, in that context, I can't see the next president of the US taking a different view. It's just like whoever that may be. Well, with that image of safe ground, I I think that's a good moment to move on to our next item on our agenda. Mark, coming to you, we had the UK artificial intelligence safety summit, which resulted in the Blakely declaration, that involved some statements about trying to keep AI safe and also made reference to the fact that, companies would have to be involved in that process too.
Looking at that declaration, do you think it's avoided a terminator style meltdown in artificial intelligence, or are there still big risks out there?
Oh, look, I think there's big risks, but I don't wanna be at, doomsayer on this.
I think the scale of risk depends on who you ask.
And, well, I think, you know, first of all, that that actually so much I think was very much a kind of a coup for the UK government, and I think very well done. I mean, if there's a characteristic in all of the development in this area, it's that it's quite fragmented.
There's not a lot of joint up thinking at an international level, and and that is adding to the risk scenarios that are out there. But, so I think, you know, well done on that and it does add, you know, it creates something which is is very beneficial from that perspective. That said, I think we really don't know enough about the impact that this technology can have.
And we don't know about how different agents are gonna use it. And so there is a fundamental uncertainty that remains out there. And I think What what's interesting is now, you're gonna see a move gradually towards more and more regulation of this space.
And whether that's through the EU, through the UK government, whoever, and gradually, I think, maybe not harmonization of those standards, but a certain amount of joining of dots in terms of the public interest that a bit touched.
And that's part of a bigger agenda that's that's happening. You know, I thought it interesting in the King speech that there are there's an act there listed, which is around data protection and and digital information. You've got the DSA and the the auditing of of how companies act in that space and use of algorithms. In the EU, you've got an equivalent in Joe Biden recently announcing So I think governments are starting to catch this up, and that's probably to everybody's benefit.
George, the, summit was, really interesting in that it, seemed to place at its center, security and existential risk The one thing you didn't mention very much at all was the impact on labor markets. Yes. Look, before we type labor markets. I need to say something as a very avid reader of of sci fi.
And this is that which started speaking to us in a known cold way.
Is is not that huge a breakthrough.
Okay. It appears as such because we can resonate with it, but what I have long feared is that this is that that we are confusing a little bit, the, a very popular movie franchise with which we all grew up with what AI might actually bring.
Chajapiti is not Skynet.
Okay. It is it is Skynet's great, great, great, great, great, great, potentially great grandfather.
And it would take it would take a very big leap in the technology we now have to you know, for this to to be a huge issue. Obviously, and, you know, if you read, if you read actually, some of the reports charge a pet after interacting with humans, becoming dumber. It tends to get, things less right Okay.
So, you know, that's there's something to be said here. It's not the first time.
Microsoft released an AI on Twitter a few years ago called Thai. You should look it up. I'd had to shut it down, after twenty four hours because the the AI just acquired all those wonderful Twitter characteristics that were also, also, fond of.
And they had to shut it down because it was it was simply inappropriate.
So the thing with AI is I can't predict what's going to happen in the labor market. The one thing I do know and that is dangerous, by the way, is that there was an experiment with AI in the military a few months ago where there was, a simulation of a drone, conducting an attack And when the, operator said that should abort the attack, the simulation went back and killed the operator because it needed to fulfill its original mission.
Okay. So there are obviously glitches and things that should be taken care of, but, you know, guy, and I'd remember it was this big global thing that took the world in less than twenty four hours and start started launching nukes. So we're very far from that.
And there is sci fi also, which says that optimized decision making, which has been the subject of philosophy for ages, could happen in AI, and it could, in fact, augment and improve our political.
And business decision making. So the point I'm making is exactly Mark's point. We do not know what this brings.
Okay. People were afraid of of the loom. And, we had the the industrial revolution, which made the United Kingdom and global economic power.
So you don't know what this brings, and that's why I think the Bletchley declaration is not something for the history books. We're trying to regulate something that we have no idea what it looks like. Yeah. But, and I sorry, Gavin, I know I'm jumping the the cueing heavy, but you know, I think there there's a couple of things in what you say, George, that that is that are absolutely true. And maybe the one that maybe smiled was that after encountering humans, AI becomes dumber, that that in a way is the problem.
Is that it's not that humans are dumber. It's that As you start to develop this kind of technology, we are very much in the hands of people who use it for different reasons, and who will have good or bad governance, good or bad controls, good or bad ways of doing things. And its ability to to create millions of millions of interactions and transactions. It's the volume thing where an error gets repeated in spots worrying.
That's that's one reason. I think it's important that governments do get to rip with it because if you think of, you know, the unintended consequences of a high speed trading platform, having an error in an algorithm that gives rise to very significant financial consequences. You're not just talking about maybe that bank failing or whatever, but maybe other institutions and businesses failing as well. So a big effect is is certainly imaginable.
I'm not saying that, you know, and and you control it with human things around. I'm not saying it's gonna be inevitable. The other thing that that really has me worry about it and and keen that we do see regulation is we've already seen pre pre the kind of steps forward in AA the last year or two. He very structured industrialization of Cybercrime.
And this again is just adding another tool that people who want to cause issues, will put to use in whatever way they want with their way of doing things. And that's not necessarily good for the rest. So, What I share a lot of George's view that we shouldn't get too excited about and get too far ahead of ourselves, and it's not, you know, robots soaking the earth or whatever, There is there is a risk here.
It is part of government's role and business's role to go back to your original question, Gavin. To make sure we behave responsibly. George, you haven't quite soothed Mark's AI anxiety there. What what's your advice to business now as they because there's gonna be a lot of boardrooms in which people are saying we must have AI now to streamline our systems and processes What what's your advice to those guys? My advice is to research the subject, to start small, to work out the kinks, AI at this point is the new Microsoft Windows.
I'm sorry. You know, I I just don't see the world destroyed by a robot and strange Austrian accent just yet.
What I what I see is a tool. As any tool, it could be used well. And, you know, they need to put research, they need to put policies, they need to figure out what this thing is. I know Morgan Stanley has used chat JPT in a great way across its operations globally.
So, you know, it can be very beneficial. And the way, by the way, they used it, just as an example is that, you know, they give investment advice to, say, in Peru, for example, or in Venezuela. Well, not Venezuela, Paris, but, and they would give investment advice to wealthy people there. So, instead of the, Peruvian, relationship manager, trying to find reports or calling up New York and say, okay, our opinion on bonds, they can put a couple of, words in their customized strategy, and they can have a great narrative to put an any any email for a client that exactly reflects the firm's view on equities.
Okay. This doesn't take up any person's position. And if there was a person behind this, then the role would have been completely functional. This is what AI is going to help everybody with. It's going to eliminate roles that are functional just in nature. They exist to to bridge a gap. In in an operations process.
But when when it comes to, you know, thinking when it comes to analyzing, when it comes to decision making, we're not nearly anywhere close to, what we fear. And the reason for this is that we do not have quantum computing.
It's an AI run on a computer that that we have to do or even, you know, the biggest servers is going to be a childish AI. Okay. One quantum computer is developed and discovered, then we can have this discussion again, Gavin.
Okay. Well, it sounds like we're going to end up with a child helping us fill in forms online in some way that that I've got one in the bedroom next door. It might be helpful as well. Look, I do wanna ask one last question, though, because I I I do wanna address this labor market issue.
Whenever people talk about AI, they say you know, it won't just destroy jobs. It'll create new kinds of jobs. I I want to see from you guys, Georgia Mark, how much do you believe in that? Start with you, Mark.
I I don't believe it's going to destroy jobs on the scale that some people are predicting. We've had the we've had this kind of view that not just about AI, but about technology for many years. I think what what you've seen actually is that professions, different types of jobs, whatever that they develop over time. And, you know, when you look at those lists of what people predict accountants are amongst the the top of the list, fact, what we're seeing is where we're adapting as businesses and we're in the same way as, you know, email was an innovation and people said, well, that was gonna change.
It did change things radically, but it didn't stop the growth of the business. So I'm a little bit more sanguine about that. And I, you know, I think George and I are not that far apart on the topic generally. I'm probably a little bit more of a look at the risk side type, but I think my advice to a business is put good governance around it, create strong kind of controls around it, and here's something that could be very useful, but do it responsibly.
But anyway, George very quickly, create new jobs or kill jobs. What's your instinct?
I think historically speaking, technological leaps, they both create and kill jobs.
And, let's be honest about this. Some of the jobs lost, some of the people that are going to be left behind will never be able to to recover. Think of the rust belt in, in the US, you know, manufacturing when when when it went out, those people never really worry trained or recovered.
That is the creative distraction, which looks great from a historical and economic perspective. But, yes, make no mistake. It can leave generation of people, behind. Okay.
And then we'll have to see, social policies that might help with this. Precisely, it'll be a political issue at that point twenty. Yes. Yes.
Be question for politicians.
Well, I think we're coming to the end of our time together, guys. It's time to turn to our last item. Just a quick look forward into the global calendar to see what's in your diary and why it's important. Let's start with you, George. What are you What are you looking at in the future, the very near future? And why is it important? Cop twenty eight, the climate change, conference let's do to happen the at the end of November.
It is very important. I would like to see some evidence that finally they're going to create the fund that's going to help with environmental disasters.
In in Greece, specifically, which generally has a benign climate, we faced wildfires at the at the end of the summer. And then right after they were done, we faced floods like, we haven't seen before.
So, you know, all all these events are supposed to be happening once every two, three hundred years seem to be happening twice a year now. Okay. And I think, you know, we've seen it in Spain. We've seen it actually all across the Southern Mediterranean. We've seen it in, the West United States. I think, eventually, I thought it's going to be created. That is the express mandate for the next go, but at least the express discussion that needs to be had.
How they're going to give money to countries that are struggling with climate change.
Ultimately, again, with climate change. The issue is not, we'll try to, you know, to to to stop as much CO2 as possible. I don't think they're going to meet their one and a half degrees target.
And the next subject that's going to be debated in the next few ones is not going to be the font, but rather migration.
Because when the weather changes, the one thing that happens, throughout the whole of human history's mass migrations.
Some big issues there, Mark, to consider what's on, your calendar.
So what I'm watching out for is not actually gonna happen till the next month to the it's just been set, I think, in the last day or so for the seventh and eighth of December. But I think it's important to start watching what happens in the lead up to it. And and the event itself is the first visit of the European Commission to China since four years ago, I think, was the last time there was a meeting between the two blocks.
And it's being flagged, Ursa Wander Dayen last week said in a speech that she's looking to try and create a constructive and not hostile relationship between the two blocks. And this flagging it as a meeting to derisk true diplomacy. So she's clearly setting out. And again, remember the commission isn't gonna change, and they're not distant future, there's gonna be elections.
So she's putting Europe into a position there where they're going to see to be seen as an actor on that global tension, conflict stage that we were talking about earlier. I think the interesting thing for business people is watching the lead up, watch the pre meetings are gonna lead to. And and today, Terry Bredrill and one of the other commissioners is in China meeting as part of the preparations. He's calling the Chinese out on their blocking of European technology companies accessing the Chinese market typically around five g.
I think you'll see in the next I think there's four separate meetings set up as we run towards it. And I think you'll see there both sides putting out to indicate to yourself what they would like to try and shake hands on. And some of those things they may not achieve but it's potentially a very, very major meeting, both for Europe, China, and and everybody else. Well, I'll be sure to be glued to both cop twenty eight and that EU China.
Summit George Legarius, Mark Kennedy. Thanks very much for making the macro memo, a, a must listen to event, and thanks to all of you out there for downloading and tuning in.
Thank you, and goodbye.
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