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Who Will Be Most Exposed to AI Disruption in the US?

Prior research indicates that less-educated workers will experience the greatest shock from automation, but the authors of a new report from Brookings found that when they focused solely on AI, the trend changes and “better paid professionals” are the ones most likely to experience disruption in their jobs. 

The impact will be felt most strongly by men, workers ages 25-54 and white and Asian Americans in the U.S., according to the report. Industries with a majority of women on staff, including education and health care, are less likely to be disrupted by AI, it found. 

Workers and businesses should prepare for AI to have a different effect on the workforce than robotics and software had, the authors advise, because “while earlier waves of automation have led to disruption across the lower half of the wage distribution, AI appears likely to have different impacts, with its own windfalls and challenges.”

Financial Institutions Across 45 Countries Make the Net-Zero Pledge

During COP26, Glasgow Financial Alliance for Net Zero (GFANZ) announced that it now includes over 445 financial institutions in 45 countries. The alliance mobilizes more than $130 trillion in private capital. GFANZ was launched in April 2021 to accelerate decarbonization and limit global warming to 1.5 degrees Celsius, as indicated by the Paris Agreement.

Stopping climate change will require coordination across the financial system, and to achieve this goal, GFANZ brings together existing and new net-zero finance initiatives. Participating institutions are required to set science-based goals to reach net-zero emissions — including interim 2030 targets — and commit to transparent reporting in line with the criteria detailed by the United Nations Race to Zero

As more firms in the financial sector align their lending, investing, asset management and underwriting practices with net-zero targets, companies can expect to face increasing pressure to decarbonize and disclose their emissions and climate risks.

The Global Cities Most At Risk of a Housing Bubble

Frankfurt, Toronto and Hong Kong are the cities most at risk of a housing bubble, according to new research by Switzerland-based UBS. Its latest Global Real Estate Bubble Index found nine cities around the world that have a high index score. Meanwhile, Madrid, Milan and Warsaw are deemed to be cities with “fairly valued” housing, and Dubai has a negative index score, indicating that its housing is undervalued.

Overall, bubble risk has increased, along with the potential severity of a price correction, as a result of rising house prices across the world. UBS has found that growth in home prices increased 6% from mid-year 2020 to mid-year 2021 — the highest rate of growth since 2014.

To determine a city’s index score, UBS tracks whether a city shows symptoms of previous real estate bubbles, such as a decoupling of prices from local incomes and rents, and imbalances in the real economy, such as excessive lending and construction activity. In Frankfurt, for example, housing prices have increased steadily every year since 2016, in part due to a focus on building luxury housing, but the average price-to-income ratio has doubled in the last decade, leaving housing unaffordable for many. These trends point to a possible correction if the housing bubble were to burst.

Supporting US Airlines Could Recover 10% of GDP

Source: Bureau of Transportation Statistics

The U.S. aviation industry is seeing a moderate recovery from the pandemic, according to data from the U.S. Bureau of Transportation Statistics. August saw a total of 592,760 flights, 84.1% of the number from August 2019, continuing its strong performance from July.

Despite the recovery in total flights operated, pandemic concerns and international travel restrictions have kept capacity down. Analysis by Oliver Wyman shows that seat totals are still down from pre-pandemic levels. Capacity for the top 15 airlines is 12.8% below 2019 levels, meaning the industry expects significant losses in 2021 — $38.7 billion, according to the International Air Transport Association (IATA).

Airlines have survived on government support, according to IATA, and only have enough funds to stay afloat for around 8.5 months. Supporting airlines’ recovery “is one of the most important investments that governments can make. It will save jobs and kick-start the recovery in the travel and tourism sector which accounts for 10% of global GDP,” says IATA’s CEO, Alexandre de Juniac.

Crypto Investment Surges by Nearly 400%

$15 billion. That’s how much funding has gone into blockchain/crypto startups in 2021, according to a new report by CB Insights. Over 800 deals were made, with U.S.-based CoinBase Ventures leading the pack with 24. Of the top 10 investors, just two are based outside the U.S. — Hong Kong-based Kinetic Capital and Japan-based SoftBank Group.

Two billion dollars were invested in NFT (non-fungible token) companies, a 6,427% increase from 2020, while almost $4 billion was invested in custody and wallet companies, which provide user-friendly crypto storage solutions. Crypto exchange companies such as FTX received $3.7 million in funding as well. This increase in investment shows a significant appetite for solutions offered by decentralized systems, such as opportunities in cybersecurity, privacy, control of confidential data and supply chain management, as well as new business models created by decentralized finance.

The U.S. leads the world in total funding with $2.96 billion in funding, followed by $1.43 billion funded by Asia-based companies and $1.14 billion from European-based companies.

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