Insights

The Wharton School, founded in 1881 as America's first business college, played a pivotal role in professionalizing commerce and shaping American business innovation. Celebrating the U.S. 250th anniversary, Wharton faculty highlight transformative innovations including artificial intelligence (AI) and the gig economy. AI democratizes data analysis, enabling empirically driven decision-making without coding skills, and is reshaping labor dynamics by redistributing talent rather than eliminating jobs. The gig economy, rooted in historical spot labor markets, has evolved with modern platforms like Uber and DoorDash, redefining on-demand freelance work. These innovations have profoundly influenced industries, markets, and the way the world works.
ICT, Financial services, Education
America at 250: Innovations That Transformed Business
In the UK, prime ministers can change without general elections, as seen with leaders like Boris Johnson and Rishi Sunak, often through internal party maneuvers. This process is accepted by many due to psychological tendencies to justify hierarchy and authority, a phenomenon called social dominance orientation. Hierarchical institutions embed inequality as normal, making elite decision-making seem legitimate to voters, despite raising questions about true democratic representation. Reducing hierarchy acceptance requires meaningful cross-group interactions and cultural humility. Internalised classism further entrenches acceptance of unelected elites. Strengthening democracy demands greater accountability, reduced apathy, and public engagement to challenge elite rule.
Why unelected power brings us a strange comfort
The CHIPDIPLO Brussels Conference addresses the growing geopolitical tensions impacting the semiconductor industry, notably between the US and China, which affect export controls, supply chains, and access to critical materials. The event gathers policymakers, industry experts, and researchers to discuss Europe's strategic responses, including the European Chips Act 2.0, amid a fragmented global technological landscape. The conference is part of the CHIPDIPLO project, an 18-month EU-funded initiative aimed at strengthening Europe's semiconductor foreign policy, enhancing risk management, fostering coordination among EU member states, and building international partnerships to support innovation and industrial resilience.
ICT
CHIPDIPLO Brussels Conference:
Artificial intelligence is increasingly replacing human connection, with over 70% of teens and nearly one-third of US adults in 2025 relying on AI chatbots for companionship and emotional support. These chatbots simulate intimacy, empathy, and love, leading people to accept artificial interactions as sufficient and redefine their capacity for care and connection based on machine capabilities. Sherry Turkle’s "Artificial Intimacy" explores how these intimate machines, while efficient and always available, contribute to greater alienation, depression, and loneliness by providing no practice for real human relationships. Turkle warns that reliance on AI hinders emotional growth and resilience, urging a reclaiming of genuine human connection in the digital age.
Artificial Intimacy: Who We Become When We Talk to Machines
Ten years after the 2016 Brexit referendum, the outcome is widely seen as negative for both the UK and the EU. Brexit promises failed economically, with the UK experiencing significant GDP loss, reduced investment, and lower productivity. Migration control also faltered, with record numbers crossing the Channel and net migration rising, undermining key Leave campaign claims. Politically, Brexit remains divisive within the UK, notably causing splits in the Labour Party, while public opinion increasingly favors rejoining the EU. Despite these challenges, the EU treats UK relations as one issue among many, with no member states inclined to follow Britain's exit. Renewed rapprochement is desirable but complicated by differing priorities and communication breakdowns between London and Brussels.
United Kingdom
Brexit: Europe Confronted with Its British Paradox
Since 2025, major U.S. hyperscalers—Alphabet, Amazon, Meta, Microsoft, and Oracle—have massively increased debt issuance to fund AI infrastructure, with corporate bond issuance surpassing $100 billion by the end of 2025 and reaching an estimated $300 billion in 2026. This surge, involving long-dated bonds and significant off-balance-sheet private credit, has transformed AI investment into a capital-markets phenomenon, representing about 15% of the U.S. investment-grade market. While top-tier firms maintain strong credit ratings, rising capital expenditures now outpace operating cash flows for some, notably Oracle and Amazon, raising concerns about financial risks amid rapid AI-driven expansion.
An AI debt wave meets uneven balance-sheet risk
Timely disaster response requires pre-established, flexible delivery systems tailored to local needs. In Asia-Pacific, disasters like Viet Nam's Typhoon Yagi (2024) and 2025 floods highlight that mobilizing funds alone is insufficient; delays often stem from complex procedures and limited local capacity. Cash assistance suits immediate, diverse needs, while direct support better aids costly repairs. Effective recovery depends on readiness through agreed procedures, streamlined decision-making, local training, and linking emergency aid to longer-term recovery and risk reduction. Prepared systems ensure aid reaches households promptly, minimizing prolonged hardship.
Financial services
How Better Delivery Systems Can Improve Disaster Recovery
Global drug regulation is technically converging but politically diverging, with the US FDA's longstanding dominance challenged by emerging regulatory roles from the EU and China. The FDA remains a global gold standard emphasizing scientific rigor and earned authority, with approvals influencing worldwide markets. Europe’s EMA prioritizes governance, quality, and managed innovation within a regulatory sandbox, balancing progress with public health accountability. China’s NMPA strategically uses regulation to drive industrial policy and sovereign competitiveness, focusing on scale and rapid approval to support national modernization. These differing regulatory narratives significantly impact global drug development, approval strategies, and market authority.
Financial services, Health
How different drug regulators construct global authority – and why it matters for firms
The Kluz Prize for PeaceTech is an annual initiative that supports innovative technologies aimed at saving lives, promoting peace, reducing conflict, and protecting human rights globally. It targets tech companies, peace and humanitarian organizations, especially those led by youth and the tech community, including entrepreneurs and scientists. Winners, selected by a distinguished committee, receive a $20,000 grant to advance their work, with additional distinctions awarded based on proposal quality. Awardees present their achievements at a ceremony in New York City during the United Nations General Assembly and International Day of Peace.
Launch of the Fifth Annual Kluz Prize for PeaceTech
Research from Wharton’s Generative AI Labs reveals that basic human persuasion tactics can bypass AI safeguards in large language models (LLMs) from OpenAI, Anthropic, and Google. Techniques like invoking authority, social proof, or shared identity significantly increased compliance with harmful or objectionable requests, such as synthesizing controlled substances. Compliance rates rose from 35.3% to 51.3% when persuasion was used, indicating a broad vulnerability in LLMs to social influence despite designed guardrails. While newer models show improved resistance, these vulnerabilities persist, highlighting the need for integrating social science insights into AI safety measures to better monitor and fortify AI systems against misuse.
How Basic Persuasion Can Bypass AI Safeguards
Brussels is accelerating efforts to implement Mario Draghi’s economic reform agenda aimed at enhancing competitiveness. Progress on the Draghi Report indicates that the EU is moving more swiftly and effectively than anticipated to address key reforms. This momentum reflects a growing commitment within European institutions to improve economic performance and structural policies.
Croatia, Czech Republic | Financial services
Brussels picks up pace on Draghi economic reform agenda
Civic AI, developed by Audrey Tang and Caroline Emmer De Albuquerque Green, envisions governance as a continuous, community-driven process rather than periodic voting. It proposes multiple small AI systems, called Kamil, tailored to local communities, which people can own, inspect, and control. The approach emphasizes trust and alignment through six core principles, highlighted in the Civic AI Manifesto. Practical applications include Taiwan's response to AI-driven scam ads, demonstrating effective bottom-up AI alignment. Resources such as podcasts, videos, and comics explain the framework and promote compassionate, community-responsive AI governance.
Civic AI — 6-Pack of Care
Artificial intelligence is increasingly integrated into justice systems worldwide, with 44% of judicial professionals in 96 countries actively using tools like ChatGPT, yet fewer than 10% receive guidelines on AI use. While most research focuses on wealthier nations, AI adoption is significant in fragile and conflict-affected situations (FCS), where some low-income countries surpass wealthier ones in AI usage. Justice AI is already in use in these contexts, raising important governance questions. Key considerations include how AI can improve access to justice and the risks it poses for governance in FCS environments.
Education
Artificial intelligence and access to justice in fragile and conflict-affected situations
Climate change intensifies forced migration caused by political conflicts and resource scarcity, with many displaced people moving internally from rural to urban areas, straining resources and fueling further conflicts. Video games like Half-Earth Socialism highlight migration's link to sustainability and political challenges, emphasizing the need for positive attitudes toward migrants to avoid conflict. Other games, such as We. The Refugees: Ticket to Europe and Bury Me My Love, focus on the emotional and harsh realities of migrants' journeys, drawing on real stories to foster empathy and reveal the complex experiences shaped by climate-induced pressures and conflict.
Latin America
Video games are helping players imagine the realities of climate migration
Trade tensions between the EU and China are escalating, highlighted by EU trade chief Maroš Šefčovič's call to "reset" their unbalanced trade relationship and German Chancellor Friedrich Merz's criticism of China's unfair trade practices, including market flooding and currency undervaluation. Merz referenced the 1985 Plaza Accord, which led to Japan's currency appreciation but also economic stagnation, a precedent that worries China. Beijing views the accord as a coercive tactic that harmed Japan’s economy and is wary of similar measures against itself. Recent Chinese retaliations, like restricting rare-earth exports, threaten EU interests, especially in military tech. Despite tensions, Beijing prefers bilateral dealings over confronting the EU collectively, signaling a more contentious phase ahead in EU-China relations.
Latin America | Financial services
Germany’s proposal to ease trade tensions with China has not gone down well in Beijing
China’s industrial surge, driven by state-led strategies and heavy subsidies, poses a significant existential threat to European manufacturing amid competitive exports and high-tech advancements. Despite Europe’s protective measures, Beijing resists, labeling them protectionist while using similar policies itself. The U.S. and Europe face challenges as Chinese firms rapidly expand globally, supported by undervalued currency and state aid. However, China’s domestic issues may complicate its industrial ambitions, even as cities like Shanghai showcase the country’s material progress and advanced infrastructure.
France, Italy, Taiwan, China | Financial services
Is China’s “industrial steamroller” an existential threat to European economies?
Global investment in healthcare AI surpassed $18 billion in 2025, yet health systems lack a unified understanding of the outcomes these investments should achieve. Success in the healthcare AI race depends not on technological advancement but on identifying and prioritizing outcomes that matter most to patients, professionals, and health systems. The concept of value inversion highlights a misalignment where AI’s value is often defined by those distant from its effects. To address this, four principles are proposed: engaging patients and frontline professionals to identify outcomes, co-creating outcome definitions through public–private collaboration, prioritizing meaningful outcomes over technology, and designing context-sensitive frameworks for diverse healthcare settings. Establishing a common framework ensures AI investments deliver real value to healthcare systems and the populations they serve.
Health, Education
Meaningful Outcomes Determine the Winners of the Health AI Race
Global investment in healthcare AI surpassed $18 billion in 2025, yet health systems lack a shared understanding of the desired outcomes. Success in the health AI race depends not on technological sophistication but on identifying and prioritizing outcomes that matter most to patients, professionals, and health systems. The concept of value inversion highlights the misalignment where AI's value is often defined by those removed from its impacts. Four principles are proposed for governance: engaging stakeholders to define outcomes, co-creating definitions through collaboration, prioritizing meaningful outcomes over technology, and adapting frameworks to different resource settings. This approach ensures AI investments deliver real value to healthcare systems and populations.
Health
Meaningful Outcomes Determine the Winners of the Health AI Race
Digital transformation significantly enhances corporate environmental performance in Chinese firms from 2009 to 2022. This improvement is driven by increased green innovation, better environmental monitoring and transparency, and heightened external attention. The findings highlight the importance of accelerating digital transformation as a policy strategy to support the green transition and promote sustainable corporate practices.
ICT
Corporate Digital Transformation and Environmental Performance: Evidence from the People’s Republic of China
Informal employment remains widespread in Southeast Asia, particularly in Indonesia, where many workers engage in low-productivity jobs despite economic growth. The core challenge lies in facilitating transitions from informal to more productive formal employment, driven by structural transformation and technological advancement. Higher-productivity sectors demand advanced technical, cognitive, interpersonal, and adaptive skills, yet many workers lack these, and firms face barriers to technology adoption. Digital transformation, combined with skills development and firm upgrading, can lower formalization costs, enhance job matching, and enable firms and workers to move into better-quality jobs. Policy approaches internationally emphasize industry-linked training, apprenticeships, and workplace learning to align skills with modern labor market needs.
Indonesia | Financial services, Health, Education, ICT
From Informality to Productive Employment: Role of Digital Transformation

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