The Strategist

Holiday greetings from Claude

Technological progress is likely to mitigate the effects of a shrinking labour force in the G7 countries. In addition, artificial intelligence is already doing a good job of managing the flood of information and data.

Thomas Wille
Temps de lecture
10 minutes
© Shutterstock

The labour market has been badly shaken by the corona pandemic and some sectors are still experiencing staff shortages more than three years after the outbreak of the Covid-19 crisis. In addition to these current shortages, there are medium-term developments that will shape the labour markets of the G7 countries. We already know that the size of the labour force in Western countries will continue to decline due to demographic conditions - the unfavourable age pyramid. According to the German Bureau of Statistics, the workforce is set to fall by more than 10% between now and 2035, despite immigration.

Over the past 25 years, industrialised countries have been able to compensate for labour shortages by outsourcing to China. But since the fourth quarter of 2022, the Chinese population has been shrinking and this trend is likely to be irreversible. The only way out is through technological solutions such as automation, robotics, digitalisation or artificial intelligence (AI). Two recent examples show where the journey is heading.

Service robots at the end of the world

During my summer holidays, I spent a few days in the beautiful Allgäu region of Bavaria, where I occasionally didn’t have access to the 5G network. One evening at a country inn in the Allgäu Alps, I almost fell off my chair when a service robot suddenly appeared, driving around the restaurant and terrace to help the waiters. The robot did an excellent job of serving food and drinks as well as clearing tables, thus relieving the staff. In a conversation, the owner explained that this was the only solution as there was still a huge shortage of personnel. She put the cost at around 15'000 euros, which should be paying off in a few months, in my opinion.

Claude helps in any situation

Today, investors are faced with a flood of information and data that can only be managed with the help of IT systems. It's no different for me, and the launch of the chatbot ChatGPT shows that certain tools are already providing excellent services. I recently discovered Claude, a next-generation AI assistant that allows you to upload research documents of over a hundred pages and get quick answers to targeted questions.

Technology as a solution

There will be better and better technological solutions to the challenges described above in the coming years. AI is still in its infancy. But the key question is how companies can use it to increase sales and make money. For the time being, we maintain our view that investors will continue to do best with US big tech companies, depending on their individual needs. But even in these stocks, price corrections of 20% are not uncommon.

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