US’s two economies

There are two economies in the US right now, and they are moving in different directions. For high earners and many older Americans, the economy looks robust. They are still spending like gangbusters, and their 401(k) accounts and homes have soared in value. For many others, momentum has stalled or reversed. The big wage growth experienced by low-income workers during the pandemic has petered out. Those workers are curbing their spending and, in some cases, are struggling to find jobs. Unemployment for Black Americans and many young people has jumped. The divided fortunes of rich and poor in the US may sound like an old story. Yet in recent years, workers on the low end of the spectrum began modestly narrowing the gap, as acute labor shortages enabled them to switch jobs and bargain hard for better wages. Now the gulf is widening again, creating parallel realities of American life.

(Adapted from “The Two-Speed Economy Is Back As Low-Income Americans Give Up Gains,” by Jeanne Whalen, published on September 16, 2025, by the Wall Street Journal)

AI overhype?

Will AI really become godlike? Perhaps, but a recent report by UBS, a bank, finds that revenue generation to date “has been disappointing”. A recent study by researchers at the Massachusetts Institute of Technology concludes that 95pc of organisations are getting “zero return” from investments in generative AI. Even Sam Altman, boss of OpenAI, has sounded the alarm. “Are we in a phase where investors as a whole are overexcited about AI? My opinion is yes.” Since the release of ChatGPT in 2022, the value of America’s stock market has risen by $21 21tr. Just ten firms — including Amazon, Broadcom, and Nvidia — account for 55pc of the rise. In the first half of the year, an IT investment boom accounted for nearly all of America’s GDP growth; in the year to date, a third of the West’s venture capital dollars have gone to AI firms. But if the AI stock market blows up, the potential cost could be alarmingly high.

(Adapted from “What If The AI Stockmarket Blows Up?” published on September 7, 2025, by The Economist)

Prompt templates

The most powerful AI approach isn’t crafting perfect prompts — it’s having templates ready to deploy at any innovation stage, says David Robertson, the faculty director of MIT Sloan. These proven prompt frameworks are helping students, startups, and enterprise teams improve both speed and quality in their innovation process. For example, “generate 20 different innovative product or service ideas that solve problems of [describe problem or unmet need] for [target customer segment]. Ideas should be novel but feasible within current technology and market constraints. Once you have generated 20 ideas, go through the list and make sure each idea is distinctly different from the others. Express each idea in a clear paragraph that starts with a simple title and contains 40-80 words.”

(Adapted from “Prompt Engineering Is So 2024. Try These Prompt Templates Instead,” by David Robertson, published on August 20, 2025, by MIT Management Sloan School)

‘Meritocracy’ pitfalls

Organisations tout meritocracy as a fair and efficient way to identify, advance, and reward talent. But their efforts to guarantee that everyone has an equal chance are often held back by talent management systems that confer rewards based on individual performance evaluations. In practice, such merit-based systems “may actually reinforce or create advantages for certain groups because of underlying biases and existing social barriers. Among the potential drivers of that inequity: unrecognised workplace biases, inconsistent definitions of merit, and a lack of vigilance among managers who believe their company is already meritocratic. Organisations should embrace a data-driven approach to meritocracy. This entails identifying, developing, and defining competency criteria, measuring individual attributes and employment outcomes over time, analysing data collected on both outcomes and people-related processes.

(Adapted from “Why Talent Management Strategies Go Wrong — And How To Fix Them,” published on September 16, 2025, by MIT Management Sloan School)

Published in Dawn, The Business and Finance Weekly, September 29, 2025