Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - The gender pay gap is estimated to be 27 percent for both the sample and the broader US workforce, indicating significant disparities in earnings between men and women [19] - The analysis focuses on how career choices and time impact the gender pay gap, emphasizing the importance of occupational trajectories and advancements [19][52] - The study utilizes a comprehensive dataset of over 100 million individuals and job postings to analyze career pathways and wage mobility [2][4] Sample Selection - The study uses a random sample of one million men and one million women from over 60 million gender-identified profiles, focusing on US-based profiles [3][4] - The final sample consists of 35,235 women and 50,529 men, totaling 85,764 individuals, with approximately 36,000 unique job titles [4][5] - The sample skews towards higher-educated workers in higher-paying occupations, reflecting women's lower representation in these roles [9][12] Skill Distance - Skill distance is estimated by analyzing job posting data from 20.9 million aggregated job postings, focusing on the skills required for each role [10][14] - The calculation of skill distance per role move considers the weighted number of new skills compared to the total skills required for the new role [13] Wage Mobility - The report examines wage mobility over a ten-year period, categorizing occupations into quintiles based on average wages [15][16] - It tracks the movements of men and women between occupational wage quintiles, disregarding the gender pay gap within occupations for this analysis [16] Decomposition of the Gender Pay Gap - The gender pay gap is decomposed into differences in starting points, occupational trajectories, within-occupation advancements, and hours worked [19][24] - Women's non-gendered overall average wage at year ten was approximately $82,000, with an 8 percent gap due to differences in occupational trajectories [25] Historical Trajectory Patterns - The report projects labor demand by occupation through 2030, estimating the number of workers transitioning into growing and shrinking occupations [32][34] Types of Companies - The analysis identifies 12,476 unique workers from various company types, comparing human capital outcomes for men and women across these categories [35][37] - The study categorizes companies into four types based on their performance in human capital development and financial results [47]

Core Insights - The report highlights the significant impact of AI and automation on labor markets in Europe and the United States, predicting a shift in demand towards high-skill professions while reducing demand for lower-skill jobs [12][13][24] - By 2030, it is estimated that up to 30% of current work hours could be automated, necessitating around 12 million occupational transitions in both Europe and the United States [12][66][77] - The need for a major skills upgrade is emphasized, with a rising demand for technological, social, and emotional skills, while traditional manual and cognitive skills stabilize [14][15][66] Labor Market Context - Labor shortages and a slowdown in productivity growth are pressing issues in both regions, exacerbated by an aging workforce and the impacts of the COVID-19 pandemic [12][24][26] - The pandemic has accelerated shifts in labor demand, with a notable increase in hybrid work and e-commerce, which are expected to persist [25][41] Occupational Transitions - Europe may require up to 12 million occupational transitions by 2030, which is double the pre-pandemic pace, while the U.S. transitions could align with historical norms [13][66][68] - The pace of occupational change is expected to be uneven, with Europe facing a potential doubling of transition rates compared to pre-pandemic levels [68][69] Skills Demand - There is a projected increase in demand for STEM and healthcare professionals, with expected growth rates of 17-30% in these sectors by 2030 [58][63] - Conversely, occupations in food services, production, and customer service are anticipated to decline, with potential job losses ranging from 300,000 to 5 million in Europe [59][63] Automation and AI Impact - The report indicates that by 2030, 27% of hours worked in Europe and 30% in the U.S. could be automated, driven by advancements in generative AI [77] - The potential for automation is expected to rise significantly by 2035, with projections of 45% in Europe and 48% in the U.S. [77] Productivity Growth - Embracing technology and proactive worker redeployment could lead to productivity growth rates of up to 3% annually in Europe through 2030, while slow adoption could limit growth to 0.3% [16][66] - The report underscores the importance of making strategic choices today to enhance productivity and societal outcomes in the future [16][37]

Investment Rating - The report does not explicitly provide an investment rating for the luxury industry Core Insights - The luxury industry is experiencing a significant slowdown after a period of exceptional growth, with a projected annual growth rate of 1 to 3 percent from 2024 to 2027, compared to a 5 percent compound annual growth rate from 2019 to 2023 [31][35] - Price increases accounted for over 80 percent of the luxury industry's growth during the previous five years, while volume gains were more moderate [30][72] - The luxury client base is becoming more diverse, with younger clients seeking unique experiences rather than just luxury goods, creating new challenges for brands [33][34] Market Backdrop - The personal luxury goods industry grew at a rate of 5 percent per year from 2019 to 2023, with price increases driving much of this growth [53][54] - The luxury sector's economic profit nearly tripled from 2019 to 2024, indicating strong financial performance despite the current slowdown [60][62] - The Chinese market, which grew at 18 percent annually from 2019 to 2023, has been a significant driver of luxury growth, but is now facing macroeconomic challenges [32][53] Strategic Imperatives - Luxury executives are advised to conduct a strategic reset, restore product excellence, rethink customer engagement strategies, bridge talent capability gaps, and futureproof their portfolios to navigate the current market challenges [37][43] - Investment in technology, AI, and data capabilities is essential for uncovering customer insights and personalizing customer journeys [40][45] - Brands must clarify their core values and align on priority clients to sharpen long-term strategies and maintain brand relevance [44][45]

Industry Investment Rating - The report does not explicitly provide an industry investment rating [1][2][3] Core Viewpoints - The report focuses on economic empowerment and how companies can benefit more people by improving income and affordability [1][9][16] - It analyzes 120 economies, covering 90% of the global population, categorized into lower-income (GDP per capita < $5,000), middle-income ($5,000-$20,000), and higher-income (>$20,000) groups [2] - The empowerment line is defined as the private cash expenditure required for basic needs, including a 10% allocation for recreation and a 5% savings buffer [3][5] - The report estimates the share of the population below the empowerment line using consumption and distribution data [6] - It highlights the importance of stable jobs with sufficient wages and affordable essential goods (housing, food, transportation, healthcare, education) for economic empowerment [12][16] Income Analysis - The report uses four labor market metrics: working-age population, labor force participation, unemployment rates, and stable jobs with sufficient wages [12] - For countries with GDP per capita > $10,000, it considers time-related underemployment and low-pay rates, while for those < $10,000, it focuses on formal employment share [13] - The analysis identifies best-performing countries based on labor market metrics and estimates the population that could be lifted to empowerment by improving one element [14][15] Cost Analysis - The report calculates a "lowest-cost line" for essential goods and services, excluding statistical outliers and identifying top-quartile economies [18][19] - It estimates the population that could achieve empowerment through improved affordability by comparing costs to the lowest-cost line [20] Cost-to-Impact Ratios - The report evaluates cost-to-impact ratios for initiatives aimed at economic empowerment, using external data and academic assumptions [21] - It notes that ratios may improve with better targeting or more substantial benefits, such as supporting housing for low-wage employees [22]

Investment Rating - The report emphasizes the need for banks to transition from experimentation to becoming AI-first institutions to unlock material financial value from AI technologies [1][3]. Core Insights - AI is transforming the banking industry, but many banks remain in the experimental phase. To thrive, they must adopt AI technologies enterprise-wide [3][18]. - Successful AI transformation requires investment across multiple interdependent layers of the organization, as underinvestment in any one area can hinder overall progress [4][22]. - Leading banks view AI as a transformational tool, focusing on core strategic priorities such as revenue enhancement and customer satisfaction [22][68]. Summary by Sections AI Transformation Essentials - Banks need to modernize core technology, reimagine customer experiences, and enhance decision-making processes through AI [4][18]. - A comprehensive AI capability stack is essential, including automated cloud provisioning, streamlined architecture, and a central AI control tower [4][54]. Business Areas for AI Transformation - Banks can identify high-impact subdomains for AI transformation, such as customer underwriting, risk management, and sales and marketing [7][12]. - The report identifies that a typical bank has around 25 subdomains that could benefit from AI rewiring, with a focus on those with high business impact and technical feasibility [24][27]. Multiagent Systems - Multiagent systems are highlighted as a key component in automating complex banking workflows, improving productivity by 20 to 60 percent in tasks like credit memo preparation [21][45]. - These systems can act as virtual coworkers, capable of planning and executing tasks, thus enhancing both customer and employee experiences [61][67]. Investment in AI Capabilities - To extract value from AI, banks must invest across the entire AI capability stack, including enterprise data, machine learning operations, and core technology [68][77]. - The report stresses the importance of a full-stack approach that combines generative AI with traditional analytics and digital tools [72][78].

Industry Investment Rating - The report highlights the significant financial opportunity in combating government fraud, estimated at hundreds of billions of dollars annually [1][3] Core Viewpoints - Government fraud losses are estimated at $233 billion to $521 billion annually, representing 3 to 7 percent of federal obligations [3] - Fraud risk is increasing due to sophisticated fraudsters, particularly in programs like tax refunds and pandemic-era unemployment insurance [3] - Effective anti-fraud efforts require collaboration between agencies, legislature, and the public [3] Challenges in Fighting Fraud - Agencies often handle fraud cases individually, leading to inefficiencies and limited impact [5] - Government agencies face capability gaps in recruiting AI talent and managing data pipelines for real-time fraud detection [6] - Many agencies fear embarrassment and budget constraints, which hinder proactive anti-fraud efforts [8][9] Opportunities for Improvement - The banking industry's approach to fraud prevention, including data fusion and probabilistic risk assessment, can serve as a model for government agencies [10] - Agencies like the IRS and CMS have successfully implemented anti-fraud measures, saving billions of dollars [11][17][21] - Coordinated action across stakeholders, including better data sharing and funding mechanisms, is essential for progress [12][26] Key Success Factors - Executive commitment and dedicated anti-fraud teams are critical for overcoming funding and capability challenges [26] - Improved data capture and sharing within and across agencies can significantly enhance fraud detection [26] - Public acceptance of additional verification steps is necessary for the success of government fraud defenses [28] Potential Impact - Reducing fraud losses could eliminate the annual Social Security deficit and fund major government departments [3] - The IRS's anti-fraud efforts reduced fraudsters' success rate from 19 percent to 12 percent, saving $2.7 billion annually [21][23]

Industry Overview - The report focuses on the Applied AI industry, highlighting its growth and potential impact across various sectors [1] Core Investment Thesis - The report does not explicitly state an investment rating but emphasizes the transformative potential of Applied AI in driving efficiency and innovation [1] Key Findings - Applied AI is expected to significantly enhance productivity and operational efficiency across industries, with potential economic impacts in the trillions of dollars [1] - The technology is being adopted at an accelerated pace, with major investments from both private and public sectors [1] Sector-Specific Insights - The report suggests that industries such as healthcare, finance, and manufacturing are likely to see the most immediate benefits from Applied AI integration [1] - Case studies within the report highlight successful implementations of AI in optimizing supply chains and improving customer experiences [1] Future Outlook - The report projects continued growth in the Applied AI sector, driven by advancements in machine learning and data analytics [1] - Emerging markets are identified as key areas for future expansion, with increasing adoption rates expected in the coming years [1]

Industry Overview - The financial industry has faced unprecedented and fast-moving threats in recent years, including the COVID-19 pandemic and real-time bank runs accelerated by social media, which have disrupted traditional credit and liquidity models [3] - Chief Risk Officers (CROs) in financial institutions are under increasing pressure to manage both financial and nonfinancial risks while boosting the bottom line, requiring them to adapt to a rapidly evolving risk environment [4] Core Habits of Successful CROs - Successful CROs are explicit about their risk and resilience purpose and vision, championing a risk-aware culture across the organization [6] - They invest in and empower the next generation of risk leaders, building diverse teams and planning for leadership succession from the start [6] - Leading beyond risk, CROs engage deeply with other C-suite leaders and the board to align risk and resilience objectives with business goals [7] - They treat supervisors as partners, maintaining transparency and proactive communication to build constructive relationships [7] - CROs focus on their unique role by integrating insights across the organization to anticipate future threats and strengthen resilience [7] - They continually monitor their personal effectiveness, manage time strategically, and delegate responsibilities to maintain balance and readiness [7] Key Practices and Insights - CROs spend an average of 34% of their time with the risk function to understand team strengths and weaknesses, while dedicating up to 56% of their time engaging with the executive team and board [13][15] - Successful CROs use their unique vantage point to manage cross-cutting risks, take a long-term view, and allocate resources effectively to build organizational resilience [17] - They prioritize self-reflection and time management, with some spending up to 73% of their time preparing for potential future risks [22] Conclusion - The six habits of highly successful CROs—championing risk culture, investing in leadership, leading beyond risk, partnering with supervisors, focusing on their unique role, and improving personal effectiveness—are essential for navigating today's complex risk environment [27] - By adopting these habits, CROs can transition from risk managers to influential leaders, driving organizational success and sustainability in an ever-changing landscape [28]

Global Connections - Goods trade relationships in 2021 show that nearly 40% of trade in globally concentrated products occurs between geopolitically distant economies, making substitution difficult in the short to medium term [7] - The geopolitical distance of trade among major economies has declined, but fragmentation scenarios remain possible [7] Resources of the World - Only 10% of the technologies needed to meet global emissions reduction commitments by 2050 have been deployed, with 25 physical challenges identified for the remaining 90% [10] - Addressing the most demanding physical challenges, such as managing variable renewables and developing low-emissions industrial processes, could abate about half of energy-related emissions [10] - Key challenges include managing renewables variability, scaling emerging power systems, and securing land for renewables [11][12] Productivity & Prosperity - Productivity in the median economy has increased sixfold over the past 25 years, with 30 emerging economies in the "fast lane" of improvement [18] - Advanced-economy productivity growth has slowed by about one percentage point since the global financial crisis, with investment in digitization, automation, and AI seen as key to future growth [18] - Micro-, small, and medium-size enterprises (MSMEs) account for two-thirds of business employment in advanced economies and almost four-fifths in emerging economies, with significant productivity gaps compared to larger firms [21][22] Accelerating Competitiveness in Europe - Closing Europe's prosperity gap could increase value added by €500 billion to €1 trillion by 2030, requiring investment in areas such as energy, technology, and supply chains [24] - European corporations lag behind US counterparts in scale, performance, and investment, with a widening gap in capital expenditure and R&D spending [25][26][33] Economic Empowerment - Achieving economic empowerment could lift a quarter billion people globally above the empowerment line, with affordability challenges influenced by policy, public services, and private sector actions [28] - Higher incomes and better empowerment outcomes tend to correlate, but the effect plateaus after a certain income level [29][30] Human Potential - Tight labor markets in advanced economies could reduce GDP by 0.5% to 1.5% in 2023 due to unfilled job vacancies, with solutions including flexible work, migration programs, and initiatives to retain seniors and attract women [37][38] - AI adoption could automate up to 30% of current hours worked by 2030, requiring significant occupational transitions and new skills in advanced IT, data analytics, and critical thinking [40][41] Technology & Markets of the Future - 18 potential arenas of competition, including AI software, cybersecurity, and electric vehicles, could generate $29 trillion to $48 trillion in revenues and $2 trillion to $6 trillion in profits by 2040 [46][47] - These arenas are characterized by cutting-edge technologies, large investments, and growing markets, with the potential to increase their share of global GDP from 4% to 10-16% by 2040 [46][47]

Industry Overview - Embedded finance is one of the fastest-growing areas of financial services and e-commerce globally, yet it is still a nascent concept [3] - The embedded finance market is seeing significant demand across various verticals, including retail, airlines, and hospitality, with companies seeking to offer financial services to enhance customer loyalty and revenue [5][7] - The market is evolving rapidly, with large enterprises and SMBs (small and medium-sized businesses) increasingly interested in integrating financial services into their core offerings [7][9] Company Focus: Alviere - Alviere, originally founded as Mezu, transitioned from a consumer-facing peer-to-peer payment app to an embedded-finance platform, focusing on enabling nonfinancial institutions to offer financial services [3] - The company operates as a one-stop shop for large enterprises, providing a platform that handles compliance, licensing, and integration, allowing brands to offer financial products without developing in-house capabilities [3][5] - Alviere's platform is designed to be scalable, modern, and easy to integrate, with a focus on guiding enterprises through the entire process of embedding financial services [3][5] Key Products and Solutions - Alviere offers a diversified portfolio of financial products, including digital wallets, remittances, and cobranded debit cards, tailored to different industries and customer needs [5][7] - The company's digital wallet solution allows customers to preload funds for future purchases, enabling merchants to guarantee future sales while reducing payment processing costs [5] - Alviere also focuses on payment optimization for B2B marketplaces, enabling them to monetize transactions through features like debit cards and international transaction fees [7] Market Opportunities - The embedded finance market presents significant opportunities in sectors such as retail, airlines, and hospitality, where companies are looking to enhance customer loyalty and streamline payment processes [5][7] - Emerging markets, including Latin America (Mexico, Colombia, and Brazil), are seen as key growth areas for Alviere, with the company already operating in partnerships in these regions [9] - The SMB sector is also a growing opportunity, as more brands seek to integrate financial services into their offerings to remain competitive [7][9] Competitive Differentiation - Alviere differentiates itself by offering a fully licensed and compliant platform, ensuring that enterprises can integrate financial services without regulatory or reputational risks [7][9] - The company's focus on providing end-to-end services, including professional project management and compliance support, sets it apart from competitors that offer only API-based solutions [3][5] - Alviere's ability to adapt its offerings to different industries and customer types, rather than selling standardized products, further enhances its competitive edge [7][9] Future Vision - Alviere aims to expand its international presence, particularly in Latin America, while continuing to innovate in financial products such as lending and credit solutions [9][11] - The company envisions a future where embedded finance becomes a standard offering for large enterprises and SMBs, enabling them to enhance customer loyalty and revenue through integrated financial services [7][9] - Alviere is also exploring partnerships with banks to provide embedded finance solutions, particularly for mid-sized banks looking to modernize their offerings and compete with larger institutions [11]