Taylor Swift economy

It’s hard to say just how much Taylor Swift’s Eras Tour, which ended on Sunday, affected the broader economy, but some have taken a crack at it. Economists at Nomura, the Japanese bank, estimated that the US leg of the Eras Tour last year generated consumer spending of $5bn — and that was just for the tour’s first few months. The extravaganza — spread across two years, five continents and 149 shows — is estimated to have sold roughly 10m tickets, generating around $2bn in revenue, based on calculations by the Journal. It is certain to be the biggest tour, by revenue, in history. And that’s only the concert tickets. Unofficially, the Swift lift is much wider. Hotels, restaurants, bars and other businesses lucky enough to be in the tour’s path often get a boost when Hurricane Taylor blows in.

(Adapted from “Billions In Cocktails And Friendship Bracelets: How Taylor Swift Juiced The Economy,” by Hannah Miao, published on December 8, 2024, by the Wall Street Journal)

Firing tactics

In the messy business of getting rid of employees, the performance improvement plan (PIP) is having a moment. A PIP plan is usually a list of tough-to-achieve goals to be completed within 30 to 90 days. Can’t shape up? You’re out. The percentage of workers who are subject to performance actions, including PIPs, is on the rise. In 2020, 33.4 people for every 1,000 workers had documented performance issues, according to software firm HR Acuity, which conducts an annual survey. In 2023, 43.6 workers out of every 1,000 were involved in formal performance procedures. That includes PIPs and performance counselling, among other measures. PIPs are intended to bring consistency and fairness to the way employees are judged and managed. That said, many workers and even managers say they’re used primarily to provide legal cover from employment lawsuits or to cut costs without announcing layoffs.

(Adapted from “The Most Hated Way Of Firing Someone Is More Popular Than Ever. It’s The Age Of The PIP,” by Lauren Weber and Chip Cutter, published on November 29, 2024, by the Wall Street Journal)

Bitcoin rally

Bitcoin investors celebrated last week after the price of the world’s largest cryptocurrency hit $100,000 for the first time. Believers say the rally will continue because of a key technical feature of bitcoin: There is a limit to the number of bitcoins that can ever be created.The computer code behind bitcoin imposes a hard cap of 21m bitcoins. So far, about 19.8 million bitcoins have been created, and it will take more than a century to make the rest, a process that will become increasingly difficult over time. Proponents of bitcoin argue that its scarcity will fuel rising prices as buyers scramble to acquire the last new coins to come online, or to buy existing coins from people fortunate enough to own bitcoin already. Sceptics counter that bitcoin has no intrinsic value and that a wave of selling could wipe out its recent gains. Bitcoin has been hugely volatile over its short history, alternating between feverish rallies and spectacular crashes. It plunged nearly 80pc from its peak in 2021 to its low point the next year, after the collapse of the FTX crypto exchange.

(Adapted from “Behind Bitcoin’s Rally Is A Simple Fact: Supplies Are Limited,” by Alexander Osipovich, published on December 10, 2024, by the Wall Street Journal)

Gambling on AI

It may be the biggest gamble in business history. Today’s mania for AI began with the launch of ChatGPT at the end of November 2022. OpenAI’s chatbot attracted 100m users within weeks, faster than any product ever. Investors piled in. Spending on AI data centres between 2024 and 2027 is expected to exceed $1.4tr; the market value of Nvidia, the leading maker of AI chips, has increased eight-fold, to more than $3tr. And yet most companies are still not sure what the technology can do, or how best to use it. Few AI startups are turning a profit. And the energy and data constraints on model-making are growing steadily more painful, indicating that the adoption of AI is proving to be patchy.

(Adapted from “Will The Bubble Burst For AI In 2025, Or Will It Start To Deliver?” published by the Economist on November 18, 2024)

Published in Dawn, The Business and Finance Weekly, December 16th, 2024