Also: Sam Bankman-Fried trial nears, China's gloomy forecast, smaller raises. 
Good morning, Peter Vanham here in Geneva, filling in for Alan.
Congress this weekend voted to narrowly avert a government shutdown—until at least Thanksgiving. If even a dysfunctional Congress can broker a surprise (albeit stopgap) compromise, perhaps there’s hope for the other stalemates gripping the U.S.—the ongoing UAW and SAG-AFTRA strikes in Detroit and Los Angeles.
So far neither is going great. One early lesson from the labor stoppages is that there is little to gain when companies and workers bargain only over pay. Each side believes it has valid arguments, which in both cases has led to long weeks of standoffs and losses.
But there is a promising takeaway from the recent breakthrough agreement the Writers Guild of America struck with Hollywood studios last Wednesday: to end up with a win-win and be better prepared for the future, it is useful to open the aperture and include technology adoption and remuneration in negotiations.
As a case in point, the Writers Guild successfully included rules about the use of artificial intelligence in its agreement with studios, Fortune’s David Meyer reported. The deal it struck means that employees have a greater say in when and how to use AI going forward and how to get credit for it.
The benefit for studios is threefold: first, use of AI is now agreed on by both sides, in principle. Second, studios are better insulated from copyright infringement claims in using AI, as their human writers are always involved. And finally, studios’ agreement with workers gives them additional leverage in lobbying government over the laws governing AI.
Other sectors would do well to take note. Technological disruption, including from the use of artificial intelligence, may well be the most important factor in companies’ competitiveness going forward. And for the most part, governments and international organizations are running behind the facts in regulating it, leaving the door open to a Wild West, with more losers than winners.
If companies manage to unite with their workers over AI’s use and benefits, however, they are in a much stronger position to adopt new technologies and gain from the disruption—individually and for the economy. And they are making it easier for Congress and other legislative bodies to regulate the technology. It’s an exercise well worth trying.
More news below.
Peter Vanham
peter.vanham@fortune.com
@petervanham
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Sam Bankman-Fried trial nears
The fraud trial of the decade will get underway Tuesday when jury selection begins in the case of disgraced FTX founder Sam Bankman-Fried. Three of Bankman-Fried’s top deputies are expected to testify against him—former Alameda CEO and Bankman-Fried's one-time girlfriend Caroline Ellison, ex-engineering chief Nishad Singh, and CTO Gary Wang. The prosecution is also expected to call to the stand FTX customers who lost their fortunes on the failed exchange. Fortune
China's slowdown
The World Bank has slashed its growth forecast for China for 2024 to 4.4%, down from the 4.8% it expected as of April. U.S. protectionism and mounting debt are likely to dim the economic prospects for the whole region. The bank cut its forecast for developing economies in east Asia and the Pacific to 4.5% GDP growth, down from the 4.8% predicted in April and this year's expected 5%. Financial Times
Disappointing raises
Two new surveys suggest U.S. workers are likely to get smaller merit raises next year as employers tighten their belts and inflation eases. An Aon survey pegs next year's raises at 3.7% versus 3.9% this year. Likewise, Mercer data forecasts merit salary bumps of 3.5% next year, compared to 3.9% in 2023. Bloomberg
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State of the startup exit environment What’s next for emerging growth company exits? According to Deloitte’s most recent Road to Next report, a handful of financing metrics suggest that the best-positioned companies can still achieve liquidity events, and sentiment is on the upswing. Learn more.
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Check out Fortune's Innovators Shaping the Future of Health This year's winners offer creative solutions to systemic health care problems. Explore the list |
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