Wharton: On the Rise of AI

Podcast

Wharton Ripple Effect 

Rise of AI: How Do We Coexist With Algorithms?

THIS EPISODE   Professor Kartik Hosanagar discusses how AI is impacting the world as we know it and how we can keep up.

Knowledge at Wharton is the free online journal of the Wharton School of the University of Pennsylvania.

ChatGPT Passes MBA Exam Given by a Wharton Professor

AI Winter Now Over for the Good and the Bad?

ARTIFICIAL INTELLIGENCE

ChatGPT Passes MBA Exam Given by a Wharton Professor

Professor Christian Terwiesch authored the research paper "Would Chat GPT3 Get a Wharton MBA? A Prediction Based on Its Performance in the Operations Management Course"

New research conducted by a professor at University of Pennsylvania’s Wharton School found that the artificial intelligence-driven chatbot GPT-3 was able to pass the final exam for the school's Master of Business Administration (MBA) program.

Professor Christian Terwiesch, who authored the research paper "Would Chat GPT3 Get a Wharton MBA? A Prediction Based on Its Performance in the Operations Management Course," said that the bot scored between a B- and B on the exam.

The bot's score, Terwiesch wrote, shows its "remarkable ability to automate some of the skills of highly compensated knowledge workers in general and specifically the knowledge workers in the jobs held by MBA graduates including analysts, managers, and consultants."  ... ' 

Published January 23, 2023 • Updated on January 24, 2023 at 9:57 am 

Can the US Avoid a Recession?

Good points here.  Ultimate influence of COVID, Ukraine?

Can the U.S. Avoid a Recession?  in Knowledge@Wharton

Many economists are warning of a recession, while Wall Street bulls are saying those fears are overblown. Wharton experts weigh in on what’s ahead for the U.S. economy.

Is the U.S. headed for a recession? Opinion is divided on that question, with many economists warning of a recession and Wall Street bulls saying those fears are overblown. The familiar precursors of a recession have arrived: an inverted yield curve and rising interest rates on the back of high inflation (8.5% in March), with COVID uncertainty and disruptions caused by Russia’s invasion of Ukraine thrown in.

The yield curve inverted on March 29 for the first time since 2019. That happens when short-term treasury bills attract higher interest rates than longer-term treasuries — a sign that investors are losing confidence in the economy. Meanwhile, Federal Reserve chairman Jerome Powell brought down the other shoe on speculation of higher doses of rate increases when he signaled a 50-point increase in May (earlier increases have typically been in 25-point bursts). He also wanted to move “a little more quickly” with shrinking the Fed’s asset portfolio in an effort to tame inflation.

The most widely accepted definition of a recession is two consecutive quarters of declining GDP. According to a forecast by The Conference Board, U.S. real GDP growth will slow to 1.5% in the first quarter of 2022, down sharply from 6.9% growth in the last quarter of 2021. The White House is confident of strong GDP growth in 2022 despite inflation risks, and the International Monetary Fund shares that optimism with an estimate of 3.7% GDP growth this year for the U.S.

All Eyes on the Fed

The Fed has the wherewithal to stave off a recession, according to Wharton’s Susan Wachter, professor of real estate and finance, and Nikolai Roussanov, finance professor. “The main cause that would trigger a recession now is a spike in interest rates,” Wachter said. “The Fed’s actions so far and expected over through the end of the year will not in themselves trigger a recession.”  ... '

Government Regulating Cybercurrency

 Clearly required,  with Podcast: 

Why the U.S. Government Should Regulate Cryptocurrency

March 28, 2022 • 5 min read  In Knowledge@Wharton

Wharton’s Kevin Werbach explains why the Biden administration’s executive order to develop a national policy on cryptocurrency is an important step forward.

he Biden administration’s executive order to develop a national policy on cryptocurrency and digital assets is an important first step in setting some guardrails around a global market now worth more than $3 trillion, said Wharton legal studies and business ethics professor Kevin Werbach

The executive order issued in early March calls for government agencies to coordinate on six key priorities: protecting consumers and investors, preserving financial stability, mitigating risks from illegal digital assets, promoting American competitiveness, ensuring financial inclusion, and guiding responsible innovation.

“We need experts working on these issues and working through the mechanisms of these agencies, so I give the administration a good deal of credit for how much work it must have taken to align all of these different groups to move forward,” Werbach said during an interview with Wharton Business Daily on SiriusXM. (Listen to the podcast above.)  .....' 

Wharton on the Economy this Year

Where are we going?  

What’s Ahead for the U.S. Economy in 2022

LISTEN TO THE PODCAST:

Wharton’s Jeremy Siegel speaks with Wharton Business Daily on SiriusXM about what’s ahead for the U.S. economy and the stock market in 2022.

Podcast Audio at link ...

The Federal Reserve must get “more aggressive” in 2022 by increasing interest rates and tapering down asset purchases in order to tame inflation, according to Wharton finance professor Jeremy Siegel. “The Fed is way behind the curve … and should have started raising interest rates by now,” he said on the Wharton Business Daily show on SiriusXM as he forecast market and economic trends for 2022. (Listen to the full podcast above.)

Siegel predicted the Dow and the S&P 500 will continue to climb in the year ahead, albeit at a slower pace than in 2021. The stock markets will face some headwinds when the Fed raises rates, but “stocks are real assets, and you want to hold real assets when there is inflation,” he said. His biggest concern is about containing the double-digit growth in money supply, which he said is not consistent with inflation at rates of even 2% or 3%. But with inflation edging towards 6%, he expected pressure on wage growth and resulting repercussions in the labor markets.

Following is an edited version of his interview.

Wharton Business Daily: Give us your overview on how you thought 2021 was from a market perspective.

Jeremy Siegel: Early on in 2021, I saw the burst of the money supply that was produced by the Federal Reserve, and that really clued me in on what was going to happen. I had never seen such a strong provision of liquidity, and I knew it would first go into the markets because spending was repressed. But I had predicted that we were going to have substantial inflation in 2021, and so what has happened has not surprised me.

Wharton Business Daily: Are we past the point where we consider the rise in inflation to be transitory?

Siegel: Absolutely. It was never transitory in the sense that it’s only going to be a few months. In fact, I have been saying for over six months that I think the cumulative amount of inflation that we’re going to have over the next three or four years will be 20% to 25%. Now, I don’t mean that in one year. It’s impossible to know how it’s going to exactly be distributed. But when we come out of this, the price level of goods and services will be about 25% higher.  .... ' 

Greece, USC, Wharton and AgentRisk Develop COVID Risk Analysis

 Interesting approach and claims.

How Greece Let in Tourists, Kept Out COVID-19,  By University of Southern California,  September 24, 2021

A hand clad in the colors of Greece holds a test tube containing a COVID test. 

The Eva algorithm caught nearly twice as many asymptomatic infected travelers than would have been caught if Greece had relied on only travel restrictions and randomized COVID testing.

Researchers at the University of Southern California (USC) Marshall School of Business, the University of Pennsylvania’s Wharton School of Business, wealth management advisory firm AgentRisk, and Greece's universities of Athens and Thessaly collaborated on the development of an algorithm that can identify asymptomatic COVID-19 infections in travelers.

The “Eva” algorithm utilizes real-time data to identify high-risk visitors for testing.  The researchers found the algorithm was able to identify nearly twice as many asymptomatic infected travelers to Greece than if the country had depended only on travel restrictions and randomized testing.  Eva was used to weed through data provided by tourists to develop profiles of those likely to be infected and asymptomatic.

From University of Southern California

Podcast: Future of the Office

 How well did working at home really accomplish things? 

What’s the Future of the Office?

Wharton’s Peter Cappelli talks about his new book, ‘Future of the Office: Work from Home, Remote Work, and the Hard Choices We All Face.’

Audio Player ... of podcast

Wharton management professor Peter Cappelli is the author of the new book, The Future of the Office: Work from Home, Remote Work, and the Hard Choices We All Face. Cappelli, who has for decades studied the forces shaping and changing the workplace, says the choices employees and employers must make about the future of work could be among the most important they face.

Brett LoGiurato, senior editor at Wharton School Press, sat down with Cappelli to talk about his new book. They discussed work during the COVID-19 pandemic, the complications with return-to-office hybrid models, and how employees and employers can make the best choices about what to do.

An edited transcript of the conversation follows. 

Brett LoGiurato: Could you share your overall message about what you believe is at stake for the future of the office?

Peter Cappelli: I don’t think it’s going to surprise many people to get the sense of how big an issue this is, about whether we go back to the office or not. If you think about the value of commercial real estate, what happens if we don’t need offices and all the supporting services and the little businesses and restaurants that support offices? And commuting? All those sorts of things matter. In addition to whether this might be better for employees, one of the things we know is that not everybody agrees that they want to work from home. There is the issue of whether it’s actually going to work for the employers, and that’s not completely clear.

Part of the message of the book is that we don’t know how well things worked during the pandemic’s work-from-home phase. A lot of organizations said that things were fine. A lot of employees said they got their own work done. But closer examination is suggesting that maybe it wasn’t quite so great and things didn’t work quite as well, and more to the point, there were a lot of things that were unique about the pandemic that are not going to carry over afterward.

For example, most people felt a special effort to pull together and try to get things done [because] we were keeping businesses together and keeping our jobs together. Is that going to continue afterward? Post-pandemic is unlikely to look much like what happened during the pandemic. We know a fair bit about that situation because we’ve studied it. We’ve studied telework for quite a while. That is regular businesses operating more or less as they did, with some people working at home and some people working in the office. The results there were not as nice as you might expect. People working remotely don’t do as well, and their careers don’t do as well, either.    ... ' 

Wharton Book and Podcast: On Serious Gamification

Book and podcast on the subject:

Gamification Is Changing How We Work — and Succeed

‘For the Win’ authors Kevin Werbach and Dan Hunter discuss the revised and updated edition of their book and how gamification has changed the way we work toward goals.

Podcast  At link ... 

The story of gamification isn’t fun and games. It’s serious.

Authors Kevin Werbach and Dan Hunter have been at the forefront of the development of gamification tools in business. In a revised and updated edition of their book, For the Win: The Power of Gamification and Game Thinking in Business, Education, Government, and Social Impact, they explain that when used carefully and thoughtfully, gamification produces great outcomes for users, in ways that are hard to replicate through other methods. Other times, companies misuse the “guided missile” of gamification to have people work and do things in ways that are against their self-interest.

The authors recently sat down with Brett LoGiurato, senior editor at Wharton School Press, to discuss their revised and updated book.

An edited transcript of the podcast conversation follows. 

Brett LoGiurato: I wanted to talk first about your initial interest in gamification and what drew you together. I understand it started as a shared interest in World of Warcraft, so how did you develop it from there?

Kevin Werbach: It was a shared interest in games and the power of games. We were originally both faculty at Wharton, and we were both studying what was then called “cyberspace”—virtual worlds. Dan actually did this work before I did, but he and others started looking at virtual worlds of games and comparing that to the virtual world that was getting built with the internet in cyberspace. I found that incredibly fascinating, and I found Dan to be a really brilliant guy, as well. So we became friends, and one of the things that we did was with a group of researchers, journalists and others who studied games in virtual worlds — we got together and started playing a game, World of Warcraft, back when it originally launched, now 15-plus years ago.  ...'

Opportunities and Dangers of Decentralizing Finance

Useful definitions and opinions on the state and future of what is being called DeFi.  Much on the Podcast and text below at the link.

The Opportunities and Dangers of Decentralizing Finance

MIC LISTEN TO THE PODCAST:

Wharton’s Kevin Werbach speaks with Wharton Business Daily on SiriusXM about the opportunities and risks of decentralizing finance.

Audio Player :Use Up/Down Arrow keys to increase or decrease volume.

Decentralized Finance — or DeFi — has experienced explosive growth in the past year. But in order for DeFi to fulfill its promise as a disintermediated ecosystem that helps rather than harms, “now is the time to evaluate its benefits and dangers,” write Wharton legal studies and business ethics professor Kevin Werbach and David Gogel, a recent Wharton MBA graduate, in the article that follows. Werbach is author of the book The Blockchain and the New Architecture of Trust and leads Wharton’s Blockchain and Digital Asset Project. Werbach and Gogel recently collaborated with the World Economic Forum to create the Decentralized Finance (DeFi) Policy-Maker Toolkit,  providing guidance to regulators and blockchain watchers everywhere.

Intermediaries have always played essential roles within financial markets, facilitating trust, liquidity, settlement, and security. Yet these benefits come with costs. Intermediation contributes to slow settlement cycles, inefficient price discovery, and limitations on market access. Financial services markets tend to be highly concentrated, with a few powerful intermediaries exercising significant control and extracting substantial rents. Since the 2008 Global Financial Crisis, there has been increased attention on structural inequalities and hidden risks of the financial system. Recent controversies such as the GameStop short squeeze, in which retail investors were blocked from trading during a period of volatility, also cast a spotlight on the shortcomings of legacy financial infrastructure.

Until now, however, intermediation was a necessary feature of finance. Even peer-to-peer fintech lending platforms such as Prosper and cryptocurrency exchanges such as Coinbase retain an important central role. This is the environment in which Decentralized Finance (DeFi) has emerged .... ' 

Wharton says Robots are Coming, but Just for Your Management

Robots are Coming, is Your Firm ready?

Wharton’s Lynn Wu talks about her research on how automation is reshaping the workplace in unexpected ways.

Audio Player at the link above.

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If you’re worried that robots are coming for your job, you can relax — unless you’re a manager.

A new survey-based study explains how automation is reshaping the workplace in unexpected ways. Robots can improve efficiency and quality, reduce costs, and even help create more jobs for their human counterparts. But more robots can also reduce the need for managers.

The study is titled “The Robot Revolution: Managerial and Employment Consequences for Firms.”   The co-authors are Lynn Wu, professor of operations, information and decisions at Wharton; Bryan Hong, professor of entrepreneurship and management at the University of Missouri Kansas City’s Bloch School of Management; and Jay Dixon, an economist with Statistics Canada. The researchers said the study, which analyzed five years’ worth of data on businesses in the Canadian economy, is the most comprehensive of its kind on how automation affects employment, labor, strategic priorities, and other aspects of the workplace.

Wu recently spoke with Knowledge@Wharton about the paper and its implications for firms. (Listen to her full interview in the podcast at the top of this page.)

More Robots, More Workers

Contrary to popular belief, robots are not replacing workers. While there is some shedding of employees when firms adopt robots, the data show that increased automation leads to more hiring overall. That’s because robot-adopting firms become so much more productive that they need more people to meet the increased demand in production, Wu explained.

“Any employment loss in our data we found came from the non-adopting firms,” she said. “These firms became less productive, relative to the adopters. They lost their competitive advantage and, as a result, they had to lay off workers.”  ... '

Podcast: Forward Look into Inflation

Via Knowledge@Wharton:

Inflation: What Lies Ahead?

Subscribe on iTunes!

MIC LISTEN TO THE PODCAST (at the link) 

Wharton’s Itay Goldstein speaks with Wharton Business Daily on SiriusXM about how the Federal Reserve may respond to the recent rise in inflation.

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The latest rise in the inflation rate to 4.2% for April 2021 has fueled expectations that the Federal Reserve could raise interest rates and tighten monetary policy. The rise in the consumer price index for all items is the largest 12-month increase since a 4.9% increase in September 2008, the U.S. Bureau of Labor Statistics (BLS) reported earlier this month.

In recent times, the Federal Reserve has been willing to accommodate higher inflation, but that stance could change with the unexpected pace of price increases in the latest data. “The Fed sent pretty clear and strong messages over the last year or so that it is not going to be deterred by signs of inflation, and that it’s going to keep a loose monetary policy and keep [interest] rates down,” said Wharton finance professor Itay Goldstein in an interview on the Wharton Business Daily radio show on SiriusXM. (Listen to the podcast at the top of this page.)

That position could now change as the inflation data for April “was quite alarming,” Goldstein continued. “No one really expected the number for inflation to be that high. So now we start seeing more expectation that maybe the Fed will eventually act and start raising rates and tighten monetary policy.” The federal funds target rate serves as the benchmark for bank interest rates and is currently in the range of 0% to 0.25%. The Federal Reserve has said it expects to keep its benchmark interest rate near zero through 2023.  ... " 

On Serious Gamification

Podcast on the evolution of serious gamification.   We used it to some extent in the enterprise, but never to my satisfaction.  It requires a change in business user behavior.  There is much opportunity here.

Podcast:

‘For the Win’ authors Kevin Werbach and Dan Hunter discuss the revised and updated edition of their book and how gamification has changed the way we work toward goals.

The story of gamification isn’t fun and games. It’s serious.

Authors Kevin Werbach and Dan Hunter have been at the forefront of the development of gamification tools in business. In a revised and updated edition of their book, For the Win: The Power of Gamification and Game Thinking in Business, Education, Government, and Social Impact, they explain that when used carefully and thoughtfully, gamification produces great outcomes for users, in ways that are hard to replicate through other methods. Other times, companies misuse the “guided missile” of gamification to have people work and do things in ways that are against their self-interest.

The authors recently sat down with Brett LoGiurato, senior editor at Wharton School Press, to discuss their revised and updated book.

An edited transcript of the conversation follows:

Brett LoGiurato: I wanted to talk first about your initial interest in gamification and what drew you together. I understand it started as a shared interest in World of Warcraft, so how did you develop it from there?

Kevin Werbach: It was a shared interest in games and the power of games. We were originally both faculty at Wharton, and we were both studying what was then called “cyberspace”—virtual worlds. Dan actually did this work before I did, but he and others started looking at virtual worlds of games and comparing that to the virtual world that was getting built with the internet in cyberspace. I found that incredibly fascinating, and I found Dan to be a really brilliant guy, as well. So we became friends, and one of the things that we did was with a group of researchers, journalists and others who studied games in virtual worlds — we got together and started playing a game, World of Warcraft, back when it originally launched, now 15-plus years ago.

That experience of seeing what it was actually like in this incredibly sophisticated virtual world really further kindled our interest. Then when this phenomenon of gamification started to develop a couple of years later, people were saying, “We can learn from games and take insights from developing effective games and apply that to business and apply that to the things in the real world that we are studying.” I think that’s really the point where both of us jumped and said, “Yes, we really think this is something significant, and we can contribute to the understanding.”  ....  '

Worrying What others Think of Us

Useful piece, we all practice this. 

Why We Should Stop Worrying About What Others Think of Us
Mar 31, 2020 Research North America  In Knowledge@Wharton

Standing in the spotlight can be daunting. Giving that third-quarter report to shareholders, pitching your idea at a team meeting, even competing in the state fair to win first place with a batch of your best chocolate chip cookies makes most people feel the uncomfortable pressure of being judged. But there’s new scientific evidence to bolster the anecdotal advice that mom always gave you: Just relax and do your best.

A study co-authored by Alice Moon, Wharton professor of operations, information and decisions, finds that when people perform tasks in front of others, they tend to believe they are being judged harshly on their performance. But in reality, actors are much harder on themselves than the observers who are watching them. People also worry that they will be unfairly judged on the whole based on a single part. For example, a driver who can’t parallel park worries that people watching him from the sidewalk now think he’s lousy at all aspects of driving. But in reality, observers would evaluate his skills behind the wheel based on a number of measures, such as his awareness of blind spots, maintaining a safe distance, his attention to road signs, his use of turn signals, etc.

All that worry and stress can lead to what Moon calls the “overblown implications effect.” When people are so preoccupied with the judgment of others, they tend to believe that that judgment is far worse than it is. Through a series of experiments, Moon and her colleagues found that actors consistently overblow their failures — and even their successes — because they often don’t see things from the broader view of the observer. “Actors see their own performance as having more evaluative impact on observers than it actually does.… Successful parallel parkers will be mistaken in thinking their full driving skills are on display,” the researchers write in their paper titled, “The Overblown Implications Effect.”

Moon wrote the paper with Clayton Critcher, associate professor of marketing at the Haas School of Business at the University of California, Berkeley, and Muping Gan, a former UC Berkeley graduate researcher who now works for YouTube. Moon recently discussed the implications of their research with Knowledge@Wharton.

Knowledge@Wharton: What piqued your interest in this topic?  ... '

China Blockchain Dominance

Previously noted.  What are the consequences?  Fewer intermediaries for sharing key data sources and analyses.

China’s Blockchain Dominance: Can the U.S. Catch Up?
Knowledge@Wharton

By all counts, China is leading the world in the use and development of blockchain technology. It has far and away filed the most patents related to blockchain in the world and some of the biggest names in the blockchain and cryptocurrency community are Chinese firms. What’s more, blockchain is also a national priority: The Chinese State Council included its development in the nation’s 13th Five-Year Plan. And last year, President Xi Jinping said China seeks to lead in innovation worldwide, citing blockchain, AI, the Internet of Things and other technologies as the driving forces.

This national focus was confirmed by Chinese executives and entrepreneurs involved in blockchain endeavors at the recently held invitation-only roundtable discussion on blockchain hosted by the Penn Wharton China Center. Two-thirds of blockchain-related patents come from Chinese firms or entities, one participant said, adding that China also holds 72% of the mining power for bitcoin. “China is very pro-blockchain technology and the government has positioned itself to dominate the blockchain space in the world.”

For the West, however, there is a bit of a conundrum about this focus. Blockchain, the underlying ledger technology of the bitcoin cryptocurrency, was created in 2009 by a mysterious entity called Satoshi Nakamoto to be a decentralized system. That means there is no central authority in control, which flies in the face of the current political system in China. But comments on China Central Television by Chinese official Xu Hao clarify the party’s stance: Blockchain in China is not about decentralization but “de-intermediarization. There is no way to get rid of the center.”   ... "

Examining Smart City Backlash

A look at how people are reacting to 'smart' and trust, and surveillance and privacy stretching that are parts of smart city plans and implementations.  Is it best to see these ideas as primarily cost saving and life improving?  Or addressing outliers like solving and preventing crime in city spaces?     Both are happening today.

https://penniur.upenn.edu/  Penn Institute for Urban Research

What’s Fueling the Smart City Backlash?

A new phase of pause and double-check assumptions seems to have gripped the three-decades-old global movement of overstressed urban centers transitioning to so-called smart cities with innovative, technology-led promises. The latest phase is marked by scattered, local-level resistance by residents to smart-city programs in big cities like Toronto and New York to small towns such as Ross, California — near San Francisco — with less than 2,500 residents.

Other cities have banned specific technologies such as facial recognition software, amid doubts over its accuracy or concerns over cities stealthily collecting such data on their citizens through video surveillance. In some cases, they see technology companies forming opaque partnerships with city-level agencies to profit from projects at their expense, using public resources such as land and development rights.

Fears over privacy intrusions in today’s digital age and unbridled development compromising the public interest have been heightened by the erosion of trust between residents, city administrations and private companies leading “smart” projects. With increased transparency, and stronger citizen engagement, the smart-city movement could regain lost credibility and continue its growth, according to experts who spoke with Knowledge@Wharton.

For the most part, residents are wary about how city governments and big technology companies involved in the projects will track and collect data about their daily activities while not compromising their privacy and security by selling data without their consent. In several cases, legislators in many U.S. states have enacted or are considering laws to ban or limit the erection of 5G cell towers because of health concerns.

Data privacy and security issues are more sensitive in some settings than others. “Smart cities mean different things to different people, but big data is intrinsic to these initiatives and thus privacy concerns arise,” notes Susan Wachter, Wharton professor of real estate and finance. “However, some initiatives such as coordinated traffic lights are high on efficiency and low on privacy issues — and they are no brainers. Others, such as tracking people — much as is done in private places such as malls — provoke a backlash because they undermine the anonymity privilege of public spaces.” ... '

Podcast: Can Cybercriminals be Stopped?

Have been seeing increasingly dangerous threats to our technologies:

Can Cybercriminals Be Stopped?
Cybersecurity expert and journalist Kate Fazzini exposes the true nature of cybercriminals in her new book.

Cybercriminals aren’t all young hackers living in dark basements armed with their laptops and quaffing energy drinks. The new generation of cybercriminals have organizations that function much like startups, with CEOs and recruiters, and customer service agents. In her new book, Kate Fazzini, a cybersecurity professional and CNBC journalist, reveals the true nature of these cybercriminals beyond the headlines. She recently joined the Knowledge@Wharton radio show on SiriusXM, to talk about her book, Kingdom of Lies: Unnerving Adventures in the World of Cybercrime. (Listen to the podcast at the top of this page.)

An edited transcript of the conversation follows.

Knowledge@Wharton: Are top-level executives devoting enough resources to cybersecurity within their own companies?

Kate Fazzini: Except for the really large companies — the Fortune 20, Fortune 30 companies — we’re not even close yet. For most companies, the top cybersecurity official is reporting up through a technology organization that then probably reports up through one or two other people to the highest levels of the organization and the board.

That’s very problematic because the technology executive has a bit of a conflict of interest. They’re the ones who are doing the [software] applications for the company. They are the ones who are making the purchases. They want the budget that they’ve allocated to go through, and they don’t want a security person stopping them from doing what they want to do. For most companies, that’s a very old-fashioned way of doing things, and that cybersecurity person still doesn’t have the visibility at the highest C-level that they need to have.

Knowledge@Wharton: We hear stories about hackers in Russia, China and Eastern Europe. How much of this activity is happening inside the United States?

Fazzini: As much as we like to say that we aren’t able to catch these criminals, we have a much more robust law enforcement capability of catching these criminals. What makes us different in the United States is that the people who are doing cybercrime in this country, especially if it involves hands-on activities like going to an ATM or something like that, they’re much deeper underground than they are overseas.

That’s partially because in a lot of Eastern European nations, law enforcement just looks the other way on a lot of these crimes. In countries like Russia and in some Asian countries — not so much China — they will actually recruit criminals who show that they have a really good way of doing certain cyber activities. … That is not something that we do in the United States at all. You will never see the NSA (National Security Agency) recruiting a significant cybercriminal into their organization.  ....  "  

Should Amazon Upskill its Employees?

Retention, improvement and modeling HR asset.

Will Amazon’s Plan to ‘Upskill’ Its Employees Pay Off?

Wharton’s Matthew Bidwell and NYU’s Ari Ginsberg discuss Amazon’s $700 million plan to retrain its workforce.

Prime Day was a big success for Amazon this year: The two-day online shopping event held in mid-July and featuring special discounts netted higher sales than last year’s Black Friday and Cyber Monday combined, the company said on July 17.  But that wasn’t the only positive publicity Amazon received this month: On July 11, the company announced it is launching an ambitious $700 million retraining program to create “pathways to careers” for its employees in areas including health care, machine learning, manufacturing, robotics, computer science and cloud computing.

The six-year, $700 million effort covers about 100,000 employees, or about a third of Amazon’s U.S. workforce of nearly 300,000, and works out to about $1,200 a year annually for each employee. (That contrasts with a $500 spend on each employee for training by large employers with 10,000 workers or more that were surveyed by the Association for Talent Development, The Wall Street Journal reported.) The mostly free program does not require employees to stay on at Amazon; some programs pay 95% of the costs for tuition and textbooks, capped at $12,000 per employee over four years.

The move will make it easier for Amazon to hire and retain employees, gain a competitive edge over rivals, and it could help to improve its image, said experts at Wharton and New York University. ...

Fraud Detection with AI

And even the predictive risk of the exposure to financial crimes.

How AI Can Help with the Detection of Financial Crimes
Paige Dickie develops artificial intelligence (AI) and digital strategy for Canada’s banking sector at the Vector Institute for Artificial Intelligence in Toronto. She began her career in management consulting — much to the disappointment of her father, an engineer — because she had earned advanced engineering degrees in biomedical and mechanical engineering. Dickie initially worked at McKinsey, the global consulting firm, helping multinational financial institutions across a range of fields from data strategy and digital transformation to setting up innovation centers. She recently joined Vector to lead what she describes as “an exciting project with Canada’s banking industry. It’s an industry-wide, sector-wide, country-wide initiative where we have three different work streams — a consortium work stream, a regulatory work stream, and a research-based work stream.”

Knowledge@Wharton interviewed Dickie at a recent conference on artificial intelligence and machine learning in the financial industry, organized in New York City by the SWIFT Institute in collaboration with Cornell’s SC Johnson College of Business.

According to Dickie, AI can have a significant impact in data-rich domains where prediction and pattern recognition play an important role. For instance, in areas such as risk assessment and fraud detection in the banking sector, AI can identify aberrations by analyzing past behaviors. But, of course, there are also concerns around issues such as fairness, interpretability, security and privacy.

An edited transcript of the conversation follows.  ... " 

Itunes Shutting Down, History and implications.

A favorite prof at Wharton discusses ITunes.  Long been interested in how the music industry has been changed by tech.

Game-changer to Digital Dustbin: Why iTunes Is Shutting Down

Wharton's Peter Fader and UT-Arlington's David Arditi discuss why Apple is shutting down iTunes. 

[Podcast] and transcript ....

If video killed the radio star, as the old song goes, then iTunes killed the record industry. Now, 18 years after Apple launched the music download store, the company announced that iTunes is shutting down.

During its Worldwide Developers Conference this week in San Jose, California, Apple announced iTunes will no longer exist as a digital jukebox but will be reformed into three separate apps for music, television and podcasts. While the change has been a long time coming —  sales of digital music downloads have dropped for six straight years, according to the Recording Industry Association of America  — it marks a significant shift in the company’s business model and in the kind of consumer behavior that Apple helped shape when it first opened the digital store in 2001. Music lovers were no longer bound to the full purchase of an album that was packaged and sold by a record label; they were free to buy single songs for 99 cents, which ushered in a new era of pick-and-choose consumption.

“iTunes is a cancer for the music industry. This was obvious 15 years ago … Good thing it will finally go away,” Wharton marketing professor Peter Fader wrote on Twitter. When Knowledge@Wharton asked him to explain his tweet on the K@W radio show on SiriusXM, Fader didn’t mince words. (Listen to the podcast at the top of this page.)  ... "

Medium Impacts Message

Another example of where context of data creation matters.  Podcast and transcript.  Implications for interpretation of language use.

User-generated Content: The Medium Impacts the Message
Wharton's Shiri Melumad discusses her research on how user-generated content changes in tone based on the type of device used to create it.

From Yelp reviews about the corner pub’s burger of the month to comments about how much laundry can be stuffed into a high-efficiency washing machine, user-generated content is ubiquitous. Retailers and aggregator sites have made it easier than ever for customers to post their thoughts on everything from the quality of the service to the cleanliness of the bathrooms. In this avalanche of content, is there a difference in tone depending on what device is used to transmit the review? In her latest research, Wharton marketing professor Shiri Melumad finds that consumers who write out their thoughts on smartphones tend to be more emotional than those who wait until they get home to type on their personal computers. Her findings have implications for both marketers and consumers who rely on user-generated content to inform their decisions.

Melumad recently spoke with Knowledge@Wharton about her paper, “Selectively Emotional: How Smartphone Use Changes User-generated Content,” which was written with co-authors J. Jeffrey Inman, business professor at the University of Pittsburgh, and Michel Tuan Pham, marketing professor at France’s Emlyon Business School. (Listen to the podcast at the top of this page.)
Knowledge@Wharton: What was the inspiration for this research?

Shiri Melumad: This research was actually inspired by patterns that I noticed in my own behavior. A few years ago, I started noticing that the way I expressed myself when I was writing certain types of content on my phone — things like work emails or messages to friends — differed quite a bit from how I expressed myself when I wrote the same type of content on my computer. I became really interested in whether any differences systematically arise when consumers generate content on their phone versus a personal computer and, if so, what are the factors that underlie these differences. ... "