The Futures - No. 63

Europe’s far-right pivot / Climate change lowering home values / Six-day workweek

Jul 09, 2024

In this issue

The Quantumrun team shares actionable trend insights about far-right policies gaining a larger foothold across Europe, climate change driving homeownership woes, Greece’s six-day workweek, and music labels suing AI music generators.

Future signals to watch

Starting July 1, certain industrial and manufacturing facilities in Greece, along with businesses providing 24/7 services, can shift to a six-day workweek. This change excludes the tourism and food service industries and increases the legal workweek to 48 hours from the previous 40, with additional pay for extra hours worked.
Saudi Arabia is poised to become the world's largest construction market, with its total construction output expected to reach $181.5 billion by 2028.
Consulting firms like IBM and Accenture are already profiting from generative AI, with IBM securing over $1 billion in sales commitments and Accenture booking $300 million in 2023.
Japan plans to connect major cities with automated zero-emissions logistics links by 2034, reducing road traffic and shifting millions of tons of cargo.
Researchers have developed entropy-based uncertainty estimators to detect hallucinations in large language models, improving their reliability across various tasks and ability to answer new questions without needing task-specific data.
Israel-based Ever After Foods has secured $10 million to accelerate the growth of its bioreactor platform, which will enable cost-effective and scalable manufacturing for cultivated meat producers.
Arc Institute researchers have discovered an RNA-guided system enabling modular and programmable DNA modifications, advancing programmable genome engineering.
The world’s largest record labels, including Universal, Sony, and Warner, are suing AI music companies Suno and Udio-maker Uncharted Labs for releasing AI programs that generate songs from text prompts. This move highlights the growing concerns in the music industry about the ethical and legal implications of generative AI, which many artists fear could undermine their work and compensation.

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Culturally // Trending

YouTube → Heretic // X → The new Barbenheimer // Reddit → Bartending but make it extra // TikTok → Tomato Aesthetic // Instagram → Oslo’s anti-tourism ad // Spotify → “Whiskey Whiskey”

🇪🇺 Why Europe is leaning to the far-right

We’ve seen this unfold over the past few years: Europe’s increasing adoption of far-right policies (and political parties). At the June 2024 European Parliament elections, these parties made significant gains across multiple countries, indicating a broader trend towards more conservative and nationalist policies in the region.

In Italy, the government led by Giorgia Meloni, a hard-right leader, has seen significant electoral success. Meloni's party represents a strong conservative stance, which has become more prominent in Italian politics.
Germany has also experienced notable gains by far-right parties. The coalition government led by Chancellor Olaf Scholz is weak and fragmented, contributing to the rise of these far-right elements.
In France, the National Rally, a traditional far-right party led by Marine Le Pen, has performed well in recent elections, surpassing the ruling party led by President Emmanuel Macron. This success has led to Macron calling for snap elections to reassert his leadership.
Hungarian Prime Minister Viktor Orbán launched the "Patriots for Europe" alliance with Austria's far-right Freedom Party and Czechia's ANO party, aiming to form the largest hard right-wing group in the European Parliament. The announcement in Vienna came just before Hungary assumed the EU's rotating presidency for six months.

Europe's electoral systems have fueled this shift. In contrast to the US system—which encourages broad-based appeal to win elections—Europe's electoral method often relies on proportional representation, allowing smaller, more diverse, and in some cases, more extreme parties (from both political ends) to gain parliamentary seats and influence government policies. Over the past half-decade, this system has enabled far-right parties across the EU to capture a significant portion of the vote and gain power.

Demographic shifts also play a crucial role. Europe, especially Southern countries like Italy and Spain, has seen declining birth rates since the mid-20th century, leading to an aging population that tends to favor conservative policies. However, young voters are also starting to prefer far-right parties, as seen in the 32% vote won by the National Rally among French voters under 34. Additionally, economic challenges and concerns over migration have fueled nationalist sentiments.

Actionable trend insights as far-right parties gain more power in Europe:

For public sector innovators

Conservative political parties in European countries (and regions experiencing rapid demographic aging) must continuously monitor the political landscape to anticipate changes and adapt strategies accordingly. Localities that skew older, depend on blue-collar employment, and/or are close to national borders may be worthwhile targets to invest in campaigning activities.
Political parties on both spectrums must develop a clear and unified platform that effectively communicates and addresses voters’ main concerns, such as social and economic inequality, climate inaction, and the threat of jobs being replaced by artificial intelligence.

Trending research reports from the World Wide Web

India's young population will sustain high consumption demand and drive rapid economic growth for the next three decades, according to Finance Minister Nirmala Sitharaman.
Citizens Financial Group describes how they implemented two generative AI use cases out of over 90 explored, ensuring appropriate security and oversight through a dedicated steering committee.
Alphabet, Amazon, and Microsoft collectively invested $40 billion in data centers in the first quarter of 2024, while Meta's AI-related capital expenditure could reach $40 billion this year.
Companies were laying off copywriters and editors, shifting to AI-generated content production. However, they’re now hiring human writers again to make the articles “sound human.”
Generative AI technologies have led to a 21% decrease in job posts for writing and coding and a 17% decrease for image creation on a global freelancing platform, increasing competition among freelancers and resulting in higher pay for the remaining complex jobs.

🏡 Climate change is making homeownership difficult

Financial and insurance service companies in the US are feeling the long-term effects of climate change, particularly extreme weather events, on their clients’ properties. Nearly half of all US homes, valued at approximately $22 trillion, are at risk of severe damage from flooding, high winds, wildfires, and poor air quality, according to a study by Realtor.com.

These escalating climate risks are driving up insurance costs, reducing property values, and making homeownership more expensive. For example, 36 million homes face rising insurance costs and reduced coverage options due to mounting climate risks, with US states like Kentucky and West Virginia seeing sharply higher premiums.

Coastal areas like the Outer Banks in North Carolina have seen homes collapse into the sea due to rising sea levels and stronger storms, highlighting the growing reluctance of lenders to finance properties in high-risk areas. Moreover, inland states are not immune; severe hail storms in Minnesota have led to significant insurance challenges.

As climate risks become more apparent, banks are increasingly cautious, with mortgage approvals falling by nearly 1% for every degree Celsius rise above average temperatures. This financial caution could potentially destabilize local economies and reduce homeownership opportunities.

Homeowners are already feeling the strain, particularly in high-risk areas like Florida, where insurance premiums have soared to more than double the national average. Residents report unbearable financial pressures, with some considering moving to cheaper states or regions within Florida. For instance, a homeowner in Broward County saw their insurance premium double to over $7,000, a significant burden on top of existing taxes and living expenses. This trend indicates the broader issue of climate change prompting demographic shifts as people seek more affordable and safer environments.

Actionable trend insights as climate change lowers property values:

For entrepreneurs

Entrepreneurs can develop climate-resistant construction products.
- For example, a startup could focus on creating fire-resistant roofing materials for homes in wildfire-prone areas. These materials could be designed to not only withstand extreme temperatures but also integrate with existing solar panel systems, providing an eco-friendly and resilient solution.
They can offer relocation services tailored to individuals and families moving away from high-risk areas due to climate change. This service could include real estate assistance, climate risk assessments, and community integration support.
- For instance, a business could develop an app that helps users find safer, affordable housing options while providing data on local climate risks, schools, job markets, and healthcare facilities.

For corporate innovators

Companies can create Real Estate Investment Trusts (REITs) focused on acquiring and developing properties in areas deemed low-risk for climate-related disasters. These REITs could invest in mixed-use developments that prioritize sustainability, such as green building certifications and renewable energy integration.
Insurance companies can develop products specifically designed to support climate adaptation measures.
- For instance, a corporation could introduce a new insurance policy that not only covers damage from climate-related events but also provides funding for home retrofits to improve resilience. This might include grants or low-interest loans for homeowners to install hurricane-proof windows, flood barriers, or advanced HVAC systems that improve air quality.