Monthly Archives: May 2025

Government-Funded Study Investigates Role of AI in Enhancing Worker Safety and Product Quality in Manufacturing

Recent developments in artificial intelligence have focused mainly on language models capable of interpreting and generating text. However, AI’s capabilities steadily expand beyond textual applications into sectors such as manufacturing and the service industry. These domains, which often involve manual labour and physical processes, may not initially appear to benefit significantly from AI integration. Yet, a new interdisciplinary study from the University of Notre Dame reveals that AI tools can enhance product quality and worker safety in these environments, opening the door to substantial improvements in industrial practices.

The study, published in the journal Information Fusion, centres on a class of AI systems known as multimodal large language models (MLLMs). Unlike traditional AI models that operate within a single input type—usually text—MLLMs can process and integrate information from multiple sources, such as images, text, and data tables. This capacity enables more nuanced reasoning and decision-making. While most academic investigations into AI’s impact on the workplace have focused on white-collar occupations, the Notre Dame research team aimed to evaluate AI’s potential within industrial and production-based settings, where its adoption has thus far been limited.

To conduct their research, the team collaborated with vocational institutions and trade professionals across Northern Indiana, a region noted for its high concentration of manufacturing jobs. Partner organisations included the Elkhart Area Career Centre, Plymouth High School, Career Academy South Bend, Plumbers & Pipefitters Local Union 172, and Ivy Tech Community College. These partnerships, facilitated through Notre Dame’s iNDustry Labs, allowed researchers to collect real-world weld imagery to assess AI model performance. iNDustry Labs has worked with over 80 regional businesses on more than 200 applied projects, making it a valuable conduit for integrating academic research with industrial needs.

The study specifically focused on the welding practices found in the recreational vehicle, marine, aeronautical, and agricultural sectors. Researchers tasked MLLMs with evaluating images of welds and determining their suitability for various manufacturing applications. While the AI models demonstrated a promising ability to assess weld quality using high-resolution, curated images sourced online, their performance declined when applied to images captured in real-world settings. This discrepancy highlights a significant challenge: models trained on idealised data do not generalise well to messy, unstructured environments that typify most manufacturing floors.

According to Nitesh Chawla, the Frank M. Freimann Professor of Computer Science and Engineering at Notre Dame and founding director of the Lucy Family Institute for Data and Society, this finding emphasises the need to retrain models using actual industrial data and more sophisticated techniques. “This discrepancy underscores the need to incorporate real-world welding data when training these AI models, and to use more advanced knowledge distillation strategies when interacting with AI,” he explained. Such approaches could allow AI systems to assess weld integrity more accurately, thus improving both product performance and occupational safety.

Interestingly, the study also found that the complexity or scale of an AI model did not necessarily correlate with better outcomes. In several cases, performance improved significantly when researchers used context-specific prompts rather than larger or more computationally intensive models. This insight challenges prevailing assumptions in AI development and suggests that customisation and prompt engineering may be more effective than merely scaling up existing systems. As such, the authors recommend that future research focus on equipping AI models with stronger domain-specific reasoning abilities and adaptability.

The implications of this study extend far beyond welding. As industries move towards greater AI adoption, the challenge will be to balance the power of general-purpose models with the practicality and precision of fine-tuned tools tailored to specific environments. Yong Suk Lee, associate professor at Notre Dame’s Keough School of Global Affairs and chair of technology ethics at the Institute for Ethics and the Common Good, stressed the importance of explainability in AI. “As AI adoption in industrial contexts grows, practitioners will need to balance the trade-offs between using complex, expensive general-purpose models and opting for fine-tuned models that better meet industry needs,” he said. Integrating transparent and accountable AI systems will build trust and ensure these technologies benefit the workforce and society.

More information: Grigorii Khvatskii et al, Do multimodal large language models understand welding? Information Fusion. DOI: 10.1016/j.inffus.2025.103121

Journal information: Information Fusion Provided by University of Notre Dame

The right message, in the wrong place, is still the wrong message

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When securing a sale, the most articulate pitch may still fall flat if delivered in the wrong setting. According to new research from Washington State University (WSU), the location of a sales interaction can be just as influential as the content of the message itself. Salespeople may unknowingly alienate potential customers before speaking a single word simply by approaching them in a space that feels too personal or private. This insight challenges the traditional assumption that success hinges solely on persuasive language or product knowledge.

The study, “Psychological Reactance Among B2C Sales Prospects”, published in the Journal of Personal Selling & Sales Management, explores how the physical environment shapes consumer receptivity during business-to-consumer interactions. Conducted by Bitty Balducci and Minjoo Kim, both assistant marketing professors at WSU’s Carson College of Business, the research delves into customer behaviour in different settings—from the public sphere of retail shops to the private domain of homes and members-only lounges. Their findings point to a consistent pattern: people are more likely to reject a sales approach when they perceive the space as private.

The researchers demonstrated this trend across multiple contexts through a series of experiments. In one scenario, participants were less inclined to engage with a product demonstration when approached at home than when the same offer was presented in a store. In another case, those in an exclusive airport lounge exhibited more resistance than individuals in a general terminal. The underlying explanation lies in a psychological mechanism known as “reactance”—a mental pushback that emerges when people feel their freedom is being encroached upon.

As Kim explains, psychological reactance heightens in environments where individuals feel a strong sense of ownership or control, such as their homes or private lounges. When someone enters these spaces with an unsolicited offer, it can feel intrusive, triggering an instinctive desire to protect one’s autonomy. This resistance is less pronounced in public settings, where interactions with strangers are expected and do not evoke the same sense of personal boundary violation. In this way, the same sales pitch can yield vastly different outcomes depending on what is said and where it is delivered.

Interestingly, the study also reveals that physical distance can mitigate this defensive response. When salespeople maintained respectful space—especially in private or semi-private environments—participants reported feeling less pressured and were more open to engagement. Even subtle cues, such as how enclosed or open space feels or how closely a salesperson stands, had measurable effects on customers’ willingness to listen. These small but powerful elements of spatial awareness can make the difference between rejection and receptivity.

The implications for sales professionals are significant. While crafting a compelling pitch remains essential, this research highlights the importance of environmental and psychological context in shaping customer behaviour. By recognising the emotional cues associated with space and autonomy, salespeople can adjust their approach to feel less intrusive and more respectful. Doing so makes them more likely to build trust and achieve better outcomes. As Kim concludes, the setting of a sales conversation is not just a backdrop—it is a critical component of the interaction itself.

More information: Minjoo Kim et al, Psychological reactance among B2C sales prospects, Journal of Personal Selling and Sales Management. DOI: 10.1080/08853134.2025.2479453

Journal information: Journal of Personal Selling and Sales Management Provided by Washington State University

Who Truly Holds the Power in Crypto Governance?

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With Donald Trump’s return to the White House, cryptocurrencies have seen renewed momentum, spurred partly by the administration’s more permissive stance on digital assets. In a notable move, an executive order issued in January barred federal agencies from developing a U.S. central bank digital currency (CBDC), commonly called a “digital dollar.” This action signalled a departure from state-backed innovations favouring private-sector solutions, effectively throwing greater support behind decentralised cryptocurrencies and stablecoins. As regulatory pressure eases, the crypto landscape is entering a transformative phase that has reignited interest in alternative financial models such as Decentralised Autonomous Organisations (DAOs).

DAOs are often hailed as revolutionary institutions capable of delivering a more democratic and transparent financial system. Instead of relying on top-down hierarchies typical of corporations—where CEOs, CFOs, or boards make decisions—DAOs promise community-driven governance. Members participate directly in decision-making by casting votes with governance tokens, digital assets that function like shares. These votes determine everything from fee structures to developmental roadmaps. In theory, this system distributes power evenly among users and reflects the ideal of collective ownership. Yet, the reality appears far more complex and, in some cases, troubling.

Despite their reputation for openness, many DAOs suffer from significant centralisation of power. Governance tokens, the foundation of DAO decision-making, are frequently concentrated in the hands of a small number of early adopters, developers, or investors. Stefan Kitzler, a researcher at the Complexity Science Hub (CSH), explains that while every user has the right to vote, the identities behind wallet addresses remain hidden, making actual participation difficult to assess. “In principle, every user can participate,” he notes, “but it remains unclear who these users actually are, as only pseudonymous addresses are available.” This lack of transparency undermines the democratic image of DAOs and invites scrutiny regarding who controls them.

Kitzler and his team conducted a large-scale study investigating the extent of centralisation in DAO governance. Analysing over 35,000 proposals from 872 DAOs and nearly one million voters, their research, published in Financial Cryptography and Data Security, revealed a stark contrast between theory and practice. In 7.54% of the DAOs studied, core contributors—such as project owners and developers—held enough voting power to decide outcomes unilaterally. Furthermore, in about 20% of these organisations, insiders could pass at least one proposal without broader community involvement. These findings cast serious doubt on the decentralised nature of many DAOs, raising concerns about accountability and fairness.

The 2022 case of Tornado Cash serves as a cautionary tale. Once celebrated as a decentralised privacy-enhancing tool, the platform came under fire when the U.S. government sanctioned it for allegedly facilitating money laundering by North Korean hackers. Two of its developers were later arrested, prompting public debate over the proper level of decentralisation within such platforms. According to Kitzler, “inner circles” in many DAOs suggest that decision-making power often resides with a tight group of influential individuals. Bernhard Haslhofer, head of the Digital Currency Ecosystems research group at CSH, adds that even DAOs managing millions of dollars have shown signs of unilateral control—findings that surprised the research team.

The problem is compounded by the opaque nature of blockchain transactions, which makes it virtually impossible to determine the real-world identities behind extensive token holdings. This anonymity creates vulnerabilities in governance processes, such as potential vote manipulation. The researchers observed instances where tokens were transferred just before necessary votes, suggesting strategic behaviour aimed at swaying outcomes. As cryptocurrencies surge in popularity and policy discussions intensify globally, understanding how DAOs function in practice—not just in theory—has never been more critical. “Our findings provide empirical insights that can help shape future regulations,” Haslhofer concludes, “so that DAOs can live up to their original promise of decentralised, community-led governance.”

More information: Stefan Kitzler et al, The Governance of Decentralized Autonomous Organizations: A Study of Contributors’ Influence, Networks, and Shifts in Voting Power, Financial Cryptography and Data Security. DOI: 10.1007/978-3-031-78679-2_17

Journal information: Financial Cryptography and Data Security Provided by Complexity Science Hub

Digital Transformation Is No Longer Optional for B2B—Adapt or Fall Behind

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Manufacturers that fail to embrace emerging digital technologies are doing more than risking their competitive edge—they are laying the groundwork for eventual failure. This is the central warning from researchers at the University of Surrey, whose latest study underscores the critical importance of digital transformation in the manufacturing sector. In today’s rapidly evolving business environment, adopting digital tools is not merely an option; it is necessary for survival and long-term relevance.

Published in Business Research, the study by academics from Surrey Business School offers a practical framework to guide manufacturers through the complexities of digital transformation. It highlights how emerging technologies can enable firms to deliver superior value by focusing on customer-centric strategies. Rather than placing technology at the heart of innovation, the study urges manufacturers to pivot towards a model that puts customers—particularly in B2B contexts—at the centre of their strategic thinking.

According to the research, embracing specific technologies such as chatbots, digital twins, augmented and virtual reality (AR/VR), digital platforms, and digital product passports allows manufacturers to enhance the customer experience significantly. These technologies have the potential to revolutionise interactions, simplify complex processes, and improve coordination across supply chains. When implemented thoughtfully, they can enable firms to become more agile, responsive, and attuned to the evolving needs of their business customers.

Dr Nima Heirati, Associate Professor of Marketing and co-author of the study stresses the importance of a mindset shift: “To remain competitive in today’s market, companies must learn to place the customer—not products, services, or technologies—at the centre of their strategy, designing every other element of the business around this core mindset.” He further explains that it is not enough to adopt digital tools for the sake of modernisation; their deployment must be strategically aligned with the goal of creating meaningful value for the customer.

To support this alignment, the study introduces a framework categorising technologies into three functional groups: experiential, performance-enhancing, and automated. These categories clarify how digital tools contribute to four critical areas: managing customer relationships, involving customers in co-creating business value, improving internal collaboration, and enhancing partnerships with external actors. Practical applications include using chatbots for efficient customer service, digital passports to provide transparency and traceability, and AR/VR to support customer decision-making by offering immersive product experiences.

Dr Heirati concludes with a firm message for manufacturers: “Adopting a digital-first approach can fall short if managers overlook how emerging technologies reshape the customer journey. As the B2B landscape continues to shift, those who resist these changes will soon find themselves outpaced by competitors who are willing to adapt. The time to act is now. Manufacturers who fail to evolve risk becoming obsolete relics of a bygone era.” The study ultimately serves as a call to action, urging manufacturers to move beyond superficial digital upgrades and commit to a more profound, customer-focused transformation.

More information: Nima Heirati et al, How to use emerging service technologies to enhance customer centricity in business-to-business contexts: A conceptual framework and research agenda, Journal of Business Research. DOI: 10.1016/j.jbusres.2025.115284

Journal information: Journal of Business Research Provided by University of Surrey

Bank Deregulation in the U.S. Has Enabled Widespread Corporate Misconduct

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A new study from the University of Surrey has uncovered troubling consequences arising from the deregulation of the American banking sector. Since the mid-1990s, a loosening of financial regulations has transformed the landscape of corporate earnings management in the United States. The paper, published in the International Review of Financial Analysis, highlights a shift in corporate behaviour resulting from these regulatory changes. Rather than promoting transparency or responsible financial governance, deregulation has inadvertently encouraged corporations to adopt more concerning financial practices.

Central to the study is the observed trade-off between two distinct forms of earnings management: accrual-based (AEM) and real earnings management (REM). AEM alters reported financial outcomes by manipulating accounting assumptions or estimates, such as revenue recognition timing or expense accruals, without affecting the company’s cash flow. In contrast, REM involves adjusting genuine business activities—such as reducing research and development expenditure or overproducing inventory—to influence reported profits. While both strategies aim to present a more favourable financial position, REM has more tangible, and often more damaging, implications for long-term corporate health.

According to Professor Liang Han, the study’s lead author, deregulation has strengthened banks’ market presence and improved their ability to monitor borrowers. However, this increased oversight has not deterred earnings management; it has shifted the focus from AEM to REM. In other words, firms are not engaging in less manipulation—they are simply changing their methods. “While banks are better equipped to monitor financial practices,” Han notes, “the reality is that corporations are now more inclined to engage in risky behaviour that could have detrimental effects on their long-term performance.”

To support these conclusions, the researchers examined a vast dataset of 63,846 financial statements from U.S. corporations spanning several decades. The analysis showed a clear correlation between increased banking deregulation and the strategic shift from accrual-based to real earnings management. As financial institutions gained power and monitoring sophistication, corporations responded by adopting more subtle yet risk-laden tactics. These included cutting vital operational costs and altering business decisions to meet earnings benchmarks without regard for future viability.

The study warns that such shifts pose significant risks to sustainable corporate development and innovation. By its nature, REM sacrifices long-term strategic investments for immediate financial appearance. Cutting research spending or distorting production cycles might meet investor expectations temporarily but often leads to weakened innovation pipelines and volatile performance down the line. These findings echo the lessons of the 2008 financial crisis, where excessive short-termism, enabled by a lack of effective oversight, contributed to systemic instability.

Professor Han stresses the need for caution as deregulation reshapes corporate finance. “As the landscape of corporate finance evolves, it is essential for stakeholders to remain vigilant about the potential pitfalls of deregulation and the necessity of responsible financial practices in safeguarding the economy.” The study calls on policymakers and regulators to consider the broader consequences of financial liberalisation, urging a balanced approach that encourages innovation without compromising the long-term stability of firms and markets.

More information: Liang Han et al, Balancing acts: Bank market deregulation and the dynamics of earnings management, International Review of Financial Analysis. DOI: 10.1016/j.irfa.2025.104040

Journal information: International Review of Financial Analysis Provided by University of Surrey

From Boardroom to Battlefield: CEOs Turn Activist After Exit

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Few phrases are as likely to send shivers down a CEO’s spine as “activist shareholder.” In recent years, investment firms like Elliott Investment Management have demonstrated their formidable influence, successfully pressuring major corporations such as Starbucks and Southwest Airlines to restructure their boards and rethink their strategic operations. These campaigns often make headlines due to their scale and confrontational nature, painting a picture of corporate upheaval led by powerful, well-resourced outsiders.

However, a different kind of activist shareholder is quietly reshaping boardrooms across the corporate landscape. Jonathan Cohn, Associate Professor of Finance at the McCombs School of Business at the University of Texas, refers to them as “quasi-insiders.” These individuals—former CEOs, directors, or founders—retain substantial ownership stakes and possess intimate knowledge of the inner workings of the organisations they once led. Unlike traditional activist investors, who are external to the companies they target, quasi-insiders are deeply embedded in the corporate histories they seek to influence, making their campaigns uniquely personal and often strategically incisive.

Cohn’s latest research, conducted in collaboration with Mitch Towner and Aazam Virani from the University of Arizona, explores the prevalence and impact of quasi-insider activism. Analysing a wide array of third-party datasets and federal financial filings, the researchers identified 327 quasi-insiders involved in approximately 280 public activist campaigns between 1995 and 2021. These individuals were not fringe actors; 38% were former CEOs, 30% were founders, and 21% were ex-directors. Perhaps most notable is their high success rate—43 per cent of these campaigns met their primary objectives, such as securing board representation or influencing corporate strategy. In Cohn’s words, this is a “strikingly high” figure, especially when compared to traditional activism outcomes.

Investors seemed to respond positively to such interventions. On average, the share price of the targeted firms rose by 3.9 per cent in the ten-day window following the announcement of the activist campaign. While the longer-term effects on profitability were less clear and more challenging to quantify, the data revealed no signs that these quasi-insider efforts harmed the financial standing of the companies involved. Cohn suggests that the results challenge common assumptions about shareholder activism, particularly the belief that it is exclusively driven by hedge funds or large institutional investors pursuing short-term gains.

Interestingly, quasi-insider campaigns predominantly targeted smaller firms that were underperforming financially—organisations often overlooked by significant hedge funds due to the limited returns they might yield. In such cases, personal motivation usually plays a pivotal role. One example cited is Destiny Media Technologies, where the ousted founder and former CEO attempted to reclaim influence by nominating himself and four allies to the company’s board. His argument was twofold: that he had been wrongfully dismissed and that current leadership was faltering. Although the effort ultimately failed, it underscores a recurring theme. These campaigns may be as much about personal vindication and unresolved tensions as they are about strategic direction or corporate mismanagement.

Cohn concludes that companies might reduce the risk of quasi-insider activism by maintaining open lines of communication with former leaders, particularly those who continue to hold significant equity stakes. Rather than severing ties entirely, boards might consider ways to constructively engage with ex-CEOs and founders, recognising that their historical insights and emotional investments can, if handled diplomatically, be assets rather than threats. Quoting the timeless advice of Michael Corleone from The Godfather Part II—“Keep your friends close but your enemies closer”—Cohn suggests that a strategic approach to corporate relationships may be just as crucial as any policy or protocol in safeguarding governance stability.

More information: Jonathan Cohn et al, Quasi-Insider Shareholder Activism: Corporate Governance at the Periphery of Control, The Review of Corporate Finance Studies. DOI: 10.1093/rcfs/cfad016

Journal information: The Review of Corporate Finance Studies Provided by University of Texas at Austin

Ultrafast EV Charging in China: Obstacles, Innovations, and Economic Considerations

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A recent study published in Engineering explores the emerging landscape of ultrafast electric vehicle (EV) charging stations in China, offering a detailed examination of usage patterns, grid implications, proposed solutions, and the associated financial costs. As the global EV market continues to expand remarkably—with China at the forefront in adoption—gaining a nuanced understanding of the infrastructure challenges and opportunities is imperative for sustainable growth in this sector.

The research, led by Yang Zhao, Xinyu Chen, and Michael B. McElroy, is grounded in an extensive analysis of real-world charging data from over 15,000 EVs across fast-charging stations in ten Beijing districts. Using this empirical dataset, the team developed a series of future-oriented scenarios that reflect evolving EV specifications and charging behaviours. Key parameters incorporated into the modelling include charging power levels, battery capacities, and charging session durations, all critical to anticipating infrastructural needs.

One particularly significant finding concerns the non-linear relationship between increased charging power and station load. While it might be intuitively assumed that doubling charging power would result in a proportional doubling of station load, the study demonstrates that this is not necessarily the case. In larger charging stations equipped with numerous chargers, the peak power demand rises far less dramatically—by under 30%—even when charging power is doubled. This phenomenon arises because shorter charging durations reduce the probability of session overlap. For instance, in simulation scenarios ranging from S1 to S7, where the maximum EV charging power increased tenfold, the peak load at the airport charging facility only increased by 4.90, underscoring the moderating effect of session timing on load intensification.

To address the challenge of limited power capacity at charging stations, the researchers evaluated two broad mitigation strategies: a dynamic waiting system and integrating energy storage solutions. The dynamic waiting strategy entails staggering specific charging sessions to alleviate peak loads. Notably, at the airport station—where the total capacity is equivalent to 120 kW multiplied by the number of chargers—this approach alone was sufficient to accommodate ultrafast charging needs across all simulated scenarios (S1 to S7), albeit with a manageable increase in waiting times.

In parallel, the study assessed the role of battery-based energy storage systems in absorbing peak demand surges. Although effective, this solution comes at a considerably higher cost. The unit cost of lithium-ion energy storage in China is approximately four times that of conventional pad-mounted distribution transformers. Despite the expense, energy storage offers distinct advantages: It obviates the need for grid capacity upgrades and allows for greater flexibility in station deployment, especially in areas where grid reinforcement is impractical or delayed.

The financial implications of infrastructure upgrades were also a focal point of the study. The chargers themselves and the associated distribution transformers were among the key cost drivers identified. By comparing the costs of various upgrade pathways, the researchers offer a strategic framework for stakeholders—particularly policymakers and utility providers—to optimise investment decisions. Their findings support the establishment of large-scale ultrafast charging stations featuring chargers with power ratings between 350 kW and 550 kW in regions with high charging demand. Such an approach, the authors argue, represents a cost-effective and scalable response to the anticipated surge in EV charging needs.

Overall, this study provides a comprehensive and data-rich perspective on the future of ultrafast EV charging infrastructure in China. Its integration of empirical evidence with forward-looking scenario analysis highlights the complexity of managing high-power charging networks. It presents actionable insights for infrastructure planning, grid integration strategies, and regulatory frameworks. As China continues to lead the global EV transition, studies of this kind will prove critical in ensuring that the supporting infrastructure evolves in a manner that is both economically and environmentally sustainable.

More information: Yang Zhao et al, Future Ultrafast Charging Stations for Electric Vehicles in China: Charging Patterns, Grid Impacts and Solutions, and Upgrade Costs, Engineering. DOI: 0.1016/j.eng.2025.01.015

Journal information: Engineering Provided by Higher Education Press