Recession reality hits major economies. Japan and the U.K. each saw their economies shrink for two consecutive quarters, meeting the technical definition of a recession, according to data out Thursday. Meanwhile, in Europe, officials said they expect weaker economic growth across the bloc. (Axios)

US wholesale inflation accelerated in January in latest sign that prices picked up last month. Wholesale prices in the United States picked up in January, the latest sign that some inflation pressures in the economy remain elevated. (AP)

Russia’s economy ‘in for very tough times’ despite improved growth outlook, IMF managing director says. The head of the International Monetary Fund warned the Russian economy is still facing significant head winds despite receiving a recent growth upgrade by the Washington-based institution. (CNBC)

Inflation edges up, pushing back forecast of first Fed rate cut. Futures traders now see a 52% probability that policymakers in June will cut the federal funds rate from its current peak level between 5.25% and 5.5%. (Construction Dive)

British retail rebound provides some hope for recession-hit economy. U.K. retail sales rebounded by 3.4% after a grim December, according to the Office for National Statistics, the strongest monthly gain since April 2021. (CNBC)

China’s biggest problem is a ‘lack of confidence,’ Standard Chartered CEO says. China is facing a confidence deficit as its economy undergoes massive transition and concern grows over its ongoing property crisis, a top banking CEO said while onstage at Dubai’s World Governments Summit. (CNBC)

China’s carbon emissions are set to decline years earlier than expected. China’s rollout of 300 gigawatts of new wind and solar power last year was for the first time enough to cover its new electricity demand. (WSJ)

Why oil prices aren’t soaring despite Middle East uncertainty. When Russia invaded Ukraine in 2022, the price of oil jumped to over $100 a barrel. But despite the threat of an escalation of tensions in the Middle East and attacks on Red Sea shipping, oil markets have yet to see such moves this time around. (CNN Business)

Politics and convenience drive Mexico to be US’s top trading partner. The boom around ‘nearshoring’ and tensions with China have led to a manufacturing boom in Mexico, for the US. (Al Jazeera)

Algeria’s black market for foreign currency underlines its economic woes. In a square near the center of Algiers, currency traders carry wads of euros, pounds and dollars, hoping to exchange them to those worried about the plummeting value of the Algerian dinar. (AP)

Germany’s economy is on shaky ground and glimmers of hope are few and far between. Good news has been sparse for the German economy. And the latest economic data has not done much to change this. (CNBC)

Retail and apparel groups call for secure travel on the Red Sea. The trade organizations cited rising rates, delays and at least $80 billion in cargo that has been diverted around the region amid attacks. (Supply Chain Dive)

Cocoa supply issues could lead to smaller chocolate bar sizes: expert. Major chocolate producers are grappling with the high costs of cocoa, and consumers are feeling the impact. (Supply Chain Dive)

Backlog dips again amid tight lending conditions. The heavy industrial sector saw large gains, while institutional and infrastructure segments dropped. (Construction Dive).

Could Remote Work Hurt On-the-Job Learning?

Frank Van der Wouden, Hyejin Youn, Kellogg Insight

Four years since the start of the COVID-19 pandemic, many workers still find themselves logging on from home at least part of the time. Zoom meetings with teammates, once thought to be a short-lived pandemic trend, have remained on work calendars. And these geographically flexible workers report increases in productivity and satisfaction.

So, does that mean that we no longer need to see each other in person? Is distance dead? Not when it comes to learning through collaboration, says Hyejin Youn, an associate professor of management and organizations at the Kellogg School.

In analyzing more than 17 million scientific publications over the past 45 years, Youn and Frank van der Wouden of the University of Hong Kong found that researchers who collaborated locally were much more likely to gain new knowledge from their teammates than those who collaborated at a distance.

That’s because being together physically—reading body language, mulling a problem at a whiteboard, and teaming up to use specialized laboratory equipment—is especially valuable when knowledge isn’t yet codified.

“We learn from each other in person more than we think we do,” Youn says. “That’s part of our success as humans, especially when it comes to knowledge that is new, not yet defined. You have to be present to watch and learn. And collaborating locally is the way to do that.”

How collaborations lead to new knowledge

Even before the COVID-19 pandemic, geographical distance between people and organizations seemed increasingly irrelevant. Advances in communication and transportation technologies seemed to flatten the globe, and workers in both academia and industry found that collaboration and knowledge transfer could take place successfully across institutional and international borders.

But Youn wasn’t convinced that collaborating remotely was a perfect substitute for being together in the same room. Why, then, was knowledge and innovation still largely concentrated in urban cities? Why was business travel still so popular? These trends would seem to suggest that knowledge creation and transfer might benefit from togetherness.

So, to study the effect of geography on learning among collaborators, Youn teamed up with van der Wouden, then a Kellogg postdoctoral scholar, to study whether and how knowledge production depended on physical proximity.

The pair analyzed data from Microsoft Academic Graph that included information on millions of academic publications from authors who published their work between 1975 to 2018.

Youn and van der Wouden wanted to identify scholars who had gained new knowledge from their previous collaborations. A good proxy for this, they realized, was doing research in a new field: someone who started their career in one academic discipline (materials science, for example), then collaborated with authors from another discipline (chemistry), and ultimately published a paper in that new field (chemistry) as a sole author. This seemed like relatively straightforward evidence that the scholar had learned from their earlier collaboration. Though single-author academic papers are rare in many disciplines, the team still found 1.7 million authors who met this criterion.

Then, they identified the geographical locations of these 1.7 million authors and their collaborators, right down to the location of the author’s building. (For example, if the author was listed as being from Harvard University’s psychology department, the building housing the psychology department was considered their location.) Collaborations were considered local if the authors were less than 700 meters apart, about a 10-minute walk.

They also analyzed the authors’ career stage, the ranking of their institution, and the number of authors on their group publications.

To investigate whether scholars learned from their collaborators, the team calculated a learning rate. That rate—the percentage of scholars who first collaborated with scholars in a new field and later published a paper in that field—was calculated for local and nonlocal collaborations within each academic discipline.

The team also calculated the learning premium for collaborating locally versus nonlocally. For example, if a field had a local learning rate of 10 percent and a distance learning rate of 5 percent, it would show that scholars who collaborated locally were twice as likely to learn from that collaboration.

Who has the most to gain from local collaborations?

Youn and van der Wouden found that local collaboration among the scholars they studied had decreased markedly over time—from 75% of collaborations in 1975 to 60% in 2015. Throughout that same period, the average geographical distance between collaborators doubled to nearly 2,000 kilometers.

“Thanks to technology, we collaborate across great distances even more now,” Youn said. But that accessibility comes at a cost. “The longer the distance between collaborators, the less likely you are to learn from each other,” she says.

Indeed, across all academic disciplines, the learning rate was greater for local collaborations than for long-distance collaborations.

The rate wasn’t equal among disciplines, though. In fields like history and political science, distance had a negative impact on learning, but a small one.

But researchers in science and engineering were much more affected by distance. Geologists, for example, had a large learning rate from local collaborations. And geographical distance most harmed scientists in chemistry, materials science, and engineering. Their learning rate was much lower in nonlocal collaborations, perhaps because these fields rely more on instruments and equipment that require in-person collaboration.

And today, scholars have even more to gain from local collaboration. The learning premium from collaborating locally has increased from 50% in 1975 to 85% in 2015, the team calculated.

Certain scholars had the most to gain from local collaborations, the analysis found, including those in the early stages of their careers and those at lower-ranked institutions.

“That’s understandable, because early in your career, you still need to acquire knowledge, and you have to be present to do that when knowledge isn’t yet codified,” Youn says. “It’s like riding a bicycle. You can’t learn how to ride a bicycle by reading a paper.”

Work from home? Not if you want to learn from colleagues.

Of course, the world has changed since the most recent paper in the dataset was published in 2018. Now, meetings over Zoom and Microsoft Teams are much more common, even among local collaborators. And while operating remotely once seemed like a temporary accommodation, many companies are adjusting to a new reality in which workers demand to work from home, at least part of the time. So how will that affect learning in the future?

People who work from home may be missing out on opportunities to expand their expertise, which could have career consequences, both in the short term and down the road. “It could result in a knowledge disparity and segregation,” Youn says. “Especially if you’re early in your career. You may miss collaborative learning opportunities that could ultimately benefit your career.”

Too much remote work could also have larger implications for innovation, which often emerges from teams exchanging ideas. “If you want to be innovative, if you want to collaborate and learn from each other at the cutting edge,” Youn says, “you need to be in person.”

That’s not to say all collaboration needs to be local. Learning can happen at a distance, as Youn found when her coauthor van der Wouden was hired as a professor at the University of Hong Kong toward the end of this research. Still, Youn says, it was difficult to coordinate Zoom calls and “not the same as working together in person.” And she thinks if the move had happened earlier, while they were thinking through key concepts and ideas, the challenges would have been far greater.

Youn suggests companies should find the right blend of having employees work from home, where they can be productive, and bringing them into the office, where they can work together to create new knowledge; firms focused on innovation should be particularly careful to find the right balance. Companies looking to expand their knowledge portfolio should also look to establish offices in regions where that knowledge is located, such as Silicon Valley for tech or Washington, DC, for government.

“Bring people together so they can exchange ideas in person,” Youn says. “We are incredibly good at learning from each other, especially in these murky ways that can lead to innovation.”

This article originally appeared in Kellogg Insight.

Week in Review Editorial Team:

Annacaroline Caruso, editor in chief

Jamilex Gotay, editorial associate

Kendall Payton, editorial associate