In short
Iran’s nationwide protests and the risk of renewed Israel-Iran conflict, plus brief segments on AI’s impact on 2026 graduates and Europe’s pension pressures.
Guests
Anshul Pfeffer (The Economist Israel correspondent). Henry Tricks (US technology editor). Carla Subirana (news editor, The Economist). Host: Jason Palmer (The Intelligence).
Guest backgrounds
Pfeffer covers Israel and regional security; Tricks writes about AI, jobs, and education; Subirana edits European policy/news.
Key claims
Iranian authorities are using extreme force; Israeli leadership fears protests could trigger an attack or another war, including missile/nuclear concerns. Netanyahu suggests waiting for events inside Iran, with “horrible consequences” if Iran attacks Israel, and highlights possible gains: missile deterrence, proxy network strain, and long-term regional alignment.
Notable examples
Netanyahu’s Mar-a-Lago meeting with Trump; Israel monitoring remote Iranian missile-launcher preparations; Stanford study on reduced youth employment in AI-exposed industries.
Written by AI. May contain mistakes. Listen to the episode to check what was said.
Chapters
Tap a time to open that second in VOGenerative AI and Pensions in Europe
1:27 to 2:14
Explore the impact of generative AI on future graduates and pension systems.
“We ask how those grads will fare in the workplace and how the workplace is likely to change to accommodate them.”
Iran's Intensifying Protests
2:14 to 4:49
Discussion on the current protests in Iran and their implications.
“to suppress the protests we were talking about on Friday.”
Israel's Concerns About Iran
4:49 to 10:00
Insights into Israel's perspective on Iran's protests and potential military actions.
“the Israelis are looking at more remote places in Iran, the places where missile launchers are being prepared.”
The Future of Iran-Israel Relations
10:00 to 13:05
Analyzing the long-term possibilities of relations between Iran and Israel.
“Netanyahu is trying to head off that miscalculation you were talking about before.”
AI's Impact on the Job Market for Graduates
14:59 to 21:37
Exploring how AI is reshaping employment for upcoming graduates.
“Think back to the technology that influenced your education, however far you decided to take it.”
Demographic Challenges in European Pensions
21:37 to 28:00
Understanding the demographic shifts affecting pension systems in Europe.
“Across Europe, playgrounds are emptying while care homes are filling up.”
Closing Remarks and Acknowledgments
28:06 to 28:43
Jason and Carla wrap up the episode with thanks and goodbyes.
Transcript
Automatic transcript. May contain errors.0:00Host:There's one place for the newest drops in wellness and performance and the biggest sale of the year. It's the drop by GNC, curating the best of what's new, handpicked by the pros who know what works. And right now, get it all, buy one, get one 50 % off during the semi-annual LiveWell sale. From crushing workouts to leveling up your nutrition and everything in between, get the best deals on the latest innovations. All the newness is all on sale right now during the LiveWell sale on the drop by GNC. If you work in university maintenance, Grainger considers you an MVP because your playbook ensures your arena is always ready for tip-off.
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1:05Host:The Economist
1:12Host:Hello and welcome to The Intelligence from The Economist. I'm Jason Palmer. Every weekday we provide a fresh perspective on the events shaping your world.
1:26Host:There's a whole graduating class coming in 2026 that will have had generative AI at its fingertips for the whole of its college education. We ask how those grads will fare in the workplace and how the workplace is likely to change to accommodate them. And pensions in Europe are a fiscal time bomb as demographics change, Ensuring them up by changing retirement ages or benefits is politically dangerous. We look at what must and what might happen to fend off crises across the continent.
2:05But first...
2:13Host:In Iran, the authorities are using an ever-heavier hand to suppress the protests we were talking about on Friday. Across the country, cities and towns, demonstrators are being mowed down. 490, according to a Washington-based human rights group. That's almost certainly an undercount. We've said this before, I know, but what's going on inside Iran really is different this time, which makes for a different dynamic outside it, in particular for its principal rival in the region. People ask me during the war, is your goal regime change? And I said, no, it's not. But it could be the consequence of the war if we were successful.
2:57Binyamin Netanyahu:And we were successful. On Thursday, we interviewed Benjamin Netanyahu, the prime minister of Israel. When I say we, my bosses, editor-in-chief Zannie Minton-Beddoes and deputy editor Ed Carr, I was there as well in the prime minister's office studio in Jerusalem.
3:15Host:Anshul Pfeffer is The Economist's Israel correspondent.
3:19Binyamin Netanyahu:Naturally, we wanted to ask Netanyahu about the protests, which were already then gripping Iran. Since then, the protests have intensified and we have a lot of evidence of very violent suppression by the Iranian authorities. Reports of hundreds of people already killed across Iran. My shootings, there's a real question mark looming over the future of the regime. That was one of the main issues which we talked within an hour about. And it's obviously being followed very closely here in Israel as well.
3:54Host:What do you mean by that? What do Israelis or what do the Israeli leadership make of those protests?
4:00Binyamin Netanyahu:Well, the Israeli leadership is very concerned that this may also spiral out to an attack, perhaps even another war between Israel and Iran. We're just seven months after the 12-day war back in June between Israel and Iran. And in many ways, this is connected to the protests. The protesters are there because of the economic situation and the lack of democracy in Iran. But a lot of observers who have spoken to are saying that something happened in June in this war, which Israel achieved dominance of the skies over on pretty quickly. And this may have, in a way, broken something of the barrier of fear that kept people from protesting against the regime.
4:45Host:And so now the Israelis are watching those protests quite closely.
4:48Binyamin Netanyahu:But while obviously our main focus of intelligence services and governments around the world is on those protests taking place on the streets, the Israelis are looking at more remote places in Iran, the places where missile launchers are being prepared. And there are indications of preparations happening there.
5:10Host:So I'm still a little unclear on what the Israeli fears are here. Iran has its own problems at home. What's in it for them to sort of retaliate now about what happened in June?
5:21Binyamin Netanyahu:So there'll be a number of reasons why the Iranian regime may want to launch a strike right now. For a start, this perhaps could be something which would avert the attention or perhaps even rally the Iranian people around the regime. Another war with Israel. When you have problems at home, you cast around for an external enemy. There is also the fear of an Iranian miscalculation. the Iranians are themselves very much concerned that Israel will try again to strike their country and to destroy the remaining missile launchers, the remaining components of the nuclear program. And if they fear that that is something that is about to happen, they want to put in a preemptive strike first.
6:02Binyamin Netanyahu:And then there's the lingering frustrations of the Iranian regime from this war that they didn't succeed in stopping Israel from attacking their main strategic sites. They didn't really succeed in landing a serious blow on Israel despite firing over 500 missiles. And therefore there's an expectation that at some point Iran will try to restore its own deterrence and restore its military pride. There's also a worry in Israel that if the United States, as Donald Trump has been threatening in recent days, does attack Iran in some way, Trump has said that if Iran continues shooting at protesters, he will do something very painful to Iran, then Iranians will have to retaliate to that.
6:46Binyamin Netanyahu:And the easiest way for them to retaliate would be hitting one of America's allies in the region. These are all reasons why Israel is concerned that this could actually be the moment when Iran, despite the regime being very much embattled now at home, may try to take an opportunity and attack abroad.
7:03Host:But what about the prospect of Israel using this opportunity, conversely to finish the job that started in June, for example.
7:12Binyamin Netanyahu:Well, we saw just two weeks ago when Netanyahu visited Trump at Mar-a-Lago that he was basically egging Trump on to support Israel if such a strike was needed. Trump delivered on that.
7:24Host:Now I hear that Iran is trying to build up again, and if they are, we're going to have to knock them down. We'll knock them down, we'll knock the hell out of them, but hopefully that's not happening.
7:33Binyamin Netanyahu:So there is American backing for that, And we know that Israel does see this as something that will have to be done in the future. But the question really is the timing. And I don't think from what I've been hearing from Israeli sources that Israel is quite prepared now in the next days or weeks for such an attack, mainly because Israel is still replenishing its own missile defense and interceptors. I don't think they want to do it quite now. So it was interesting to note the differences between Netanyahu two weeks ago in Mar-a-Lago and Netanyahu in our interview with him on Thursday.
8:06Host:Well, exactly that. What did Mr. Netanyahu say when you were sat down with him last week, specifically on this question about Iran?
8:12Binyamin Netanyahu:Well, anyone who's ever seen a Netanyahu interview or Netanyahu's speech knows that he's very, very quick to get to Iran. And Iran is his main bugbear and has been for many years. And what was interesting in our interview with him on Thursday is that he didn't seem that eager to speak about Iran. He didn't bring it up. Zannie and Ed brought it up. And when they asked him about Trump's recent statements about Iran, his threats to attack Iran, if they do shoot at the protesters, interestingly, he didn't even endorse that strike. Do you think that's a good idea? And do you think that there should be outside pressure now for regime change?
8:50Host:I think there is pressure. Everybody wants to see that. But I said, I was asked about that, and I said, I'll tell you one definite time when we would resume our military activities. If Iran attacks us, which they might, then there will be horrible consequences for Iran. That's a definite. Everything else, I think we should see what is happening inside Iran.
9:13Binyamin Netanyahu:We've had this strange situation, which Netanyahu for so many years has been urging American leaders to get tough on Iran. and now for the first time we have the president of the United States saying much tougher things than Netanyahu himself is saying. Beyond that, he was almost reluctant to threaten Iran.
9:30Host:And it may be a moment where the people of Iran take charge of their own destiny. Revolutions are best done from within.
9:37Binyamin Netanyahu:In other words, perhaps America and perhaps other countries shouldn't be interfering right now. We should let things work themselves out in Iran. And this is something that I've spoken with Israeli officials in recent days, that the policy currently is to lower the Israeli profile and for it not to be seen as if Israel is in any way interfering in the internal issues within Iran.
10:00Host:So that would suggest that Mr. Netanyahu is trying to head off that miscalculation you were talking about before. If Iran feels less threatened, it is less likely to attempt what it thinks is a first strike.
10:10Binyamin Netanyahu:Yes, I mean, it's clear that Netanyahu hasn't abandoned his plans to destroy Iran's nuclear and missile programs and he talked about the threat that they pose. It's akin to somebody who has horrible cancer,
10:23Host:the attempt to build atomic weapons, and the other is the attempt to build 20 ,000 ballistic missiles. So we had to take it out. But when you take out these lumps of cancer, and certain types of lumps of cancer can reappear. If you don't take it out, you'll die.
10:38Binyamin Netanyahu:But right now he wants whatever is happening in Iran, if it's mass protests, if it's perhaps even a regime change and revolution, to play out before there is possibly another round of warfare between Israel and Iran.
10:51Host:So extremely uncertain, obviously, as you say, but how do you think Israel might hope it can turn the situation to its advantage?
10:59Binyamin Netanyahu:Well, there are three types of threats and also perhaps gains that Israel can have here. I think the most immediate concern is what we've mentioned already, the ballistic missiles. The nuclear program currently is dormant, but the missiles that have begun to rebuild them, this is an immediate concern. If, for example, law and order breaks down in Iran or parts of Iran descend into anarchy, then what happens to these very dangerous weapons and this nuclear program? And this is also something that the regime perhaps could use in a deal with the Americans to reduce the pressure. And we already saw last night that Donald Trump said that the Iranians have talked to him about reaching some kind of a deal.
11:37Binyamin Netanyahu:So these are assets that are in play. Then the next type of concern is iran's regional network of proxies which has been hit very hard by israel the last couple of years but it's still there and iran which will have to focus much more now inwards both on trying to maintain order in iran and on rebuilding the iranian economy simply won't have the money or the attention spent to continue building and and maintaining this network and that study for israel would be a major gain and then there's a i think the longer term issue that That is where Iran fits in the region. Now, if you go back before the Iranian revolution in 1979, Iran was Israel's probably most important ally in the region.
12:20Binyamin Netanyahu:Two regional powers, non-Arab, the Iranians aren't Arabs, obviously, and they had a very good relationship with Israel. Israel bought most of its oil from Iran up until the end of the 1970s. Iran put a lot of weapons and other types of technological know-how from Israel. All that ended in 1979 when Khomeini came to power with the Islamic Republic. But you speak to a lot of people who were around in those days. They don't see a reason why that kind of alliance can't exist again. Now, this is not something that's going to happen in days or weeks, even if the regime does fall. But I think it is a long-term eventuality that we can look towards, certainly as the desired result for Israel.
13:05Host:Anshul, thanks very much for your time.
13:07Binyamin Netanyahu:Thank you as ever for having me, Jason.
13:36Host:Click the link in the show notes for more.
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14:59Host:Think back to the technology that influenced your education, however far you decided to take it. Me? I didn't even have my own email address until late in my undergraduate years. Clearly, universal internet access changed education forever. But then, perhaps an even more transformative tech. Consider the class that will graduate from American universities in 2026. Just after they got to university in 2022 came an innovation that has changed the classroom and will change the job market. America's class of 2026 will be the first members of the chat GPT generation to graduate. Henry Tricks is our US technology editor and has been writing about grads, jobs and AI for the Economist's World Ahead series.
15:52Host:Now, some of those will be AI pioneers who are highly adept at using generative AI and no doubt will be keenly sought after by employers. But for others, AI threatens something of a rude awakening as they enter the workforce. So you think 2026 is going to be where AI essentially really makes itself felt in the workplace? It's been a long time coming. There are forecasts that predict that by the end of 2026, as many as 40 % of workplace applications will be done by AI agents working either alongside or replacing human workers. And if they do those jobs on our behalf, then the worries are that there will be less hiring, especially in white collar work and especially for young graduates.
16:51Host:And that has, to some degree, already started to bite, hasn't it? There is some evidence that we're beginning to see the early stages of this, although the evidence is still quite slim. But there was a recent study by researchers at Stanford University who detected a decline in employment from 2022 until 2025 for particularly young people, 22 to 25-year-olds, working in very AI-exposed industries, such as software development and customer service. It's quite possible that other factors were involved. There was a lot of overhiring, especially in software development during the pandemic. But it's also possible that companies are kind of using AI as an excuse to curtail hiring, or they're seeing the benefits of AI and basically realizing that they need fewer workers.
17:51Host:Which at the bottom end of the skill set of the seniority makes a lot of sense, right? This is something that is coming for the new grads, for the young people, for the juniors. Yeah, it's unfortunate and companies need young blood. Where you're not seeing the same effect is higher up in the workplace among the more senior workers. So, for example, researchers found that headcount of junior employees in firms that were big adopters of AI had fallen since early 2023, but it hadn't fallen for higher ups. And what researchers are seeing there basically is not so much layoffs as a result of generative AI.
18:32Host:What they're seeing is a reduction in hiring. So at the same time, this is changing hiring practices and I guess job prospects for some people. It's changing companies themselves, right? If you think about the way that companies look now, they have a sort of pyramid structure with a lot of workers at the bottom gradually tapering towards very few leaders at the top. And the scenario under generative AI suggests that that structure, that shape may start to change. What we're likely to see in the short term is what consultants call the diamond structure, which now means that you continue to have few people at the top, you have few people at the bottom, but you have a big rump of people in the middle.
19:20Host:But there is a more hopeful longer-term alternative scenario, which is called the hourglass. The hope is here that young graduates who are actually AI natives start to prove to their bosses that actually they're really vital to have as workers because they get it. They get how to use generative AI and they know how to bring productivity to the companies. And in that case, you get a different shape in which you get more workers at the bottom and then you have fewer workers in the middle because that's some of the work that the AI agents will do. And then you have the leaders at the top. This basically means that those workers who are fresh from college may be able to take advantage of AI and overtake those AI laggards in the middle.
20:10Host:So taking all that in then, what would you suggest for new grads or people coming onto the job market in 2026? I would say that if you are coming onto the job market in 2026, you've got two options. One of them is to double down on AI literacy. Get as much training as you can, as much practice as you can, using the tools that are already available. And then the other one is basically to opt for jobs that are less vulnerable to disruption because of AI, and hence easier to enter. And that might be manufacturing, It might be service towards human beings in the form of entertainment or cooking or all those sort of things.
21:01Host:But I think that whatever option you choose as a graduate, you have to make the case to potential employers that it's really important to hire young talent, notwithstanding the rise of the agents. After all, young graduates can make the case that they are the first ones literally schooled on ChatGPT. And even if they aren't fans of AI, they can argue that if there are no employees brought into the firm at the bottom and qualified to take over as bosses age, then the firm has no future. Henry, thanks as always for joining us. Jason, thank you for having me.
22:14Host:Transcription by CastingWords 64? Fury. Chaos. Riots. It is a notoriously sticky problem. Across Europe, playgrounds are emptying while care homes are filling up. And neither pensioners nor working folk want to be told that the payoff at the end is going to be trimmed. But trimming is going to be necessary, in some places more than others.
22:39Binyamin Netanyahu:In France, the average retiree now spends 23 years drawing a which is longer than in any other OECD country. Spain and Italy are not far behind.
22:52Host:Carla Subirana is a news editor at The Economist.
22:55Binyamin Netanyahu:And by contrast, in Denmark, pensioners draw a pension for 19 years on average, which is much lower. So basically, we're seeing a divide in Europe, in which some countries have low retirement ages, while others are reforming faster and preparing for the coming demographic hit.
23:13Host:Well, let's start there with the demographic hit. What is that going to look like?
23:17Binyamin Netanyahu:So Europe is often referred to as the old continent and for good reason. According to the European Commission, by 2070, there will be barely two working age adults on the continent for every person over 65, which is down from around three today. And that's a really big problem for countries with what we call unfunded pension systems. And in those systems, today's workers pay for today's retirees. So essentially what this means is that if there's a shrinking pool of contributors, pension generosity must inevitably fall. And then there are countries which have funded systems, which are much better prepared for the hit, because in those systems, workers and employers pay into large collective pension funds, which then invest the money, And then the returns go towards paying for future pensions, which means that they're less reliant on current workers.
24:14Binyamin Netanyahu:So they will be less affected by a shrinking of the workforce. And the problem is that the countries with unfunded systems are the ones with the most generous pension systems. And so the ones who are finding it hard to reform, like France, Spain or Italy. And then to complicate matters even further, those countries are also aging the fastest. The European Commission says that the growing dependency of more elderly people and fewer workers will add almost four percentage points of GDP to state pension costs in Spain and around three in Portugal by 2045. So this combination of factors means that basically those countries, normally southern countries, are really in a bind.
24:59Host:So there's sort of several conspiring factors here that people are living longer, taking care of them in their old ages, getting more expensive while all of this is going on.
25:08Binyamin Netanyahu:Yes, making European pensions more affordable is becoming even more urgent because other aging-related costs are rising fast. As a society's age, countries are going to need to invest a lot in health care and care for the elderly. So, for example, the European Commission expects the cost of long-term care to rise from 1.7 % of Europe's GDP in 2022 to 2.6 % by 2017. And that group of countries that I mentioned that are worst placed to cope also have weaker health and social systems than their northern counterparts, which means that they will need to invest a lot more. So, for example, in Spain, societies rely a lot on family members to care for the elderly.
25:52Binyamin Netanyahu:But as there's more elderly people and at the same time more women enter the workforce who are the ones who usually do the care, governments are going to need to step up to fill that gap.
26:03Host:So it sounds as if broadly it's northern European countries that aren't going to be hit quite so hard here.
26:10Binyamin Netanyahu:Yes. So a handful of northern countries such as the Netherlands, Sweden, Denmark and Switzerland are in a better position because of a combination of factors. First of all, they have funded pension systems, which, as I explained, means that they are less impacted by the fact that contributors are shrinking. And then those countries are also aging less fast. They have more solid economic growth and they are in a better fiscal position than their southern counterparts.
26:39Host:So how to make the numbers add up, though? It's obviously politically difficult for anyone to try to change what pensioners are going to get or when they're going to get it.
26:49Binyamin Netanyahu:Yes, so there are no easy answers to this. You either make pensions less generous or you raise the retirement age. But governments are very scared of angering pensioners, as they're a very important electoral force. So sadly, I don't think we're going to see any big changes soon. And the plan to increase the retirement age didn't work in France. And in October, Emmanuel Macron's prime minister had to shelve the measure basically to save his government. Other governments like Germany and Spain have faced similar challenges. And so by 2045, the biggest spenders will be France, Belgium, Norway and Austria.
27:29Binyamin Netanyahu:They will spend around 30 % of GDP on aging related costs. So those are the countries that are going to be under most pressure to reform. Norway is better placed because it has the world's biggest sovereign wealth fund. So it can afford to age more luxuriously. but the others are going to have to make some really tough decisions. And they should look to Denmark, which is the one who has made the most bold reforms. It plans to raise the retirement age from 67 to 70 by 2040, which would be the highest in Europe. But the rest are under a lot of pressure to reform.
28:05Host:Carla, thanks very much for your time.
28:07Binyamin Netanyahu:Thank you, Jason.
28:43Transcription by CastingWords
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From the publisher
Each country fears an attack from the other: Iran may wish to distract from internal conflict, Israel to exploit it. In an interview with Prime Minister Binyamin Netanyahu we explore perspectives on the war-gaming. As the first cohort of graduates weaned on generative AI enters the workforce, we examine a changing career ladder. And why European pension systems badly need reform.
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