BizResearch

World Economic Situation and Prospects 2012

A joint product of the Department of Economic and Social Affairs, the United Nations Conference on Trade and Development and the five United Nations regional commissions

Extract from Publication Page

The world economy is on the brink of another major downturn. Global economic growth started to decelerate on a broad front in mid-2011 and is estimated to have averaged 2.8 per cent over the last year. This economic slowdown is expected to continue into 2012 and 2013. The United Nations baseline forecast for the growth of world gross product (WGP) is 2.6 per cent for 2012 and 3.2 per cent for 2013, which is below the pre-crisis pace of global growth.

Persistent high unemployment in the United States and low wage growth are holding back aggregate demand and, together with the prospect of prolonged depressed housing prices, this has heightened risks of a new wave of home foreclosures. Growth in the euro zone has slowed considerably since the beginning of 2011 and the ever-simmering sovereign debt crisis heavily weighs on consumer and business confidence across Europe. The failure of policymakers in developed countries to address unemployment and prevent sovereign debt distress and financial sector fragility from escalating has posed the most acute risk for the global economy in the outlook for 2012-2013, with renewed global recession being a distinct possibility.

Against this background, the report discusses several policy directions which could avoid a double-dip recession, including: optimal design of fiscal policies to stimulate more direct job creation and investment in infrastructure, energy efficiency and sustainable energy supply, and food security; stronger financial safety nets; better coordination between fiscal and monetary policies; and the provision of sufficient support to developing countries in addressing the fallout from the crisis and the coordination of policy measures at the international level.

Click here to read the full report

Click here for link to publications page (includes links to individual chapters)

Photo from Creative Commons: Flickr: Leo Reynolds

Digital Communication 2012

Source: Key Note

Extract from Executive Summary

The digital communications market is becoming increasingly vital to more and more people in the UK. The focus of the market is now predominantly portability and accessibility, and this is where any future growth in the industry will be attained. Traditional means such as landline phones are showing considerable long-term decline, while mobile Internet used on portable devices is becoming very popular in its infancy.

The market has quickly become a battle field between a handful of companies. Apple’s iPhone and iPad have become the market leaders in the premium category, while mobile phones and tablet computers running on the Google Android system have done very well in the mid-market, as have RIM’s BlackBerry phones and tablet computers. All of these devices have taken advantage of a good 3G network in the UK and many Wi-Fi hotspots across town and city centres.

Moving onto communications via the Internet, a large majority of residents in the UK use social networking sites as a means of communication. Consequently, this sector has recorded the largest growth in recent years. However, the only revenue generated from this sector comes from Internet advertising, and very little revenue is seen in the digital communications industry overall.

The future of the digital communications market will undoubtedly rely on more portable devices that are able to perform a greater variety of tasks. Video calls between mobiles could easily become commonplace when the new 4G Internet network is auctioned off by the Office of Communications (Ofcom) in the coming years, possibly late 2012. However, for now, consumers seem to be happy to invest in their digital communication usage despite a recent period of financial uncertainty which could continue well into the future.

This report is available to current London Business School staff, students and faculty from Key Note Online which can be found on the A-Z list of library databases via Portal.

Photo from Creative Commons: Flickr:  David Reber's Hammer Photography

Global Economic Prospects 2012: Uncertainties and Vulnerabilities

Source: World Bank

Extract from Press Release

Developing countries should prepare for further downside risks, as Euro Area debt problems and weakening growth in several big emerging economies are dimming global growth prospects, says the World Bank in the newly-released Global Economic Prospects (GEP) 2012.
 
The Bank has lowered its growth forecast for 2012 to 5.4 percent for developing countries and 1.4 percent for high-income countries (-0.3 percent for the Euro Area), down from its June estimates of 6.2 and 2.7 percent (1.8 percent for the Euro Area), respectively. Global growth is now projected at 2.5 and 3.1 percent for 2012 and 2013, respectively.
 
Slower growth is already visible in weakening global trade and commodity prices. Global exports of goods and services expanded an estimated 6.6 percent in 2011 (down from 12.4 percent in 2010), and are projected to rise by only 4.7 percent in 2012. Meanwhile, global prices of energy, metals and minerals, and agricultural products are down 10, 25 and 19 percent respectively since peaks in early 2011. Declining commodity prices have contributed to an easing of headline inflation in most developing countries. Although international food prices eased in recent months, down 14 percent from their peak in February 2011, food security for the poorest, including in the Horn of Africa, remains a central concern.

Click here to read full report

Click here to go to publications pages (for topical appendices, regional appendices, and non-English materials

Photo from Creative Commons: Flickr: DFID

2012 Index of Economic Freedom

Source: Heritage Foundation

Extract from Press Release

Economic freedom declined worldwide in 2011 as many countries attempted -- without success -- to spend their way out of recession, according to the 18th annual Index of Economic Freedom, released today by The Heritage Foundation and The Wall Street Journal.  The average economic freedom score for the 2012 Index stands at 59.5 (on a scale in which 100 represents the ideal), down two-tenths of a point from 2011.

Hong Kong and Singapore finished first and second in the rankings for the 18th straight year. Australia and New Zealand ranked third and fourth, and Switzerland fifth. Canada finished sixth, slipping almost a full point and falling out of the group of “free” economies into the “mostly free” category.

Greece’s Index score declined the most, plunging nearly five points to 55.4. This put it in the middle of the pack of “mostly unfree” economies. Many of Greece’s European neighbors also suffered from exploding government budgets; 37 of the 43 European countries ranked in the Index lost ground in the spending category.

The Index also studies economic freedom on a regional basis. In 2011, only the Sub-Saharan Africa and Asia-Pacific regions advanced. The other regions -- South and Central America/Caribbean, Europe, Middle-East North Africa and North America -- all declined

The Index measures economic freedom in 10 specific categories: labor freedom, business freedom, trade freedom, fiscal freedom, government spending, monetary freedom, investment freedom, financial freedom, property rights and freedom from corruption. Scores in these categories are averaged to create an overall score

Click here to read full report (pre-registration required)

Click to here for country rankings, data, and interactive features

Photo from Creative Commons: Flickr: 4rank

Global Economic Crime Survey 2011

Source: PwC

PwC's sixth global economic crime survey examines the causes and effects of fraud worldwide, focusing on the growing threat of cybercrime. This year’s survey was completed by 3,877 respondents from 78 countries, making it one of the largest and most comprehensive studies of economic crime available to businesses.

The report is divided into two sections:

• Cybercrime: Its impact on organisations, their awareness of the crime and what they are doing to combat the risks.
• Fraud, the fraudster and the defrauded: The types of fraud committed, how they are detected, who is committing them and what the repercussions are

Key Findings from the report:

• 34% of respondents experienced economic crime in the last 12 months (13% increase from 2009
• Almost 1 in 10 who reported fraud suffered losses of more than US$5 million
• Cybercrime now ranks as one of the top four economic crimes
• Reputational damage resulting from cybercrime is the biggest fear for 40% of respondents
• 40% of respondents don’t have the capability to detect and prevent cybercrime
• 56% of respondents said the most serious fraud was an ‘inside job’
• Senior Executives made up almost half of the respondents who didn’t know if their organisation had suffered a fraud

Click here to read the full report

Photo from Creative Commons: Flickr: By AngusKingston

2011 China Luxury Market Study

Source: Bain & Company

Extract from Insights Article

According to findings from a new Bain study, sales of luxury goods in mainland China will grow overall by 25 to 30 percent in 2011, with more than 60 percent of purchases coming from new luxury customers. Strong sales in the first three quarters of this year in China are driving Bain’s luxury goods 2011 estimate, with a gradual softening seen for the fourth quarter, according to the study. Watches are the growth leader in the market, with a growth forecast of 40 percent for 2011, while shoes, cosmetics and fragrances will see growth rates near 20 percent. Growth rates in China continue to outperform globally; Bain finds that 2011 sales will be up by eight percent in the Americas, two percent in Japan, and seven percent in Europe.

While the majority of sales growth in 2011 is coming from new luxury shoppers, the share of growth from existing customers will improve to reach approximately 40%, according to the shopping intentions of the 2,000 Chinese luxury shoppers surveyed across Tier One to Tier Three cities in China including Beijing, Shanghai, Chengdu, Shenzhen, and Hangzhou. The study finds that China’s domestic market growth is still driven by new store openings. Bain saw a continued expansion into Tier Two and Tier Three cities, although the pace of store openings in China has cooled down in 2011. For a select group of luxury brands, the new store openings declined from 150 in 2009 and 160 in 2010 to an estimated 90 store openings in 2011.

A detailed recap of the study’s key findings is freely available from the Bain & Co website (pre-registation required)

Photo from Creative Commons: Flickr: dmoola

London's Digital Economy

Source: GLA Intelligence Unit (Greater London Authority)

This report draws together a variety of data sources to highlight London’s position in the digital arena. The report looks at uptake and use of digital technologies by businesses and households. Amongst the findings are:

• There are over 23,000 ICT and software companies in London – the highest number of any European city. London specializes in the technology industry hosting a quarter of all British jobs in computer and related activities employment and 22 per cent of British jobs in Telecommunications. London has the highest level of private equity and venture capitalists investments into technology companies of the UK regions. In 2010 they invested £453 million into 60 companies in the city.


• London adults are more likely than those in the rest of the country to access the internet by mobile phone.


• The Broadband Quality Survey 2010 shows that UK broadband services enable users to “comfortably enjoy” the latest web applications but still lag someway behind the best in the world, such as those in South Korea, Hong Kong and Japan. The Survey scores London at 30, the same as Glasgow and one point higher than Birmingham. This compares to the winning city of Seoul that has an overall score of 73. Both Virgin and BT are in the process of updating their networks to offer their customers superfast broadband and the Government recently announced that they are creating a new £100 million urban broadband fund part of which will benefit London.

Click here to read the full report

Photo from Creative Commons: Flickr: By petahopkins

Applying a Gender Lens to Science, Technology, and Innovation

Source: UNCTAD

Extract from Press Release

This report was prepared as a contribution to the fifty-fifth session of the United Nations Commission on the Status of Women.

Based on an examination of women´s roles in a number of sectors such as agriculture, water, energy, and transport, the report argues that science, technology, and innovation - known by the acronym STI - will not have the broadly positive effects sought in less-wealthy regions of the world if STI policies do not specifically take into account the needs and talents of half the global population. Further gains in development depend on fully appreciating women´s engagement in economic life and in society, the report contends; policy should be attentive not only to the differing impacts STI can have on men´s and women´s lives, but also to the significant part women play in economic growth. This approach should be followed throughout the process of STI policymaking: from policy analysis and design to implementation, monitoring and follow-up. Recognizing this is what the report calls applying a "gender lens".

The report identifies three areas for policy action:

• Science for women: developing science and technology that support women´s development and livelihood activities, especially in areas such as agriculture, water, energy and transport;
• Women in science: promoting gender equality in science, technology and engineering education, careers and leadership;
• Women in innovation: encouraging and supporting the role of women in innovation, enterprise and entrepreneurship at the national and grassroots levels.

Among the report´s recommendations for national governments:

• Conduct impact assessments of policies related to STI for development to ensure that they benefit men and women equally;
• Take into account when developing STI policies the extensive work done by women in areas such as agriculture, water and energy use;
• Expand the education of women in scientific and technological fields, and in entrepreneurship, so that this reservoir of talent can boost economic growth and raise living standards;
• Ensure that women have equal access to financing, land and markets so that businesses they found and the science and research they perform can have their full developmental impacts;
• Support the participation of women in STI decision-making at all levels.

Click here to read the full report

Photo from Creative Commons: Flickr: USAID Images

Global Digital Communication: Texting, Social Networking Popular Worldwide

Source: Pew Global Attitudes Project

Extract from Press Release

Cell phones are owned by overwhelmingly large majorities of people in most major countries around the world, and they are used for much more than just phone calls. In particular, text messaging is a global phenomenon – across the 21 countries surveyed, a median of 75% of cell phone owners say they text.

Texting is widespread in both wealthy nations and the developing world. In fact, it is most common among cell phone owners in two of the poorest nations surveyed: Indonesia and Kenya.

Many also use their mobile phones to take pictures or video. A median of 50% use their cell phones in this way in the 21 countries polled. Fully 72% of Japanese cell phone owners take pictures or video, as do roughly six-in-ten in Mexico (61%), Spain (59%) and Egypt (58%). Fewer users access the internet via cell phone, although more than four-in-ten mobile phone owners use their device to go online in Israel (47%), Japan (47%) and the United States (43%).

The survey by the Pew Research Center’s Global Attitudes Project, conducted March 21 to May 15, also finds that social networking is popular in many nations around the globe. This is especially true in Israel (53%) and the U.S. (50%), where half or more say they use social networking websites. More than four-in-ten use these sites in Britain (43%), Russia (43%) and Spain (42%).

Social networking is generally more common in higher income nations; however, this is largely driven by the fact that wealthier countries have higher rates of internet access. People in lower income nations who have online access use social networking at rates that are as high, or higher, than those found in affluent countries.

Click here to read full report

Photo from Creative Commons: Flickr: Tray

UK: Understanding High Street Performance

Source: Department for Business Innovation and Skills (UK)

From Executive Summary

The study team considered the advantages and disadvantages of a range of analytical frameworks, including PESTL (Political, Economic, Social, Technological and Legal), Porter’s 5 Forces, and SWOT (Strengths, Weaknesses, Opportunities, Threats). The study team took the view that none of these frameworks could be applied to the evidence in a way which completely captured the wide range of performance on performance that occur on the high street. A bespoke analytical framework was therefore developed, based on an initial review of the evidence, and which was modelled on and not dissimilar to the PESTL approach. This framework includes:

Externalities – high streets are influenced by externalities that are generally outside user/occupier control. These might include macro-economic factors such as the recession/loss of consumer confidence, or centralised decision-making by property owners/retailers, but also micro-economic issues such as the loss of a major employer and its consequential impact on a local area;

Spatial and physical factors – high street performance is affected by factors such as the development of new residential areas or demographic changes; changes in the physical environment; accessibility related to car access and car parking and cycle/walking friendliness; amenity in terms of streetscape, public space and private/public space;

Market forces and competition – the development of the high street is undoubtedly affected by the emergence/presence of competitive alternatives to the high street, through a range of channels;

Demographics – changing demographic trends are likely to have important implications for our high streets. There are implications related to the impact of factors such as: ageing populations; transient populations such as students/immigrants; and the socio-economic catchment/level of disposable income that influence the face of high streets;

Regulation and legislation – a range of regulatory and legislative policy initiatives have impacted on high streets including planning policy and licensing legislation and the introduction of financial incentives;

Management - the management of high streets has the potential to affect change and can contribute to the differential impact of certain factors or events.

Click here to read the full report

Photo from Creative Commons: Flickr: TheatricAL 03

Energy & Development Trends: the Role of Rapidly Emerging Countries

Source: Center for Strategic & International Studies (CSIS)

From the publication web page:

One of the least understood but potentially important trends in the energy field is how emerging economies’ development priorities are shaping energy markets. Emerging economies are expected to make up the bulk of growth in demand for energy in the coming decades, with countries outside the Organisation for Economic Co-operation and Development (OECD) accounting for 83 percent of expected growth in energy demand between 2008 and 2035. As the global centers of expansion, these countries will increasingly influence how new energy markets evolve—commercial frameworks, technology sharing and development, regulations, and preferences for fuels and technologies that meet their societies’ needs. Many of these countries have integrated new notions of sustainable development—driven by concerns about local pollution, energy security, climate change, and social development—that are likely to bring about energy systems different from U.S. or European models of energy infrastructure and use.

These development frameworks also influence how companies compete and succeed in these markets by influencing technology decisions, efficiency or local pollution regulations, local rules about content, interaction with state-dominated sectors, and the dynamics of markets and physical infrastructure. Moreover, the influence these development policies have on the investments and strategies of energy companies and energy markets can materially impact investment and technology trends available to other developing countries. These strategies and experiences can open up opportunities for bringing energy to new areas in other countries. U.S. development efforts might gain useful insights through a survey of how Brazil, China, and India view meeting their energy needs within their development agenda, how companies are involved in these ventures, and what models could be useful for countries developing their systems. This report evaluates the role of rapidly emerging developing economies in energy development trends and recommends how the development programs of the United States, along with the international donor community, should shift to capitalize on these trends.

Click here to read the full report

Photo from Creative Commons: Flickr:  urbangarden

Loyalty Programs - recent research from Foundations and Trends

Loyalty Programs: Generalizations on Their Adoption, Effectiveness and Design
Foundations and Trends® in Marketing
Volume 5 Issue 4
Tammo H. A. Bijmolt, Matilda Dorotic, Peter C. Verhoef

 

"Loyalty programs (LPs) have increased in popularity, and have been studied extensively in the academic literature with mixed findings. Therefore, we offer an overview of extant research on LPs. We derive generalizations on the effectiveness and best design of LPs, discuss conditions that mediate and moderate the effects of LPs on customer behavior and attitudes, and highlight avenues for further research. Overall, we conclude that LPs are effective in increasing consumer purchase behaviors over time, but their impact differs across consumer segments and markets. Numerous practical examples illustrate the points discussed. Overall, this monograph provides insights to researchers and practitioners through a comprehensive, research-based synthesis of current knowledge. As a consequence, LP managers may better understand the implications of LP adoption, and ultimately improve the effectiveness of their LPs."

For London Business current students can read the whole articleby going to: Portal>Library Services>A-Z list of databases> Foundations and Trends.

Picture of Augustus: Flickr, creative commons by shrugged

Trends in UK financial and Professional services November 2011

Trends in UK financial and Professional services November 2011

Despite concerns about the future competitiveness of London as a global financial centre, it continues to rank strongly in survey evidence and market activity. London was first in the September 2011 GFCI survey of international financial centres, closely followed by New York, Hong Kong and
Singapore.

Click here to read the full report.

One of the 'Economic trends series' by TheCityUK - a professional services association working to build a better understanding of the importance of the UK financial and related professional services industry.

Least Developed Countries Report 2011

Source: UNCTAD (United Nations Conference on Trade & Development

The least developed countries (LDCs) are a group of countries that have been classified by the United Nations as least developed in terms of their low gross domestic product (GDP) per capita, weak human assets and high degree of economic vulnerability.

This Report argues that the LDCs need to go beyond business as usual in order to promote inclusive and sustainable development and it suggests how South–South cooperation supports such a transformational agenda. Findings show that despite strong GDP growth during the last decade, the benefits of growth were neither inclusive nor sustainable, mainly because growth was not complemented by structural transformation and employment creation. Growth and trade has not-recovered to pre-crisis levels after the global recession of 2009. Most LDCs continue to deepen their specialization in exports of primary commodities and low-value, labour-intensive manufacturing, rather than diversifying into more sophisticated products. Growth projections also indicate that the poorest countries of the world could face a more volatile and less expansive global economic environment in the coming decade.

Further, the Report examines how South–South cooperation could support development LDCs against this background. It shows that there are intensifying economic relationships between the LDCs and other developing countries and that these helped to buffer LDCs from the downturn in advanced economies. A major new trend in the pattern of integration over the last decade or so has been the deepening and intensification of economic and political ties with more dynamic, large developing countries, acting as growth poles for the LDCs. While intensifying South–South relations presents major new opportunities for LDCs in terms of markets, foreign direct investment, remittances and official financing, they also bring many challenges, ranging from extreme competition to de-industrialization. Therefore, the long-term impact of South–South economic relations on the LDCs still remains a puzzle.

Click here to read the full report

Photo from Creative Commons: Flickr: SonnyandSandy

Why the Rich Are Getting Richer

Source nef (new economics foundation)

Executive Summary

Economic inequality is a hot topic. Most people are now aware that the rich have got richer, leaving everyone else with less to share. However, most do not know why the situation has got so bad and what to do about it. Tax is the obvious remedy, but in the current context where demands are growing on shrinking public resources, this is not a realistic possibility.

nef’s research sets out to consider how to tackle inequality at its source. It explores pre-tax or market income inequality, bringing together the academic literature that identifies the key factors and processes that have caused inequality to grow in the UK. It also considers how more equal countries have successfully addressed causal factors. Finally, it uses these findings to highlight policy areas that offer potential direction for change.

Findings

There are multiple reasons why inequality has grown, and varying degrees to which each factor has mattered. In order to sort and make sense of these factors we have grouped them under five headings:

• Initial conditions: the economic situation that people are born into, including wealth and asset ownership.
• Channels of influence in early life: the routes that could potentially inflate unequal starting points, most notably early childhood education and care, primary and secondary education.
• External influences: globalisation and liberalisation are two major external forces that have both directly fuelled inequality and played a considerable role in shaping the UK economy and labour market.
• The national economic system: including the make-up of sectors and profile of the labour market.
• The political system and tax: the type of political system, namely if it is proportionally representative or not, dictates the likelihood of governments tackling inequality. This in turn influences the progressive or regressive tilt of tax policy.

Click here to read the full report

Photo from Creative Commons: Flickr: SamPac