BizResearch

Renewables 2011 Global Status Report

The Renewables 2011 global status report, commissioned by REN21, shows that the renewable energy sector continues to perform well despite continuing economic recession, incentive cuts, and low natural-gas prices.

Highlights from the report

• Global solar PV production and markets more than doubled in comparison with 2009, thanks to government incentive programmes and the continued fall in PV module prices.
• Germany installed more PV in 2010 than the entire world added in 2009.  PV markets in Japan and the U.S. almost doubled relative to 2009.
• Globally, wind power added the most new capacity (followed by hydropower and solar PV), but for the first time ever, Europe added more PV than wind capacity.
• Renewable energy policies continue to be the main driver behind renewable energy growth. By early 2011, at least 119 countries had some type of policy target or renewable support policy at the national level, more than doubling from 55 countries in early 2005. More than half of these countries are in the developing world.
• At least 95 countries now have some type of policy to support renewable power generation. Of all the policies employed by governments, feed-in tariffs remain the most common.
• Last year, investment reached a record $211 billion in renewables -- about one-third more than the $160 billion invested in 2009, and more than five times the amount invested in 2004.
• Beyond Asia, significant advances are also seen in many Latin American countries, and at least 20 countries in the Middle East, North Africa, and sub-Saharan Africa have active renewable energy markets, the report says.
• Developed countries still led the way in investment in small-scale power projects and R&D during 2010. Germany, Italy and the US were the top three.

Click here to read the full report

Photo from Creative Commons: Flickr: Abi Skipp

New Firm Creation: A Global Assessment of National, Contextual, and Individual Factors

Source: Foundations and Trends in Entrepreneurship ;  V 6 (5-6)

Author: Paul D. Reynolds

Abstract
The prevalence of individuals actively involved in business creation among 75 countries varies from one in thirty (Japan, Belgium, France) to one in three (Peru, Uganda). Predictive models reflecting five national aspects — economic, structural, centralized control, population potential for entrepreneurship, and cultural support — are able to account for 63% to 93% of the variation in 23 types of business creation. The most important factors associated with the prevalence of business creation are the capacity of the population to participate in business start-ups, a high prevalence of small businesses, participation of women in the labor force, the presence of informal investors, emphasis on traditional rather than secular–rational values, presence of young adults, and income inequality. The use of log linear regression modeling to predict individual participation in 15 types of business creation explained from 14% to 41% of the variance. Personal attributes, national cultural and social norms, and personal context were much more likely to be associated with individual participation in business creation than characteristics of the national economy, economic structure, population readiness for business creation or centralized control of economic activity. The primary policy implication is that efforts to directly prepare individuals for business creation are more likely to have an impact compared to adjustments in regulatory procedures or legal standards. The assessment demonstrates the considerable value from harmonized cross national data on business creation and national attributes. There remains, however, substantial opportunity for improving understanding of the entrepreneurial process.

Foundation and trends can be found on the A-Z list of library databases in the library area of the Portal. It is available to available to current staff, students and faculty of London Business School.

World Investment Report 2011

WIR2011: Non-Equity Modes of International Production and Development

Source: UNCTAD (United Nations Conference on Trade and Development)

Global foreign direct investment (FDI) has not yet bounced back to pre-crisis levels, though some regions show better recovery than others. The reason is not financing constraints, but perceived risks and regulatory uncertainty in a fragile world economy.

The World Investment Report 2011 forecasts that, barring any economic shocks, FDI flows will recover to pre-crisis levels over the next two years. The challenge for the development community is to make this anticipated investment have greater impact on our efforts to achieve the Millennium Development Goals.

In 2010 – for the first time – developing economies absorbed close to half of global FDI inflows. They also generated record levels of FDI outflows, much of it directed to other countries in the South. This further demonstrates the growing importance of developing economies to the world economy, and of South-South cooperation and investment for sustainable development.

Increasingly, transnational corporations are engaging with developing and transition economies through a broadening array of production and investment models, such as contract manufacturing and farming, service outsourcing, franchising and licensing. These relatively new phenomena present opportunities for developing and transition economies to deepen their integration into the rapidly evolving global economy, to strengthen the potential of their home-grown productive capacity, and to improve their international competitiveness.
Unlocking the full potential of these new developments will depend on wise policymaking and institution building by governments and international organizations. Entrepreneurs and businesses in developing and transition economies need frameworks in which they can benefit fully from integrated international production and trade. I commend this report, with its wealth of research and analysis, to policymakers and businesses pursuing development success in a fast-changing world.

Photo from Creative Commons: Flickr: mag3737

Missing out: Why ordinary workers are experiencing growth without gain

Source: Resolution Foundation

Executive Summary

It is a central assumption of modern, democratic economies that economic growth leads to rising living standards for the great majority of people. Now, evidence is emerging that questions that assumption. Median wages in the UK were stagnant from 2003 to 2008 despite GDP growth of 11% in the period. Similar trends are evident in other advanced economies from the US to Germany. For some time, the pay of those in the bottom half of the earnings distribution has failed to track the path of headline economic growth.

If a central goal of government is to secure a new period of rising living standards then these trends point to one of the great economic challenges of our time: the need to restore the link between economic growth and the pay of ordinary working people. That challenge raises a number of immediate questions. Which factors decide whether the pay of ordinary workers rises when the economy grows? How have these factors changed over time in the UK? How have changes in the UK’s industrial make-up affected these trends?

This paper builds on our earlier work by considering these questions in more detail. We use the wages of those in the bottom half of the earnings distribution as a proxy for the earnings of people on low-to-incomes. Our focus is specifically on earnings and the outcomes of the jobs market before the redistribution that is carried out by government through taxes and benefits. As with all of the work of the Commission on Living Standards, our concern is not the immediate fallout from the recent recession but longer term trends.

Click here to read the full report

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Consequences of Mandatory Corporate Sustainability Reporting

Authors: Ioannis Ioannou (London Business School); George Serafeim (Harvard Business School)

HBS Working Paper Number: 11-100

Executive Summary:

The number of firms reporting sustainability information has grown significantly in the past decade, both due to voluntary actions and to mandates from several national governments and stock exchange authorities. In this paper, London Business School's Ioannis Ioannou and Harvard Business School's George Serafeim investigate whether mandatory sustainability reporting has any effect on a company's tendency to engage in socially responsible management practices. Key concepts include:

• The researchers show that mandatory sustainability reporting effectively promotes socially responsible managerial practices. Overall, supervision of managers by boards of directors improves, bribery and corruption decreases, and credibility of managers in society increases.
• In companies where sustainability reporting is a requirement, employee training becomes a higher priority, and corporate boards supervise management more effectively.
• These positive results are more pronounced in countries that have stronger law enforcement, countries where assurance of sustainability data is more frequent, and countries that are generally more developed.

Abstract: We examine the effect of mandatory sustainability reporting on several measures of socially responsible management practices. Using data for 58 countries, we show that after the adoption of mandatory sustainability reporting laws and regulations, the social responsibility of business leaders increases. We also document that both sustainable development and employee training become a higher priority for companies, and that corporate governance improves. Furthermore, we find that companies implement more ethical practices, reduce bribery and corruption, and that managerial credibility increases. These effects are larger for countries with stronger law enforcement and more widespread assurance of sustainability reports. We conclude with thoughts about mandatory sustainability and integrated reporting.

 

Global Private Equity Report 2011

Source: Bain & Company

Authors: Hugh MacArthur, Graham Elton, Bill Halloran &Suvir Varma

This report provides a timely look at every major aspect of private equity. Building on the insights delivered in Bain & Company's 2010 report, we have worked hard to sift through the complicated forces that buffeted PE markets in 2010 and will continue to shape them in 2011.

Since the financial crisis, industry participants have had to wrestle with significant new realities. Although trading conditions for private equity have improved over the past year, PE firms need to reassess how they can continue to deliver superior returns when the traditional drivers they looked to in past years—GDP growth, multiple expansion, and friendly debt markets—no longer provide the lift they once did.

In the pages of this report, you will find Bain's in-depth analysis of the journey the PE industry travelled in 2010 and where we see it going in the years ahead. We buttress our thinking with fresh data and with insights from surveys and interviews with leading industry insiders. We also bring to bear the experience and judgment that Bain & Company derives from its unparalleled position as the leading consulting partner to the private equity industry and its stakeholders.

The full report is avaialble for download from the Bain & Co website (pre-registration required)

Photo from Creative Commons: Flickr:  Andreas-photography

India Philanthropy Report

Source: Bain & Company

From Introduction

A year ago, Bain & Company published the first edition of the India Philanthropy Report. We were surprised by the chord that it struck and the conversation it provoked about the state of philanthropy in the country. Our perspective last year was that private giving in India—both individual and corporate—lagged significantly behind global benchmarks, largely for valid economic, cultural and systemic reasons. As we set out this year to revisit the issues raised more than a year ago, we decided to take a different approach and speak to private donors to better understand their perspective.

As part of our research for the India Philanthropy Report 2011, we interviewed and surveyed more than 20 philanthropists and experts on philanthropy in India. We also conducted a survey of more than 300 wealthy individuals in three major cities across India, including nearly 100 high-net-worth individuals (HNWIs) with assets of more than $1 million (excluding primary residence, collectibles and consumables). This year, our research has focused only on private donations, not government contributions, because private giving defines philanthropy globally. This ground-level view has provided critical insights into the current state of Indian philanthropy.

Although the human conditions in India remain difficult for many, we can confidently say that, over the course of last year, the attitude towards giving has started to shift. Our research charts a significant trend: wealthy individuals are giving more—and intend to give even more—as major obstacles are addressed. As a percentage of the gross domestic product (GDP), private charitable giving has increased 50% since 2006. This is a significant achievement.

Photo from Creative Commons: Flickr: Dey

Startup Factories: The rise of accelerator programmes to support new technology ventures

 
Source: Nesta

Authors: Paul Miller and Kirsten Bound

Extract from executive summary

Over the past six years, a new method of incubating technology startups has emerged, driven by investors and successful tech entrepreneurs: the accelerator programme. Despite growing interest in the model from the investment, business education and policy communities, there have been few attempts at formal analysis. This report is a first step towards a more informed critique of the phenomenon, as part of a broader effort among both public and private sectors to understand how to better support the growth of innovative startups.

The accelerator programme model comprises five main features. The combination of these sets it apart from other approaches to investment or business incubation:

• An application process that is open to all, yet highly competitive.
• Provision of pre-seed investment, usually in exchange for equity.
• A focus on small teams not individual founders.
• Time-limited support comprising programmed events and intensive mentoring.
• Cohorts or ‘classes’ of startups rather than individual companies.

The number of accelerator programmes has grown rapidly in the US over the past few years and there are signs that more recently, the trend is being replicated in Europe. From one accelerator programme, Y Combinator in 2005, there are now dozens in the US that are funding hundreds of startups per year. There have already been a number of high profile startup successes from accelerator programmes.

The rise of accelerator programmes is closely associated with the changing economics of starting up. Costs associated with early-stage tech startups have dropped significantly in the last decade, creating an opportunity to invest with very small amounts of money (￡10,000-￡50,000) compared to previous eras of investment in digital businesses.

Click here to read the full report

Photo from Creative Commons: Flickr: npmeijer

Climate Change Policy and Business in Europe Evidence from Interviewing Managers

Source: Centre for Economic Performance

CEP Occasional Paper ; 27

Abstract: This report presents new evidence relating to the effects of climate policy in Europe, particularly the European Union Emissions Trading Scheme (EU ETS). The evidence is based on new data from almost 800 phone interviews we conducted with managers in manufacturing plants in six European countries: Belgium, France, Germany, Hungary, Poland and the UK. The interview design follows an innovative method that has recently emerged in the study of management practices and that mitigates well-known biases found in more conventional survey designs such as paper-based or web-based questionnaires. This report describes the interview design in detail and summarises the responses. For further analysis, we link the interview data with company data from a range of secondary sources including transaction data from the official EU ETS registry and performance data from both commercial and government sources. We use the combined data to analyse three aspects of the EU ETS in depth, namely (i) the behaviour of firms in the EU ETS, (ii) the vulnerability of firms in terms of negative impacts on employment and carbon leakage, along with an assessment of how well the proposed EU legislation to protect vulnerable firms does at identifying them, and (iii) alternative criteria for the allocation of free emission permits during the next phase of the EU ETS.

 

A Golden Opportunity

Visa Europe have just published an Economic Impact Report on the likely impact of increased consumer spending generated by the London 2012 Olympic and Paralympic Games in London and the whole of the UK. The findings of this report show that London 2012 will be a once in a generation opportunity for the British public to support Team GB and ParalympicsGB on home territory, it is also a unique opportunity for British businesses to capitalise on the increase in expenditure and wider economic impact

Report highlights

This report projects a £750 million additional consumer spending increase during the seven week Games period. It considers the impact this consumer spending increase will have on the wider economy, including economic outputs and incomes, both during the seven week Olympic and Paralympic Games period and beyond. The report concludes that the increased consumer spending generated by the London 2012 Olympic Games will have a significant impact on the UK economy.

Over the seven week period, international visitors are expected to spend a total of £709 million in the UK, an 18% increase on what would be expected if The Games were not taking place. Domestically, a £41 million spending boost is expected from UK cardholders during the seven week period of The Games. This is a first for an Olympic Games host market, which usually experience a domestic spending slump during The Games. This will be driven by the public’s enthusiasm for The Games, demonstrated by the high demand for Olympic tickets. British residents are likely to switch from traditional patterns of summer spending to getting into the Olympic spirit by stocking up on supplies and entertaining at home. Supermarkets will be particular beneficiaries of this. Overall, the retail, leisure and travel sectors look set to be the biggest winners from The Games, benefiting from a combined spending injection of £508.4 million in seven weeks

Photo from Creative Commons: Flickr: Failing Angel

Trends in UK Financial and Professional Services

TheCityUK have just published their semi-annual Trends in UK Financial and Professional Services.

Highlights from report

Financial markets in London and the UK have seen a recovery over the past 18 months. TheCityUK’s May 2011 City Indicators Bulletin found that 10 out of 11 indicators were higher in Q1 2011 compared with the same quarter in 2010.

The CBI/PwC survey indicated that the volume of financial services business rose in Q1 for the seventh survey in succession with a further increase expected for Q2. Overall the short term picture was mixed with five indicators rising, five falling in Q1 and one flat compared with the previous quarter. Indicators on the up in Q1 included trading in UK equities and financial derivatives, while City job vacancies were at their highest point for over two years. Bank lending to the non-bank private sector was marginally up, but generally has been relatively flat for the past two years.

Financial and professional services continue to make a substantial contribution to the UK economy. Key aspects include:

• Over 1 million people working across the UK in financial services, nearly 4% of total UK employment. About one third are employed in London and two thirds in the rest
  of the UK.
• The UK financial services trade surplus of £36bn in 2010 helping to offset the £98bn deficit in trade in goods.
• The UK’s financial services industry contributing £124bn to UK GDP in 2009, accounting for 10% of total economic output.
• UK financial services contributing £53bn in tax revenue in 2009/10, 11% of total UK tax receipts.

Photo from Creative Commons: Flickr: Simon Goldenberg

Smartphone Adoption and Usage

Source: Pew Internet & American Life Project

In its first standalone measure of smartphone ownership, the Pew Internet Project finds that one third of American adults – 35% – own smartphones. The Project’s May survey found that 83% of US adults have a cell phone of some kind, and that 42% of them own a smartphone. That translates into 35% of all adults. Our definition of a smartphone owner includes anyone who falls into either of the following two categories:

• One-third of cell owners (33%) say that their phone is a smartphone.
• Two in five cell owners (39%) say that their phone operates on a smartphone platform (these include iPhones and Blackberry devices, as well as phones running the Android, Windows or Palm operating systems).

Mobile phones are a main source of internet access for one-quarter of the smartphone population

Some 87% of smartphone owners access the internet or email on their handheld, including two-thirds (68%) who do so on a typical day. When asked what device they normally use to access the internet, 25% of smartphone owners say that they mostly go online using their phone, rather than with a computer. While many of these individuals have other sources of online access at home, roughly one third of these “cell mostly” internet users lack a high-speed home broadband connection.

Android is the most common smartphone platform, followed by iPhone and Blackberry devices

Phones operating on the Android platform are currently the most prevalent type of smartphone, followed by iPhones and Blackberry devices.

Click here to read the full report

Photo from Creative Commons: Flickr: Steefafa

Good banking: why we need a bigger public debate on financial reform

Source: nef  (the new economics foundation)

This is a report of the Good Banking Summit, convened by nef and Compass on Wednesday 25th of May 2011.

The summit was organised in the light of an apparent return to business-as-usual in the financial sector, in response to growing public dissent about the conduct of the banks, and to address the too-narrow remit of the Independent Commission on Banking (ICB), also known as the Vickers’ Commission.

Three years on from the full outbreak of the banking crisis, a unique range of leading figures from academia, finance, politics, the law, consumer and civil society groups gathered in London, alarmed at the failure of banking reforms so far. Over 100 experts representing more than 60 organisations attended to address the question: ‘what would a good banking sector look like and how do we get there?’

The context for the summit was set by government inaction, and a range of other disturbing trends and factors including:

• The absence of proposals sufficient to change the culture of excessive remuneration, itself evidence of surplus profit generation and lack of competition
• A misunderstanding by the Commission of the implications of modern money creation which exposes the system to endemic instability, and which further leaves the public purse out-of-pocket
• The tolerance of continued risk taking for the disproportionate benefit of a few, underwritten by public guarantees
• Failure to resolve the issue of large financial institutions being ‘too big to fail’ and consequently presenting systemic risks. Failure to address the impact of ‘too big to fail’ public guarantees that generate substantial private profit for which the public finances are not compensated. The unfair competitive advantage this circumstance gives to large over small banks, which further entrenches barriers to market entry.
• Inadequate measures to ensure that businesses have access to adequate credit on appropriate terms
• No sufficient remedy to consolidation within banking since the onset of the crisis given the sector’s already high degree of concentration, and the perverse nature of this outcome considering the high degree of concentration existing prior to the crisis.
• A lack of consumer choice and universal service in high street banking, meaning that, as with utility companies, all citizens need a banking service and should be provided for even though some customers will be loss-making to the provider.

Click here to read the full report

Photo from Creative Commons: Flickr: Images of Money

The Entrepreneurial State

Source:  Demos

The prevailing opinion on public spending is that the state must be cut back to make room for entrepreneurship and innovation, to prevent the public sector ‘crowding out’ the private sector. This draws on the belief that the private sector is dynamic, innovative and competitive, in contrast to the sluggish and bureaucratic public sector.

The Entrepreneurial State challenges this minimalist view of economic policy. It finds that successful economies result from government doing more than just creating the right conditions for growth. Instead, government has a key role to play in developing new technologies whose potential is not yet understood by the business community. State-funded organisations can be nimble and innovative, transforming economies forever — the algorithm behind Google was funded by a public sector National Science Foundation grant.

This pamphlet forces the debate to go beyond the role of the state in stimulating demand, or crudely ‘picking winners’ in industrial policy. Instead, it argues for a proactive, entrepreneurial state: a state that is able to take risks and harness the best of the private sector. It imagines the state as a catalyst, sparking the initial reaction that will cause innovation to spread.

Click here to read the full report

Photo from Creative Commons: Flickr: Cowgirl Jules

The Ratio: Common Sense Controls for Executive Pay and Revitalising UK Business

Source: nef

Extract from executive summary

This report covers the issue of the widening gap between pay at the top and bottom of corporations, the effect that has on society and the economy, and the effect it has on the companies concerned. In particular it covers how the ratio between the bottom and the top might be used in order to bring more pressure to bear, both moral and practical, on the problem.

One of the central concerns of the co-operative movement is to distribute more evenly the benefits of economic activity. Their relative success during the recent banking crisis and ensuing economic recession is testimony to the greater resilience of more fair and equal models of corporate governance. But, whilst the co-operative sector is enjoying a renaissance, a greater creeping inequality continues to spread more widely in the corporate sector, bringing with it a range of economic and social costs, and dysfunction. This report suggests how we might begin to reverse that tide.

The publication of the crucial ratio between lowest and highest paid in every public company would encourage debate about pay and corporate responsibility. It would, we believe, kickstart a more informed debate about what kind of pay gap is acceptable and what is simply divisive and inflationary. It would also have a healthy effect on both fairness and equity in the UK, and on the companies themselves. One of the more surprising revelations, shocking even, is the absence of any evidence to support and justify high pay ratios, compared to the large body of evidence concerning the costs of inequality. We believe that the burden of proof should shift, so that companies operating a ratio above 1:20, or even 1:10 (this is the debate we need to have), would need to show how the economic and social benefits of doing so outweighed the costs.

Click here to read the full report

Photo from Creative Commons: Flickr: Andwar

Driving global wealth: mapping ultra high net worth individuals around the globe

Source: Forbes Insights

The balance of global wealth has begun to shift from traditional western economies to the emerging markets. The unprecedented growth of the Chinese economy, the expansion of India and the ongoing progress of markets in Russia, Brazil and other emerging nations, have led to this change in the nature of the world’s richest individuals and families. While the United States still has the greatest number of ultra high net worth individuals (UHNWIs), China, Russia and India have overtaken Western Europe in the number of billionaires they produce. This marks a fundamental shift in the social demographics of the world’s ultra-rich population.

Forbes Insights, in association with Societe Generale Private Banking, examined the unique characteristics of ultra high net worth individuals (UHNWIs) in a dozen countries. The analysis is based on exclusive data from Forbes Magazine’s database of the world’s wealthiest people. The minimum net worth of the individuals studied was US$1 billion, with three exceptions: India ($500 million minimum), China ($425 million minimum), and Singapore ($190 million minimum).

Selected key findings

There are extremely strong family links among the UHNWIs studied. This is a global phenomenon present in nearly all markets, with a few notable exceptions such as Russia. In many societies, keeping family close is a priority, as they have their children and other family members involved in their businesses. Still, as generations pass, some conflicts can arise, particularly when investments are managed by a family office.

Philanthropy and charity remain priorities for many UHNWIs as they look for ways to create a more lasting legacy and have a greater impact on society. In three quarters of the markets studied, more than 40% of the UHNWIs fund their own charitable foundation, or run a charitable foundation founded or started by other family members. Yet this is not yet universal. China remains a significant outlier, as only 7% of UHNWIs have foundations. But efforts are underway to encourage greater giving and philanthropy from the emerging Chinese billionaires.

Click here to read the full report

Photo from Creative Commons: Flickr: lincolnblues

The Global Innovation Index 2011

The Global Innovation Index 2011 ranks 125 countries/economies across the world in terms of their innovation capabilities and results. The Report highlights those countries that achieve more innovation outputs surmounting weaknesses from the input side – the efficient innovators – and those that lag behind in fulfilling their innovation potential. Innovation performances are analyzed in reference to the income and regional groups.
The GII is a collaborative effort of five Knowledge Partners,led by INSEAD, and including Alcatel-Lucent, Booz & Company, the Confederation of Indian Industry and the World Intellectual Property Organization (WIPO), a specialized agency of the United Nations

Read the Report.

Picture: Flickr:Creative Commons: Tanakawho