BizResearch

The True Cost of Energy

Source: IPPR (Institute for Public Policy Research)

The cost of an average energy bill has risen dramatically in recent years: from £605 in 2004 to £1,060 in 2010 (CCC 2011b). Higher energy bills were a key factor in the increase in inflation in 2010/11 and are contributing to the squeeze in living standards faced by many families in the UK.

There has been a vigorous debate about the cause of these price rises, in particular the contribution that has been made by environmental and social policies.1 Evidence shows that the rises were mainly due to increases in the wholesale cost of gas (DECC 2011a). The government’s independent advisers, the Committee on Climate Change (CCC), calculated that the wholesale cost of gas added £290 to the average energy bill between 2004 and 2010, compared with £75 for environmental and social policies (CCC 2011b).

The level of profits made by energy supply companies has also been the focus of scrutiny. The energy supply market in the UK was opened to competition in the late 1980s. But there are a number of reasons for thinking that competition in the energy supply market is not in good health.

This report sets out to establish what impact a lack of competition in the energy supply market is having on consumers’ energy bills. In or der to answer this question we estimate the cost to energy companies of supplying households with gas and electricity. We do this through extensive analysis of data published by the energy markets regulator, energy companies and industry associations, among other sources.

Click here to read the full report

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Intelligence - new report from Demos

Source: Demos

The growth of social media poses a dilemma for security and law enforcement agencies. On the one hand, social media could provide a new form of intelligence – SOCMINT – that could contribute decisively to keeping the public safe. On the other, national security is dependent on public understanding and support for the measures being taken to keep us safe.

Social media challenges current conceptions about privacy, consent and personal data, and new forms of technology allow for more invisible and widespread intrusive surveillance than ever before. Furthermore, analysis of social media for intelligence purposes does not fit easily into the policy and legal frameworks that guarantee that such activity is proportionate, necessary and accountable.

This paper is the first effort to examine the ethical, legal and operational challenges involved in using social media for intelligence and insight purposes. It argues that social media should become a permanent part of the intelligence framework but that it must be based on a publicly argued, legal footing, with clarity and transparency over use, storage, purpose, regulation and accountability. #Intelligence lays out six ethical principles that can help government agencies approach these challenges and argues for major changes to the current regulatory and legal framework in the long-term, including a review of the current Regulation of Investigatory Powers Act 2000.

Click here to read the full report

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Olympics 2012: The Economic Impact Market Assessment 2012

Source: Key Note

Extract from Executive Summary

The economic impact of the Olympic Games on London is the focus of this Key Note Market Assessment; this will be analysed using figures for tourism and hotels from the three previous Olympics, as well as taking into account other significant issues such as transport and security. This report mainly focuses on the economic impact on London during the Games period, with some mentions of prospects for the economy after the Games is over. However, it must be noted that the pre-Games activity, which has been in motion since 2005, has also had an economic effect, such as through investment expenditure, preparatory costs and the potential loss of benefits from projects that may have occurred in London, but were displaced in favour of the Games

The Olympics is set to display London and the UK on the world stage in the summer of 2012, but whether any immediate or future benefits occur as a result of the Games does not appear certain yet. There have been past success stories for previous Games, with the Barcelona 1992 Summer Olympics being touted as a prime example of economic success as a direct result of it hosting the Games. However, the 1976 Summer Games in Montreal did not prove as economically viable, with Olympic debts the city ran up going unpaid for almost 3 decades. A great deal depends on the reception the Games receive in the UK by the population; although traditionally increases in outbound travel are seen in host countries during Olympic years, the people of Britain may decide to welcome the Games and celebrate its arrival in the UK, thus spending money which would boost the economy.

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: ThomMck

The Future of Money in a Mobile Age

Authors: Aaron Smith, Janna Anderson, Lee Rainie

Source: Pew Internet & American Life Project and Elon University

Overview: Within the next decade, smart-device swiping will have gained mainstream acceptance as a method of payment and could largely replace cash and credit cards for most online and in-store purchases by smartphone and tablet owners, according to a new survey of technology experts and stakeholders.

Many of the people surveyed by Elon University’s Imagining the Internet Center and the Pew Research Center’s Internet & American Life Project said that the security, convenience and other benefits of “mobile wallet” systems will lead to widespread adoption of these technologies for everyday purchases by 2020.

Others—including some who are generally positive about the future of mobile payments—expect this process to unfold relatively slowly due to a combination of privacy fears, a desire for anonymous payments, demographic inertia, a lack of infrastructure to support widespread adoption, and resistance from those with a financial stake in the existing payment structure.

Click here for the full report

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Measuring Financial Inclusion: The Global Findex Database

Source: World Bank

Policy Research Working Paper ; No 6025

From the summary:

This paper provides the first analysis of the Global Financial Inclusion (Global Findex) Database, a new set of indicators that measure how adults in 148 economies save, borrow, make payments, and manage risk. The data show that 50 percent of adults worldwide have an account at a formal financial institution, though account penetration varies widely across regions, income groups and individual characteristics. In addition, 22 percent of adults report having saved at a formal financial institution in the past 12 months, and 9 percent report having taken out a new loan from a bank, credit union or microfinance institution in the past year. Although half of adults around the world remain unbanked, at least 35 percent of them report barriers to account use that might be addressed by public policy. Among the most commonly reported barriers are high cost, physical distance, and lack of proper documentation, though there are significant differences across regions and individual characteristics.

Click here to read the full report

The Global Integrity Report: 2011

Source: Global Integrity Project

From the publication web page

The Global Integrity Report is an essential guide to anti-corruption institutions and mechanisms around the world, intended to help policymakers, advocates, journalists and citizens identify and anticipate the areas where corruption is more likely to occur.

The Report evaluates both anti-corruption legal frameworks and the practical implementation and enforcement of those frameworks, and takes a close look at whether citizen can effectively access and use anti-corruption safeguards.

The Report is prepared by local researchers, journalists and academics using a double-blind peer review process. More than 1,000 local contributors have participated in preparing the Report since 2004.

Each country assessment contained in the Global Integrity Report comprises two core elements: a qualitative Reporter's Notebook and a quantitative Integrity Indicators scorecard. An Integrity Indicators scorecard assesses the existence, effectiveness, and citizen access to key governance and anti-corruption mechanisms through 320 actionable indicators.

They are scored by a lead in-country researcher and blindly reviewed by a panel of peer reviewers, a mix of other in-country experts as well as outside experts. Reporter's Notebooks are reported and written by in-country journalists and blindly reviewed by the same peer review panel.

The insights from the close to a million words of text and 10,000 data points of each year’s Report help shape evidence-based policy reforms that can promote open and accountable government

Click here to read the report

Click here for datasets and previous reports

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Adults Media Use and Attitudes Report

Source: OFCOM

Extract from Press Release

UK adults’ concerns about the internet have dropped steadily since 2005, falling from seven in ten (70 per cent) users to half (50 per cent) by 2011, with confidence online at high levels (84 per cent), according to Ofcom’s Adults Media Use and Attitudes report.

The fall in concern comes as people are spending increasing amounts of time on the internet. The average user now says they are online for over 15 hours each week, an increase of five hours since 2005. The internet is increasingly part of people’s everyday lives wherever they are, and eight in ten adults (79%) now go online on any device in any location – up by 20 percentage points compared to 2005.

Social networking is continuing to grow in popularity and three fifths of adult internet users (59 per cent) say they now have a profile on a social networking site. However, the increase has slowed, with a rise of five percentage points since 2010, compared to increases of ten percentage points in 2010 and 22 percentage points in 2009.

Adults are increasingly turning to the internet for information. Seven in ten (68 per cent) users have accessed the internet to find details about public services, compared to half (49 per cent) in 2005. And eight in ten (79 per cent) have searched online for information about leisure time activities, up from six in ten (61 per cent) in 2005. However, those aged over 65 are less likely than other age-groups to be online – with some 51 per cent saying they do not intend to get the internet at home, compared to 15 per cent of the population as a whole.

Three in ten (29 per cent) internet users said they have had a virus on their home PC in the past twelve months, with a similar number receiving unsolicited emails directing them to a website that asks them for personal information. Almost nine out of ten (87 per cent) home internet users who access through a PC, laptop or netbook said they have anti-virus software installed on their computers at home.

Click here to read the full report

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The Future of Apps and Web

Source: Pew Research Center’s Internet & American Life Project

Overview

The Web Is Dead? No. Experts expect apps and the Web to converge in the cloud; but many worry that simplicity for users will come at a price.

Tech experts generally believe the mobile revolution, the popularity of targeted apps, the monetization of online products and services, and innovations in cloud computing will drive Web evolution. Some survey respondents say while much may be gained, perhaps even more may be lost if the “appification” of the Web comes to pass.

About the Survey

The survey results are based on a non-random, opt-in, online sample of 1,021 Internet experts and other Internet users, recruited via email invitation, Twitter or Facebook from the Pew Research Center’s Internet & American Life Project and the Imagining the Internet Center at Elon University.  Since the data are based on a non-random sample, a margin of error cannot be computed, and the results are not projectable to any population other than the experts in this sample

Click here to read the full report

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UK: Golden Opportunities: Social Entrepreneurs in an Ageing Society

Source: UnLtd

The number of people aged 50 and over is growing as our society ages. Yet this age group appears to be under-represented amongst social entrepreneurs.

This Findings Paper explores social entrepreneurship amongst people aged 50+, looking at the motivations, distinctive features and contributions of older social entrepreneurs, and the benefits of social entrepreneurship to them as individuals. It concludes that there is untapped potential in this age group, and that social entrepreneurship may offer some unique solutions to issues associated with an ageing society

Selected Key findings:

Around half of social entrepreneurs aged 50+ are female; 14% are from minority ethnic backgrounds; and 67% are educated to degree level or have professional qualifications.

Factors related to age (such as the feeling of having a lifetime of experience to share) or lifecourse (such as children moving away) often seemed to play a role in motivating people to start a social venture.

There was a tendency for older social entrepreneurs to focus more on creating social value than economic value. Amongst UnLtd’s annual survey respondents aged 48 and above, half generated no turnover during 2009-10. Nevertheless, there were exceptions. For example, 9% of those aged 48 and over generated more than £100,000 turnover in the reporting period.

Click here to read the full report

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The State of the News Media 2012

Source: The Pew Research Center's Project for Excellence in Journalism

Extract from Press Release

More than a quarter of Americans (27%) now get news on mobile devices, and for the vast majority, this is increasing news consumption, the report finds.  More than 80% of smartphone and tablet news consumers still get news on laptop or desktop computers. On mobile devices, news consumers also are more likely to go directly to a news site or use an app, rather than to rely on search — strengthening the bond with traditional news brands.

While technology may be adding to the appeal of traditional news, technology intermediaries are capturing even more of the digital revenue pie. In 2011, five technology giants generated 68% of all digital ad revenue, according to the market research firm eMarketer — and that does not include Amazon and Apple, which make their money from devices and downloads. By 2015, roughly one out of every five display ad dollars is expected to go to Facebook, according to the same source.

Social media platforms, meanwhile, grew substantially over the last year, but still play a limited role in daily news consumption. Only about a third as many news consumers follow stories via Facebook as do so by going directly to news websites or apps or by using search, according to new PEJ survey data released here. For Twitter, the proportion drops to less than a sixth as many.

These are some of the conclusions in the ninth edition of PEJ’s annual State of the News Media report.  The report is a comprehensive analysis of the major trends in news over the last year and includes detailed chapters on eight major media sectors — digital, newspapers, cable news, network TV, local TV news, audio, magazines and ethnic media. This year’s study also includes two new national surveys examining how news is consumed on different devices and the impact of social media on news, a special report on the state of community media and an examination of Native American media.

Click here to read more

Global Private Equity Report

Source: Bain & Company

Extract from report introduction

In the following pages, you will find several integrated topics that describe what is happening today in the world of private equity, with a particular focus on buyouts. We begin with a brief review of 2009—examining what happened and, equally important, explaining what didn’t. From there, we quickly shift to assess the environment the global private equity industry faces in 2010, and what opportunities and headwinds the industry will encounter during the next 12 months and beyond. We make no claims to be seers; our crystal ball is as cloudy as yours in many respects. We do bring the facts to the table in classic Bain fashion and integrate them with our decades of expertise working in the private equity space to characterize the environment all firms must navigate—not just to survive, but to thrive.

We conclude by offering some insights into what leading-edge private equity investors will be doing better and differently in 2010. It’s often said that where you stand depends upon where you sit. If nothing else, it is quite clear that almost all private equity firms sit in different places today than they did five years ago. The processes, organizations and rules of the past may no longer apply to building a successful investment business for the future.

Click here to read the full report

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Search for a New Business Model: How Newspapers are Faring Trying to Build Digital Revenue

Source: Project for Excellence in Journalism

Extract from overview

A new study, which combines detailed proprietary data from individual newspapers with in-depth interviews at more than a dozen major media companies, finds that the search for a new revenue model to revive the newspaper industry is making only halting progress but that some individual newspapers are faring much better than the industry overall and may provide signs of a path forward.

In general, the shift to replace losses in print ad revenue with new digital revenue is taking longer and proving more difficult than executives want and at the current rate most newspapers continue to contract with alarming speed, according to the study by the Pew Research Center’s Project for Excellence in Journalism. Cultural inertia is a major factor. Most papers are not putting significant effort into the new digital revenue categories that, while small now, are expected to provide most the growth in the future. To different degrees, executives predict newsrooms will continue to shrink, more papers will close and many surviving papers will deliver a print edition only a few days a week.

The study involved 38 newspapers from six different companies providing highly granular data about their digital revenue and sales efforts—creating a robust series of case studies. The data sought were developed in consultation with the partnering newspaper companies after site visits and interviews with multiple executives. After collecting the data, researchers conducted follow-up interviews to confirm whether the findings reflected broader company performance. Those findings, in turn, were shared with executives from seven more companies to test how widely they could be generalized. All data was provided on the basis that it would be anonymous.

Click here to read the full report

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Intellectual Property and Women Entrepreneurs

Source: National Women’s Business Council

Extract from press release

The number of women awarded patents has soared over the last several decades far beyond previously reported figures, and the percentage of trademarks granted to women has more than doubled, a new study commissioned by the National Women’s Business Council found.
 
The study found that women had a higher representation among trademark holders than patent owners; in 2010, 18 percent of all patents granted went to women while 33 percent of all trademarks granted to individuals and sole proprietorships went to women.

The report found a surging number of women obtaining patents in recent years, with the largest spike seen in 2010, when 22,984 patents were granted to women, a 35 percent jump over the previous year. In 2009, women received 17,061 patents, a 4.5 percent increase over the 16,321 issued in 2008. Men also saw a jump in patent receipts, but at 28 percent, the increase was not as sharp. In 2010, they received 121,257 patents, compared to the 94,850 they received in 2009, a 4 percent bump over the 91,342 patents men obtained in 2008.
 
The top categories for women-owned patents were chemistry, bio-affecting drugs, semiconductor device manufacturing, and furnishings. The biggest increases, however, in women-obtained patents came in data processing, surgery, and electrical computers and digital processing systems

Click here to read the full report

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The Impact of Tablet Visitors on Retail Websites

Source: Adobe Systems Incorporated via iStrategy Conference

Executive Summary

Consumers who visit retail websites using tablet devices (“Tablet Visitors”) are more valuable online customers than those who visit websites using smartphones or traditional desktop/laptop computers.

Based on its analysis of 16.2 billion visits to the websites of more than 150 retailers in 2011, Adobe Digital Marketing Insights found that Tablet Visitors spend over 50% more per purchase than visitors who use smartphones (“Smartphone Visitors”) and over 20% more than visitors who use desktop/laptop computers (“Traditional Visitors”). Additionally, Adobe found that Tablet Visitors are three times more likely to make a purchase than Smartphone Visitors and nearly as likely to purchase as Traditional Visitors.

Other findings from the Adobe study include:

• Tablet Visitors respond to promotions: Conversion rates and average order values on Black Friday and Cyber Monday rose above their 2011 Holiday and Calendar 2011 averages.
• Tablet Visitors are rapidly growing in size. Although they generate a small portion of total website visits, their share of total visits increased from 1% to 4% in just 12 months.
• Tablet Visitors appear to spend more because of their demographics, the nature of the tablet user experience, and the environment in which Tablet Visitors shop online.

These findings suggest that retailers can no longer afford a “one-size-fits-all” approach to mobile optimization because Tablet Visitors and Smartphone Visitors are distinct customer segments. Retailers should evaluate the opportunity that Tablet Visitors offer and develop strategies to better attract, convert and retain them.

Click here to read the full white paper

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Survey of Mining Companies: 2011/2012

Source: Fraser Institute

From publication web page

Since 1997, the Fraser Institute has conducted an annual survey of metal mining and exploration companies to assess how mineral endowments and public policy factors such as taxation and regulation affect exploration investment. Survey results represent the opinions of executives and exploration managers in mining and mining consulting companies operating around the world.

The survey now includes data on 93 jurisdictions around the world, on every continent except Antarctica, including sub-national jurisdictions in Canada, Australia, the United States, and Argentina. This year, Missouri, Dominican Republic, Egypt, Guyana, Laos, Mauritania, Morocco, Po land, Suriname, and the following sub-national jurisdictions from Argentina: Catamarca, Chubut, Jujuy, Mendoza, Rio Negro, Salta, San Juan, and Santa Cruz were added to the survey. South Dakota and Wisconsin were dropped.

Click here to read the full report

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Trade, Competition, and the Pricing of Commodities

Source: CEPR

Editors: Simon J Evenett, Frédéric Jenny

Summary:

After several decades of quiescence, global commodity prices almost doubled in 2008 and, after a brief fall, rose again in 2011. Over the longer term, the impact of population growth on demand, and of climate change on supply, makes it likely that commodity prices will continue to be an important issue on the global policy agenda.

The purpose of this volume, composed of papers presented at a conference co-organised by CEPR and CUTS in Geneva in September 2011, is to identify and assess the importance of the factors responsible for the recent increases in the levels and volatility of commodity prices

Click here to read the full report

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The State of Renewable Energies in Europe

Source: EurObserv'ER

Extract from Foreword by Willian Gillett:

As the renewable energy sector shows promising signs of growth, we acknowledge the growing accuracy of EurObserv'ER's estimates. According to the official data published in November 2011 by Eurostat, the share of renewables in the EU in 2009 was 11.7%; EurObserv'ER’s estimation of the same figure published in last year's report was 11.6%. Such a good approximation confirms the accuracy of the EurObserv'ER methodology and its ability to provide policy makers and market actors with timely and reliable information on the evolution of the renewable energy sector.

This year’s edition presents the main statistics on the renewable energy market in the EU for the year 2010, for which official data will only be available next year. Its last chapter focuses on seven EU regions which have particularly high amounts of RES investments during the last year, and highlights how these regions have managed to create a favourable climate for new investments. Their experiences can hopefully inspire and help actors across Europe to make their regions more sustainable and create new jobs in the renewables sector.

Click here to read the full report

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Green and Ethical Consumer 2012

Source: Key Note

Extract from executive summary

The green and ethical consumerism market has changed significantly over the last decade, as have attitudes regarding the environment and ethical sourcing of products. As a result, a number of new products, ranging from items used in the home to transport, have been launched on the market to appeal to consumers who value the green and ethical qualities of the products that they purchase.

This report specifically examines the ethical food and drink, home, transport and holiday travel, fashion and beauty and finance markets. Overall, Key Note has estimated that total sales of ethically-sourced products in the UK reached £50.76bn in 2011. Furthermore, the market observed year-on-year increases between 2007 and 2011, with market value rising by 39.2% during the 5-year period. Despite this growth, however, factors such as the recession are believed to have dampened the market’s potential in recent years. This is principally because the price of ethical goods and services are often much higher than alternative products and, as a result, consumers were forced to put their ethical values on hold during the recession in order to save money.

Currently, new products, notably in the food and drink and beauty sectors, have helped to boost sales for the industry, as organic alternatives continue to become more mainstream. Retailers themselves have also implemented a number of changes, for example, by reducing their carbon emissions and waste output, in response to consumer’s opinion regarding the importance of the environment and sustainability. Furthermore, the purchase of second-hand clothing has become much more popular in recent years and has served to boost sales at clothing swapping events and charity shops. The fashion trend towards vintage clothing has gone some way in reducing the stigma previously attached to shopping at such outlets, and the purchase of second-hand garments and accessories is currently viewed as a much more ‘fashionable’ way to shop.

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.

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The Sky Is Rising: A Detailed Look at the Entertainment Industry

Source: Computer & Communications Industry Association

From Press Release

Concurrent with the MIDEM music business conference in France today, the Computer & Communications Industry Association released a study it commissioned, “The Sky is Rising,” by Mike Masnick, who writes about technology policy for Techdirt and is founder and CEO of Floor 64. The economic report on entertainment over the past decade found that the entertainment industry grew 50 percent while consumer spending on entertainment also increased.
 
Some findings:

• Using numbers from the US Bureau of Labor Statistics, the study charts how consumer spending on entertainment as a percentage of their household income rose 15 percent from 2000 to 2008.


• BLS data also show entertainment sector employment also grew 20 percent during that last decade and 43 percent for those identified as independent artists.


• According to MPAA, box office revenues grew 25 percent from 2006 to 2010 from $25.5 billion to $31.8 billion.


• Data from PricewaterhouseCoopers and iDATE show that from 1998-2010 the value of the worldwide entertainment industry grew from $449 billion to $745 billion.


• From 1999 to 2009 music concert sales in the US tripled from $1.5 billion to $4.6 billion


• Consumers’ choices growing as more movies are produced jumping from 5,635 films produced globally in 2005 to 7,193 in 2009.

Click here to read the full report

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Do SMEs create more and better jobs?

Source: European Commission Directorate General Enterprise and Industry

The European Commission (has) published a study analyzing the important role small and medium sized enterprises play in creating more and better jobs. According to the analysis, 85% of net new jobs in the EU between 2002 and 2010 were created by small and medium sized enterprises (SMEs). This figure is considerably higher than the 67%-share of SMEs in total employment. During this period, net employment in the EU's business economy rose substantially, by an average of 1.1 million new jobs each year.

With 1% annually, the employment growth for SMEs was higher than for large enterprises with 0.5%. A clear exception is the trade sector, in which employment in SMEs increased by 0.7% annually, compared to 2.2% in large enterprises. This is due to the strong increase of large trade enterprises, in particular in sales, maintenance and repair of motor vehicles.

Within the SME size-class, micro firms (less than 10 employees) are responsible with 58% for the highest proportion of total net employment growth in the business economy.

Secondly, the study has shown that new firms (younger than five years) are responsible for an overwhelming majority of the new jobs. New enterprises operating in business services create more than a quarter (27%) of the new jobs, while the new firms in transport and communication contribute least (6%).

Click here to read the full report

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World Press Freedom Index 2011-2012

Source: Reporters Without Borders

Extract taken from publication web page

“This year’s index sees many changes in the rankings, changes that reflect a year that was incredibly rich in developments, especially in the Arab world,” Reporters Without Borders said today as it released its 10th annual press freedom index. “Many media paid dearly for their coverage of democratic aspirations or opposition movements. Control of news and information continued to tempt governments and to be a question of survival for totalitarian and repressive regimes. The past year also highlighted the leading role played by netizens in producing and disseminating news.

“Crackdown was the word of the year in 2011. Never has freedom of information been so closely associated with democracy. Never have journalists, through their reporting, vexed the enemies of freedom so much. Never have acts of censorship and physical attacks on journalists seemed so numerous. The equation is simple: the absence or suppression of civil liberties leads necessarily to the suppression of media freedom. Dictatorships fear and ban information, especially when it may undermine them…….

Within the European Union, the index reflects a continuation of the very marked distinction between countries such as Finland and Netherlands that have always had a good evaluation and countries such as Bulgaria (80th), Greece (70th) and Italy (61st) that fail to address the issue of their media freedom violations, above all because of a lack of political will. There was little progress from France, which went from 44th to 38th, or from Spain (39th) and Romania (47th). Media freedom is a challenge that needs addressing more than ever in the Balkans, which want to join the European Union but are suffering the negative effects of the economic crisis.

Click here to read the full report

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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

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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

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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

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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)

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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

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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

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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

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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

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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

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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

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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

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Value and Values: Perceptions of Ethics in the City Today

Source: St. Paul's Institute

Extract from Executive Summary

This research confirms and refutes numerous stereotypes about financial services professionals working in the City of London. In response to certain questions, the respondents play to type. For example, ‘salary and bonuses’ are the most important motivation for professionals working in the FS sector in London for 2 in 3 (64%) of participants. ‘Enjoyment of the work’ comes a distant second. However, in other areas, they confound the stereotype of ‘greed is good’ capitalists. Most notably, FS professionals in London tend to think that bankers, stock brokers, FTSE 100 chief executives, lawyers and city bond traders are being paid too much. Moreover, most

FS professionals in London think that deregulation of financial markets results in less ethical behaviour. FS professionals in London tend to be positive about Corporate Social Responsibility (CSR) in their companies, with the majority agreeing that CSR is discussed and incentivised in their workplace. They also tend to reject the notion that CSR has a negative effect on shareholder value. Most notably of all, 75% agree that there is too great a gap between rich and poor in this country, and 58% agree that companies should invest directly in deprived communities.

Levels of knowledge on the history of the FS in the UK varies considerably, with the most experienced professionals far more knowledgeable about the history of the City and the economy more broadly.

• Most do not know the London Stock Exchange’s (LSE) motto (just 14%).
• Most FS professionals are not aware of earlier recessions in the UK around 1980 and 1990/91.
• Many are not completely familiar with what happened after the financial ‘Big Bang’:
• – 2 in 5 think that the LSE crashed following the ‘Big Bang’.
• – 1 in 3 disagree that the financial markets were deregulated.
• – 2 in 5 are not sure whether firms were allowed to be owned by an international corporation, although 42% say that was the case.
• – The majority do not know that minimum scales of commission were abolished and whether individual members of the LSE ceased to have voting rights.
  – More than two-thirds (69%) did not know that the financial ‘Big Bang’ happened in 1986.

Click here to read the full report

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The Global Gender Gap Report 2011

Source:  World Economic Forum

Extract from Press Release

Over the last six years, while 85% of countries are improving their gender equality ratios, for the rest of the world the situation is declining, most notably in several African and South American countries. The sixth annual World Economic Forum Global Gender Gap Report 2011 shows a slight decline over the last year in gender equality rankings for New Zealand, South Africa, Spain, Sri Lanka and the United Kingdom this year, while gains are made in Brazil, Ethiopia, Qatar, Tanzania and Turkey.

Selected Findings:

• Nordic countries (Finland, Iceland, Norway and Sweden) continue to hold top spots having closed over 80% of their gender gaps
• Women hold less than 20% of all national decision-making positions
• India ranks lowest on gender parity among the BRICS countries
• USA continues to improve, moves up two places
• UAE ranks highest in the Arab World with Saudi Arabia improving the fastest over past 6 years
• Gender gap worsening in Nigeria, Mali, Colombia, Tanzania and El Salvador over past 6 years

The Global Gender Gap Index introduced by the World Economic Forum in 2006, assesses 135 countries, representing more than 93% of the world’s population, on how well resources and opportunities are divided amongst male and female populations. The Index benchmarks national gender gaps on economic, political, education- and health-based criteria, and provides country rankings that allow for effective comparisons across regions and income groups, and over time. The rankings are designed to create greater awareness among a global audience of the challenges posed by gender gaps and the opportunities created by reducing them. The methodology and quantitative analysis behind the rankings are intended to serve as a basis for designing effective measures for reducing gender gaps.

Click here to read the full report

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The State of the Communications Nation

Source: Ofcom

Ofcom have just launched digital communications coverage maps, including outdoor mobile coverage and mobile broadband availability, using data supplied by communications providers. The maps are part of Ofcom’s first report on the UK’s communications infrastructure which it is now required to submit to the Secretary of State for Culture, Media and Sport every three years. Ofcom’s report also refers to the coverage and capacity of the UK’s landline network, digital radio and TV.

Each of the 200 areas of the UK has been ranked according to a score given for coverage and colour coded with green ranking highest and red lowest.

Ofcom’s data shows considerably better household coverage compared with geographic coverage. This is because mobile providers tend to prioritise investment in network infrastructure where the maximum number of consumers and businesses can be served.

The maps show that 97% of premises and 66% of the UK landmass can receive a 2G signal outdoors from all four 2G networks. This means that approximately 900,000 UK premises do not have a choice of all four 2G mobile networks.

For 3G, 73% of premises and 13% of the UK’s landmass can receive a signal outdoors from all five 3G networks, with lower coverage in less densely populated areas. This means that approximately 7.7million UK premises do not have a choice of all five 3G mobile networks. The areas of lowest 3G geographic coverage are in the highlands of Scotland and mid-Wales which are both sparsely populated with hilly terrain.

The report also shows significant demand for broadband data from UK consumers. Residential fixed broadband customers are using on average 17 Gigabytes of data per month. This is the equivalent to downloading more than 11 films per month, streaming 12 hours of BBC iPlayer HD video or more than 12 days of streaming audio content. This compares with mobile broadband demand which is on average 0.24 Gigabytes per month per connection.

Click here to read the full report

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Reforming the International Monetary System

Source: CEPR (Centre for Economic Policy Research

Author(s): Emmanuel Farhi, Pierre-Olivier Gourinchas and Hélène Rey

Abstract:
The international financial and monetary system must adapt to the global economy’s upcoming challenges by laying down the foundations for renewed world macroeconomic and financial stability. The authors of this report present a set of concrete proposals aimed at improving the international provision of liquidity in order to limit the effects of individual and systemic crises and decrease their frequency. The recommendations outlined in the report include:

• Develop alternatives to US Treasuries as the dominant reserve asset, including the issuance of mutually guaranteed European bonds and (in the more distant future) the development of a yuan bond market.
• Make permanent the temporary swap agreements that were put in place between central banks during the crisis. Establish a star-shaped structure of swap lines centred on the IMF.
• Strengthen and expand existing IMF liquidity facilities. On the funding side, expand the IMF’s existing financing mechanisms and allow the IMF to borrow directly on the markets.
• Establish a foreign exchange reserve pooling mechanism with the IMF, providing participating countries with access to additional liquidity and, incidentally, allowing reserves to be recycled into productive investments.

To limit moral hazard, the report proposes the setting up of specific surveillance indicators to monitor “international funding risks” associated with increased insurance provision.

The report discusses the role of the special drawing rights (SDRs) and the prospects for turning this unit of account into a true international currency, arguing that it would not solve the fundamental problems of the international monetary system. The report also reviews the conditions under which emerging market economies may use temporary capital controls to counteract excessive and volatile capital flows. The potential for negative externalities requires mutual monitoring and international cooperation in terms of financial regulation and suggests that the mandate of the IMF should be extended to the financial account.

This report is available to current London Business School students, faculty and staff from CEPR Papers via the A-Z list of library databases within Portal.

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The 2011 Fortune 500 and Social Media Adoption

Source: Center for Marketing Research at UMass/Darmouth

From Introduction

Fortune Magazine annually compiles a list of America’s largest corporations, aptly named the “Fortune 500” given their size and wealth. Due to the hugely influential role that these companies play in the business world, studying their usage of new technological tools like social media offers important insights into the future of commerce. While these companies may not always be the first to innovate, they do provide a look at emergent trends among America’s most successful companies.

In 2008, the Center for Marketing Research at the University of Massachusetts Dartmouth released one of the first studies of the Fortune 500 (F500) adoption and repeated that study every year since. The study has been expanded to include the usage of the fastest growing social media tools – Facebook and Twitter.

For the first time, this latest iteration includes information on the number of Facebook fans a company has as well as the number of Twitter followers.

This research also builds on the Center’s work since 2007 examining social media in a variety of organizations including the Inc. 500, US colleges and universities and the Forbes list of the 200 largest charities.

Each May the list of the top 500 companies is released in a special issue of Fortune Magazine. The Fortune 500 (F500) list includes publicly and privately held companies for which revenues are publicly available. For more information on the F500.

Click here to read the full report

Photo from Creative Commons: Flickr:  Martin Diller

Risky Business

Source: Demos

Authors: Helen Burrows, Kitty Ussher

The creative industries are the UK’s ‘Cinderella sector’. While the economy is currently growing at a snail’s pace, there are very few conventional policy levers left for politicians to pull. One of the economic sectors with the greatest potential for growth is the creative industries – which include the music, fashion, video games, radio and TV production, and advertising industries.

But this success is put at risk by a combination of disinterest and misunderstanding. There is a persistent prejudice that the sector is inherently risky; that creative entrepreneurs are only in it due to their passion, not their business sense. This myth is dispelled in this pamphlet, which demonstrates that on average, creative enterprises are more likely to still be in existence after five years than other businesses. Their disadvantage is compounded by the Government’s myopia towards the sector. The system of SIC codes in economic reporting neglects the creative industries, leading to a lack of reliable information and sound policy for the sector.

Risky Business argues that a first step for government should be to develop a better understanding of the creative industries, through dedicating more civil servants to the sector and regularly publishing data on trends within it. This will help to encourage both appropriate policy and private sector investment, allowing the creative industries to realise their potential and make their maximum contribution to the UK’s economy

Click here to read the full report

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Technology and the Innovation Economy

Source: Brookings Institution

Author:  Darrell M. West

Executive Summary

Innovation and entrepreneurship are crucial for long-term economic development. Over the years, America’s well-being has been furthered by science and technology. Fears set off by the Soviet Union’s 1957 launch of its Sputnik satellite initiated a wave of U.S. investment in science, engineering, aerospace, and technology. Both public and private sector investment created jobs, built industries, fuelled innovation, and propelled the U.S. to leadership in a number of different fields.

In this paper, I focus on ways technology enables innovation and creates economic prosperity. I review the range of new advances in education, health care, and communications, and make policy recommendations designed to encourage an innovation economy. By adopting policies such as a permanent research and development tax credit, more effective university knowledge commercialization, improving STEM worker training, reasonable immigration reform, and regional economic clusters, we can build an innovation economy and sustain our long-term prosperity.

Click here to read the full report

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Special Eurobarometer 370 - Social Climate

Source: Public Opinion Analysis sector of the European Commission

Extract from introduction

Europe is still in a state of flux. The impact of the 2008 financial and economic crisis is still being felt, with bouts of speculation in relation to various EU Member States – and predictions of further economic problems making the headlines for every piece of good news about recovery.

In addition to this, there has been a renewed focus on environmental problems, resource use and the associated impact upon utility costs and people’s individual financial situations. Property prices continue to fluctuate, the employment situation remains unsteady and societal unrest continues.

This special Eurobarometer survey on the social climate gives answers to the following questions: how does this state of change affect the European public? How are European citizens responding to this changing economic situation? What is the impact on their daily lives?

This survey is the third of its kind to be conducted in the EU, following on from those conducted in 2009 and 2010. The Eurobarometer survey at hand intends to uncover these opinions and see whether or not there have been any changes since the last wave of analysis, in 2010. Around 1,000 people have been interviewed in each country3. This survey not only measures how Europeans perceive the current recession and its social impact, but also reveals interesting differences between countries which seem to reflect the strengths and weaknesses of national policies and institutions.

Click here to read the full report

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Supporting London’s innovators

Source: Greater London Authority (GLA)

Authros: Nick Ennis and Slawek Kozdras

Extract from Executive Summary

Innovation boosts efficiency and productivity and contributes to economic growth. Innovation is a tricky word to pin down, meaning many things to many people. For the purpose of this paper, innovation is defined relatively broadly as the exploitation of new ideas, but to give the word more meaning, we focus primarily on radical innovations that transform the user experience, as Apple’s iTunes and iPod revolutionised the way people consume music.

Research shows that innovations, especially service innovations, are often invisible, highly customised and contextual, relying heavily on organisational change, training and other intangibles. All of this makes them difficult to analyse and reproduce and near to impossible to measure. Economic literature dating back more than five decades has focused on the role of competition in producing innovations. But in policy circles, innovation has long been synonymous with scientific research and development, perhaps because it is identifiable and measureable, unlike innovations.

One of the key findings of the last decade’s research into innovation is recognition of the wider innovative ecosystem that nurtures and facilitates innovation. The social and economic context in which firms operate can encourage or hinder innovation. Lessons from history make it clear that innovators respond to wider conditions and incentives to be entrepreneurial. The wider conditions approach calls for policy to get the conditions right for innovators to thrive rather than ones that try to pump-prime innovation through investment in research and development.

Click here to read the full report

Photo from Creative Commons: Flickr: By MinimalistPhotography101.com

Financing Industrial Biotechnology in the UK

Source: NESTA

Report prepared for NESTA by Technology Greenhouse Ltd

Extract from Executive Summary:

The UK Government has identified industrial biotechnology (IB) as a key driver of wealth creation in the 21st century and in November 2007 it established the Industrial Biotechnology Innovation and Growth Team (IB-IGT). In May 2009, the IB-IGT presented a major report to government (‘IB-2025’) which estimated that IB could add £4-12 billion per year to the UK economy by 2025. In order to capitalise on this opportunity, UK companies will need to raise finance to invest in the industrial and commercial development of IB products.

Building on the pioneering work of the IBIGT, NESTA commissioned this research to examine the corporate funding environment for IB in the UK two years on. It involved an in-depth survey of selected participants working in this nascent sector. The output from the interviews is summarised into a series of common themes. Based on these themes, a number of conclusions were drawn regarding the current status of the UK IB sector and ad hoc recommendations developed for steps which could lead to an improved financing environment (Key Findings).

At the broadest level of categorisation, biotechnology can be divided into ‘Healthcare’ and ‘Industrial’ segments. For the purposes of this research, the industrial biotechnology (IB) segment has been sub-divided by product into four categories: chemicals and materials, bio-energy and biofuels, waste to energy and waste remediation, and enhanced food production.

The leading country internationally in IB is the US. Within Europe, Germany is well ahead of all other countries. The UK competes in the next tier, most notably with Switzerland and Holland, which is an improvement on the position the UK has historically occupied. In Asia, both India and China are increasingly active. Brazil is also making significant progress, particularly where sugar is used as a feedstock.

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Economic Freedom of the World: 2011 Annual Report

Source: Cato Institute

This year's report notes that economic freedom fell for the second consecutive year. The average economic freedom score rose from 5.53 (out of 10) in 1980 to 6.74 in 2007, but fell back to 6.64 in 2009, the most recent year for which data are available. In this year's index, Hong Kong retains the highest rating for economic freedom, 9.01 out of 10, followed by Singapore, New Zealand, Switzerland, Australia, Canada, Chile, the United Kingdom, and Mauritius. The world's largest economy, the United States, has suffered one of the largest declines in economic freedom over the last 10 years, pushing it into tenth place. Much of this decline is a result of higher government spending and borrowing and lower scores for the legal structure and property rights components.

This year's report also contains new research comparing policies that promote "freedom" compared to "entitlement" in relation to economic development. The findings suggest that fundamental freedoms are paramount in explaining long-term economic growth. Countries that favor free choice - economic freedom and civil and political liberties - over entitlement rights are likely to achieve higher sustainable economic growth and to achieve many of the distinctive proximate characteristics of success identified by the Commission on Growth and Development (World Bank, 2008). In contrast, pursuing entitlement rights through greater coercion by the state is likely to be self-defeating in the long run. The report also includes findings on the positive relationship between increases in economic freedom and improvements in women's well-being.

The first Economic Freedom of the World Report, published in 1996, was the result of a decade of research by a team which included several Nobel Laureates and over 60 other leading scholars in a broad range of fields, from economics to political science, and from law to philosophy. This is the 15th edition of Economic Freedom of the World and this year's publication ranks 141 nations for 2009, the most recent year for which data are available.

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Reinventing the wheel: a circular economy for resource security

Source: Green Alliance

Authors: Hannah Hislop and Julie Hill

Extract from Executive Summary

Green Alliance aims to promote the concept of the circular economy as a new approach to the use of all resources. We examine three crucial inputs to our society: metals, phosphorus and water. The way we use them provides ample demonstration of our overwhelmingly ‘linear’ economy, with its current problems and future risks.

This report makes the case for the more circular use of resources, as a way of avoiding at least some of the impacts of ever more extraction of natural resources, and to avoid the worst impacts of generating waste. We concentrate on the role of economic instruments in promoting a more circular economy, a concept which has influenced economic policy in both China and Japan and which is gaining traction in many other countries.

We examine the particular conditions for, and some of the inter-relationships between, the circulation of three major inputs to our modern economy: metals, phosphorus and water. Alongside means of generating energy, these resources are crucial to our future on this planet, yet their long term future is rarely fully and frankly examined.

Metals have been in the spotlight as part of the debate about ‘raw materials security’, but the emphasis has been on finding new sources and improving terms of trade with those nations where the resource is found. Instead, we advocate a major political push to promote the circulation of metals within the economy, rather than continuing to allow the loss of large amounts, whether dissipated in the environment or consigned to landfill.

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Women, Business and the Law 2012: Removing Barriers to Economic Inclusion

Source: The World Bank & International Finance Corporation

From the World Bank press release:

Women, Business and the Law 2012: Removing Barriers to Economic Inclusion finds that while 36 economies reduced legal differences between men and women, 103 out of 141 economies studied still impose legal differences on the basis of gender in at least one of the report’s key indicators. The report also identifies 41 law and regulatory reforms enacted between June 2009 and March 2011 that could enhance women’s economic opportunities.
 
Globally, women represent 49.6 percent of the population but only 40.8 percent of the workforce in the formal sector. Legal differences between men and women may explain this gap. The report shows that economies with greater legal differentiation between men and women have, on average, lower female participation in the formal labor force.

The report measures such things as a woman’s ability to sign a contract, travel abroad, manage property, and interact with public authorities and the private sector. In all economies, married women face more legal differentiations than unmarried women. In 23 economies, married women cannot legally choose where to live, and in 29 they cannot be legally recognized as head of household.
 
Every region includes economies with unequal rules for men and women, although the extent of the inequality varies widely. On average, high-income economies have fewer differences than middle- and low-income economies. The Middle East and North Africa have the most legal differences between men and women, followed by South Asia and Africa. In Africa, a notable exception is Kenya, which leads globally with the most gender-parity reforms during the past two years. Regionally, the most improvements in gender parity occurred in Latin America and the Caribbean, Europe and Central Asia.

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Statistical Abstract of the United States: 2012

Source: US Census Bureau

From press release

This annual factbook contains more than 1,400 tables of social, political and economic facts about our nation and the world. Among the broad topics covered are marriage and divorce, health, education, law enforcement, national security, social insurance, business, science and technology, agriculture, natural resources, energy, information and communications, banking and international statistics. The source of the data is not limited to the Census Bureau -- statistics are also derived from other federal agencies and private sources. Data in this edition are generally for the most recent year or period available by spring 2011.

Selected Highlights

BUSINESS: In 2009, there were roughly 388,000 business startups (businesses less than 1 year old), which created 2.2 million jobs. While service industry firms aged 1-10 years experienced the largest number of firm deaths (212,000), the manufacturing industry experienced the greatest amount of job loss due to firm deaths and contractions, losing almost 1.3 million jobs. All industries together suffered a net job loss of 4.8 million in 2009.  Of the 27.1 million U.S. firms in 2007, nearly 7.8 million were women-owned and 5.8 million were minority-owned. Together, women and minority-owned businesses earned more than $2.2 trillion in sales.

ENERGY: In 2009, passenger cars, light trucks, vans, and SUVs consumed more than 15.2 quadrillion Btus and 86 million gallons of gasoline, more than all other modes of transportation, including air, transit, rail, water, and pipeline, put together.  Renewable energy production has almost doubled from 4.69 quadrillion Btus in 1975 to 8.06 quadrillion Btus in 2010. More than half of the renewable energy produced in 2010 was from organic non-fossil materials of biological origin, known as biomass (4.31 quadrillion Btu).

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