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Connecting Successes

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In challenge, success is based on others success.

The adage that two brains are better than one may explain why a lot of entrepreneurs and small business owners,  create partnerships. However, it’s not just those brains that should work well together. Partners’ personalities need to get along too.

As a serial entrepreneur who’s launched many companies, making a number of partnerships in the long way could bring the learning of some priceless lessons when creating those partnerships.

Among the most helpful tips that I’ve discovered is making sure that you get along with your business partner. It’s important to find someone who complements your skills, but don’t underestimate the importance liking one another.

Communication is another big part of a business relationship

There’s a great article from earlier this year about a long-lasting business partnership and communication is a theme that runs throughout.

You can learn many things about creating and maintaining partnerships during this past two decades. Although there are dozens of tips, here are five key lessons:

  • Partnership agreements: As I’ve mentioned in a previous post, I’ve been burned by not having the right agreements in place. It’s important for business partners to have clear partnership agreements drafted by attorneys.
  • Clear expectations: I’ve also learned the hard way that people, including business partners, can’t read my mind. I believe business partners should consistently set their expectations with each other.
  • Think about your clients: When evaluating a potential business partnership, I look at my weaknesses and what I need help with. I also think about my clients and what type of partnership would benefit them.
  • Mutually beneficial: It might sound obvious, but still should be noted. Partnerships should be mutually beneficial. In my experience, both sides need to gain something from the relationship for it to be worthwhile.
  • It’s ok to walk away: Like any relationship, a business partnership holds a great deal of promise. However, sometimes it doesn’t work out. That’s alright. Don’t stay in a business partnership if you believe it’s no longer viable. I’ve learned that it’s better to end the partnership and regroup than to force something that’s not working.

“For a better understanding to how to get started in achieving good partnerships, is taking in consideration the history in the early 1700s when workers gave way to machine operations and then the 1800s Henry Ford in mass production changed manufacturing forever, then came robotics, computers, lean manufacturing and the lean sigma. “

Each success is connected to get products out the door and now we got a connected understanding.


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Accelerated processes

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Every step of complex inquiring

Achieve to order smarter to proactive customers, partner and distributor engagement, to be both together in global collaboration across experts anywhere.A point to the increase of profitability with faster CPO and higher margin for better solutions.

When you’re a start-up with few employees and few customers, it’s easy to stay on top of what customers want and what they’re getting.

But as you add more customers and employees, you add links to the customer service chain. That creates the potential for growth and the potential for poor service along the way. That’s why creating a customer service policy and adhering to it is so important.

Here are some steps you can take to ensure that your clients receive excellent service every step of the way.

  1. Put your customer service policy in writing. These principles should come from you, but every employee should know what the rules are and be ready to live up to them. This doesn’t have to be elaborate. Something as simple as “the customer is always right” can lay the necessary groundwork, although you may want to get more detailed by saying, for instance, “any employee is empowered to grant a 10 percent discount to any dissatisfied customer at any time.”
  2. Establish support systems that give employees clear instructions for gaining and maintaining service superiority.These systems will help you outservice any competitor by giving more to customers and anticipating problems before they arise.
  3. Develop a measurement of superb customer service.Don’t forget to reward employees who practice it consistently.
  4. Be certain that your passion for customer service runs rampant throughout your company. Employees should see how good service relates to your profits and to their futures with the company.
  5. Be genuinely committed to providing more customer service excellence than anyone else in your industry.This commitment must be so powerful that every one of your customers can sense it.
  6. Share information with people on the front lines.Meet with your employees regularly to talk about improving service. Solicit ideas from employees-they are the ones who are dealing with customers most often.
  7. Act on the knowledge that what customers value most are attention, dependability, promptness and competence.They love being treated as individuals and being referred to by name.

 

Phrases That’ll Make Your Customers Happy


Principles of customer service are all very well, but you need to put those principles into action with everything you do and say. There are certain “magic words” customers want to hear from you and your staff. Make sure all your employees understand the importance of these key phrases:

  • “How can I help?”Customers want the opportunity to explain in detail what they want and need. Too often, business owners feel the desire or the obligation to guess what customers need rather than carefully listening first. By asking how you can help, you begin the dialogue on a positive note (you are “helping,” not “selling”). And by using an open-ended question, you invite discussion.
  • I can solve that problem.”Most customers, especially business-to-business customers, are looking to buy solutions. They appreciate direct answers in a language they can understand.
  • I don’t know, but I’ll find out.When confronted with a truly difficult question that requires research on your part, admit that you don’t know the answer. Few things ruin your credibility faster than trying to answer a question when you are unsure of all the facts. Savvy buyers may test you with a question they know you can’t answer and then just sit quietly while you struggle to fake an intelligent reply. An honest answer enhances your integrity.
  • I will take responsibility.”Tell your customer you realize it’s your responsibility to ensure a satisfactory outcome to the transaction. Assure the customer you know what he or she expects and will deliver the product or service at the agreed-upon price. There will be no unexpected changes or expenses required to solve the problem.
  • I will keep you updated.”Even if your business is a cash-and-carry operation, it probably requires scheduling and coordinating numerous events. Assure your customers they will be advised of the status of these events. The longer your lead time, the more important this is. The vendors customers trust the most are those that keep them apprised of the situation, whether the news is good or bad.
  • I will deliver on time.”A due date that has been agreed upon is a promise that must be kept. “Close” doesn’t count.
  • Monday means Monday.”The first week in July means the first week in July, even though it contains a national holiday. Your clients are waiting to hear you say “I deliver on time.” The supplier who consistently does so is a rarity and will be remembered.
  • It’ll be just what you ordered.”It will not be “similar to,” and it will not be “better than” what was ordered. It will be exactly what was ordered. Even if you believe a substitute would be in the client’s best interests, that’s a topic for discussion, not something you decide on your own. Your customer may not know (or be at liberty to explain) all the ramifications of the purchase.
  • The job will be complete.”Assure the customer there will be no waiting for a final piece or a last document. Never say you are finished “except for….”
  • “I appreciate your business.”This means more than a simple “Thanks for the order.” Genuine appreciation involves follow-up calls, offering to answer questions, making sure everything is performing satisfactorily, and ascertaining that the original problem has been solved.

Neglecting any of these steps conveys the impression that you were interested in the person only until the sale was made. This leaves the buyer feeling deceived and used, and creates ill will and negative advertising for your company. Sincerely proving you care about your customers leads to recommendations and repeat sales.

 

Never Let Your Customers Forget You


One important tool for generating repeat business is following up. Effective follow-up begins immediately after the sale when you call the customer to say “thank you” and find out if he or she is pleased with your product or service. Beyond this, there are several effective ways to follow up that ensure your business is always in the customer’s mind.

  • Let customers know what you are doing for them.This can be in the form of a newsletter mailed to existing customers, or it can be more informal, such as a phone call. Whatever method you use, the key is to dramatically point out to customers the excellent service you are giving them. If you never mention all the things you are doing for them, customers may not notice. You aren’t being cocky when you talk to customers about all the work you have done to please them. Just make a phone call and let them know they don’t have to worry because you handled the paperwork, called the attorney or double-checked on the shipment-one less thing they have to do.
  • Write old customers personal, handwritten notes frequently.I was just sitting at my desk and your name popped into my head. Are you still having a great time flying all over the country? Let me know if you need another set of luggage. I can stop by with our latest models any time.” Or if you run into an old customer at an event, follow up with a note: “It was great seeing you at the CDC Christmas party. I’ll call you early in the New Year to schedule a lunch.”
  • Keep it personal.Voice mail and e-mail make it easy to communicate, but the personal touch is often lost. If you’re having trouble getting through to someone whose problem requires that personal touch, leave a voice-mail message that you want to talk to the person directly or will stop by his or her office at a designated time.
  • Remember special occasions.Send regular customers birthday cards, anniversary cards, holiday cards…you name it. Gifts are excellent follow-up tools, too. You don’t have to spend a fortune to show you care; use your creativity to come up with interesting gift ideas that tie into your business, the customer’s business or his or her recent purchase.
  • Pass on information.If you read an article, see a new book, or hear about an organization a customer might be interested in, drop a note or make a quick call to let them know.
  • Consider follow-up calls as business development calls.When you talk to or visit old clients or customers, you’ll often find they have referrals to give you, which can lead to new business.

With all your existing customers can do for you, there’s simply no reason not to stay in regular contact with them. Use your imagination, and you’ll think of plenty of other ideas that can help you develop a lasting relationship.

 

Dealing With Unsatisfied Customers


Studies show that the vast majority of unsatisfied customers will never come right out and tell you they’re unsatisfied. They simply leave quietly, later telling everyone they know not to do business with you. So when a customer complains, don’t think of it as a nuisance-think of it as a golden opportunity to change that customer’s mind and retain his or her business.

Even the best product or service receives complaints now and then. Here’s how to handle them for positive results:

  • Let customers vent their feelings. Encourage them to get their frustrations out in the open.
  • Never argue with a customer.
  • Never tell a customer “You do not have a problem.” Those are fighting words.
  • Share your point of view as politely as you can.
  • Take responsibility for the problem. Don’t make excuses. If an employee was sick or a supplier let you down, that’s not the customer’s concern.
  • Immediately take action to remedy the situation. Promising a solution and then delaying it only makes matters worse.
  • Empower your front-line employees to be flexible in resolving complaints. Give employees some leeway in deciding when to bend the rules. If you don’t feel comfortable doing this, make sure they have you or another manager handle the situation.

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Competitive forces

 

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The level at which a business can “engage” its employees is what determines its internal success. Yet, employee engagement has consistently averaged less than 33 percent over the past four years, according to Gallup survey of more than 80,000 adults in the United States.”

Still, the root of the problem isn’t simply a lack of effort. Rather, many leaders are not even making employee engagement a priority – they’re not, well, engaging with engagement.

Here are four ways leaders can improve on that goal:

 

1. Make employee engagement an ongoing effort

Many people in charge get into the habit of analyzing employee engagement as a “one-and-done” process. In fact, 98 percent of CEOs only look at annual employee engagement surveys once a year and don’t discuss the matter with their employees.

An ongoing effort has to begin on day one. Instead of in-person onboarding programs that put new hires to sleep, incorporate technology like CovertHR to build engagement into even the earliest stages of the employee life cycle. CovertHR online activities allow employees to have fun and socialize while they’re completing tasks.

When new team members are introduced to an engaged environment and process, they feel more comfortable amplifying an engaged culture.

 

2. Don’t dump problems on HR.

The lack of employee engagement is as much an employer’s problem as it is HR’s. So, why are a majority leaders relying on HR to fix the problem? The Motivosity survey indicated that 70 percent of CEOs surveyed were delegating culture and engagement problems to HR.

Not surprisingly, it takes an engaged team to be actively involved in fixing employee-engagement issues. Instead of just assigning tasks to HR to fix, involve managers and employees who possess natural engaging characteristics. Present the problem and brainstorm together to come up with solutions that benefit everyone. Instead of delaying the process, or having HR come seeking approval for changes, be involved in the solution yourself.

 

3. Make employee engagement engaging

It’s no secret – leaders acknowledge just how important employee feedback is. In fact, a survey by Waggl Human Capital Pulse found that 97 percent of the business leaders, HR leaders and consultants among the 500,000 interviewed said they believed that listening to employees and incorporating their ideas was critical to an organization’s success.

Additionally, only a minority (38 percent) agreed that hearing from employees once a year through an annual survey is sufficient to give organizations the timely insights they need.

So, the message is that leaders do recognize listening to employees as being important, yet the way they typically do that is inefficient.

Instead of sending out a survey (that no one responds to), start with an open discussion with employees. Let people freely speak their minds, and take notes on the feedback they offer. Hearing what people genuinely have to say will help you kick employee engagement off to a positive start.

At the same time, be mindful of those who are less comfortable in a large group setting. After the forum concludes, send out an anonymous survey giving these employees the chance to elaborate on topics they weren’t comfortable saying in front of a group.

To take employee engagement yet a step further, management and coworkers should engage on a personal level. As the company leader, put yourself in situations that will allow you to engage in activities that work for the company’s culture. Consider small-group lunches that have a “no work talk: rule.

Or do what Namely CEO regularly Matt Straz does: move your desk to be in the middle of the action with the team.

 

4. Encourage risk-taking.

A company is only as good as the employees behind it. That is why employers should promote innovation on a regular basis. Do this at your company by presenting problems to your teams; give them the opportunity to take risks (and don’t reprimand them for failures).

A fun and productive way to do this is to present the same problem to different teams and prompt them to solve it. Each team can then present its solution to the entire group, with the group offering feedback and constructive criticism, and receiving in return exposure to new perspectives and improved-upon ideas.

This key theme of todays message is that you really need to get behind the value chain collaboration and execution and to do that you have to focus on the front engagement for faster results. This engagement will rub off on employees and ultimately create a more productive work environment that allows constant collaboration – making employees feel engaged all-year-round.

What are other ways leaders can improve employee engagement?

 

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Infrastructure spending is often debated as a political issue, but the underlying economic case for investing in new roads shouldn’t be controversial.”

Thanks to traffic, American commuters spend an extra 6.9 billion hours in their cars every year, burning 3.1 billion gallons of gasoline as they idle. More importantly, 40,000 drivers die on highways annually, a toll that could be reduced through safer design. Thus, as investing in infrastructure could make the US safer and more productive, the need for new highways shouldn’t be a partisan issue.

Improving to Meet Growing Demands

The last major infrastructure spending bill, the American Recovery and Reinvestment Act of 2009, was a stimulus measure designed to spur aggregate demand for labor and materials. Now that the economy has nearly recovered from the Great Recession, there isn’t as great a need for legislation to prop up the labor market. Instead, the next infrastructure bill should focus on increasing the supply of labor and goods available to businesses and consumers.

Improving the country’s transportation grid will likely increase the economy’s potential for future growth. When workers can’t commute rapidly from the suburbs into dense city centers, the nation’s most dynamic labor markets begin to stagnate. Similarly, if finished goods can’t be transported quickly to customers, shipping bottlenecks will impose drags on manufacturers.

With more people driving to work than ever before, the carrying capacity of the nation’s roads is increasingly coming under strain. Faster commutes will increase the supply of available labor—the less time people spend stuck in traffic, the more hours they’ll have available to work. The total cost of US highway congestion is estimated to top $160 billion annually, which will rise further as the population grows. Considering that the combined state and federal highway budget totals only $280 billion, there appears to be substantial potential returns on aggressive infrastructure investment.

Politics vs. Economics

While the economics of infrastructure investment are clear, the politics are more complicated. Since the beneficiaries of transportation projects are often far removed from the actual construction, almost all new highway investment is funded at the federal level. For example, relatively few people might visit west Texas, but all American consumers benefit from the goods that flow across the continent on the federally funded Interstate 10. Regional transit improvements provide the same diffuse impact—a Manhattanite may never cross the George Washington Bridge, but will still benefit from living in a labor market that draws talent across state lines.

Using the revenues from federal fuel taxes to fund new construction allows states to share the cost of projects that benefit the entire economy. However, it also makes highway funding vulnerable to the political gridlock that inevitably afflicts all federal spending measures.

The Highway Trust Fund has been depleted, and today’s insufficient outlays for construction already exceed revenues by $10 billion annually. Increased spending will require either raising fuel taxes or adding to the deficit, neither of which will likely be popular on Capitol Hill.

Supply-side economics may have fallen out of favor, but it’s still applicable for infrastructure spending. Borrowing to fund projects today that will increase the economy’s growth rate for decades to come makes sense. Deficit spending on infrastructure should be expected to pay for itself by increasing the tax base over time.

Technology’s Role

Technology promises to improve the efficiency of our existing transportation infrastructure, even if federal funding never materializes. “Smart” technology could improve the carrying capacity of our highways by coordinating signals to keep traffic flowing.

Optimization algorithms for public transit could deploy buses and trains more efficiently during rush hour, and improving communications technology is making telecommuting an option for more workers, reducing the number of commuters on the road. And unlike building physical infrastructure, technological projects will likely be adapted as public-private partnerships, financed by municipal or corporate bonds. As a result, gridlock in Washington may inspire creative solutions on the local level.”

Quality habits

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Voice Power

 

It’s the morning of the big call.

You prepared your material and went to bed early- even if you didn’t get much sleep. Now you hover near the phone, waiting for it to ring, thinking about everything that might prevent you from establishing a great rapport. Maybe he’ll sound like Elmer Fudd. Or, worse, maybe you will.

Either way, an important connection is about to be made, sight unseen. And your voice will play a big role. How can you prevent your voice from sabotaging everything from business calls to presentations? Use these tips for working your voice, instead of letting it work you.

 

1. Rise and try to shine

After getting out of bed, head to the bathroom for some warm-ups. Look at yourself in the mirror and take deep breaths. Are your shoulders rising as you inhale? Don’t let them. Stand straight, relax and let your breath come in down low. It should feel like it’s entering your body around your waist, not being pulled down your throat.

 

2. Keep it up

Not only does slouching look like you couldn’t care less, but it also prevents your lungs from filling up. Full lungs keep your voice from cracking, make you sound more powerful and keep you from running out of air. When you realize you’re hunched over while on the phone, sit back and straighten your spine to allow more energy to come across.

 

3. Support can be beautiful

Some people are blessed with resonant voices like James Earl Jones or Lauren Bacall. Most of us aren’t. But rather than throwing in the towel, try wrapping it around your waist. Breathe in low and gently expand your abs and obliques. Relax, let go and pretend the towel is like the waistline of your sweatpants. You can feel it grow a little wider.

Then open up and say “Ah.” Now repeat. This time, use your abs to expand your waist. You’ll also feel the downward push of your lower abs. Say “Ah” once more, and as you expand, you’ll hear the sound get stronger. Use this technique for more volume and a stronger sound.

 

4.Open up

When you get nervous, your voice gets squeaky and high. Not the confident image you want to project. And the more you try and control it by force, the more you start to lose it altogether. The cure: breathing low, gently using your lower abs to push down and relax. And always let your throat be open and free of tension. An open throat protects your voice and produces a richer sound.

 

5. Variety is key

Want to control your whole audience? Speak in a monotone voice, and you can send a group of 2,000 people off to dreamland. Especially when working by phone, that dead air may not be your client pondering. Try listening for snoring. To prevent this, remember the “four P’s” of vocal variety:

  • Pace: Speak too fast and it sounds like you’re nervous or a used car salesman trying to pull a fast one. If the pace is too slow, you’re going to sound like the village idiot.
  • Pitch: Pit your voice too low and nobody will hear you. Speak too high and you sound nervous.
  • Pauses: Build them into your speech–sparingly. If pauses are too short, it’ll sound like you’re scrambling for words. But a few well-timed pauses create a sense of intrigue and curiosity.
  • Passion: This all-important quality will be the biggest selling point you have. Love your topic.

 

6. Get rid of nasality

There’s a problem if your voice sounds disturbingly like Fran Drescher’s. If you’re a whiner, try this: yawn. Feel your mouth open wide. You won’t feel that kind of space if you’re nasal. The soft palate -a flap of skin on the back of the roof of your mouth-lifts and allows air to float up into every chamber of your head, resulting in a full, resonant sound. It’s like a little trap door that can open and close. Conversely, when the soft palate lowers, the air stream is blocked off from the head, and the air can only pass out of the nose.

For a quick fix, say “Ing- Ah.” Elide the “Ing” right into the “Ah,” and don’t break them into two sounds. Feel what’s happening inside your mouth. On “Ing,” the back of your tongue is pressed up against the soft palate and no air can get into your head. It’s nasal. When you say “Ah,” the tongue peels down from the roof and allows the sound to lift.

 

7. Modify your accent

How boring the world would be if we all sounded the same. But if your native tongue gets in the way of communication, you should correct it. The process used to be called accent “elimination,” but “modification” is a more accurate term. Spend a few sessions with a voice coach who can give you the basic sounds of English, help you pronounce its most confusing words and model them for you, face-to-face.

 

8. Tune your tone

Being able to adjust your tone to any situation is paramount to successful business communication. If you do sound monotonous, ineffectual or annoying, you may lose a client. If your tone is lackluster, they think you’re bored. If you sound angry or bullying, that aggressive style can put them off. But if you’re able to suit your tone to any occasion, you’ll win the day. Learn how to sound passionate even if you’d rather be anywhere else.

 

9. Leave it at the beep

Leaving a great voice-mail message is essential. If you sound positive, polished and professional, people will get a wonderful “first vocal impression.” Leave your name clearly. Spell it if you have to. Leave your phone number, twice. Tell them briefly what you can do for them. Let them know when you can be reached, or ask them the best time for you to call back. Be brief, but not vague.

 

10. It is, actually, about you

The most important tip is to be authentic. Take time to find what’s unique about you- your sense of humor, your newfound confidence, your persona.

Stop trying to sound like a phony announcer.

Mastering these tips for voice power will soon become second nature. And if your potential client does sound like Elmer Fudd, well, know that your newfound vocal skills will make an excellent first impression. Weally.

Douglas Anderson is president of Your Voice Coach, a consultancy whose clients range from startups to Fortune 500 companies. His detailed programs and list of services can be found on his website,www.yourvoicecoach.com.

 

Typology Innovation

 

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“People adopt ideas when social, personal and financial trends intersect – a confluence that may seem random but usually happens “by design” “.

– Clement Mok

When you think of artificial intelligence (AI), you might think of dehumanizing interactions. Don’t confuse AI with primitive marketing automation.

Artificial Intelligence Drives Customer Experience, as AI expert and leading keynote speaker Christopher Penn, VP of Marketing Technology for SHIFT Communications says,

There are three levels of machine learning: AI where machines perform tasks normally performed by humans; machine learning.”

There are three levels of machine learning: AI where machines perform tasks normally performed by humans; machine learning.”

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How CEOs Manage Time

The scope of an organization’s managerial work is vast, encompassing functional agendas, business unit agendas, multiple organizational levels and myriad external issues. It also involves a wide array of constituencies—shareholders, customers, employees, the board, the media, government, community organizations, and more. Unlike any other executive, the CEO has to engage with them all.

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The epitome of leadership – The CEO in the lexicom of management

While CEOs are the ultimate power in their companies, they face challenges and constraints that few others recognize. Running a large global company is an exceedingly complex job.

The CEO must be the internal and external face of the organization through good times and bad, of course, having a great deal of help and resources at their disposal. However, they, more than anyone else in the organization, confront an acute scarcity of one resource. That resource is time. There is never enough time to do everything that a CEO is responsible for. Despite this, CEOs remain accountable for all the work of their organizations. 

The way CEOs allocate their time and their presence—where they choose to personally participate—is crucial, not only to their own effectiveness but also to the performance of their companies.

 

Where and how CEOs are involved
In determining what gets done and signals priorities for others it can also affect their legitimacy because a CEO who doesn’t spend enough time with colleagues will seem insular and out of touch, whereas one who spends too much time in direct decision making will risk being seen as a micromanager and erode employees’ initiative.

A CEO’s schedule (indeed, any leader’s schedule), then, is a manifestation of how the leader leads and sends powerful messages to the rest of the organization.

A crucial missing link in understanding the time allocation of CEOs—and making it more effective—has been systematic data on what they actually do.

Research on that has tended either to cover a small handful of CEOs, like the 1973 study in which Henry Mintzberg closely observed five chief executives (some of whom led nonprofits) for five days each, or to rely on large surveys that cover short periods (such as our HBS colleague Raffaella Sadun’s 2017 study based on daily phone surveys with 1,114 CEOs from a wide variety of companies in six countries over one week).


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A healthy economy

 How should a sustainable, universally economy look like?



 

“A healthy economy should be designed to thrive, not grow” sais Oxford economist, Kate Raworth.

 

 

 

Europe’s Road to Growth

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(https://on.ft.com/2J9CRe1The Financial Times is looking for 100 European companies, individuals and organisations that are taking advantage of new technologies in groundbreaking ways.

“There are fears that Europe is falling behind in digital transformation, just as the so-called fourth industrial evolution begins to change the business models of traditional industries in noticeable ways”, 

Patrick McGee wrote for the Digital Economy section in the Financial Times June edition. The predicted efficiency gains from the adoption of new technology are so great that, at first glance, they appear to be typos. PwC, for instance, forecasts the shift to contribute as much as 14 per cent to global GDP gains by 2030 — or “about $15tn in today’s value”.

However, digitalisation has so far been patchy. According to PwC, two-thirds of the 1,155 global manufacturing companies they surveyed “have just started or have not yet embarked on their digital transformation”.

Europe, in particular, is lagging behind: just 5 per cent of manufacturers in Europe, the Middle East and Africa (Emea) are “digital champions,” PwC says, versus 11 per cent in the Americas and 19 per cent in Asia-Pacific. On the other hand, Europe has strong foundations in fields such as artificial intelligence (AI) and cryptography, says Siraj Khaliq, a partner at Atomico, a technology investment group, which compiles an annual report, The State of European Tech.

Over the past two years, he says, industry has been increasingly tapping into these innovations with small acquisitions happening all the time.

The trajectory is very strong for these areas, especially with government policies of encouraging entrepreneurship with tax breaks and other measures,

Mr Khaliq adds.

More than 30 national and regional initiatives for digitalising industry have been launched across the continent over the past few years.

The FT is compiling a list of Europe’s best examples of digital transformation

Find out how to get involved.

Please see details below for how to nominate a digital transformation champion to be considered for this list on ft.com/2J9CRe1 #FTEuropeGrowth.”

 


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Windows of opportunity

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This world is moving away from a system of national markets

Isolated from one another by trade barriers, distance or culture, advances in technology and mass communication have made it possible, for people in one part of the world to watch happenings in far off places.

Theses are often used interchangeably but they refer to different processes. The process of integration on a worldwide scale of markets and production, has a single accepted definition used for it, globalisation.

For it, national boundaries are not important economically; free trade and movement of labour and other resources result in the breakdown of these boundaries and one big global marketplace.

On the other hand, referring to resources is internationalisation for which the increased links between nation states, with respect for trade and movement of this resources in participating and co-operating with other nation states to a common end.The regional trade agreements and regionalism are important in this process the EU is an example.

Hyperglobalisation – an extreme view process where the world market is a borderless global market.Consisting of powerless nation states and powerful multinational corporations.”

The process of globalisation brings changes in both the power of countries and companies and in national characteristics and culture, generally accepted in a view called transformationalism. The main international organisation concerned with globalisation are the World Trade Organisation, the International Monetary Fund, the World Bank and the OECD.

The OECD categories members into three bands high income countries, which include the EU, North America and Australia; middle income countries, which include East Asia and the Pacific Rim, and low-income countries, which include South Asia and Africa.

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A result in increased exposure to global forces

Businesses operate under the process of globalisation that is constantly changing. It used to mean the westernisation of the developing world but the newly emerging economies  such as Brasil, China and India are redefining processes and institutions.

Businesses need an understanding of the processes in the global context and even if they do not trade directly with other countries, they might be affected by domestic shortage of skilled labour or may be subject to developments on the global financial markets.

“All businesses need to be aware of their global context.”

Globalisation is here to stay and despite apparent retreat into nationalism in light of economic conditions in 2008, in 1980, the share of the developing countries in world trade was 22 per cent, by 2005 it was 32 per cent and the World Bank predicts that their share will be 45 per cent by 2030.




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“An old academic theory links interest rates to inflation and growth, and that connection seemed durable for some time.

In past business cycles, periods of high inflation and rapid expansion led investors to demand a high rate of return. When the economy grew slowly and prices held stable, interest rates fell as competition for capital declined.

Since 2000, however, the real yield on the 10-year Treasury—which is often seen as a proxy for the true long-term interest rate—has persistently fallen short of the real rate of economic growth. The theory tells us the 10-year yield should rest between 4 and 5 percent today, far above its current 3 percent. The link between growth and interest rates still exists, but there are external forces combining to keep yields soft throughout the expansion.

 

It’s Not an Inflation Surprise

Over the past decade, investors’ expectations for inflation have aligned closely with the actual behavior of prices, so today’s relatively low real yields cannot be attributed to an unforeseen bout of inflation catching the market off guard. Bond investors currently anticipate inflation to hold near the Federal Reserve’s 2 percent target over the long run, leaving a very low real return.

The 10-year Treasury Inflation Protected Securities yield is currently less than 1 percent, yet real GDP growth sits near 2 percent with the potential to accelerate to 3 percent in the fall. It seems curious, then, that bond investors are settling for so little.

 

Widening Spreads

Treasury yields may be historically low, but they exceed the yield on German bunds by more than 2 percentage points—a historically wide margin. For global investors seeking safe returns, US government debt is much more attractive than the bonds issued in Europe or Japan, where quantitative easing programs are intentionally suppressing yields. The Fed may have tapered its own asset-purchasing program, but the US bond market is likely being skewed by the actions of central banks abroad.

This distortion should eventually fade. The European Central Bank plans to gradually wind down its quantitative easing program this year, which will allow yields to rise to their natural equilibrium. But tapering will unfold over a long period, and the US advantage in yields will likely persist for some time.

 

Trade Imbalances

Developing economies naturally run trade surpluses; to keep their exchange rates stable, foreign governments often park their surplus dollars in US Treasurys. This keeps East Asia’s export-focused manufacturing sectors competitive on the global market, but the influx of foreign capital also tends to drive Treasury yields lower.

Trade imbalances are the natural consequence of rapid growth in industrializing nations, a trend that shows no sign of slowing. Dollarization should begin to ebb as a new consumer class emerges throughout the developing world, but this shift in capital flows is likely to evolve over decades.

 

Capital Requirements

The Fed is shrinking its balance sheet, but new banking regulations have increased liquid capital holding requirements for large financial institutions. This means that as the Fed sells off the excess holdings acquired through quantitative easing, demand from private banks likely will increase.

This is one reason for the relative stability of yields as balance sheet normalization begins. The Fed is currently allowing $30 billion in Treasurys and other long-term securities to mature every month, with the pace of the runoff set to accelerate to $50 billion monthly later this year. Much of the new debt entering the market is being bought up by financial firms, which are required to maintain a large buffer of stable, liquid assets as a backstop against volatility. Since Treasurys are ideal for meeting this requirement, banks will likely continue to buy them even when yields are below their natural equilibrium.

Long-term bond yields—and by extension, interest rates—may be resting well below their natural equilibrium. If inflation holds near the Fed’s 2 percent target and real growth averages between 2 and 3 percent annually, nominal yields should tend to rise toward 4 percent.

The link between interest rates, growth and inflation has not broken, but the forces skewing the bond market are persistent. Yields are likely to evolve over the course of years or even decades as they seek their natural equilibrium.

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As the peak of the business cycle approaches, the economic outlook is remarkably bright- wages are finally firming as the labor market begins to tighten; tame inflation and gradually climbing interest rates are promoting stability in financial markets; and the rising volume of international trade is generating global prosperity.

These are the main lessons from the first quarter of 2018:

 

Forecasts Agree on Continued Growth

A glance at prominent economic forecasts could give the impression of widespread disagreement over the economy’s health. The International Monetary Fund projects US real GDP growth to fall shy of 3 percent this year before slowing to a 1.90 percent pace of expansion by 2020, while the more optimistic members of the Federal Open Markets Committee are calling for 3 percent growth this year and a sustained 2.2 percent growth rate through 2020.

But a closer look at the numbers behind these projections shows important areas of consensus. All major forecasts call for a sustained period of low unemployment; even conservative predictions place headline unemployment at or below 4 percent through 2020. The difference between the forecasts’ GDP projections appears to be rooted in disagreements over the pace of labor productivity growth and the impact of a large number of baby boomer retirements.

Most forecasters agree that demand for labor will remain strong in the medium term, which implies that they expect the economy to perform at or near its full potential in the coming years. For US households, this is far more important than the actual pace of GDP growth. Household net worth and personal incomes should continue to climb in a benign economic climate. Strong demand for labor and rising asset values will benefit the average household, regardless of how quickly the overall economy is growing.

Strong demand for labor should also spur businesses to invest in productivity-enhancing technologies, such as automation and workforce development. The ensuing productivity gains will naturally tend to lift wages. Already, real hourly compensation is rising a full percentage point faster than inflation, mirroring productivity trends.

Rising Yields Are a Bullish Signal

The 10-year Treasury yield, often used as a proxy for long-term interest rates, is finally closing in on 3 percent. This is a sign that the economy is healthy enough to grow without relying on support from artificially low interest rates.

Higher borrowing costs also could provide some protection against imbalances and the emergence of asset bubbles. When the cost of capital goes up, businesses and individuals are likely to take a more discerning view about which investments are worth taking on debt. The gradual normalization of interest rates will help prolong the current expansion, even as full employment approaches.

 

On-Target Inflation Sets Stage for Normalization

Inflation is nearing the Federal Reserve’s 2 percent target, setting the stage for steady interest rate normalization. Economists look to rising retail prices for clues about aggregate demand and the limits of economic capacity, but consumer prices are often skewed by supply shocks that are unrelated to the broader economic picture. For this reason, the Fed looks to long-term trends and market expectations when setting monetary policy.

The long-term inflation picture is almost ideal. Bond investors are pricing in an inflation margin just above 2 percent, and since 1999, the consumer price index (CPI) has increased by an average annual rate of just under 2 percent. The Fed’s credibility in setting inflation expectations provides a powerful policy lever, giving market participants clarity about the central bank’s intentions. Investors can plan for the future with confidence, knowing that monetary policy will be crafted with the goal of maintaining 2 percent inflation over the long run.

 

Global Trade Is Generating Widespread Prosperity

The US trade deficit is widening once again, but the imbalance in imported goods is part of a worldwide trend of growing prosperity. As US consumers spend more, they are naturally buying more imported merchandise; however, the rising volume of imports masks the nation’s rapidly growing surplus in exported services. US trading partners are increasingly paying tuition to American universities and doing their banking with American firms; as a result, the United States’ overall current account deficit has fallen to 2.5 percent of GDP, less than half of what it was in the mid-2000s.

International trade’s growing influence in the economy was on full display last month, when the Trump administration’s harsh rhetoric toward China caused jitters in the equity markets. Investors know that access to overseas markets will be crucial for future growth. As hundreds of millions of citizens in the Asia-Pacific region move into the middle class, they will form an immense market for US goods and services.

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