Month: October 2012

EU tries to boost broadband coverage

Posted on by Ben Debski

Finding a way out of the financial crisis engulfing Europe is troubling policy leaders across the continent, but what the area most agree on is vitality of an upgrade of modern infrastructure to help new technologies and industries grow.

EU leaders are hoping that improving the capacity for internet speeds and coverage will help promote a thriving online community of businesses, and not get left behind by forward-thinking economies in Asia and the US.

European Commission vice president Neelie Kroes yesterday announced she would be asking telecom CEOs and politicians to endorse her Connecting Europe Facility fund, which would provide investment of €9.2bn between 2014 and 2020.

Announcing the plans yesterday, Kroes said: “Already today we see the havoc when broadband networks get congested. But with Internet use doubling every 2-3 years, those networks need a serious upgrade. Without investment, we condemn our citizens to slow connections with frequent blackouts; we make our businesses less competitive and less productive; we force our public authorities to meet 21st century expectations using 20th century systems.

She hopes that the loans would lead to telecom companies pumping a further €100bn into improving coverage across the EU and helping countries with slower speeds and patchy coverage. Ultimately, she hopes that as many as 45 million homes will be provided with fast broadband connections.

Kroes added: “On 12 July I set out the regulatory framework to encourage private investment in broadband. But the fact is private money can’t do it all: broadband needs public support through financial instruments. If we fail to invest, millions in less populated areas will find themselves on the wrong side of the digital divide, cut off from tomorrow’s opportunities. That’s bad for our economy, and bad for our society.”

Supply chain efficiency in food management

Posted on by Ben Debski

Almost half of the planet’s population does not enjoy a healthy diet. One billion people suffer from hunger, one more billion people are undernourished and another billion people overeat. Food supply, however, is not the only problem. There is more than enough grown to feed all seven billion of the world’s inhabitants. Per capita food production continues to increase, bringing with it a new problem: waste.

The best scientific analysis done to date estimates that over one-third of the world’s food is either lost during its journey across the supply chain or is tossed away by the consumer. Over 70 percent of all water is used on farms, which means that roughly one fourth of all the water that humans take from the planet goes into food that nobody eats. The Food and Agriculture Organisation of the UN (FAO) projects that demand for food, feed and fibre will grow by another 70 percent by 2050. Water and land resources needed to grow food are also under increasing pressure from all sectors of the global economy, and particularly for energy production, which is also projected to stand 84 percent higher than it does today.

It is not just water and money that are being wasting away either. Food production requires significant amounts of energy, and can also be a major source of greenhouse emissions and pollution when it is not properly disposed of. Efficient water use – in agriculture and industry in particular – and dramatic reductions in the losses and waste of food, are among the most effective ways to provide for a growing global population while reducing pressure on the environment. Investments by governments, financial institutions and companies in resource efficiency can save money today and help ensure that the planet’s limited resources are preserved for the future.

Fixing the leaks
Losses accumulate during the harvesting, threshing, transportation, distribution, processing and storage of food before it reaches the consumer. The packaging and marketing of food products can all also contribute to more or less food going to waste. Investments in improved harvesting, storage, transport and cooling infrastructure can reduce losses significantly. Coupled with increased access of local producers to better food processing, packaging and new markets, more food will be sold and less lost, providing economic and social benefits to both producer and consumer. Reducing losses in the supply chain has the potential to save production costs, and increase profitability for farmers and companies.

Investment in more productive agricultures, especially in developing countries, will also pay off in a big way. There are a variety of techniques, technologies and investments that can enable farmers to grow more ‘crop per drop’ of water, with the potential for improvements vast.

With widespread action to improve the efficient and fair use of available water resources, it is possible to sustainably double agricultural production in the coming decades and provide enough food for a growing global population. Food production can be rapidly increased using renewable water through support to rain-fed smallholder agriculture. The Consultative Group on International Agricultural Research (CGIAR) estimates that investment in international agricultural research in developing countries can deliver as much as nine dollars worth of additional food produced for every dollar invested by finding, for example, drought-tolerant crop varieties and hardier livestock breeds that are more resilient to climactic variability.

Curbing waste
In more advanced economies, less is lost in the field but more is discarded into the bin. In the US, 40 percent of purchased food is thrown away either in the market or by the consumer.  That waste is worth up to $100bn and has more than enough calories to meet the needs of all of the world’s hungriest. Europe is not much different. Today, the average European throws away nearly 180kg of food each year and with the exception of the US, Canada and Australia, the nations with the highest rates of food waste per capita are located in Europe.

One of the major barriers to preventing food waste is that the responsibility for the problem is muddled. It is a consumer’s right to eat or not eat food, and ultimately it is the individual’s responsibility and choice to take action to reduce the amount of food that they throw away.

However, there is a role for governments, food producers and sellers to engage consumers and provide incentives, guidance to reduce the waste and unhealthy overconsumption of food.

Numerous cooperative initiatives led by governments, private sector companies and NGOs are being led to help individuals improve energy efficiency in their homes, and campaigns to increase recycling have had success in several countries. Reducing food waste is a similar win-win issue that should be added to the priority list of local and national governments and relevant private sector companies. There are positive signs that this is starting to happen in the EU, which should expand opportunities for solution providers that make it simpler and more convenient for people and businesses to reduce their waste.

Facilitating change
The action by the EU Parliament in 2012, which called on the European Commission to adopt a goal of halving food waste by 2025 is precisely the type of initiative that is needed, not only here in Europe but also globally. The European Commission estimated in a recent report that if no action is taken, total food waste will continue to increase by an additional 40 percent across the continent. The resolution specifically pushes for many waste-reducing measures, like less confusing date labelling on food packaging, a wider range of package sizes with perishables, and country-specific food-waste-prevention targets, and even declares that 2014 will be the “European Year Against Waste”.

There is still a long way to go to ensure that actions are taken to actually achieve these goals, but this is a crucial first step. Leaders in government, business and finance around the world should follow suit and work harder to cultivate opportunities to reduce losses across the entire supply chain. Time, like water and food resources, is too valuable to waste.

Bermuda’s new technology appeal

Posted on by Ben Debski

The international business environment is dynamic with rapid changes and immense competition between countries and jurisdictions to capture capital, deliver innovation through new products and services, and the creation of jobs and sustainable growth.

Longstanding business practices, regulations, and traditional cross-border relationships are continually evolving as new players emerge with original ideas and open, untested markets. An international finance centre that churns out yesterday’s answers to today’s demands will quickly find it has no tomorrow.

But, this does not of course mean that a long established reputation founded on quality and reliability no longer matters, rather that it must be supplemented with innovation that meets the needs of new market entrants and that will take advantage of fresh opportunities opened up by new technology.

New opportunities
Let us take the case of offshore trading platforms to illustrate the point. When the TMX Group, owners of the Toronto Stock Exchange, looked for new international growth opportunities, they chose to make a strategic investment in the Bermuda Stock Exchange (BSX). What was Bermuda’s distinctive selling point, apart from its reputation as a fully regulated exchange that is the only offshore exchange with membership in the World Federation of Exchanges?

A key feature was its 24-hour functioning electronic trading platform that serves as a bridge that links markets around the globe. The BSX has used this position to develop innovative products that marry the evolving capital markets with Bermuda’s expertise in insurance. Today, Bermuda is the leader in insurance-linked securities. The leadership and cooperative approach of Greg Wojciechowski, CEO of the Exchange, made a telling difference. So did the Bermuda Stock Exchange’s recognition of the importance of an offshore trading platform and exchange that can advance capital markets and hasten the next generation of capital markets, products, and services.

But while innovation and the harnessing of new technologies have become essential for a financial centre’s long-term growth, a good idea needs a secure context if it is to translate into a profitable business opportunity. Otherwise, a lone innovator can fall foul of the old adage that “pioneers get all the arrows”.

Therefore, when one of the world’s major hedge funds looked for a suitable jurisdiction for the creation of a reinsurance company that would insure risks from all over the world, it selected Bermuda. John Berger, CEO of Third Point Re, explained in the Royal Gazette, one of Bermuda’s leading daily newspapers: “There are many great advantages to Bermuda. It is a very civil place with an established infrastructure and banking industry.

The Bermuda Monetary Authority is a very respected regulator and good to deal with. Bermuda’s proximity to the US is also helpful, and it’s not far from London.” He added: “But, overall, most importantly Bermuda is really a reinsurance centre.”

Platform for growth
To achieve this sort of recognition as an international centre, a jurisdiction today must have a wealth of expertise from a wide range of experienced service providers, whether home grown or attracted to its shores from abroad, readily available. Such high-calibre service providers must include lawyers, accountants, fund managers, bankers, auditors, insurance professionals, and – increasingly in our high-tech world – IT, telecoms, and e-commerce professionals.

Complex business transactions on a global scale demand nothing less than what can seem a daunting depth and breadth of highly skilled professionals. In today’s fast moving markets what matters is less where you are on the globe and more how easily you can connect with the rest of it. That is the thinking behind Bermuda’s investment in providing the connectivity and technology needed to carry out business in real time in any part of the world.

Also, modern location decisions have a personal as well as professional dimension. Because they are so highly skilled and in great demand, talented professionals tend to shun destinations that are remote, in an awkward time zone, have an unfavourable climate, or lack the security and social amenities that make family life attractive. Political and financial stability is another crucial requirement, especially in the aftermath of the financial uncertainty in Europe and the political upheavals in many emerging countries.

When a centre has achieved critical mass of intellectual capital, with a full array of support professions, then you can be confident that your new product or service will get all the expert backup it needs in order to succeed.

But even that is no longer enough to ensure the recognition of your international centre of choice. Today change happens at a much faster speed. It’s simply not enough to have installed all the latest business support – in the demanding context of global competition a centre that wishes to stay ahead must take care to keep installing each new innovation, provided that it has been tested and found reliable.

Bermudian backing
In Bermuda, we endeavour to keep adding to the effectiveness of the support services for the businesses that are domiciled and operating on the Island. One crucial element in this process is to maintain a continual dialogue with businesses and their advisers – and especially to welcome rather than to deflect challenging feedback.

Listening and learning form a crucial part of building an understanding of the key forces that are driving business decisions in the market. However experienced and enthusiastic a centre may be, its offering can be significantly improved by the insights and practical perspectives of market participants and their professional advisers. That’s why a genuine public-private partnership ensures that businesses can benefit from a supportive and adaptable working environment.

Nor should the conversation be restricted to businesses already located in the centre. In a global economy where cross-border business accelerates by the day, it makes sense for representatives of an international business centre to be regular visitors to jurisdictions likely to be important sources of new business. Business Bermuda’s campaign of marketing activities takes place as much in key locations such as Beijing, London, and New York as back home.

For example, Business Bermuda recently organised a visit to China with the Ministry of Business Development & Tourism to meet leaders of government and industry in Beijing and Shanghai.  The visit built on previous links established in Hong Kong with the China Council for the promotion of international trade. Business Development & Tourism Minister, Wayne Furbert, secured a high profile speaking opportunity at the Chinese Enterprises Outbound Investment Conference in Beijing. This enabled him to highlight the attractions of Bermuda as an international business jurisdiction and to focus specifically on opportunities for Chinese investment in tourism and development infrastructure in Bermuda.

China is a relatively new international market and one that is growing fast. However traditional markets matter too, and they need to be nurtured rather than taken for granted. So Business Bermuda also features an annual Bermuda Financial Services Conference in London. This is an opportunity to reconnect with traditional business partners and to continue to deliver the message on Bermuda’s services and products. Investments in international events such as these enable Bermuda to build its global brand and create an environment that is responsive to the needs of international business.

Staying competitive
But some of the requirements of a successful international centre cannot be achieved by investment or effort – they just depend on the good fortune of a favourable location. Bermuda is fortunate that its location enjoys easy access to major North American cities such as New York, Washington, Boston, Miami, and Toronto. The island also has numerous direct flights to London and easy connections to major European business hubs.

This ease of accessibility can be critical for companies whose leaders need to have those important face-to-face meetings. Tax competitiveness is another critical determinant of the relative attraction of a business centre. Bermuda is an established tax-neutral jurisdiction, and imposes no tax on profits, income, dividends, or capital gains. Indeed Bermuda’s only business-related tax is a payroll tax, which is paid on all employees within a company at a maximum rate of 16 percent.

Equally important, though, in deciding on an international location are the credibility and transparency of its laws and regulations. If these are flawed then a company’s assets and trade in a jurisdiction are in permanent hazard.

Every prudent business wants to compete on a level playing field, not in a system that lets the unscrupulous sneak forward. With that in mind, Bermuda’s rigorous observance of the rule of law has built up its international credibility over many years. The jurisdiction has signed Tax Information and Exchange Agreements and Treaties with member countries of the EU, G20, Organisation for Economic Cooperation and Development and white-listed jurisdictions and other key countries. Agreements are in place with more than thirty countries including the US, Canada, China, Japan, Germany, France and India among many others.

As an illustration, the BMA, which has sole responsibility for financial regulation, has developed a risk-based approach enabling it to concentrate its resources on those firms that may pose the greatest risk – with minimum bureaucracy imposed on other businesses. Bermuda has a record of being several steps ahead of the compliance curve. For example, the island was in a position to meet the EU’s AIFM Directive long before it was set to come into force.

Looking ahead, Bermuda seeks to be ahead of the game also in new global developments such as takaful and retakaful and other forms of Islamic finance, special purpose insurance with exotic names such as cat bonds and sidecar transactions, and support for China’s drive to establish sophisticated financial products more appropriate to its impressive economic expansion. Bermuda has already come a long way as an international business centre. It has much more still to accomplish as the free flow of capital accelerates around the world.

Igniting the renewable samba spark

Posted on by Ben Debski

At the recent Rio+20 UN Conference on sustainability, Brazil was announced as among one of the most sustainable countries within the G20 group. According to a study published this year by the Brazilian Association of Finance, Administration and Accounting Executives, the Latin American nation is only behind France and the UK in terms of clean energy usage.

In Brazil, 91 percent of electric energy comes from hydropower plants, which are among the cleanest sources of energy generation. New hydropower plants are under construction in the country following a scheme of pursuing more environmentally friendly projects. One scheme envisages the removal of need for reservoirs, based on a run-of-river model, preserving Brazil’s numerous rainforests.

If we consider all energy sources, rather than only electricity, Brazil gets 45 percent of its energy matrix from renewable sources, while the world average is only 13 percent of clean energy.

Brazil is among one of the global leaders in terms of clean energy, and the Neoenergia Group is one of the best examples of the nation’s cutting-edge performance, in partnership with the Spanish company Iberdrola, the state-owned company Banco do Brasil and the pension fund of the employees of that bank, Previ.

Renewable revival
The third largest private investor in the Brazilian electrical sector, and the fortieth largest private group in the country, Neoenergia was also the first private holding in Brazil to receive the Investment Grade from Standard & Poor (BR AAA in National Scale and BBB- in Global Scale). This acknowledgement, renewed in 2012, is proof of the group’s solidity in all of its businesses: generation, distribution, transmission and commercialisation of electrical energy.

Present in 12 Brazilian states and with investments totaling R$20.4bn, the Neoenergia Group has already invested around R$2bn in the generation of clean and renewable energies, such as hydropower and wind power, in addition to the development of other sources. By 2019, the company’s projects will be responsible for the generation of 2.5 percent of Brazil’s energy, becoming one of the country’s largest private groups in the generation of electric power from renewable sources.

Preserving paradise
Neoenergia’s growth is concomitant to the Group’s investment in the reduction of socio-environmental impact. The Dardanelos Hydropower Plant, in the central-west region of Brazil, generates energy without the need of a reservoir and helps preserve the region’s natural beauty.

Another ecological paradise in Brazil, the Fernando de Noronha archipelago, is also benefitting from Neoenergia’s energy efficiency programmes. In partnership with the Brazilian Air Force, a solar power generation plant is being installed, and – in conjunction with other initiatives – will contribute towards the reduction in the consumption of 175,000 litres of B5 Biodiesel, currently used for the generation of energy on the island.

Footballing energy
Neoenergia has also invested in the generation of solar and wind energy, complementary sources that are growing fast in Brazil, contributing to the country’s sustainable development. This year, Neoenergia inaugurated the first photovoltaic solar power generation plant in Latin America inside a football stadium, the 34,000-seater Pituaçu in Salvador, Bahia.

This same technology will be adopted at the Arena Pernambuco, in the northeastern region of Brazil, one of the 2014 World Cup’s 14 host-stadiums, in partnership with Odebrecht Energia. The full R&D project, costing around R$24.5m, includes the construction of a solar panel certification laboratory and the development of electronic transformers.

Complementing sources
The Neoenergia Group is also participating in the implementation and operation of 10 wind power plants in the northeastern region of Brazil, through Força Eólica, a joint venture with Iberdrola. It relies on six energy co-generation plants, using natural gas and steam. While producing 905 tonnes of steam per hour, these plants generate 93MW of energy and save the atmosphere from 46,000 tonnes of carbon gas. Besides, four out of five small hydropower plants (SHPP) of Neoenergia Group have received the UN’s  authorisation to issue carbon credits, as they produce clean energy. Always aware of innovation, Neoenergia has already scheduled extensive studies for the generation of electric energy from biogas (generated in sewage treatment stations).

Neoenergia is also pushing the northeast of Brazil – one of the fastest growing regions in the country – to become one of the leaders in energy efficiency. The group controls the electrical energy distribution companies of three important states of the region: Coelba in Bahia, Celpe in Pernambuco, and Cosern in Rio Grande do Norte, which are among the best distributors in “service quality” of Brazil, according to the Brazilian Electricity Regulatory Agency. These three states total 9.5 million electrical consumer units, which makes Neoenergia the largest private company of the sector in the number of clients in Brazil.

More than half of this population belongs within the low-income sector – with a monthly income lower than €124 for each person in the family. For this reason, Neoenergia has invested around €90m since 1999 in energy efficiency programmes. The main objective is to adjust these clients’ consumption to their payment capability, and contribute to the improvement of the population’s quality of life. Within this scope, one of the major projects is the Nova Geladeira (New Refrigerator) programme, which has already replaced more than 200,000 old and inefficient refrigerators with new and more economic ones certified by the Procel Energy Efficiency Seal. A refrigerator in poor working conditions can be responsible for up to 70 percent of the total energy bill of low-income families. By adjusting these consumers’ consumption to their payment capability, Neoenergia reduces the number of clandestine electric power connections and also contributes to increasing people’s quality of life by improving the level of food conservation.

The programme has already saved €91.6m, equivalent to a 50.9MW hydropower plant or to the consumption of a town with more than 110,000 inhabitants. The environmental benefits generated by the programme are also worthy of note. CFC gas – and its harmful impact on the ozone layer – is reduced from the old refrigerators and treated.

Furthermore, the new refrigerators use R600a (isobutene), an environmentally friendly gas. This means that the Neoenergia Group is already influencing the energy market by aiming to replace harmful CFC gasses with isobutene. And that is not all: the old refrigerator is recycled, the scrap metal sold and the resulting revenue is earmarked for other projects, such as the Vale Luz programme which provides discounts on the energy bills of clients that donate recyclable waste, such as glass, plastic bottles, metal, paper and other materials. Until the first quarter of this year, around 512 tonnes of solid waste had been recycled and R$35,000 in energy bill discounts had been granted.

Inspiring programmes
Neoenergia Group’s energy distribution also has an important role in one of the major social projects of the Brazilian government: the Luz para Todos (Light for All) programme, with the objective of supplying electrical energy to more than 10 million people who do not have access to this essential service. In Bahia, the state with one of the largest populations in the country, Coelba, the electric energy distributor of the Neoenergia Group, is to reach the fantastic milestone of 500,000 connections for low-income citizens. Out of these domiciles serviced, more than 20,000 are classed in extreme poverty, with per capita income lower than €28 per month.

In order to install the new electricity connections of the project, Coelba expanded Bahia’s electric network by more than 78km since 2004. This meant an investment of more than €1bn, shared by the Federal Government and Coelba, with the participation of the Government of Bahia. By 2014, Coelba is to reach the target of 588,000 connections in domiciles of the rural area of Bahia.  The three Neoenergia Group distributors together have already made 664,000 connections for the Luz para Todos programme, from the start of this year, with an investment of €1.4bn.

Forest restoration
Neoenergia is a signatory of the Global Compact and Atlantic Forest Restoration Pact, and it reports all of its practices by way of GRI reports, maintaining a close and transparent relationship with all its stakeholders (communities, clients, governments, employees, suppliers).

“We are helping, together with our 5,100 direct collaborators, Brazil become an example to the world regarding sustainability in the electric energy sector”, said Solange Ribeiro, Neoenergia Group’s interim CEO in a recent interview.

Austria’s progressive infrastructural bloom

Posted on by Ben Debski

The Austrian province of Carinthia is not just a renowned skiing and hiking destination, it is steadily becoming characterised by its magnificent infrastructure, its location at the heart of the Alpe-Adria region, and for its up-and-coming dynamic research landscape.

Carinthia is the middle-ground between established markets in western and central Europe and the up-and-coming markets of southern and south-eastern Europe and as such is an ideal springboard for businesses looking for an inroad into these new emerging markets.

Carinthia has an attractive mix of industries, with its strongest economic sectors overtaking tourism a long time ago. The fields of metals, machine and plant engineering, plastics and wood/paper are traditionally strong fields in Carinthia. However, the local economy is also focused on future fields of growth.

The latest energy and environmental technologies combined with microelectronics, IT and communication technologies make Carinthia a forward-thinking location to do business. Numerous companies from the area have made a name both nationally and internationally with their innovative products and specialist expertise. For example, the world’s leading producer of high-quality solar thermal cells is located in Carinthia.

Dynamic research
Carinthia’s research landscape is also on the up. There are some 270 technology-related companies creating a diverse and dynamic research environment in Carinthia. A good mix of in-house, university and non-university research institutes enable companies to enter into various partnership and cooperation agreements. The Carinthian Tech Research AG in Villach, for example, conducts application-oriented research for small, medium and large companies. The focus is on the fields of sensor technology and photovoltaics. Additional R&D focal points in Carinthia include: embedded systems, energy efficiency and wood processing.

The area also offers companies highly qualified employees with practical training in numerous areas. In addition to the Alpen-Adria University and Carinthia University of Applied Sciences, several apprenticeship schemes help to train young people within relevant technological sectors. Some 9,000 young, skilled workers are trained in Carinthia every year – with around 1/10 working on an industrial placement. Measured collaboration between education and the economy means that the on-going education in Carinthia can be adapted to fit the future requirements of the economy, thereby generating well-trained, employable staff.

Convincing investors
Carinthia is acknowledged by both domestic and foreign businesses as a prime investment location. Over 200 companies have chosen the region as the location to setup or expand their business since 1999. Carinthia has proven particularly successful with investors from other Austrian states, Germany and Italy. However, interest in the Alpen-Adria region has also increased in other nations such as Russia, Slovenia, US and the UK. The British company Intel Mobile Communications chose to settle in Carinthia last year and since then has been researching the field of mobile communication with over 20 employees.

Carinthian employees are impressed by the location too. Some of the largest employeers in Carinthia include Infineon Technologies Austria, which has experienced global success in the field of semi-conductor technology. The company is currently investing over €250m in expanding its headquarters in Carinthia, thereby creating over 450 new jobs primarily in the fields of semi-conductor research and development. In addition to the numerous benefits of the location, the area also has a beautiful, unique natural landscape, with a wide variety of outdoor leisure activities, Mediterranean-style flair and an attractive cultural ambience.

The Carinthian Investment Agency (EAK) provides interested companies from Austria and abroad with comprehensive information and professional advice about establishing or expanding of companies in Carinthia. The EAK team offers free support in finding suitable locations, contacting authorities and public institutions, local partners and research and educational institutes. Subsequently, the EAK was awarded the Best Inward Investment Agency Award 2012 in The New Economy.

At a glance
– Austria’s southernmost province
– Neighbouring countries:  Italy, Slovenia, Germany, Czech Republic
– Industry has overtaken tourism as the strongest economic sector
– Economic strengths: Metals, machinery and plant engineering, plastics, wood/ paper,  ICT, microelectronics, renewable energy
– R&D focal points: Sensor technology, photovoltaics, microelectronics, embedded systems
– Funding: Maximum 60 percent funding for investments in R&D, maximum 25 percent funding or investments in plant and machine construction
– Attractive group taxation, no business tax or tax on assets.

For more information
Entwicklungsagentur Kärnten GmbH – Carinthian Investment Agency
Primoschgasse 3, 9020 Klagenfurt am Wörthersee, Austria
Tel: +43 463 3875 101
Email: office@madeinkaernten.at
Web: www.investincarinthia.at

Hybrid vs electric futures

Posted on by Ben Debski

The hard-charged hybrid
Toyota started it off in the late nineties with the Prius, the first mass-produced hybrid vehicle. Running on a cleverly managed engine system using electricity and petrol, it pioneered twinning a battery-powered electrical motor for shorter journeys and a fairly conventional petrol engine that took over for longer trips. To the astonishment of the automotive giant, the Prius became a huge hit with environmentally minded, deep-pocketed customers who prided themselves on driving a low-emission vehicle despite its staid performance.

And although it’s taken more than a decade for rival manufacturers to follow suit, they’re catching up fast in the biggest revolution in the automotive industry since the invention of the internal combustion engine, according to automotive analysts.

Among many other models coming on the market, Ford is set to release its C-Max Energi, a plug-in hybrid selling in the US for nearly $30,000, less a $7,500 tax credit. Toyota ultimately plans to “hybridise” its entire range of models. And General Motors is hoping its Chevrolet Volt, a mid-sized saloon, will become a world favourite.

The rush of models is a far cry from the early nineties when nearly all major manufacturers gave up on electric power. After dismal sales for cars such as GM’s EV1, named by Time as one of the 50 worst automobiles ever made, they binned their battery technology and focused on smaller, petrol-sipping cars. Indeed GM bought up its fleet of EV1s and turned them to scrap metal.

The automotive industry was, however, forced back to work on cleaner fuel solutions by tougher environmental regulations and fears about the availability of oil in the wake of Hurricane Katrina in 2005. Soon specialist energy companies were coming up with batteries that were sufficiently small, powerful and easily chargeable to give the industry hope.

The Volt is the result of much research from GM. Driven by an internal combustion engine married with an electric motor capable of 40 miles on a single charge, it’s starting to win over car buyers. Many commuting Volt-owners say that they rarely dip into the fuel tank.

“Gas-guzzler nothing,” responded one irate owner to a criticism of the car on an environmental blog. “I drive 34 miles to work and back, plug the car in, eat dinner, ready to go. We’ve only bought 30 gallons of gas [in six months].”

Although showroom prices for hybrids are generally higher than for petrol-powered vehicles, a Volt selling for nearly £35,000 [€44,300] in UK and Europe, compared with £17,500 [€22,160] for the battery-powered Renault Fluence, taking government subsidies into account, prices are expected to fall further. According to an analyst for TechNavio, a market intelligence company, hybrids will soon cost less than comparable petrol-powered vehicles. “This reduction in cost will fuel the growth of the global hybrid car market,” he said.

The big saving is in fuel. Depending on the model, hybrids use about a quarter less petrol than conventionally engined cars. For instance, the Ford C-Max Energi will cover 95 miles on a single gallon and 550 miles by employing both technologies.

And hybrids are more environmentally virtuous. Because most journeys can now be accomplished on the battery alone, exhaust emissions are way down on petrol-driven vehicles.

While electric cars undeniably suffer from an absence of glamour, seen as mainly small city cars for short commutes, the hybrid line-up can boast luxury executive saloons such as the Lexus CT200h and a handful of supercars such as Porsche’s 150mph Cayenne. More are coming round the corner like BMW’s Spyder i8 concept car, a rocket-quick car that will use the same amount of fuel as a small car.

The exemplary electric vehicle
It’s a big mistake to judge all electric cars by the clunkers of yesteryear, insist enthusiasts of battery-powered vehicles. Or, for that matter, by current sales. In July, for instance, the electric Smart ForTwo sold just six units in the whole of the US, while BMW’s Active E sold absolutely none.

Yet the tide is slowly turning. Until the past couple of years, the only electric vehicles in common use on the world’s roads were small trucks. The reason? The batteries weighed a tonne. In the absence of plug-in facilities elsewhere, cars had to be hooked into the household mains for a painfully slow charge that usually took all night. And even fully charged, they rarely ran for more than 20 miles.

But since giant energy companies started throwing billions of research dollars at battery technology, electrically powered cars are roaring onto the world’s roads. Of the automotive giants, the biggest adopter is France’s Renault, which is rolling out four electric cars, including the Fluence family saloon and the tough little Kangoo truck.

Although the price of battery-powered cars is usually higher than for conventionally powered vehicles, as it is for hybrids, the advantages are significant. Low-wearing electric motors require little maintenance and soon recoup the initial investment because of their long life. At two cents a mile or less, running costs are about six times less than those of ordinary petrol-powered cars.

Pollution is almost zero and, unlike earlier batteries, today’s lithium-ion ones are environmentally impeccable. They can be dismantled and fully recycled. Most convincingly, the batteries are now powerful enough to get city commuters to and from their destination, without a recharge. Recharging times are collapsing from whole days to mere hours, and supermarkets have started installing plug-in facilities in their car parks.

As electric cars proliferate, the economies of scale justify much heavier investment in technology that is making batteries ever lighter, more powerful and faster-charging by the year. China’s BYD group (Build Your Dreams) will soon launch its E6 model with a range of 200 to 250 miles. To boot, BYD says it will take roughly the time to drink a cup of coffee — about 10 minutes — to recharge to 50 percent capacity and 15 minutes to 80 percent. Mega-investor Warren Buffett is convinced — he’s a major financial backer of BYD.

With the help of design gems such as Pininfarina’s Bollore Blue Car, electric vehicles are shedding their earnest image. The chic four-seater derives its energy from a 50kw motor powered by a lithium polymer battery pack with a range of 150 miles. As an eco-bonus, the Blue Car also boasts roof-mounted solar panels. This has prompted Pininfarina to boost production to 60,000 units a year by 2015.

Like their hybrid cousins, electric supercars are throwing down the gauntlet to petrol heads. Tesla’s $109,000 Roadster is a blazing performer that can hit 60mph from a standing start in less than four seconds. A little-known virtue of battery power is that it delivers head-snapping, low-down torque.

BMW’s imminent Megacity is a low-slung coupe that will hurtle around the urban environment in total silence apart from the whoosh of its tyres. And for good measure, Swedish supercar manufacturer, Koenigsegg, is aiming to go to another level altogether. It is developing a solar-powered supercar.

Finally, another virtue of all-electric power is that it facilitates low-cost, low-volume production of highly individual forms of transport. And one of the best is the Aptera 2e, a head-turning, US-made three-wheeler with a fully-enclosed cabin resting on aircraft-type wheel struts. The single-seater Aptera will retail for about $27,000.

Nagoya sets MBA standard

Posted on by Ben Debski

Since its foundation, Nagoya University of Commerce and Business (NUCB) has been a pioneer in international education. Contrary to most business schools in Japan, which usually only offer programmes in Japanese, NUCB offers an MBA programme fully conducted in English.

NUCB’s English conducted MBA course, the Global MBA (Global Leader Programme), was ranked as the third best full-time MBA in Japan, as well as the best among one-year English-taught MBAs, by SMBG’s “Best Masters Rankings”. Internationally recognised, NUCB is the only Japanese business school to be accredited by both the AACSB and AMBA, as well as having a number of its Master’s courses continually rank in the Top 10 in east-Asia by Eduniversal.

Recipe for success
Adopting a case method style for its teaching, NUCB’s highly experienced international faculty of staff brings both global and Japanese insight into classroom.

“The case studies used and explained by the Japanese business professionals allowed me to get an insight into why Japan was able to become the second largest economy in the world in such a short period of time,” says Hungarian GLP alumnus, Halashi Gergo.

In pursuit of its goal of helping to produce future global leaders, the combination of global knowledge and Asian insights is reflected in all aspects of GLP’s research and teaching.

Caroline Pulg, German GLP alumna, says, “With the booming Asian economy, learning business skills in Japan has many advantages. For me, it will be a major benefit when going back to Europe, where business relations between east and west are becoming more and more important with every passing day.”

Prime location
Another unique aspect of NUCB is its widespread exposure to the real world. Its campus is located in the heart of Nagoya, the third largest city in Japan, known as the hometown of many leading manufacturing companies, which encourages students to get involved with the real business world. NUCB arranges corporate study tours for international students so that they can get a better perspective of what they have learned in class. Students visit international business firms such as Toyota and other long-established traditional Japanese companies.

In addition to having over 80 partner schools in 40 countries, students have numerous opportunities to study abroad as well as to learn from visiting professors from business schools around the world.

“Using the advantages that NUCB has with its global partners creates a unique opportunity to achieve a global mindset while networking with business professionals at the same time. I believe the skills you can collect during the programme gives you an incomparable advantage for becoming a global leader in the future,” says Halashi, who has expanded his network and successfully found a position as a consulting manager in Japan.

The international dimension of GLP – where studying among different nationalities with diverse backgrounds and cultures is common practice – helps to broaden student’s social and work-related contacts.

For more information
The NUCB Graduate School; Tel: +81-52-203-8111; mba@nucba.ac.jp; www.nucba.ac.jp/en; www.facebook.com/MBA.JP; 1-20-1 Nishiki Nakaku Nagoya,
Aichi 460-0003 Japan

Enterprise Architect sets new standards

Posted on by Ben Debski

It is a sunny morning in Toulouse, France and a technical working-group begins the day. The members in attendance are volunteers originating from 33 different countries, speaking five different languages. All have a personal interest in some aspect of geospatial analysis. Up on their screens is Enterprise Architect, showing a recent geo-specification model.

This model has been accessed, amended and updated by each member in their centrally hosted location from around the world; effectively being developed 24/7 over the past three months since the group last met. Progress has been swift. Using the readily available Enterprise Architect toolset, the team has not only modelled the needed specification, but they have also used the tool to solicit feedback from stakeholders, manage task allocations and generate all the specification documentation directly from the model.

This kind of scenario is becoming more commonplace for organisations. Individuals and teams based all over the globe are working towards common standards in industries ranging from telecommunications, utilities, healthcare, finance, geospatial analysis and defence. This collaboration is made possible by Enterprise Architect software from Sparx Systems.

The group’s business development manager, Ken Harkin, explains Sparx’s widespread involvement in standards, and the benefits that are made possible as a result of the firm’s range of solutions.

What purpose do standards serve and how do they help deliver value?
Widely accepted standards help foster product interoperability and system architectures that mitigate risks, simplify and reduce delivery time and yield a stronger ROI as global industries such as healthcare, retail, utilities, telecommunications and other sectors continue rapid modernisation programmes. Interoperable system architectures that share a common language and interfaces at a hardware, software and system level are essential for successful global industries.

New markets can emerge from the open access to information made available through interoperability. Many stakeholders can benefit from standards including domains that see the need to integrate and share information, and those vendors who deliver value solutions to the industry at every point in their relevant supply chain.

Conversely, a lack of interoperability reduces customer choice, new opportunities for developers, possibilities for technology convergence and generally limits the growth rate of the particular market in question.

How can stakeholders be assured that their voice is being heard?
Standardisation provides stakeholders everywhere with harmonised rules and tools to implement reliable and cost-effective traceability methods and provide a platform upon which to build new ideas and fully-realise exciting products and markets.

Standardisation helps change innovation into accepted market application.  As an agreed codification for action, standards help provide a benchmark against which inclusive evaluations and judgements may be made by the global community on technical criteria, products and services, systems and processes and business model transformation.

A common language and toolset is essential for a wide range of individual and group stakeholders to collaborate and remotely communicate their ideas on all of these issues while providing assurance that process changes are effectively audited. Sparx Systems Enterprise Architect provides such a toolset and facilitates this language of change.

What is Sparx Systems involvement in standards?
Sparx Systems has been a contributing member of the Object Management Group (OMG) since 2003 and helped pioneer much support for standards in 2002. The company supported UML and XMI, which helped many to enable the interchange of both data (models and model fragments) and meta-data positioning.

Enterprise Architect is based on open-standards and is designed to be used throughout the full lifecycle of a systems development cycle. Whether it be large-scale vertical markets such as utilities, healthcare, telecommunications, automotive, or the single developer – Enterprise Architect delivers cost-effective “out-of-the-box” management of the development lifecycle and provides direct traceability from one stage of the lifecycle to the next. Enterprise Architect is an open, standards-based modelling solution that enjoys popularity as the tool of choice for many standards organisations worldwide.

Do you have any instances of value realisation from standards development in the domains serviced by Sparx Systems?
Well concerning the value of geospatial standard’s to the industry, a study conducted by Booz Allen Hamilton on behalf of NASA in 2005 to assess the cost of implementing geospatial standards delivered some very positive conclusions.

“Overall, the project that adopted and implemented geospatial interoperability standards saved 26.2 percent compared to the project that relied upon a proprietary standard. One way to interpret this result is that for every $4.00 spent on projects based on proprietary platforms, the same value could be achieved with $3.00 if the project were based on open standards.”

More recently the Defence Geospatial Standardisation Framework was published in April 2012. This is a network of forums, processes and communication mechanisms to facilitate robust engagement and responsibility for enabling interoperability in the geo-domain, where this network can be enabled through the development, management, and implementation of new standards. As previously stated in a statement published in 2010, the application of a defence geospatial information and technology standard is vital to achieving a geospatially enabled and networked workforce.

In order to allow geospatial information to be delivered seamlessly across the network from the strategic to the tactical level, the capabilities that defence groups acquire in the future must be able to ingest standard data-formats.

This framework goes on to point out that non-compliance with standards will result in additional costs and delays in the acquisition of new systems. Once operational, non-compliant platforms adversely affect interoperability and create an ongoing requirement to convert proprietary data formats into standard data formats resulting in systems that are expensive and unsupportable in the long-term. It is important, therefore, that geospatial standards, including meta-data standards, are collaboratively developed, managed and applied throughout the defence sector.

How can Enterprise Architect help companies wanting to implement smart-grid technology in the future?
Today, power-supply companies face the daunting task of optimising their core processes as a matter of survival in a deregulated energy market. The task is to combine the large number of autonomous IT systems into a homogeneous IT landscape. However, because they do not use uniform data standards, conventional network-control systems can only be integrated through considerable time and effort.

Network-control systems with a standardised data format for source data based on the standardised Common Information Model (CIM), usually offer the best basis for IT integration. Enterprise Architect is being used to develop and maintain the CIM, which defines a common language and data modelling with the object of simplifying the exchange of information between the participating systems and applications via direct interfaces.

The standardised CIM data model offers a range of advantages for power suppliers and manufacturers as the model describes the electrical network, the connected electrical components, the additional elements and the data needed for network operation as well as the relationships between these elements. The Unified Modelling Language (UML) is used as the descriptive language.

In a McKinsey report published in 2010, optimistic projections were made that the smart-grid market would generate technology and services revenue in the order of tens of billions of dollars annually. However, this scenario ultimately depended heavily on the development of universally accepted standards.

What is Sparx Systems position on education with respect to standards?
Sparx Systems supports many other domains and makes Enterprise Architect technology available to those volunteers who represent various stakeholders and give their time to the standards development effort. We are currently supporting close to 40 industry domains through our standards development programme. We participate as fully as we can through involvement in industry key events and our education outreach programmes.

Still no answer for newspapers in digital age

Posted on by Ben Debski

Solving the problem of declining newspaper circulation in the age of the internet is something that has troubled media moguls the world over for a number of years now. Falling sales, crumbling advertising revenue and an entrenched attitude among those brought up in the internet age that creative content should be free have all contributed to the sense of urgency within the industry that a system needs to be devised to keep journalism both profitable and with its integrity intact.

Paywalls
Many organisations have attempted wildly different strategies to attempt to claw back some of the financial shortfall that the internet has created. Rupert Murdoch’s newspaper arm in the UK News International closed-off their flagship papers, The Times and Sunday Times, behind a paywall in 2009, arguing that the allowing free content online served by advertising was not financial viable. At the same time, they withdrew permission for Google to provide Times articles in search results, with Murdoch describing the search giant as a “parasite”.

Elsewhere, the New York Times placed a paywall over its website in 2011, allowing partial viewing of articles, which has been a popular system for rivals, such as the Financial Times and the Wall Street Journal. The NY Times paywall has been partially successful, seeing 16 percent growth during this year, although digital advertising plummeted 22.5 percent during the same period.

The success of their paywall has been unclear, with the paper reluctant to provide firm statistics on subscriber numbers. According to the Audit Bureau of Circulation, however, the paper received 132,000 digital subscribers by July 2012. This was stark contrast to the number of people reading online versions of rivals like the Telegraph, which saw just under 2.8m visitors in August. In September, Murdoch was forced to back down over his stance with Google, allowing articles in the Times to be partially viewed in search results, albeit keeping the paywall intact.

Broadband levy
Writing in the Guardian newspaper, British journalist David Leigh has suggested that broadband providers be forced to charge a small levy, perhaps of about £2 a month, which would then be used to fund journalism. Each news organisation would get money in accordance with their readership figures. Leigh writes: “A small levy on UK broadband providers – no more than £2 a month on each subscriber’s bill – could be distributed to news providers in proportion to their UK online readership. This would solve the financial problems of quality newspapers, whose readers are not disappearing, but simply migrating online.”

Obviously there are concerns about having a state-funding mechanism for news providers, bringing into question journalistic independence, but Leigh believes the model used for funding the BBC would sufficiently address these concerns: “The levy would, like the BBC, be operationally ring-fenced against ‘state intervention’, although it might well be subject to the same long-term political tensions as the BBC licence fee. That licence fee system still works more or less successfully, of course, just as the more extreme Nordic model of direct newspaper subsidy does.”

The Nordic model Leigh refers to is one born during the middle of the last century as a means to aid the newspaper industry from an increasingly competitive marketplace. However, the idea that a direct government subsidy for an industry meant to be holding it to account is surely not something to be encouraged. Likewise, the fact that the BBC license fee works in the UK does not mean that it is a system that could be transferred to the newspaper industry. It’s a format that has worked as a quirk of the British system, but not one that can be easily replicated abroad.

Paywalls may represent the most obvious system, but they neglect the fact that a whole generation has been brought up to expect content – be it music or news – for free. While subscription services like Spotify are becoming more popular in the music industry, paywalls have a long way to go before they are considered the norm. Closing off whole swathes of readers is not going to endear your paper with the reluctant-to-pay public, but a model like the New York Times, offering some free content in order to entice future subscribers may. Changing these habits is the real area that media companies need to focus on, and until that happens, newspapers are destined to struggle.

Cheryl Packwood on Bermuda | Business Bermuda | Video

Posted on by The New Economy

Bermuda has a global reputation as a top place to do business. It is the number one reinsurance jurisdiction in the world, and is well known for its for fund and asset managers. Business Bermuda is the membership organisation dedicated to facilitating companies’ entry to the country; Cheryl Packwood tells The New Economy how it can help business owners and investors form vital partnerships.

The New Economy – What are the advantages of investing in Bermuda?

Cheryl Packwood: Bermuda is a premier jurisdiction. We have some of the highest sovereign debt ratings for an offshore jurisdiction of our size. We are a transparent jurisdiction when folks try to lump us in the category of tax havens we always shout No and we are right to shout no because we are not a jurisdiction that you can come in and hide money. We are a jurisdiction that has real business. We are the number one reinsurance jurisdiction in the world. We are a well known funds jurisdiction asset management jurisdiction and that is because of our reputation globally as a top place to do business.

The New Economy: And what should investors be aware of? Are there any risks at all?

Cheryl Packwood: In terms of investments, the risk is associated with your strategy. Bermuda is not a risky jurisdiction. We have no had the bank failures or the failiures of any major companies. We did not have major exposure in the Madof scandal that took place a few years ago. And that is because Bermuda prides itself on who invests in Bermuda. We look very carefully at who comes in to our jurisdiction precisely because we do not want to be associated with major scandals. We want to ensure that the money is really behind the name that they claim is really there. And that has stood Bermuda in good stead and to that degree no, the risk is only associated with your own business strategy.

The New Economy: So exactly how does business Bermuda spread the word about investment in Bermuda?

Cheryl Packwood: Business Bermuda is a membership organisation. We are run out of the private sector with a grant from the government for promoting Bermuda globally. We go to conferences, we host our own events, both here in London and in New York and now we’ve branched out to the rest of the world. We’ve’ held events in Bahrain, Hong Kong, Singapore and we just came from Shanghai and Beijing where we also hosted events and we were a major sponsor in the CCPIT conference; the Chinese outward investment conference. That was so exciting to be there and to feel like we, I was opening China for Bermuda. So Bermuda is very much becoming recognised, known quantity in the world. Precisely because of what Business Bermuda does and the award that we’ve received today from you, The New Economy, is a tribute to all the hard work that we’ve done. Thank you.

The New Economy: Who is your typical client?

Cheryl Packwood: Bermuda’s typical clients are real investors who want to do real business trying to increase their value, increase their holdings, increase their assets. We did a study on Bermuda’s economic impact on the United States and then in future years we took that study and looked at Bermuda’s economic impact on the UK, on parts of Asia, parts of Europe, and we came to discover that for example in the United States, over 300 thousand jobs are created as a result of setting up companies in Bermuda. We help the rest, an economy or a jurisdiction increase their wealth, increase the jobs. Our two way trade with the UK has increased 250% just since we started doing that study. These are incredible figures and it shows that we’re partnered with the rest of the world. We’re not just a tiny little jurisdiction saying ‘we want your money, we want your money’ and that is what is so important about Bermuda.

The New Economy: And how can Business Bermuda help those looking to invest in Bermuda?

Cheryl Packwood: Business Bermuda provides a first hand experience to the business client. We are a first point of entry, if you will, to come in to Bermuda because we are a membership organisation of the private business community; that’s he lawyers, the bankers and the accountants. And we’ve grown now to include international businesses, all the different telecoms technology companies, the fund administrators, all of these different entities are part of our membership. Whatever your needs are we can set you up with the exact person that you need to speak to. And we will know which lawyer and which firm you should talk to and we can give you a variety of names of lawyers or accountants or whomever to speak to and decide for yourself who is it that you get along with best. We provide the government with legislative policy in terms of changing or mending business legislation, regulation, policies. To keep ahead of the game or to keep in line with global regulations and legislation requirements our membership on that on a daily basis with government and in committee, which is an amazing offering that we provide and we do it because we want to create a viable environment to do business, not just viable but a terrific environment in which your client can do business once they are in Bermuda.

The New Economy: Cheryl Packwood, thank you very much for your time.

Cheryl Packwood: Thank you very much. This is a true honor and to be recognised for all the hard work that we do, again, I am honoured that you have given us this award. Thank you very much.