Uber gives up the battle in China, but looks set to win the war worldwide

Posted on 10/27/201610/27/2016 by Ben Debski

When ride-sharing app Uber launched its rebrand in February, many speculated the move was part of its strategy to rise to dominance in China. At the time, the company was locked in a heated battle for market share with a number of other firms: Didi Chuxing dominated the Chinese app-based taxi industry, with a market share of 87.2 percent. Uber, however, felt it could crack the competition, dedicating more and more resources to the fight, even to the point of subsidising the cost of rides at a loss.

Yet the efforts of CEO Travis Kalanick seem to have been in vain. In August, it was announced Uber would be merging with Didi Chuxing: Uber’s Chinese operations will be handed over to Didi, in exchange for a 20 percent stake and $1bn in equity investment from the Chinese company. Uber, despite its best efforts, failed to crack China. The US firm was unable to best its native rivals, just as eBay lost out to Alibaba in the e-commerce field. Once again, in the world’s second largest economy, the home team won.

For many US tech companies, ‘cracking China’ has become a holy grail. As Mike Michelini, a US social media and e-commerce specialist based in China, said: “Every MNC dreams about cracking the Chinese market. It’s a country of 1.3 billion people, with a growing middle class with disposable income, that is over four times bigger than the US market.”
Chinese consumers are also becoming wealthier. “It’s not just people with a few cents in their pockets”, Michelini said. “Chinese consumers have been proven to spend money over the years, and they have grown to become the second largest economy in the world – with projections to become the largest in the future.”

For many US tech companies, ‘cracking China’ has become a holy grail

In among these movements, the app-based taxi market is uniquely prized. As Wan Yuchen of the China Market Research Group said: “China is critical for Uber, because it has a huge population who can’t afford a car, or who cannot get a car because of license plate regulations, but have the money for comfortable rides.”

Big trouble
When it entered the Chinese market in 2013, Uber was hamstrung by not taking into account various local peculiarities. As an example, Michelini noted, Uber began by “using Google Maps and other western services”.

According to the Harvard Business Review: “At first, customers had to validate credit card information before opening an account. This presented a major obstacle for many potential Chinese users.” Wan made a similar point: “They did not accept local credit cards, while Didi used Alipay, which was a more common payment method in the country.” However, Uber soon learned and adapted. “They localised. They found partners in the market and adapted to operate here”, Michelini said.

Still, competition from local market actors remained stiff, particularly due to their better knowledge of the Chinese market, in particular Didi Chuxing’s ability to better cooperate with other Chinese firms to facilitate the use of their app. As an example, Didi had a strong partnership with popular messaging app WeChat, which proved a useful tool.

“WeChat often blocks competitors from using their official business accounts, stating they are violating the terms of service”, noted Michelini. “While they won’t say which terms were violated, Uber and other competitors to WeChat’s partner Didi frequently had accounts disabled.”

Certainly, circumstances were stacked against Uber. However, as the Harvard Business Review noted: “It wasn’t competition that spelled Uber’s demise in China; it was impending national regulations.” First among these new rules was a ban on Uber’s tactic of subsidising the cost of rides in order to gain market share.

The rules clarified that Uber, as a foreign firm, was to be subject to different regulations than domestic firms. As the Harvard Business Review explained: “Uber’s national platform would now be handled differently. Local governments would be allowed to issue ‘ride-hailing service licenses’, and to determine who is eligible to be a driver. This was an impending disaster for Uber.”

Strategic retreat
While Uber did not achieve the dream of cracking the Chinese market, it would be unfair to label its merger with Didi a sign of failure. “I am amazed at how far Uber got”, said Michelini. “When I saw them come into the market in 2013, my friends and I predicted they would exit quickly. I wouldn’t consider it a complete failure – they made a merger with Didi happen! That is a big event, as competitors normally fight to the death. Uber China has a presence, and is still operating to this day.”

However, with Uber now subsumed by Didi and the taxi wars seemingly concluded, there remains one group in China set to lose: consumers. The fierce competition between Didi and Uber drove prices down, even at the expense of creating negative margins. The subsidies that drove these bargains, however, are now redundant.

“Consumers were concerned that there would be monopoly, and the price would go up”, said Wan. “Drivers are also concerned that current subsidies would be gone. Consumers want more competition in market at this point.”

As Michelini concluded: “In my personal social media streams, everyone is just worried that cheap taxi rides will go up. A merger means less competition, so people feel that now the prices will go up. And they already have.”

Energy security is important – should it be risked for short-term savings?

Posted on 10/27/201611/21/2016 by Ben Debski

In August, Australia made a decision regarding its energy infrastructure that caught many off-guard. Ausgrid, the country’s biggest energy grid, currently in the process of being privatised by the New South Wales Government, rejected an offer from the highest bidder. The offer was a joint proposal from the Chinese state-owned State Grid Corporation and Hong Kong-listed Cheung Kong Infrastructure. The Australian Treasurer at the time, Scott Morrison, announced the rejection: “After due consideration of responses from bidders to my preliminary view… I have decided that the acquisition by foreign investors under the current proposed structure of the lease of 50.4 percent of Ausgrid, the New South Wales electricity distribution network, would be contrary to the national interest.” The decision was reportedly in-line with a recommendation made by the Australian Foreign Investment Review Board.

The rejection of the proposed deal – which Morrison claimed raised a number of security concerns – was not well received by the Chinese Government. “This kind of decision is protectionist and seriously impacts the willingness of Chinese companies to invest in Australia”, said Shen Danyang, a spokesman for the Chinese Commerce Ministry, according to the BBC.

The situation bears a striking similarity to one faced by the UK in negotiating a deal over the Hinckley Point nuclear power station. The UK Government temporarily delayed the approval of the project that was jointly funded by France and China. In the wake of the delay, China’s ambassador to the UK, Liu Xiaoming, warned the Financial Times that international relations between the UK and China stood at a “crucial historical juncture”. The deal was eventually approved.

Muddled definitions
As energy security continues to appear at the forefront of foreign policy, international ownership of energy infrastructure is coming under increased scrutiny. According to the International Energy Agency, energy security is defined as “the uninterrupted availability of energy sources at an affordable price”. Such a broad definition has somewhat diluted the concept’s meaning, leaving it open to interpretation, and leading it to become associated with varying definitions.

Dr David Reiner is a senior lecturer in technology policy at the University of Cambridge. He said a challenge when it comes to analysing energy security policy is the many different ways the term ‘energy security’ can be used.

“I think the danger is people aren’t always consistent when they’re discussing it. It tends to be used quite loosely, so sometimes you think they’re talking about self sufficiency and then all of a sudden they start veering off into security of supply, which is quite different. And then there are also ideological differences of opinion within governments, within ministries, within individuals as to its importance.”

To this extent, energy security can be broadly applied to not only the daily availability of energy for a populace, but also more long-term prospects in terms of where energy can be sourced. A poorly designed grid prone to blackouts is a very different problem to making sure countries are able to access liquefied natural gas on the international market, but both can fall under the broad definition of energy security.

Foreign investment
In terms of foreign investment, the main energy security concern is when a country’s energy supply becomes too intertwined with international politics. Reiner said foreign investment into national energy systems could be considered similar to any sort of trade between countries, so determining whether foreign investment poses an energy security risk comes down to how a country interprets the intent of an investor.

“So, if you believe that Russian investment in the UK might make the Russians more sensitive to UK economic interests, then you might be, again, a bit more relaxed about that. Whereas, if you believe a firm like Gazprom might be acting not in its own economic interest, but might be acting more in the strategic and geopolitical interests of the Russian Government, then they would be doing things not economically or commercially rational.”

Reiner said attitudes vary from government to government, and frequently change. In any case, given energy networks are considered critical infrastructure, foreign investments tend to be placed under immense scrutiny.

Global grid ambitions
China’s State Grid Corporation has signalled it has broad and ambitious goals for international energy infrastructure. The company is the largest energy provider in the world and, according to Fortune 500, the world’s second largest corporate entity by revenue. Its aggressive global growth is showing no signs of slowing down, with the company already owning portions of the energy network in Italy, Brazil and the Philippines.

The company’s international expansions are the beginnings of an impressive scheme. Chairman Liu Zhenya said in a March 2016 interview that the company’s ambition is an international interconnected energy network. “If railway, road and internet can link the whole world, why can’t an energy network be built?”, he said. “The problem right now is just that people need to embrace new ideas and not let the old thinking stand in the way of new innovation.”

The technology that would be needed to develop such a system has only recently become feasible, with the development of high-voltage direct-current electricity transmission making longer transmission distances possible. Liu has also proposed a smart grid system to manage the allocation and distribution of energy across regions. The system has the potential to be more efficient than smaller local grids, and also improve the reliability of renewable systems. Widely distributed sources of renewable energy could alleviate the supply and storage issues that go along with the technology. If an energy grid were to span continents and hemispheres, for example, solar energy could be continuously supplied even if some regions were in the dark.

However, any chance of implementing his scheme seems unlikely anytime soon. Apart from the $50trn estimated cost of the project, many countries are unlikely to relinquish national control of their energy networks to an international body. Instead, some governments are looking at internal sources wherever they can.

Renewable and independent
Renewable energy sources, such as wind or solar power, can provide energy security by reducing the reliance on international provision. Reiner said, while they may be at the mercy of the weather, their supply isn’t affected by an election on the other side of the world.

“You might be buying the turbines from Denmark, Germany or China, but after they are built they are not reliant on what’s going on in any particular year in the Gulf. You don’t have to worry about the long-term prospects for Qatar or any of these other countries.”

However, though they do cut out foreign powers from the equation, renewables still suffer from the problem of security of supply. In order to take full advantage of their benefits, and short of a global interconnected system, governments may have to rethink the way local energy grids are managed.

David Hall is a visiting professor at the University of Greenwich. In April 2016, he released a report into the potential costs of renationalising the UK’s energy network. As per his calculations, he estimated the cost of renationalising the UK’s energy infrastructure at between £24bn and £26bn, with a national saving of £3bn every year. He said that, across Europe, energy infrastructure owned by the pubic is between 20 and 30 percent cheaper. In the US, it is around 15 percent cheaper. He also observed energy infrastructure in public ownership offers more energy security benefits.

“One is the very obvious one that if it is actually owned by the country through the public sector, then there’s no danger of foreign interests having a built-in say in what’s going on”, explained Hall. “You’re not subject to the pressure of, for example, multinational companies who want to see the generation of policy around items that favour their interests, as well as not being subject to political pressure.”

Hall also noted the increasing use of renewables offers the opportunity to escape the uncertainty that goes along with dependence on foreign energy markets. “One of the worst issues in energy security has been the instability of oil and gas prices, and the impact that has on the cost of energy. We’ve seen that in some other countries over the last few years. One of the great advantages of going to renewables is that, as part of that process, you make yourself independent of the oil and gas markets and move beyond gas politics as well. This is a real economic security gain, as well as – indirectly and directly – a political security gain, because you eliminate the political risk of oil and gas suppliers.”

It’s a method private companies have caught on to before governments have. Walmart, Google and Apple have received designation from the US Government to become electrical wholesalers, generating and supplying green energy to themselves. While it could be seen as a mere nod towards environmentalism, the move does allow these companies to lock in the price of their energy bills.

Secure future
However, despite all the efforts of governments, complete long-term energy independence – and therefore total security of supply – is a near impossibility. Reiner observed that, in an interconnected and fragmented world, one country is not able to consistently internally source everything it needs.

“You occasionally get those periods. Arguably, because of the shale gas revolution in the US, 40 years after project independence they’re now accidentally somewhere near energy independence for maybe a few years. But, fundamentally, you’re always fighting against the inevitability that you’re going to be relying on foreign sources, and then it becomes a question of what can be an acceptable foreign source.”

As such, energy security will remain a political issue, with countries continuing to make decisions as to what are acceptable investments, ownerships and imports. But, with the changing nature of the energy grid, a major rethink of who owns these critical pieces of public infrastructure seems inevitable.

Could oil put the ‘resource curse’ on Kenya?

Posted on 10/26/201610/27/2016 by Ben Debski

In 2016, the Kenyan Government approved a much-anticipated plan to kick-off production of crude oil in the east African country. Kenya – having only recently discovered that it sits atop oil reserves – aims to eventually start exporting 4,000 barrels a day.

Kenya’s oil reserves were discovered in 2012 by British firm Tullow Oil. A joint venture between Tullow Oil, Maersk Oil and Africa Oil is due start drilling and constructing wells this year, with the aim of producing up to 2,000 barrels a day by the end of 2016. Kenya’s oil reserves are located primarily in the north-west of the country, most notably the South Lokichar field. In order to facilitate the transportation of Kenya’s crude to the coast, the construction of a pipeline running from the north-west to the country’s new port on the Indian Ocean is underway. Stretching nearly 900km, the pipeline comes at a cost of $2.1bn.

Resource curse
At such a cost, one may wonder if such an investment from the Kenyan Government is worth it. For many developing nations, oil has proven to be nearly as much a hindrance as a blessing for the progress of their economies and institutions – the so-called ‘resource curse’.

In its favour, Kenya’s oil reserves are relatively small in a global sense. Increased output by Kenya will be of negligible consequence on the world stage, leaving the current supply glut unaffected. More importantly, this means Kenya is not at risk of becoming a petro-state. Oil revenues should supplement, not supplant the country’s already developing economy.

Often, oil has a distorting effect on the institutions and governance of a developing country. Large revenues facilitate a culture of corruption and rent seeking

According to the World Bank Country Economic Memorandum (CEM) on Kenya, released in March, one of the major problems afflicting the Kenyan economy is the need for increased investment in the nation’s capital stock and population.

As the report noted: “For sustained and rapid growth, Kenya needs further investment in physical and human capital to promote productivity growth.” To this end, resource extraction should “generate fiscal resources that could be used to raise public investment, human capital, and productivity in the non-resource sectors of the economy”. The windfall from the oil reserves, then, should “help bridge Kenya’s infrastructure gaps and skills deficiencies, and expand the provision of health or other social services”.

Staying grounded
Often, oil has a distorting effect on the institutions and governance of a developing country. Large revenues facilitate a culture of corruption and rent seeking. However, Kenya’s current position in the trajectory of economic development should prevent this. As the World Bank CEM also noted: “The timing of the discoveries relative to Kenya’s development cycle is appropriate. Kenya’s level of development is sufficiently high to be able to absorb the windfall revenue and establish the needed legal framework and infrastructure for developing the oil sector.”

Kenya’s oil reserves should be able to facilitate modest economic progress. Its reserves and revenues are not large enough to cause the usual negative distortions that befall many resource-rich developing economies. Kenya has a relatively healthy and growing economy, alongside moderately developed institutions that should be able to safeguard against the many potential downsides oil can bring. At the same time, the windfall in taxes from exporting oil should be able to provide the country with critical revenue to allow it to invest in both the human and physical capital of the economy, which will further spur Kenya’s growth.

US oil exports could dramatically change the crude game

Posted on 10/26/201611/16/2016 by Ben Debski

In February, the US completed its first major export of natural gas, with an American ship setting sail for Brazil. Cheniere Energy, the US firm that orchestrated the shipment, said the occasion represented a significant turning point in US global trade, with the energy company predicting “the US will be one of the biggest three suppliers of LNG by 2020”. In July, two further cargoes left Cheniere’s Sabine Pass plant in Louisiana, venturing to the Middle East – with Kuwait and Dubai the recipients. These shipments were symbolic of a major change underway in the world economy; they signified the US’ increasing importance in the export of hydrocarbon energy.

The US has seen an almost constant year-on-year increase in its export of gas

Export surge
Figures from the US Energy Information Administration (EIA) show February saw the country export 884,000 barrels of propane/propylene gas per day. At the time, this was the highest figure on record. The US has seen an almost constant year-on-year increase in its export of gas. Exports took a slight dip in the months following February’s record figure, down to 673,000 per day in March, before rising again to 700,000 in April. Data for May showed this number rising again, taking it to 894,000 per day, and beating February’s record figure. These figures are a long way from the 127,000 barrels per day exported by the US in January 2011.

The trend is clear: the US is becoming an ever-more-significant exporter of propane/propylene gas. According to analytics provider IHS, cited in The Wall Street Journal, US oil and gas producers are “on track this year to export more propane than the next four largest exporting countries combined – OPEC members Qatar, Saudi Arabia, Algeria and Nigeria, which have long dominated the trade”.

The same is true for crude oil exports. As noted by the EIA: “Since the removal of restrictions on exporting US crude oil in December 2015, the number of countries receiving exported US crude has risen sharply. In 2010, the US was exporting 42,000 barrels of crude a day. By 2013 this surged to 134,000, and in 2015 it totalled a massive 458,000 barrels per day. In the first five months of 2016, US crude oil exports averaged 501,000 barrels per day, 43,000 barrels per day (nine percent) more than the full-year 2015 average.” The destination of these exports has also changed notably; prior to the December 2015 restrictions being lifted, the majority of exported US crude oil went to Canada. However, as the EIA noted: “In March, total crude oil exports to countries other than Canada exceeded those to Canada for the first time since April 2000.”

The US transition
The bulk of this growth has come from the monumental increase in shale oil and gas extraction in the US. Technological advancements took off in 2008, quietly seeing US production of both natural gas and oil surge. A cocktail of high energy prices and cheap credit (due to a loose federal monetary policy) caused a flurry of investment in shale production. While softened oil prices have since seen many of the less cost-effective shale projects shut down, the US’ capacity to produce – and therefore export – hydrocarbons has seen rapid growth in the past eight years.

According to some commentators, the US’ newfound position as a major energy exporter will come with major geopolitical benefits for the country. For one thing, the country’s growing ability to export gas and oil to Europe will seriously dent Russia’s sway over the continent. Many European nations have been beholden to Russian natural gas – but with the US’ renewed ability to export this commodity to Europe, Russia’s influence will likely dwindle. The same is true for oil. According to a Manhattan Institute report by Mark Mills, entitled Expanding America’s Petroleum Power, over “60 percent of Russian oil exports currently go to Europe”.

Europe currently imports roughly 90 percent of its oil needs, and European governments are keen to increase the amount sourced from the US. “During the 2014 EU-US trade negotiations”, noted Mills, “a leaked memo revealed European eagerness for access to American oil.” Becoming a major exporter of oil will also give the US leverage over an increasingly assertive China. The latter is both the world’s second-largest economy and the world’s biggest importer of oil. If the US were to increase its exports to China, it would further wed the countries economically, and provide the US with a powerful bargaining chip to counter any sway held by China’s ownership of US debt.

Better for the world economy
The US becoming a major oil exporter not only puts it in a stronger geopolitical position, but also brings benefits to the global economy. Its increased role in oil deals should bring greater transparency and stability to markets. The world’s current top exporters of oil tend to be ranked poorly in terms of corruption and transparency. As Mills noted: “Because America scores well in these categories, as well as in rule-of-law metrics, an expanded role for the US in oil trade would add confidence and stability to global commerce.”

Oil prices will also, in theory, become more stable. Some of the world’s largest oil producers, such as Iran and Iraq, are global political hotspots. Political crises within countries in volatile political regions – be it war, revolutions or sanctions – will, with increased US global supply, be somewhat muted. OPEC’s power to manipulate and force price changes will also further be diminished. In fact, this is already happening, with the ability of the cartel to hold the world economy to ransom, as it did in the 1970s, now long gone.

Although not his obvious intention, under President Barack Obama’s two terms of leadership, the US has changed from a major importer of energy to a major exporter. Although Obama’s legacy on energy is often spoken of in terms of his commitment to renewables and reduction in coal use, the shale boom over which he has presided is much more significant. The transition will have, and indeed already has had, massive consequences for the wider world.

A higher minimum wage benefits all parties – employers need to look at the figures

Posted on 10/25/201610/26/2016 by Ben Debski

The US’ low-wage economy is best characterised by one or both of two extremes: on the one end, we have unskilled workers whose pay scarcely covers the basic costs of living; on the other, we have a corporate class overcome by record-breaking profits. Over the past couple of years, this disparity has become a mainstay of policy discussion, and the issue of inequality itself has featured prominently in the national debate.

Substandard wages have turned workers into activists – the ‘Fight for $15’ campaign having produced results, even if the desired outcome is being phased in only gradually – while those writing on the subject of income inequality have elbowed their way into the bestseller lists. Any politician with a harsh word to say on inequality is guaranteed votes, while worker pay and unemployment arguably have more sway over public opinion than any other two issues combined.

Research out of UC Berkeley’s Labour Centre last year estimated over half of all America’s fast food workers collected some form of public assistance on top of their wages – costing state and federal governments $7bn a year. But as costly as these ultra-low wages are, governments are concerned anything higher could prove an annoyance for corporations. Both sides, it seems, are at a loss as to how best right the imbalance, and this quandary has given rise to a climate of hostility.

Low numbers, low pay
In the meantime, companies’ profits have been boosted to never-seen-before heights, employing as small a number of workers as possible and at as low a rate as they can muster. On the face of it, it seems corporations are among a minority of parties not affected by widening inequality, and calls for a higher minimum wage have often been overturned by the threat of job losses, higher consumer prices and uncertainties with regards to what constitutes the ‘living wage’.

Research out of UC Berkeley’s Labour Centre last year estimated over half of all America’s fast food workers collected some form of public assistance on top of their wages

For these reasons and others, not much has changed: cash piles, both in dollar terms and as a share of the economy, are stratospheric, though calls to raise pay for those on the lowest rungs of the ladder are finally beginning to make an impact, with the average hourly wage in the US having risen 16 percent since 2008.

Today more than ever, the plight of the entry-level worker is known to all but a few in corporate America, and changes like the McDonald’s $10-an-hour minimum wage are symptomatic of a new, arguably more progressive corporate culture. Many of the nation’s top employers have opted for a starting pay above the federal minimum, while 29 states have an hourly minimum above the $7.25 federal rate.

Those with a financial stake in these companies are beginning to wonder what rising worker wages might mean for corporate balance sheets. Those caught up in the debate could find themselves with a delicate balancing act to strike between worker demands and investor confidence, as higher wages, many fear, could tighten the vice on corporate profits.

Paradoxical situation
Illogical as it may seem, the companies that stand to gain the most business from a higher minimum wage – namely McDonald’s, Walmart and the like – are the most anxious about its effects on profitability. The former said in its last annual report: “The trend towards higher wages and social expenses could have a negative impact on the margins of our company-owned restaurants.” Considering the lack of research to show this or otherwise, the hesitancy is entirely understandable. GAM Multi-Asset Class Solutions (MACS) remarked in an investor note last year that, while a great deal has been said about the relationship between the minimum wage and unemployment, much less has been written and researched about its correlation with profitability.

“While the minimum wage is an emotive issue central to the equality debate, it is important for investors to coolly assess how it will affect corporate profitability and, ultimately, the course of equity markets”, wrote Julian Howard and Graham Wainer, both of MACS, in the note. “It remains the case that – whether the result of politics or labour market conditions – higher ‘forced’ wages are likely to negatively impact the profit outlooks of firms relying on low-wage workers and whose customers don’t consume significantly more of their product as they get wealthier.”

In the months after Walmart raised wages for half a million American workers, the company revealed its profits had taken a hit: having lifted its starting wage to $9 last year, and again to $10 more recently, the US’ largest private employer scaled back its profit outlook for the year. And while sales in the second fiscal quarter racked up a fourth successive quarter of comparable growth, the uptick was not enough to cushion the knock-on effect for its bottom line.

A decline in customer satisfaction and issues to do mostly with staffing prompted the retail giant to introduce a higher minimum wage on the basis that doing so would improve customer service and its reputation among consumers. The fear for lower earners, however, is that much of the focus in the upper echelons will fall not on rising sales, but on falling profits, confirming worker and investor interests do not necessarily align.

Granted, a US comparable sales increase of 1.5 percent beat Wall Street expectations. However, Walmart’s profit of $4.40 to $4.70 per share last fiscal year was down from an earlier range of $4.70 to $5.05. Not just Walmart but McDonald’s, Starbucks, IKEA and Gap have all boosted pay or put in place a more generous minimum recently. That said, they have also raised prices or cut jobs to stave off the short-term effects on their bottom lines.

“Somewhere along the line, we’ve got to reflect those increased costs and increase the revenue”, said Michael Weinstein, CEO of Arks Restaurants, in an earnings conference call last year. “If you’re a purveyor selling us chicken, and if your minimum wages go up, you’re going to raise your prices to us, and we’re going to raise our prices to the customers.”

Clearly, employee pay and benefits is the largest cost for many employers. Katie Donovan, Founder of Equal Pay Negotiations, cited Human Capital Management Institute figures that said the two outlays average around 70 percent of expenses for employers. She told World Finance: “If the percentage of lower earners for one employer is large enough then higher wages can indeed impact corporate profits.”

Up on high
Donovan and others maintain, however, that higher worker wages could actually benefit shareholders seeking higher returns, despite the fact the two groups are often at odds with one another. While fast food workers in 190 US cities walked off the job last year to contest low wages, with their attention mostly directed at McDonald’s, the fast food chain later announced it would pay out a – seemingly disproportionate – $30bn in dividends to shareholders. Former prospective Democratic presidential nominee Bernie Sanders said of the situation: “In America today, what we are seeing is the richest people becoming richer, and almost everybody else becoming poorer.”

“I’d say shareholders support what helps a company grow because it is growth that ultimately makes shareholders wealthy”, said Donovan. “In theory it’s great to keep costs down, but at some point low salaries will keep top talent away from an employer. Good employees are key to growth and, currently, to get good employees, employers need to pay higher than they have been for the past few years.”

In spite of examples that show higher wages can drive growth in the long term, the prevailing logic among major employers is the same as that held by the likes of Weinstein, who figure the issue is a zero sum game. Charts detailing the supposed impact of higher wages on profitability vary, but the overriding message is that treating employees with more respect means they will show the same respect to customers. The question is how much it will have that effect, which in turn will dictate whether or not employers take the plunge.

For as long as they hold fast to the thinking that employees simply do not add enough value to merit a wage hike, the uneasy relationship between workers and investors will remain.

Smart grids could be the route to a truly renewable energy system

Posted on 10/25/201611/04/2016 by Ben Debski

Keeping the lights on isn’t always as simple as it looks, and, in the future, we may well rely on data to do it. Technological innovations in big data and the Internet of Things are now changing the energy landscape for good, and the grid systems of the future will use data to optimise, automate and manage energy flows more efficiently.

Tomorrow’s smart grid could even resemble a brain, sending reciprocal information between household consumers, grid operators and generators. It would be able to pinpoint potential problems, predict fluctuations and make decisions to re-route electricity accordingly – seamlessly matching demand and supply.

“In the end, the smart grid will self monitor, self control, self manage, self heal and learn by itself based on what happens on the grid”, said Professor Rajit Gadh, Director of UCLA’s Smart Grid Energy Research Centre (SGERC). It may sound like the stuff of science fiction, but the deployment of smart grid technologies is already making an impact on the grid, and will have significant ramifications for the electricity market in the future. Without it, our transition to a green economy will be impossible.

Why the green revolution needs data
Since COP21 in Paris last year, sustainability has become a global watchword, but our growing reliance on renewable energy presents logistical problems of its own. Namely, how do you integrate renewable sources into traditional, and arguably outdated, grid systems?

Without smart grid technologies, our transition to a green economy will be impossible

Grids that were built to support large coal and gas-fired generators are now having to support more and more diverse, and intermittent, sources of energy, like wind and solar. On the one hand, there’s the issue of balancing supply when the wind isn’t blowing and the sun isn’t shining, and on the other, how to deal with oversupply during times of peak output.

In many places where the share of renewables has risen exponentially, suppliers are now jostling to gain access to the grid at times of the day when supply is exceeding grid export capacity. Some are even being asked to switch off by grid operators during periods of congestion, much to the ire of investors and policymakers alike.

It’s a surprisingly pervasive problem. Germany paid out $94m in compensation last year to wind farms that were forced to turn off 1.2 percent of their capacity. China, according to official statistics, wasted 15 percent of its wind capacity in the same year, with some provinces losing out on as much as 60 percent, despite having invested $102.9bn in the sector. This accounted for 36 percent of their global green investments last year. Meanwhile, experts also expect US curtailment rates to rise in the near future.

The US currently boasts 17 percent of the world’s installed wind capacity, and while China is ahead, with one-third of the world’s capacity, curtailment rates are so high it actually produces less electricity from wind than the US. “It’s a huge waste of investment and it’s contributing to emissions”, said Mark Clifford, Head of the Asia Business Council.

One challenge for renewable integration in China is geography, and more specifically, scale. Most of China’s wind and solar resources are located in the north and west, while the energy demand is greater on the densely populated east coast. “They need massive infrastructure to transport power from one side to the other”, said Adrian Timbus, Global Smart Grids Technology Manager at ABB, one of the largest engineering companies in the world.

China’s President, Xi Jinping, announced his ‘green power dispatch’ policy last year in a bid to solve the problem, and is now building the world’s most technologically advanced grid. Ultra-high-voltage power lines are central to the policy, which will see $64.5bn invested between 2011 and 2020 in the deployment of intelligent smart grid technologies.

However, Timbus said different regional requirements are driving the implementation of smart grid technology across the globe, and not just in China. “In Asia, the need for more power is driving investment, whereas in Europe the influence of renewables is the driving force. In other markets, like the US, this is primarily driven by the need to update ageing infrastructure. We need to reinforce parts of the grid so they don’t collapse. Data analytics will help us optimise the transition to the next power system.”

Power politics
In a 2010 report, McKinsey & Company estimated the total potential value generated in the US from a fully deployed smart grid could reach as high as $130bn per year by 2019. But, unlike in China, the focus of smart developments in the US has been on the consumer.

The Internet of Things potentially gives customers considerable autonomy over their energy usage

For the first time, the deployment of sensors, meters and monitors across the grid is allowing two-way traffic of information, gathering real-time data on how and when consumers are using energy.

The key to a sustainable future lies in how data will enable the smart grid to monetise consumer behaviour in real time, and offer financial incentives to modify that behaviour. “If the customer makes no change in their behaviour, then the role of the smart grid is actually harder, but if the customer changes their behaviour, then the role of the smart grid gets easier”, said Gadh.

SGERC is now developing mobile apps that will allow consumers to automatically schedule their appliances to be used during off peak periods. Gadh added: “I see the mobile app as an excellent conduit to study and understand consumer behaviour, and [we can] use the app to provide incentives.”

The large-scale roll out of household smart meters in places such as California, Italy and Germany points towards a future of sophisticated and localised demand response technologies, which Gadh suggested could lead to a radical devolution of power away from larger utility companies.

The Internet of Things, in which washing machines, dryers, electric cars and lights could all eventually be connected to the cloud, potentially gives customers considerable autonomy over their energy usage, both helping to balance grid loads, and save money for the consumer.

“With an app, the consumer could also turn off their rooftop solar panel or an electric car charging station, and that is completely different from a grid operator having complete control”, Gadh said. “The consumer in California and in several places around the world is becoming educated about energy resources, and is driving the policy. They are saying ‘I want control’.”

Whether consumers across the board will jump at the technology, however, is still not certain. Richard Hepworth, Director of Digital Transformation at PwC, suggested it is crucial energy retailers don’t confuse their consumer base with over-complicated products, and ensure the deployment of meters causes minimal disruption.

Despite this assertion, disruption is likely to occur in the electricity market as a result of these innovations – especially when it comes to supply chains. “I think there’s a general recognition that the traditional business model has to change”, added Hepworth.

In the US, more nimble, unregulated suppliers have started to crop up, with larger traditional utility companies creating separate, spin-off businesses to compete with them. In the UK, this could perhaps mean a changing role for the traditional major providers. Hepworth went on, stating: “It’s going to be an interesting space to watch, because different players could take on different parts of the supply chain.”

Whether this will lead to widespread fragmentation is not yet clear. It will largely depend on what regulators decide to do in the face of a rapidly changing landscape, and whether policy choices are made with a view to allowing more or less flexibility. In some regions, operators are allowed to do more than just distribute power, while others have strict boundaries preventing them from doing this.

Regardless of differences, one thing is certain; data is pushing the energy sector towards unchartered territory, and in this brave new world, the businesses involved must adapt or die.

Small businesses a great fit for the new nimble marketplace

Posted on 10/24/201610/28/2016 by Ben Debski

Consumer behaviour, and the way in which people shop, is changing. Over the last several years, e-commerce has risen and there’s no longer a clear-cut distinction between bricks (store) and clicks (online shopping). It’s all just shopping. There’s increasingly an omnichannel approach to purchasing. More and more consumers are opting for ‘click and collect’, especially around the holidays. There’s even movement within the online category of shopping. According to Google, 85 percent of online shoppers start their purchase process on one device and finish it on another.

Consumers are looking for a seamless shopping experience – whether that is online or in-store – as well as reliable and speedy delivery to locations around the world. In fact, social media platforms, like Facebook, have become useful sources of product endorsements. We are now almost as likely to buy a product because of an online review or recommendation from someone within our social media circles as we are after seeing a TV ad.

Of course, it’s not just big companies with large teams of experts that prosper in this new world. Small and medium-sized enterprises (SMEs) are increasingly successful because they’re nimble, quick to adapt and generally speak to customers in a more personal voice. They’re also more open to taking risks and to trying new things – all must-have attributes for any company that wants to harness the power of the new consumer environment and grow its business.

E-commerce is expected to continue to grow aggressively in the years ahead – but in ways that may surprise many retailers, especially SMEs. There are a number of megatrends that all businesses should be aware of – with mobile commerce, social commerce and omnichannel retailing among the most important.

The prominence of mobile commerce (m-commerce) continues to grow, with advancements in device technologies and mobile networks sparking the use of mobile devices by shoppers at every point on the path to purchase. As the mobile shopping experience improves, retail industry observers expect its use – searching for merchandise, making price comparisons, ordering and paying – to continue to rise dramatically. Europe currently has the highest mobile penetration rate, and with mobile spending doubling between 2014 and 2015, the growing potential of m-commerce is there for all to see.

As the mobile market has developed, so has social networking, with more than two billion people using popular social networks such as Facebook and Instagram. Growing popularity has prompted some social networking ‘stars’ – including bloggers and YouTube favourites – to cash in by accepting advertising on their channels or selling their own products online.

Furthermore, many social platforms are developing ‘buy buttons’ and similar technologies to enable consumers to purchase products without exiting their favourite social channels. Facebook, for instance, continues to upgrade its Shopping tab, a service designed primarily for SMEs who can extend a robust social media presence with easy-to-buy functionality.

While mobile commerce continues to grow in popularity, customers still expect a consistent and high-quality experience across all shopping channels, whether that be in-store, in-app or online – this is known as omnichannel retail. Often, a mix of all three channels plays a role in any single shopping experience – buying online and then picking-up in-store for example. While companies focused on an omnichannel strategy retain 89 percent of their customers, only 45 percent of retailers are making omnichannel a top priority. Honing omnichannel can be a competitively differentiating factor for SMEs, requiring them to integrate their systems and supply chain to ensure a pristine experience for every customer engagement.

Top tips for SMEs
Shoppers engage with retailers in multiple ways. SMEs must optimize marketing, sales and delivery strategies to meet the needs of consumers – no matter when, where or how they choose to shop.

In order to grow sales both regionally and globally, SMEs must invest wisely to improve their e-commerce capabilities. There are a number of ways in which a company can fully optimise its e-commerce ahead of the critical holiday shopping season:

Online and mobile payment solutions are keeping pace with the e-commerce evolution thanks to Apple Pay, Google Wallet, ‘buy buttons’, and other technologies that make anytime/ any device payments simple and more secure. SMEs who add more payment options – and integrate them with their loyalty program – can capture additional shoppers who might otherwise delay or forego their mobile purchases.

Equally, it is important not to bombard customers with promotional messaging or ads that may distract them when finalising their purchases. Keeping the checkout process simple and secure to provide a quick and problem-free checkout limits the potential for transactions to be abandoned at the final stage of the purchase.

In order to fully utilse omnichannel retailing, SMEs need to create target-right, customised marketing and merchandising programs to fit each channel. Some solutions enable SMEs to link with established mobile marketing platforms, a simpler way of advertising and offering coupons than developing an app that could be overlooked among competitors.

One of the most important functions SMEs must get right is order fulfilment – a critical touch-point for nurturing satisfied and loyal customers. There are a number of key aspects a business must consider in order to ensure the customer is left with a positive impression of the company.

First, it is vital that a company recognises that no two customers are the same – with great diversity in age, incomes, geographies and expectations, it is important to offer varied shipping and fulfilment choices. When choosing a logistics provider, ensure that they offer a wide range of solutions and the flexibility to handle all facets of domestic, regional and international deliveries.

It is also important to consider the inventory and warehouse costs, as many can skyrocket during seasonal slumps, and inadequate fulfilment services can delay deliveries during busy times. Using a scalable logistics provider can help to reduce overhead costs, consolidating operations and ensuring flexibility when responding to dynamic changes in the market.

A complicated process could prompt poor online reviews and customer dissatisfaction. Therefore, using logistics providers that offer sophisticated, easy-to-use returns processes can reduce hassle, save time, and most importantly, preserve reputations.

Retailers that cater to the needs and whims of consumers can attain competitive advantages. Taking the online shopping experience and bringing it to life through a reliable order fulfilment process may spell the difference between business growth and failure for SMEs looking to expand their business globally.

Bees are nature’s most important pollinators – and they’re dying

Posted on 10/24/201606/14/2017 by Ben Debski

Nature’s countless creatures, large and small, each play their own particular and necessary role in the life of this planet. Ironically, as with so many of life’s little nuances, one of the most diminutive happens to have one of the greatest parts: the humble bee is a vital element of the environment – indeed, it is responsible for much of life as we know it.

And yet, despite our complete dependence, humankind has done an exceptionally poor job of protecting this critical species. In the US alone, by 1947, the number of bee colonies across the country had plummeted from six million to four million; by 1997, the figure had dropped to just 2.5 million, according to a press release published by the White House in June 2014.

The same trend has been seen across the pond in the UK: “Roughly 60 percent of our social bumblebee species have declined in range, and even widespread species are thought to be less common”, said Gill Perkins, CEO of the Bumblebee Conservation Trust. “Two species have become nationally extinct and a further four species have declined in range by over 50 percent – only a minority of bumblebee species are thriving.”

Sweet like honey
Bees have an integral purpose within both natural ecosystems and commercial agriculture. According to the UN’s 2016 report Pollinators, Pollination and Food Production, 75 percent of all food crops and almost 90 percent of wild plants worldwide need animal pollinators to some extent.

While their importance varies among plants, and therefore regions, the yield and quality of many of the world’s most important cash crops rely to some extent on animal pollinators. Examples include cocoa and almonds, the former growing in developing economies and the latter in developed nations. Both crops provide significant export revenue and employment for millions across the globe. What’s more, many fruits, vegetables, seeds, nuts and oil crops that are dependent on bees are fundamental sources of vitamins and minerals in healthy diets.

As such, the pronounced decline of bees in both number and variety has a direct impact on food production, price and security. As food prices creep up, the negative impact felt in advanced economies worsens and spreads, while in developing nations it can be downright deadly.

The effect of dwindling bee populations can already be seen across the planet. In the UK, for example, “we already import 65,000 boxes of commercially bred bumblebees to satisfy our soft fruit industry”, said Perkins. “And only bumblebees can pollinate tomatoes through buzz pollination.”

To get some sense of the scale of this, consider the vast array of vegetables and fruits we have come to expect and enjoy on a daily basis – certainly in developed countries. Not to mention the various types of meat we eat, which are fed on products that also depend on animal pollination. “This is a very conservative estimate: the global value of pollinators to food production is estimated to be between about $235bn and $577bn each year”, said Simon Potts, Agri-Environment Research Professor at the University of Reading.

And yet, these figures, vast as they are, form just part of the story – there are numerous associated industries to consider as well. The most obvious is, of course, honey. Packed with nutrients and unmatched in flavour, honey has been eaten for millennia. The earliest reference to the highly versatile substance dates back some 8,000 years, to a rock painting found in Valencia, Spain, which depicts a figure delving into a beehive. Celebrated by the Ancient Greeks and Egyptians as a gift from the gods, honey was not only used to sweeten food and make desserts, it was also used for medicinal purposes due to its antiseptic qualities.

A major problem across the world that continues to worsen with each passing generation, particularly in developed nations, is the disconnect between what we eat and where it comes from

Bee by-products also have non-culinary uses. Following the introduction of Christianity, beeswax was employed to meet the exponential demand for church candles. The substance is also increasingly popular in the cosmetics industry, particularly for use in lip balms and hand creams. Burt’s Bees, a company that sells a wide range of beeswax products, grew so rapidly after being founded in 1984 that it was sold to manufacturing giant Clorox for $925m in 2007, with sales climbing to $5.7bn in 2015.

So important are the various products bees produce that entire supply chains, retailers, distributors, suppliers, producers and manufacturers rely on them. “So, the total global value of pollinators is [actually] many of hundreds of billions of dollars – it’s huge”, Potts said.

Growing buzz
With an expanding global population and the resultant burgeoning demand for food, the agricultural industry is under more strain than ever in its millennia-long history. In a bid to produce ever-growing volumes of crops and livestock, as well as to house growing populaces, vast areas of natural habitat are being converted into farmland and urban areas at an unceasing pace. The upshot is a huge loss of natural features in the landscape, such as hedges and grasslands, which directly impacts the various species these elements house.

The intensification of agriculture has also resulted in the application of more pesticides and the growing use of genetically modified crops. Most of these carry traits for insect resistance and herbicide tolerance. The perils of the former are clear, though the latter is also a danger – reduced weed populations diminish food resources for animal pollinators, and a lack of data means potential long-term repercussions remain unknown.

Pesticides play a particularly nasty role in the decline of bee populations, with neonicotinoids, the most commonly used ‘systemic’ seed treatments, especially menacing. Instead of being sprayed directly onto plants like other pesticides, neonicotinoids are applied just once to seeds before they are sown.

“As the plant grows, the pesticide moves through the roots, leaves and flowers. When a pest insect feeds on the plant, it is feeding on foliage that is filled with the pesticide”, explained Dr Ben Woodcock of the Centre for Ecology and Hydrology. “This is, in principal, a great idea; it means rather than inaccurate spraying, you can apply pesticides in a very targeted way. Unfortunately, bees also feed on crops, albeit in a beneficial way rather than as a pest, when they eat the pollen and nectar from the flowers.”

Recent research suggests exposure to neonicotinoid-treated crops does not kill bees immediately, but sub-lethal effects do transpire. “In honeybees, the pesticide disorientates workers, so that they effectively get lost when returning to hives. This has a subtle but cumulative impact on the strength of hives, which can potentially reduce their viability”, Woodcock explained. There is also growing evidence indicating contact with neonicotinoids can reduce the reproductive potential of wild bees.

We found correlative evidence of reductions in species distribution in response to the use of neonicotinoid seed treatment on oilseed rape

“The recent research we undertook used data over a period of 18 years to look at 62 species of wild bee”, said Woodcock. “We found correlative evidence of reductions in species distribution in response to the use of neonicotinoid seed treatment on oilseed rape. Importantly, we show that those species that actively feed on oilseed rape are three times more negatively affected by exposure to neonicotinoids than those species that don’t feed on this crop.”

Pests and pathogens, which are ubiquitous across the world, also pose a problem for bees. Specifically, commercial breeding and the transportation of managed pollinators can transmit parasites, while also increasing the likelihood of alien species and infectious pathogen invasion, which can lead to the extinction of local pollinator species in a region.

Finally, climate change – which casts its shadow over all life on the planet – also affects bees. “Changes in seasonal weather patterns and increased extreme weather events can affect wild pollinators by limiting their ability to forage”, said Perkins.

Potts added: “We’ve got good evidence that each one of these is definitely having a negative impact somewhere, but what is making it a little bit more difficult is that the effects quite often work in tandem, so you might get two of these things, or even three of these things, all working together to be a threat to pollinators. It’s a complex story.”

Behaving like drones
A major problem across the world that continues to worsen with each passing generation, particularly in developed nations, is the disconnect between what we eat and where it comes from. We are so used to taking a convenient trip to the local supermarket to buy plastic-wrapped foods that look all shiny and clean, that we forget the process involved to get to that point. We forget about the land used to grow crops and animal feed, the water required, the lives of the farmers, the delicate balance of natural ecosystems, and the incredibly vital role played by animal pollinators.

“I know from experience that the connection between bees and where our food comes from has been lost”, said Perkins. “I go to schools and ask the young people ‘what do you know about bees?’, and the answer is ‘they sting’ or ‘they make honey’, almost invariably. I don’t know why or how we have got to the point where people have lost the connection with nature and what it provides for us.”

While this missing link from farm to table still exists, there is growing public awareness regarding to the importance of bees to our diets, and governments are beginning to take notice. As always, the first step is research, for little of it exists at present. Then comes international consensus and, finally, action.

“We do have responses from governments and from other sectors of society that are trying to combat these threats, but it’s not enough and it’s not widespread enough to really stop decline”, said Potts.

“I think governments have a real responsibility to help coordinate and reform, as well as legislate for these things. There really are definite opportunities that will work, but there is a question of timeliness. This problem has been around for quite a while, yet only recently do we seem to have understood the extent of it and the real risks associated. As with anything, we don’t want to miss the boat and find out that we’ve gone too far down the line of losing pollinators. So, there is a real call for action now.”

We must find a way to balance the needs of a swelling global population with mitigation of the harm we are causing to the natural environment

The solutions, however, are as complex, if not more so, than the problems themselves. We must find a way to balance the needs of a swelling global population with mitigation of the harm we are causing to the natural environment, while safeguarding it as well. Such a scenario will involve a seismic shift towards sustainable agriculture, including re-diversifying oversimplified agricultural landscapes. Other practices must also be introduced on a worldwide scale, including no-till farming and better crop rotation.

While reintroducing biodiversity will aid in the recovery of pollinator populations, the issue of insecticides and fertilisers remains a challenge, given the swelling pressures on the agricultural industry worldwide. “I think neonicotinoids are an important pesticide. However, the evidence of their impacts on bees suggests that careful consideration needs to be given as to their use”, Woodcock said, adding more targeted strategies, such as focusing on places where pest resistance makes neonicotinoids essential, and easing the impact by creating new foraging and nesting habitats for bees, may be viable strategies that allow their use in a more environmentally sensitive manner.

“Whether such practices are effective would need to be tested. In part, this could only be achieved by long-term monitoring of wild bee populations. I suspect that the current position of denial on one side and accusations on the other is not constructive, and that a more useful dialogue needs to be opened up to investigate management strategies that can accommodate biodiversity and agricultural needs in the same space. Ultimately, modern agriculture cannot be effective without pesticides, so some kind of middle ground needs to be reached.

There is also substantial room for developing current management practices, particularly when it comes to pathogens and parasites. What’s more, the selection of desirable traits in managed bees, while also breeding for genetic diversity, may improve both the size and diversity of populations. Engaging with local communities and bringing them together with stakeholders and scientists to monitor farms and share knowledge is another key factor in better protecting bees.

Hive mind
Despite our nonsensical insistence on causing irreparable damage to the environment, we remain deeply intertwined with nature, and our fate is linked with that of bees. The extinction of any species is a grave sin – a crime that will never be eroded from the pages of history, and never forgiven by future generations. In the event of the extinction of bees, however, there may not be any future generations to look back. Beyond mere monetary loss, in the event of the extinction of bees we are looking at a disaster that threatens the very survival of the human race. So widespread, minute and all-encompassing are animal pollinators, that no man-made replacement could suffice.

Plenty of options have been suggested, but talk is cheap: now is the time to act. We rely on governments to fund initiatives, support scientific studies and encourage sustainable farming practices, but the private sector has a responsibility too. Companies in all industries and of all sizes can make a difference, and so too can the individual. We each have a crucial role to play, even small acts, from planting lavender in our gardens, to making responsible consumer choices, can make a huge difference when it comes to preventing a catastrophe of apocalyptic proportions.

The end of the eight-hour day – employers must take decisive action

Posted on 10/24/201606/14/2017 by Ben Debski

The number of hours an employee should spend working each day is a question that has been pondered since the beginning of the modern industrial economy. Before the advent of the Industrial Revolution, the question of working hours was largely redundant: with daily duties consisting of tending to the fields or livestock as required, the working day was changeable and undefined. However, the mass adoption of waged and salaried labour by modern, industrialising economies changed this. Work was carried out through the division of labour, à la Adam Smith’s pin factory. Workers were expected to carry out a singular task repeatedly over a defined period of time, with the end product emerging some way down the production line. Labour became abstract, organised around the amount of time spent carrying out specific tasks as part of a larger production process, and seemingly independent of the labourer’s own efforts.

At first, early industrial workers were liable to devote upwards of 12 hours a day to their work. In the early 1900s, however, Robert Owen, a factory owner and philanthropist, started campaigning for the adoption of a 10-hour working day. He would eventually refine this demand, coining the slogan ‘eight hours’ labour, eight hours’ recreation, eight hours’ rest’. This slogan would later be adopted by trade unions and socialist political parties alike, making Owen’s assertion a core political demand. By the mid-20th century, many of the industrialised and advanced economies of the world had adopted, and legislated for, an eight-hour working day, or a 40-hour week.

Many in France suggest the 35-hour working week has done little to increase employment

Enlightened employers
Despite predictions from the likes of John Maynard Keynes in the 1930s, and the ‘leisure time’ theorists of the 1970s, most of the world’s advanced economies still adhere to the eight-hour working day. However, the last decade has seen a renewed push for a reduction in daily working hours, with supposedly enlightened business owners spearheading the offensive.

Many employers, most notably those in Sweden, have started to experiment with a six-hour working day. Retirement homes such as Sjöjungfrun in Umeå, as well as Svartedalen in Gothenburg, have trialled this new working format in recent years. Hospitals and call centres across the country are also reported to be looking at a decrease in mandatory daily working hours. The experiment isn’t limited to just Sweden, however, with firms around the globe slowly introducing similar measures – albeit in small numbers. Liverpool-based marketing firm Agent Market, for instance, is one of the latest to attempt the change.

Looking back, it makes sense that the socialist parties and unions of the 19th and 20th centuries would be the ones to push for shorter days. Interestingly, however, the latest campaign to further reduce working hours has come from employers themselves, believing people working fewer hours can actually increase productivity and therefore benefit the business. Working fewer hours in a day can increase the happiness of employees, making them more committed during the time they are at work. The resulting happiness and change in work-life balance is also said to reduce illness levels, resulting in fewer sick days taken. As long as pay is not cut – in other words, as long as a six-hour day is still paid the equivalent of the current eight-hour day – both employees and employers are set to benefit. The former gets a better work-life balance, while the latter saves on costs and benefits from increased productivity.

French folly
Productivity, however, is not the only consideration for many businesses. For employers to wilfully set a six-hour day, there must, of course, be a considerable benefit to them. For businesses employing workers in low-skilled industries, and paying employees simply on an ‘hours put in’ basis, mandating a maximum of six hours seems conceivable and perhaps even beneficial. In other areas of the economy, however, a six-hour working day seems less likely to succeed. In technology and finance, for example, many employees already work well in excess of eight hours on a regular basis. The highly specialised and skilled nature of the work also means expanding the number of workers to make up the lost hours would prove troublesome and costly. Most likely, as already happens in France, such employees would need to be paid the required overtime hours, with the base rate of their salary adjusted accordingly.

With many nations also seeing increased falls in labour participation, and automation eliminating many jobs, some argue the state itself, rather than businesses, could take action

With many nations also seeing increased falls in labour participation, and automation eliminating many jobs, some argue the state itself, rather than businesses, could take action. By reducing the number of working hours for each person, it could be argued that more jobs would be created, and unemployment figures would drop. However, France’s decision to limit its working week to 35 hours at the turn of the millennium has been far from a resounding success. Many finance workers and other highly skilled corporate employees are simply paid the overtime remuneration required to skirt the 35-hours-a-week labour law. For low-skilled workers, the result of the law has been an increase in hourly production quotas to off-set the reduced working time or, in some cases, midday shutdowns during slower business times – an inconvenience to the rest of the economy. Many in France also suggest the 35-hour working week has done little to increase employment.

Uncertain future
After a steady reduction in working hours throughout the 19th and 20th centuries, most industries settled on an eight-hour working day. With productivity now higher than when the policy was first legislated for almost a century ago, it seems naive to assume it cannot fall further in coming decades.

However, it is unlikely, at present at least, that a work reduction can provide a solution for all professions and job types. For some jobs it may work, and for others not. Many of the most highly sought-after or most skilled jobs already demand more than eight hours a day from their workers. Even UK Opposition Leader and champion of the six-hour working day Jeremy Corbyn believes the policy is not suited to everyone, stating: “I don’t know if I could quite get my job done in only six hours a day.” This is why individual employers, rather than the state, provide the best hope moving forward. For some workplaces, a reduction in hours may well be of benefit, and forward-thinking firms that implement the system with success will encourage others to follow suit, while those firms for which it doesn’t work can simply maintain current working hours.

Personalised communications will shake advertising out of its slumber

Posted on 10/24/201606/14/2017 by Ben Debski

The digital age has transformed the marketing and advertising landscape, shifting it from the limited realms of radio and television straight into the palms of our hands, every minute of the day. Through social media and data analytics, companies are now able to capture precise details about their consumers, connecting with them on a much deeper level than ever before.

Although an evolution in marketing is certainly underway, it has become stuck in limbo. Issues relating to trust and wavering loyalty have made it harder for firms in highly competitive markets to reach out, capture and retain customers. Likewise, rapidly changing consumer expectations have become a huge challenge, with individuals now demanding enhanced value and tailored campaigns as the minimum. Yet, amid all this, the traditional format of conveying a message has remained intact – in text form, generic and detached, very much an anachronism.

The modern consumer
Without a doubt, the biggest change that marketing has seen in recent years has been the rise of social media and the volume of data that now accompanies consumer purchase and usage behaviour. “Most people think this is only occurring online, but consumers are being tracked offline as well, with loyalty programmes and other tracking technology, for example, RfID, CCTV and GPS”, said Dr Kirk Plangger, Lecturer in Marketing at King’s College London. The masses of data collated from consumer tracking have, therefore, become a hurdle for marketers charged with discovering new insights into consumer behaviour and devising corresponding strategies.

Most people think this is only occurring online, but consumers are being tracked offline as well, with loyalty programmes and other tracking technology, for example, RfID, CCTV and GPS

While social media has given organisations a global platform, irrespective of their size, it has also given them a new range of concerns, particularly regarding the speed at which bad news travels. What’s more, with so much information available, consumers can make more measured and informed decisions when it comes to the purchases they make and the services they use. “Consumers are much wiser now, much more selective, much more careful and much more powerful in terms of networking, word of mouth, referrals and so forth”, said Professor Shintaro Okazaki, Editor-in-Chief of the Journal of Advertising.

With this power, consumers are shaping the markets they interact with. They demand greater value and more engagement, in addition to some level of personal involvement. “One of the most important changes in marketing is the co-creation of value, because now consumers want to participate to create something together”, Okazaki continued. “Before Web 2.0, we were very reactive and we received information in a very unidirectional way from firms. But, nowadays, because we have tools such as social networking sites, we can transmit our opinions more proactively.”

As such, it is crucial that companies interact with their consumers more effectively and involve them in some way, which has given rise to the term ‘prosumer’. “Prosumers have much more power and they participate with each other through social media”, Okazaki said. “Firms have to listen to them to create more effective personalised marketing communications.”

Marketing campaigns can no longer be generalised for mass audiences. So familiar are we with the constant stream of advertising that pervades our lives, through every format and on every screen, that we have become immune to it. Personalised communications, on the other hand, still have the power to reach out and deliver a message; they can provide that missing link between individuals and the faceless corporations that influence their lives.

“Personalised marketing not only impacts behaviour, but also consumer attitudes, feelings and associations”, Plangger explained. “Consumers respond differently to personalised marketing, but [the reaction] depends on the execution. If the marketer is too blatant with the use of consumer data, many consumers may have negative attitudes and feelings toward the brand. But, if the marketer is careful about using consumer data, many consumers may have very positive feelings that could have a significant impact on satisfaction, word of mouth, consumer engagement and retention.”

Bespoke ads
While many approaches to marketing and advertising remain out-dated, recent developments in technology are propelling personalised campaigns in line with what we have come to expect today. One company moving in this direction is VideoSmart, a new service that allows companies to instantly send out thousands of videos personalised for each and every recipient.

VideoSmart can combine a generic piece of film with a customer’s data to produce a video tailored specifically to them, akin to a personalised TV advert delivered straight to their mobile device or desktop. “We work with the client to create an advert that reflects their brand’s personality and tonality, while ensuring that we have clearly articulated their marketing message”, said Sami Aintaoui, Director at VideoSmart. “We then overlay the customer data so that all the content within that video is personal to the recipient, and that means that any imagery, maps, narration, text, music, or even the order of the scenes that are displayed, are all specific to that customer.”

We overlay the customer data so all the content within that video is personal to the recipient, and that means any imagery, maps, narration, text, music, or even the order of the scenes that are displayed, are all specific to that customer

The idea behind delivering communications via video is that, through this medium, customers are more likely to recall the message that has been conveyed, and are more likely to understand it as well. “I absorb information better in visual form, other people are audio learners, others prefer text. Traditionally as businesses, we’ve only ever communicated via the latter”, Aintaoui said. “With personalised video, we leverage all three, which means we’re satisfying everyone and it also means that a company’s messages are better retained by the customer.”

Indeed, better communications via such media can also help to satisfy increasingly stringent regulations by ensuring that a customer fully understands the product or service they are buying into. “If we can alleviate some of the pressures that businesses feel from regulators, their marketers will start to get back what marketers do, which is building brands, building relationships with customers and allowing them to create unique brands that people actually have an affinity to”,
Aintaoui explained.

New phase
By communicating with potential and existing customers in a more direct, personable manner, as opposed to doing so through a jargon-heavy, corporate block of text, consumers are more likely to stop and listen, and less likely to ‘shop around’. Essentially, the medium of video can break existing barriers between companies and consumers, create a more frictionless customer journey and significantly improve customer relationship management systems. “It could be used across the customer relationship lifecycle, whether that’s acquiring, growing, on-boarding or retaining customers”, added Aintaoui.

This approach is particularly useful when it comes to winning back lapsed customers, which is increasingly important as online shopping continues to expand. Around 63 percent of potential online transactions, or some $4trn worth of merchandise, will be abandoned in the ‘shopping cart’ in 2016, according to a report by BI Intelligence. While this figure is a huge concern for retailers, the research also indicates conversion rates can be improved by retargeting shoppers via email after they have left a website.

According to digital marketing platform Listrak, emails sent around three hours after a shopping cart has been abandoned have a 20 percent click-through rate. Now, imagine the same approach, but with a video adapted specifically for the consumer and their purchase. It starts by addressing them by name, and then perhaps offers a discount or free delivery; it may answer a query they had about the product and provide some information the absence of which caused their initial hesitation. Simply put, the possibilities of personalised videos are boundless. They can take client relationships to a whole new level, and even form a connection that lasts a lifetime.

As technology continues to march forward, marketers have fallen behind. While wading through reams of consumer data and combatting the explosion of social media culture, they have unwittingly neglected the importance of engaging with customers, building relationships and establishing loyalty. Now, however, the technology finally exists for these traditional pillars to be combined with a modern data-led approach. The future of marketing has very much arrived.

Globalisation will be the talk of the town in Davos, as the WEF begins

Posted on 10/23/201610/24/2016 by Ben Debski

In January, the world’s richest and best connected will descend upon a sleepy village for the annual meeting of the World Economic Forum (WEF). Since 1971, the global elite has gathered at the small Swiss mountain resort of Davos to discuss the world’s most pressing issues. This time round, over 2,500 guests are expected, with attendees paying upwards of $20,000 for the privilege. Founded by Klaus Schwab in 1971, the WEF operates under the motto “committed to improving the state of the world”. From Canadian Prime Minister Justin Trudeau and the IMF’s Christine Lagarde, to leading business minds such as Bill Gates, the wide array of speakers always makes for an impressive showing and insight.

The range of issues is broad too, with recent discussions ranging from the impact of 3D printing to global gender equality, although usually there is some sort of overarching theme to the discussions. The 2016 edition focused on the world’s ‘fourth industrial revolution’, a concept first put forward by Schwab himself. In his most recent book on the topic, Schwab argued we are once again undergoing a revolution in economic production techniques, one which will have profound consequences for our world. Whether it is mobile supercomputing, artificial intelligence and cognitive computing, self-driving cars, or neuro-technological brain enhancements, the way society and economies are organised is set for a huge shake-up. How world leaders should approach this seismic shift was the central theme for 2016.

This year’s meeting, it appears, will take a slightly more political turn. The headline theme will be ‘responsive and responsible leadership’. Indeed, 2017’s gathering will focus on a number of growing trends and global events that have caused great concern, particularly in terms of the future direction of the world economy. According to the overview: “The weakening of multiple systems has eroded confidence at national, regional and global levels. In the absence of innovative and credible steps towards their renewal, the likelihood increases of a downward spiral of the global economy, fuelled by protectionism, populism and nativism.” How to stem this tide will be the primary concern this year.

Brexit bother
Last year’s gathering focused partly on the then-upcoming referendum on the UK’s membership of the EU. Since then, the UK electorate voted narrowly to leave the bloc, surprising most observers. Of immediate concern for WEF attendees will be how this decision is handled. UK Prime Minister Theresa May has said the process will begin no later than March, with the activation of Article 50 of the Lisbon Treaty. The UK will then have two years to negotiate the terms of the exit. The direction of the UK’s departure and what terms it should both seek and receive will be a hot topic for all involved.

This year’s meeting will take a slightly more political turn. The headline theme will be ‘responsive and responsible leadership’

Questions will be raised about the precise nature of the separation; specifically, whether or not the UK will remain in the single market. The answer to this question will have serious implications for firms around the world that currently use the UK as the base of their European operations. Financial institutions, for instance, based in the City of London will be keen to maintain passporting rights in order to operate in the EU. However, these may be lost should the UK go for a ‘hard Brexit’ and leave the single market altogether.

Economic implications aside, the sentiment behind the vote will also be up for discussion at the WEF meeting. For many commentators, the Brexit vote was indicative of a rising populism across the continent, which the WEF has identified as one of the key threats facing the future of the global economy. Panellists are likely to discuss populist and anti-EU groups across the continent, including Germany’s Alternative für Deutschland and France’s Front National.

For many attendees, this ideological shift will raise the spectre of a growing sentiment against globalisation, chiefly in its forms of international governance and increased mobility of labour. Speakers and panels will explore why growing numbers of people are becoming disenchanted with globalisation, and sceptical and hostile to its outcomes and processes. The focus will be on how leaders around the world can maintain a global and open economy, while also placating the fears and concerns of their electorates.

This will involve finding solutions to some of the most pressing issues faced by Europe today. Top of the agenda in this respect will be Europe’s migration crisis. Since the last WEF gathering, millions of migrants have entered Europe from war-torn countries, including Syria and Afghanistan, in order to claim asylum. Europe was woefully underprepared for this mass movement, and rifts quickly emerged within countries and even within political parties as to whether to welcome or turn away those in need. With migrants still making their way to Europe, how the continent can coordinate a coherent and unified strategy will be of vital importance.

Likewise, other perceptions of the EU are likely to be addressed. While the southern European debt crisis has largely been out of the news, questions over the currency union’s viability and Greece’s financial health persist. Other threats to the financial health of the continent are also likely to be on the agenda, including Italy’s weakening financial position, the effect of the ECB’s negative interest rate policy, depressed profitability for European banks, Hungary’s own referendum vote to reject EU migrant quotas, and Deutsche Bank’s increasing volatility. On an existential level, attendees will have to grapple over whether European integration should continue, and how it could continue in a way that is acceptable to the citizens of Europe.

Tough trade
After years of ever-greater advances in global trade, citizens in many countries have started to assert their dissatisfaction with the direction of the trend. In the US, both presidential candidates opposed the Trans-Pacific Partnership (TPP). Donald Trump called it “a bad deal”, while Hillary Clinton – once a TPP advocate – reversed her policy to oppose it during the campaign trail. This rare point of agreement is reflective of a rising anti-trade sentiment within the US.

Indeed, after decades of growing trade, momentum appears to be slowing. In September, the World Trade Organisation announced it was revising its estimates for global trade growth in 2016 downwards to just 1.7 percent, from an earlier estimate of 2.8 percent. This new figure is the slowest predicted rate of trade growth since the start of the 2008 financial crisis. Trade growth, relative to GDP, has been weak since the end of the global recession. As an analysis by the Peterson Institute for International Economics noted: “Following the Great Recession of 2008-09, global trade and FDI performance did not resume their accustomed growth rates, unlike in the aftermath of previous recessions.” Since 2008, the world has seen “the longest post-war period of relative trade stagnation”. It will be of vital importance, then, for the bigwigs at Davos to discuss the future of international trade. Generally a pro-trade crowd, top on the agenda will be how to reverse the slowdown.

Economic inequality
Related to worries over trade and growing protectionist sentiment, as well populist sentiment within in the EU and beyond, will be a topic of increasing concern among the global elite today: economic inequality. Thomas Piketty’s book Capital in the 21st Century is one of the most popular economic tomes of recent years. Think tanks and charities regularly publish reports measuring inequality around the world. Indeed, Barack Obama himself labelled economic inequality the “defining issue of our age”.

Many economic commentators see it as holding back economic growth through lowering aggregate demand, and much of the anti-trade sentiment in the US stems from growing inequality. Trade has, it is argued in some quarters, damaged the US’ middle class through offshoring and reduced wages. A hot topic at last year’s gathering, WEF attendees will once again hold counsel on how to address the growing gap between top-end wealth and average incomes.

On the surface, the focus on responding to the threats facing the world economy seems overtly political. However, embedded in these political challenges are deeper social, economic, financial and existential issues. At the heart of the WEF discussion will be how leaders can make the global economy and its integration more palatable and more inclusive for the world’s citizens. Political trends reflect a growing malaise with the globalised economy and world at large, and the meeting at Davos will provide a forum for the sharpest minds to work out the cause of this sentiment, and how to address it.

New fertility treatments could offset the problems of ageing

Posted on 10/23/201606/14/2017 by Ben Debski

In recent years, a social phenomenon has emerged: men and women are waiting longer and longer to start a family. Gone are the days when the majority would settle down early in their 20s and promptly begin having children. Today, we want to live our lives to the fullest before making lifelong commitments. We want to focus on our careers, and we want to find the right partner to share our futures with, rather than the one that is most judicious and timely.

While greater financial security and life experience make for an ideal environment in which to raise children, nature unfortunately has its own schedule, and an obdurate one at that. As we age, it becomes increasingly difficult to fall pregnant, not to mention risky. The likelihood of genetic disorders increases dramatically over time, particularly after the age of 35, which is now around the time many people plan to have children. This seismic shift in social norms and expectations, together with the mounting cost of living, has led to fewer people having children, while those who do have children generally have fewer than previous generations. Aside from the emotional turmoil this can cause for individuals, the cumulative result has been a decline in birth rates in numerous countries around the world. This phenomenon has direct economic repercussions that may well result in demographic disasters in the not-too-distant future.

Age-related fertility problems
Women are born with a finite number of egg cells, or oocytes, in their uterus – between one and two million. This number, however, soon begins to fall, and by adolescence, only some 300,000 eggs remain. While the quantity remains abundant during a woman’s 20s, the rate of decline begins to accelerate at the age of 32, speeding up even more so just five years later. By menopause, which usually takes place around the age of 50, all oocytes are gone.

What’s more, not all oocytes mature into eggs, while those that do are usually released one at a time during the monthly menstrual cycle. Eggs thus stay dormant until they are released, making them some of the longest living cells in the body. Herein lies the crux of the problem: as dormant eggs do not perform cellular repair, the likelihood of damage grows with each passing year.

Although these biological truths remain, our attitudes and the choices we make have changed – and drastically at that. “Many women are waiting until their 30s and 40s to have children. In fact, about 20 percent of women in the US now have their first child after 35, and this leads to age becoming a growing cause of fertility problems”, said Dr Sheree Boulet, Senior Epidemiologist at the Centre of Disease Control (CDC) Division of Reproductive Health.

About 20 percent of women in the US now have their first child after 35, and this leads to age becoming a growing cause of fertility problems

According to Boulet, in the US, around one in three couples in which the woman is older than 35 experience fertility problems. Indeed, becoming pregnant is but the first hurdle to overcome. Boulet stated: “Ageing not only decreases a woman’s chances of having a baby, but also increases her chances of miscarriage and of having a child with a genetic abnormality.”

The causes of female infertility are generally associated with ovarian function, and include diminished ovarian reserve, premature ovarian failure and, the most common cause of infertility in women, polycystic ovary syndrome. Also presenting a problem is tubal patency, which refers to how open, swollen or blocked fallopian tubes are. Under this category falls endometriosis, a common condition in which tissue and cells similar to those of the womb lining (the endometrium), are found outside it. Finally, uterine contours, namely the physical characteristics of the uterus, can also cause issues such as fibroids and other abnormalities.

With such conditions increasing in prevalence with age, and the changing of social norms, rates of pregnancy and childbirth continue to decline around the world. For example, recent estimates by the CDC’s National Survey of Family Growth indicate six percent of married women between the ages of 15 and 44 are unable to fall pregnant after one year of unprotected sex (which is how infertility is commonly defined). “This figure is generally considered an underestimate”, said Boulet. “Results from a few cohort studies and a cross-sectional study using a current duration approach, [which] considers time to pregnancy suggest that the prevalence of infertility is closer to 15 percent.”

In Japan, a plunging population rate has become a national concern of grave economic importance. At present, Japan’s birth rate is 1.4 children per woman – far lower than the 2.1 average needed to ensure stability in one of the world’s largest economies. Since the country’s population peak of 128.1 million in 2008, Japan has become increasingly skewed towards an older populace. Today, around 25 percent of the population is over the age of 64, while the number of children below 15 is at an historic low. Based on the current trajectory, Japan’s population is expected to plummet to 86 million by 2060, 40 percent of whom will be over 65. Such a demographic will place incredible pressure on the state, particularly in terms of medical and pension systems.

Gender parity
Contrary to common misconceptions, the fault does not lie with the age of the woman alone, as men also experience increasing fertility problems as they grow older. The CDC’s analysis of the 2002 National Survey of Family Growth found that 7.5 percent of sexually experienced men under the age of 45 in the US (around 3.3 to 4.7 million men) have seen a fertility doctor at some point in their lives. Of those men, 18 percent were diagnosed with an infertility problem, including semen problems and varicoceles. “Varicoceles are overly large veins on a man’s testicles, which cause them to overheat; the heat may affect the number or shape of the sperm”, Boulet explained.

During evaluation practitioners will assess the concentration of sperm, as well as its motility and morphology – both of which can affect chances of insemination. That said, as Boulet explained: “A slightly abnormal semen analysis does not mean that a man is necessarily infertile. Instead, a semen analysis helps determine if and how male factors are contributing to infertility.”

Issues related to sperm can be caused by various factors. As with women, lifestyle plays an important role; habits such as heavy alcohol use, smoking, drug abuse, and anabolic steroid or testosterone supplementation can have a detrimental impact on the concentration and motility of sperm. Likewise, environmental factors are relevant, particularly in terms of exposure to pesticides, lead and other toxins.

As far as male infertility is concerned, we are not yet able to choose the best spermatozoa for use

Various medical conditions, such as diabetes, cystic fibrosis and infections, can also contribute to abnormal semen analyses, as can cases in which a man has received chemotherapy or been exposed to radiation. Of course, the likelihood of any of the above taking place swells as the years march on. Moreover, the cessation of sperm production altogether also becomes more likely with age, and is caused by a condition called male hypogonadism, which, according to a study published by the International Journal of Clinical Practice in 2006, affects 40 percent of men over the age of 45.

And yet, at present, treating male infertility remains highly problematic. “As far as male infertility is concerned, we are not yet able to choose the best spermatozoa for use”, said Dr Kostandinos Sfakianoudis, an obstetrician and gynaecologist specialising in human infertility at Greek fertility clinic Genesis Athens.

Fixes and breakthroughs
At present, in vitro fertilisation (IVF) is the most common treatment for fertility. First used in 1978, the process involves surgically removing eggs from the ovaries, then fertilising them with sperm within a laboratory setting. The fertilised eggs, or embryos, are then implanted into the womb in the hope that one will take. The process involves taking daily injections of follicle-stimulating hormones, which can be emotionally punishing and lead to a reduced libido, and can be an issue itself when trying to conceive. In fact, IVF can sometimes lead to depression or anxiety during or after treatment. And, despite such an uncomfortable and gruelling process, it does not always result in pregnancy; in the UK, for example, only 20 to 25 percent of cases are successful.

Moreover, due to the private costs and various rules for state-sponsored IVF, many people do not even have access to fertility treatments. For instance, in the UK, patients over the age of 43 or with a BMI over 30 are unlikely to receive IVF treatment from the state, and instead face a private healthcare cost of £5,000. Given this is the age at which an increasing number of couples try to have children, a large portion of the population is thus prevented from receiving treatment – and this issue isn’t exclusive to the UK. “As we all know, most patients delay the onset reproductive pursuit, and therefore they are always confronted with the problem of age and time, yet still, there are many societies and governments that do not allow the performance of IVF even in advanced age”, Sfakianoudis said.

However, while governments may be slow to change their rules, medical research is taking a leap forward. In particular, 2016 has been a significant year for innovations in fertility treatment. Take Genesis Athens, which recently pioneered a method to reverse menopause through platelet-rich plasma (PRP) therapy. PRP, which is made by centrifuging a blood sample to isolate growth factors, is currently used in conditions such as osteoarthritis, tennis elbow and rotator cuff tears. The therapy is proven to be highly effective, utilising platelets from the patient’s own blood in order to rebuild damaged cartilage and tendons.

Genesis Athens recently pioneered a method to reverse menopause through platelet-rich plasma therapy

“We know that the PRP helps tissue recovery very well; it enhances healing procedures and stimulates tissues. So we thought: ‘Why not test that on menopausal ovaries?’ We have already tested it on more than 30 patients, and it seems that in many among them, it works”, said Sfakianoudis. “It works in terms of improving hormonal parameters and recovering menses after menopause; there are patients who do not respond, but it seems promising.”

PRP also appears to be an effective treatment for women whose embryos refuse to attach to the uterus. This condition often arises as a result of scarring from miscarriages, thin uterine lining, or cysts. Naturally, as with any medical breakthrough, more steps are needed until widespread access is available. “Larger studies need to be implemented”, Sfakianoudis said. “For the moment, we are recruiting patients and enlarging our samples. If it is proved to be working then it will certainly get a clean clarification and commercial use, but for the moment, it needs to be investigated further.”

Treatments for male infertility have also shown great potential this past year. In June, New Scientist revealed progress had been made to help men who cannot produce viable sperm. The method extracts the stem cells that produce sperm, and then corrects the mutations in vitro, before implanting them back into the testicles. Through this method, not only is a couple spared IVF treatment, but the child they produce will also benefit from no longer having the faulty gene present in the father. Genome editing does, however, raise ethical questions, with many opposing the idea of ‘designer babies’.

Nonetheless, the ability to prevent faulty genes being passed on to a child offers a wealth of opportunities in preventative care, as well as enabling more couples to have children. This area in particular was the subject of the media spotlight at the end of September, when it was revealed New York’s New Hope Fertility Clinic had successfully carried out the world’s first birth involving three parents. So as not to pass on a lethal genetic disorder from the mother, the nucleus from her egg was removed and implanted into a donor egg, which was then fertilised with the father’s sperm. This technique was successful in removing the genes carrying Leigh syndrome, while still carrying traits of the couple. Although such procedures are currently illegal in the US (it was done in Mexico for this reason), it holds great promise for countless couples around the world who refrain from producing offspring for fear of the genetic disorders their children might inherit.

Blurred lines
When it comes to fertility treatments, there is a fine ethical line to tread. Some argue a couple should not be allowed to give birth after a certain age, as their own health may become an issue; they may not be able to run around after toddlers or indeed survive until the child’s teen years or adulthood. Of course, such scenarios can transpire for young couples as well – and they do, every day.

That said, many still argue it is unfair to purposefully put a child in an unstable or uncertain environment. Misfortune is all too frequent; when it comes to children, as a society, we strive to ensure their wellbeing at all times.

Some argue a couple should not be allowed to give birth after a certain age, as their own health may become an issue

When asked about this particular issue, Sfakianoudis was clear in his conviction: “We deal with lots of women every day and their desire is enormous. It’s a life dream that we are pursuing for each one of them, and I cannot deny it to any of them. I understand the ethical issues, but I cannot condemn a patient who wasn’t able to find the right person to construct her family in the right time as our society implements.”

He is right to a certain extent: who are we to judge another on the path their life has taken? Whether it’s due to choice or chance, a couple should not be denied the greatest gift that life has to offer.

Moral issues regarding the age of new parents aside, the truth of the matter is infertility is a colossal problem. It affects millions of people around the world every day. It can disrupt lives, cause depression, and wreak havoc on an economy. As such, governments and scientists have a responsibility to tackle this escalating problem, not only to help potential parents realise their dreams, but to ensure economic stability in the long term. The saying ‘children are our future’ may be a cliché, but it is as true today as it has ever been.

Society has changed; the social norms and customs associated with decades gone-by cease to function in the modern climate. It is becoming increasingly difficult to buy a home, have a steady income, and pay for childcare and schooling, not to mention everything else that comes in between. For these reasons, and so many more, people are delaying parenthood – this is a fact. But, when all is said and done, it is a fact that we must address if we are to balance our personal aspirations with societal needs, now and into the future.