Business Annual 2010 by Sextant Media Limited

Finance Location Trends Offshore Lifestyle Environment Education 1

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Diligence

- The Order of the Day

As a humbler world economy wakes up to a new less forgiving climate, there nonetheless remains cause for optimism.

Few of the world’s economies are expected to have achieved positive growth over 2009, while across the world output is set to have fallen by 2.3%. Yet, while few are predicting a return to the good old days any time soon, resolute fiscal stimulation policies have created the conditions for the beginnings of a recovery next year in the majority of advanced economies. With interest rates cut to virtually zero across much of the world and massive levels of government borrowing – particularly in the US and UK with their flagship quantitative easing measures – it is hoped that apart from leading to record post war budget deficits, this will also lead to a lowering of the cost of credit for firms and households. However, there is of course no guarantee that lower policy rates will necessarily filter through immediately to the wider economy. Many are once bitten, twice shy, and could take time to be convinced that speculation still leads to accumulation. Their current priority would appear to be balance sheet repair. This could yet prove to be a major headache for governments as they seek to address the dire state of public finances once the economic recovery has been established. The worry is that this will increase competition for global savings which will inevitably push up long-term interest rates and stifle private investment. Other parts of the global economy are inevitably feeling the knock-on effect of the prevailing wind of financial pessimism and neurosis. Tax havens, for example are under ever tighter scrutiny across the globe as advanced economy governments co-operate to close loopholes and ensure that potential tax revenues do not leave their respective jurisdictions in the volume that they have been over the last couple of decades. Equally, multinationals that move contributions within their organisations to lower tax liabilities in the respective jurisdictions in which they operate also find themselves increasingly under the watchful eyes of the authority, manifested through a rise in transfer pricing regulatory compliance criteria and the number of audits carried out.

All the while there are ever rising energy costs to deal with and increased competition for the advanced economies from the BRICs contingent. Yet, on the plus side the winds of change are not without clemency. For example there is greater investment in low carbon initiatives and renewable clean energies to ensure environmental compliance, and there has been a marked adoption of sustainable practices into the heart of commercial strategic thinking as it comes to be understood that profits are not incompatible with a cleaner environment, and that climate change is ultimately to no one’s benefit.

On the plus side the winds of change are not without clemency There is also an increasing acceptance that the traditional developed world has now got company, and that it is here to stay. Thus, apart from the fact that many companies can now be safe in the knowledge that to outsource is not necessarily to put the fate of your business in the lap of the Gods, there is also an understanding on the home front that to remain competitive it is imperative that skills are both supremely honed and relevant. This requires greater co-operation between business and higher education, and of this there are encouraging signs. Meanwhile, one positive by-product of the rising unemployment caused by the recession is that from an employers’ perspective right now there is a large and diversified pool of talent to choose from as never before. Not only this, but commercial property prices are lower than they’ve been for many years. Yes, it’s tough, but as ever the opportunities are out there. Seek, and ye shall find! Richard Smith

SAPPI

FINE PAPER EUROPE

focussing on the strengths of print and paper all photos - ©Eric Van Den Bruel

The role of print in the media mix Despite predictions that the 21st century would see print swamped by electronic and digital media, print and paper continues to play a valuable role in our everyday lives and are more powerful than ever. Sappi Fine Paper Europe is the largest producer of coated paper in the world, having acquired M-real’s coated graphic paper business at the end of 2008. Sappi regularly publishes information about the powerful characteristics of print and paper through its ‘Life with Print’ initiative. A series of “Life with Print” books have been issued over the past 6 years, which provides qualitative examples of the value of print in the media mix, as an irreplaceable platform for impactful communications and brand building. The latest edition, entitled ‘Engaging New Generations in the Media Mix’ looks at the role of print in our modern world of mobile devices and social media and is itself a mix of printed and electronic content.

A truly renewable resource One of the many unique characteristics about paper is that its main raw material is renewable - the paper industry is one of the most sustainable industries in existence. Nowadays, well managed forests provide the wider community with a multitude of benefits - a natural habitat, a place you can feel life and a place of inspiration; a storage of water and carbon, a highly powerful air filter - and of course, a source of raw wood materials that can be used for many valuable products, one of which is paper. Sappi has a strong commitment to environmental protection and sustainable development. All materials Sappi uses come from responsibly managed forests and Sappi is certified under the international health and safety, environmental and quality standards: OHSAS 18001, ISO 14001, EMAS and ISO 9001.

What’s new about paper today? Whilst digital media is often considered the medium that can respond to industry demand most quickly, paper and print have been making headway as innovators. Sappi’s belief is that paper can live and evolve. Following a 12-month study of printers needs, Sappi set to work in developing a revolutionary paper product. The end result was a market changing brand called Tempo™, referred to as the silk paper that behaves like a gloss as it produces high end print quality at a significantly faster pace than industry standards. The magic quality of Tempo™ is in its innovative coating which enables it to go through printing machines quicker than all its other competitors and then printed on the reverse without the usual waiting times. In most cases, thanks to Tempo™’s innovative coating, no protective varnish is required which means the look, feel and colour integrity of the original print proof is retained. Together with the reduced use of anti set-off powder, the end result is blemish-free and extra smooth.

Sappi’s coated fine papers are used in premium magazines, catalogues, books and high-end print advertising. Headquartered in Brussels, Belgium, Sappi Fine Paper Europe is recognised for innovation and quality. Sappi papers are produced in mills accredited with ISO 9001 and ISO 14001 certification, with EMAS registration also for all its mills in the EU. Sappi Fine Paper Europe’s mills hold chain-of-custody certification under the Forest Stewardship Council (FSC) and/or the Programme for the Endorsement of Forest Certification (PEFC) schemes. Sappi Fine Paper Europe is a division of Sappi Limited (NYSE, JSE, LSE), a global company headquartered in Johannesburg, South Africa, with over 17,000 employees and manufacturing operations on four continents in nine countries, sales offices in 50 countries, and customers in over 100 countries around the world. Complimentary copies of the ‘Life with Print’ books can be ordered at: www.lifewithprint.com Learn more about Sappi at: www.sappi.com

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BPO’S

NEXT TOP MODEL

Outsourcing F&A is a valid response to the economic downturn, when cost savings are more attractive. Capgemini’s Neil Shepherd describes how a new model for quick transition to best-in-class processes ensures that quick wins go hand-in-hand with sustainable value.

The sustained interest in business process outsourcing (BPO) in areas like finance and accounting is testament to the appeal of cost savings in difficult economic times, but companies are not blind to the long-term implications of BPO. They want quick wins, but they understand that outsourcing agreements should be transformational, not tactical. Leading consulting, technology and outsourcing services provider Capgemini is helping clients shorten their journey to optimal BPO implementation, whilst also delivering the flexibility, reduced risk and sustainable value that enable an organisation to transform its business model for the future. Building on Capgemini’s BPOpen™ technology platform, the Global Process Model (GPM©) leverages innovative outsourcing work flow technologies, including new process-monitoring and performance-management tools, to pave the way for quicker, smoother transition to an outsourcing model. Its backers believe that GPM can reduce the typical time frame from a maximum of three years to around 18 months. ‘GPM is more than a work flow technology. It is a complete environment – a set of processes

aligned with a client’s needs, a set of controls and performance metrics – that we predict will get a client very quickly to a best-in-class position through the degree of standardisation to world class processes it delivers, and the value it creates,’ says Neil Shepherd, Capgemini’s head of product development, BPO. The key to GPM is that it not only offers a quicker route to world-class F&A outsourcing, but also targets long-term, Sustainable value. ‘It offers speed-to-value, which means not just the speed of the transition but the speed of transformational Change within the organisation. We train staff through our Finance Academy and because the target operating model is the GPM and therefore known, the training is accelerated. This means the transition is compressed, and that we can concentrate on the value that is delivered at the end,’ he remarks. Clients also want transformation with reduced risk, and GPM helps with that. It speeds up the process in a managed way so that if circumstances are changing rapidly around a business then exposure to those changes is reduced,’ he adds.

Neil Shepherd, Capgemini’s head of product development, BPO

Enduring end-to-end value GPM provides the process environment in which companies can not only target the bottom line benefits of BPO – cost reduction, process improvement and standardisation – but also targets top line benefits through Capgemini’s Business Insight capability, which focuses on extracting client value through applying business analytics to end-to-end processes such as order-tocash.

Most F&A outsourcing is in traditional transactional areas like accounts payable and general accounting, but to deliver maximum value you must think about end-to-end processes. Accounts payable should inform procurement, general accounting should inform management reporting and decision-making,’ explains Shepherd. Furthermore, the GPM is unique in using 3D metrics, adding a measure of value to the standard measures of efficiency and effectiveness in a BPO engagement, which not only enables clients to make the link between outsourced F&A processes and the broader, end-to-end cycles that shape a company’s decision-making process, but also gives them the flexibility they need in volatile times. ‘Clients get the added benefit that we continue to develop GPM. Best practice continues to evolve and we constantly target those improvements. GPM offers a quick, low-risk way to meet your objectives and supports continuous process improvement,’ says Shepherd. ‘There is no endgame in BPO, only a journey, so we need to provide a vehicle for best practice now and in the long term.’ Many of Capgemini’s existing clients are currently transitioning to GPM, and new clients are likely to follow, as few could fail to be tempted by a short cut to sustainable value. Contact Information: Email: neil.shepherd@capgemini.com www.capgemini.com/bpo

world-class F&A performance in half of the time

Achieve

of traditional routes with Capgemini

BPO

The Global Process Model© (GPM) is an innovative new approach to transforming F&A processes from Capgemini. In essence the GPM is a unique ‘Target Operating Manual’ of world-class best practice in global F&A BPO. The key benefit of GPM is that it not only offers a quicker route to world-class F&A outsourcing, but also delivers long-term, sustainable value. To Outsource your F&A to Capgemini, please contact: carina.smith@capgemini.com and visit: www.capgemini.com/bpo to learn more about Capgemini BPO.

CONTENTS 3 Diligence

– The Order of the Day, by Richard Smith

38 Trends

9 Finance 10

The State of Forex, courtesy of Sterling York. How to get the best from this most liquid of markets

12 14

Transfer Pricing: Keeping it at arms length, by John Neighbour, OECD Centre for Tax Policy and Administration. How to Invest in Art, by Mary Gilleece. A safe haven during tough times?

Dover

Mersey

Widnes

Swansea Bay

Clyde, Aberdeen

Stirling

Redcar

Lincolnshire

Serviced Offices, by Piers Ashton. Why they are proving so popular at the moment.

Light at the End of the Tunnel? by Paul Thompson. A look at manufacturing prospects.

A Transparent Roadmap to Recovery, by Huguette Labelle, Chair, Transparency International. Why Governments must put transparency and accountability at the heart of all rescue and reform measures. Source of inspiration, by Joanna Gray. BPO is becoming synonymous with more than simply back office operations.

Turks and Caicos Islands

British Virgin Islands

Liberia

53 Lifestyle 54 55 58 60

30 Business and the Environment

General Knowledge Quizzed, by Mary Gilleece. The Knowledge Economy – today and tomorrow.

47 Offshore

15 Location: UK

39 40 42

Green Politics, by Joanna Gray. Political energy wrangling.

The Business of Weather, by Richard Smith. A look at weather derivatives.

Emissions trading, by Magnus Andersen. Lower carbon = higher profits.

Hard Copy, by Joanna Gray. There’s life in the paper industry yet, and it is leading the way in sustainable initiatives.

Take to the Field, by Mary Gilleece. Polo isn’t as exclusive as you might imagine. The Wonder of Yachting – Guide to buying a yacht. Racing without the Horses, by Joanna Gray. How racecourses are diversifying to successfully exploit alternative revenue streams. Irons are still hot, by Joanna Gray. The golf course is still the place where deals are struck.

63 Education 64

Business Schools, by Jeanette Purcell, Chief Executive of the Association of MBAs (AMBA). The MBA market is counter-cyclical.

Editor: Richard Smith Business Development: Dominic Hale Designer: Wallace Wainhouse Production Assistants: Fleur Wainhouse, Claire Turner In House Photographer: Chad McQueen Additional photography: Steve Jurvetson, www.DFJ.com/J √oхέƒx™, www.voxterra.blogspot.com/ All enquiries: info@businessannual.net

FINANCE

courtesy of Sterling York (www.sterlingyork.co.uk) The Foreign Exchange (Forex) market has been described as the market closest to having perfect conditions from an economic perspective. Its high trading volume and large number of traders, combined with its geographical range and trading hours truly make it a very unique market. The Forex market is the largest financial market in the world. Its average daily trading volume is estimated at over $3 trillion dollars and that number grows each day. It is used by people and companies looking to transfer funds overseas as well as for currency speculation. The foreign exchange market is also used by tourists exchanging cash and making overseas withdrawals and purchases on credit/debit cards. The investor’s goal in Forex trading is to profit from foreign currency movements. Forex trading or currency trading is always done in currency pairs. For example, the exchange rate of EUR/USD on Aug 26th, 2003 (quite a while ago we know!) was 1.0857. This number is also referred to as a “Forex rate” or just “rate” for short. If the investor had bought 1000 Euros on that date, he would have paid 1085.70 U.S. dollars. One year later, the Forex rate was 1.2083, which means that the value of the euro

(the numerator of the EUR/USD ratio) increased in relation to the U.S. dollar. The investor could now sell the 1000 Euros in order to receive 1208.30 dollars. Therefore, the investor would have USD 122.60 more than what he had started one year earlier. However, to know if the investor made a good investment, one needs to compare this investment option to alternative investments. At the very minimum, the return on investment (ROI) should be compared to the return on a “risk-free” investment. One example of a risk-free investment is long-term U.S. government bonds since there is practically no chance for a default, i.e. the U.S. government going bankrupt or being unable or unwilling to pay its debt obligation.

Whether you are trading stock, commodities, or a Forex market, following the overall trend should be your first priority. When trading currencies, trade only when you expect the currency you are buying to increase in value relative to the currency you are selling. If the currency you are buying does increase in value, you must sell back the other currency in order to lock in a profit. An open trade (also called an open position) is a

trade in which a trader has bought or sold a particular currency pair and has not yet sold or bought back the equivalent amount to close the position. However, it is estimated that anywhere from 70%-90% of the FX market is speculative. In other words, the person or institution that bought or sold the currency has no plan to actually take delivery of the currency in the end; rather, they were solely speculating on the movement of that particular currency. The foreign exchange market is unique because of: • Its trading volumes • The extreme liquidity of the market • Its geographical dispersion • Its long trading hours: 24 hours a day except on weekends • The variety of factors that affect exchange rates • The low margins of profit compared with other markets of fixed income If you spend any time at all in forex (FX) trading forums you’ll see constant questions like: “What’s the best FX trading system?,

The State of Forex

what’s the best free forex trading system, or where do I find good forex trading signals?” There are so many expert advisors (EAs), indicators, and systems available that it’s nearly impossible for a novice trader to find a decent FX trading system, or one that produced consistent results. Still, given a little information, traders should be able to identify a system that will work for them. Any FX trading system worth following will have four traits: The FX trading system will trade with the long term trend. The system will provide inflexible rules. The FX trading system will use a very limited set of indicators and will rely on an easily identified setup. Finally, the ideal FX trading system will provide a positive financial edge. Whether you are trading stock, commodities, or a Forex market, following the overall trend should be your first priority. Trading against the trend might get you a few winning trades, but a prudent trader sticks with the overall trend. Chasing retracements is okay if you want a rush. If you want to make money, you need to manage your trading like a business. That means that we make purchases at a lower price than the projected sale price. Counter trend trading goes against that rule. There are several methods for determining a trend. I recommend the Blue Zone, or a similar method for determining the health of a trend.

The ideal FX trading system will provide you with an iron clad set of rules for trading. Your trading results will be tightly correlated to your adherence to rules. When selecting a trading system, make sure you can live with the rules. If you cannot, find another system. If you find that your emotions will not allow you to follow these rules, find another way to make money. A system will only work if you use it correctly and consistently.

Our goal in forex trading is not to win more often. Our goal is not to win at all. Our goal is to make money. When reviewing messages in the Forex trading forums, you’ll often see charts. Some of these charts are so covered with indicators that you can hardly see the price action! The best FX trading system will only use a couple of indicators. The Blue Zone system, as an example, only uses three simple moving averages (SMAs). It uses these to determine the health of the trend. The best FX trading systems will couple these few indicators with setups that are incredibly simple and easy to identify. There are systems that use ascending triangles, multi-candle setups, and complicated crossovers. Those are just too complicated to be of much value, and in my opinion, lack consistency. The Blue Zone

system uses a single candle setup. This single candle is highly predictive of reversals and will provide consistent results. Of course you have to know which times to trade it. Finally, any FX trading system can be judged on one metric alone, the Financial Edge. Financial edge is a simple formula. It states: E= (AW*PW) – (AL*PL) Or, in English it states Edge equals the difference between the average winner times the probability of winning and the average loser times the probability of a loss. Example System: Average Winner: 200 pips Probability of win: 15% Average Loser: 25 pips Probability of loss: 85% Edge = 8.75 pips. The above example illustrates how important edge is and how unimportant percentage of winning is. We only won 15% of the time in the above example. Using the system consistently, however, would give us nearly 9 pips per trade! Our goal in forex trading is not to win more often. Our goal is not to win at all. Our goal is to make money. The sooner this is learned, the better. When reviewing the numerous systems available for forex trading, if you remember the preceding facts, you’ll be well on your way to finding or developing the perfect FX trading system”

FINANCE

Transfer pricing can deprive governments of their fair share of taxes from global corporations and expose multinationals to possible double taxation. No country – poor, emerging or wealthy – wants its tax base to suffer because of transfer pricing. The arm’s length principle can help says John Neighbour, OECD Centre for Tax Policy and Administration Not long ago, transfer pricing was a subject for tax administrators and one or two other specialists. But recently, politicians, economists and businesspeople, as well as NGOs, have been waking up to the importance of who pays tax on what in international business transactions between different arms of the same corporation. Globalisation is one reason for this interest, the rise of the multinational corporation is another. Once you take on board the fact that more than 60% of world trade takes place within multinational enterprises, the importance of transfer pricing becomes clear. Transfer pricing refers to the allocation of profits for tax and other purposes between parts of a multinational corporate group. Consider a profitable UK computer group that buys micro-chips from its own subsidiary in Korea: how much the UK parent pays its subsidiary – the transfer price – will determine how much profit the Korean unit reports and how much local tax it pays. If the parent pays below normal local market prices, the Korean unit may appear to be in financial difficulty, even if the group as a whole shows a decent profit margin when the completed computer is sold. UK tax administrators might not grumble as the

profit will be reported at their end, but their Korean counterparts will be disappointed not to have much profit to tax on their side of the operation. This problem only arises inside corporations with subsidiaries in more than one country; if the UK company bought its microchips from an independent company in Korea it would pay the market price, and the supplier would pay taxes on its own profits in the normal way. It is the fact that the various parts of the organisation are under some form of common control that is important for the tax authority as this may mean that transfers are not subject to the full play of market forces.

Transfer pricing refers to the allocation of profits for tax and other purposes between parts of a multinational corporate group Transfer prices are useful in several ways. They can help an MNE identify those parts of the enterprise that are performing well and not so well. And an MNE could suffer double taxation on the same profits without proper transfer pricing. Take the example of a French bicycle manufacturer that distributes its bikes through a subsidiary in the Netherlands. The bicycle costs €900 to make and it costs the Dutch company €100 to distribute it. The company sets a transfer price of €1000 and the Dutch unit retails the bike at €1100 in the Netherlands. Overall,

the company has thus made €100 in profit, on which it expects to pay tax. But when the Dutch company is audited by the Dutch tax administration they notice that the distributor itself is not showing any profit: the €1000 transfer price plus the Dutch unit’s €100 distribution costs are exactly equal to the €1100 retail price. The Dutch tax administration wants the transfer price to be shown as €900 so that the Dutch unit shows the group’s €100 profit that would be liable for tax. But this poses a problem for the French company, as it is already paying tax in France on the €100 profit per bicycle shown in its accounts. Since it is a group it is liable for tax in the countries where it operates and in dealing with two different tax authorities it cannot just cancel one out against the other. Nor should it pay the tax twice.

Arm’s length

In a bid to avoid such problems, current OECD international guidelines are based on the arm’s length principle – that a transfer price should be the same as if the two companies involved were indeed two independents, not part of the same corporate structure. The arm’s length principle (ALP), despite its informal sounding name, is found in Article 9 of the OECD Model Tax Convention and is the framework for bilateral treaties between OECD countries, and many non-OECD governments, too. The OECD Transfer Pricing Guidelines provide a framework for settling such

Transfer Pricing : Keeping it at arms length

matters by providing considerable detail as to how to apply the arm’s length principle. In the hypothetical French-Dutch bicycle case, the French MNE could ask the two tax authorities to try to reach agreement on what the arm’s length transfer price of the bicycles is and avoid double taxation. It is likely that the original transfer price set by the MNE was wrong because it left all the profit with the manufacturer, while the Dutch proposal erred on the other side by wanting to transfer all the profit to the distributor. But all of this assumes the best possible world, where tax authorities and MNEs work together in good faith. Yet transfer pricing has gained wider attention among governments and NGOs because of another risk: that it could be used to shift profits into low tax jurisdictions even if the MNE carries out little business activity in that jurisdiction. This leads to trade distortions, as well as tax distortions. No country – poor, emerging or wealthy – wants its tax base to suffer because of transfer pricing. That is why the OECD has spent so much effort on developing its Transfer Pricing Guidelines. While they help corporations to avoid double taxation, they also help tax administrations to receive a fair share of the tax base of multinational enterprises. But abuse of transfer pricing may be a particular problem for developing countries, as companies might take advantage of it to get round exchange controls and to repatriate profits in a tax free form. The OECD provides technical

assistance to developing countries to help them implement and administer transfer pricing rules in a broadly standard way, while reflecting their particular situation. Applying transfer pricing rules based on the arm’s length principle is not easy, even with the help of the OECD’s guidelines. It is not always possible – and certainly takes valuable time – to find comparable market transactions to set an acceptable transfer price. A computer chip subsidiary in a developing country might be the only one of its kind locally. But replacement systems suggested so far would be extremely complex to administer.

Transfer pricing has gained wider attention among governments and NGOs because of another risk: that it could be used to shift profits into low tax jurisdictions even if the MNE carries out little business activity in that jurisdiction The most frequently advocated alternative is some kind of formulary apportionment that would split the entire profits of an MNE among all its subsidiaries, regardless of their location. But proponents of such alternatives not only have to show that their proposals are theoretically “better” but that they are capable of winning international agreement. Not easy, since the very act of building a

formula makes it clear what the outcome is intended to be and who the winners and losers will be for a given set of factors. Tax authorities would naturally want the inputs to reflect their assessment of profit. Questions like how to apportion intellectual capital and R&D between jurisdictions would become contentious. Such problems would make it very difficult to reach agreement on the inputs to the formula, particularly between parent companies in wealthy countries and subsidiaries in poorer ones. ALP avoids these pitfalls as it is based on real markets. It is tried and tested, offering MNEs and governments a single international standard for agreements that give different governments a fair share of the tax base of MNEs in their jurisdiction while avoiding double taxation problems. Moreover, it is flexible enough to meet new challenges, such as global trading and electronic commerce. Governments so far appear to agree: much better to update the existing system than start from scratch with something new. References •For more on the OECD’s tax work: www. oecd.org/taxation •Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations, OECD, 2001. ©OECD Observer 230, January 2002 (Corrected 3 July 2008)

FINANCE

How to Invest in Ar t While some see art as stable as gold, others view investing in it as flighty fantasy, Mary Gilleece puts both sides in the frame

But $200,000, $10,000 or $100 who decides how much art is worth? As with the entire finance system confidence is key. Art is worth something because someone says it is. And just as Bernie Madoff’s ponzi scheme crashed because enough people lost confidence in it, so can the art market implode if enough dealers avoid certain genres. While the Mei Moses index does

commonplace; an investor in a certain artist will bid for other lots by the same artists, raising the price and thus the value of his already owned work. With even the big money men, the newly rich Indians, Chinese and Russians leaving the art world in droves, prices are invariably coming down. Post-war art is faring the worst possibly on account of the problems in valuing the works of artists who are still alive. And yet, with lower prices, the options for bagging a relative bargain now are better

Photo - KellyK

If you have any money left after this recession, should you invest it in art? With the majority of senior investment bankers in London keeping their money in an HSBC standard savings account, who is brave enough to forgo stocks and shares in favour of Sotheby’s and Christie’s? Well, those who

Management that only demands a $10,000 investment.

Old is Gold right now

cite the Mei Moses, the auction tracking index, as evidence that in recent years, art has outstripped equities since the 1990s to the present. Indeed like gold, art is free from the vagaries of inflation and over the long term can prove a tangible, solid asset. So confident are some that certain hedge fund managers have branched out to establish consultancies to specifically advise clients on investing in art. Fine Art Wealth Management Ltd is one such company which requires an initial $250,000 investment so largely appeals to family trust funds, wealth managers or private banks. However moves are afoot to open up the ‘art as an investment’ market to smaller clients with the imminent launch of Castlestone Asset

New can be alluring, but don’t pay over the odds

suggest art investments rose rapidly from the 1990s, the second quarter 2009 results are not so positive, rather they show a 32 per cent fall. Damien Hirst may well have made £95 million in his 2008 Sotheby’s sale, prompting everyone to suggest that art was

If you are able to ride out the current plunge in the art market, and want to invest, go for the Old Masters resilient to the wider financial meltdown, but what is murky is that his dealer is reported as having bid for 40 per cent of the lots. Indeed artificial price hikes at auctions are

than ever, especially if you can access London auction rooms. The British art market now represents 50 per cent of the entire European art market and is host to the widest variety of auctions outside New York. So if you are able to ride out the current plunge in the art market, and want to invest, go for the Old Masters. This is the only genre where prices remain steadily rising, largely on account of the limited stock. Canaletto isn’t going to paint the Birmingham canals whereas Damien Hirst can easily rattle off a ruby encrusted ankle for example. So stick with the Old Masters, bought from established auction houses or dealer and if you can, hang them and enjoy them.

LOCATION

L O C AT I O N

LOCATION

Dover

Photo - Laszlo Ilyes

Dover is the gateway to the UK, and so the ongoing developments there are of paramount importance to the whole country. Everything is pointing to those investors with foresight possessing a unique opportunity to tap into the huge untapped economic potential of this iconic area before everyone else realises what they’re missing out on. The Waterfront is currently in the process of being transformed beyond recognition thanks to a 30 year master plan for the enhancement of port facilities being implemented to cope with the anticipated doubling of traffic over this period. Dover Harbour Board is planning to build an additional terminal both creating a significant volume of jobs and cementing the port’s reputation for handling very large volumes of freight and passengers.

for operations having been earmarked for alternative development. A central cog in this process is the Dover Pride initiative a public private partnership that is delivering on its goal of a prosperous and vibrant town fit as a prime business destination in its own right as well as simply a gateway to the rest of the UK. Infrastructural changes have seen a high speed rail link introduced from Dover to London cutting journey times to just 63 minutes while there are ongoing improvements at Dover’s Priory Station.

...a prime business destination in its own right as well as simply a gateway to the rest of the UK.

In addition the Cruise Connection initiative, a public/private partnership aimed at improving tourism from the cruise industry into Dover and the East Kent surrounds aims to take advantage and build upon the anticipated explosion of cruise ship passengers arriving at the Port that will be the welcome result of a campaign to attract more cruise operators to dock there. The port facilities are the lifeblood of Dover, but developments there haven’t always delivered benefits to its immediate surrounds. This however is set to change thanks to an area encompassing the beach, former workshops at De Bradelei Wharf and conservation area of Waterloo Crescent not required

Yet it is perhaps back from the waterfront where the real evidence of Dover as a slumbering business location giant now awoken lies.

White Cliffs Business Park for example is a £100 million 65 acre mixed-use commercial, warehouse and industrial development located two miles north of Dover with excellent transport links onto the A2 and A256. Match this with the Dover Town Investment Zone (DTIZ) plans for the physical transformation of the town centre through a much improved retail, residential and leisure offering, the redevelopment of the old Connaught Barracks, as well as many other projects at various stages of planning or completion too numerous to mention here, and you begin to understand that Dover has finally awoken to change and is now truly where it should be; at the forefront of UK regeneration.

16 Photo - Ian Wilson

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                     

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   17

LOCATION

Photo - Kristian Thy

The extent of Liverpool’s recent economic renaissance has been remarkable. It finds itself once again a contender.

Liverpool’s status as European Capital of Culture in 2008 acted as a catalyst for development across the Merseyside region attracting significant public and private investment, while at the same time reinvigorating regeneration activity in of some of its most deprived areas. It would seem that glory days are just around the corner ...much of the regeneration again, and this time those involved intend to ensure activity has been centred around they’re here to stay. the area’s waterfronts. The Opportunities to build upon the city’s status as a visitor objective has been to create destination have been seized something that rivals the likes of thus ensuring it is well on the way to being one of Toronto and Sydney... Europe’s most exciting and dynamic cities. Excellent IT and transport infrastructure, access to markets, an abundant, costeffective and skilled workforce, and in some cases financial and practical assistance ensure it must be seen as a valid contender for business looking to relocate expand or start-up, particularly for incumbents in London and the South-East. In the city’s commercial district 1 million sq ft of new office space has been successfully delivered since 2000 while there has been considerable growth in financial and professional services. The retail offer is also significantly stronger than it used to be. Away from the city centre Liverpool John Lennon Airport is the UK’s fastest growing airport, while the area has also become something of a pharmaceuticals and biotechnology hub, attracting world-class companies such as Eli Lily, Novartis and Astra Zeneca. There’s also a growing noise from the city’s creative industries that is increasingly impossible to ignore. From a quality of life perspective much of the regeneration activity has been centred around the area’s waterfronts. The objective has been to create something that rivals the likes of Toronto and Sydney, and this is well on the way to being achieved.

The Royal Liver Building, one of Liverpool’s ‘Three Graces’

“...And Here I’ll Stay” In the city itself Kings Waterfront is a new Arena and Convention Centre with hotel and residential development to follow. Other projects include The Cruise Liner Terminal opened in September 2007 and the imminent completion of the Leeds-Liverpool Canal.

life-size figures have been spread out along three kilometers of the foreshore, stretching almost one kilometre out to sea in Anthony Gormley’s world famous ‘Another Place’ installation. The Wirral peninsula meanwhile in the west of the region is aiming to capitalise on its staging of the British Golf Open Golf Championship in 2006 which attracted more spectators than any other in English history. The venue in Hoylake plans to capitalise on this and make the area synonymous with all that’s best about the game with proposals for a multimillion pound golf resort in West Wirral, a plan which has already met with significant interest from international investors.

for the post coal industry era through targeted investment and training. Both areas have competitive land prices, and are well connected to the national motorway network. St. Helens has also seen tangible change on the ground with the re-development of the George Street Cultural Quarter winning a number of awards for its sensitive refurbishment measures and crime reduction measures that have been central in attracting restaurants and businesses to the area.

It is perhaps in the coastal boroughs of Sefton and The Wirral however where waterfront development has been most marked. These areas are home to some of the UK’s most awe-inspiring coastline environments encompassing incredible beaches, key wildlife habitats and seaside Local Enterprise Growth Initiative status resorts, as well as major ports and industry. (LEGI) status has seen investment flood in Specific initiatives in Sefton include the to the area and given St.Helens a confidence proposed Water Centre. This is set to be a and civic pride to rival that of fully accessible watersports facility ...(there are) proposals for a located within a coastal park its industrial glory days. Specific offering a complementary mix of multimillion pound golf resort in commercial developments include outdoor leisure activities. West Wirral, a plan which has already the flagship sustainable business park at Mere Grange just off the The Southport Townscape met with significant interest from M62. Heritage Initiative grant scheme international investors. meanwhile has been established Regeneration in Knowsley to help with the cost of improving In addition, ‘Wirral Waterfront’ is the largest meanwhile has been centred around the historic buildings in the town’s Victorian regeneration initiative to take place in Wirral Halewood Ravenscourt retail development conservation area through a combination of repairs, conversion and reinstatement of to date. It amounts to a comprehensive while the area has a sound commercial historic features to properties together with strategy to regenerate Wirral’s Mersey offering through Knowsley, Kings and a programme of enhancement works to the shoreline including a major renovation of Huyton Business Parks, as well as Knowsley public realm. Joseph Paxton’s Birkenhead Park, widely and Boulevard Industry Parks. There is also significant excitement acknowledged as the first publicly-funded surrounding plans for Southport Marine civic park in Britain UK when it opened back It’s possible you have some long-held Park from famed developers Urban Splash. in 1847. associations with Merseyside, and not all of The 34-acre plot is earmarked to include them entirely positive. It’s also likely these an atrium complete with winter garden, a In the inland Merseyside boroughs there couldn’t be further from reality. Check the marine lake, outdoor heated swimming pool and accommodation. are different demands of regeneration. place out, and prepare to be wowed. You’ll be The Coalfields Regeneration Trust’s work glad you did. It is on Sefton’s Crosby Beach however that in St.Helens and Knowsley aims to assist change is perhaps most iconic. 100 cast-iron, coalfield communities equip themselves

Photo - Tony Hisgett

Anthony Gormley’s ‘Another Place’, Crosby Beach, Sefton

LOCATION

Widnes The Widnes Waterfront Programme was initiated to transform a previously neglected area of Southern Widnes in Halton Borough into an inspiring regional business and leisure hub encompassing 200+ acres of brownfield land on the Mersey waterfront. Funding totaling several million pounds was provided by a variety of sources including the European Regional Development Fund and the Northwest Development Agency, yet it is hoped that this will prove to have been, while not quite small change, certainly prudent expenditure when set against expectations of upwards of a £70million return through inward investment.

Photo - Bob McCaffrey

Key commercial sites include Heron Business Park a £5.9m joint venture between St. Modwen and Halton Borough Council which amounts to some 125,000 sq ft of office, light industrial and general manufacturing space with flexible lease terms aimed principally at hi-tech SMEs within the technology sectors.

Photo - Bob McCaffrey

Funding totaling several million pounds was provided by a variety of sources Meanwhile, Priority Sites’ Turnstone Business Park development comprising a total of 60,000 sq ft of accommodation has been designed to reflect actual market requirements in having a 50/50 split of high quality office space and warehousing. The first phase of Easter Park on Gorsey Lane is another development now available for occupation offering production / distribution facilities complete with office space, while the second phase aims to create industrial and office units over a seven acre site with a view to attracting investors seeking high-value showroom type facilities. To this end it offers the opportunity to design and build, and so take into account any unique requirements. Finally Forward Point is another key new office development offering office units manifested as individual floors or whole buildings. It is found on Tan House Lane a major gateway into Widnes Waterfront Infrastructurally, in fact the waterfront has excellent links giving access to both the M62 and M56, while it is also served by the new ‘Gyratory’ junction which has increased capacity and improved traffic flow.

REGENERATION OF WIDNES WATERFRONT The regeneration of the Widnes Waterfront, on the banks of the River Mersey between the thriving conurbations of Liverpool and Manchester, has over the last few years seen the transformation of low quality former industrial land into a new development site of regional significance. The project is breathing new life into a dramatic waterfront setting creating a business location of the highest modern standards. Halton Borough Council has acquired a 40 acre site following £6.1 million of funding from the NWDA, to be redeveloped for employment use. The site is currently occupied by Bayer Crop Science Ltd, which announced closure of the site in 2007 as part of a restructure of operations and is due to vacate the site by March 2011. Construction work has recently been completed on the second phase of Heron Business Park. Both phases of the £5.9m development comprise of 125,000 sq ft of light-industrial space. Phase two consists of 19 units, totalling 73,700 sq ft ranging in size from 1,590 sq ft to 9,492 sq ft and has been built on the back of the popularity experienced in Phase one. It provides flexible accommodation suitable for office, light industrial and general manufacturing uses, with priority given to small and medium sized enterprises within the technology sectors. The units are available by way of a short term lease or purchase of a 250-year lease. Priority Sites is currently progressing the creation of a business hub at Turnstone Business Park, which will include high quality managed office space and meeting room facilities. The business park, completed in March 2008, is already home to a variety of businesses. Halton Borough Council has also moved its Halton Safety Partnership and the Mersey Gateway Team into the development. Turnstone offers self-contained office and hybrid units ranging in size from 1,174 to 6,616 sq ft. All units are available for sale or rent on flexible terms to suit occupier needs. Easter Park Phase 1 recently sold a 26,000 sq ft unit to Cellular Systems Ltd which leaves just one unit remaining; the 41,000 sq ft unit is available on freehold or leasehold. Several parties have already shown interest in design and building

opportunities on the plot of land earmarked for Phase 2. Work is now complete on the new Widnes Waterfront Gyratory, which is the gateway to the Waterfront and Widnes Town Centre as well as being an important focal point along a key, primary transport route. The key road interchange has been extensively remodelled to improve traffic flows and energise further the regeneration of the Waterfront through the creation of better linkages to the Town Centre. To enhance the existing planting, the design features soft landscaping with gentle land form alongside avenue tree planting to create and frame different views around the gyratory. The land form, feature lighting and planting, draws pedestrians into the hub of the gyratory. Pedestrian pathways cut through the land forms to allow a safe and more aesthetic route through the gyratory creating a smooth transition between the Waterfront and the Town Centre. Earlier this year the public inquiry into the Mersey Gateway Project took place with Halton Borough Council summing up the plans as a ‘unique opportunity’ to transform the Borough and help secure the future economic prosperity of the north. Subject to Inquiry, the £604 million project will see a New Mersey Gateway Bridge built 1.5km east of the existing Silver Jubilee Bridge. Cllr Tony McDermott, Leader of Halton Borough Council and Chair of the Mersey Gateway Executive Board, said “we are very satisfied that the inspector has looked in detail at our plans. This is a unique opportunity to transform the Borough and help secure the future economic prosperity of the north west of England”. A decision is expected early in 2010. If approved, construction work is likely to begin in 2011, with the new bridge opening in 2014.

For more information visit www.widneswaterfront.co.uk or call Sara Munikwa on 0151 471 7347

A new environment for business

LOCATION

Swansea Bay, South Wales Q. What do Amazon, HSBC, BT, Admiral Insurance, the Connaught Motor Company and 118UK have in common? A. They’re all organisations that have chosen to locate in and around Swansea Bay, an area encompassing city, country and coastal environments with a workforce of a quarter of a million people, and some 200,000 high-spending 16-44 year olds within its confines.

successful ‘Institute of Life Science’ (ILS).

Swansea Castle (with BT Tower behind)

he popularity of Swansea Bay for business should actually come as no surprise since Swansea itself was recently heralded as ‘one of the fastest growing cities in the UK for business’. (1) It is an area undergoing rapid change through text book examples of public- private partnership that are delivering successful measurable regeneration results on the ground. It is located in a beautiful natural setting where development that takes place gives full regard to environmental and aesthetic impact. This, combined with the great quality of life on offer, makes it an attractive proposition for skilled staff and key for excellent staff retention.

There is also a great synergy between business and education in Swansea Bay. This has created knowledge-intensive activity centred around establishments including the region’s 5 ‘Technium’ business incubators, and at Swansea University the ‘Institute of Advanced Telecommunications’ and the very

‘The Institute of Life Science focuses on breaking new ground in the treatment of disease and delivery of healthcare, (and) Alliance Boots have taken advantage of this and located their Boots Centre for Innovation here.’ such a success that a £30m development of ILS2 has recently been announced. Amazon meanwhile struck on Neath Port Talbot for their 4th UK distribution centre in 2007. They cited the local labour force, the cooperation and assistance of the public sector and the proximity to the London marketplace as their reasons for locating in Swansea Bay. Taking just 16 months from initial approaches between Amazon and the (Welsh) Assembly Government to its opening, First Minister Rhodri Morgan described

‘Amazon...struck on Neath Port Talbot for their 4th UK distribution centre’ it as ‘an absolutely text-book example of how to do regional economic development’.

Baglan Energy Park Phased development of a range of service and manufacturing opportunities on a lowdensity, high quality landscaped site with ample scope for expansion. The development is situated adjacent to the M4 and the main South Wales-London rail artery. It has onsite power generation offering low energy costs to businesses located there. Swansea Vale A mixed-use development consisting of a residential area ‘Tregof Village’ complemented by two large business parks, and a range of recreation facilities, all in a landscaped setting. Llanelli Waterside A mixed-use development in an area with grant potential for investors e.g. to assist in re-skilling new and existing workers. It is also subject to fast track decision-making via the (Welsh) Assembly Government. And with Swansea University driving forward ambitious expansion plans at a new ‘Bay Campus’ which would provide an open innovation environment intermingling industrial research and development, academic research and students, with an estimated economic impact of £3bn over 10 years, Swansea Bay is definitely a place to watch. (1)Royal Mail Business Barometer 2008

The principal ongoing developments are as follows; SA1 Swansea Waterfront A sustainable extension to Swansea City centre, focused around the creation of new leisure water out of old docklands, designed to be a benchmark for best practice in waterDylan Thomas Statue

All photos © Crown copyright (2009) Visit Wales

Fiona Rees, Executive Director of Swansea Bay Futures describes the region thus; “Swansea Bay is continuing to transform into a modern dynamic economy, building on its strengths in tourism, higher end creative industries, communications and IT, Life Sciences, professional business services and food, with the added advantage of proactive and co-operative local support… and a friendliness and quality of life which means that once people have spent time here, they’re often reluctant to leave and become passionate advocates for this delightful part of South Wales!”

ILS is a collaboration between the (Welsh) Assembly Government, the University and IBM. With the assistance of a unique supercomputer ‘Blue C’ ILS focuses on breaking new ground in the treatment of disease and delivery of healthcare. With state-of-the-art laboratories and a Business Development Centre, work is focused on the creation of sustainable and ever growing commercialacademic links. Alliance Boots have taken advantage of this and located their Boots Centre for Innovation here. ILS has been

front regeneration across Europe. Mixed-use development of residential apartments and high quality commercial premises complemented by a range of cafés, bars, restaurants and hotels.

Swansea Bay: the natural place for business to flourish Swansea Bay, with its co-location of city, coast and countryside, offers a superb quality of life and really is a great place to do business. Swansea city and bay

Did you know...? Swansea Bay is conveniently located with a direct link via the M4 and intercity rail to London, whilst Cardiff Airport is just one hour’s drive away. Setting up and operating a business in Swansea Bay is recognised as being extremely cost effective, and there is lots of assistance available - Amazon famously took only 16 months from initial approach to opening their newest and largest European distribution centre in Swansea Bay! Swansea University, Swansea Metropolitan University and Trinity University College boast some 20,000 students between them. Many are keen to stay on after graduation, and numerous local businesses cite this pool of bright, fresh graduates as a key benefit of operating in the area. The quality of life offer makes for a very stable, loyal workforce – good news for your bottom line!

Following the huge success of the Institute of Life Science (ILS) which opened in 2007, in collaboration with IBM and Alliance Boots, Swansea University has just secured £30m funding for phase 2, positioning the institution at the forefront of the knowledge economy in Wales.

If you’re thinking of starting up, expanding or re-locating, Swansea Bay really should be on your consideration list. For further information and links to key contact organisations visit www.abayoflife.com or simply give us a call on 01792 634662

LOCATION

Prime Scotland Aberdeen With finite North Sea oil reserves Aberdeen is repositioning itself as the energy capital of Europe to encompass all forms of energy including renewables, as opposed to simply oil. The catalyst for this technology transfer and development of new energy sources is Scottish Enterprise’s ‘Energetica’ initiative, an ambitious publicprivate partnership aimed at creating the world’s greatest community of energy technology companies, and associated infrastructure along a thirty mile strip between Aberdeen and Peterhead to the north. Within the city itself Union Square is a £250 million mixed use Hammerson developed regeneration scheme that is creating a new retail and leisure quarter for Aberdeen sustainably integrated with existing transport facilities. It includes a 203 bed Jurys Inn hotel, multiplex cinema and a new civic square.

Photo - Mohan Singh

(The) ‘Energetica’ initiative (is) an ambitious... partnership aimed at creating the world’s greatest community of energy technology companies and associated infrastructure Rita Stephen, Aberdeen City and Shire Economic Forum (ACSEF) development manager explained that “this latest hotel development, within the exciting new Union Square underlines the long-term confidence in the local economy and confirms that Aberdeen City and Shire is still an attractive proposition for developers and investors”. Combined with the likes of Donald Trump’s International Golf Links development which is planned to deliver two courses, a hotel, 500 houses and 950 holiday homes, the wider Aberdeen area is set to be at the forefront of a lot of investors’ minds.

Clyde Waterfront Clyde Waterfront is a regeneration project transforming 20km of the River Clyde from Glasgow city centre to Dumbarton. The project has strong backing from the communities affected by the changes and since Glasgow is the principal centre of population in Scotland, and those people are central in driving the economic growth craved for, the value of this support cannot be overestimated. There’s a lot of available land for businesses to expand as necessary as well as the area in question being ideally located between the city and Glasgow International Airport.

Public-private partnership is delivering...change on a huge scale An ongoing and successful framework of public-private partnership is delivering these changes on a huge scale and ensuring that Glasgow can consolidate its recent status as a preferred inward investment destination, while at the same time breathing new life into previously oft overlooked local communities. The facts speak for themselves; Employment: 17,000 new jobs have been created Premises: Over 2.8m sq ft of commercial and business space has been developed Residential: Almost 6,000 homes have been completed To date approximately £1.5bn of funding has been invested with an additional £2bn expected by 2011.

Photo - saintbob

CLYDE WATERFRONT

A RIVER OF OPPORTUNITY

The regeneration of 13 miles of the River Clyde from Glasgow city centre to Dumbarton continues to gather momentum, with about 65% of the 200+ developments either complete or under construction, making Clyde Waterfront a river of opportunity.

With £2 billion of public & private investment underway or committed by 2012, Clyde Waterfront Strategic Partnership (www. clydewaterfront.com/ukba) continues to facilitate and promote the Clyde’s renaissance i.e. 17,000 new jobs, 2.8 million ft2 new commercial space and 6,000 new homes have been created in the first 5 years of this 25 year project. Clyde Waterfront is sub divided into 6 key character areas (Glasgow City Centre, Pacific Quay / SECC, Greater Govan & Glasgow Harbour, Renfrewshire Riverside & Scotstoun, Clydebank & Erskine and Old Kilpatrick to Dumbarton), which contain several centres of excellence, namely:-

65,000 ton aircraft carriers for the MoD, over the next 6-8 years.

and nearby the St Enoch’s Centre £100m refurbishment is nearing completion.

Medical science will be boosted by the £842m re-development of the Southern General Hospital, expanding the maternity hospital and two new hospitals to provide 1,700 beds and treat 725,000 patients a year.

Providing new homes and attractive environments are integral to Clyde Waterfront’s plans. Glasgow Harbour’s £1.2 billion riverside apartments and leisure developments epitomise waterfront living and the new Ferry Village near Braehead, involving six developers, is creating 2000 homes beside the new 7 acre Clyde View park.

Leisure and tourism - new attractions such as the £74m Riverside Museum and 12,500 seat National Arena will grow tourism, whilst the Glasgow Science Centre, Xscape, the Titan Crane and Loch Lomond Seaplanes have all become very popular since opening.

Scotland’s financial services have been enhanced by the development of Glasgow’s

Scotland’s financial services have been enhanced by the development of Glasgow’s multi award winning International Financial Services District (IFSD www.ifsdglasgow.co.uk). With over £1 billion invested to date, the IFSD has attracted several world class financial services companies to this attractive area besides the river.

International Financial

The digital sector is thriving in Glasgow at Pacific Quay (www.dmq@pacificquay) with the relocation of STV (2006) and BBC Scotland (2007) into purpose built broadcasting centres and the development of Medius (2008), the Hub and Film City (2009), providing space for creative SMEs – linked to the city centre by the Clyde Arc “Squinty” bridge.

The Glasgow River Festival now in its sixth year has become a major event in the Scottish summer calendar, attracting 90,000 visitors and new hotel developments are planned e.g. the 5 star deluxe £125m Jumeriah Hotel, to meet growing tourism demand.

Shipbuilding - BVT Surface Fleet’s two yards in Govan and Scotstoun have been recruiting 100 apprentices to join the 3500 strong workforce to build six £650m Type 45 Destroyers and two new

multi award winning Services District

Clyde Waterfront boasts some of the best retail destinations in the UK. Braehead has over 100 stores and restaurants, attracting 20m customer visits a year. Glasgow’s Buchanan Street has been voted the best shopping street in Britain

An innovative education resource (www. clydewaterfronteducation.com) has been developed offering teachers 200 lesson plans linking 12 Clyde themes with the Scottish curriculum as well as “Classroom on the Clyde” school trips on Clyde Marine’s MV Cruiser, to help young people become even more enterprising and successful. A “Visit the Clyde” initiative was launched in 2009 comprising a 28 page heritage guide and website (www.clydewaterfrontheritage.com), an advertising campaign on public transport / stations and the promotion of Clyde river trips via Seaforce’s powerboats, Clyde Marine’s cruises and The Waverley Paddle Steamer.. Clyde Waterfront is making the most of its skilled workforce, excellent communications and new infrastructure to develop an internationally attractive location that appeals to investors, businesses and the public alike! Contact Details Clyde Waterfront 4th Floor, Atrium Court 50 Waterloo Street Glasgow G2 6HQ 0141 229 5423 www.clydewaterfront.com/ukba

Stirling

Forthside Scotland’s newest city, Stirling located in the heart of Scotland has its own waterfront regeneration going on along the banks of the River Forth. In Forthside over £100m is being invested in a mixed-use 40 acre development set around the waterfront which is delivering multi-screen Vue cinema (now open) hotel and conference centre, 11,000 sq m of sustainable office space, residential developments, a new city square and improved public transport offering. The development is epitomised by the £7m Forthside Bridge, a pedestrian walkway which crosses the railway and links Forthside to the city centre. It was designed by Gifford and Wilkinson Eyre architects and constructed by BAM Nuttall. Also of particular note is the work going on to create enhanced industrial premises at the city’s Springkerse Industrial Estate and Manor Business Park, near Stirling, while industrial/trade space at Allanwater Development’s Springkerse Trade Park, Stirling is literally being snapped up. Here, as elsewhere across the Stirling area there is continued interest in well placed, quality industrial and office premises despite a challenging economic climate. The cumulative effect of all this is to provide a truly viable alternative to Stirling’s near neighbours of Glasgow and Edinburgh located to the southwest and southeast respectively.

Here, as elsewhere across the Stirling area there is continued interest in well placed, quality industrial and office premises despite a challenging economic climate

Forthside Bridge, Vue Cinema, Raploch Community Campus, Proposed grade A offices by Stirling Development Agency Ltd.

Raploch

The area of Raploch meanwhile is fast shaking off its association with deprivation thanks in part to having been given ‘Pathfinder’ urban regeneration company status by the Scottish Government back in 2004.

A holistic approach has been adopted incorporating sustainable employment and new business opportunities

A holistic approach has been adopted incorporating sustainable employment and new business opportunities, as well as the creation of a new community education campus, private and affordable housing and improvements to the infrastructure. This will bring Raploch up to speed with other parts of the Stirling region in being an attractive destination for investors within an hour of the majority of Scotland’s marketplace, and an area marked by a plentiful supply of skilled, qualified labour, as well as one with a traditionally low crime rate and rich quality of life. There is a tangible desire for change here permeating all levels of this unique partnership of the community, public and private sectors who have identified those elements most deserving of assistance and who are working together to deliver strategic regeneration.

Redcar and Cleveland Redcar & Cleveland in NE England is a Special Development Area benefitting from a wide range of financial assistance, and one which is successfully building on its industrial traditions as a steel, chemicals and shipping hub through a huge economic regeneration programme that will see c.ÂŁ4 billion invested in the area.

Photo - J Brew

It has a lot going for it already such as Teesport, the third largest port in the UK, an awe-inspiring heritage coastline and the hugely significant science and engineering research and development facility at The Wilton Centre. This is situated on the Tees estuary next to Wilton International, a world leading process industry cluster that plays host to the likes of DuPont, and is an area which boasts excellent communications links including its own rail services and a direct link to Teesport. The importance of it as a catalyst for change for the region cannot be overestimated.

The first Scanning Technology Microscope paved the way for the rise of nanotechnology

The importance of (Wilton) as a catalyst for change for the region cannot be overestimated.

continued remediation of contaminated brownfield sites as part of a wholesale regeneration programme for the wider region. Thanks to significant targeted investment into the area it is becoming increasingly synonymous with the renewable energy sector which makes it well placed to be at the forefront of both the national and international drive over the 21st Century to address the potentially devastating effects of climate change, and to help lead the way in the creation of a post-fossil fuel economy.

The development, which offers both flexible leasing arrangements as well as full service packages, represents a temple to R&D and is leading the way in initiatives encompassing everything from hydrogen such as the Tees Valley Hydrogen Project to nanotechnology. The success of it has fuelled other related development in and around it such as the Pioneer Process Park which is earmarked as a specialist chemical park for companies to exploit the wealth of chemical and fuel cell expertise nearby. The success of it has also facilitated further development which has led to the The Wilton Centre, Redcar, Cleveland, UK

Searching for the perfect site or premises? Want to relocate, expand or start up? Looking for development opportunities?

Go online and search Lincolnshire’s Property Directory For all the information you need to make a wise investment decision.

www.investlincolnshire.com

Think Location . . . Think Lincolnshire

Lincoln Lincoln is the county town and chief conurbation of Lincolnshire which itself is the fourth largest county in England. It has traditionally been synonymous with culture rather than commerce, yet with significant investment having gone into making it an attractive location for business too in recent years, this is all set to change. Lincoln has designated Growth Point status within the UK which means it has been earmarked for intensive yet sustainable redevelopment as a key regional centre. In practice this means 12,000 new jobs and 14,000 new homes by 2026. The keystone of Lincoln’s ongoing regeneration has long been the Brayford Pool waterside in the centre of the city which now boasts the new University of Lincoln campus on the South Bank and multiplex cinema on the opposite side, as well as numerous bars, restaurants and retail offerings. In addition to this, there are a number of centrally positioned brownfield sites nearby that have been designated to be brought back into use in both a residential and commercial capacity. Such regeneration activity has succeeded in getting developers to focus their energies on the city once again. This is evidenced by the recent granting of planning permission for a second hotel on the Brayford Waterfront to complement the existing 118-bed Express by Holiday Inn development. What’s more, the multi-million pound ‘Think Tank’ has now opened at Brayford Enterprise Park and provides 30,000 sq ft of managed workspace and conference facilities designed to foster innovation and high skills within Lincoln and surrounds. It represents a sustainably designed flagship building for the city, yet at the same time pays homage to Lincoln’s industrial past.

Inside Lincoln Cathedral

Photo - Jonathon Gill

BUSINESS AND THE ENVIRONMENT

BUSINESS AND THE ENVIRONMENT 30

BUSINESS AND THE ENVIRONMENT

Green Politics How dark green the UK goes as a nation depends on who is in government. With a change of party likely next spring / summer, Joanna Gray puts Conservative and Labour proposals head to head.

1. Establishing a ‘smart grid’ – they call it the ‘electricity internet’ which will put ‘computing intelligence into electricity networks.’ Through, the introduction of a smart grid and the use of smart meters in people’s homes demand and supply of energy could be intelligently managed. The Conservatives claim that this will be a ‘quantum leap in energy transmission and distribution where simple, slow signals are replaced by highly sophisticated exchanges between consumers and producers, transforming the efficiency and effectiveness of the national grid.’ This will also enable people who generate electricity at home with their own windturbine to contribute excess electricity to the grid, the success of electric cars more assured and it will afford more opportunities to alternatives energies such as wind and tidal power. 2. Add carbon capture and storage to every new coal plant: this will ‘take the most highly polluting, high carbon producing fuel of all and transform it into a low carbon fuel.’ They hope that in cleaning up coal power will bring enormous benefits to the economy thanks to Britain’s large coal reserves.

Photo - Matt Foster

Conservative low carbon economy ideas:

The Conservatives propose adding carbon capture and storage to every new coal plant

3. Reduce dependence on imported gas by introducing new biogas plants: similar to the scheme mooted in The Archers, the Conservatives plan for rubbish and farm-waste instead of being sent to landfill, being turned into low-carbon, low emission biogass. It will be fed back into the grid or used in ‘community heating.’

5. Marine Energy Parks: the Conservatives promise to speed up the planning process to allow for more tidal and wave power energy production plants, offshore.

4. Encourage second-generation biofuels: this should alleviate the problem that biofuels cause by increasing food prices. The Conservatives will also encourage transport stakeholders to use second generation bio-fuels.

7. Allow every home to be fitted with up to £6,500 of approved energy efficiency improvements: the cost will be repaid through fuel bills over a period of 25 years but the Conservatives promise it will deliver immediate reductions in household bills.

6. Establish a Nuclear Waste Site and type approvals for nuclear stations: this will ‘clear the way for new nuclear power stations.’

8. Insist that energy suppliers ensure that bills contain energy use comparison information. 9. Give carbon reduction requirements to employers: employers would be able to meet these requirements by sponsoring energy efficiency improvements in their employees’ homes. 10. Highlight energy efficient household goods 11. Implement the Energy Performance in Buildings Directive: this requires certificates to display energy use for public and private non-domestic buildings over 1,000 square metres

End users are an increasingly vociferous force in the energy debate

12. Establish a new high speed rail network linking cities in the north and south: this would negate the need for a third runway at Heathrow.

BUSINESS AND THE ENVIRONMENT

device components; up to £8 million to fund expansion of testing facilities at the European Marine Energy Centre (EMEC) in Scotland; and up to £22 million for a Marine Renewables Proving Fund to support testing and demonstration of precommercial renewable devices.

1.Offshore wind: Up to £120 million to support the development of a British based offshore wind industry. 2.Wave and tidal power: Up to £60 million for a package of measures which will help accelerate the development and deployment of wave and tidal energy in the UK. This includes almost £30 million to capitalise on Britain’s wave and tidal sector strengths including investment in a major demonstrator facility for new technologies in Cornwall, as well as new support for the testing facilities at the New and Renewable Energy Centre (NaREC) in Blyth, Northumberland, to provide testing infrastructure for marine drive systems and other critical wave and tidal energy

charging infrastructure in the UK and the establishment of a cross-Whitehall Office for Low Emission Vehicles (OLEV) that will drive policy delivery. This will support infrastructure in a number of UK cities and will build on the previously announced £20 million to tackle barriers in electric vehicle charging infrastructure through the ‘Plugged in Places’ electric vehicle infrastructure framework.

Photo - Claus Rebler

Labour recently launched the UK Low Carbon Industrial Strategy with the objective of ‘ensuring that British businesses and workers are equipped to maximise the economic opportunities and minimise the costs of the transition to a low carbon economy.’ The document, drafted by experienced civil servants rather than simply a shadow cabinet team of researchers is more rigorous than the Conservatives as it includes costs. The main aims are:

Nuclear power is back in fashion

3.Civil nuclear power: The Government will provide capital investment of up to £15 million in order to establish a Nuclear Advanced Manufacturing Research Centre consisting of a consortium of manufacturers from the UK nuclear supply chain and universities. 4.Ultra-low carbon vehicles: Further funding of up to £10 million for the accelerated deployment of electric vehicle

F i v e

5.Renewable construction materials: The Government is investing up to £6 million to construct 60 or more low carbon affordable homes built with innovative, highly insulating renewable materials. 6.Renewable chemicals: £12 million for a new open access demonstrator facility for fermentation of up to 10 tonnes for industrial biotechnologies, and a fund of £2.5million over the next two years to support SMEs in using the facility. 7.Low carbon manufacturing: A £4 million expansion of the Manufacturing Advisory Service, to provide more specialist advice to manufacturers on competing for low carbon opportunities, including support for suppliers for the civil nuclear industry.

G r e e n

S c h e m e s

1.Cumbria: This area is in receipt of a £2billion regeneration package to establish the coast as a, ‘major national hub for low carbon and renewable energy generation.’ With its windy coastline and nuclear plants, the area is hoping to spearhead the practical application of alternative energy. See www.britainsenergycoast.com for details. 2.Energetica Initiative: An ambitious public-private partnership designed to create the world’s greatest concentration of energy technology companies, housing and leisure facilities along a 30-mile coastal strip between Peterhead and Aberdeen. See www.aberdeencityandshire.com for ways to invest. 3.Aberdeen Science and Energy Park: Apparently home to the ‘world’s most advanced research and development facilities for the oil, gas and renewable energy sectors’ this business park aims to attract scientists and academics to work on alternative energy schemes. See above contact details. Meanwhile, at Aberdeen Business School, part of Robert Gordon University, students can now study a specialised Oil and Gas MBA. 4.Hydrogen power: still in its infancy, South Gare lighthouse is now the first lighthouse in the world to be powered by a hydrogen fuel cell. The cell, was developed by the Centre for Process Innovation in Wilton and its only by-product is water. 5.Ground source heat pumps. Andrew Ellis, the Home Energy Conservation Officer was recently runner-up in Natural England’s green awards for installing GSHPs into the bungalows of eight old people. This scheme resulted in 35-50% running cost reductions and the initial properties reduced CO2 emissions by 25.6 tonnes pa, a 64% reduction.

BUSINESS AND THE ENVIRONMENT

The Business of Weather

There is a pressing commercial need to guard against an increasingly intense climate, particularly for certain industry sectors such as the energy, transport and construction areas, and increasing numbers are doing so through derivatives, explains Richard Smith. Fully briefed companies exposed to unfavourable weather conditions make derivative transactions that transfer the unwanted risk to the capital market. Should adverse weather conditions subsequently occur, the company receives pre-defined compensation. While still smaller than most commodity markets, as a business, the trading of weather risk has experienced explosive growth in the last ten years, so that even in 2008/2009, European markets were moving in an upward direction, according to Price Waterhouse Coopers’ Weather Risk Management Association’s commissioned survey with c.34,000 contracts traded, up from c.25,000 the previous year, the majority of trades being conducted on the Chicago Mercantile Exchange. Weather derivatives are essentially financial contracts used to mitigate financial risk related to a non-catastrophic weather risk over a specified period of time – i.e. exposure of the company to temperature, precipitation, wind, sunshine or humidity, although extreme event risks such as hurricanes, though less liquid are also traded and there is much evidence of increasing crossover into catastrophe insurance markets.

Companies are assessed as to their exposure to non-catastrophic risk so that in a nutshell the amount of payment is determined in advance in accordance with the buyer of the derivative’s sensitivity to adverse changes in temperature such as lower demand from one companies’ customer base for its fuel due to an excessively warm winter, or the increased air conditioning costs incurred by another The Weather Risk Management Association (WRMA) asserts that weather derivatives are not insurance products since as they are simply indexbased products there is no need for a proof of loss, while furthermore in many cases there is no need for an upfront payment to execute coverage. However, although it has stated that weather derivatives shouldn’t be classified and regulated as insurance products, it also recognises the value in weather insurance and believes the wider market benefits from sustaining both. due to an excessively hot summer etc. If the weather proves to be suitably adverse the company that bought the derivative collects, though if nothing untoward transpires the investor who initially sold the derivative and took on the risk profits.

The rising use of renewables is also impacting with a growing interest from developers, operators and financiers in the employment of weather risk management tools since the majority of renewable energy sources are inextricably linked to the weather. The trading market with transactions effected OTC, on exchanges or through publicly traded indices is made up primarily of monoline weather trading operations, banks’ trading desks and insurers since it is these outfits that have the ability to manage weather risk in conjunction with the management of the likes of credit risk, and in fact trading in weather is subject to many of the same regulatory disciplines. Other players include utilities, hedge funds and professional commodity traders, and where traders are concerned trading weather risk provides an opportunity for complimentary diversification. As opposed to the more traditional stock or bond markets while it is driven by atmospheric rather than human factors, there nonetheless exists a relationship between weather and weather-sensitive commodities and financial instruments e.g. energy commodities and emissions and carbon credits.

BUSINESS AND THE ENVIRONMENT

Emissions Trading Magnus Andersen discusses how emissions trading through the EU-ETS affords industry the opportunity to be financially rewarded for reducing its CO2 emissions, or to buy the additional credits it needs in the short term during the transition process to less carbon intensive operations

From 2005, industry responsible for large carbon dioxide emissions within the EU became legally obliged to limit those emissions to pre-defined levels, as part of the drive to ensure member states adhere to their targets under the Kyoto Protocol. Through an initiative known as ‘The European Union Emission Trading System’ (EU-ETS) an ever decreasing ‘cap’ gets placed on the amount of CO2 a company can emit. The aim is of course to reduce emissions to address climate change, and so it principally affects industries that rely on combustion installations, oil refineries, and coke ovens, as well as those that produce and process the likes of ferrous metals, glass, ceramic bricks, cement clinker, pulp, paper and board. After the cap has been specified each installation is then allocated equivalent ‘European Union Allowances’ (EUAs) currently without cost to the company, and outlined in each country’s National Allocation Plan. The programme, though not without its critics encompasses almost half of the EU’s Carbon Dioxide emissions. To incentivise industry and so as to make the transition to a low carbon economy not too economically shocking in the immediate term, participants that produce less than the cap can trade the surplus allowances. Equally, if exceeding their cap they can buy allowances in the cash or derivatives market. This effectively means that companies are

paying a charge for polluting, while the seller is being rewarded for having reduced emissions beyond their legal obligations. These low polluters can increase their profits and reward stakeholders by selling allowances at the best price and at a time of their choosing on the market.

The system has been designed so that reduction should theoretically be the most cost-effective option Participants’ emissions are tightly scrutinised and if a company fails to comply with its legal requirements through exceeding its allowances (measured by tonne of CO2) it is fined, ensuring that close monitoring of emissions is a must. Emissions trading uses the marketplace to determine how to deal with the problem of pollution, and so it is held up as an example of free market environmentalism. The cap is established politically, at which point individual companies choose how to reduce their emissions. The system has been designed so that reduction should theoretically be the most cost-effective option. The means by which companies facilitate such transactions is invariably through a

brokerage firm, and relevant parties would be wise to look beyond their own backyard to determine which is best for their business. Beyond the purchase and sale of emissions credits, such firms possess an intimate understanding of the carbon trading market and its liquidity, and afford the opportunity for anonymity. By speculating in this fashion companies accumulate since brokers yield cost and time savings in excess of any costs tied to the trades. These benefits are so potent that some 4/5ths of all transactions to date have been through specialised brokerage companies since the scheme was introduced in 2005. Depending on the broker these transactions encompass those that are OTC, bilateral, as well as on the exchanges. Looking forward, a number of lessons have been learned with the scheme being adapted accordingly Chief of these will be a centralised EU allocation as opposed to national allocation plans to ensure greater fairness. CO2 is no respecter of borders and it is accepted that legislation needs to take this into account to a greater extent. There is also much support for auctioning the majority of permits rather than them being exclusively given away, while it is further acknowledged that after the current phase concludes in 2012 its scope needs to become wider so that it takes in other greenhouse gases like nitrous oxide, as well as other polluting industries, most notably the airline industry which will be subject to the legislation from 2012.

BUSINESS AND THE ENVIRONMENT

With suggestions of environmental unsustainability and obsolescence in an online world, the paper industry has to put up stiff resistance to survive, Joanna Gray investigates The paper industry is having a bad press. In late 2009, Stora Enso, Europe’s largest paper producer announced plans to close mills and cut up to 1,100 jobs in Finland, newspaper groups from the Irish Voice Newspaper Group to the New Zealand 3Media went into liquidation, free newspapers folded in London and even the British Women’s Institute were campaigning to reduce packaging. The only way that it can survive is to continue its long held tradition of adapting and making use of new technologies and shouting about its sustainable credentials. The two biggest threats it faces, and has faced now for some decades, are accusations that the whole industry is environmentally

People will always crave something hard to hold, read and enjoy destructive and will soon be redundant thanks to the new digital media age that we live in. The 2009 Iranian election for example illustrated how superior new media such as Twitter was in capturing political events as

they unfolded. News as read in newspapers was already old. However, the paper industry has not forgotten the digital bubble and collapse of the early 1990s as a result of which wiped out $5trillion in market value of technology companies from March 2000 – October 2002. The public was not yet completely convinced that they wanted to abandon all shops for online stores, real life for virtual worlds and most pertinently, their newspapers and magazines for online editions. While global sales of newspapers and magazines may be falling, the launch of new magazines and the publishing phenomena of books such as Harry Potter alone (selling over 400million copies), demonstrate that people will always crave something hard to hold, read and enjoy. And as long as that lust is there, the paper industry is able to adapt to fulfil the need. As Martyn Eustace, director of Two Sides, an initiative to dispel myths about the paper industry, said at a recent function of the UK National Association of Paper Merchants, ‘Paper has irreplaceable properties and it is the flexibility of print that leads to its success.’ Companies within the paper industry are responding to the digital challenge in myriad different ways. GPS Visual Communications, an independent London based design and printing company that works with brands from GlaxoSmithKline to Lazard Asset

Management, has faced the challenges by being realistic. Partner Matthew Bowes explains, ‘We have to consider that things have been affected by the digital revolution but only to a degree. The printing industry doesn’t see digital as the enemy; in fact it has utilized the medium for its own benefit. We’re now able to offer our clients the use of digital presses which are incredibly

Companies within the paper industry are responding to the digital challenge in myriad different ways fast and efficient and the technology is developing apace.’ On a larger scale, Sappi, an international producer of coated fine paper, has launched a series of books called ‘Life with Print’ that offer a valuable perspective on the efficient use of print media. Sappi Fine Paper Europe CEO, Berry Wiersum says, ‘We believe that by providing high quality paper with excellent print results, the publishers, printers and Sappi can convince the world that print is the most tangible, portable, creative and efficient medium for advertising and promotion; Life with Print is part of this process.’ The books which range from ‘Brochures and catalogues in the Media Mix’ to ‘Corporate Communication in the

Hard Copy

The paper industry has had decades of fending off suggestions that it is destructive to the world’s forests

Media Mix’ include interviews with leading global business who use the paper industry to complement other forms of digital media. CEOs of organisations from Rupert Murdoch’s News Corporation to Mexico’s Signi offer case studies and personal insights into their use of print media. For example, in ‘Direct Mail in the Media Mix,’ Nick Meads, Creative Director Europe of Carlson Marketing Group talks about how direct mail is, ‘the tactile start of a relationship where brands have the opportunity to deliver something that can become its own theatre.’

profit organisation established to promote the responsible management of the world’s forests. See the FSC logo and feel reassured that your paper has come from well managed sources. Recently the Canadian Globe and Mail has announced a new procurement policy that gives preference to FSC certified paper. Martyn Eustace says, ‘Paper is one of the few truly renewable and recyclable raw materials we have. Wood fibre has

Taking innovation one-step further, a subsidiary of Yuen Foong Yu, Taiwan’s biggest paper and pulp group, Prime View, plans to acquire EInk the US company that holds the technology for making screens for electronic books such as Kindle and Sony’s Reader. The paper industry is nothing if not embracing, rather than resistant to new technology. So it is more than capable of dealing with the digital onslaught but how does it respond to allegations of wholesale damage to the environment? Again the paper industry has had decades of fending off suggestions that it is destructive to the world’s forests. The most obvious example is the 1993 launch of the Forest Stewardship Council, an independent, non-governmental, not-for-

See the FSC logo and feel reassured that your paper has come from well managed sources

the opportunity to renew itself naturally and be reused often; paper does have a strong environmental story to tell.’ And the industry is telling that story: efforts to recycle are making enormous headway in Europe in particular, with the paper industry among the first to make use of recycled

material. Figures from the Confederation of European Paper Industries (CEPI) show that the UK recovered 8.77 million tonnes (77 per cent) of the 11.44 million tonnes of unconverted paper and board products consumed in the UK in 2008, this compares with a European average of 67 per cent. In fact so keen are companies to promote their green credentials that demand for recycled paper has pushed up the price correspondingly. In 2007 there were even rumours of a shortage. The paper industry is also extremely industrious in converting recycled paper into useable paper and is constantly using technology to beautify the product as much as possible. Nowhere is this more apparent than in the corrugated packaging industry. We’re all familiar with the ubiquitous brown material but thank to the implementation of flexo printing and high quality print effects, brands such as jellybeans are able to use corrugated packaging without anyone guessing! So from forest management and embracing e-books, to improving the appearance of brown corrugated paper, the paper industry is well placed to survive as long as the public desires to read. As National Association of Paper Merchants President Alistair Gough said, ‘We have a window of opportunity to ensure we emerge from this crisis stronger than at the point we entered it.’

T R E N D S

General Knowledge Quizzed

With BRICs countries hosting populations of approximately 2.8billion, it’s no wonder that many pundits are lauding the new knowledge economy thriving away from the West. Mary Gilleece says it’s not so simple If you look at the pure mathematics of the thing, it’s clear that in the future the BRICS nations (Brazil, Russia, India and China) have the manpower, and thus the brain power, to shine in the ever increasing knowledge economy. However, just because certain nations are making waves in the financial markets at the same time as there is growing interest in the knowledge economy, does not mean that the two are related or mutually beneficial. It is rather the case that instead of being the new kid on the block, the knowledge economy is actually the old timer on the veranda, and as such better suited to mature economies with well established institutions. Financial commentator James Smith tells the Business Annual, ‘We always think the knowledge economy is a recent invention, but since man first made tools and herded animals and waged war, there has been a material advantage associated with technological superiority, tactical skill and knowing what your adversary is doing.’ Some commentators would suggest that the current knowledge economy has turned knowledge into a ‘commodity,’ but again this is not a recent development. James Smith explains, ‘The value of knowledge has long existed in a more refined sense as well. Plato established the first known school (fee-paying, of course) - the Akademia. His student, Aristotle, was clearly aware of the material advantages his career could bring him - not least as tutor to Alexander the Great. As the physical power of the Greek

empire waned, more and more saw the monetary value of knowledge, and for the arriviste leaders of the growing Roman Empire, a Greek tutor was an expensive must. Platonic teaching as a commercial industry boomed in Roman times.’

the knowledge economy is actually the old timer on the veranda, and as such better suited to mature economies with well established institutions The knowledge economy tends to favour mature economies as they have acquired centuries-old institutions, such as universities, civil service departments and legal infrastructure that enable their populations to firstly become educated, secondly create knowledge and thirdly sell their knowledge from a stable platform. According to the Economic and Social Research Council (ESRC), between 1996 and 2006 employment in knowledge-intensive services in the UK increased from 37 per cent of all jobs to 43 per cent. The ESRC report into the knowledge economy states, ‘A study of research collaboration between industry and academia published in 2002 reported the level of joint industry-university publications produced between 1981 and 2000, an indicator of the extent to which industry in the UK looks to universities as a source of knowledge for innovation. The highest rates of collaboration were found to be in

chemical, medical and biological sciences, supporting knowledge growth in industries such as biotechnology and pharmaceuticals.’ However, even the public sector is getting in on the act. For example, the Newcastle Business School at Northumbria University in NE England has been commissioned by the Regional Improvement and Efficiency Partnership to train 100 or more council and FRS staff as peer coaches for leadership and performance. This close working relationship between higher education institutions and business is illustrative of why mature countries do so well selling knowledge. While a great proportion of India’s financial boom is thanks to the sale of its IT knowledge, the fact that the majority of its universities are weak and at least 20 per cent of its population is illiterate explains why it is not yet at the forefront of the knowledge market. However it should not be deduced that the West should sell ideas and the rest of the world should resort to extracting mineral wealth and manufacturing. The ESRC suggests that in export terms the UK economy sells £75.6billion of knowledgebased services (from financial services to loyalties and licences) compared with £111.1billion non-knowledge services (from construction to transportation). This shows that, while important, knowledge is not sufficient to carry a nation’s wealth – the core industries must remain. Where’s Ancient Greece now we ask?

Across commerce, what you see isn’t always what you get

Huguette Labelle, Chair, Transparency International explains why Governments must put transparency and accountability at the heart of all rescue and reform measures if they are to regain public trust and investor confidence. As the effects of the global financial crisis reverberate around the world, millions of people face an uncertain future, while valuable progress on such issues as poverty, human rights and climate change is at risk of stalling. Efforts to steer us out of the financial crisis and back on the road to economic growth have involved unprecedented amounts of money. We have witnessed the biggest corporate bail-outs in history, and leaders at the G20 summit in April announced that countries’ fiscal expansion will total US$5 trillion by the end of 2010. While it is clear that the global financial crisis demands coordinated, bold and decisive action, any steps are likely to be frustrated if they are not grounded in transparency, accountability and integrity. As recently noted in this magazine, the combination of an insatiable demand for high-risk financial products and flawed credit ratings resulted in the markets becoming impenetrably opaque. When this lack of transparency and regulatory failure became apparent, investor confidence disappeared and the markets collapsed. To restore investor confidence and public trust, governments must ensure that transparency and accountability are at the heart of all rescue and reform measures. The public has a right to know how tax money is being used. All the terms and conditions in bail-out

programmes should be fully disclosed. The credibility of governments’ efforts is at risk if companies are not required to disclose information on how taxpayer money is being spent. Failure to do so will only result in public mistrust and frustration at a time when support and collaboration are crucial. The G20 tasked the International Monetary Fund and the newly announced Financial Stability Board to provide an early-warning

To restore investor confidence and public trust, governments must ensure that transparency and accountability are at the heart of all rescue and reform measures

ships between financial firms and the public sector. Worryingly, more than half of the 73,132 people from around the world who responded to Transparency International’s general public opinion survey, the Global Corruption Barometer 2009, believe that bribery is commonly used to shape public policies and regulations in companies’ favour. The OECD’s focus on tax havens and the resulting agreement by several countries to adopt OECD standards are a positive development. However, international cooperation and disclosure need to go further still. Countries should divulge information for corruption investigations, too; those nations that refuse to do so should be listed as noncooperative.

mechanism to avoid similar crises in the future. Transparency and accountability must be at the forefront of this effort. Civil society must be involved, too, as it is well positioned to provide credible, constructive input and monitoring, and gives a voice to the people most affected by the crisis.

Companies also have a responsibility to set the ground for sustainable and equitable growth. There is concern that economic uncertainty will lead some executives to cut corners and resort to bribery in order to secure business. However, recent corporate scandals show that rather than securing contracts and lucrative profits, corrupt practices do not pay. Moreover, in the current climate, many businesses cannot afford the associated damaging publicity and hefty fines.

A more consistent and internationally coordinated supervisory and regulatory framework of all financial institutions should include agreed accounting standards and the requirement that financial institutions report all derivative products and off-thebooks entities. Action also needs to be taken to prevent conflicts of interest in the activities of rating agencies, and in relation-

Foreign bribery is a commercial barrier that distorts competition and adversely affects development and the poor. Companies operating in countries where corruption is widespread can no longer cite local conditions as an excuse. In a globalised world, accountability must be guaranteed across borders and reach all the way down supply chains. It is more important than ever for companies

A Transparent Roadmap to Recovery

to ensure that their anticorruption systems are robust and rigorously enforced, and for all countries to fully commit to the OECD Anti-Bribery Convention.

ing against Corruption Initiative, companies can send a powerful signal to stakeholders, investors and business partners that they are committed to clean, ethical business.

Transparency International works with multinationals and non-corporate stakeholders to develop effective and practical tools to mitigate corruption risks. For example, the Business Principles for Countering Bribery provides a model of good practice adaptable to different company sizes and settings, while Resisting Extortions and Solicitations in International Transactions (RESIST) addresses companies’ vulnerability to solicitation and extortion.

Good corporate behaviour, though, demands more than being seen to subscribe to the tenets of social responsibility. Management must ensure that transparency, accountability and integrity are instilled at the very core of their operations. For instance, publicly listed financial-service firms in all countries should fully and publicly disclose any shareholdings owned by directors to protect against any conflicts of interest.

Transparency International has also seen great success with its “integrity pacts” in public contracting. An agreement between a government and all bidders for a public contract, an integrity pact sets out rights and obligations to the effect that neither side will pay, offer, demand or accept bribes, collude with competitors to obtain the contract, or engage in such abuses while carrying out the contract. Violations of these standards result in sanctions ranging from loss of contract, forfeiture of the bid and liability for damages, to blacklisting bidders for future contracts and taking disciplinary or legal action against government employees. In Argentina, a clean and open bidding process, involving an integrity pact monitored by Transparency International, resulted in the municipal government of Morón saving $13 million compared to the costs of the previous four-year contract. By implementing such tools and honouring the principles of the UN Global Compact and the World Economic Forum’s Partner-

Management must also be vigilant that it does not inadvertently encourage corrupt practices. Employee incentives need to be carefully formulated to avoid promoting

It is more important than ever for companies to ensure that their anticorruption systems are robust and rigorously enforced excessive risk-taking, cutting corners and conflicts of interest. There should also be procedures-and protection-for whistleblowers, since they are often the only people to raise the alarm about malpractice involving an entire team or subsidiary. Above all, the message from senior management must be clear: corruption cannot and will not be tolerated.

Rescue and reform measures must not be limited to the industrialised nations. Experts caution that the economic downturn could have disastrous humanitarian consequences. The UN Millennium Campaign reports that the fight against poverty has been pushed back by up to three years, while the UK’s Department for International Development has likened the crisis to a tsunami, warning that 90 million people will be forced into poverty by the end of next year. It is critical that outstanding aid commitments are honoured. The increase in funding to the IMF and World Bank needs to be accompanied by accountability mechanisms and transparency requirements to make sure that aid truly benefits those in greatest need. The complexity and opacity in financial markets that led to the global crisis should serve as a stark warning. Rescue and reform measures will fall short of their aims if they are not forged in the spirit of transparency, accountability and integrity to the benefit of everyone. Huguette Labelle, Chair, Transparency International, A transparent roadmap to recovery, OECD Observer No 273, June 2009, www.oecdobserver.org References Transparency International (2009), Global Corruption Barometer, Berlin, June. See www.transparency.org See OECD work against corruption at www. oecd.org/corruption ©OECD Observer No 273, June 2009

From near-sourcing the development of products in Poland to helping the Dutch government’s agricultural department enjoy ‘virtual desks’, Business Process Outsourcing (BPO) can help all business, says Joanna Gray

In IT and business services alone the offshore outsourcing market exceeded $55billion in 2008 and in spite of the recession some pundits are predicting this will grow 20 per cent over the next five years. This comes as no surprise as over 50 per cent of the Fortune Global 500, offshore their IT and business process activities in some form or another. The market is also holding up reasonably well in the recession with the number one company in the Global Outsourcing 100 list, Accenture, recently posting strong profits: net income in the second quarter of 2009 rose 37 per cent to $406.6 million. Without doubt information technology makes up the lion’s share of the BPO market, thanks chiefly to the enormous savings it can bring to companies. The Indian based Sai Outsourcing Company is an excellent example of a company that you can go to directly to offshore paper and IT-heavy operations, from medical billing and legal transcription services to data conversion and business accounting. Companies such as Sai are often the first port of call for businesses looking to maximise bottom line savings. For example, Martin Brokers, the world’s longest standing wholesale broking firm in the financial markets, headquartered in the City of London, decided to outsource its IT backup system to make bottom line savings. Its customers are typically financial

institutions such as banks, pension funds, hedge funds and insurance companies. Scott Martin, IT Manager of Martin Brokers, commented: “Our employees all pay for their own IT services, so I needed to give them the assurance that the business could continue to run in the event of a disaster through a failsafe yet affordable online backup system. With 12 employees in our IT department, we have the capacity to implement online backup in-house, but this would be an

Increasing numbers of companies are not simply outsourcing their backroom operations to make bottom line savings but also their front office services to create top line growth expensive and proprietary task if we were to opt for the best-of-breed software.” The company chose oncore IT. Scott Martin said, “After a number of service providers, oncore IT immediately stood out due to its massive cost savings of £63,000 per annum compared to our previous online backup provider. Additionally, I am convinced by the bottomline cost savings of the service and know that

the flexibility is there for me to adjust the backups when necessary to suit the business’ needs.” The above case study is pretty standard, however increasing numbers of companies are not simply outsourcing their backroom operations to make bottom line savings but also their front office services to create top line growth. Insurance services are one area that can create upfront growth. The United States based global company Accenture has recently expanded its existing application outsourcing agreement with the RSA, one of the world’s leading multi-national insurance groups, to include implementation of the Accenture Insurance Solution with the main object of helping the insurer drive growth. James de Watteville, from the RSA said, ‘The expanded agreement reflects Accenture’s role as a reliable business partner to RSA, and the extension of our successful relationship defines a new wave of investment that will help RSA deliver significant cost reductions, while providing the basis for profitable topline growth.’ It’s not simply the case that BPO can help in the rather dry but vital fields of finance and IT, it is also, in some cases, glamorous and exciting. Arvato, for example is crucial to members of the world-wide Harley Davidson Owners’ Group (HOG) in providing a global multi-lingual contact and administration

Source of Inspiration

centre for the club helping to reduce contact centre spend by £360,000 and increasing membership from 65,000 to 100,000 in three years. Clearly the requirements needed for customer services are completely different to those for IT backup. That Arvato, as part of Germany-based Bertelsmann AG was able to offer such a service is thanks to the fact that it is one of the largest internationally networked media and communication services providers, operating in 37 countries. You present them with a problem and they supply a bespoke solution. Likewise, it is imperative that the right BPO provider is chosen when dealing with issues of agriculture and food security. The Dutch Ministry of Agriculture, Nature and Food Quality has recently chosen Capgemini as its partner in an office automation initiative which will see Capgemini responsible for 9,000 work stations creating a ‘virtual desktop’. The five-year contract is worth 50 million euros and is testament to Capgemini’s pre-eminence in this field. Thanks to its global workforce of 25,000 and 30 years experience, Capgemini is a resultsdriven business that is capable of dealing with the complex of business outsourcing problems. Business Process Outsourcing, as well as bringing bottom line savings, maximising top line growth potential, creating happy bikers and assisting Europe’s agricultural

ministries, can also save that most precious of resources: time. The Parkeon Group is a market leader in transport ticketing systems. When it began developing a smartcard-based e-ticketing platform called eBus it decided to outsource developmental operations. Initially the company looked for appropriate organisations in India but eventually agreed to near-shore with the Polish company Future Processing. As a result, the project

Outsourcing needn’t necessarily mean relying on companies thousands of miles away, although in many instances they can be the best option was 40 per cent less expensive than developing it in-house, with comparable, if not better results. Testing time for entire product was reduced by 90 per cent. Christopher Octon, product development manager at Parkeon explained, ‘The testing automation delivered the same quality in the one tenth of the time. We are going to use this testing method for most of our software development from now on.’ Indeed, as the example demonstrates outsourcing needn’t necessarily mean

relying on companies thousands of miles away, although in many instances they can be the best option. As Christopher Octon from Parkeon says, ‘There are many outsourcers, who because of location, rely on a paper spec to develop something but when you see what they have done, it isn’t what you wanted because they never really understood the project.’ Indeed, the Parkeon team visited six companies in Poland alone which prompts the suggestion that it can often pay dividends to work with a large BPO specialist such as Capgemini, IBM, Arvato or Accenture for example who can work on your behalf to find the ideal outsourcing group for your company. Stephen Roehelder, chief operating officer at Accenture said recently, ‘In terms of outsourcing demand we are seeing evidence of a growing trend towards bundled outsourcing where clients see the advantage of outsourcing multiple processes, applications and/or infrastructure to a single provider.’ He demonstrates perfectly why the biggest of BPO companies are the most successful: they are well aware that each company, and indeed each department within that company, will have different outsourcing requirements and will be able to offer a range of solutions, either from one source or many. Case studies courtesy of the National Outsourcing Association and Sourcing News

Serviced Offices

Photo - Jim Linwood

Serviced Offices and Virtual Offices are fast becoming all the rage, says Piers Ashton Whether a start up or going concern, if a business has insufficient working capital to purchase office space or take on a long term lease it may like to think about exploring the serviced office route. These are fully equipped, furnished and maintained offices or buildings that are managed by a facility management company which then rent individual offices or floors to other companies - and usually without any legal fees. While this might not present the opportunities to brand premises in the same way that conventional leased space would, right now in particular the easy exit strategy this approach affords means those who have embraced this concept have a better chance of surviving the current downturn than they would if they had adopted a more orthodox approach to premises. They’re particularly ideal for start-ups and entrepreneurs, not to mention existing SMEs which don’t want to make a financial commitment to a longer term lease. It’s all very well paying less per month for conventional leased space, but if things

get tough the long term commitment which brings that perk suddenly makes a lot less financial sense. When it comes to commitments of time, economies of scale are all well and good, but only when the good times are rolling.

When it comes to commitments of time, economies of scale are all well and good, but only when the good times are rolling In terms of flexibility if you suddenly find you need more space at short notice this does not normally present a problem if you’re in serviced space, since depending on availability you simply upsize without breaking your contractual obligations. Many providers also offer a shared services package with other clients of theirs encompassing reception, equipment, meeting rooms, conference rooms etc. In truth the package can usually be specifically tailored to your

own unique requirements. If you want a dedicated receptionist, it can be arranged, if not, that’s fine. It’s all about someone else taking the strain so you are free to concentrate on growing your business or keeping it afloat. IT, telecoms, security, insurance – all of these can be taken care of. In fact, increasing amounts of businesses are going one step further and opting for a virtual office with remote receptionist affording ‘online’ or home-based entrepreneurial businesses a prestigious secure professional fascia to their business. It is a concept that is experiencing growth even in the current challenging economic climate as businesses look to cut costs and grow in a less fixed fashion. This not only reduces commercial property and admin costs to an absolute minimum, but also increases productivity through the utilisation of a decentralised workforce which itself affords the opportunity to access an almost limitless labour pool encompassing all manner of potential new markets.

Help your business succeed at MWB Business Exchange We can help your business thrive during these uncertain times by helping you to focus on what you do best – your core business. • Flexible office space on flexible terms • Up to 60% cheaper than conventional office space • Productive working environments • Advanced IT and Telecoms infrastructure • Exceptional onsite business support • Pay as you use meeting and training rooms With over 70 locations across the UK and over 40 in central London MWB Business Exchange can take the hassle out of running your office and help save you money.

0808 100 1800

www.mwbex.com

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Andover Commercial Park - plans for 1.5m square feet of commercial floorspace and hotel

Contact the Council’s Economic Development Officer @ dgleave@testvalley.gov.uk The Lights, theatre, Andover

Reel Cinema and Asda, Andover

Light at the End of the Tunnel ?

‘How do we compete with the likes of China?’, the West asks itself

Photo - Steve Jurvetson

Yes, but don’t expect to be blinded, says Paul Thompson

As other EU economies begin to post encouraging figures Britain’s economic woes are set to continue for some time yet. The EU Commission predicts that 2009 results will show the 27-nation EU economy as a whole to have shrunk by 1.8% before recovering to growth of 0.5% in 2010. Worst hit will be Ireland, with expected contraction of around 5%, with the powerhouses of Germany and France looking at negative figures of 2.3% and 1.8% respectively.

demand for steel in 2009 it is only expected to recover by 14% in 2010 according to Eurofer, the European Confederation of Iron and Steel Industries.

Where the other big EU economies have a strong and diversified manufacturing base to compensate for the meltdown in the financial sector, Britain’s is too small to exploit the sharp drop in the pound that makes UK exports more competitive. What’s more, with household spending on durable goods and investment demand forecast to continue falling in 2010, the prospect of a sharp recovery in UK manufacturing in 2010 appears slim after an expected decline in output of more than 10% by the end of 2009 with the motor vehicles, engineering and metals industries leading the decline The steel industry is perhaps the best barometer since the rise and fall of its fortunes impacts every corner of industry. In Europe as a whole after a 33% reduction in

Britain’s (manufacturing base) is too small to exploit the sharp drop in the pound that makes UK exports more competitive

The situation has been exacerbated by the current economic downturn which has led to de-stocking by such steel-using sectors as construction and auto manufacturing and this reduced demand has meant an 18% drop in output.

The British Chambers of Commerce (BCC) believes UK manufacturing has the capacity to recover but that the sector must be ably assisted in the face of a recession induced by a financial and banking crisis through policies that would facilitate the rebalancing of the UK economy towards industry. Unless the massive decline in UK capital

investment is checked and reversed, the UK’s productive potential will be take a significant battering, since the current decline in investment means that when the recession ends and demand starts recovering, UK industry will find it difficult to increase output since the infrastructure and resources will not be in place. In addition there is something of a Catch 22 situation being currently created since come the end of the recession, there will be a critical need to reduce borrowing to cover the massive budget deficits brought about by the high levels of government borrowing that had to be introduced to bring about its very end. The downside of this policy is an inevitable dampening of UK growth prospects for a considerable period thereafter. Driven by slowing domestic and export demand combined with the limited availability of credit, it is estimated by accountants and business advisors, BDO Stoy Hayward LLP that 2.3 per cent of all manufacturing business that make up the rump sector will have been forced to leave the market by the end of 2009.

OFFSHORE

Spotlight on Offshore

Assuming the criteria can be met, using an offshore jurisdiction as a corporate domicile can afford investors a greater degree of control, flexibility, protection and simplicity than they could hope to get in traditional onshore locations with opportunities to limit tax liabilities and therefore grow investments at a higher rate. Companies have widespread application while incorporation and running costs are low, with the jurisdiction’s income often being generated from fees attached to customs duties, land transfer etc. On a philosophical level ‘going offshore’ also appeals to the free spirit in some that resents over-zealous governmental interference Though lightly regulated by definition, it’s important to remember that one cannot ‘go offshore’ for illegitimate reasons. Doing it to avoid creditors is out, as of course is doing it for money laundering or tax evasion purposes, especially true given the increasing clamour for transparency and compliance with international standards across the globe, led by the likes of the Organisation for Economic Co-operation and Development (OECD). It should be stressed, however that many supporters of offshore couldn’t be further removed from the shady types traditionally synonymous with this approach. Their argument is that reputable offshore financial centres play not only an acceptable, but an essential role in international finance and trade, offering fantastic opportunities in certain situations for both corporations and individuals, and allowing for legitimate risk

management and financial planning with the result that more than half of the world’s assets and investments are now held in offshore jurisdictions.

In this feature we look at some of the key offshore jurisdictions and their USPs The Turks and Caicos Islands (TCI) are made up of 8 major islands and numerous uninhabited cays located 575 miles south of Miami in the Caribbean. They are classified as a ‘UK Overseas Territory’ which affords them a stability found in very few other locations. The islands’ remained virtually uninhabited until 1678, when a group of Bermudans settled and began extracting salt which became the islands’ keystone industry until well in to the 20th Century. It wasn’t until 1984 when Club Med opened their resort that TCI started to truly prosper and it remains tourism that continues to drive the economy with significant investment from the likes of the upmarket Ritz Carlton, Mandarin Oriental and Nikki Beach hotel groups, and associated infrastructural development in the form of road building as well as upgrading of desalination and power plant facilities. What’s more, development has been sensitive ensuring the top draw environment remains pristine yet accessible. In recent years however, the islands have

also come into their own as a financial services hub, with a regulatory framework that affords investors the opportunity to take advantage of no exchange controls, corporate, capital gains or inheritance tax such that the islands have quickly become one of the key corporate domicile spots in the region for incorporation of Exempted Companies (otherwise known as International Business Companies or ‘IBC’s) offering great flexibility in terms of defining capital structure and members rights and liabilities, as well as showing a commitment to the OECD’s principles of transparency and exchange of information. These essentially acknowledge that the financial services being provided are legitimate and contribute to the global economy. In fact, for those looking for an attractive destination for incorporating companies, the establishment of mutual funds, investments, trusts, captive insurance and banking services and products, TCI is a jurisdiction that must be on all interested parties’ radars.

Brian Robert Birke

Main Photo -√oхέƒx™

The essence of most offshore financial centres is the formation of offshore structures. These characteristically involve the formation of an offshore company, partnership, trust or private foundation. You choose in which jurisdiction and through which professional service provider to proceed, and once established – companies can be incorporated speedily and without fuss, and come with an easy exit strategy.

OFFSHORE

British Virgin Islands

The British Virgin Islands are one of the last vestiges of what was once the British Empire. These days they are classified as an â&#x20AC;&#x2DC;overseas territoryâ&#x20AC;&#x2122;, though in practice despite having a legal system based on the British one, they decide much of what they do for themselves. continued on p.50 49

OFFSHORE

In recent years they have prospered through the enactment of innovative legislation to become one of the world’s leading offshore financial centres, enjoying full autonomy from the UK as an international financial centre. The islands boast one of the highest incomes per capita in the Caribbean and the status as the world’s biggest incorporator of offshore companies. In fact, for those looking for an attractive offshore destination as part of their managed wealth portfolio, it has a lot going for it. The massive volume of offshore companies, trusts, insurers and mutual funds on the islands are testament to this, attracted by the absence of corporate, income and capital gains taxes, exchange controls or restrictions on movement of funds within the jurisdiction.

scrutiny jurisdictions such as the BVI have found themselves placed under whereby it spelt out the permitted scope of a company’s activities, its members’ and directors’ responsibilities, as well as the rules governing distributions and dividends, liquidation and other processes, complete with details of penalties for non-compliance. However, it was also an innovative act since it abolished the concept of authorised capital and rules relating to share premium where companies could purchase, redeem, or acquire their own shares either under a statutory regime or in accordance with its own articles. In addition, it became unnecessary to state the objects or purposes of a company in the M& A. Moreover, there became a wider selection of corporate vehicles to choose from, tailored to specific requirements with growing volume of expert service providers to assist and advise in the formation and administration of those most pertinent for respective corporate or personal circumstances.

By being legislatively proactive the BVI has shown it has nothing to hide

However, the BVI is very much aware that as governmental revenues fall across the globe thanks to the worldwide credit crunch and some high profile corporate collapses connected to opaque offshore dealings, the financial eyes of the world have turned to all such jurisdictions regardless of track record demanding greater transparency concerning all financial activity.

As such the BVI has taken the lead through the enactment of the Anti-Money Laundering Regulations, 2008 and the Anti-Money Laundering and Terrorist Financing Code of Practice, 2009. This ensures that the already reputable financial services providers who constitute the engine room of the BVI ship are bound to perform due diligence to clarify the identity and legitimacy of a client and the origin of the relevant funds. Consequently, you won’t find the BVI on any blacklists, since through its proactive activity it has remained compliant and in some cases exceeded the respective international requirements In another riposte to critics it is hard to argue with the ‘force for good’ credentials of its international companies that constitute a medium through which the BVI has pumped huge levels of foreign direct investment (FDI) into locations such as China where it has fuelled economic growth.

Specifically, the aforementioned VISTA legislation has made the BVI a commercially sound proposition for the holding of long-term assets in situations where private family trusts don’t offer a good fit. It does this by allowing a shareholder to establish a trust of his company that removes from the trustee the traditional monitoring and intervention responsibilities, permitting the company and its business to be retained as long as the directors deem it prudent, thereby ensuring a more likely and efficient carrying out of stated wishes when it comes to succession.

This ensures that the already reputable financial services providers who constitute the engine room of the BVI ship are bound to perform due diligence

Key Legislation It was the International Business companies (IBC) Act of 1984 that set the wheels in motion for the economic and financial development of the BVI. Straightforward and linked to a stable political structure it was used as a template by many other jurisdictions and held sway for some twenty years until it was superceded by the BVI Business Companies Act of 2004 which prevails to date. This latter piece of legislation reflected the increasing

Along with The Virgin Islands Special Trusts Act (VISTA) of 2003, the 2004 BCA Act has succeeded in cementing the BVI’s reputation as the world’s principal offshore corporate domicile.

By being legislatively proactive the BVI has shown it has nothing to hide and has allowed it to maintain good relations with onshore jurisdictions, international NGOs and regulators such as the FATF (Financial Action Task Force), IMF (International Monetary Fund) and the OECD (Organisation for Economic Co-operation and Development). Moreover, the principle of confidentiality very much persists, with disclosure only ever being made on instruction from the BVI Court with accompanying evidence of criminal activity. This policy amounts to prudent long-term thinking and should see the BVI retain its pre-eminent status well into the future.

OFFSHORE

Liberia

Photo - Rona Proudfoot

The idea of Liberia as a tax effective corporate domicile may seem incongruous to some given the political upheavals seen there in recent years, but this perception couldn’t be further from the truth

Not only is the country benefitting from fresh FDI thanks to a new found political stability which should enable it to begin to take advantage of its rich natural resources, but in fact the ship and corporate registers are administered under an exclusive agreement between the Republic of Liberia and US owned and operated Liberian Ship and Corporate Registry (LISCR), and consequently have been wholly unaffected by any politics or conflict. As such Liberia has remained one of the world’s foremost corporate and ship registries. For the purposes of incorporating a NonResident Corporation there are the usual restrictions on not trading within Liberia or undertaking banking or insurance activities, but otherwise it is entirely straightforward and affords a high degree of flexibility with minimal administration. The efficiencies are those you would come to expect from the US, while naturally all documentation is in English. Depending on requirements many other Liberian corporate vehicles also exist; Limited Partnerships, UK style Registered Business Companies, Austrian style Private Foundations and the U.S. State of Delaware style Limited Liability Companies (LLCs) are free of taxation on operations and profits if non-resident and are used for all manner of purposes Moreover and significantly, Liberia is to be found on the right side of institutions such as the OECD thanks to its

proactive subscription to all international standards. Historically, Liberia’s ship registry status has set the jurisdiction apart. Attracting owners from across the developed world, the registry flourishes due to its cost and taxeffectiveness and flexibility combined with its high levels of efficiency, ship safety and security and customer service - a reputation

Significantly, Liberia is to be found on the right side of institutions such as the OECD thanks to its proactive subscription to all international standards that has been built over a period of more than 60 years. The ship and corporate registry’s reputation is enhanced through LISCR’s significant investment in new computer and communication technologies such that in August 2009 the Liberian senate adopted and President Ellen Johnson Sirleaf (Africa’s first woman head of state) signed into law a 10-year pact to extend the existing contract with them. In maritime circles Liberia is a highly respected signatory to the major international conventions and works in close co-operation with the class societies to

ensure compliance and enforcement of the international rules and codes. Moreover, the registry maintains a global network of Liberian authorized nautical inspectors harmonizes annual safety, international safety management and ship security inspections. Meanwhile, the professional seafarers themselves, despite not being subject to any citizenship requirements, must comply with rigorous and exacting Liberian certification standards. Over the last 60 years, the ship registry has taken the lead in creating a safety and security culture resulting in a present strength of over 3,100 ships of 90 million NRT coupled with an industry lead based on its ‘white listed’ port state reputation. However, it is during this same time that Liberia’s strength as an off-shore corporate registry has grown most strategically. While use of the traditional Liberian corporation remains extremely strong, the Liberian corporate registry continues to expand with the adoption by Liberia of the new series of business entity laws referred to above (including Foundations, RBC and LLCs). These laws, as augmented by Liberia’s adoption of sophisticated Electronic Transactions and Anti-Money Laundering Laws have solidified Liberia as an off-shore corporate market leader

Discover the ease of doing business in Nevis QUALITY

EFFICIENCY

| INNOVATION

INTEGRITY

Corporate Services include: • International Business Companies • Limited Liability Companies • International Exempt Trusts • International Insurance • Multiform Foundations • Mutual Funds • Offshore Banking

In Nevis, you can take comfort in knowing that your business will be conducted with the highest degree of efficacy. There are over 60 qualified Registered Agents with expertise in law, banking, finance, tax planning and asset management. To complement this sophisticated professional infrastructure, we are committed to providing a strong regulatory framework, 24-hour incorporations, innovative laws and competitive fees.

Think Business...Choose Nevis!

Nevis Financial Services Development & Marketing Department P.O. Box 882, Rams Complex Stoney Grove, Nevis. Phone: (869) 469-0038 Fax: (869) 469-0039 Email: info@nevisﬁnance.com

www.nevisﬁnance.com 52

LIFESTYLE

Take to the Field

Thanks to Arena Polo, you don’t have to be an Argentinean aristocrat to play. Mary Gilleece explains how.

‘If you can ride you can play,’ so says Sally Smith, farmers’ wife and budding polo player. ‘On seeing my first match at Cowdray Park and hearing the ponies’ hooves thunder, I was hooked.’ And the road that she took to her first chukka is one that anyone with an inclination to do more than tread in the divots at half time can follow. It just takes time and, yes, money. Daniel Fox-Davies, international financier, current Chairman of The World Polo Association and the visionary behind the World Polo Series only began playing seven years ago. He is now hoping to do for polo what Twenty20 tournaments did for cricket, not simply to make polo more accessible but also financially lucrative. At the launch of Polo in the Park last summer where London, New York, Lagos and Moscow played televised polo at the Hurlingham Club to members of the public, Daniel Fox-Davies said, ‘Polo has been due a makeover for a number of years. It wasn’t a question of ‘when’, but a question of ‘how long’ before one of the polo organizations took steps to rejuvenate the game and bring it in keeping with modern technology and changing social interests. Polo needed to shed its mysterious aristocratic heritage and

adopt a new generation of polo aficionados.’ What makes both the farmer’s wife, the banker and indeed Joe Public able to edge into the glamorous world of polo is what is known as ‘arena polo’. Played during the winter months on a pitch smaller than the enormous outside pitch that measures

What makes both the farmer’s wife, the banker and indeed Joe Public able to edge into the glamorous world of polo is what is known as ‘arena polo’ 300 yards by 220 yards, arena polo makes for faster play. With 2,500 UK players, frequenting one of the 68 outdoor and 20 indoor arena clubs in England, it has never been easier to transfer riding skills to the polo field. However, no matter how proficient a horseman you are, riding polo ponies is an altogether wilder skill. ‘If you have plans to trot out on your favorite cob and join a string of polo ponies on the field,

forget it,’ says Sally Smith. You can also forget that comfortable position you’ve been adopting in the saddle since days at the pony club; a learner must master new riding and hitting positions, the offside and nearside backhand and forehand, changing direction and hitting at speed. While they are sparse in the north and West Country, you’ll find many clubs in the South East of England that will be able to provide details of lessons. An introductory lesson for two hours at Ascot Park costs £95 and then £75 per hour for one-to-one lessons at Epsom Polo Club for example will give you a strong beginning. From there, you can gird your loins for an ‘instructional chukka’ where you can play full seven minutes with coaching and advice. Expect to pay £100 for 45 minutes. If you can spare the time, an eight week course should then be undertaken. If you’ve got the bug but wish to stay based in the city rather than relocating to the countryside, there are stables such as Great Trippets, West Sussex which will stable your polo ponies for you to play with at your leisure. But remember the maxim, ‘there are only two ways of quitting polo, bankruptcy or death.’

The Wonder of Yachting

Tim Wright www.photoaction.com

Some in the yachting world predicted that the economic downturn would lead to a flurry of interest in fractional ownership deals, yet this has not proved to be the case. Yacht owners tend to want things a certain way and the idea of compromising on decor, or which weeks of the year you can and can’t use your yacht is anathema to them. As such, buying or leasing a yacht for exclusive use is still the preferred option. Yet how to choose? With so many new and brokerage models available, some built on a production scale and others custom designed with the cost being as much as you want to spend - £300m in Roman Abramovich’s case – it’s a minefield out there. It is important to identify not only how much money you have to allocate to a yacht, but also what are the most important criteria for you; performance , luxury, reliability? – probably an element of all three, but the latter is especially important. After all, what’s the point employing a revolutionary new technology if the payoff is an unseaworthy vessel on a day to day basis and long periods with your vessel out of action. Fortunately, advances in technology in recent years e.g. GPS plotting devices and powered winches have meant that quite ambitious sailing plans are now within reach of many more owners without the need for a professional crew though it is advisable to know one’s limits and not shy away from additional tuition. Moreover satellite communications mean that owners can keep abreast of their business affairs no matter where they are, not to mention the obvious safety advantages this brings.

Production/Custom/Semi-Custom/Brokerage Production yachts are built on a factory line with inherent economies of scale, but there are few options to personalise beyond the cosmetic.

At the other end of the scale are fully custom yachts which afford the opportunity for a completely bespoke yacht where the choice of material alone encompasses numerous materials; glass or fibreglass reinforced plastic, steel, aluminium, traditional wood, wood-epoxy or plywood depending on requirements re cost, durability and performance. Clearly however, this approach brings with it a higher price tag and a potentially long conception to launch time line which can be frustrating for some.

Semi-custom yachts are often considered to offer the best of both worlds Semi-custom yachts are often considered to offer the best of both worlds with uniform hull design, key systems, or critical bulkheads coupled with a high degree of autonomy over layout, design etc. Brokerage yachts meanwhile are pre-owned yachts that are typically cheaper than new yachts and more often than not immediately available. That said, there can be considerable costs attached to refitting them out – often a necessity as much as an indulgence, and it is wise to have a survey carried out not only to establish the correct valuation, but also to verify general condition and identify any

Photo - Tiarescott

damage and signs of osmosis (blistering of the hull). Many insurers in fact demand one for brokerage yachts, though some owners even arrange for them to be performed on new yachts for independent quality control purposes during the building process. While there is an undoubted cachet in buying one’s yacht outright with the satisfaction of knowing it is truly yours, for many this allocation of resources is unrealistic. This is where leasing comes in, enabling the exclusive use of a yacht over a pre-agreed period of time with initial purchase financed by a loan. Although you don’t own the vessel as such, your rights are nonetheless fully protected through your marine mortgage while furthermore there can be tax and estate planning benefits, not to mention the option to purchase the yacht at the end of the lease.

Corporate Ownership Corporate ownership offers buyers a higher degree of confidentiality since one’s name does not appear on any documentation and can afford the opportunity to avoid transfer taxes and effect a speedy sale by merely transferring shareholding of that

sole asset company to the new owner, which also has the potential of limiting liability in the event of any incoming claims. Others take advantage of potential inheritance tax benefits by having the assets of the company transferred to a discretionary trust fund.

Even when you administer everything yourself it’s worth remembering that no yacht owner is an island Meanwhile, some who are in a position to do so prefer the route of incorporating a tax exempt company in a favourable jurisdiction to provide charter services, with the result that the subsequent income is free of local taxes.

Service Provision Yacht management allows owners the freedom to enjoy their yacht while someone else takes the strain. This either manifests itself in the form of a turnkey operation

where everything is taken care of, or one where the service is tailored to specific requirements such as recruiting a crew, or registering the yacht in the most appropriate jurisdiction affording security of title and allowing the yacht to be operated in accordance with the owner’s needs. Even when you administer everything yourself it’s worth remembering that no yacht owner is an island. For example, in terms of after sales servicing, quite apart from issues relating to routine maintenance, warranties, damage repairs and refits, it’s imperative to have an arrangement in place with an outfit who not only hold detailed records of your vessel, but who also have strong pre-existing relationships and a network of contacts across the globe. Thus, when things go awry thousands of miles away from your home port they can initiate assistance with appropriate sub-contractors and suppliers. In cases like this there’s no doubting that seasoned operators with a proven track record are those most likely to not only provide piece of mind and sound advice, but also get you out of a tight spot. It’s worth remembering you get what you pay for!

International Yacht and Aircraft Consultants • Leasing • Marine Finance • Insurance • Tax Services • Commercial and Private • Yacht Registration • International Safety Management • (ISM) • Mini ISM • ISPS • Project Management • Yacht Management • Crew Employment

Pelagos Yachts Limited, Sea View, West Quay, Ramsey, Isle of Man, IM8 1DW. t: + 44 (0)1624 819 867 f: + 44 (0)1624 819 887 e: dos@pelagosyachts.com www.pelagosyachts.com

Racecourses are attracting new clients with performances from opera singing at Cheltenham Racecourse and funerals at Chepstow, Joanna Gray explains how three racecourses are attracting a wider crowd to their courses. Cheltenham Racecourse Home to the National Hunt Festival and Cheltenham Gold Cup, Cheltenham Racecourse is probably the best jumps course in the UK. Set in a natural amphitheatre beneath the Cotswolds, the course attracts 200,000 people in Festival week who bet over £500 million on 26 races. However, the racecourse also contains The Centaur, one of the largest conference centres in the South West. To make use of the venue, the team behind the course has led the field in putting on events that do not involve horses. Andy Clifton, Communications Manager explains. When did Cheltenham start putting on non-racing events? The racecourse has been hosting non racing events for over 35 years. When did it become profitable? Racing is our primary source of income and

profit, but the non-racing events make a valuable contribution. As with all things, some of the events are more profitable than others. Have any of the crowds who’ve been to these events then gone on to race? Undoubtedly and vice versa. What’s been your most successful style of event? We hold many different types of events as our facilities offer organisers flexible and versatile spaces. Our most recent events include hosting the Conservative Party Spring Forum, The Morgan Car Company Centenary festival and gala dinner as well as a convention for the National Association of Barber Shop Singers. We’ve also hosted concerts for global icons including Dame Kiri Te Kanawa and Lesley Garrett. And the least popular? Most events here work pretty well and are scaled to fit the expected audience. Events that take place primarily outdoors are the most vulnerable to variable attendance, given the vagaries of the British Weather! What are you most looking forward to putting on in 2010? The return of the Wychwood and Greenbelt festivals as well Gloucestershire Business Awards.

Contact details: +44 (0)1242 513 014 www.cheltenham.co.uk Fontwell Park With carboot sales, wedding fayres and baby fayres, you’d never guess that Fontwell Park is also a fabulous racecourse nestling between Arundel and Chichester. One of the smaller (they call it intimate) courses it does boast a unique figure of eight track that adds a certain something to jumps racing. After a big re-branding push last year Fontwell has exciting things to offer those looking for unusual conference venues. Becky Green, Head of Marketing explains. What percentage of your profits come from non-racing events? We only race 23 days a year so the non-racing events are crucial to the profitability of the racecourse – the new facility will give the team the opportunity to sell the venue 365 days a year. Currently non-racing business would contribute to 10 per cent of the business profit, this will increase dramatically when the new facility opens. What’s the new facility? A £6.5 million grandstand is being built

Racing Without the Horses

Racecourses such as the world famous Cheltenham are pulling in more than just racing punters these days

(due to be completed in August 2010) as a multi-purpose venue catering for race days and non race day events. Our old facility was a racecourse grandstand primarily and filled with other business when possible. The new facility is being built with both racing and non-racing events in equal terms of importance – this clearly shows how important the racecourse as an alternative venue is becoming. The grandstand has a ground floor exhibition space, a middle tier for balls (we have 40 weddings a year) and the top floor for boxes. Do you keep racing and commercial business completely separate? The management team treat the racing business and other business as two separate lines and each has a separate department to look after each income stream. Although they are managed separately, we cross-sell whenever possible and make sure our race goers are aware of our other facilities and our customers are aware of our race days. Do your traditional punters ever complain about events like the babyshow for example? Not yet! They’re not really affected by them and in fact regular racers are benefiting because their facilities are being updated. What is it about Fontwell Park that

encourages so many companies to want to work with you? Companies enjoy using a racecourse as a venue as it is unique and different to the standard hotel venue! Plus car parking is easy and FREE – one of our biggest selling points. We have to be honest and admit that currently our conference facilities are not up to the standard we would like but this is the reason for the new grandstand. We hope to have one of the best venues for parties, conferences, seminars, launches etc along the south coast once the new facility is opened in the summer of 2010. Contact details: www.fontwellpark.co.uk, +44 (0)1243 543335 Chepstow Hosting nearly 30 race days a year, Chepstow is one of the busiest turf tracks in the UK and home to the Welsh National, Wales’ most prestigious race meeting that climaxes in the £100,000 Welsh National Race. The racecourse also offers funerals amongst its other non-racing events. Marketing manager Michelle Stark explains... How many non race-day events do you

put on? We have two separate businesses, in-house events and conferences. We generally host 15 in-house events a year and the conference centre, booked by as many different business, public and private sector, all year round. Do you host any events particularly aimed at the Welsh? Even though as a racing venue we host the Welsh National, in terms of non-race days, we try to appeal to everyone. Of course some people do book the conference suite for specific Welsh events. What’s your most successful event? The babyfayre always brings with it a heavy footfall. How popular are funerals at the racecourse? There is a very mild interest in funerals at Chepstow as yet no racegoers have objected to this or any other service we offer! What is it about Chepstow that appeals to local businesses? It’s a unique and versatile venue offering fantastic facilities within the stunning Wye Valley. Contact details: +44 (0)1291 622260, www.chepstow-racecourse.co.uk

Irons are Still Hot While many corporations have cut their entertainment budgets, keeping clients happy with a game of golf will remain fundamental to business today. Joanna Gray explains why.

better courses to offer reasonable events for our clients that are cost effective.’ He’s not alone. Marriot Hotels and Country Clubs reduced their rates of corporate golf days by 50 per cent. Its marketing spokesperson said, ‘Ranging from a minimum of £2,000 to a maximum of £3,000 depending on choice of venue, companies can entertain 40 clients on any day until the end of April 2010.’ Is it really that simple? Will a client really remain loyal solely on account of a day’s

Gone are the days that an MD will stroll back into the office in time for 5.30pm clocking off and announce with a wave of his hand, ‘we’re getting new accountants, I’ve just met this terrific financial whizz on the golf course...’ Rather than deals being struck at the final hole; current business loyalties are embedded. If this recent recession has taught business anything, it is that loyalty to customers, clients, buyers, sellers and business partners, is crucial to the financial health of a company. There will always be a place for golf in business.

Simulated golf ranges It may seem a bit ‘Wall Street’ but office golf is still worth investigating thanks to the new generation of golf simulator technologies. Instead of a club and a waste paper basket you can now enjoy a full screen with cinematic, interactive vistas of the world’s best-known clubs. If you choose a ‘Full Swing Golf Simulator’ for example, you have a club and a green mat that includes 688 independent sensors allowing you to accurately hit a figurative ball into a fabulous graphic. It’s pretty much the very top end executive who has one in his office, rather you’ll find them in office complexes, where you can slip out for a meeting and a bit of putting.

While certain industries such as automotives that very publically had to lay off thousands of workers fight shy of indulging in corporate entertainment, the majority of companies still see it as money well spent. As Dennis Owen, Sales and Marketing Director of Golf and Sporting Occasions says, ‘This year I have reduced the cost of corporate golfing days by one third. Most leading companies still have their core clients that need to be well looked after. We have adapted to the circumstances by reducing some of the frills and giveaways and perhaps stepping down from some of the

pitching and putting? Jane Lawrence, Strasbourg based corporate entertainer certainly thinks so, ‘If you know your clients well, are sympathetic to their interests and know for sure that they will value a day’s golf, then it’s a no-brainer not to allocate funds to this practice. It’s an especially useful tool when a tendering process is underway. Some may call it out and out bribery, I call it loyalty.’ She can’t be wrong. In 2008 corporate entertainment sales peaked at £1bn, increasing 20 per cent over the last four years. The findings come in the MBD Commercial Due Diligence’s UK Corporate Hospitality Market Development Report. The next two years are expected to show slower growth of around two per cent but increasing after 2012 when the economic climate is set to improve. And what do the clients think? John Rowe, based in Scotland working for a leading defence organisation tells UK Business Annual, ‘Nothing beats a day with a cool iron, hot adrenaline and a seaview. While I haven’t necessarily struck a business deal on the links; I have cemented business partnerships and got to know certain clients very well. When you’re working in a sensitive industry a person’s character is paramount and there’s nothing like a game of golf to see a man as he really is. And if our clients enjoy golf, then a day on the links at the Old Head of Kinsale in Southern Ireland is simply magnificent.’

Some may call it out and out bribery, I call it loyalty

photo: Dan Perry

Best golf courses across Europe

1 Turnberry Ailsa, www.turnberry.co.uk,

6 Les Bordes, France - www.lesbordes.com

2 St Andrews, Scotland - www.standrews.org.uk,

7 Valderrama, Spain - www.valderrama.com

3 Carnoustie Championship - www.carnoustiegolflinks.co.uk

8 Royal Zoute, Belgium - www.zoute.be/index_golf.htm

4 Royal Portrush, Northern Ireland - www.royalportrushgolfclub.com

9 Halmstad (North), Sweden - www.hgk.se.se/extra/pod

5 Royal Birkdale, England - www.royalbirkdale.com

10 Domaine Imperial, Switzerland - www.golfdomaineimperial.com

photo - Paul Keleher

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EDUCATION

Business Schools

In the context of a global economic crisis, job cuts and the credit market squeeze, the ongoing increase in applications for MBA programmes throughout the world might seem surprising, says Jeanette Purcell, Chief Executive of the Association of MBAs (AMBA). MBA study is not cheap and it is common knowledge that when times are hard, company training budgets are often the first to get cut. But, despite the current climate, interest in the MBA is increasing and many business schools are reporting an increase in the take up of their MBA programmes over the last twelve months. This reaction to the recession is not unusual, a similar pattern emerged during the last downturn in the UK in 2001-2 thus supporting the conventional wisdom that the MBA market tends to be counter cyclical.

The Association of MBAs’ most recent survey For those who are still employed but who indicates that accredited business schools may be facing an uncertain future, taking the are receiving, on average, 500 applications a MBA part-time or by distance learning also year for their MBA programmes. And reliable makes sense as a form of insurance against estimates suggest that there are now over tough times ahead. In an increasingly 200,000 MBAs graduating each year in the competitive job market candidates benefit world. The state of the economy is not the only reason for the increase in demand for Full time study provides... the MBA – a surge in interest from India, an opportunity to refresh China and Eastern Europe over recent years has added to the increase in numbers. But and enhance their skills and it is undoubtedly the global recession that is responsible for the most recent increase knowledge, perhaps prepare in the qualification’s current popularity. for a career change or Senior executives, laid off with a decent lump sum, are taking the opportunity for strengthen their expertise some ‘time out’ and see MBA study as a in a specialist area sensible investment for their redundancy payment. Full time study provides these people with an opportunity to refresh and from any means of differentiation and enhance their skills and knowledge, perhaps need clear evidence that their skills and prepare for a career change or strengthen knowledge are relevant, certified and up their expertise in a specialist area. They will to date. Employers are also likely to look build new networks and useful contacts positively on those who have demonstrated among their fellow students, and, perhaps a commitment to learning and self most importantly, will get the chance to development by investing in MBA study – reflect on their personal goals and values in especially in an uncertain economic climate. the context of their career. MBAs delivered through more flexible

Jeanette Purcell, Chief Executive of the Association of MBAs

formats also help to spread the costs of training over a longer period and, providing they have met the Association’s accreditation requirements, offer the same quality and standard of education as the more traditional full time courses. Some far sighted employers, rather than cutting staff development budgets, are choosing to sponsor MBA study for carefully selected talented staff who they want to retain. Employers have learnt from previous recessions that they need to hang on to their talented people during a downturn, so that the company is ready to respond with full force when the upturn comes. Despite all these good reasons for taking an MBA, it is not a decision to be taken lightly. MBA study is costly and involves a lot of hard work – it is by no means the guaranteed route to a top job as is often claimed. Using the MBA to ‘hide’ from the recession is probably not a good idea – students taking on such a demanding course need genuine commitment and a sense of purpose to achieve the degree and to benefit from the experience.

NEWCASTLE BUSINESS SCHOOL

NORTHUMBRIA UNIVERSITY

Newcastle Business School, City Campus East

Jane Turner, Associate Dean, Executive Development Centre, Newcastle Business School, Northumbria University

There has never been a more compelling need to align Executive Education activity to the absolute needs of senior leaders and organisations. In the current climate senior leaders have naturally been more cautious over the decision to begin or continue to invest in personal and organisational development. There is significant research reinforcing the benefits of ongoing investment by and in senior leaders and the ultimate impact this has on staff and other key stakeholders but providers of Executive Education have to increasingly take the time to listen, become or remain agile, ensure their responsiveness and deliver relevance. In the current climate, Executive Education must be a sounding board to organisations, taking the time to understand the organisational landscape, fears, aspirations and requirements. In the past, providers of Executive Education have been criticized for their approach, which was largely off the shelf, theoretical and costly. Business Schools have to move away from their obsession with feedback ratings and embrace an externally facing perspective that will deliver relevant interventions. Organisations do not have the time to engage in generic, low impact interventions and Business Schools have a moral obligation to ensure they move away from this approach.

Business Schools have to move away from their obsession with feedback ratings and embrace an externally facing perspective that will deliver relevant interventions At Newcastle Business School, we are experiencing an increase in Executive Education activity which is as a result of us spending significant time ‘getting under the skin’ of the organisation, working closely with senior leaders and building authentic relationships based upon trust and ultimately delivering on the promise. The key requests are encompassing some of the following :- senior leaders seeking support to re-define the organisation’s strategic direction, re-structuring, individual leaders seeking to re-energise and identify renewed personal strategies to enhance their contribution and support to orientate towards a more agile and innovative culture. Our response is timely, relevant and completely flexible. We are increasingly working with clients in short bursts of activity that include 1:1 or Executive team coaching, facilitated ‘business critical’ sessions and virtual on line broadcasts, whilst

constantly remaining mindful and highly responsive to their changing priorities. This approach requires an agile mindset that genuinely puts the client and their needs at the core of what we do. For those seeking to invest in personal or organisational strategies that will assist in providing assurance for the future, the following questions should be asked. What is the philosophy and value base of the provider? How is this articulated and evidenced? What experience does the staff involved in Executive Education provision have? Have they worked in the corporate arena or are they pure academics? How innovative do they espouse to be and can they evidence that? Who are their current and recently past clients? Do they provide value for money? What do their clients say? Given that senior leaders provide the direction of travel and navigation in relation to that, investment in their personal and organisational development is vital. Providers of Executive Education can play a pivotal role if they give priority and attention to the client‘s agenda.

EDUCATION

In the current climate it is more important than ever for employers and students alike to consider only those business schools with a good track record and strong reputation. Prospective MBA students who confine their search to accredited programmes still have a wide range of international business schools to choose from. At the same time they can be assured that the programme they choose meets international quality standards and has been externally validated. The Association of MBAs has accredited MBA programmes at 165 business schools in 72 countries. Accreditation is independent and rigorous, involving the external scrutiny of faculty, curriculum, assessment and student services. Media rankings of business schools are also a useful indicator of quality but, unlike accreditation, do not represent a truly comprehensive and qualitative validation of the many highly respected MBAs on offer. There are a growing number of international business schools that are building an impressive reputation and which represent strong competition to the well established top institutions. Ten years ago only three European Business Schools ranked among the top twenty global MBAs – now eight have a place in this group. And of the Association’s 165 accredited business schools 100 are based in Europe and the rest are from all over the world. Emerging markets in Asia, India, Africa and South America are increasingly important. In this context ambitious individuals – some at an early stage in their career and others already in senior positions - are seeing the MBA as a critical part of their professional development.

Employers have learnt from previous recessions that they need to hang on to their talented people during a downturn, so that the company is ready to respond with full force when the upturn comes. The two year full-time MBA is no longer the norm - outside the US, full-time courses are typically one year and two year part-time courses are increasingly popular. The qualification now appeals to a wider and more diverse student market – in fact one of the key benefits of MBA study is the experience of working with a group of like-minded people from a mix of countries, cultures and organisations. To take full advantage of this benefit and to help develop cross-cultural business skills, much of the learning on today’s MBA programmes will focus on group work, student collaboration and the development of behavioural and interpersonal skills. It is important to bear in mind that the MBA is positioned as a post-experience qualification, designed to build on and enhance skills and knowledge gained in the ‘real world’. This is what makes it unique in comparison with other management programmes. MBA students are expected and encouraged to bring different experiences to the course, to share them and apply them to different business contexts. So the course offers a powerful mix of structured learning and the practical application of knowledge, skills and experience. The MBA’s worldwide reputation as the leading business qualification has been achieved largely because it has evolved and changed over time, responding to business needs and changes in the economy. So long as this continues the qualification will continue to deliver value to businesses and individuals – in good and in bad times. Jeanette Purcell is the Chief Executive of the Association of MBAs – the world’s impartial authority on postgraduate management education. See www.mbaworld.com

Aberdeen Business School Robert Gordon University

GAIN AN DVANTAGE OVEr YOUR RIVALS Studying for an MBA at Aberdeen Business School is the smart way to get ahead in your career. Fully accredited by AMBA – this prestigious course is available online, full-time and part-time. Partial scholarships may also be available – so just ask us for details. As a part of Robert Gordon University, we were named the UK’s best modern university in The Times Good University Guide 2010. Accolades such as these reﬂect the quality of our courses, which also include:

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