Business Vision Summer 2018 by Business Vision

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Business Vision Summer 2018 Issue â&#x20AC;¢ www.bv.world

Letter from the editor EVER watched a fly buzzing against a window pane? It can see daylight outside; the world of trees, flowers and (possibly) picnics lies dead ahead. The obvious thing for a fly to do is to keep flying. Forwards. But flies, of course, don’t understand the transparency, and solidity, of glass. All the available information tells the insect, “Press on. Flap those wings. Go straight ahead.” The fly will act on this information, banging its head against the pane, and eventually exhaust itself. You’ll find it, expired and quite crisp, six legs in the air and still on the sill. What the fly didn’t have is the awareness that – sometimes – the way forward is not forwards. A U-turn and a flit out the open back door would have been its only real escape. This can be the case with business, too. And medical advances. Take the case of phage therapy. As reporter Jason Agnew discovers for this Summer issue of BV, tackling the diminishing returns offered by conventional medicine sometimes involves a U-turn. Phage technology is old-school, narrow-focus stuff from Soviet-era Russia; you can’t dish out phages like penicillin and hope they will cure all ills. But this yesteryear solution has the promise of a viable alternative to antibiotics in the case of resilient bacteria which shrug-off prescription medications like ducks shedding water from their wings. Nimble-minded entrepreneurs are aware of this “back-to-go-forward” syndrome, too, and the mightiest among them are those who are prepared to take unconventional steps to achieve progress (and profit). Commit Good, for instance – an organisation featured in these Summer pages – has done some lateral thinking to help encourage generosity to charities by incorporating the genius (there can be no other word) of blockchain technology to track donations. Dutch confectionary company Tony’s Chocolonely – another of our featured companies – deliberately and uncomplainingly pays more

than it needs to for its cacao: 25 percent more than its competitors. It does so because of an ethical obligation and a heartfelt commitment to ensure their final product is untainted by slavery and inhumane working conditions that blight other parts of the industry. Readers will notice a new section at the back of this quarter’s publication: BV motoring. We kick-off with a road-test of a classy SEAT Arona, take a look at the trials, tribulations and tariff woes facing Harley-Davidson and Tesla, and study a new partnership between a fintech company and a classified-ad auto sales site. BV does what it can to recognise and celebrate ingenuity, innovation and lateral thinking. Our reporters, and our awards programme, are dedicated to sniffing out the best, the brightest and the boldest of diverse industries and organisations. We rely on nominations from you, our readers, along with industry experts, to bring deserving cases to our notice. Please keep up the flow of suggestions, comments and criticisms; BV wouldn’t be the same without them.

HAL WILLIAMS hw@bv.world

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Correspondence Brain dead

I found your article on the company offering to preserve your brain at the time of death very interesting — mainly because they are able to charge $10,000 for a process that has no basis in science or even reality! They have not shown any proof that their process has saved anything of the essence of their test subjects, all they have are rabbit and pig brains “fossilised” in glass. They even admit that they don’t have a procedure for extracting the information. It’s madness. I assume that the people signing up for this process are the same science-deniers who spend thousands on superfood supplements, green gunk juices and other “magic beans”. Life is a fatal disease, stop worrying and enjoy it. Chris Harman Manchester, UK PS I enjoyed the flat earth article. Especially the captions on the illustrations, good work!

Dirty dealings

Well done BV for shedding light on the enormous problem that is the money laundering of drug money which is then used to buy arms. Whilst Everett Stern might be accused of furthering his own agenda and promoting his Netflix series, Dirty Money, it is undeniable that he exposed corruption of such magnitude that HSBC ended up paying a $1.92 billion fine. The truly shocking thing is that, in a country like the US, which seems to find it appropriate to jail large numbers of its population with alacrity, nobody ended up behind bars. That the current incumbent in the Oval Office made Saudi Arabia his first foreign visit speaks volumes for the priorities of US government policy. Again, I congratulate you on the clarity of the article and, as long as you keep highlighting such cases, you can most certainly include me in your readership.

Being fuelish I really enjoyed reading your article on the Petro-Yuan and am so pleased that countries suffering under US sanctions will have more opportunities to grow and prosper, but… why are we still worried with oil? With all the renewable and sustainable energy options available, it frustrates me to see world powers still focusing on energy solutions that contaminate the environment, create a vast wealth disparity, and cause political strife. As a self-proclaimed environmental warrior, I’d like to see more articles showcasing the profitability of renewable energies: be part of the solution, not the pollution! Aloïsia Schmidt Cologne, Germany

Max Armbruster Basseterre, St Kitts & Nevis

What are you lot up to? I read with interest the Spring issue of Business Vision, but came away a little confused by the editor’s rather scattergun story selection. What exactly is the intended focus of your publication? Topics from arms dealing to fashion and fitness make for an entertaining read (although the piece on the “Flat-Earther” and his ludicrous instruments left me cold). Reviews, humorous accounts of Japanese girl bands and travel tales also make for easy reading, and the company profiles are enlightening – but what, exactly, is your target audience? What are you trying to achieve? I am not a subscriber (I find the cover price alarmingly high) but I will continue to dip in online now and then. I just want to know what it’s about! Ken Curtis Broadbeach Australia The editor replies: Our aim is to create the sort of magazine people want to read, with a focus on investment, innovation, international trade – and individuals. It’s always a pleasure to winkle-out interesting tales and personal experiences and learn more about the characters behind the stories. I like to think we hit the mark at least some of the time. HW 10

Trump cards In response to your online article about the supposed rapprochement between the US and the EU, surely I cannot be the only one to see a pattern developing. As with calling Kim Jongun the â&#x20AC;&#x153;little rocket manâ&#x20AC;? then going on to meet him in Singapore and lavish praise on him, TrumpÂ´s modus operandi appears to be go in hard and then do a volte-face. He then claims credit for having transformed the problem into a solution. I cannot help but wonder if the reverse will happen with Vladimir Putin. Karen Turner London, UK

Editor Hal Williams

Assistant Editor Janet Newbury Executive Editor Susan Shaw

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Pictures Editor and Layout Richard Thomas

Editorial Jason Agnew Heather Leah Smith Naomi Snelling Tony Lennox Gil Gildner George Short Oscar Van Gent Valerie Follon

Distribution Manager Thomas Terrell Subscriptions Max Pragnell Commercial Director Graham Church Publisher David Eyres

Business Vision The Lansdowne Building 2 Lansdowne Rd Croydon CR9 2ER United Kingdom Tel: +44 (0)203 745 7671 Fax: +44 (0)203 745 7674 Email: info@bv.world Web: www.bv.world Printed in the UK. All rights reserved.

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In this issue 16

16 23 32 42 54

Phages: The new old way to tackle infection

Starting up: One coupleâ&#x20AC;&#x2122;s plunge into the deep-end

Space Tourism: Reach for the sky

Data mining special: BV digs deep in a multi-page feature ICOs: Licence to print money or a dead loss?

68 14 14

Biomarin: Looking for cures for “orphan” diseases

Employee satisfaction: You know it matters

Guatemala: Armchair travel for you?

Headhunting: How to find the right staff with the right stuff

Property: Spain, a land of contrasts

Tony’s Chocolonely: Giving it some beans

Cybersecurity: Staying one jump ahead

Contents

Sharia banking: Investigating the Islamic financial model

Charity donations: blockchain goes the last mile

Award highlights

BV Motoring

Business Vision Summer 2018 Issue • www.bv.world

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Old-school therapy finding traction as antibiotic-resistant bugs multiply BV’s JASON AGNEW looks into the mysterious world of phages. These little blighters may be the medical advance we’ve been dying for. AS YOU walk past Saint Mary’s Hospital in Paddington, west London, your attention might be drawn to a blue plaque informing you that in the second-floor room above, Scottish doctor Sir Alexander Fleming discovered penicillin in 1928. Directly across the road stands a pub called the Fountains Abbey, often full of doctors and nurses letting their hair down and blissfully ignoring the 21 units a week recommendation of their professional body, the BMA. This hostelry has a sign making the ambitious, or tongue-in-cheek, claim that mould spores from their kegs floated across Praed Street and landed in the great doctor’s petri

dish, thus facilitating his historic discovery. Diseases that had been a death sentence were soon curable thanks to penicillin. Along with other antibiotics, the drug saved millions of lives during World War II. However, you can depend on the human race to get too much of a good thing. Not only have these medications been dispensed to humans for even the most minor illnesses, they have been added to animal feed to accelerate growth and fatten livestock. This overuse led inevitably to bacteria developing resistance to many of the treatments – and now

Take me to your leader: phages resemble aliens

humanity is once again staring into the abyss of death through infection in routine surgery, from common ailments or from simply spending a few days in a hospital bed. So-called superbugs are on the rise, and it is estimated that by 2050 antibioticresistant micro-organisms will be responsible for ten million deaths a year. As in all good films, just as we are faced with being wiped out, a superhero comes to the rescue. And our knight in shining armour is called bacteriophage, or just plain old phage to his friends. From the Greek word “phago”, meaning “I ate”, present in words such as oesophagus and hippophage (eater of horsemeat), phages (pronounced to rhyme with rages) are tiny viruses 100 times smaller than the bacteria they infect. They insert their DNA into the bacterium until they have devoured it. Bacteriophages were around before penicillin. Englishman Frederick Twort, in 1915, and French-Canadian, Félix d’Hérelle, in 1917, independently noticed that phages were ever present in the faeces of dysentery patients. D´Hérelle went on to travel through Egypt and India, refusing to work in a western style hospital and insisting instead on operating from a tent in a slum. He and his team dropped phage solution in village wells where people were suffering with cholera; the death rate dropped from 60 percent to eight percent. A Georgian doctor, George Eliava, met d’Hérelle in the Pasteur Institute and was so struck by his work in the field that in 1923 he founded the Eliava Institute in Tbilisi. It was here in Georgia, then

Félix d’Hérelle, right (or left maybe; it´s hard to tell) in his laboratory alternatives. The main difference between the two forms of treatment is that bacteriophages are much more specific than antibiotics. This is a positive, in that they are typically harmless towards the host organism and beneficial bacteria.

The most effective therapy: a ‘cocktail’ injection But this specificity is doubleedged, as a phage will only kill a bacterium if it is an exact match to the strain; antibiotics are more general in their efficacy. While personalised medicine will probably play a major role in the future of pathology and the treatment of infectious diseases, the problem so far has been that due to the specificity of phages, the most effective therapy would be a “cocktail” injection – something

which is generally rejected by the US Food and Drug Administration (FDA). In 2015, then president Barack Obama in his State of the Union address recognised that “giving the right medicine to the right person” would be the way forward in healthcare. Pharmaceutical companies are becoming increasingly interested in the potential of phages. A Dutch company, Micreos BV, has gained approval for two products, ListShield™ and Listex™ P100 as being effective in improving food safety, particularly in the production of dry-cured ham and for foodcontact surfaces. In April 2018 Micreos BV won the Ideas From Europe final with its Alternative To Antibiotics pitch – but there has yet to be any approval of products for human use. The need for a replacement for increasingly less-effective antibiotics is clear. Few new antibiotics are in development, and overuse of existing ones has created resistant strains of deadly bacteria. To quote Stephen Baker, head of medicinal chemistry for antibacterials at GlaxoSmithKline (LON: GSK): “We need a change from what we have.”

Business Vision Summer 2018 Issue • www.bv.world

a Soviet republic, that the virus therapy received support from a man who knew a fair amount about eliminating his enemies: Joseph Stalin. Ten years later, d’Herelle went to work there at the behest of Stalin. He was welcomed as a hero, and dedicated one of his books, The Bacteriophage And The Phenomenon Of Recovery, to Comrade Stalin. Unfortunately, Eliava fell in love with a woman who was being courted by the head of the secret police. Uncle Joe, ever capricious in his patronage, decided the doctor was an enemy of the people and had him executed. D’Hérelle wisely fled back to Paris, and his book was banned in the USSR. During World War II, phage therapy thrived as both sides sought to minimise casualties from infection; but poor Félix, in an unfortunate twist of fate, was being kept under house arrest by the German army in Vichy France; he used this time to write his memoirs. After D-Day in June 1944, the Allied governments felt confident enough and the use of penicillin became widespread in western hospitals, eclipsing phages. Phage therapy continued to be a common treatment in the Soviet Union until its break-up five decades later. D´Hérelle died, largely forgotten by the medical world, in Paris in 1949. Nevertheless, his name appears on the Nomination database of the Nobel Foundation 28 times over eight years. In 1991, when Georgia declined to join the Russian Federation, civil war ensued; the Eliava Institute facility was ruined as the Russians transferred much of the material to Moscow. Decades of research into phages very nearly went down the drain. Six years later, a BBC report on the institute attracted the West’s attention, drawing doctors, scientists and – importantly – entrepreneurs to Tbilisi. The work continued. As resistance to antibiotics has built-up and newspaper headlines have screamed Armageddon, scientists have been quietly working behind the scenes to find more

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Sea pollution challenge meets its match: just put it in the bin Surfers find a stop-gap solution to a growing, and internationally worrying, problem A PASSION for the oceans, and the growing awareness that human overconsumption and waste mismanagement is killing them, has driven two surfers to find solutions. Andrew Turton and Pete Ceglinski quit their jobs to create a “floating debris interception device” – the Seabin – to automatically collect trash, oil, fuel and detergents. The Seabin is designed for specific debris problem areas, such as the marina of a floating dock. Water is sucked from the surface to pass through a “catch bag” inside the Seabin, with a submersible water pump displacing up to 25,000 litres per hour. The water is pumped out, leaving litter and debris trapped in the catch bag. This requires a power source; it has to be plugged into a 110/220-volt outlet. This bag can hold up to 20 Kgs of debris, which means regular maintenance, checking and

emptying, but strategic positioning enables wind and currents to push the debris directly to the bin.

Ultimate goal is pollution-free oceans The Seabin Project, with offices in Australia and Europe, has the ultimate goal of pollutionfree oceans; in the meantime, the company is working to make the device better and more available – and increase awareness of the global marine litter problem. Up to 20m tonnes of plastic ends up in the sea each year; more than a quarter of a million tonnes is already there.

Education – and children themselves – are seen as key to a lasting solution: “We need to provide the knowledge, tools and capacities to the decision-makers of the future, our children.” The Seabin Project team has developed an open-source, interaction-based education programme (with and without the Seabin technology). An instructional booklet has been produced for schoolchildren to learn more about oceanic littering, with lessons, data-collection exercises and activities on how to design and build products. The price per Seabin unit is €3,300, dropping progressively for bulk orders to (the lowest price quoted on the company website) €2,700 for 100 units. Each bin can catch up to 90,000 plastic bags (or 16,500 plastic bottles) per year, along with other detritus.

See more at seabinproject.com

Seabin entrepreneurs Andrew Turton and Pete Ceglinski with one of their creations

Alice Zhang A notable innovator who followed her dream

ALICE Zhang quit university to follow her dream – not unusual, when it comes to innovators. She pulled out of a PhD program at UCLA (University of California at Los Angeles) to launch Verge Genomics. Verge uses machine learning to help it develop drugs for complex diseases. But it isn’t just Zhang alone, of course. Verge has mathematicians, neuroscientists, computer and biotech experts to fast-track understanding of diseases, and – hopefully – to find new solutions. Verge has a focus on neurodegenerative disorders; it recently announced a series of public-private partnerships to create databases of relevant information on Parkinson’s disease, Amyotrophic Lateral Sclerosis (ALS, also known as motor neurone disease or MND), and Lou Gehrig’s disease. ALS causes the death of neurons controlling voluntary muscles. “At Verge, we believe that breaking down the barriers that exist between industry, academia, computation and biology is critical to fully realising the potential of AI in drugdiscovery,” Zhang said in a media release. Zhang’s pioneering work in the medical field has been well received, with accolades pouring in from peers and the business and academic communities. In 2012, was awarded a Paul And Daisy Soros Fellowship for New Americans, and last year she was named one of Forbes magazine’s 30 Under 30 list. Need some inspiration? Go ask Alice.

Business Vision Summer 2018 Issue • www.bv.world

PEOPLE

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Eye in the sky or pie in the sky? Drone tech moves on BV’s TONY LENNOX takes to the heavens to trace the upward trajectory and expanding scope of the drone industry IN DECEMBER 2016, a drone took off from an Amazon research facility in Cambridgeshire. Its payload was a firestick and a bag of popcorn. It took just 13 minutes from the placement of the order to the delivery of the package to the recipient, a few hundred yards away. This unusual but apparently unremarkable delivery may prove to be as significant as the event which took place in Kitty Hawk, North Carolina, in December 1903 when the Wright brothers, Orville and Wilbur, first took to the skies. The popcorn delivery was the first time Amazon had demonstrated its automated Prime Now drone service. The tech giant is pinning many hopes on the possibilities that have been opened-up. That this experimental flight took place over East Anglia’s flat landscape is testament to the UK’s comparatively enlightened attitude to the commercial use of UAV (unmanned

aerial vehicle) technology. In the US, a similar flight would have been illegal. Of course, this wasn’t actually the first time hi-tech gadgetry has been used to make a delivery. Gangsters have been using drones to drop mobile phones and drugs over the walls of Britain’s prisons for years. But to Jeff Bezos, Amazon’s energetic CEO, the Cambridgeshire flight represents an important milestone. The UK is at the forefront of this developing industry, and experts believe that commercial development of UAVs is more likely to happen in Britain. The American Federal Aviation Authority (FAA), which controls the country’s skies, has thrown up a prohibitive blanket of restrictions. The UK, while not exactly lax in the area of aviation safety, is more welcoming to commercial experimentation. Which is good news for those,

like Amazon, who see moneymaking potential in the use of drones in a variety of fields. Until recently, the TV and film industry in the UK accounted for 75 percent of the commercial use of drones. But in the past five years, a range of businesses has recognised the commercial advantages of drones. Hertfordshire farmer, Simon Holtom is one such UAV enthusiast. He first realised the agricultural value of aerial reconnaissance when taking a recreational hot-air balloon flight. “I noticed how easily I could spot different thicknesses of crop and poorer yielding areas that needed special attention,” he says. “This led me to wonder if it would be cost-effective to over-fly my own farm to spot such areas. But it was prohibitively expensive to hire a helicopter.” With the advent of massmarket UAVs he is able to “walk the

English Heritage now uses drones to record historic buildings; here a new church roof blessing, from on-high 20

fields” from a different and telling perspective. Holtom now regularly flies a drone over his fields to monitor crops. He has even used the machine, at the behest of local parishioners, to check the extent of damage following the theft of lead from the church roof. (His drone was later used to film proceedings as the bishop, hoisted aloft in a cherry-picker, blessed the replacement roof.) While the agriculture industry has embraced the new technology, others are quickly catching up. The property and construction sectors now regularly use UAVs to reach previously difficult or inaccessible places: high buildings, wind turbines, oil and gas rigs and church steeples. They are also being used in mapping and surveying. As many as 80,000 commercial-use drones are expected to be active in UK skies by the end of the decade. British police are coming to recognise the UAV as a vital piece of equipment, cheaper to operate and maintain than helicopters, and just as effective. Spotting criminals hiding from authorities, detecting

illegal drug labs or following suspect vehicles: all in a day’s work for a drone. The Fire Service is also using the technology to identify “hot spots” or assist in rescue efforts. The BBC recently reported that a major search for Peter Pugh, 75, from Norfolk, ended happily after a drone was brought in the help. Pugh had gone missing after a beach walk. When the drone was sent up, Pugh was spotted trapped up to his arms in a muddy creek at Titchwell Marshes. Police said the technology was key to their rescue operation; Pugh’s wife, Felicity, praised it as “a miracle”. COST-EFFECTIVE Another useful application for UAVs has been in archaeology. English Heritage now uses drones to record historic buildings, monuments and archaeological sites and landscapes. The machines can provide a cost-effective method of creating aerial photographs of sites, accurate mapping, and records for survey and conservation work. Across the globe, UAVs have been used successfully as part of emergency responses to life-

threatening situations, helping to search for survivors in earthquakes, for instance. And in remote areas, where mobile phone coverage is scant, drones can be used to boost coverage, if only for short periods, to aid search-and-rescue operations. Finnish tech firm Nokia, in collaboration with UK mobile operator, EE, is testing such a system in the Scottish Highlands. Drone technology is also being trialled to help with sea rescues. For the last two years, Californian tech firm Zipline, has been operating a drone delivery service in the African state of Rwanda, sending vital medical supplies to remote corners of the country, cutting delivery times from four hours to an average of half an hour. Research into drones designed for greater load-carrying ability, capable of flying longer distances on lighter batteries, will extend UAV uses. And the next generation of superfast 5G mobile phone networks should ensure that the transfer of data between a drone and the ground never drops out. Bad publicity and illicit drone

Business Vision Summer 2018 Issue • www.bv.world

Hertforshire farmer Simon Holtom has found benefits in drone technology

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use – mostly thanks to amateur, unlicensed users – is a fly in the ointment of progress. Concerns have been expressed about privacy issues, as well. Can drones really be used to spy on people? Holtom says: “There’s a bit of a myth that when you’re flying a UAV you can automatically see into every bedroom window and spot every naked-sunbather in town. I would love to give those complainants the controls and see if they could spot a house, let alone a nubile sunbather.” But an informal display by a teenaged drone owner, witnessed by BV staff, showed that with practice, it isn’t that hard to pinpoint a specific location. A Northumberland company, Open Works Engineering, may have an answer to illegal drones. It has developed anti-drone technology called Skywall; a shoulder-mounted launcher, equipped with a net, can capture and bring down a rogue drone. The offending machine is brought to the ground on a parachute. The launcher has a range of 100 metres and the netmissile is guided by computer with a holographic scope which predicts the rogue drone’s path. Security companies, and even

the military, have expressed an interest in the machine. Most legally held UAVs are electronically restricted to a height of 400 ft, and because they are geoprogrammed, they cannot fly near an airport or any other no-fly zone. Most city centres, including the whole of central London, are no-fly zones – though this doesn’t seem to

Ultimate goal is pollution-free oceans stop many building contractors from covertly using them to check roofs and gutters. Following many hours of study and instruction, Holtom is now a qualified UAV pilot under a scheme run by the Civil Aviation Authority. He is concerned that the cheap and easy availability of drones will encourage illegal operators. “The market is full of unlicensed amateurs with no insurance, and there are many unscrupulous businesses happy to hire them on the cheap – especially estate agents,” he says.

“One’s licence forbids certain manoeuvres, like flying above a certain height or within certain distances of objects and people. Non-licenced flyers can ignore these rules. “It is almost impossible to connect the drone with the flyer. Cowboys have to be caught before they can be brought to book,” he says. The UAV pilot-training involves learning about meteorology, the principles of flight, air law and emergency procedures. Pilots have to complete a written examination, followed by a flight evaluation in front of an examiner. A UAV trainee also has to write his or her own flight manual. Every year the manual is officially checked to ensure all relevant updates concerning new regulations have been completed. Amazon’s first commercial delivery was hardly the stuff of science-fiction; the journey was just over 700 yards and the package was accidentally delivered to the customer’s next-door neighbour. But few people remember that the Wright Brothers’ historic first powered flight over the fields of North Carolina took only 11 seconds… and ended in a crashlanding.

Oil spills and sea disasters can be most easily accessed from above

Getting started: it’s as bad, and as exciting, as you had thought Self-confessed non-social nerds GIL and ANYA GILDNER created a search marketing company despite a lack of networking skills. Gil guest-wrote this piece for BV

Gil and Anya Gildner say life is still a ‘cliffhanger’ a statistic which doesn’t give a whole lot of confidence to the frustrated cubicle-dweller. Worse, if you’ve ever looked for advice, nobody seems to have an exact recipe for starting success. There are countless articles on how to scale revenue from $1m to $10m, or how to scale email lists from 10k to 100k, or (to reference an actual article) how a billion-dollar healthcare company generated 5,100 percent ROI from a $1m online marketing campaign. If you’re running a company that has a million bucks to spend on a marketing test, you could do that too. What’s not easily available is finding out how to go from nothing

to something. That first bit is the hardest: going from $0 revenue to $100k. Ask someone who’s done it, and chances are they don’t even know how they did; they just worked hard, things fell into place, and it happened. Peter Thiel’s excellent book Zero To One underlines this concept. From a pure math perspective, creating something from nothing is a greater win than creating something bigger from something smaller. We started out with exactly zero traffic, zero leads, and zero budget. All we had was a vision of where we wanted to be, and a ridiculous yet brandable title (Discosloth, a name

Business Vision Summer 2018 Issue • www.bv.world

LAST year, my wife and I had decent jobs. They weren’t anything fancy (I was a creative director and she was a marketing manager) but they did have an important feature: the stable monthly salary. For us, however, it didn’t quite feel enough. Anyone who’s ever sat twiddling their thumbs in a cubicle, or endured yet another weekly meeting, or compiled another useless report, will know the feeling. You’re not exactly fulfilling your own destiny. And good luck getting a decent pay raise. So we quit our jobs and started a search marketing company. When we went into this head-on, there were hurdles: bootstrapping it ourselves, getting clients onboard, arranging publicity, increasing prices, keeping existing clients happy. Especially difficult for the average technically-minded founder or cofounder is networking. Some are fortunate enough to be able to work a room, sip some champagne, and schmooze their way into six-figure deals. The problem with Anya and I? We’re nerds, not networkers. We don’t really want to hear about someone’s golf score, poolhouse renovation, first round draft picks, or PTA meetings. If you give me a cold beer in a dive bar or hand Anya a glass of red wine we can hold our own with the best of them, but we’re probably not going to take the average corporate spreadsheet warrior very seriously. Quitting everything and starting fresh is a huge risk, and it comes with a combination of elated independence and financial fear. Over 90 percent of startups in the United States fail within five years,

designed to evoke instant respect). We used digital to scale, because W O R L D that’s what we know how to do, but the strategy is essentially applicable to any method. It was a slow start: a project here or there, a few stutters, and a couple early ignorant mistakes. But within a few months, suddenly our company’s revenue was outstripping our former salaries, our workload doubled, and we were able to turn down clients. The real beauty of it, though, was that we were no longer tied down to the corporate structure of meetings, schedules, locations, or process. We suddenly had total freedom to design a company in the exact way we wanted it to be. Throughout our first few months, we knew we needed something to catapult us out of that slow, steady trajectory. Our answer to this was to produce a painstakingly complete guide to the search marketing industry: all secrets revealed on how to build profitable Google Ads and Bing Ads pay-per-click campaigns. We spent months working on our guide: writing chapters, building the website, developing materials, and finally in marketing. Then, we released it for free. We feel that this was our big industry break: influencers in the internet world promoted it without

‘We were no longer tied down to the corporate structure’ us even asking. Within a month we’d had thousands of visitors, downloads, and shares of our guide. Even better, in the midst of all this we started getting press: I talked to a reporter from the Associated Press late one night on the phone, and a few weeks later we woke up to brand mentions in papers all across the US: The New York Times, Washington Post, Chicago Tribune, Inc, USA Today, and a few local papers to boot. The first chapter of Discosloth turned out to be a page-turner – and for us it’s still a cliffhanger. We’ve built a business with predictable revenue, solid referrals, website traffic, and a growing industry presence. We passed $1.75 million in managed-ad spend this quarter (a small figure in the industry, but something we’re incredibly proud of) and have worked with clients like Volvo, Tyson, and MSF. We’ve started branching out into

educational engagements to share our knowledge of digital marketing at universities and corporations. The great thing about taking your company to a sustainable level is that you can then dedicate resources and energy to new ventures. We’re a heavily tech-based company, and we know that the future of scalability is in software. Anya is taking this chance to pursue a lifelong dream of software development, giving herself the next year in which to learn Python and JavaScript. But the cliffhanger is still there: our company is still not where we want it to be, and that’s the challenge for the next chapter. Perhaps we’ve taken Discosloth from nothing to something, but we still think it needs to go from something to something… bigger. The reality is that there is no secret: it’s just persistence and diligence. You keep on doing something, and it happens. It’s not a linear process: if you do something for a month, you’ll get nowhere. If you do it for a year, you’ll be successful. As the old saying goes, the definition of insanity is doing the same thing over and over and expecting different results. But, perhaps, those quitting their jobs and founding companies are all a little insane anyway…

OPTIMISM IN THE ENGINE ROOM OF UK ECONOMY SMALL and medium enterprises (SMEs) are in the news with optimistic projections for Britain’s export trade – despite Brexit. Data from Smith & Williamson suggest UK business is confident of a major export boost. Almost half (47 percent) of 640,000 SMEs in the study predict their overseas turnover will jump in the next year. Just 12 percent of firms expect export revenue to fall. HMRC (Her Majesty’s Revenue and Customs) figures released recently showed that the number of UK exporters had risen by four percent since last year. These two data sets appear to challenge the notion that UK SMEs are holding back on international trading due to uncertainty or fears for Brexit trade negotiations. Companies with 50-250 employees were most 24

confident, with 61 percent of the group predicting an increase; 14 percent believed export turnover would rise by more than half. Smaller firms and micro-businesses with fewer than 10 workers, the figures were lower, with the percentage of businesses forecast more modest increases of 34 percent and 33 percent respectively. When comparing scale-up companies and non-scaleups, 59 percent of the former expected increased overseas revenue, compared with the latter’s 27 percent. “There is a clearly a growing global demand for UK goods and services, despite any complications being caused by the Brexit process,” said Stephen Drew, head of international services at Smith & Williamson. “Any aspiring entrepreneur with an opportunity to expand overseas should grasp it.”

George Soros The man who broke the bank

GEORGE Soros is an investor, political activist and philanthropist – and one of the most successful businessmen in the world. He founded his own hedge fund, Quantum Fund, in 1970, delivering high returns for investors, but his place in history was cemented in 1992. On September 16 of that year, a day which came to be known as Black Wednesday, he and other speculators shorted the British pound and forced the government to withdraw from the European Exchange Rate Mechanism (ERM). Soros pocketed £1bn for his efforts. 2008 global financial crisis, when the EU adapted a program of fiscal retrenchment where the debtors had to meet creditors’ conditions. The resulting unemployment in countries such as Greece led to an awkward relationship between EU neighbours. Using the same nous and tactics that served him so well on Black Wednesday, Soros helped markets in the aftermath. In 2015 came the refugee crisis; Europeans became disillusioned with authorities who failed to solve, or meaningfully tackle, the issue. Refugees fled war-torn countries, such as Syria, and many more joined the diaspora in search of better economic opportunities. In May this year, Soros shared his rescue plan for Europe in a speech to the European Council on Foreign Relationships. (He also shared his despair at the fact that “everything that could go wrong, has gone wrong” in the EU.) Soros’ scheme – the “Marshall Plan for Africa” – involves the EU giving £35.4 billion annually to Africa to alleviate the crisis, provide education and employment and help to staunch the steady flow of refugees from the continent. Where would the money come from? Soros has been a little cagey about this, but has said that his plan “contains an ingenious device that would enable the EU to borrow from market at a very advantageous rate”. History shows that it pays to heed when Soros speaks. VALERIE FOLLON

Business Vision Summer 2018 Issue • www.bv.world

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Brexit ‘not a concern’ for SMEs, says study of 500 UK businesses DESPITE uncertainty about Brexit, small British businesses are increasingly optimistic about international trade – especially with Europe. The majority expect to increase overseas sales in the next year, according to a study by international payments company OFX. The annual survey of 500 small business owners and senior managers found that 62 percent feel confident about doing business outside the UK, and 46 percent said that Brexitrelated uncertainty had no effect on their appetite for international trade. Only 15 percent reported reduced interest. Since 2017, 47 percent have seen increased overseas sales, with international revenues growing by an average of £50,000. This year, 40 percent said that they expect to increase overseas sales in the next 12 months – a jump from 2017, when only 17 percent expected to do the same. OFX saw a 21 percent increase in the overall volume of international money transfers made by small and medium-sized British businesses. Europe has regained popularity as an export market, while the Commonwealth splits opinions. With just nine months until Brexit, western Europe has become SMEs’ favoured export market. Last year, small businesses singled-out the US as the most attractive export market. This year, in a U-turn, 45 percent chose western Europe, suggesting that Brexit-related uncertainty is no longer holding small businesses back from EU trade ambitions. Only 36 percent still favoured the US – down 26 percent. Commonwealth markets split opinion as a potential postBrexit target for trade. Younger

entrepreneurs are optimistic about future trade with Commonwealth countries, with 61 percent of those aged 18-40 considering this a viable option. More than half of those aged over 40 – 51 percent – disagreed. Most small businesses trading internationally (53 percent) said that their company’s “Britishness” is a valuable asset when selling goods and services outside the UK. BRAND BRITAIN This was particularly true for companies exporting to New Zealand (74 percent), Australia (60 percent), the US (65 percent) and Russia (64 percent). Almost a quarter (24 percent) of small businesses planning to start or increase international sales in the next year said that their main reason for doing so was the growing international appetite for Brand Britain. The survey uncovered a regional disparity in small businesses’ confidence around international trade. In England, 72 percent of small

businesses said they felt confident about doing business overseas – but this fell to just 40 percent in Scotland, 48 percent in Northern Ireland and 58 percent in Wales. The majority of respondents in Wales (50 percent), Northern Ireland (46 percent) and Scotland (36 percent) believe that there is not enough support for small British businesses trading internationally. In London, 63 percent of said that there was sufficient support. OFX’s Jake Trask said that London brands “don’t have the monopoly on Britishness” and said he expected a boost in international sales in the next 12 months. Joshua Williams, co-director of Welsh menswear company Tails And The Unexpected, sells British-made clothes online from the company’s base in Penarth, near Cardiff. “My father founded our business almost 40 years ago as a stall in a Cardiff antique market,” he said. “Today, we make almost all our sales online, with more than half our customers based outside the UK.

Business Vision Summer 2018 Issue • www.bv.world

Export ambitions focus on western Europe rather than US

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Solar advances bring clean energy hope to the Valleys BV’s NAOMI SNELLING finds solar energy is thriving in Wales, despite UK government level resistance to small-scale renewable energy solutions THE JOKES are easy to anticipate; solar power in Wales? But yes: despite the rainy weather which yields those lush green hills and valleys, the country is surging ahead in the natural energy league. According to the Energy Generation In Wales report, published in December last year, Wales is making good progress towards its ambitious targets for clean energy. The report estimates that 43 percent of the country’s electricity consumption in 2016 came from renewable energy – an increase on the previous year’s 32 percent. The report also found that solar is the most common renewable technology in the country, accounting for 81 percent of renewable energy projects. This success comes in spite of a cut in UK government support for renewables. Ever since Feed-in Tariff (FIT) rates

were slashed back in 2011, national support for renewables has been waning. Renewable energy consultant Robert Speht points out that renewables were eschewed in favour of large-scale projects such as the Hinkley power station. There was a grudging governmental nod for offshore windpower generation – given that the UK leads in this sector. But onshore wind and solar energy were largely left to flounder, leading to significant job losses in SMEs in the sector. In November 2017, the Cabinet Secretary for Energy, Planning and Rural Affairs, Lesley Griffiths, headed-up a call for the UK Government to do more to support onshore wind and solar development. It is against this challenging backdrop, and despite government resistance, that solar energy in

Wales has managed to advance. This is partly due to the fact that solar PV (photovoltaic systems) don’t need to export to the grid; it can be consumed onsite. Another factor is the decreasing cost of components. The challenging marketplace has helped to spawn innovative projects and collaborations that have put Wales on the renewable energy map. Glen Peters, CEO of Western Solar, is the brains behind one of Wales’ most innovative energy schemes. Western Solar created Pentre Solar, a purpose-built solarpowered hamlet in Pembrokeshire that captured national news headlines in 2017 for its innovative energy policies and solutions. Peters’ Western Solar journey started back in 2011, when he focused on finding a social housing solution that would overcome fuel poverty, help the environment and

Wave power might be more reliable than sunshine in Wales, but new projects show promise 28

Workers erect solar panels in Pembrokeshire wellbeing for the occupants. People are still full of admiration for how well they feel in these houses.” The eco-entrepreneur is optimistic that an increasing focus on the Wellbeing Of Future Generations Act, which the Welsh government brought into force in 2016, should help him hit his target of 1,000 solar-powered homes. During the past two years, there has been widespread enthusiasm for the spirit of the new law, but Future Generations commissioner Sophie Howe has said that public bodies need to demonstrate that they are applying the principles of the act more systematically. Wales has several solar energy schemes, including the commercial Shotwick Park project in Flintshire, the largest solar park in the UK. It was built in just over eight weeks and connects directly to the private infrastructure of the UK’s largest paper mill, generating around one third of its annual electricity requirements. In South Wales, pioneering solar energy projects include SCEES (Swansea Community Energy and Enterprise Scheme). Set up in September 2015 to develop community-owned solar projects in Swansea, the project has featured the installation of solar panels on nine schools and one care-home in Townhill and Penderry, two of the

city’s economically deprived areas. Also based in the Swansea region is the charmingly named Gower Power, which includes solar energy projects in its mix. The Gower-based co-operative develops renewable energy projects and specialises in putting them into community ownership. One of the organisation’s latest projects, Gower Regeneration, is a one Megawatt solar farm. Building on the success of its solar energy sector, Peters believes there is a crucial role for the Welsh government in helping to smooth the wheels of the industry that surrounds the building process. “Our houses need to be insured and need warranties and guarantees. Traditional insurance providers have been reticent because the industry they know is bricks and mortar. “In Europe, timber frame houses are commonplace, but it has traditionally been difficult to get a mortgage for a timber-framed house in the UK. I think there is something the Welsh government could do to help with changing mindsets.” Solar energy has strong government support, with ambitious renewable energy targets for Wales. These include generating 70 per cent of Wales’ electricity consumption from renewable energy by 2030 and for new renewable energy projects to have an element of local ownership by 2020.

Business Vision Summer 2018 Issue • www.bv.world

boost the local economy. Creating a small project team – himself, an architect and an engineer – Peters built a solar farm, which quickly overcame doubts that the Welsh climate could support a solar project. Western Solar then set to work to create Tŷ Solar – a prototype solarpowered house. “We used tried and tested German ‘Passivhaus’ design processes to create a high-quality, well-insulated, airtight house made of locally-sourced timber and powered by solar energy,” says Peters. “We ended up with a prototype that produced 3.5 times the energy it actually used – but we didn’t get any interest from any of the housing developers. I think it was just too innovative - they were used to bricks and mortar and traditional build.” Western Solar then decided to build a “solar village” as an operational showcase. SOCIAL HOUSING A disused cowshed was transformed into a factory to assemble timber frames, using locally sourced douglas fir trees. By 2017, Pentre Solar, a small solar hamlet of six homes a stone’s throw from the small village of Glanrhyd, was ready to open its doors to carefully selected families from Pembrokeshire’s social housing list. Residents were rigorously interviewed to check they were 100 percent onboard with the development’s eco ethos. In 2017, Welsh Government launched an innovation housing grant. On the back of its success with Pentre Solar, Western Solar partnered with Swansea-based Coastal Housing and Pembrokeshire Housing, (now known as ATEB), and was granted innovation housing grants for two projects, one in Carmarthenshire and one in Pembrokeshire. “In Pembrokeshire the first house is already up,” says Peters. “By the end of this year we will have 18 houses up and running. “I have set myself a target of 1000 houses. We were early in the market with our innovation and now in the aftermath of Brexit we’re a strong ‘made in Britain’ offering. If you have a lot of light coming in to your house it creates a tremendous amount of

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The most precious resource of them all is in short supply for Indian agriculturalists Resource-rich country is plagued by shortage of safe water supplies – and hundreds of thousands die each year

The South-Asian country is suffering from the worst water crisis in its history

INDIA – the world’s seventh biggest economy – boasts impressive reserves of 87 natural resources, but one is in critical shortage: water. The country has a burgeoning economy and large deposits of coal (the fourth largest reserves in the world), iron ore, manganese ore (seventh largest), mica, bauxite (fifth largest), chromite, natural gas, diamonds, limestone and thorium (world’s largest deposit, along the Kerala coast in southern India). But the South-Asian superpowerin-waiting is suffering from the worst water crisis in its history. Millions of lives and livelihoods are under threat, and as many as 600 million Indians face high to extreme water stress. About 200,000 people die every

‘There is an imminent need to deepen our understanding’ year from inadequate safe water supplies. The crisis is likely to get worse, experts predict. By 2030, the country’s water demand is projected to be twice the available supply, meaning severe water scarcity for hundreds of

millions of people – and an eventual six percent loss in the country’s GDP (gross domestic product). A report by the National Commission for Integrated Water Resource Development predicts the water requirement by 2050 will outstrip availability. “There is an imminent need to deepen our understanding of our water resources and usage and put in place interventions that make our water use efficient and sustainable,” say the report’s authors. Data systems are limited in their coverage of the problem, with an inadequate level of detail. Water-use data for domestic and industrial sectors are available at only the aggregate level, with scant information for policymakers.

To compound the problem, available data are often unreliable because of outdated methodologies sometimes in use. “There is an opportunity to improve centre-state and inter-state co-operation across the broader water ecosystem,” the report says. A Composite Water Management Index (CWMI) is seen as a major step towards a culture of databased decision-making for India. It is hoped that this can encourage “competitive and co-operative

federalism” in the country’s water governance and management. The CWMI is the first attempt at a comprehensive collection of water data in India. It hopes competitiveness among states will drive them toward effective water governance. The country’s low performers in water safety and supply are, worryingly, the populous northern states. The north of the country is home to more than 600 million people and is responsible for 20-30

percent of India’s total agricultural output. More than half the country’s agricultural area – 52 percent – remains dependent on rainfall across the region. “The future expansion of irrigation needs to be focused on last-mile efficiency,” the report concludes.

*See the full report at: www.niti.gov.in/writereaddata/files/ document_publication/2018-05-18Water-index-Report_vS6B.pdf

IFC PRIMED TO MOBILISE CAPITAL IN DRIVE TO HALT CLIMATE-CHANGE

IFC CEO Philippe Le Houérou: taking on the issue of Climate Change

* Sri Mulyani Indrawati’s participation is part of the Voyage To Indonesia, a series of activities leading up to the 2018 Annual Meetings of the International Monetary Fund and the World Bank Group to be held in Bali on October 12-14.

Business Vision Summer 2018 Issue • www.bv.world

By SRI MULYANI INDRAWATI THE International Finance Corporation (IFC), a global leader in green financing, took on the issue of climate change at a forum it recently hosted at the Spring Meetings in Washington DC. Panellists from the public and private sectors, financial institutions and philanthropic organisations discussed solutions to mobilising capital for green projects in emerging markets. In his opening remarks, CEO Philippe Le Houérou noted that the IFC pioneered the use of green bonds as a financing mechanism in 2007. Today, the market now stands at $250 billion – clear evidence of the bonds’ popularity among multilateral development banks, governments, and corporations. Weighing in on climate-smart solutions, panellists noted that IFC’s work with governments in areas such as blended finance helps lessen any volatility in green investments, bringing in risk-averse private capital. Green bonds also provide an opportunity for investors to support complex projects such as infrastructure. The overall climate-smart business is now already more than $1 trillion. In addition to the 189 national commitments as part of the Paris Agreement, incentives are needed to attract the support of local governments and encourage them to comply with national climate policy.

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Out of this

The only way is up: space tourism counting down to a 2021 blast-off: 5, 4, 3, 2... ? Been there, done that? Seen it all? Not yet, you haven’t. Space, as always, is the final frontier – this time, for tourism. HAL WILLIAMS reports

Dennis Tito

Space Adventures, which brokered a deal on his behalf with Russian government agency Roscosmos (more on these two organisations later). Tito was eventually rewarded with a seat at the pointy end of a Soyuz TM transport rocket, a fourth-generation Soviet spacecraft developed in Russia to service space station Mir and the ISS. Tito’s voyage took place in an era when space tourism was barely even “a thing” outside of sci-fi, but his was no quick flip. He visited and passed time aboard the ISS, in orbit 254 miles above Earth. In all, he spent a full eight days in space – and a cool $20m for the experience. It may be hard to believe, but this was a relative bargain. Private space tourist Richard Garriott, whose father, Owen Garriott, was an astronaut, said he made tens of millions of dollars doing contract work while on the ISS – but paid hundreds of millions for his trip. Others in the industry say the figure Garriott paid was closer to $40m. (An aside: Garriott would have been the first private citizen in space but for the dot.com crash. The entrepreneur and video game maker was forced to sell his “ticket to space” to Tito when the bubble burst. He went back to work and earned another few gazillion until he could fulfil his dream.) Five other well-heeled tourists have so far made it beyond the great blue yonder of our skies; one of the best-known (and the most recent, in 2009) was Cirque du Soleil founder Guy Laliberté. More tourists – the official terms is “spaceflight participants” – will soon be heading into space if people like Jeff Bezos

and Richard Branson have their way. And they usually do. Sir Richard’s Virgin Galactic has resumed testing its SpaceShipTwo – after a disastrous incident in 2014 in which test pilot Michael Alsbury died – while Bezos’ Blue Origin is planning to send private, crewed missions into space, possibly as early as this year. But these household-name entrepreneurs are not the only players here. Orion Span is a space technology start-up founded by self-confessed “serial entrepreneur” CEO Frank Bunger, based in Houston, Texas.

Business Vision Summer 2018 Issue • www.bv.world

TO DATE, just seven Earthlings have had the ultimate out-of-thisworld tourism experience and seen our blue planet from space. American businessman Dennis Tito was the first, in 2001 – a very fitting year for a space odyssey. NASA wouldn’t play ball when Tito announced his desire to cross the Kármán Line 100,000m above us, and leave the Earth’s atmosphere. The renowned National Aeronautics and Space Administration – “The Agency” to those in the field – doubted Tito’s depth of training. He was not to be deterred, and nor was tourism agency

Richard Garriott

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An artist’s impression of the Orion Span’s Aurora Station

The company’s ultimate goal is to have people eventually living and working in space, but the immediate focus is on the Aurora Station, a luxury space hotel which Bunger hopes will be up there somewhere, and ready to welcome travellers, by 2022. Named after the magical light phenomenon that graces the Earth’s polar skies, Aurora Station will take travellers on a 12-day, once-in-alifetime journey. Due for launch and construction-in-space in 2021, Aurora will have two private suites for guests, hosting six people at a time – two trained crew members among them. They will soar above the world in Low Earth Orbit (LEO) – around the 320,000-metre level – experiencing zero gravity and views to die for. The Aurora Station will orbit Earth every 90 minutes, so those aboard will see an average of 16 sunrises and sunsets every 24 hours. I know what you’re wondering, and yes, you can sip a cocktail (probably through a straw) while the world goes by. It is a luxury hotel, after all. “We will have alcohol and fine dining,” says Bunger. Bathrooms will, he says, be “luxurious for what bathrooms are in space”. But despite these bold plans, not everyone is convinced. “Space hardware and launch is very expensive and time-consuming,” says Laura Forczyk, an aerospace industry

Overpromising is the curse of the nascent industry analyst. “I see no evidence (Orion Span) will succeed in the timeframe they have proposed.” Overpromising, she says, is the curse of the nascent industry. “Hyping-up future plans that may be long delayed, or may not happen at all, lowers the credibility of the industry as a whole. I’m wary of companies that have yet to achieve tangible progress through prototypes, testing, or missions. “It’s easy to create a website to claim anything – space tourism trips to a private space station, to the Moon, to Mars, to Alpha Centauri.” Bunger hits back: “Most operators are focused on brief suborbital flights. The competitors we have for an orbital space tourism stay haven’t yet figured out how to market and sell their offering, nor have they determined how to fund their operations. We have figured all of this out and have started taking reservations by putting them in escrow for our customers.” Forczyk is the owner of space

analysis firm Astralytical, and is studying the current state of space tourism. “(It) has gone through significant changes over the past 15 years, with lots of promising projects starting and failing,” she says. “We will soon enter a new wave of space tourism interest, especially if a company can successfully begin flying paying customers.” Flying those paying customers is one of the many problems facing hopeful operators. Orion Span has said it hopes to partner with SpaceX to actually get guests up to the Aurora Station. Elon Musk’s red Tesla, with Starman aboard, is out there somewhere on a mission to infinity – but the Space-X chief is said to be steering away from tourism while his engineers work on developing a bigger rocket. Two private adventurers looking to hitch a ride on SpaceX were knocked back by Musk earlier this year. But Orion Span is not limiting itself to one operator. “We’re also evaluating Blue Origin, as well as space agencies,” says Bunger. Safety is another issue, of course. Bunger says LEO itself is not risky; “the launch and return to Earth by our partners are the areas to look at”. Well, yes. But Bunger says Soyuz has a remarkably good safety record, and he expects to see SpaceX, Blue Origin, and others to “quickly meet and exceed that safety record”. Orion

Frank Bunger

Weightless but still waiting: Laura Forczyk NASA has integrated the BEAM module into an operational unit, currently holding over 1,000 pounds of cargo. Bigelow Aerospace has tested three of the expandable modules in which it plans to use to host tourists and professional astronauts, and to conduct experiments in space. Becoming economically viable is crucial if the industry is to have a future. “Space travel will need to come down in price for more customers to be able to afford it,” agrees Forczyk. “But we still have a while to go before that happens. In the immediate future, only governments and very wealthy adventure-seekers will be able to afford it.” As the total flight time aboard Virgin Galactic’s SpaceShipTwo will be just minutes-long, a seat for a suborbital flight will cost a (relatively) more reasonable $250,000, and passengers won’t need extensive training. About 700 people have already purchased tickets. Blue Origin’s New Shepard programme, named for

America’s first man in space, Alan Shepard, is still in development – but the company is still hoping to launch its first crewed flight late this year or early in 2019. This is also a short-duration mission of about 11 minutes, which requires just one day of training before the flight. Prices are yet to be announced. The company responsible for organising the voyages of all seven space tourists is Space Adventures. It hasn’t been possible to send new paying guests to the ISS since 2009 because of capacity issues, but Space Adventures is still promoting new specials, including a spacewalk at the ISS and a trip around the moon. Space Adventures has traditionally partnered with Russian agency Roscosmos to send its guests into space. Roscosmos is said to be developing its own program for through its partnership with RKK Energia, a space station contractor. Guests will pay $40m for a one- to two-week stay. You might want to try to negotiate a special rate.

Business Vision Summer 2018 Issue • www.bv.world

Span says it will work proactively with regulators to craft meaningful regulations. Forczyk’s day-to-day job involves the examination of large and small players entering the space tourism market, as well as their potential customers. “I compare plans, progress, and probability of success to predict which companies may be successful in the space tourism industry, and when.” Astralytical’s analysis predicts that the large majority of currently announced space tourism projects will fail. “But it only takes a couple of successfully operating companies to create an industry,” Forczyk says. “Thus far, space tourists have flown on government vehicles to a government station. The next step is for private industry to demonstrate this capability and turn a profit. “I believe this will be accomplished in the next decade, likely in the 2020s.” EXPANDABLE MODULE A company to watch, according to Forczyk, is Nevada-based Bigelow Aerospace. Billionaire Robert Bigelow founded the company to work on expandable habitats. The company’s mission is “to provide safe and low-cost commercial space platforms for Low Earth Orbit, the Moon and beyond”. In 2016, the Bigelow Expandable Activity Module (BEAM) became the first expandable module to reach the International Space Station.

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Phillip Nunn Piggy wallet teaches children

PEOPLE

A MANCHESTER-BASED entrepreneur has joined the team behind Pigzbe, an innovative “piggy wallet” that teaches children about cryptocurrency. Phillip Nunn, who advises blockchain companies in media, transport and sport, says he was inspired by the future his three-year-old son, Frank, will experience. He made the decision to join the financial education start-up as a commercial advisor after reflecting on the probably cashless society in store for Frank. Nunn was inspired to start teaching his son about money management from an early age, and has already lined-up Frank to become one of the world’s youngest product-testers. He’ll be among the first to trial the game. The piggy wallet, the brainchild of entrepreneur Filippo Yacob, combines cryptocurrency and gaming to turn money into an adventure for children. Unlike a regular piggy bank the application aims to teach children the power of earning, saving and spending in a cashless society. Pigzbe combines a physical device with an app that turns giving, and saving, into a game. It runs on a new cryptocurrency called Wollo, which is specifically designed for small transactions from parents to reward children for chores or pay them pocket money. The experts behind the product say playing with the device can stimulate the development of good money habits, a concept which Nunn found encouraging. “As soon as I was approached by Pigzbe, I immediately thought about Frank and how much he could benefit from something like this,” Nunn said. “I am passionate about financial education and have been championing cryptocurrency and blockchain technology for years. This isn’t just something I do for work. If I can teach (Frank) about technology and finance from an early age, I think it will really enhance his future.”

Professor Susan Hart Ethical perspectives in business education

WHEN Susan Hart took over as Dean of Durham University Business School in July 2016, she did so against the backdrop of the Brexit vote and the uncertainty the referendum had caused. Hart had previously spent seven years in charge at Strathclyde School of Business And Internationalism where she had “led and developed the school in 10 centres across Europe, the Gulf States and Asia”. In a branch of academia where less than a fifth of the deans are women, Hart’s approach has been to promote internationalism and a strong ethical stance on sustainability and diversity. Having gained experience in the US, Spain, the Netherlands, France, Denmark, and Australia, her global perspective is understandable, and during her tenure at the school, her enhancement of international research programmes – plus her development of a network of over 100 academic partners worldwide –resulted in the highest levels of international accreditation. Since joining Durham, her innovative and collaborative modus operandi has rapidly borne fruit; in The Economist Which MBA ? ranking results for 2017, the full-time MBA programme rose from eighth to fourth in the UK (67th to 57th internationally). That it was ranked first in its diversity of recruiters highlights the wide range of industries in which the school´s MBA graduates have found employment. Hart attributes this success to DUBS´ “dedication to providing progressive, challenging and transformative approaches to business education and research”. She has certainly been true to this, having set up an International DBA with Fudan University in China in April 2018, with a similar partnership with French business school emlyon in the pipeline, and is working on an MSc programme in Data Analytics to be delivered jointly with the Department of Computer Science, enabling students from a technological background to build their business expertise, and vice- versa.

Business Vision Summer 2018 Issue • www.bv.world

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Refinancing: you know it makes some sort of sense – sometimes Raising working capital is crucial for growth and there are options for businesses that struggle via normal lending routes. NAOMI SNELLING reports

Please, sir, can I have some more...? Every business has to make the most of its assets WHETHER it’s negotiating overdrafts, obtaining bank term loans, sorting out factoring and invoice discounting or supply chain finance, refinancing is part of business life. From multi-million pound management buyouts to smaller interventions, the aim is the same – to restore financial viability and flexibility. “Factoring and invoice discounting are good ways to freeup cash based on the security of debtors, and no longer carry the stigma they did a couple of decades ago, when they were seen as ‘last resort’ financing,” says Ruth Bender, professor of Corporate Financial Strategy at Cranfield University. “Likewise, supply chain finance has grown considerably, with small suppliers piggy-backing on the 38

Supply chain finance has grown over recent years strong credit ratings of their large customers.” Alongside the growth of assetbased finance as a leading source of funding for SMEs and corporates reported by the Financial Leasing Association earlier this year, there is a surge in take-up of asset refinancing solutions – which are no longer seen as “last resort” options. Every business has a responsibility

to make the most of its assets, and sometimes raising additional finance against assets is the right solution to the problem. Asset refinancing frees-up working capital on assets that a business owns (or which are nearing the end of an arranged payment schedule). It’s a quick win; it delivers a speedy cashflow boost to working capital that can be used for reinvestment elsewhere. Just as with standard asset finance, a business makes agreed monthly payments over a few years. Asset refinancing is most often available on vehicles, equipment, plant and machinery that was either previously financed or that has been bought outright. It’s also sometimes possible to refinance assets alongside other facilities such

important considerations. “Perhaps the main perceived disadvantage is that the company may be giving up the ‘family silver’,” he says. “However, the reality is that you need to think more holistically about the benefit that this cash injection will bring. “It’s also worth considering the impact that this type of transaction will have on balance sheet when looking at the debt to equity ratios. “Ultimately, the current market provides favourable circumstances for companies to achieve strong returns on equity; this also presents an opportunity to use sale and leaseback transactions to raise relatively cheap funding. “The success of this will come down to how well the new funding performs in relation to the price and terms agreed.”

Refinancing often accelerates business growth Refinancing is often a route that accelerates business growth and helps organisations take a step to a higher level. Glyn Trott, director of Cardiffbased LetMC, an estate agency software specialist, says refinancing helped him to do a management buyout of the firm’s minor shareholders without having to bring in new investors. “I was under an assumption I would have to source other business partners, but I was able to show a long track record and a robust business investment plan and was able to source refinancing,” Trott said. “It means that I am now able to pursue the clear vision I have for the company and propel it forwards faster.”

SONY CORP TAKES MAJOR STAKE IN EMI SONY Corporation has announced it will pay about £1.7 billion to gain control of EMI – and a catalogue of more than two million songs from artists including Queen, Kanye West, Sia and Pharrell Williams. Sony is raising its stake in EMI from 30 to 90 percent by taking over the portion held by Mubadala Investment Company. Sony’s existing publishing portfolio includes 2.3 million tracks, including The Beatles catalogue. EMI currently controls an estimated 15 percent of the music publishing industry, but the new deal will make the Japanese giant the industry leader with a market share of 26 percent. Sony CEO Kenichiro Yoshida says streaming technology has breathed new life into the music business through services such as Spotify and Apple Music. He said the company was focusing on creating a strong intellectual property portfolio. Yoshida took over from former CEO Kazuo Hirai earlier this year. Sony reported a net profit of 380bn yen (£2.54bn) for last year, a seven-fold increase on the previous year. Almost all divisions had an improved performance – with sales in PlayStation 4 units up almost 300 percent. Yoshida and predecessor Hirai worked together to sell-off Sony’s flagging PC business and launch the high performing game console. Sony’s recently announced business strategy for the next three years is to focus on electronics, entertainment and financial services.

Business Vision Summer 2018 Issue • www.bv.world

as invoice discounting. It is usually only available on assets that are owned in full. “Due to the competitive nature of business, making the most of your assets is not only desirable, but is an essential component of getting ahead of industry rivals. “Releasing equity typically comes with the stigma of being the last resort for businesses; however, by releasing capital tied up in fixed assets, it is possible to improve cash flow and business stability,” says Charlie Robertson, commercial manager at price comparison website 4choice. “This injection of working capital can be used to reduce bank overdrafts or consolidate other debts. It is also a sensible way of eliminating any CVA or HMRC arrears. However, if debt isn’t a concern for your business, refinancing can still be a useful way to fund expansion. This can be in the form of purchasing business critical assets or to fund important projects that will enable your business to expand and prosper. “Companies can also raise money using sale and leaseback. Here, the property-owning company sells that building to an investor and at the same time enters into a leasing agreement so that they can continue using the building.” adds Bender. “For a company with a building in a good location, this is attractive to potential investors, and sale and leaseback is no longer the province of larger companies. “The advantage to the SME is that money that was tied up in property is now released. “However, they also need to build into their financial plans their commitment to a future stream of rental payments – this will hit future profits and cash flows. “And, of course, they lose out on any potential uplift in property prices, although an immediate need for cash should outweigh such factors.” Charlie Robertson says generating cash by sale and leaseback comes with some

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Rolls-Royce forced to cut more than 4,000 jobs in restructure Despite a pre-tax profit turnaround over 2016, the British aerospace manufacturing giant says it must trim middlemanagement positions

A Rolls-Royce Trent XWB-84 engine at the UK manufacturing plant

ICONIC British engineering firm Rolls-Royce is cutting 4,600 jobs over the next two years. The cuts – 3,000 of which are expected to hit management and office staff based in Britain – have been described as part of a major reorganisation. Rolls-Royce said the £500m project to reduce staff would begin this year and continue through 2019, with all 4,600 cuts made by mid2020. It predicts resulting savings to amount to £400m. The company has faced problems with its on-going development and modification of the Trent 1000 aircraft engine. Some planes have been grounded because of rapid wear on some components in the Trent 1000. The major earner for RollsRoyce is powering Airbus planes.

This has been criticised by industry experts as “all eggs in one basket” syndrome; Rolls-Royce has failed to garner as many orders from Boeing – the other half of the “jetliner duopoly”, with Airbus – as it had hoped for. MIDDLE-MANAGEMENT CEO Warren East told the BBC that Rolls-Royce could afford to strip away some layers of management:. “We have too complex a management and support organisation and we need to simplify that so that we can remain competitive,” he told the national broadcaster. East said most cuts would be in Derby, the company’s biggest manufacturing base in Britain, where most middle-management staff are based and where most backoffice functions take place.

Compulsory redundancies were “inevitable”, East said, but the firm has promised to honour its commitments to unions. Rolls-Royce currently employs 55,000 people worldwide, with a British workforce of 26,000. The company showed pretax profits of £4.9bn for 2017, on the back of better-than-expected earnings. That is a significant turnaround, following a £4.6bn loss in 2016, the company’s worst year since its inception in 1904. The Derby-based company shifted its focus from luxury car manufacture to civil aerospace, defence and power systems in the 1970s. The firm takes its name from founders Charles Rolls and Frederick Royce.

Business Vision Summer 2018 Issue â&#x20AC;¢ www.bv.world

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The latest commodity is information about you, and you, and you – the product IN ALL the fuss over data-mining by social media, it’s easy to forget that another entity probably knows almost as much about you as Facebook – your local supermarket. The Tesco Clubcard was introduced over 20 years ago. If you use one, Tesco has – at the very least – your name, age and address, and everything you have bought from them. Shopping data can track the growth of your family, from nappies and baby food to school clothes, books and birthday cards. The customers of any free service are advertisers, who pay for space on the network; the product is you, the consumer. In the wake of the recent Facebook and Cambridge Analytica scandal, data-mining has become a dirty term. So much so that Facebook was recently fined the maximum allowed by UK law: a cool £500k. But it is the use of the technology, rather than its existence, which is the problem. Data-mining is the process of discovering patterns in large sets of data. The process starts with a large set of numbers and, through statistical analysis, finds non-random, significant patterns. Pattern types include clusters, anomalies and dependencies; in short, anything which indicates the data isn’t random. Not all correlations will be valid . A website called Spurious Correlations allows users to select a data set; it will then find other unrelated data sets with a strong correlation. US spending on science, space and technology from 1999 to 2009 has a very strong correlation

Digging deep, but this time for your personal information (99.79 percent) with suicides over the same period. But, as statisticians and scientists are wont to say, correlation is not causation. Statistical analysis owes a great deal to Carl Friedrich Gauss, a German mathematician born nearly 250 years ago. He formulated the “normal distribution”, which describes data equally distributed above and below a median value to allow analysts to find bias. Gauss also invented “statistical regression”, which is today the standard method of determining the relationship between two variables.

Machine learning is a more dynamic process. It uses the same algorithms as data-mining, but the patterns it finds are combined and focused over time as more data is accumulated. If you had never seen a bird, and someone showed you a picture of an ostrich, you might assume that birds have long necks. When you see a picture of a giraffe, you might, as a result, classify it as a bird. If you are then shown a picture of a sparrow, and told that it is also a bird, your initial assumption is shown to be wrong. The more bird photographs you are shown,

Business Vision Summer 2018 Issue • www.bv.world

#deleteFacebook NOW! But what about that loyalty card in your wallet? RICHARD THOMAS arms himself with a canary and heads down the data mine.

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the closer you get to the realisation that birds come in all shapes, sizes and colours. They all have a beak, two wings and two feet, and most of them can fly. This is how machine learning works — the more data put into a system, the more accurate it is. The world of driverless cars is a good example of machine learning at work. They will have to learn to react to permanent signs and road layouts, as well as temporary signs for diversions and roadworks. Machine learning will be key to their success – and the data is already being generated by internet users. Have you ever come across one of those are-you-a-robot tests on the web where a picture is split into a grid of squares and you are asked to click on all those that contain a road sign, a shop front or a car? This a CAPTCHA test devised by Google to help their driverless cars make autonomous decisions. To get an ETA for an Uber, data on current traffic conditions and average traffic conditions for the time of day are used. The more journeys made by Uber, the more

accurate the system becomes. Log into Amazon and go to any product page, and as you scroll down you will see lots of “recommendations”. One thing you don’t get to edit is that supermarket purchase history mentioned earlier. An astounding amount of data from loyalty cards is collected and analysed – and if you think you are immune by not having one, your buying habits can still be tracked via your debit or credit card. One UK supermarket found that a certain cereal brand was worth stocking, despite weak sales, as those who bought it tended to be bigspending, loyal customers. Shopping data has been used to identify pregnant customers, and even their approximate due date, then send them appropriate vouchers at the appropriate time. Third party companies can get involved as well. The manufacturer of Brand A coffee/detergent/cat food might pay a supermarket to send vouchers to those who bought their competitors’ product. When the website ancestry. com offered a DNA-testing service

to help find people’s relatives, law enforcement agencies saw it as a rich seam of data and got court orders forcing Ancestry to allow them access. DNA samples sometimes provided tentative links to those from crime scenes. Ancestry.com cooperated only if police had a court order, and has since shut down the database in question. California police recently arrested a suspected serial killer and rapist, whose crimes covered a period of more than ten years in the ‘70s and ‘80s thanks to a DNA match which had come from GEDMatch, a free website that offers a similar service to ancestry. com. Multimedia sources, such as audio, video and images, increase the amount of data available. Spatial and geographic data will uncover patterns from global data sets. Time series data will do the same for cyclical and seasonal trends, especially important in retail. If you want your privacy, avoid social media – and when you’re at the supermarket, only pay in cash.

AND IT ALL BEGAN HERE...

IF THERE is a “father” of the algorithm, the most obvious candidate is German mathematician Carl Friedrich Gauss (pictured at the top of this page; no, not him: the other one). Gauss was born 241 years ago, but still today his work influences many industries – and any field using mathematics, such as data-mining. His findings are used daily to measure the curvature of surfaces (architects and designers); his development of the discrete Fournier Transform is used by engineers for image and sound processing. Biologists employ Gauss’ Normal Distribution Formulation to study patterns in nature. Gauss has been referred to as the Prince of Mathematicians. He considered his invention of statistical regression, a central tool in modern statistics and data science, too trivial to report.

Gauss invented least squares regression to calculate a straight line that best fits a set of data, as well as the earlier form of regression analysis. It is primarily used to predict outcomes or understand the relationship between variables. Another star in the mathematical firmament was the Frenchman Adrien-Marie Legendre. He was the first to publish a paper using regression (in 1805), but Gauss is credited with inventing the method years earlier, in 1795. Legendre later used regression to successfully predict the location of an asteroid. Legendre and Gauss were locked in enmity for the rest of their lives, both claiming credit for the invention. Gauss, history has decided, did more to explain regression’s fundamental value, and provided an algorithm to compute it.

FACEBOOK FOUNDER FACES LAWSUIT IN CALIFORNIA, a recent lawsuit – to decide whether Facebook routinely spied on users – threw up a cloud of controversy for Facebook and the field of data collection. The allegations against the site founded by Mark Zuckerberg (pictured left) focused on the collection of data from users’ phones, including photographs and contents of text messages. It was a scandal which likely to colour the image of the emerging field of datamining, or data-scraping, for a long time. A start-up called Six4Three brought the suit against Facebook after developing an app called Pikinis, which gave users the apparent ability to search for photos of online friends in swimwear.

The court documents alleged that Facebook collected content and data from texts on Android phones and pictures on iPhones – including photos that had not been uploaded to Facebook. The lawsuit further claimed that Facebook could remotely activate Bluetooth on users’ devices, and that early termination clauses meant privacy protections for users was terminated without users’ knowledge. The UK’s data protection watchdog, the Infomation Commissioner’s Office has announced it will fine Facebook £500,000. It will also take action against Cambridge Analytica’s former parent company SCL Elections (which is now defunct).

Kissing frogs in Spain in bid to discover more about AI MADRID is a long way to go, but an invitation to attend an AI conference in the Spanish capital – at a time when data-mining and hi-tech were smack in the BV crosshairs – seemed too good an opportunity to miss. Our invitation to the conference sprang from a chance meeting with a marketing operative in an AI accelerator firm. Without too much time to do detailed research – the event was taking place two days hence -- the BV team swiftly packed, saddled-up and headed across the plains, mountains and sunny farmlands of Spain. While the trip was pure pleasure, the event itself turned out to be a something of a damp squib. Marketing people are notoriously quick to snare any chance of publicity, and they sometimes tend to play a little fast and loose with terminology. There was also, in this instance, a language-barrier problem. Despite all this, BV stumbled on. The “AI conference” turned out to be a pitch to investors for a

new mobile phone app, and little more. To make matters worse, the entire presentation was in Spanish (no sign of the vaunted visitors from South Africa, Russia, America and Kazakhstan). I had to rely on my bilingual press pack – and the whispered, piecemeal translation from the nice lady sitting next to me – to keep track of things. The app itself appeared to be modestly interesting, if a little hohum in a world of emerging trends, blinding technology and vibrant financial ecosystems. It uses artificial intelligence – to a limited degree -to accumulate, filter and fine-tune data to improve people’s decisions about where, and how best, to enjoy their recreational experiences: bars, hotels, restaurants, travel and shopping destinations. AI and robotics technologies work their magic using speech, handwriting and facial recognition, along with sentiment analysis, robotic process automation, casebased reasoning, data-mining and reinforcement learning.

The app in question, as presented, didn’t seem exactly cutting-edge as far as I (or any English speaker around me) could tell, but the company claims to have major clients in Spain and Mexico. The route to information-gathering in this case was to use a “semantic affinity rank and collective intelligence” algorithm, combined with data gleaned from the internet, mobile phones and social media sites. In a nutshell, the app appears to do a wheat-chaff triage to improve decision-making and hone awareness of event, venue and entertainment opportunities. According to research by the company, as individuals we make in the order of 35,000 conscious decisions daily. The app aims to add a crucial motivation factor in the making of those decisions by forming an aggregate of other people’s choices and recommendations. Still under the mistaken impression that an AI conference was about to unfold around me, I

Business Vision Summer 2018 Issue • www.bv.world

Artificial Intelligence is the flavour of the month in the big hunt for data. HAL WILLIAMS sets off for Madrid...

chatted with Carlos Garcia, one of about 25 potential investors present. W O R L D He told me he was in Madrid to find out if the app was worthy of investment, but he showed admirable caution before plunging in. “I understand the (AI) business,” he said, “but I would like to know if this is solid tech. And why now? What’s different from five years ago?” The app in question – I’ve decided to leave the company and the app nameless – has reputedly been five years in development (hence Garcia’s mention of the five-year time-frame).

‘I don’t think this one is for me’ It claims to use “collective intelligence” – the intersection of people’s shared individual experience and knowledge – to build a comprehensive aggregate of tastes. (“Bio-inspired” was an ambiguous buzzword dropped throughout the pitch; I’m still not quite sure what that means.) All well and good: but is this AI? And was the app worth the €54m the company was aiming to raise (to eventually create an international company with a valuation of €360m)?

The potential, according to my press pack, is growth hacking (find your customers), growth talent (attract the right staff) and growth recommendation (find products or content to enhance expansion). As the actual algorithm driving this particular app is being kept secret (and the chances of me understanding it anyway were slim), there was little more to discover on the night. Neither the presentation by the company CEO, nor the glitchy promotional video which followed, did anything to convince Garcia to part with his hard-earned. “I didn’t see anything special,” he said after the event.

“We don’t know how many people are using it, how much income there will be. There were no investment figures. “In order to make my mind up about investing, I need more information. But I don’t think this one is for me.” It wasn’t really for BV either, but hey, Madrid’s a lovely city, and we enjoyed the trip. When I related the slightly underwhelming result of our European trek to a co-worker, he philosophically responded: “Well, you have to kiss a lot of frogs.” BV kissed this one for you. Mwah. Tastes like chicken. Thanks Madrid. It was fun anyway.

A TOOLBOX TO TIGHTEN RECRUITMENT

WORLD Careers Network (WCN), a talent-acquisition company, has announced a new brand identity, Oleeo, launched to coincide with new offerings designed to let recruiters reclaim time for talent engagement. Oleeo, with offices in London, New York and Vietnam, offers machine-learning and big data-based tools to help employers reduce unconscious bias and enhance diversity by uncovering strong candidates who may go unnoticed in a manual selection process. The new offerings provide recruiters with prescriptive analytics informed by 120 data points, helping them to make better informed decisions in a fraction of the time. Charles Hipps, founder and CEO, says Oleeo’s system means “more effective hiring for companies and a more engaging experience for candidates”.

Oleeo identifies the top third of candidates from an applicant pool, highlighting the most qualified applicants for interview. Hipps says this will cut time from application to interview, improve the diversity of overall hires and deliver savings. Stephanie Ahrens, head of talent acquisition at Morgan Stanley, says she has faith in the Oleeo system. “The tools we harness mean we can run end-to-end hiring, including strengths-based interviewing, without having to juggle systems in the process.” She also praised the “watertight security and robust compliance measures”. The suite of tools has been adopted by 400 companies around the world, including Morgan Stanley, WPP, Marks & Spencer, the UK Civil Service and NBC Universal.

Scraping a living: more inviting and rewarding than it sounds BV editor HAL WILLIAMS talks to techie and former heavy metal rocker Craig Wilson, who has found a niche in the datamining industry thing we came across was a dating website, for some reason. James found vulnerability in the site, errors in the code. We thought we could monetise that, that was our goal. And that was our first encounter with data mining.” Wilson and Lowe formed VIAS, and got to work. “We didn’t pursue the dating website; it wasn’t the right thing to push forward, as it was not particularly ethical,” says Wilson. “We moved into the defence industry, and oil and gas.” Most of their early work was around services, Wilson says. “A lot of branding, a lot of marketing, strategic marketing, things like that, so we were trying to break into new sectors.

“But the whole time, what we were looking for was consistent trends within the companies, something that they were all lacking. Then we could build a software package around it.” It didn’t take too long to find a blank area that needed filling. “One of the key things we found was a lack of marketing and competitive intelligence: What are the major players in the industry doing, who’s winning contracts, financial updates – and what are your competitors doing? “Every time your competitors announce something, put something out through their website or LinkedIn, whatever it might be, how do you get all this information

Business Vision Summer 2018 Issue • www.bv.world

WHEN Scottish entrepreneur Craig Wilson and Londoner James Lowe decided to move into the industrial software sector, they had no clear idea of what they were going to do. “We’re an unusual company,” says Wilson. “My business partner (Lowe) isn’t your average guy. He was one of those kids who hacked the school computer system when he was 11 years old.” Wilson isn’t your average techie either, with an international career as vocalist of a heavy metal group, Killerfix, behind him. Have a look at Youtube.com/ watch?v=uiWPiC4Zcpk. “We wanted to start a software company, but we didn’t know which type of software company. The first

Let there be rock: Craig Wilson, second left, with Killerfix

and put it in one place?” VIAS pursued that angle. “There are massW O R L D market applications that provide a similar solution. But the reality is that because they are mass-market, they’re not always reliable. Let’s say, for instance, you want to check a particular oil company. You usually have to wade through a lot of shit in order to get down to the finer detail. “The difference in the way that we do it is that our platform is bespoke. For everything you want to monitor, we write a selection of algorithms to filter out all of the ‘noise’. Mass-market applications might give you 98 percent nonsense, two percent accuracy. We’re kind of the reverse of that.” Wilson and Lowe didn’t have the playing field to themselves; in fact, it was standing-room only by the time they got there. “There’s obviously thousands and thousands of people (data-mining), but it’s all about what you do with the actual data.” Mining data is quite simple – if you’re a talented programmer. It’s how you take that information and put it into a platform that makes sense that provides value. Wilson and Lowe decided to focus on the industrial sector, “because it can be more challenging to get specific information about these companies than, say, Apple”. VIAS enters into agreements with companies with a pledge not to work with any of their competitors. “We don’t work with major oil and gas companies, we work with OEMs (original equipment manufacturers) who make components for an overall system, whatever that system might be. In sub-sea (oil prospection) for example, the components can’t fail, so it has to be high-integrity. “From a defence point of view, it’s very similar. We don’t work with anyone that makes weapons as such, but we work with companies that make components for the industry.” The ethics of data-mining (or data-scraping, as it is sometimes called) is something of a grey area, Wilson admits. “If information is in the public domain – and I would extend that by saying you don’t need a user-name and a password to access data – then some would consider it 48

Craig Wilson acceptable to take that information. “There’s a lot of debate about this. We are very small, very specific. We take pieces of specific information. There are various ways to do that; if you want information from a social media site, you would visit x-number of pages a day, thousands of pages. No human can do that, so it’s quite easy for a social network to identify that someone has created a robot.”

‘It’s a quietly profitable operation’ Detection methods have become more sophisticated over the years, and data-mining companies like VIAS have to stay on their toes. “Dataminers have to become more and more stealthy as detection methods improve. If you visit a selection of pages on a single platform, each for exactly 15 seconds, they know it’s a robot. There are departments dedicated to stopping scraping. “Websites frequently put a number of new things in place which make it harder for data to be scraped. To avoid detection, you need to make sure a scraper behaves as much like a human as possible. For instance,

James Lowe make sure the pages visited are always random, change the length of time the scraper visits each page. This makes is very difficult for the scraper to be detected.” What can make it easier to scrape social networks is that the structure of pages is generally the same. It’s a quietly profitable operation for VIAS. “When you first start you have dreams and ideals, we were going to create a million-dollar company, we watched the Steve Jobs film and that sort of stuff,” says Wilson, with a grin. “Then you realise that those days are somewhat gone because you’re almost always competing with major players. If you want to create a massmarket application, you’re always going to go up against major, major companies.” Small has turned out to be beautiful for VIAS. “We don’t need more than 15 clients, when we charge them a monthly licencing fee that reflects the bespoke nature of the offering.” Most companies might require half-a-dozen programmers, computers, an office, all the trimmings. “We’ve done it without any of that; there’s two of us, James works from home, I work from home. How profitable is it? Well, with 15 clients paying us a respectable monthly fee, it can be very profitable.”

Timeline of Facebook controversy

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From Serena’s socks to rabbits’ feet – superstition is all around HAVE you ever worn your “lucky” shoes to a job interview, or knocked on wood after saying something hopeful? Experts from the Kellogg Institute aren’t surprised…

If this is the final, how long have you been wearing those socks, Serena…?

SUPERSTITIOUS actions aren’t rational, but many of us do them anyway. Take Serena Williams, who is known to wear the same socks – unwashed – when she’s on a winning streak, as well as to bounce her tennis ball exactly five times before her first serve. These observations helped spur a new research study from two Kellogg professors, who became curious about such actions. If even one of the world’s greatest tennis players is susceptible to superstition, they thought, none of us is fully immune. “We wanted to know if such acts might affect people’s more typical, more mundane decisions,” says Ping Dong, an assistant professor of marketing at the Kellogg School. So Dong and Kellogg marketing professor Aparna Labroo set

People generally hate losing more than they like winning out to examine how engaging in superstitious actions affects how we think. Specifically, they wondered whether engaging in a superstitious act changes the way we calculate our odds of success or failure when deciding whether to do something risky. Previous research has shown that people generally hate losing more than they like winning. For example, people will take significant risks to

avoid losing money – but will not accept the same amount of risk in hopes of receiving a windfall. This is called loss aversion, has been observed in everything from the sale of wine to the housing market. But what happens when superstition enters the picture? Will black cats, evil eyes, and broken mirrors change how people react to gambles, gain, and loss? The answer, according to the researchers, is an unambiguous “yes.” The simple act of crossing one’s fingers or clutching a rabbit’s foot keychain flips loss aversion on its head. People become more riskseeking in gains but more risk-averse when facing losses. When people devote fewer cognitive resources to a risky choice, they don’t play the odds – instead, they focus on the possible outcomes. Labroo and Dong believe

percent took the gamble. In essence, these participants were willing to take a bigger risk when primed to think about what they had to lose. But among subjects who had been clutching a rabbit’s foot, the effects reversed. In the gain-primed group, 44 percent took the gamble, but in the loss-primed group, only 14 percent did. These results helped to demonstrate the basic concept: that superstition upends loss aversion. The second experiment looked more closely at the mechanism underlying the phenomenon. Using a similar setup that presented a high- or low-risk gamble where participants could earn or lose money, the researchers replicated the findings of the first study. Gain-primed subjects engaging in a superstitious act (crossing their fingers, versus, in the control group, making a fist) were more likely to seek risk; loss-primed participants were more likely to do the reverse. The researchers also asked participants more detailed

Loss-aversion is an important force that depends on context questions about how much they had deliberated when coming up with their decision, as well as whether they had focused more on their odds or on the outcome of the gamble. The results showed that participants engaging in superstitious acts deliberated less when coming up with their decision. They also focused more intently on the ultimate outcome of the gamble – gaining or losing money – and less on the probability of the gain or loss. While crossing their fingers or performing similar superstitious actions, people “just look at the endpoints, gain or loss”, Labroo says. “They don’t think about expectancy. They just think, ‘Gains are going

to happen’ or ‘Losses are going to happen’.” Fatalism at its finest. The final experiment, also conducted online, showed that people engaging in a superstitious act behave a lot like people who are feeling mentally taxed, a state known as high cognitive load. As in the previous studies, Dong and Labroo had participants write about loss or gain. Then participants were separated into a superstition group or a control group, using the same actions as the second study – crossed fingers or a fist. The participants were divided further into a high-cognitive-load group and a low-cognitive-load group. In the high-cognitive-load group, participants were asked to memorise a list of words before making a choice; in the lowcognitive-load group, they were asked if they knew the words’ meanings. The results showed that people in the high-cognitive-load group “behave exactly the way people in superstitious tasks groups behave”, Labroo says. This finding jibed with the results of the previous experiments: when people devote fewer cognitive resources to a risky choice, they don’t play the odds – instead, they focus on the most extreme possible outcomes. Dong and Labroo say they are interested in how far-reaching the effects are of superstition on decision making – for ourselves and others. Will the effect they discovered hold true for decisions with longer-term implications, like how risky to be with retirement savings? The current study also shows that while loss aversion is an important force, it depends a lot on context – and it is one that can be manipulated. This is another area the researchers may explore. But neither Labroo nor Dong will be reaching for the rabbit’s foot as they decide which research avenue to pursue next: Dong says she’s not superstitious, and Labroo says she’s not either – except, she jokes, “when I’m in a lot of trouble”. * This story first appeared in Kellogg Insight.

Business Vision Summer 2018 Issue • www.bv.world

the turnaround is the result of increased fatalism: when engaging in superstitious acts, people stop making rational deliberations about probability. Instead, they believe outcomes are predetermined. “We can think about all kinds of good things happening and all kinds of bad things happening, but thinking about the probability and trying to compute expected value, is less natural. It takes a little more effort,” Labroo explains. And many of us give up on those complex computations while engaging in superstitious actions, she says. Does consciously or unconsciously engaging in superstitious acts makes people believe in a world governed by mysterious forces rather than probability – one where outcomes are simply “meant to be”? The researchers devised a few different experiments. In the first, participants wrote about a time they waited to hear about something – such as an exam result or investment outcome – that either turned out favourably or unfavourably. This primed participants to think about either gains or losses. Then, in an ostensibly unrelated task, subjects randomly selected a keychain to hold as they made a decision. Some were given a rabbit’s foot keychain. Those in the control group received a simple fluffy white keychain. While holding one of the two keychains, subjects were asked to make a hypothetical risky choice about an upcoming vacation. They could pick between a basic room at a three-star hotel in an average neighbourhood at their destination, or a five-star hotel whose name and neighbourhood were concealed, meaning the location could be great or terrible. It was a gamble: a low-risk, lowreward option, or a high-risk, highreward option. As expected, those who held the simple fluffy keychain showed classic loss-averse behaviour. When they had been primed to think about gains, only 19 percent opted for the “risky” hotel option; when they had been primed to think about losses, 41

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Jeff Bezos ‘Better to fail than not to try at all’

PEOPLE Frederic Legrand - COMEO / Shutterstock.com

JEFF Bezos surely needs no introduction. The founder of Amazon. A man with a net worth of $112 billion. Number one on the Forbes list of the world’s billionaires. It was back in 1994 that Bezos, then senior vice-president at multinational investment management firm DE Shaw & Co, quit his job with the modest plan to start an online bookstore. By 2013, Amazon had become the largest online shopping retailer in the w.w.world. Tesla founder Elon Musk has become renowned for his space exploits (he gets a mention in our special feature on Space Tourism, elsewhere in this issue), and Bezos also has high-flying ambitions. He is the founder of Blue Origin, an aerospace manufacturer and spaceflight service company, which has among its aims an intetion to get in on the embryonic industry. Blue Origin has a rocket – the New Shepard, a vertical-take-off, vertical-landing, suborbital crewed vessel developed for suborbital space tourism – ready and waiting for customers. Unfortunately, said customers will have to have a bank account alsmost as plump and juicy as that of Bezos himself. The New Shepard has made several successful test flights, but paying passengers aren’t expected until at least the end of this year. The company’s eventual goal is to build space hotels, amusement parks and colonies. Like many successful businesspeople, Bezos isn’t afraid of failure. In a speech to Princeton University students, he said: “I suspected I would always be haunted by a decision to not try at all.” VALERIE FOLLON 52

Pierre Omidyar A bid to be the best in online auctions

PIERRE Omidyar, founder of eBay, has been lightening his load and extricating himself from the day-to-day running of the online auction firm and its ex-subsidiary, PayPal. Omidyar is actively involved in journalism – he created and financed First Look Media – and his attention has recently turned to a self-funded venture capital firm bearing his name, Omidyar Technology Ventures. The company invests in technology innovators, partnering with entrepreneurs “looking to solve big, meaningful problems”. On its website, OTV announces its mission as a search “for founders with unique insights that give them clarity of purpose, courage and conviction enabling them to pursue their vision with a sense of inevitability”. Fine ambitions; but it was the online auctions which first led Omidyar to wealth and fame. The name eBay was reportedly the second choice for Omidyar; his first choice, Echo Bay, was already registered to a Canadian mining company. The first item sold on the site, according to urban legend and Wikipedia, was a broken laser pointer; it was sold to a buyer who – surprises all round – collected broken laser pointers. “Weird” is no barrier to an online sale, Omidyar discovered, along with the rest of us. Other odd hits with bidders include a grilled cheese sandwich with the face of the Virgin Mary, a ghost in jar, a haunted rubber duck and a corn chip resembling the Pope’s hat. The billionaire entrepreneur and philanthropist was born in 1967 and, by the age of 31, had made his first million with eBay’s 1998 IPO. Omidyar formed eBay in 1995, and while he still serves on the company board he now owns just seven percent of the company. Hawaiian resident Omidyar, a French-American from Iranian parents, also owns resort properties in California and Mexico, and is involved in journalism and real estate development.

Business Vision Summer 2018 Issue • www.bv.world

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IC… oh, dear! Initial coin offerings can, and do, go wrong – so ‘caveat investor’ Do some Google research on ICOs and you will immediately hear the faint, but unmistakable, clang of warning bells. Bells that almost – but not quite – drown out the siren song of profits waiting to be made…

LET’S talk about ICOs – and let’s start with the bad news. Initial Coin Offerings were all the rage in 2017. Start-ups created all manner of digital currencies, following the Bitcoin model, and sold them for Bitcoin or Ether (the coin that drives the Ethereum blockchain). These cryptocurrencies were – and are still – then sold for fiat currencies, or used as funding in their own right. These coins can be linked to a product or a company but – big but – nothing says they have to be. And this is one of several reasons that regulators around the world continue to warn that ICOs are speculative, high-risk, ventures. For the past eight years or so, ICOs have been funding the development of new cryptocurrencies; Mastercoin was the first, back in 2013. And ICOs are practical; they enable start-ups to dodge the regulatory hoops banks and venture capitalists are forced to jump through. They can be used for perfectly legal activities, such as corporate finance and charitable fundraising. They can also be used for fraud. According to Cointelegraph, about 10 percent of the Ethereum network ICOs have resulted in phishing and Ponzi schemes. Nor are ICOs a sure-fire path to wealth, for developers or investors. Almost half of the offerings launched in 2017 had failed by February this year. Regulatory bodies and governments are keen to try to reestablish some form of control, often in a heavy-handed way: ICOs have been banned outright in China and South Korea; other administrations and governments are thought to be considering similar restrictions.

Gibraltar, Britain’s overseas territory on the Iberian penisula, is keen to carve a spot for the Rock in the world of fintech and cybercurrency. But even the Gibraltar Financial Services Commission warns against ICOs, saying that early-stage financing is best left to experienced investors familiar with the project, the business plan and the products, as well as the capabilities of team. The US Securities and Exchange Commission (SEC), the UK Financial Conduct Authority, and the European Securities and Markets Authority (ESMA) also bleat high risk, high risk, and no protection. So far, so bad. And then, this year, social media joined in. In the first month of 2018, Facebook banned advertisements for ICOs, cryptocurrencies and binary options. By April, Twitter, Google, and MailChimp had followed suit.

Japanese platform Line, and the Russian platform Yandex, have brought in the same prohibitions. Towards the end of last year, there were about 50 coin offerings being made every month, regardless of all those calls for caution. With that amount of buzz, there has to be honey, too. And there is – for some. At the time of writing, Ethereum is the leading blockchain platform for ICOs, with more than 80 percent of the market share. (Tokens are generally based on the Ethereum ERC20 standard; ERC stands for Ethereum Request for Comment, and 20 is the number assigned to that request). Ethereum’s distributed computing platform removes risks inherent in using contracts. During its own 42-day ICO in 2014, Ethereum raised 3,700 Bitcoin (then worth about $2.3m) in its first 12 hours, a sale which many believe started the whole ICO gold rush.

WALA, DALA…VOILA! Africa’s ICO success story NOT all ICOs end in misery. The Wala app is one of the success stories from Africa. Wala is a blockchain-powered financial services platform for the unbanked and underbanked. Wala’s utility token is called the Dala, a crypto-token designed to enable instant, zero-fee, borderless micropayments. The two have entered into a strategic partnership with Block Commodities Limited, a commodity trader operating across Africa and listed on the Nex Exchange in London (BCLL), and FinComEco Limited (the integrated Financial and Commodities Ecosystem), which fosters “financial inclusion with social responsibility” throughout the agricultural value chain. Dala, Wala, Block Commodities and FinComEco are working together in this partnership to develop a range of platforms, projects and initiatives in the agricultural commodity markets sector in subSaharan Africa. A detailed product roadmap has been released outlining the development goals for the Dala token and network. In January this year, the Dala wallet was released on the Wala app providing users with functionality to earn Dala tokens through platform enhancing behaviour (signing up, saving, inviting friends). Dala tokens can be redeemed for value-added services (airtime, data, bill pay), and users have the ability to transact with Dala in person at 30,000 points of sale throughout Africa. In February, the Wala team in Cape Town, South Africa, expanded from seven to 14 with more members for the engineering and marketing teams. The Wala rewards system will drive user-growth and engagement in Wala and Dala. These token rewards will initially come from the Dala Corporation’s allotment for incentivising partner and consumer adoption. The Dala ecosystem will enable unidirectional, peer-to-peer payments. After this, Dala will build towards deployment on the Raiden Network to enable distributed, instantaneous, and near-free transactions between addresses on the network. A handful of enterprises in the retail, energy, and infrastructure industries have been engaged and are looking to use Dala. Loans of $10m have been made to 50,000 smallholder farmers in sub-Saharan Africa.

Business Vision Summer 2018 Issue • www.bv.world

By the end of 2017, ICOs had raised almost 40 times as much capital as they had raised in 2016 (impressive, but that is less than two percent of the capital raised by IPOs, or Initial Public Offerings). In May last year, the ICO for web-browser Brave generated $35 million – in less than a minute. Just 30 seconds, to be precise. Filecoin was the highest-grossing ICO, raising $257 million – and $200 million of that came within the first hour. In September last year, messaging app developer Kik raised venture capital through an ICO. This was an unusual move; Kik is an established business. It’s been around for the best part of 10 years and – with more than 15 million monthly users – it’s valued at more than $1 billion. It could have raised venture capital in more conventional ways, but the company decided to go with an ICO. And Kik raised nearly $100 million in one of the most successful ICOs in history. Kik was one of the first major companies to enter the blockchain world, but it’s unlikely to be the last. STAYING SAFE... Here are some “stay safe and have fun” tips from the experts… Investors should get involved at the pre-ICO stage, where fundraising targets are usually lower and tokens are often sold at a lower price. Many ICOs offer a bonus to early investors. The minimum investment for the LiveEdu pre-ICO, for example, was $3. But by investing $50 or more, investors qualified for a bonus of at least 25 percent. Tokens received from an ICO can be traded on exchanges for other cryptocurrencies or cash; consider selling a third of your tokens to recoup your initial investment. Last, but not least, sit tight. Hold onto the remaining tokens for a few months before thinking about selling again. Cryptocurrency markets are volatile, so this is the tricky part. Always research the ICOs you plan to invest in. Get to know the product offering, the whitepaper, and the company, before getting stuck in. Good luck; let us know how you get on…

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Inefficient supply chains ‘cost UK businesses £1.5bn a year’

SUPPLY chain inefficiencies and miscommunication are estimated to cost British businesses more than £1.5bn in lost productivity. Over 100 shipments from a cross-section of UK industries were analysed by digital freight forwarder Zencargo. The results suggest that UK businesses waste an average of three hours per international shipment. Employees are spending time on phone calls and emails to channel data back and forth between trade partners. Across the UK, this adds up to 100 million hours of wasted time – the equivalent of 50,000 work hours. Brexit is likely to exacerbate this

efficiency problem, the study found. Communication and documentation hitches mean shipments between Britain and non-EU countries waste 17 percent more time than shipments to EU countries. Supply chain innovation is seen as a route to solving the productivity puzzle. Technology that automates communication can deliver productivity gains of £1.5bn per annum – five percent of the UK Government’s annual target for productivity gains from digitisation (£30bn per year until 2030). Zencargo says its newly developed dashboard allows supply chain teams to collaborate in real time, book shipments online, track

status updates and run analytics. Its purchase-order management streamlines communication around an order. Tom Hook, supply chain and operations manager at wearable technology firm Catapult, said its supply chain had benefitted from the system, minimising the amount of admin and communication required. Zencargo CEO Alex Hersham said communication shortfalls – “Chinese Whispers” – and complicated supply chains cause small problems to escalate. “Now … we can truly compete on the global stage and at the same time benefit on a productivity level,” he said.

DIY PROJECTS CAN GO WRONG, AS WESFARMERS FINDS OUT THE UK DIY chain Homebase recently changed hands for £1 – the in-store price of 1.3 litres of Crown Brilliant White emulsion paint, a single LED solar light or a 40mm white plastic pipe clip (if you throw in another 20p). It’s the end of a sad saga for the Australian-owned chain’s financially doomed UK foray. Wesfarmers bought the retailer for £340m two years ago; it was sold in recent weeks to restructuring specialist Hilco for £339,999,999 less. Hilco revived HMV music stores after buying them from administrators in 2013; the back-from-the-dead resuscitation experience could come in handy. Poor management decisions and a misperception of the UK market have been blamed for the Homebase chain’s demise. Store closures and job losses are expected in the 250 British stores, where some 11,500 workers are currently employed. 56

The 24 stores still operating under the Australian Bunnings name will revert to the Homebase name. Wesfarmers moved in with confidence in 2015 to the create basic, no-frills Bunnings warehouses and sacked Homebase’s senior management staff. But the optimistic Homebase operator – which had hoped to take on major DIY chain B&Q – had misread the UK market. Wesfarmers has admitted making mistakes in its takeover, underestimating demand for some items and dropping popular lines. It had to write off £500m after cutting some products, taking total acquisition losses to a reported £1bn. Wesfarmers managing director Rob Scott said (with admirable understatement) that the foray into the British market had been “disappointing”. Wesfarmers will be entitled to 20 percent of any future sale of the Homebase business.

Business Vision Summer 2018 Issue â&#x20AC;¢ www.bv.world

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Boris Becker From court to court in bankruptcy battle

PEOPLE THREE-TIME Wimbledon winner Boris Becker is reportedly claiming diplomatic immunity to protect himself from a lawsuit. The former tennis champ – who won his first Wimbledon in 1985 at the tender age of 17 – says his appointment as a diplomat by the Central African Republic (CAR) gives him immunity from legal claims. The CAR, one of the world’s poorest countries, made Becker an attache for sport and culture in April. Becker, whose defence has been lodged in the High Court, said the proceedings were unjustified. Becker was declared bankrupt in 2017 because of debts to private bank Arbuthnot Latham. He is now being pursued through the courts for further assets. He said he hoped diplomatic immunity would bring an end to what he sees as unjust prosecution. Becker was declared bankrupt after Arbuthnot Latham said he had owed them money for a disputed loan for more than two years. He will be defended by Ben Emmerson QC, who represented Julian Assange. According to the Vienna Convention of 1961, diplomats are immune from criminal prosecution and civil proceedings in a host country – but they are expected to abide by that country’s rules. The CAR is a former French colony which has been unstable since independence with rebel forces vying for control of the capital, Bangui. 58

Michael Dell From a $1,000 start-up to glory

MICHAEL Dell is chairman and CEO of Dell Technologies, a family of businesses that includes Dell, Dell EMC, Pivotal, RSA, Secureworks, Virtustream and VMware. Dell Technologies– with revenues of $748bn and 140,000 employees – provides infrastructure for organisations to build digital infrastructure and protect information. Dell Technologies is one of the biggest IT companies in the world, with a range of customers and clients from SMEs to global corporations and governments. Dell – the man, not the company – started into the field back in 1984 with a budget of $1000; he was just 19. “Technology is about enabling human potential,” he once said, in one of his more quotable quotes. Dell’s vision of technology design, manufacture and sales was a game-changer for the IT industry. In 1992, he became the youngest CEO to earn a ranking on the Fortune 500, and 11 years later, in 2013, he took Dell private. The ensuing amalgamation of Dell, EMC and VMware in 2016 came in 2013. It was the largest technology deal in history. In 1999, he and his wife, Susan, established the philanthropic Michael & Susan Dell Foundation to support worthy global causes. Dell is an honorary member of the Foundation Board of the World Economic Forum, an executive committee member of the International Business Council, a member of the Technology CEO Council, the US Business Council and the Business Roundtable. His influence and expertise extends beyond the States; he serves on the advisory board of Tsinghua University’s School of Economics and Management in Beijing, and on the governing board of the Indian School of Business in Hyderabad, India. He also served as the United Nations Foundation’s first Global Advocate for Entrepreneurship.

Business Vision Summer 2018 Issue • www.bv.world

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‘Orphan’ diseases adopted and targeted in drive for real cures One company is breaking away from the pack and focusing on ailments others choose to ignore MORE than 20 years ago, an international pharmaceutical company turned its attention to the so-called “orphan diseases” — ailments for which there was limited, or no treatment. Mainstream pharmaceutical companies have traditionally ignored this family of diseases because of their rarity and / or a lack of profitability. When BioMarin was founded in 1997, it put its focus on the diseases that Big pharma was overlooking. The company’s ethos insists that no disease should go untreated – and it remains dedicated to that mission. Rare diseases, as defined here, are those that affect fewer than 200,000 people in the US, including some familiar names such as cystic fibrosis, Lou Gehrig’s disease and Tourette’s Syndrome, as well as some lesser-known ones: Jumping Frenchmen of Maine Disorder and Hamburger Disease.

According to the FDA, there are more than 6,000 of these orphan diseases, with new ones constantly being discovered and diagnosed. Each may affect only a small portion of the population, but according to the National Institutes of Health (NIH) they collectively affect about 25 million people each year in America alone. ‘NEGLECTED‘ Some other diseases are termed “neglected”, like Leishmaniasis and Hepatitis C. Although they affect vast patient populations in developing countries, pharmaceutical industries have had little incentive to develop treatments because of an unattractive bottom-line. In 1983, the FDA established the Office of Orphan Products Development (OOPD) to advance the evaluation and development of promising treatments for neglected diseases and disorders. The OOPD regulates the market, designates

products or diseases with orphan status, evaluates clinical data, and collaborates with medical and research communities. It also provides the all-important financial incentive to stimulate research. Many of the ailments in the orphan category are the result of genetic mutations. There are about 30,000 genes in the human body, and they provide the basic code for each cell’s function. BioMarin (Nasdaq: BMRN) has released seven game-changing products on the market and has three more in late-stage development. One of BioMarin’s latest products was launched to combat Batten disease. This is a family of rare, fatal, hereditary disorders of the nervous system, also known as neuronal ceroid lipofuscinoses (NCLs). Batten is a particularly vicious disease, mostly affecting children. There are 14 known forms of the illness, numbered CLN1 to

CLN14. They are caused by genetic mutations in the body that disrupt cells’ ability to dispose of wastes such as proteins and lipids. Batten progresses through a series of debilitating symptoms, starting with vision loss, cognitive impairment, loss of motor skills, and seizures. For affected children, the prognosis is poor: reduced life expectancy with the likelihood of becoming wheelchair-bound and bedridden. Blindness and an inability to communicate follow, with death almost certain to follow. As Batten disease affects only three in every 100,000 new-borns worldwide, the pharmaceutical industry has had little financial incentive to invest in research and clinical trials. With OOPD regulations and incentives, pharmaceutical companies are now more inclined to give Batten, and other rare diseases, the attention they need. In 2017, BioMarin brought to market Brineura, the first and only treatment for any form of Batten disease. Brineura is meant for paediatric patients aged three and

older, with late infantile neuronal ceroid lipofuscinosis type 2 (CLN2). This innovative enzyme replacement therapy is the first of its kind, directly administered into the brain fluid, treating the root cause of disease by replenishing the missing enzyme and slowing the loss of ambulation. GENETIC DISORDERS For patients suffering from phenylketonuria (PKU) — a condition in which the brain is unable to break down phenylalanine (Phe) — toxically high levels of Phe can build up in the brain and lead to serious neurological and neuropsychiatricrelated issues, affecting a person’s thoughts, emotions, and actions. Cue BioMarin’s two breakthrough enzyme substitution therapies: Palynziq and Kuvan. PKU — which affects as few as 350 new-borns in the US each year — requires daily lifelong management, and BioMarin’s 2018 Palynziq and 2007 Kuvan are a clinically proven solutions to manage Phe levels. Likewise, BioMarin has addressed various life-threatening forms of lysosomal genetic disorders (MPS I, MPS VI, and MPS IVA), which are

Image: CNBC

caused by a lysosomal deficiency and affect a cell’s capability to process and eliminate waste. Without the missing enzymes, an accumulation of unprocessed waste disrupts the cell’s normal functioning. BioMarin’s offers a few solutions — Aldurazyme, Naglazyme, and Vimizim — to pick up the slack, helping to break down complex carbohydrates and restoring cell function. Another rare autoimmune disease, Lambert-Eaton Myasthenic Syndrome (LEMS), is characterised by muscle weakness caused by attacks by the body’s immune system on connections between nerves and muscles, impeding nerves from signalling or stimulating muscle cells. BioMarin released Firdapse in 2009 for the symptomatic treatment of LEMS in adults. The success of its products hasn’t made BioMarin complacent or content to rest on its laurels. If anything, it’s made the company more inspired and determined to research other rare diseases and develop more life-changing treatments — or hopefully some lifesaving cures.

Business Vision Summer 2018 Issue • www.bv.world

Biomarin CEO Jean-Jacques Bienaime

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Let’s get holistic and create ‘happy’ workplaces for all Sometimes you have to forget about the bottom line and concentrate on the backbone of an enterprise: the staff

HR OFFICES worldwide are all abuzz about employee engagement. So, what exactly is it and why is it so important for work productivity and worker recruitment and retention? Engage: occupy or attract one’s interest or attention, participate or become involved in, establish a meaningful contact or connection with. Employee engagement refers to the business approach of fostering a workplace of inspired, purposeful, and empowered employees. However, all-too-often corporate leaders are more interested in bottom lines and profit margins than the overall wellbeing of their employees. ABUSIVE POLICIES Dishonest business practices make frequent headlines, abusive customer policies abound, and corporate social initiatives often come up lacking. Nevertheless, the times are changing and many businesses have adopted a more holistic view of truly successful business practices. It shouldn’t come as a shock, but a happy worker is a more productive worker. According to the 2017 Gallup survey, companies that expand their ranks of talented managers and double the rate of engaged employees can expect to see 147 percent higher earnings per share than their competitors. In addition, engaged employees are less likely to look for a new job within a year, which translates to big savings in invested time and resources in recruitment and training programmes. The survey warns that disengaged employees are 41 percent more likely to look for a new job within a year, resulting in a loss of invested time and resources, particularly in recruitment and training programs. According to

their triennial survey, disengaged employees cost the USA somewhere between $450 and $550 billion each year. The survey results are clear: shirk on employee engagement strategies and suffer the costly consequences. Otherwise, look to some of the companies that are clear winners of the engagement game, copy some their successful strategies, and reap the rewards. Two pillars of employee engagement are purpose and passion. According to Sir Richard Branson, founder of the Virgin empire, anyone looking to start a new business should have purpose and passion at the heart of their plans. “We spend about 80 percent of our waking lives at work,” wrote Branson in a blog, “so it’s important

that we do what we love and love what we do.” As a manager or business leader, it’s important to clearly communicate the company’s vision and to seek out employees or colleagues who share that passion and believe in the purpose. In short, Branson advises entrepreneurs to turn their passions into something that can benefit others. “This will align your business better with the needs of your customers, as well as give you a competitive edge,” wrote Branson. “Purposeful businesses also have, in general, significantly higher rates of employee engagement, retention and productivity.” Furthermore, if employees have been carefully selected to align with company ethos, then managers can confidently delegate responsibility,

creating a sense of trust and autonomy in the workplace. This has a positive correlation with increased productivity, as employees who are given the freedom of decisionmaking on important projects tend to feel more dedicated to and responsible for the brand. Finding and hiring great people is only the start: a successful business invests in its staff, providing training programmes to develop their skills and offering advancement opportunities from within. According to Branson, businesses should “train people well enough so they can leave,” and “treat them well enough so they don’t want to”. DESIRABLE PERK Along the same lines and ranking high on the list, work flexibility is a highly desirable perk in today’s workplace. With new technologies connecting people all around the world, the rigid workweek of the past is being retrofitted with a flexible working schedule. This flexibility assures the employee of the trust and esteem of their employers, thus improving morale and engagement.

Next, companies with a high rate of employee engagement have correlating high expectations of their workforce. Objectives are clearly communicated, progress is monitored, and high performance is recognised and rewarded. “If people are properly and regularly recognised for their initiative,” says Richard Roberts, Employee Engagement Consultant and founder of en:Rich HR, “then the business has to flourish. Why? Because it’s their business.” Roberts, former Head of Resourcing and Engagement and then HR Director at Virgin Mobile, blogged about some of his personal encounters with the Virgin corporate-culture guru, Sir Richard Branson, describing the founder’s leadership style as authentic, personal, and engaging. According to Roberts, whenever the mogul visited the offices, Branson always made an effort to speak to every employee — all 1,500 of them, in that particular office. It was not unheard of for Sir Richard to personally call staff to thank, praise, or congratulate them. Branson truly

lives his life and runs his businesses by the adage “treat others as you would like to be treated”. When Branson makes his rounds of his empire, touching base with individual staff members and personally interacting with customers, he is actually taking the pulse of the business. He realises that the people on the ground can offer unique insights into what is working and what’s not. By actively listening to staff and customer feedback, business leaders can develop strategies for targeted improvement. “We give our people real autonomy,” Branson says, “and celebrate their achievements by identifying star contributors and highlighting brand ambassadors. We also facilitate peer-to-peer nominations to recognise top performers.” The Virgin brand has been at the forefront of employee engagement for years and their mobile-first platform is only one factor of their success. If you´re still not sure where to start, follow Branson’s advice: take care of your employees, and they’ll take care of your business.

Business Vision Summer 2018 Issue • www.bv.world

Are you a happy worker? If not, try sniffing the flowers

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Global investment in renewable energy falling, IEA report warns Nuclear power at lowest level in five years, but electricity, oil and gas attract increased spending

Decline in investment in renewables is worrying, says IEA percent of investment now based on regulation or contracts. New projects are having “a dwindling role” based solely on revenues from variable pricing in wholesale markets. Investment in energy efficiency was directly linked to government policy, the review found, most often through energy performance standards. Recent policy changes in China, linked to reduced support for solar PV (photovoltaic systems) raise the risk of a slowdown in investment this year, the IEA cautions. China accounts for more than 40 percent of global investment in solar PV, and its policy changes have global implications. Past IEA reports have highlighted the importance of

policies in driving investment in the sector. Energy efficiency expanded in 2017, but not by enough to offset the decline in renewables, and efficiency investment growth has also weakened in the past year. The spending on oil and gas is expected to continue in 2018, but nearly a quarter of worldwide electric vehicle (EV) sales in 2017 came from governments allocating more capital to support the sector. The global coal market continued to expand, mostly due to Asian markets. The report found that almost 60 percent of current operating capacity is using “inefficient, subcritical” technology.

Business Vision Summer 2018 Issue • www.bv.world

AFTER several years of growth, combined global investment in renewables and energy efficiency dropped by three percent in 2017 – and it may slow further, the International Energy Agency (IEA) warns. Global energy investment of $1.8 trillion in 2017 is down two percent on the previous year, according to the IEA’s World Energy Investment report. More than $750 bn went to the electricity sector, while $715 bn was spent globally on oil and gas supply. Nuclear investment is at its lowest level in five years. Those were some of the findings of the most recent review of worldwide energy spending. IEA executive director Fatih Birol described the decline in global investment for renewables and energy efficiency as “worrying” and “disappointing”. “This could threaten the expansion of clean energy needed to meet energy security, climate and clean-air goals,” he said. While we would need this investment to go up rapidly, it is disappointing to find that it might be falling this year.” The report shows that investment in renewable power – which accounts for two-thirds of power generation spending – dropped seven percent in 2017. The amount of fossil fuels used in energy supply investment rose for the first time since 2014, while the closure of nuclear power plants now exceeds construction. The electricity sector attracted the lion’s share of energy investments in 2017, with “robust” spending on grids – more than on the oil and gas industries for the second consecutive year. Government policies are driving private spending across all power sector investments, with more than 95

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Thereâ&#x20AC;&#x2122;s more to employee satisfaction than monetary gain, online report shows Finding the best staff is only part of the equation; the secret to keeping them is the most important part FINANCIAL professionals have voted Goldman Sachs the worldâ&#x20AC;&#x2122;s top company to work for. Research by eFinancialCareers was conducted via an online survey between the months of October and December 2017. A total of 12,322 votes for ideal employers were cast, with a mention of 2,824 different companies. JP Morgan, which topped the Ideal Employer Report last year, came in at second place. Global tech companies, including Google and Amazon, rose sharply in the rankings. Companies in the UK scored well on a variety of attributes, such as

opportunities for promotion, positive organisational culture, and open and transparent communication. Overall financial performance and industry connections were also key criteria. Financial professionals were asked to name their top three companies to work for, and rank 20 attributes for companies. They then rated their three ideal employers based on how strong they believed companies were. Goldman Sachs took the title for its mix of strong rewards and market leadership. It scored highest in the survey on competitive salaries (83 percent), the most valued attribute

in the criteria. This was followed by competitive bonuses (80 percent) and industry leadership (79 percent). Edith Cooper, the former global head of HR for Goldman Sachs, said the company recognises and pays for performance. Goldman Sachs received 223,849 applications for analyst positions in 2016, with only two percent landing a position in a highly competitive market. Google held its overall global Number Three ranking for a third year running, though for the first time was ranked a region-specific Ideal Employer in Asia-Pacific, beating Goldman Sachs and JP

Edith Cooper, former head of HR at Goldman Sachs

Morgan (ranked #1 and #2 by US and UK markets). Google held its own by scoring high on innovation and office environment, beating the likes of UBS, HSBC and Morgan Stanley. The result seems to prove that even in the financial sector, a company’s culture is starting to become as important as monetary gain. Apple, Amazon, Facebook and Microsoft also appeared in the top 30, a hugely-positive showing in what is typically a finance companyled ranking. Amazon rose 12 places, the biggest increase in the report. One financial professional described Amazon as a “dynamic environment — where there is no shortage of

interesting problems to solve or opportunities to build”. Employees are encouraged to create their own career paths, and they have great flexibility to move between departments and roles. SENTIMENT The sentiment echoes the overall theme of the report, which found employees want more attractive attributes than just pay. To compete with the tech sector for the best talent, employers in financial services will need to adjust their recruitment drivers. Although three out of the top five companies were rated highest by competitive salary, other elements of work-life are considered when choosing an employer. John Benson, the founder of

eFinancialCareers, a careers site for financial services professionals, said the report proved professionals across the globe were equally enticed by salary and challenging projects. “In most regions, employees put challenging and interesting work as important factors when contemplating which employer to work for, a sign of exciting times ahead,” he said. “There needs to be an added focus on organizational culture and the work itself. “The tech industry has been ahead on this for a while now and seeing the likes of Google and Amazon challenging the financial giants to attract smart financial professionals shows that financial institutions need to adapt.”

DEUTSCHE BANK TO CUT THOUSANDS OF JOBS TO GET BACK IN THE BLACK

DEUTSCHE Bank has announced it will cut more than 7,000 jobs by the end of the year in an attempt to regain profitability. “The number of full-time positions is expected to fall from just over 97,000 currently to well below 90,000,” Frankfurt-based Deutsche Bank said in a recent media statement. The job cuts are expected to hit hardest in the bank’s equities sales and trading division, which is expected to lose up to 25 percent of its workforce. New CEO Christian Sewing said the lender would remain committed to its corporate and investment bank and its international presence. “We are unwavering in that,” he is quoted as saying, adding that the bank would concentrate on doing

“what we truly do well”. The bank said it would slash leverage exposure in the investment arm by 10 percent. The news of the cut-backs was broken by The Wall Street Journal. They have been tagged as part of increased cost-cutting efforts by Sewing. Deutsche Bank Chairman Paul Achleitner recently replaced the former CEO, John Cryan. Achleitner took up the position after complaints that the bank

was slipping in its plans for a comprehensive turnaround. Cryan, too, had job-cutting in mind before he was himself replaced; his target was, in fact, higher than Sewing’s, at 9,000. The struggling German lender has been cagey in light of approaches from several news media groups. Shares in Deutsche Bank, Germany’s biggest private lender have fallen by more than 30 percent this year.

Business Vision Summer 2018 Issue • www.bv.world

Drastic bid to return to profitability

Guatemala, land of suffering and incredible beauty

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Business Vision Summer 2018 Issue • www.bv.world

The country’s recent volcanic eruption was tragic, but it won’t stifle the country’s peacetime economic growth

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Central American hotspot – mostly for the right reasons Guatemala is blessed with a gorgeous coastline, natural beauty ... and the prospect of future growth

Picture perfect: From volcanos to beaches, Guatemala has a lot to offer the adventurous tourist

Story and pictures by RICHARD THOMAS CENTRAL America has a reputation for violence and political instability, but these days regional cooperation and free trade agreements are more the norm. The recent news from Guatemala has all been bad. Nobody can forget the harrowing photos of displaced people with missing families following the eruption of the Fuego volcano. And the country has suffered a great deal over a longer period. A generation-spanning civil war that raged from 1960 to 1996 is still etched into the people’s memory, but co-operation with neighbours is bringing Central America together in the form of the Central America Integration System (SICA, from its name in Spanish). SICA signed a free trade agreement with the EU

in 2012, and is forming an internal customs union: Guatemala and Honduras are the founder members, and negotiations are under way to bring in El Salvador. Within SICA, Guatemala is a member of CA-4: a Schengen-like border agreement which allows unrestricted travel to El Salvador, Honduras and Nicaragua. Guatemala’s main industry is agriculture. Exports are mainly sugar cane, African palm and maize for biofuel production, but also increasingly fruit, vegetables and coffee. Tourism is becoming a major industry, and with good reason. As well as unspoilt Caribbean beaches, visitors are treated to ancient ruins of the Mayan civilisation, and the more recent ruins of Spanish colonisation. The town of Antigua Guatemala was the colonial capital until it was levelled by an earthquake in 1773. It

is still a prime example of Spanish colonial architecture, although mostly limited to single-storey buildings given its vulnerability to seismic instability. In 1979 it was made a UNESCO World Heritage site. The skyline is dominated by three volcanoes, including the Fuego volcano which is continually active with clouds of steam and gas seen coming from vents almost daily. Tikal, in the rainforest of northern Guatemala, is the ruin of an important city of the Mayan civilisation. Some of the temples at the site date back to the 4th century BC, but the city had its heyday from 200 to 900 AD when it dominated the region. Atitlán Lake, to the west of the capital, is a picturesque lake surrounded by volcanoes. Coffee plantations fill their slopes, and

Rustic charm is something to be treasured, and traces of history are everywhere to be found

Business Vision Summer 2018 Issue â&#x20AC;˘ www.bv.world

several small towns surrounding the lake feature on the backpacker trail. Of all the countries blessed with a Caribbean coastline, Guatemala is probably the least known and explored by tourists, and relatively undeveloped. The town of Livingston can only be reached by boat. No roads lead there through the jungle, and its relative isolation makes it easy to get that classic Caribbean photograph of a palm tree hanging low over a deserted beach. The customs union and free trade agreements, as well as business legislation promoting privatisation over monopolies, have helped to attract foreign investment. FDI currently accounts for 17.4 percent of Guatemalaâ&#x20AC;&#x2122;s GDP, and that figure is rising, especially in sectors such as wfood, telecommunications, tourism and consumer goods. Far from being a banana republic basketcase, Guatemala is geographically, economically and politically at the centre of a rising Central America.

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Head-hunting isn’t easy in age of fintech Financial services are looking for specialty skills and finding slim pickings. Will Brexit shrink the pool of applicants still further?

DESPITE the challenges facing the financial services industry today, the market is in an uptick worldwide. The economy has bounced back from its crash, with innovative technologies spurring the market along and encouraging investors’ confidence. The breakneck speed of advances in fintech, and the market’s rapidly changing regulations, have created a need for skilled and experienced applicants. The financial services sector is undergoing a digital transformation by making use of time-saving automation processes and AI solutions to increase productivity and enhance customer experience. Fintech, once a term used to describe the back-end computing of banks and brokers, now encompasses a broad variety of technological innovations in personal and commercial finance. According to EY’s Fintech Adoption Index, a third of consumers are actively and consciously using multiple fintech services in their daily lives. For financial services professionals, this means that they need to be versed and competent in machine-learning techniques, data analysis, domain expertise, cyber-security knowledge, and communications skills. Above all, they must be adaptable; these technologies are swiftly evolving, and their application requires a high degree of creativity and versatility. According to Daniel Halstead, founder and CEO of the Kite Consulting Group, Financial Market Infrastructure (FMI) businesses now need “people who are skilled to support the rapidly changing environment and to represent their businesses in the competition for OTC market share”. He calls these ideal applicants “A-players”. One characteristic that elevates A-players from the chaff is how they deal with adversity and challenges. These prime candidates may look and sound like the rest, but there are subtle differences that mark them as the crème de la crème of the market, those colleagues who love a challenge. They’re motivated by the desire to succeed, and tend to measure themselves against their own ideals and values rather than external references. Highly regarded throughout their careers and rarely looking for work, they typically have to headhunted. For

The Kayan Dayak people of Borneo, Indonesia, one group of head-hunting specialists such a high-calibre specialised hire, most FMI businesses rely on trusted consulting agencies to fill their niche needs. However, the pool of highly qualified individuals is small, even at the global level, and as Brexit negotiations continue it’s expected to shrink even more in London, one of Europe’s major financial hubs. Those negotiations are stirring up fear and uncertainty in UK financial markets and raising important questions. “First, if moving fresh talent into the UK becomes more difficult, then just how willing are UK businesses to bear that burden?” asks Nathan Fuller, managing director of Kite Consulting. “Secondly, if talent senses greater opportunity elsewhere — will it stay or will it go?” He likens the impeding exodus to migrations in the natural world, where animals travel great distances in search of viable habitats and fresh resources. He sees Brexit as a possible impetus to drive talent abroad, looking for locations with fewer hurdles to gainful and gratifying employment. “As a recruitment company, Kite delivers high calibre people to the Financial Markets. We work with the CCPs, exchanges, settlement providers and broker-

dealers, across Europe and Asia,” Fuller says on the company blog. “We are the only business to claim this particular specialism, so there is a unique opportunity to track trends in this market as we try to understand what a Brexit Britain will look like. There is precious little clarity at the moment as to the future state of EU residents who wish to work in London – both for those already here and for those who may seek to move in the future. We can, however, be relatively sure of one thing: it’s very unlikely to be as simple as it is now.” Even if Brexit leaves UK financial markets more isolated and complicated, Fuller still has high hopes for the future – particularly because he has studied his history lessons. Over the past five years, almost 80 percent of the applicants Kite has placed in the London markets have been British passport holders, while about 11 percent have been EU passport holders and less than 10 percent have come from outside of the EU and require sponsorship. “At face value these stats are fairly mundane, but there’s a hidden gem in the detail,” says Fuller. “The figures reveal that our customers are almost as likely to endure the challenge of sponsoring a move from outside the EU (9.5 percent) as they are to accept an EU passport holder with freedom of movement (11 percent). In other words, the financial markets have already demonstrated that they are prepared

to cough up both the effort and the cost to move talented people into the positions in which they are needed. “The precedent has already been set – the City is willing to pay a premium for talent – and the good news is that there’s no reason to believe this would change in a post-Brexit London.” While those may sound like promising stats, Fuller warns not to pop open the champagne just yet. London, epicentre of the world financial markets, has had no problems enticing top FMI businesses to set up shop there, bringing with them competitive job offers and filling them with prize A-players. “But,” Fuller wonders, “why is the talent here? Are the A-Players here because of all the great jobs — or are the jobs here because of all the great A-Players?” High-calibre people are the most important commodity in the financial markets, and FMI businesses may rethink the location of their corporate headquarters if the talent begins to relocate for better opportunities. “This might lead to significant changes in global organisational design,” says Fuller. “To put it bluntly, that may lead to fewer jobs in London.” But one thing remains constant despite the Brexit woes: elite workers can rest easy. “The A-Players will be fine,” Fuller assures. “Our customers across Europe and Asia welcome London talent and the best people will always find rewarding, challenging work.”

DESPITE the impact a sudden departure can have on a company, almost half of UK businesses don’t have a succession plan in place. Research by Norrie Johnston Recruitment (NJR), involving 127 senior directors, found that even in companies where succession has been considered, the plans are patchy. Most plans (53 percent) consider what would happen if the finance director suddenly left, followed by the CEO, (51 percent), with the sales and operations director roles included in 49 percent of plans. But only 19 percent of plans consider the chairman, 20 percent the IT director, 33 percent the marketing director and 35 percent the HR director. Over a third do not consider senior managers at all. Graham Oates, chief executive of NJR, has some simple advice on the matter. “If your succession planning is all about identifying

current senior managers who have the potential to fill top positions should a vacancy arise, then it makes sense to also evaluate the senior managers’ roles, to see who below them might fill their shoes, should they be promoted. “Armed with this insight employees can be given additional training and mentoring, to help develop them and recruitment strategies can be put in place to plug any gaps. In this way succession planning, recruitment and leadership development can go hand in glove.” According to the study, not many companies are this joined up in their thinking. More than half (57 percent) of the companies with a succession plan don’t have a leadership development programme in place to support it; and over one in ten (12 percent) of those that do admit their leadership programmes are little

more than some ad hoc training. The study has unearthed a few exceptions to the rule. Of the companies which have a leadership development programme in place, 60 percent say this includes mentoring plus in-company assignments to stretch senior managers and develop their skills and experience. More than half (53 percent) say the programme also includes coaching. “There are a few companies – around 14 percent overall – adopting good practice,” adds Oates. “They’ve prepared for the departure of every board member and thought about their key senior managers, identified where the talent sits within their organisation and have sophisticated leadership development programmes in place to support that talent. “However, they are in the minority.”

Business Vision Summer 2018 Issue • www.bv.world

PUTTING THE ‘SUCCESS’ IN SUCCESSION

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Andalusian hideaway bringing promise of communism to life Utopian small town in the heart of Andalusia? Or a communist dream turned autocratic nightmare? HEATHER LEAH SMITH reports. IMAGINE a typical Andalusian town, with whitewashed homes and orange trees lining the streets – but unlike most of the Costa del Sol, the rent here is a mere €15 a month and most of the inhabitants work the land, earning a monthly salary of €1200. Big businesses aren’t welcome and real estate speculation is strictly forbidden. In a country eager to attract foreign investors — at times to the detriment of its own citizens — Marinaleda is unique in its approach to government. The fight for a social-democratic and cooperative government in Marinaleda began in the 80s when Juan Manuel Sánchez Gordillo — now mayor for more than 30 years — energised and organised the town to protest the capitalist system that had taken so much from them and given back so little. Gordillo believes

that the land belongs to the people who work it, not negligent nobility interested only in quick profits. His message struck a cord and his antics have garnered media attention nationally and internationally, earning him the nickname of “Spanish Robin Hood”. To make a utopia, Gordillo and the townsfolk of Marinaleda were prepared to fight. And fight they did. For over a decade, they marched and protested, staged hunger strikes, and occupied the uncultivated land of wealthy absentee landowners. They struggled and suffered the legal consequences of their actions, until finally the land was ceded over to them and they began to slowly transform the town. They irrigated their newly ceded farmland, called El Humoso. Crops were selected based on how much employment they could create, not

on how much profit they produce. Preference was given to fruits and vegetables that require the most human effort to cultivate, harvest, and preserve — such as olives, artichokes, and peppers. This contrasts sharply to forprofit agricultural models which prize lucrative efficiency over humanitarian concerns. The town also saves over €350,000 a year by opting not to have a muncipal police force. The project seems to be working as most of Andalusia suffers from more than 30 percent unemployment, whereas in Marinaleda it’s at only five percent. Today Marinaleda may look like any other Andalusian town, but the similarities are only skin-deep. It’s a place where they live by the motto of “for the people, by the people”. However, while most of the citizens in Marinaleda praise Gordillo’s vision for and stewardship of the town, there are a few voices of dissent quietly critiquing the mayor’s totalitarian tactics. According to MG Magazine, some citizens claim that it’s better to keep complaints or criticism quiet, otherwise they might find themselves blacklisted from the town’s agricultural cooperative or refused permits to start a business. Most of the available work is agricultural, but there are also a few positions in social services or education. Each work shift is six and a half hours long and pays the same regardless of the job: €47 per day. The work is distributed throughout the town — some 2,000 citizens — but it’s not enough to constitute a full 40-hour work week even at the peak of the harvest season. And if you don’t work, you don’t get paid.

LIVING ANOTHER SORT OF DREAM IN SPAIN? MARKET IS STILL OPEN of International Property Professionals), bringing new levels of professional standards and ethics. The majority of buyers are from the UK, despite Brexit concerns, but figures are still 36 percent down on pre-Brexit levels. The market is more diverse and more secure than in previous years, with an increasingly cosmopolitan mix of buyers. The current breakdown of nationalities buying Spanish property is British (28 percent), Spanish (17 percent), Swedish (12 percent), Belgian (seven percent), with German and French buyers making up a combined five percent. Over the past two years, Chinese, American and Australasian buyers are entering the market. Some of these buyers are accused of buying a “Golden Visa” – a purchase of €500,000 can allow access to the Schengen Area, a gateway into Europe. Marbella has traditionally been the jewel of the Costa Del Sol’s crown, with the cobbled streets of the old town rubbing shoulders with the glitz and glamour of upmarket Puerto Banus. But property buyers are thinking, and spreading, laterally. Mijas is proving popular with those seeking space and a traditional Andalusian feel. Other buyers favour Estepona, with its flower-lined streets, picturesque marina and stunning old town. Estepona is where most new developments are being built due to available land. As the dream of owning property in the UK becomes increasingly out-of-reach for many British buyers, the tandem dream of home-ownership in Spain remains very much alive.

Business Vision Summer 2018 Issue • www.bv.world

By GEORGE SHORT THE Southern coast of Spain remains one of Europe’s leading holiday destinations, and it’s easy to see why: more than 320 days of sunshine a year, an average temperature of 21 degrees, over 90 golf courses, an array of Michelin-starred restaurants – and the blue beauty of the Mediterranean. The Costa del Sol is home-away-from-home for many Europeans – and some have made it a more permanent home, plunging into the local property market. There aren’t many hotels on the coast, and with increasing demand and fixed supply, room prices have risen as much as 40 percent over 2017. This has prompted many holidaymakers to short-term rentals, which in turn has encouraged investor-led clients. Steady growth is seen as evidence that the market is back on its feet and moving ahead. The total number of month-on-month property sales from February 2017 to February 2018 was up 16 percent, with more than 575,000 property transactions expected this year. That trend continues, evidenced by the fact that a quarter of newly registered companies in Spain fall within the real estate sector. Since 2014, property transactions have increased by 61 percent, with current prices 30-50 percent below 2007 levels. The fourth quarter of 2007 was the high-water mark for property sales on the Costa del Sol before the fall (due to the global recession) of 2008. The market took a positive turn in 2014 and the stagnation became slow growth in 2015. Over the past 50 years, the market has moved in seven-year cycles, with things expected to cool off in 2021. Within the past year there has been a 15 percent increase in building licenses granted in the region, but today’s property market hinges on resale. The off-plan market has only recently shown signs of revival. While there is high demand for new modern product, clients need to imagine what the finished dwelling will look like – and to have the patience to wait at least 18 months for completion. Relative regional market stability puts the Costa Del Sol ahead of the rest of the country. With just over nine percent year-on-year price-growth in 2018, the market is forecast to show a 10 percent increase for the Costa del Sol, compared with a 5.2 percent rise for the whole of Spain. The famous coast’s property market is still largely unregulated; anyone can start a company to act as a broker between buyer and seller. The resulting lack of professionalism can result in clients being misled or fed incorrect information. The field is slowly changing, with the introduction of regulatory boards such as REAS (Real Estate Agency of Spain) and AIPP (Association

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Gender pay divide: women undervaluing their own contributions, study finds Expectations play a part in unequal rewards system – and women appear less pushy than men when it comes to negotiating a salary

WOMEN often find themselves on the wrong end of the gender pay divide, but recent research suggests that they themselves are asking for lower pay than their male counterparts for identical senior roles. The issue is back in the news; in fact, it never went away, with Britain’s national broadcaster making headlines for all the wrong reasons in a recent report in The Guardian newspaper (www.theguardian.com/ commentisfree/2018/jul/11/bbcnot-close-gender-pay-gap-men). A separate study by Norrie Johnston Recruitment (NJR) of more than 6,000 senior executives earning at least £70,000 per annum found a 25 percent difference between the salaries expected by male and female non-executive directors. Males surveyed were looking for an annual salary of £106,935, while women going for the same NED roles expected just £83,125. The data from the report Women, Pay And Progress shows that the problem is widespread, with men’s salary expectations

higher than women’s for 10 of the 13 senior/board-level roles studied. Men pursuing customer service head roles on average expect to be paid £93,833. In contrast, females competing for the same role expect £75,114 - a 22 percent difference. There’s a 14.5 percent difference for financial director roles, while for chief operations officers and sales directors the pay gap is 13 percent and 12 percent respectively. SENIOR ROLES “We’re not saying that companies coming to us with senior roles to fill expect to pay women less than men,” explains NJR CEO Graham Oates. “The differences we’ve recorded are the salary expectations set by the candidates themselves. “When gender pay-gap statistics were made public for the first time earlier this year many argued that the major factor behind the disparity was that there are more men than women in senior positions; the challenge was simply to help more women reach the top. “However, our research suggests that even when women get into

senior roles a major pay gap can still prevail.” Things are less marked for managing director or CEO roles (2.5 percent), senior change managers (7.5 percent), facilities managers and marketing directors (both three percent). But the gap is there, and every time it is in favour of men. There are a few roles where there is virtual parity: HR, supply chain management and IT programme management. And with chief technology officer roles, the difference actually tips in favour of women, with an eight percent differential. These are rare exceptions to the rule. “It’s fair to assume that the senior executives we studied are basing their salary expectations on their most recent roles,” said Oates. “If that’s the case, then what appears to be happening is that women somehow find themselves on a career trajectory which culminates in them being on a pay scale which is out of kilter by the time they reach a senior level. This needs to be addressed. “The various bodies looking

AUNTY BEEB KEEPS IT FAIR BRITAIN’S national broadcaster, the BBC, says it has reduced its mean pay gap from 10.7 percent to 8.4 percent. Last year’s salary disclosures prompted controversy over the gender pay gap and instances of unequal pay. The BBC announcement of improved pay equality was made before the publication of the broadcaster’s annual report. The corporation has calculated that about 25 percent of the improvement is thanks to a merger between BBC Studios and BBC Worldwide. The BBC calculates that 7.1 percent of the remaining pay gap is due to structural issues. It reports that there are too few women in leadership roles, and more women than men in the lowest paid sectors. The broadcaster has improved female representation in senior leadership positions, from 42.1 percent to 43.3 percent. The BBC has pledged to eradicate its gender pay gap by 2020. Britain’s national average pay gap is more than 19 percent. The Bloomberg Gender-Equality Index (GEI) is a comprehensive investment-quality data source on gender equality. The 2018 Gender-Equality Index includes more than 100 companies from 10 sectors in 24 countries and regions. The Bloomberg GEI was created to bring transparency to social data. Investors and companies increasingly rely on environmental, social and governance (ESG) information to evaluate reputation, risk and performance. It takes into account company statistics, employee policies, external community support and engagement, and gender-conscious product offerings.

Business Vision Summer 2018 Issue • www.bv.world

to tackle the pay gap issue need to perhaps consider how young women early in their careers value themselves within the labour market, and what happens to their pay, career path and opportunities as they progress. We need to understand how things get out of step.” The study also looked at the dayrate expectations of senior interim managers and found that while the gap isn’t as significant, there is still a sizeable disparity for eight of the 13 senior interim roles studied. The biggest gap is a 15 percent difference between male and female interim non-exec directors (in favour of men), and double-digit differences for interim senior change manager and customer service roles. IT appears to be an area where the tables are turned, with female interim CTOs and IT project/ programme managers expecting a significantly higher day rate than their male counterparts. “Hopefully, by flagging these figures, we are adding more insight to the debate and drive to eradicate this gender pay imbalance,” says Oates.

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Chocolate frenzy: don’t bite into wrong bar, students advise Dutch university probe highlights one company’s go-ahead policy to avoid cacao from unethical sources A GROUP of International business management students from the Fontys University of Applied Sciences in the Netherlands was recently given the task of company analysis. The (anonymous and possibly sweet-toothed) students opted to study Tony’s Chocolonely, a Dutch company – and shared their findings with BV. The students have succeeded in raising the company’s profile, thanks to its commitment to human rights and the environment. Tony’s Chocolonely has been built around the central focus of ensuring its confectionary is untainted by slave labour, a recognised and troubling problem in the cacao farming industry. (All chocolate, incidentally, comes from cacao; cocoa refers to the powder that lines supermarket shelves and is used in cooking

Things are not always shared evenly in the supply chain and hot drinks. Cocoa is created by applying heat to raw cacao, a process which destroys some of the beneficial nutrients.) “Things are shared unevenly in the chocolate supply chain,” notes the Chocolonely website. THE BIT IN-BETWEEN “The chain starts with the millions of farmers that produce cacao and ends with the billions of consumers that enjoy chocolate. “But what about the bit inbetween?” The bit in-between is the

problem – and the moral triumph of Tony’s Chocolonely. The students chose to evaluate the company because it sets an example by having a major motivation other than profit: slavery-free chocolate production. The international market is dominated by a group of “chocolate giants” that profit from keeping the cacao purchasing price as low as possible. “As a result, farmers are forced to live in poverty,” says Tony’s, “leading to child labour and slavery.” The Dutch students produced a short video as their university assignment, featuring an interview with farmworker Kam Sami Felix, aged 16, who worked from 1999 to 2003 on a cacao plantation. He told the interviewers he wasn’t paid during that time, and was forced to work. Tony’s Chocolonely is right behind workers like Felix, supporting

Ethically sourced cacao is becoming de rigueur for manufacturers with a conscience 78

company’s turnover is in the Netherlands, the rest is in the US, where the concept and ethical philosophy have struck a chord with the buying public. Tony’s Chocolonely is still taking on those “giants”. CERTIFIED SOURCES Mars Chocolate has a 24 percent of the market (the market leader), while Nestle has 20 percent and lesser-known Mondelez International 16 percent. Mars is also moving towards fair trade, with more than 50 percent of its cacao beans from certified sources. The goal is to have 100 percent from certified sources by 2020. Nestle is lagging, with only three percent of its cacao purchase used for the Fairtrade Kit Kat bar – but

since last year the company has been sourcing cocoa, sugar and vanilla through Fairtrade programmes. The students found, in their research, that packaging was another strength for Tony’s Chocolonely. It reminded people of Roald Dahl’s Charlie And The Chocolate Factory. The young investigators also found most people were aware of Chocolonely’s mission and felt brand and design help sell the product. Higher prices don’t count against ethically sourced cacao producers; buyers are willing to spend more for the knowledge that their sweet snack is slavery-free. The fact that there are 20 flavour options probably does no harm at all to sales in the Netherlands, or elsewhere in the world where the faithful gather for chocky.

HEALTHY FARMING IN GHANA CACAO farmers from the western region of Ghana are turning to digital technology to reduce reliance on pesticides and improve yield. The Olam Farmer Information System (OFIS) app run by commodities giant Olam, has helped farmers to triple their output, the BBC recently reported. The technology puts growers in contact with experts who offer advice – other than the obvious option of turning to chemicals – when agricultural problems strike. The World Economic Forum predicts that a dramatic increase in food production is needed by 2050 to feed a growing population. It is hoped that digital tech will play a part in increasing yields over coming years. The OFIS app collects data from farmers and uses algorithms to create personalised recommendations to farmers about increasing yields.

Business Vision Summer 2018 Issue • www.bv.world

him and his colleagues by applying five main principles: traceable beans, higher prices for the farmers, investments for growth of the corporation, working for long-term, and the aim to improve quality and raise productivity. Beans for ethically sound confectionary are mainly sourced from farms in western Africa. Tony’s Chocolonely makes at least three visits per year to farms to verify that working conditions meet the company standards. It pays farmers a Fairtrade premium and a “Tony’s bonus”, all of which means Chocolonely pays 25 percent more than other companies for the same amount of cacao beans. This goes to agricultural training courses and new nurseries for cacao trees. The company works directly with 5,420 farmers to check farm workers and harvesters are healthy and not working under harsh conditions. The company offers them a fiveyear contract so they can calculate future revenue and plan ahead; the knock-on benefit for the company is knowing that its supply is reliable. Tony Chocolonely’s market share to October 2017 was 16.7 percent of total revenue of all chocolate bars sold in Dutch supermarkets; it has seen a 35 percent growth over the previous year (€44.9m revenue for the company). The company made six percent profit after tax: €2.7m. A full 93 percent of the Dutch

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The crypto balloon is rising again, with new player Ethereum hanging on tight

BITCOIN’S value will more than double by the end of 2018. Buy, buy, buy! But, um, not Bitcoin. And hey, relax your shoulders: while this information comes to you from the mugs who purchased Litecoin at its absolute, probablynever-to-be-seen-again zenith (the BV investment team, aka pictures editor Richard Thomas and myself) the source of this particular tip is more reliable: Reddit co-founder Alexis Ohanian, speaking via Fortune magazine. Ohanian estimates Bitcoin will climb back up to its all-time high of $20,000 by the end of the year, and here’s his punchline prediction: Ether will reach 21 times its current value during the same period. This means that the downtrodden step-sibling running on the Ethereum platform will rise from $502 (at the time of writing) to $10,542,700 in December. Remember: your mileage may vary. So, with that caveat in mind, get your wallets out. Developers have used Ethereum to create applications including a blockchainbased virtual-cat breeding game

(I’m not making this up) and major firms, including banking behemoth JP Morgan, have been testing technology based on Ethereum. It’s the second-largest cryptocurrency by market value, and it’s up by several percentage points in the past few days. Ethereum cofounder Vitalik Buterin believes the currency is poised for more gains, as companies develop decentralised applications using Ethereum’s basic platform. With a vested interest in

Ethereum, the emerging ecosystem (remember that term from the Gibfin Conference?) stands a better chance against rival blockchains. An Ethereum Community Fund (ECF) has been created to free-up communication between the various Ethereum blockchain projects – and to theoretically create a platform to finance selected projects. Ethereum “has grown beyond my expectations”, Buterin has been quoted as saying, “but the work is clearly not finished”.

AT THE CRYPTO COALFACE BITCOIN mining annually consumes as much electricity as the country of Ireland (about 24 TWh, or terawatt hours). That energy use doubles every six months and could reach 67 TW before the end of 2018 – about 0.3 percent of the world’s electricity consumption. GEAR, which stands for Green and Energy Renewables, the world’s first closed-loop network. Larry King, Jim Rogers, and Stan Bharti have praised GEAR’s aim to turn mining around and use it as a tool for development. GEAR is also developing a self-financing network, cleaning out proofof-work systems, funding and distributing green energy and renewable innovation. By cleaning out the proof-of-work systems, GEAR supports the mining community with green energy and plans to distribute its tokens to promote environmentally friendly transactions. Cryptocurrency companies are considering the long-term implications.

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Arming digital warriors in the evolving war of cybersecurity From Hillary Clinton’s presidential campaign to email hacks, the bad guys are busy – but help is at hand

Wave power might be more reliable than sunshine in Wales, but new projects show promise

Cartoon: World Tribune

DIGITAL warfare is one of the greatest threats facing businesses and governments today. In an age of ingeniously malicious and incredibly adaptive hackers, cybersecurity is more crucial than ever. These digital terrorists are here for the long haul, so companies must shore up cybersecurity if they hope to survive today’s digital battles. Why is cybersecurity so important? How much damage could a digital attack really do? In the gamut of digital terrorism, beleaguered businesses could have data breaches that steal proprietary data or expose corporate secrets. Ransomware attacks highjack a user’s system, locking them out and wreaking digital havoc, and require a Bitcoin ransom payment to recover stolen data or unlock the system. Cyber criminals can also have more sophisticated agendas

Staying ahead of the cybercriminal curve such as corporate espionage, market manipulation, disinformation and unlicensed dissemination of information. Cybercriminals have adopted cutting-edge attack tools and are using automation, toolkits and cloud technology to effectively hold businesses hostage. They are employing highly advanced tools in a rapidly growing — yet poorly protected —digital ecosystem.

With such high stakes, companies need to be sure they’re choosing cybersecurity with superior performances records and forward-thinking R&D strategies. Palo Alto Networks offers a next-generation platform using automatic orchestration on cloud providers. The company is on its third generation of the platform in an effort to stay ahead of the cybercriminal curve. Not convinced? Listen to John Podesta, Hillary Clinton’s 2016 campaign chairman, and America’s cybersecurity poster child. Podesta failed to take basic security measures to protect his sensitive data, opening himself (and Clinton’s presidential prospects) to one of the largest political cyber thefts in history. According to the Associated Press, Podesta fell victim to a phishing email scam by the Russian

As service networks rapidly evolve, reaching speeds of up to 5G, they inundate the market with new users, devices, applications, and services. Users from all over the world roam across these networks, many of which have lagging, legacy architectures. The networks are often set up in a complex fashion with separate data and application planes, creating unnecessary security challenges. In a world of ever-evolving threats, Margais asks: “How do we secure these evolutions over time?” Palo Alto Networks has pushed cybersecurity innovation, developing an integrated Security Operating Platform that protects and defends data assets with effective tools at network, data-centre, and endpoint levels. The platform features automatic orchestration — leveraging rapid dynamic analysis, STAC analysis, and machinelearning at scale.

Effort to arm as many digital warriors as possible Compared with traditional security infrastructures, which offer piecemeal solutions that need to be mixed and matched, Palo Alto Networks has an elegant and simple solution that works, so that companies can focus on business. Today’s digital threats are dynamic, and the traditional architecture of cybersecurity no longer cuts it. Gone are the days of multiple security layers spread over a multitude of products and services, resulting in redundancies and a deluge of security alerts to sift through. With Palo Alto’s tightly integrated system and advanced analytics, users can automate threat identification and enforcement across cloud, network and endpoints. The platform protects endpoints

and servers by blocking exploits, ransomware, malware and fileless attacks. By automating attack detection and streamlining response, operations teams and analysts are free to focus on higher value activities. Palo Alto Networks’ technology is a powerful cyberwar ally. By harnessing analytics to automate routine tasks and enforcement, it has created an integrated, partner-rich platform which simplifies security so businesses can secure users, applications and data. Companies want to partner with Palo Alto because of its strong market presence and its pledge to make attacks more difficult and more costly for cybercriminals by focusing on threat-prevention via a natively integrated and highly automated platform. Palo Alto Networks disseminates white papers and training material through its website, and conducts seminars and conferences highlighting best practice or threats. This is an effort to arm as many digital warriors as possible against cyberterrorists and level the playing field. It published a free US Cybersecurity Guidebook back in 2015 and has since created other region-specific iterations for France, Australia, Singapore, Benelux and the United Kingdom. Palo Alto Networks has opened a Cybersecurity Skills Practice Lab facility in Amsterdam which offers practical, hands-on courses — onsite or web-based — to help prepare students against current and future digital threats. Palo Alto Networks, as a member of the Cyber Threat Alliance, puts its customer’s interests first and shares threat intelligence information — which used to be considered the proprietary repository of threat intelligence of each competitive individual business — with other leading cybersecurity solution providers. Now CTA members come together to share threat intelligence on advanced attacks in order to gain some understanding of the motivations and tactics of the bad actors behind them.

Business Vision Summer 2018 Issue • www.bv.world

hacker group known as Fancy Bear, which then proceeded to erase all data from his Apple devices and published his Gmail messages and email password on WikiLeaks. It also hacked his Twitter account, broadcasting to the world, “I’ve switched teams. Vote Trump 2016”. Podesta can commiserate with other Washington officials: the director of National Intelligence, James Clapper, CIA director John Brennan, and 2012 Republican presidential nominee Mitt Romney have also all experienced the misery of having their personal email accounts exploited. In the political world, the stakes affect political aspirations, but in the business world they can have dire financial consequences. Over the years, many companies have been successfully attacked, causing massive breaches of customer privacy and financially damaging business. Personal information (names, addresses, dates-of-birth, phone numbers, and even some social security and drivers’ license numbers) have been compromised in cyberattacks on Yahoo, Ebay, Equifax, Uber, and JP Morgan Chase in recent years. Millions of clients were exposed in each breach and the companies had to spend considerable time and resources to resolve the issues. Other attacks have harvested users’ credit card information, such as Target’s 2013 breach – with about $162 million in losses – or Sony’s Playstation Network breach in 2011: $162 million in lost revenue as well as a $15m class-action settlement. These last two examples highlight an important new front in cyber warfare. The exploding Internet of Things (IoT) market poses a prominent new threat, allowing cyber criminals to hack any device with WIFI capabilities and begin harvesting personal information. Pair all the above with the race by network providers to create more capacity, and lower latency, and we have what Peter Margais, Palo Alto Networks head of service-provider product marketing, calls a “perfect storm”.

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Emma Isaacs This chick means business

PEOPLE

EMMA Isaacs, CEO of Business Chicks, Australia’s largest community for women, has her gender’s best interests at heart. Isaacs, passionate about supporting courageous, risk-taking women, showed she can “walk the walk” before advising others to do the same. She ran her own recruitment business – acquired at the tender age of 18 – for seven years before discovering a group called Business Chicks. She learned that the business was for sale, took a leap of faith and plunged in. Ten years later, there was a flock of 250 Business Chicks and a community of determined businesswomen. Business Chicks organises events, publishes a magazine, Latte, and helps its members (and 250,000 social media followers) forge new connections through its engaging content. In 2016, Emma packed up her young family to move to California where she launched the USA arm of Business Chicks. People often talk about a ‘Business Chicks feeling’ and much of this comes back to Emma. She is perpetually optimistic and always joking wherever she goes. Emma wants to make people feel special, always. Customer service is at the forefront of everything she does and that is evident in every touch point of a Business Chicks interaction – from the gift bag attendees receive at events, to the thousands of Christmas cards that are sent out from the team every year. In many ways you could say that Emma is unconventional in the way she does business – she treats her team like her family, she knows the Business Chicks members by name and she signs off emails with kisses – but that’s what makes Emma and the business so unique. Emma has spent time with some of the world’s greatest thought leaders including Sir Richard Branson, Bill Gates, Sir Bob Geldof and Arianna Huffington. She is a highly sought after keynote speaker and media commentator on topics around female leadership and entrepreneurship and has been featured in BRW, Cosmopolitan, Sydney Morning Herald/The Age, The Australian Financial Review, InStyle and Marie Claire, and on Sunrise, Sky Business News and The Today Show.

Levitt and Dubner Get yer Freak on! Outrage and delight

PEOPLE IT’S BEEN almost 13 years since Freakonomics, the seminal (and controversial) book co-authored by Steve Levitt and Stephen Dubner, was published to a mixed response of enthusiasm, outrage, confusion and delight. Freakonomics is (in a nutshell) a lateral look at how the pros and cons of incentives affect the global economy. Its observations range from the implications of secret handshakes within the Ku Klux Klan to the parallel strategies of drug gangs and fast-food giant McDonald’s. Not surprisingly, it stirred some interest at the time of its publication – and it remains a touchstone of alternative economic thinking. It began when Dubner went to Chicago to interview Levitt for The New York Times Magazine. Both were reluctant to do the interview, but the meeting resulted in an unexpected partnership that yielded their off-the-wall book about cheating teachers, odd baby names and crack dealers. Without bogging ourselves down in the squidgy but enthralling terrain Steves Levitt and Dubner laid before their unexpecting readers in Freakonomics, BV thought it was time to revisit – albeit briefly – the publishing phenomenon, and its legacy. The original Freakonomics (since joined by follow-on books Think Like A Freak and When To Rob A Bank) became a required-reading staple for economics students around the world, and for anyone with a questing and questioning spirit. There is now a website (www.freakonomics. com), a lecture series, radio shows, a documentary film and a blog, all of which have continued to garner followers from both mainstream and alternative observers of economic systems. Freakonomics was initially expected to sell a few hundred copies at most; it went on to spend two years on the New York Times Best Seller list and total more than four million copies worldwide. Together, Levitt and Dubner have written books with total sales of more than seven million. The original book, which used ideas from statistics and economics to explore real-world problems, was an instant bestseller. It attracted some controversy, but the Freakonomics phenomenon remains relevant.

Business Vision Summer 2018 Issue • www.bv.world

Image: Player FM

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Sharia banking weaves moral fibre into an oft-flawed system No pork, no porn, no booze: this traditional Islamic take on finance relies on ancient ethical codes — and ensures lender and borrower share risk and profit. TONY LENNOX reports

Mohamed Iqbal Asaria: Sharia promotes equity and finance these objectives are promoted through the observance of the Maqasid al-Shariah (objectives of the Sharia). These require that Islamic financial institutions do not finance activities like gambling, pornography, tobacco and alcohol. “In addition there is a promotion of risk-sharing rather than risktransfer mechanisms along with the prohibition of usury. There is also an emphasis on financing transactions in the productive economy rather than financing speculative activities. “The ethos thus generated strives to direct Islamic financial institutions towards equity and justice as per the tenets of Sharia Law.” Almost a quarter of the world’s

population is Muslim, yet less than one percent of financial assets are Sharia-compliant. This is changing rapidly. Global Islamic investments have increased by 150 percent since the financial crash of 10 years ago. The sector is growing 50 percent faster than the traditional banking sector. Islamic finance has to function in accordance with Sharia Law — edicts laid down in the Koran which cover everything in Islamic society from marriage to crime to commercial dealings. The key principle in terms of finance is the prohibition of monetary exploitation. The sub-prime selling which led to the banking crisis would,

Business Vision Summer 2018 Issue • www.bv.world

TRAFFIC warden remains the most hated trade in the UK today — though in the wake of the global banking crisis a decade ago, bankers now find themselves firmly embedded with journalists, secondhand car salesmen and politicians in the top five. This is hardly surprising. Past generations held the local bank manager in the same sort of reverence as the family doctor. But after the crash of 2008 that aura of calm common sense and respectability was wiped away in a moment, to be replaced by images of ravening, greedy wolves, bent on ripping you off. One of the consequences of the crash was an upsurge of interest in alternatives to traditional banking which had become so tainted in the eyes of many. And over recent years more and more people have been drawn to investigate the Islamic financial model. Islamic banks operate under strict Sharia Law principles, which means they do not pay or receive interest on any of the products that they offer. To many in the West, Sharia Law conjures images of fanatical and intolerant religious teachings. But when applied to finance, the outcome is rather more ethical than conventional banking attitudes. Mohamed Iqbal Asaria, who is an advisor on economic and business affairs at the Muslim Council of Britain, has seen a remarkable growth in non-Muslim interest in the ethical principles promoted by Islamic banking institutions. “In general Sharia Law is designed to promote equity and justice,” he says. “In banking

for instance, have been deemed most unethical and therefore forbidden W O R L D under Islamic law. Besides ruling that investment in sinful activities is against God’s law, Sharia also forbids gambling, which rules owut unsafe financial products which bet on uncertain outcomes, such as derivatives, futures or swaps. In fact, anything speculative is deemed to be iniquitous. There are some obstacles to overcome for those in the industry wanting a slice of this growing market. Knowledge of Sharia Law is an obvious essential, and a bank or financial institution will need to establish a Sharia board made up of Islamic scholars to provide guidance to the directors — which isn’t as straightforward as it might seem, especially for those dealing in global markets. Different Islamic countries interpret Islamic law in diverse ways. Language can be a problem too, as many Islamic scholars will use only Arabic. COMPLIANCE There’s also the question of supply. There are a limited number of Islamic scholars in the world, and companies aiming for Sharia compliance are finding it more and more difficult to acquire the services of bona fide scholars. Apart from the obvious sectors of alcohol, tobacco, pork, pornography and gambling, Sharia Law proscribes financial dealings in anything connected to the military, or even conventional banks and insurance companies. In Islamic law there is a clear distinction between money and capital. Money is simply a means of exchange, not an asset. Great attention is paid to the social accountability required not only of financial institutions but of individuals too. The critical assertion under Sharia Law is that none should profit purely from money. This means, for instance, that a bank doesn’t simply provide finance and then leave the risk entirely to the individual borrower. There is an understanding that a relationship has been created — and that both 88

‘Money is simply a means of exchange’ parties share the risk and the potential profit. This has the effect of tying all parties into a concentrated interest in the long-term success of any project. If the project fails, the bank stands to lose as much as the individual. These days many people see this method as a much more ethical and sustainable model in comparison to traditional western banking. Even in these post-Crash days, there remains a deep suspicion that those banks who took us to the edge of the abyss may not have fundamentally changed their ways, and that Sharia financing methods offer a real alternative. While it is still only a fraction of the global financial world, Sharia banking is seeing significant growth, particularly in the developing economies of the Middle East and Asia. Western banks, businesses and investors are beginning to understand that, despite the complexities of

Sharia Law, they will need to adapt if they are to take advantage of the opportunities on offer. There is resistance, though, particularly in the US, where general suspicions of the growth of Islam, however misguided, remain strong. Many state legislatures, fearing that Islamic finance could be a backdoor to the funding of terrorism, have clamped down on all forms of Sharia law applications in state courts. But there are many in the US and in Europe who — putting the religious aspects aside — see Islamic principles as a legitimate and ethical way to do business, especially given the extremes demonstrated by the banks before the financial crisis. The question being asked is why should a system so clearly based on morality be stigmatised? Failure to recognise the general desire for a more ethical banking model can only be harmful to Western economies in the future, they believe. The growing interest being shown in Islamic principles of banking is not necessarily based on religion, but on a yearning for a return to banking integrity. And if that happens, traffic wardens can relax…the number one spot in the most-hated league table is still theirs.

In Islamic law there is a distinction between money and capital

Charity begins at home; a new plan ensures it goes the distance Commit Good lives up to its name with technology to track donations from source to recipient

IS THE money you just donated to that children’s charity really going to help the kids, or is it going into the pockets of the CEOs who run the thing? According to a study done by Charity Navigator, top executives of the largest and most prestigious charities in the US receive annual salaries of more than $1 million. Charity donors have also become obsessed with the “wrong kind” of transparency, and social organisations are under massive pressure to cut costs. This has led to under-investment in talent and infrastructure, and has shifted the focus away from the more important issue of actual impact. How can individuals contribute in a manner that is most beneficial to giver and receiver? Enter Commit Good, a US-based organisation that is using blockchain technology to “transform the charity and NGO ecosphere”. With

charity-based blockchain platforms, donors will be able to track their donation through distributed ledger technology. Blockchain prevents transactions from being erased, providing immutable accounting. Blockchain donations are executed directly and reach the charity instantaneously, with a fraction of the traditional costs and fees. There is also direct communication between the organisations and the donor community. This concept has been endorsed by IBM, with recent reports that it sees the potential for blockchain technology to encourage philanthropy by tracking charitable donations – where the money came from, what it was spent on, and who received the donated goods. Clay Baswell, the CEO and founder of Commit Good, says there are five ways that blockchain will benefit givers and receivers.

“Until now, charitable giving followed the normal monetary process of cash, cheques, and bank card transactions,” he told BV. “This process needed third parties – such as banks – who managed and controlled donations. “Commit Good will power a virtual charitable economy where social and economic interactions are governed by rules prescribed by smart contracts, resulting in absolutely no need for a third party or regulator.” Commit Good’s Ethereum blockchain-powered smart contracts make donations more measurable, traceable and impactful. “It is the only blockchain platform that is creating a charitable ecosystem that includes digital currency donations, in-kind donations, providing charities with a percentage of marketplace transaction fees, dispute resolution, and last-mile delivery,” says Baswell.

Business Vision Summer 2018 Issue • www.bv.world

Blockchain technology ensures charity donations go all the way

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AN INVITATION TO VOTE Readers are cordially invited to vote in the Business Vision (BV) Awards Programme. BV seeks out candidates with outstanding corporate achievements but all eventual winners will have convinced the judging panel that they have the vision to maintain and build on their success well into the future. Visit our website www.bv.world/awards to place your vote or email us at award@bv.world We will send you a copy of the nomination form. The information you provide will be used by the BV judging panel but not shared with third parties. As a small token of our thanks you will be entered in a free draw for a one-year complimentary subscription. No vote is wasted. Your recommendation will receive our full attention.

Virgin Atlantic – Best Employee Engagement | UK 2018 COMPANIES should “put purpose and passion at the heart of their plans,” says Sir Richard Branson, who surely needs no introduction in this context. The bottom line -- to quote again from Branson -- is to “seek out people who understand your passion”. Virgin Atlantic has made a speciality of finding qualified, enthusiastic people capable of taking on responsibility -- with impressive results for both employees and company. Virgin Atlantic follows Branson’s vision of creating “businesses driven by an equal concern for people, profit and the planet” and gathers a happy and empowered workforce at a stroke. BV’s Best Employee Engagement Award granted, without hesitation.

Edelweiss Capital – Best Financial Solutions | India 2018

THE EDELWEISS Group is one of India’s leading diversified financial service conglomerates, which prides itself on providing a “bank-style” model. It provides a range of products and services to a client base of corporations, institutions and individuals. A set of 13 guiding principles has governed the company’s operations since its inception, helping to guide decision-making -- no matter how challenging the circumstances. Those principles reflect company values and breathe life into the credo of “Ideas create, values protect.” Employees are inspired by a common vision that generates value for stakeholders and steers progress. The BV judges were impressed by the company’s differentiated approach to business, its customer-centric initiatives and intelligent investments. The judges unanimously conferred the Best Financial Solutions (India) Award.

BIOMARIN provides therapeutics to treat rare genetic diseases and has brought five products to market. In the past 10 years, BioMarin has had a revenue increase of over 1,200 percent, a total of more than a billion dollars. This success, the innovative therapies and the global success of its treatments made BioMarin an easy choice for BV’s Most Innovative Pharma Company (US) award. The most striking feature for the judging panel was the fact that most of BioMarin’s revenue comes from outside the US, where single-payer systems pay essentially the same price for therapies as is charged in the United States.

Business Vision Summer 2018 Issue • www.bv.world

BioMarin – Most Innovative Pharma Company | United States 2018

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AfrAsia Capital Management – Best Tailored Investment Solutions Team | Indian Ocean 2018 INVESTMENT is key to protecting and growing wealth over the long term, and the more fine-tuned that process can be the better. Mauritius-based AfrAsia Capital Management (ACM) was nominated to the BV Awards programme for its suite of tailored investment products. Once ACM fully understands an individual client’s needs and goals, the process whirrs to life. ACM and its global partners manage equity, bond and alternative investment funds. Portfolio and pension fund management, financial product distribution, Collective Investment Scheme (CIS) management, investment advice: all this falls neatly under the ACM umbrella of expertise. The precision and concern for clients meant the judges were unanimous in conferring the Best Tailored Investment Solutions Team (Indian Ocean) Award for 2018.

Alcazar Energy – Best ESG Energy Project Team | META 2018)

ALCAZAR Energy, an independent developer and power producer formed in 2014 with offices in Dubai, Jordan, Turkey and Egypt, has a noble vision: “To empower the evolution of society by being a conscious and accountable leader in the field.” The company’s inclusion on these pages indicates that the goal has been achieved. Its focus on mid-market renewable energy generation across the META (Middle East, Turkey and Africa) region has kept it competitive, taking development risk, securing project finance and managing PPA negotiations. Alcazar’s vision, along with its development and financing skills, impressed the BV judges, who presented the company with the Best ESG Energy Project Team (META) 2018 Award.

Ashurst - Best Corporate Restructuring Law Team | Australia 2018

RESTRUCTURING – classical definition – is the act of reorganising the legal, ownership, operational, or other structures of a company to make it more profitable. With its technical expertise, local knowledge and international network, Ashurst delivers that and more for its Australian clients, with five offices giving it a presence in every Australian state and territory. It is committed to being a sustainable global law firm, and creates positive developments for its clients, employees, the environment and the communities in which it is based. The BV judging panel was impressed by Ashurst’s commitment and efficacy, and has conferred the award for Best Corporate Restructuring Law Team (US). 92

Jaguar – Best Automotive Branding | UK 2018

WHO CAN forget the iconic silver jaguar ornament that graced the bonnet (hood, to our American readers) of older Jags? Now outlawed in some countries for pedestrian safety concerns, the leaping jaguar is mostly a thing of the past – but Jaguar has never been in danger of losing its identity. If anything, that is expanding, with Jaguar now producing models aimed at 18-34-year-olds. “Accessible luxury” is the new watchword, without any sacrifice of classic lines or kudos of ownership. That simple nickname “Jag” is known the world over, and remains synonymous with luxury and build quality. Best Automotive Branding (UK) Award? The BV judges gave a jungle cat roar of approval.

BK Capital – Best Securities Brokerage | Rwanda (2018)

Charles Taylor – Best Mutual Insurance Partner | Global 2018

CHARLES Taylor & Co was founded around 1840 in the north-east of England – as a coal merchant. In 1885, the Standard Steamship Owners’ Protection and Indemnity Association Ltd engaged Charles Taylor as its manager. This was the company’s principle activity until the 1960s, when it began to develop other mutuals. These include SCALA (for Canadian shipowners) and SIGNAL (for US stevedore employers). In 1996, the company was listed on the London Stock Exchange. Organic growth and acquisition led to the development of its management, adjusting and insurance support services. Charles Taylor is a leading provider of services in the global insurance market. The company prides itself on its professional workforce and passion about its work. These factors impressed the BV judges, who presented Charles Taylor with the Best Mutual Insurance Partner (Global) Award.

Business Vision Summer 2018 Issue • www.bv.world

BK CAPITAL is the brokerage arm of the Bank of Kigali, which has 79 branches across Rwanda. BK Capital controls 60-70 percent of the trade market and employs almost half the country’s brokers. It provides advisory services and does its own in-house market research to inform, and provide focus for, its clients. Innovation is key, CEO Carine Umutoni says, and BK Capital encourages out-of-the-box thinking with shared internal and social media platforms. It holds weekly staff meetings for its young and go-ahead team and prides itself on its open-door policy. The company is undergoing large-scale digital transformation and is expanding its international client base. BK Capital has positioned itself as “the gateway for investment” – with the full support of the Rwandan parliament – and is working on making Rwanda the region’s financial driver. Best Securities Brokerage (Rwanda) 2018 Award? The BV judges gave a unanimous “Yes”.

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HSBC – Best Commercial Bank | Hong Kong 2018 THE CITY’S very name – Hong Kong – is loaded with inferences and expectations linked to the adjective “commercial”. For a bank to survive and thrive in this highpaced environment – and HSBC certainly has ¬– requires immersion, experience and expertise. Success is a process of continual adaptation, and HSBC constantly evolves and upgrades its services. This allows customers and clients to grasp more opportunities and maintain an edge. The new Business Internet Banking system is an example of HSBC’s constant evolution, with new tools tailored to corporate banking needs. “Together, we stay ahead,” and “The world’s local bank” are HSBC mottos which – along with that innovation – appeal to the BV judging panel. Best Commercial Bank (Hong Kong) award duly conferred.

De Brauw Blackstone Westbroek – Best Employment Law Team | Netherlands 2018

DE BRAUW’s employment and employee benefits practice covers employment law in the widest terms. The practice provides support and advice in national and international transactions, social and employment law regarding mergers, acquisitions, joint ventures and outsourcings. The company also advises and represents companies in dismissals, reorganisations, downsizings, pensions law and industrial action, among other things. The nature of the client base keeps its lawyers abreast of the latest developments and current market practices. The company’s practical and pragmatic approach to problem-solving appealed to the BV judging panel, and its global legal expertise was a clincher for the award of Best Employment Law Team (Netherlands).

ThinCats – Most Visionary SME Financing | United Kingdom 2018

THINCATS, now at the forefront of the alternative finance industry, started out in 2011 in the wake of the global financial crisis. It quickly transformed SME lending-market systems by attracting institutional investors. ThinCats believes that SMEs represent a good investment, and it provides a more flexible service than the average bank. It prides itself on its innovative data analytics as a gauge of a company’s strength, and hires employees with experience, intelligence and drive. ThinCats encourages innovation, and a recent staff-satisfaction survey came back 80 percent positive. The BV judges like the cut of ThinCats’ jib and its realistic, positive approach, conferring the Most Visionary SME Financing (UK) Award. 94

ICBC – Best Banking Services | China 2018

INDUSTRIAL and Commercial Bank of China (ICBC), with branches in 42 countries and territories, has been around since 1984. Through continuous development it has become one of the top banks in the world, with an excellent customer base, a diversified business structure, strong innovation and market competitiveness. It provides financial products and services to 5,784 corporate customers and 530 million personal customers. It has achieved healthy and sustainable development for itself, and turned client businesses into engines of profit growth. While it adheres to its bedrock of operation and management, the bank supports structural reform and economic transformation. These old-school values have impressed the BV judging panel, which has accorded ICBC the Best Banking Services (China) Award.

UBS Asset Management – Best ESG Finance Sector | UK 2018

ENVIRONMENTAL, social and governance (ESG) refers to the three central factors measuring the sustainability and ethical impact of an investment. Put more simply, sustainable investing is about aligning your values and aspirations as a person with your money as an investor. In an uncertain and sometimes troubled world, ESG would seem a certain growth area for all the right reasons, and Britain’s UBS Management already has its niche within the niche. It operates by excluding unethical portfolios (controversial weapons and tobacco, for instance), using ESG factors to manage risks, and focusing on investments which generate measurable, positive environmental or social impact. This fine philosophy made an impact on the BV judges, who have conferred the Best ESG Finance Sector (UK) award.

QRF City Retail – Best Niche Property Portfolio | Belgium 2018

QRF CITY Retail entered the inner-city retail property market in 2013, full of ambition and fully understanding the various drivers that lure us to big cities. Ever since, it has been developing its stature, and now operates in 13 Belgian and five Dutch city centres. It’s a digital world, but the company’s awareness that bricks and mortar are still essential to business has honed its talent for identifying specific, beneficial city locations. Qrf ’s drive has taken it to the top of a dynamic and ever-changing environment. The astuteness and grace it has shown in creating and developing a place in an always competitive, sometimes cut-throat field impressed the BV judges. They were unanimous in naming it the Best Niche Property Portfolio (Belgium).

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CTBC – Bank Best Banking Services | Taiwan 2018 CTBC Bank, established in 1966, has the proud motto, “We are family.” It values its caring, professional and trustworthy reputation as a front-runner in the Taiwan financial scene. It was the first bank in the country to issue credit cards, set up a customer service centre, and install ATMs in convenience stores. With a commitment to innovation, it continues to lead the way with branches in 14 countries. CTBC Bank strives to strengthen corporate governance, fulfil corporate social responsibility, and aims to become “Taiwan Champion, Asia Leader”. The BV judging panel couldn’t help but be impressed, and has conferred the Best Banking Services award.

DBS – Best Banking Services | Singapore 2018

“INSTANTLY” is a key word on the DBS website – “request a waiver”, “block it”, “unblock it”, “change it” “replace it” and “increase it”: all these things apply. For anyone who dreads queueing up in a bank, or sitting on hold listening to Bach (or worse), “instantly” is a damn fine word. Home loans, car loans, information on how to improve your credit rating, insurance, retirement plans, saving schemes for your children’s education – DBS has it covered. There is advice for married couples on planning their finances, digital banking services, credit and debit cards that come with privileges and promotions. This is a bank that pretty much does it all, something that the BV judging panel noticed, appreciated and considered when conferring on DBS the Best Banking Services (Singapore) Award.

Fullon Hotels and Resorts – Best Resort Brand | Taiwan 2018

THE FULLON Hotels chain benefits from the skills of specialists in hotel design, planning, service, and management. The first Fullon opened in Jhongli in 2002, and there are now 14 Fullon hotels and resorts across Taiwan. Perhaps the best known is the Hotel Fulong, which features a golden beach and hot springs. Other gems include the Lih Club, with yoga, sports and fitness facilities, and the Fullon Hotel Taoyuan Airport – a great choice for business travellers. The parent Lih Pao conglomerate has four non-negotiable principles of management: honesty, steadiness, quality and service. The BV judging panel admires these values, and thus decided to award Fullon the Best Resort Brand (Taiwan). 96

Yapi Kredi Asset Management – Best Investment Strategy | Turkey 2018

FOR ANY asset management company, ensuring the application of the best possible investment strategy lies at the heart of the operation. Yapi Kredi Asset Management, one of the first nationwide commercial banks in Turkey, has achieved the necessary balance between the need to find returns and the disciplined investment process to protect them. Institutional and private investors now entrust over $5 bn to the firm. The BV judges were impressed by Yapi Kredi’s passionate, highly disciplined and dynamic approach to investment strategy, that has always kept its eye on the long term. The judges are happy to confirm Yapi Kredi Asset Management as having the Best Investment Strategy (Turkey) 2018.

Guggenheim Investments – Best Fixed Income Investment Manager | United States 2018

Kite Consulting Group – Best Financial Services Recruitment Agency | United Kingdom 2018

CAN’T get the staff? The Kite Consulting Group is a recruitment agency that boasts that it can find the most talented people out there. “We believe that integrity is doing the right thing when nobody is looking,” is one quote from the Kite website. It’s a nice definition, and a fine core value. Kite hunts out the best people, contract or permanent, for every hire in its market. It also delivers return on a company’s recruitment investment, promising “more value per pound of recruitment spend than any other channel”. The BV judging panel felt that Kite’s impressive commitment to its specialist task, its focus on efficiency – and that succinct “integrity” definition – were more than enough to justify the Best Financial Services Recruitment Agency Award.

Business Vision Summer 2018 Issue • www.bv.world

GUGGENHEIM’S fixed-income portfolios are managed by a systematic, disciplined investment process designed to mitigate behavioural bias and implement better decision-making. Its investment process is structured to allow best research and ideas to be expressed in actively managed portfolios. Guggenheim has disaggregated fixed-income investment management into four primary and independent functions that work together to deliver a predictable, scalable, and repeatable process. It’s a simple formula that works impeccably in a complex field and it impressed the BV judging panel, which has accorded Guggenheim the Best Fixed Investment Manager (US) Award.

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Latham & Watkins LLP – Best M&A Law Team | United States 2018 LATHAM & Watkins – Latham for short – has no headquarters. The firm’s management is spread across 30 offices in 14 countries, Latham lawyers speak more than 60 languages, and there are over 60 international practice groups and industry teams. Impressed? Leading legal and business publications are; they have consistently ranked Latham in the top tier. The BV judging panel agrees, and has recognised the impressive fact that last year Latham lawyers handled more than $388 billion in announced mergers and acquisitions transactions worldwide. An impressive figure, and often undertaken in highly regulated industries. The judges were also impressed by the 236,000 hours of pro bono work undertaken by Latham lawyers and staff in 2017. Best M&A Law Team (US)? Yes.

Lomsko Pivo AD-Lom – Best Beer Brand | Central Europe 2018

LOMSKO Pivo AD, founded in 1894 in the Danube town of Lom (Lomsko pivo means “Lom’s beer”), is one of the few remaining breweries in Bulgaria using classic technology. The company produces 11 light, special and dark beers, some of which have received Monde Selection medals at the International Exhibition in that world capital of beer: Brussels, Belgium. The BV judges were impressed by this small company’s fearless investment to improve workplace safety and reduce energy consumption (its energy bill has been cut by €86,000 per year). The investment also led to a substantial emissions decrease, with positive effects for the environment. The company brand identity is as strong as its ethical efforts; the award for Best Beer Brand (Central Europe) duly accorded.

Tanqia Siyana FZC – State-Of-Art Operator of Wastewater Treatment Systems | Middle East 2018

GROUNDWATER is a precious resource – nowhere more so than in the Earth’s drier regions. Tanqiya Siyana FZC is a private company based in Al Fujairah, United Arab Emirates (UAE), pioneering wastewater treatment in the Tanqia region. Tanqiya Siyana uses the latest technology to generate high-quality, treated effluent for irrigation and industrial activities. It is the first privately held wastewater collection and treatment system in the UAE and Middle East, implementing waste-management solutions for the City of Fujairah with plans to expand the model across the UAE and overseas. The company ensures full compliance with environmental laws, guidelines and regional standards, and keeps customer costs to a minimum. The BV judges were impressed by the drive and environmental conscience shown by Tanqiya Siyana FZC. State-of-Art Operator of Wastewater Treatment Systems (Middle East) Award duly accorded.

Business Vision Summer 2018 Issue • www.bv.world

Get on the road…

With BV motoring

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Arona astounds with snappy performance, luxury, pizzazz This one-litre crossover four-door has some pleasant surprises in store for jaded motorists like BV editor HAL WILLIAMS

Zoom: You wouldn’t believe this is a one-litre powerplant when you hit the throttle CLUNK. Clip. Snicker. Vroom. That’s me closing the door, putting on my safety belt and hitting the cool keyless ignition button of the SEAT Arona. There’s something instantly welcoming and enveloping as you get into the Arona, and getting into it was something I did as often as I could for the 10 days I had the pleasure of its company. I never got tired of the solidity of that solid door-closing “chunk”, or the gentle thrill of hitting the red start/stop button on the dash. The test vehicle provided to BV – a one-litre, three-cylinder TSI model with Xcellence trim package in white and grey – is the luxury offering of the Arona range. This smart and spunky four-door was, for me, an eye-opener in many 100

ways. The build quality, as evidenced by those reassuringly solid noises and a flawless level of finish, was the first pleasant surprise. The quality of equipment, from seats to stereo, paint job to classy 17-inch alloy rims, was the second; in all, it was of a standard I wasn’t expecting at this price point. These cornerstones of quality are important to those who “get” vehicles and see time spent with them as relationships rather than simply periods of ownership. But rest assured that this SEAT (it’s an acronym: Sociedad Española de Automóviles de Turismo) has a lot more than build quality to offer. The sporty, small-diameter, stitched-leather steering wheel is a thing of beauty in its own right, and a control centre with wellpositioned knobs and dials to control

the Arona’s settings and driver aids without taking your eyes off the road. It’s a handsome centrepiece, complemented by the black and brushed aluminium finish of the dash. It’s nicely weighted on the move, too, and coupled with the lively boost from the 115CV threepot engine and the slick-shifting sixspeed gearbox, it leaves the driver in snug control of a confidenceinspiring cockpit. That one-litre, normally aspirated, petrol-sipping engine meets all Euro6 emissions and noise standards – ahead of time. How this tiny powerplant meets Euro6 and still pumps out such startling performance is pure engineering alchemy. The Arona has a roomy interior, with space for four adults to travel

Leather-covered steering wheel is a handsome centerpiece hammering it into hairpin bends way too fast and stomping on the brakes at the last moment. The little SEAT took it all with such aplomb, and was so unfazed by this rude input, that I felt slightly guilty for even doing it – though it did prove that even a complete dunce will get a satisfactory motoring experience from the Arona.

Plenty of active and passive safety features are included It boasts plenty of passive and active safety features, from blind-spot alert to a “tiredness detection” system which monitors driver behaviour, using erratic steering wheel movements and lane deviations to judge when the driver is starting to tire and needs to stop. It will signal an alert with a visual display on the dashboard and a warning sound, which repeats if the driver hasn’t taken a break within 15

minutes. Clever stuff. Not so clever is the Arona’s speedometer demarcation. On my first long highway drive with the car, I noticed with sudden alarm that I was humming along not at an almost-legal 130km/h, as I had thought, but at almost 150. The km/h demarcations on the speedometer go: 80, 100, 120, 150. Numbers 130 and 140 have been omitted to allow the dial to be graded up to 240km/h. Now unless the nice lady with the plummy voice who lives in the Satnav system becomes possessed by even more malicious spirits and instructs you to drive off a very high cliff, your chances of hitting 240 in the Arona are nonexistent. The number-jostling could have come between 200 and 240, where it would have mattered not a jot. The fact that the gap in precision comes at normal highway speeds is a regrettable oversight. The ratios for the first four gears are perfect, to the point of brilliance. You always have enough torque and power on-tap, or at least a short shift away. Fifth likes a flat road, and sixth is happier if there’s a slight descent, but both work as open-road overdrive ratios in clear road conditions. Keep the engine on the boil – anything over 3,000 rpm – and that

Business Vision Summer 2018 Issue • www.bv.world

in comfort, and a fifth one wedged in between the two seated in the back in extremis. Its mini-SUV looks hint at the possibility of 4WD, but the Arona is front-wheel-drive only. There is a raised hump in the floor at the rear, rather like the transmission tunnel of a rear-wheel-drive vehicle. There is doubtless a good reason for its existence, but I couldn’t work out what that might be, other than (possibly) increased rigidity and chassis strength. While the cause remains a mystery, the effect is that the middle passenger in the back has a foot either side of the carpeted hump. It isn’t really a comfort issue, certainly on short trips, and the general consensus from passengers was “comfortable”. Notice that nowhere in this road test have I referred to the Arona as “little” or “small”, but it is when it counts: parking it, for instance. It’s slim, fairly tall – you sit higher than the average sedan – and with a wheelbase of 4.135m, on a par with competitors such as the Audi Q2 and Nissan Juke. Its compact size is further enhanced by “Park Pilot” assistance, complete with a clear rear-vision camera which takes over the multimedia screen and cuts the stereo when reverse gear is engaged. The beep...beep..beep. beepbeepbeep warning blip made me a little jumpy when it sped-up to warn me I was approaching a wall /tree/ car (it picks up even tiny objects), but that’s just me. The Arona’s Satnav system proved its worth most of the time, but on a few notable occasions it couldn’t have done much worse. It refuses to accept destinations it doesn’t recognise – it simply won’t let you type them in – and it will offer bizarre and remote options of destinations with similar names to the one you’re aiming for: caveat navigator. On some twisty and remote mountain tracks which I visited unintentionally (see the above paragraph on Satnav), I put the Arona through some mild “torturetesting”: revving the little engine into the red, making it chug up steep inclines in the wrong gear, hauling on the steering wheel like a fool,

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Arona has plenty of zap on tap surprising supply of zap is always there beneath your right foot. At lower revs the Arona will gamely slug along, but response can be a bit limp without a downshift. Braking performance is surefooted and safe, with ABS for the diagonally split disc set-up as standard across the Arona range. The stoppers on the test vehicle were a trifle sharp, in that a light dab of the pedal would result in a tiny jolt, and even feathering the pedal could have the same effect. I would guess this is a simple matter of adjustment rather than a flaw in the system. I mention the Arona’s minor

shortcomings only in the interests of balanced reporting, and because it’s so damn good there was a clear and present danger that this roadtest might read as if it was written by SEAT’s media office. BV staff who tried the vehicle out were unanimous in their praise; suddenly everyone in the office was getting in-touch with their inner Clarkson, sharing their motoring anecdotes with me and covetously eyeing the cool black switchbladestyle key fob on my desk. Hands off. I’ve got to go to a meeting. Mine. Mine. Chunk. Clip. Snicker. Vroom. Ah.

THE BOTTOM LINE: Price of Arona TSI with Xcellence trim package, as tested: €22,314 Base-model Arona starting prices: UK: £ 16,750 Spain: €14,420 Germany: €16,290 France: €16,700 Italy: €17,100

THE BUSINESS VISION ENGINE’S RUNNING – JUMP ABOARD! CAR and motorcycle manufacturers, dealers, distributors and enthusiasts, you are cordially invited to participate in the BV Motoring section. BV Motoring will road-test anything with two, three or four wheels, attend vehicle launches where possible, profile industry leaders, report on innovative marketing strategies and technical developments, share news and crow (or commiserate) with you about triumphs or woes. 102

BV, as always, looks beyond the mainstream. We also want to hear about the challenges faced by those in the accessories market or customising industry (especially in light of increasingly restrictive regulations and legislation) – and we want to learn more about the expanding world of electric vehicles. Contact editor Hal Williams at hw@bv.world with your stories and suggestions, and let’s get on the road!

Rumblings of discontent as Harley-Davidson opts for offshore manufacture to beat tariff blues ICONIC American motorcycle manufacturer Harley-Davidson has recently found itself at the centre of a cross-Atlantic tariff tiff between US President Donald Trump and, well, just about everyone else. Trump’s 25 percent tariffs on steel and aluminium imports have attracted reciprocal taxes from the EU on American goods – including motorcycles. The White House doesn’t like this whipper-snapper attitude, and has accused the EU of trying to “punish US workers” with its trade policies. Trump has said the steel and aluminium duties which sparked the embryonic trade war were imposed for reasons of national security. Canada is prominent among those surprised to find themselves categorised as security threats, and – along with the EU, Mexico and others – it has imposed its own retaliatory tariffs So why has Harley so publicly fallen into this morass? And why is there so little support or sympathy for

the US manufacturer from Trump’s office? As one of the most identifiable US products – along with blue jeans and bourbon – Harley-Davidson typifies an accessible slice of that everappealing American pie. For some dyed-in-the-wool bikers, only a Harley will do. For those in the throes of a midlife crisis, lashing about for a suitable toy to boost the ego and up the status, Harley is still, and perhaps always will be, the go-to marque. H-D has never been an affordable option; you buy the brand, as much as the bike, and you pay top-dollar for it. It’s all about kudos, not kilowatts. Harleys hold their value, and command bigger starting prices than rival makes. The retaliatory tariffs imposed on the US by the EU mean that already important entry hurdle to Harley ownership has just been raised. By 25 percent. On bikes costing up to £33,995 (€38, 515). Take out your calculators. The EU tariffs are likely to add an

average of €1,884 (£1,660) to midrange bikes exported to Europe from the US. Import tax will rise from six percent to 31 percent. About 40,000 Harleys were sold in Europe in 2017. The EU has targeted other American imports, such as bourbon, peanut butter and orange juice – in all, an estimated €2.91 bn (£2.56 bn / $3.4 billion) of US products will be affected – but this one was always going to be an emotive skirmish. The Wisconsin-based company has announced that the manufacture of bikes for the European market will be shifted to other countries. After a brief period of silence – during which BV’s entreaties for information were ignored or rebuffed, along with those from other media outlets – H-D spoke out with a statement which Trump instantly derided as “waving the white flag”. Harley has plants in Australia, India, Brazil and Thailand. And it will build its export models at one, or possibly all, of those bases. (Harley-

Business Vision Summer 2018 Issue • www.bv.world

Trump sneers at bike firm’s solution to EU’s retaliatory tariff hike

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Davidson has not yet said which of these plants will be used.) WORLD The over-engineered simplicity of a big-displacement, air-cooled, push-rod Harley engine lies at the heart of the machine’s appeal. It speaks – in a very deep, gruff voice – of simpler times, open roads, and spirits freed with a twist of the wrist. A growing awareness of motorcycle development has increasingly isolated Harley as the choice of serious outlaws or wannabes. Efficiency, power output, handling, quality of components: in none of these areas is Harley king. It has amended its output to reflect a desire to stoke-up purchases, and perhaps change its image; change is the only constant. Time is nipping at Harley’s heels, with smaller displacement engines, water-cooling and whiffling mufflers now rolling into showrooms. There are even electric powerplants in the works. Stiff opposition has always from Japan and Europe, which (let’s face it) do pretty much everything HarleyDavidson does, but better. That isn’t going to change any time soon – and the new price differential won’t help H-D. Quoting from information provided by the World Trade Organisation, motorcycles with an engine capacity of more than 500cc imported to the UK will attract a new 25 percent tax. The smallest Harley in the range is the Street 500, which, at 494cc, might evade the new tariff. But “real” Harleys start at 883cc, the entry-level Sportster, and heavy hitters like the Road King have a whopping 1802cc capacity. The controversial tariff issue isn’t going away any time soon, and – if you want to stand on something and watch the biffo – the HarleyDavidson issue could provide an entertaining vantage point.

For the full list of exactly what tax will now be paid for which product, visit: http:// trade.ec.europa.eu/doclib/docs/2018/ may/tradoc_156909.pdf 104

Some Harley-Davidson production will be shifted overseas

HOG DAY AFTERNOON HARLEY-DAVIDSON was founded in 1903 by William S. Harley and brothers Arthur and Walter Davidson in Milwaukee, Wisconsin. Current ownership includes members of the founding families, who have a hand in the day-to-day running of the company, such as the “president of styling”, Willie G. Davidson. Harley-Davidson bikes use a signature 45-degree air-cooled V-Twin engines. Their main competitor has been — and still is — Indian motorcycles. Harley-Davidson supplied American military forces with about 90,000 units for use by despatch riders during WWI and WWII. The longest-running model in production is the Sportster, which first saw light of day back in 1957. The Softail, FLT, and Road King lines were introduced in the 1980s and 1990s and are still available today. In an effort to attract the younger crowd, Harley-Davidson has given an edgy makeover to classic models, such as the Cross Bones and the Iron 883 from the Dark Custom line. Tricked-out, customised bikes are available through their Genuine Motor Accessories and Motor Parts catalogue as part of its CVO (Custom Vehicle Operations) line. Harley-Davidson motorcycles shone during the early days of circuit and dirt-track racing with riders Joe Petrali, Cal Rayborn, Scott Parker, Chris Carr, Andrew Hines, Eddie Krawiec, and Kenny Coolbeth. Harley has let motorcycle racing take a back-seat to its domination on the roads, where — for the faitful, at least — it still rules the roost.

Big cat still rules the jungle when it comes to identity Jaguar, Britain’s biggest car manufacturer, chooses to walk on the wild side world’s third-largest, hardest-biting jungle cat. Tigers and lions are bigger, but neither has more crushpressure in their bite. Jaguar’s start in life was, strangely enough, with a single wheel – it was a sidecar, made in Blackpool, England – and the big cat wasn’t the only choice of name. When founders William Lyons and William Walmsley put their heads together to create a car back in 1935, the company itself was called SS, and the Gazelle and the Hawk were mooted as model names for the fourwheelers. Someone, somewhere, made the inspired call to make it Jaguar: rare, predatory and not to be trifled with. In nature, the jaguar’s brawn is matched by beauty; the name was a perfect fit. With a start like that, and a statuesque hood ornament in solid metal back in the day – since discontinued due to pedestrian safety concerns – Jag was off to a

great start in terms of branding and company identity. From the gorgeous, swooping lines of the XK120, through the famous E-type and Mk II to the modern incarnations of the enduring XJ range, Jaguar hasn’t missed a beat in terms of styling and performance. It remains the biggest car manufacturer in Britain, and one of the most recognisable worldwide. Not that the marque – now owned by India’s Tata Motors – has had a trouble-free run. There have been brushes with bankruptcy, and just this year the firm’s concerns over the possibility of a rough Brexit deal have made the world’s business pages. Its plans for investment and expansion could be compromised, and Jaguar Land Rover (JLR) CEO Ralf Speth told the BBC that a poor outcome from Brexit negotiations could cost the company more than £1.2bn in annual profits, and force factory closures.

Business Vision Summer 2018 Issue • www.bv.world

WHEN choosing an animal as an emblem for the spirit of a vehicle, it pays to give it some thought ¬– and there have been some classic choices over the years. There’s the Ford Mustang, obviously: wild, untamed, powerful. Ford stuck with the wild horse theme for the Bronco, while Plymouth went lean, mean and submarine with the Barracuda. Nissan opted for fluttery and graceful with the Bluebird, Shelby went venomous – the Cobra – and VW plumped for cute with the Beetle. On the two-wheeled front, Triumph chose, and stuck with, the Thunderbird and the Tiger, while Honda and Suzuki got airborne with the Blackbird and Hayabusa (it means falcon in Japanese) respectively for their powerful, mileeating sports tourers. But when it comes to animal icons, no one picked better than Jaguar: an entire marque, not just an individual model, named after the

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Some 20 percent of Jaguar cars in Castle Bromwich, in Birmingham, are sold in mainland Europe. Planned expenditure of £80bn over the next five years may have to be curtailed if Brexit “turns bad”, Jaguar says. The future for any manufacturer is, and always will be, uncertain. What is sure is that the car-buying public will still be drawn by the aura of muscular luxury and class. Jaguar has that in spades – and the company has ensured its luxury is accessible. Jaguar strives to remain competitive in price without sacrificing any of its classic lines, or the indisputable kudos of ownership. Its name is mentioned in the same breath as Porsche, BMW and Mercedes-Benz – rarefied air indeed – and with increasing homogeneity between marques, Jaguar has kept its edge as a unique brand synonymous with punch and panache.

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Obvious build quality and unique styling have been defining characteristics of Jaguar cars since the early days. Right, the thinking person´s dream car, the Mark II, and below, the logical progression: the stunning F-type.

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Electric car production has shocks in store for ‘superentrepreneur’ Elon Musk

Gull-wing doors on this Tesla Model X – but will the company continue to spread its wings? confident statements about the future (no need for additional financing this year, and so on) – but experts say otherwise. First quarter results for the Tesla Model 3 are due out any day now. The company churns out 2,000 vehicles a week from its Fremont, California, plant, but unless punters are buying them as fast as they come

Space age meets space project, and costs are sky-high

off the line, impressive production figures are no gauge of success. (And it must also be noted that 2,000 cars a week is way short of Tesla’s stated goal of 5,000.) Could a giant such as Musk eventually be felled by a few minor miscalculations and a couple of bad decisions? Quite possibly; he wouldn’t be the first, and he has fingers in many pies. Multiple rocket launches soak up a few dollars, for a start. As Musk’s Rocket Man heads out to the Martian orbit in his shiny red Tesla starship, listening endlessly to Life On Mars in one ear and Space Oddity in the other – a cruel and unusual punishment, even for a dummy – Musk may be feeling the pangs of his own frustration. Or maybe, as so often thus far, he knows something we don’t.

Business Vision Summer 2018 Issue • www.bv.world

ACCORDING to Bloomberg, Tesla – which, whoa, has been in business for 15 years – is burning $6,500 each and every minute. Someone do the math, quick. Free cash flow (how much money a company makes after removing capital expenditures) has been negative for Tesla for the past three quarters. For a full 12-month period between the end of 2016 and 2017, Tesla was recording negative free cash flow of around $500 million per quarter. It doesn’t take an accountant to know these figures and stats aren’t promising. But Elon Musk – all-round global achiever and godfather of Paypal, Space-X et al – obviously has a business head on his shoulders. So how have things got so far out of whack? Experts peg the end of this year as doomsday for Tesla, unless there is a dramatic turnaround. The company doubled its workforce last year, while scaling up for Model 3 production, and employee numbers more than tripled from 2014 to 2017. Once again, get out the abacus, because revenue per employee has stagnated. Tesla went for automation as a solution, but the man himself has criticised the resulting robotic production model, a move which has since inspired him to tweet that “humans are under-rated”. Over-automation is a process that has tripped-up better-established vehicle manufacturers than Tesla, including Volkswagen and Fiat. Musk has touted his “Russian doll” theory of contractor and subcontractor companies involved in production at Tesla, and made

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Convertible for you? Classifieds and UK fintech join forces Don’t buy a lemon: UK fintech scale-up partners with US carsales site for a fully transactional marketplace

Put yourself in the driving seat with new partnership between classified-ad site and a UK fintech scale-up. Negotiation and payment are easier under the new scheme.

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IN A fightback against social media disruptors – and to compete for a trillion-dollar global marketplace – a UK fintech has struck up a partnership with a US-based vehicle classified-ad site. Shieldpay has linked with AutoClassics.com to make the site fully transactional to its customers across the UK, EU and US. The company says its transparent payment solution mitigates the risk of fraud by verifying the identity of both parties, holding funds and only releasing them when both sides are in agreement. Shieldpay hopes the payment solution will bring transparency and efficiency to the payment process by integrating services to power payments, listings, bids and offers. Classifieds and marketplaces can leverage an Application Programming Interface (or API, a set

Social media take back seat in fight for marketplace of subroutine definitions, protocols and tools for building software) to make use of the user interface. Consumers can avoid carrying cash or wiring money when buying a car online. They will also be able to negotiate the price of the car “on the driveway” and authorise the payment via the app to complete the sale. Shieldpay’s Tom Clementson says the technology will allow classified

sites to fight back against disruptors “like Facebook Marketplace” and compete for more of the global trillion-dollar marketplace. He says the system is the logical follow-up to PayPal. “Classifieds and marketplaces are under-served by secure solutions for larger payments,” he said. “Classified sites have come under increasing pressure from disruptors and we believe our technology will allow them to fight back and transform their business models.” Geoff Love, CEO of AutoClassics, said the system “has allowed us to become transactional for the first time” with increased confidence for users. As well as the vehicle market, Shieldpay’s instant digital escrow facility can be used in merger and acquisition deals and real estate transactions.

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