World Excellence International Edition N° 28 | April / June by Le Fonti S.r.l.

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Substantial Earnings Opportunities for both Seasoned Traders and Novice Learners Marina Mikelsone COO E-Global

INNOVATION & TECHNOLOGY

SPOTLIGHT

FOOD

Is Technology Hurting Productivity?

The Chinese Tourism Market is Booming

Excellence is Believing in Values

It is possible that new technologies are not just doing less to boost productivity …

A more informed, demanding and affluent Chinese consumer is paving the way…

Howard Schultz, Executive Chairman of Starbucks voices his opinions…

| HONG KONG MARCH, 23rd 2018

ECONOMICS

FOOD

WORLD AFFAIRS

CONTENTS

The Real Reason for Trump’s Steel and Aluminum Tariffs

Excellence is Believing in Values

Making the Case for Sovereign GDP-Linked Bonds

Populists of the World Unite

Chocolate’s Sustainibility Challenge

The Next Phase of Finance

The Digital Evolution in Human Resources

The Chinese Tourist Market is Blooming

A Learning Experience With a Global Reach

Foreign Exchange Services Made Easy for Everyone

SPOTLIGHT

Keeping Companies and Workers Engaged

April / June 2018 - World Excellence International Edition

CONTENTS

BUSINESS & FINANCE

INNOVATION & TECHNOLOGY

OVERVIEW

Page 6 What’s Happening Now?

AWARDS 48

The Dollar Doldrums

Education in the Digital Age

A Better Way to Fight Corporate Tax Avoidance

Is Technology Hurting Productivity?

Publisher/Director Guido Giommi Editors, America: Rosalyn Williams Editor, Asia: Eric Davide Editors: Marco Siepi Simona Vantaggiato Alessia Rosa Alessia Liparoti Claudia Chiari

International Subscription Kate Rios Art Director Nick Lowen Graphic Design Giulia Andreoli Mary Thompson Editorial Oﬃces: London, Milan, New York, Singapore, Dubai and Hong Kong

Page 59 Le Fonti Awards Hong Kong March 9th 2018

solely on sources believed to be reliable, though the accuracy has not been veriﬁed by World Excellence. Neither the information in World Excellence nor the opinions expressed should be taken as a solicitation for investment. World Excellence accepts no liability for actions based on the information herein.

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April / June 2018 - World Excellence International Edition

OVERVIEW

WHAT’S HAPPENING NOW? - April Market Review -

UNITED STATES OF AMERICA Market Volatility

Interest Rates

Headlines surrounding tariffs, the Syrian conflict and the ongoing Russia probe in the United States regarding President Trump continue to provide means to keep investors anxious as the markets have been churning over the last 60 days. Since its fair to say these news events are far from over, we can expect more downward pressure on equity markets from time to time. Fortunately, the US market is based on a strong economy and on stable corporate earnings. Investors should continue to stick to a stable financial plan and risk tolerance to be able to make sensible investments based on strong financial fundamentals.

Emboldened by a strengthening economy and increased confidence that the US Federal Reserve will reach its inflation target in the near future, central bank policymakers suggested that the path of future rate hikes could be “slightly steeper” over the next few years than previously thought, according to minutes of their March meeting. During that meeting, the Fed raised its economic growth forecast to 2.7%, up from 2.5% in December. That was before Republican tax cuts were enacted and lawmakers made a deal for $300 billion in additional government spending. We expect to see at least two additional rate hikes this year.

Trade Wars According to a number of economists, the US-China / US-EU trade skirmishes would barely scratch the American economy — even if both parties carried out their threats. Those same economists also believe the threats are negotiating ploys and, in both cases, both are likely to settle the feud in coming weeks, or at least scale back the tariffs. The larger, looming risk is that negotiations fail and tariffs increase. While the situation is potentially volatile, we believe the risk will pass and revised trade deal will become clearer in the short term.

World Excellence International Edition - April / June 2018

Foreign Reserves While dominance in the value of foreign exchange and gold reserves remain a major economic negotiating weapon for China and Russia, the US dollar and Euro still constitute over 80% of this global dominance. It remains to be determined what significance the Chinese Yuan will bring, if any, to the international currencies negotiating table, especially considering the fact that the US dollar has not been overlooked despite attacks from international detractors.

OVERVIEW

UNITED KINGDOM

CHINA

Brexit

The Months Ahead

Bitcoin

Lawmakers, celebrities and business leaders launched a campaign in early April to call for a “people’s vote” on any final Brexit deal, stepping up pressure to try to stop what they describe as Britain’s damaging departure from the European Union. Those in support of Brexit call this the latest in a long line of delay tactics by the remnants of the Remain Party. However, this movement seems to be gaining strength and could re-route some of the more delicate negotiations currently underway.

Just like last month, trade and tariffs will likely dominate headlines this month, especially those related to China. Our expectation is we are nearing the end of the phase related to trade tactics and serious negotiations will begin behind the scenes. Market volatility will likely still be with us.

Investors should not be overly concerned about the increased hype in cryptocurrencies like Bitcoin. Some analysts have forecasted increases in bitcoin value to reach up to $30,000 by year-end 2018. However, until the currency is recognized by central banks as a foreign reserve backed by a national economy, as legal tender and not a form of speculation, the possibilities remain remote that it or any other cryptocurrency will ever overcome or come even close to the US dollar, Euro or even the Chinese Yuan as a foreign exchange investment alternative.

In an article by Tom Holland, he asserts “that China’s most effective defense against US trade and investment restrictions may not lie in imposing countervailing trade tariffs of its own. Instead, they have suggested that China could deploy its “nuclear option”, either by dumping its vast holdings of US government debt in retaliation or by devaluing the yuan.” This concept is shared by many on the media and represents an unlikely path. Why? Both scenarios would be far worse for China over the long-run than the U.S.

The Bottom Line We continue to see stable and healthy economic data. At this time, we have no economic data that supports a recession in the next 6 to 12 months.

April / June 2018 - World Excellence International Edition

WORLD AFFAIRS

INTERNATIONAL TRADE WARS

THE REAL REASON FOR TRUMP’S STEEL AND ALUMINUM TARIFFS The Trump administration’s proposed tariffs on steel and aluminum imports will target China, but not the way most observers believe. For the US, the most important bilateral trade issue has nothing to do with the Chinese authorities’ failure to reduce excess steel capacity, as promised, and stop subsidizing exports. Martin Feldstein

World Excellence International Edition - April / June 2018

ASHINGTON, DC - Like

almost all economists and most policy analysts, I prefer low trade tariffs or no tariffs at all. How, then, can US President Donald Trump’s decision to impose substantial tariffs on imports of steel and aluminum be justiﬁed? Trump no doubt sees potential political gains in steel- and aluminumproducing districts and in increasing the pressure on Canada and Mexico as his administration renegotiates the North American Free Trade Agreement. The European Union has announced plans to retaliate against US exports, but in the end the EU may negotiate – and agree to reduce current tariffs on US products that exceed US tariffs on European products.

BUT THE REAL TARGET OF THE STEEL AND ALUMINUM TARIFFS IS CHINA. The Chinese

government has promised for years to reduce excess steel capacity, thereby cutting the surplus output that is sold to the United States at subsidized prices. Chinese policymakers have postponed doing so as a result of domestic pressure to protect China’s own steel and aluminum jobs. The US tariffs will balance those domestic pressures and increase the likelihood that China will accelerate the reduction in subsidized excess capacity. Because the tariffs are being levied under a provision of US trade law

that applies to national security, rather than dumping or import surges, it will be possible to exempt imports from military allies in NATO, as well as Japan and South Korea, focusing the tariffs on China and avoiding the risk of a broader trade war. The administration has not yet said that it will focus the tariffs in this way; but, given that they are being introduced

with a phase-in period, during which trade partners may seek exemptions, such targeting seems to be the likeliest scenario. For the US, the most important trade issue with China concerns technology transfers, not Chinese exports of subsidized steel and aluminum. Although such subsidies hurt US producers of steel and aluminum,

April / June 2018 - World Excellence International Edition

WORLD AFFAIRS

the resulting low prices also help US ﬁrms that use steel and aluminum, as well as US consumers that buy those products. But China unambiguously hurts US interests when it steals technology developed by US ﬁrms.

UNTIL A FEW YEARS AGO, THE CHINESE GOVERNMENT WAS USING THE PEOPLES LIBERATION ARMY’S (PLA)

sophisticated cyber skills to inﬁltrate American companies and steal technology. Chinese ofﬁcials denied all wrongdoing until President Barack Obama and President Xi Jinping met in California in June 2013. Obama showed Xi detailed proof that the US had obtained through its own cyber espionage. Xi then agreed that the Chinese government would no longer

THE STRATEGY

THE US TARIFFS WILL... INCREASE THE LIKELIHOOD THAT CHINA WILL ACCELERATE THE REDUCTION IN SUBSIZED EXCESS CAPACITY use the PLA or other government agencies to steal US technology. Although it is difficult to know with certainty, it appears that such cyber theft has been reduced dramatically. The current technology theft takes a different form. American firms that want to do business in China are often required to transfer their technology to Chinese firms as a condition of market entry. These firms “voluntarily” transfer production knowhow because they want access to a market of 1.3 billion people and an economy as large as that of the US.

These firms complain that the requirement of technology transfer is a form of extortion. Moreover, they worry that the Chinese government often delays their market access long enough for domestic firms to use their newly acquired technology to gain market share. The US cannot use traditional remedies for trade disputes or World Trade Organization procedures to stop China’s behavior. Nor can the US threaten to take Chinese technology or require Chinese firms to transfer it to American firms, because the Chinese do not have the kind of leading-edge technology that US firms have.

SO, WHAT CAN US POLICYMAKERS DO TO HELP LEVEL THE PLAYING FIELD?

This brings us back to the proposed tariffs on steel and aluminum. In my view, US negotiators will use the threat of imposing the tariffs on Chinese producers as a way to persuade China’s government to abandon the policy of “voluntary” technology transfers. If that happens, and US ﬁrms can do business in China without being compelled to pay such a steep competitive price, the threat of tariffs will have been a very successful tool of trade policy. WEIE

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Le Fonti Awards 2018

Melco awarded Best Promotions & Events Team in Asia

n March 23rd 2018, Melco Resorts & Entertainment received Le Fonti’s prestigious award for Best Promotions & Events Team of the Year in Asia at Le Fonti’s awards ceremony in Hong Kong. This was the second year in a row that the company received the award. “Melco Resorts & Entertainment has become renowned for promoting ‘innovative excitement in a new age’ in

www.melco-resorts.com the events they organize, involving the best actors and talents worldwide”, said Mr. Guido Giommi, President of Le Fonti Group. “The company has successfully represented the ‘City of Dreams’ for all ages and a ‘next-generation’ of ‘must see, must experience’ leisure and entertainment experiences”. “Melco is honoured to receive this prestigious Le Fonti award for the

second year running, especially with such an exceptional array of nominees and leaders from various sectors across the globe,” commented Melco. The company also added, “it is a testimony to Melco’s dedication and efforts to presenting superior standards of quality, and to the Company’s contribution in promoting Macau as the world’s center of leisure, tourism and city of gastronomy”.

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WORLD AFFAIRS

POLITICAL TENDENCIES

POPULISTS OF THE WORLD UNITE Former White House Chief Strategist Stephen Bannon’s starring role at the recent convention of France’s far-right National Front is the latest indication that a transatlantic populist alliance is forming. Can it be stopped? Dominique Moisi

ARIS - In 1965, Henry

Kissinger wrote a book called The Troubled Partnership, in which he examined the tensions affecting the transatlantic alliance during the Cold War. A stable international order, he argued, demanded the leadership of the United States – a powerful model for democracy in the world – supported by strong ties with Europe. Kissinger probably never would have imagined that, less than six decades later, the US would be playing precisely the opposite role, as a new, darker version of the transatlantic alliance emerges. Consider last week’s convention of France’s far-right National Front. Upon being re-elected leader of the party, Marine Le Pen announced that it was to be renamed Rassemblement National (National Rally). The guest of honor at this consequential event

was none other than Donald Trump’s former chief strategist, Stephen Bannon. “All great world-historic facts and personages appear, so to speak, twice,” Karl Marx famously wrote, “the ﬁrst time as tragedy, second as farce.” It would be easy to place the convention in Lille in the “farce” category. After all, Le Pen and Bannon are both political rejects.

LE PEN LOST LAST YEAR’S FRENCH PRESIDENTIAL ELECTION TO EMMANUEL MACRON IN A LANDSLIDE. Moreover, she

is now being challenged within her own party by her much younger and more intellectually impressive niece, Marion Maréchal-Le Pen, who spoke just ahead of US Vice President Mike Pence at February’s Conservative Political Action Committee (CPAC)

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gathering in Washington, DC. As for Bannon, he was fired unceremoniously by Trump in August 2017. To add insult to injury, Trump released a statement declaring that Bannon “had very little to do” with Trump’s victory in the presidential election, and had lost not just his job, but also “his mind” when fired. Bannon’s presence at the Lille event was paradoxical. After all, his firing was rooted partly in his extremism, while Le Pen is currently attempting to widen her party’s support by softening its image. Yet, in another sense, his participation made perfect sense, as it reflected the ongoing development of a transatlantic populist alliance, a bleak variation on the “geography of values” upon which the Cold War alliance was based.

WORLD AFFAIRS

Despite Bannon’s own political setbacks, he maintains that the “tide of history” is irresistibly moving toward the populists. From his perspective, with Trump having secured the US presidency – a development that has destabilized the world order that Bannon and his ilk so badly want to burn down – it is only a matter of time before Europe follows in America’s footsteps.

IT WOULD BE DANGEROUS TO DISMISS BANNON’S VISION

as mere bluster. Macron may have won the day in France, but Trump’s electoral victory was no accident. Nor was the strong showing by populist parties in this month’s election in Italy, where the anti-immigration League

party and the anti-establishment Five Star Movement together secured some 50% of the vote. Even Germany has, to some extent, fallen victim to populist forces. To be sure, a new grand coalition government – comprising Chancellor Angela Merkel’s Christian Democratic Union, its Bavarian sister party, the Christian Social Union, and the Social Democratic Party – has been formed. But it took more than ﬁve months for the parties to agree, and the largest opposition party is now the far-right Alternative for Germany. In a country that seemed to have been vaccinated against populism by its Nazi history, this is a particularly distressing development. Democracy is more fragile than it may seem, and it can

never be taken for granted. So how can we stem the populist tide? For starters, political elites on both sides of the Atlantic who still believe in liberal democracy must recognize that it is they who are responsible for populism’s rise, owing to their failure to respond adequately to the concerns of the electorate. They must work tirelessly to ﬁnd real solutions to the problems, from inequality to migration, that have fueled support for populist forces. Those solutions must address not only technical challenges, but also citizens’ feelings – skillfully tapped by populists – of disenfranchisement and loss of identity.

OF COURSE, US DEMOCRATS MUST ALSO FIND A COMPELLING CANDIDATE TO RUN AGAINST TRUMP in the 2020

presidential election. And France and Germany must push forward with further European integration. Here, France has a special responsibility, under Macron’s leadership. And, make no mistake: Contrary to what Bannon said in Lille, it is Macron – not Le Pen and her rebranded party – who holds the key to the future of democracy in France. If he fails to make the system work for more of the electorate, France could well go the way of the US, setting a dangerous precedent for the rest of Europe. In such a scenario, the transatlantic alliance really would be in deep trouble – and so would the world order that it underpins. WEIE

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FOOD

STARBUCKS

EXCELLENCE IS

BELIEVING IN VALUES Howard Schultz, Executive Chairman of Starbucks voices his opinions and gives his suggestions about what makes this food company so special. Rosalyn Williams

ILAN - Howard Schultz, Executive Chairman of the largest coffee chain in the world, opened the World Innovation Food Summit on May 7th 2018 in Milan, Italy. He has revolutionized the way we consume and appreciate coffee but has also set new standards for corporate social responsibility and employee benefits. Workers at Starbucks receive generous benefits like stock options and even free college tuition. Starbucks is ranked as one of the best companies to work for according to its employees. WEIE was at the summit to provide you with the exclusive details and suggestions provided by Schultz in his memorable speech. Growing up in a working-class family in Canarsie, Brooklyn, Mr. Schultz experienced first-hand the struggles that American families face to make ends meet. Coffee figured early in his career: upon graduating with a Bachelor of Science degree, Schultz worked for Hammarplast

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FOOD

selling European coffee machines in the United States. His position led to his ﬁrst encounter with The Starbucks Coffee Tea and Spice Company, a small Seattle-based operation founded in 1971 that sold high quality beans to retail outlets. In 1982 he was hired as the Director of Retail Operations and Marketing for the young company, and in 1987 he bought out the company and became its CEO. The company had only 11 retail points and about 100 employees, with a dream to become a national brand. Schultz’s approach was quite focused from the beginning. In looking for investors, his plan was to provide workers with complete health insurance (something still unavailable to the majority of American citizens), and ownership in the company. It was not easy at ﬁrst and many investors were wary of the company. However, through perseverance and hard work, Starbucks raised the money and became a recognized national brand. “Dream big, surround yourself with the right people, leave your ego at the door and, most importantly, share your success.” These are the credos which Schultz has attempted to instill in Starbucks and its employees: The success of the company will depend on the values it instills in its employees and the employees themselves, much more so than the products or services offered.

“WHEN BUILDING A BUSINESS YOU NEED TO IMPRINT IT WITH A SET OF VALUES which will endure”, he

declared, stating that the love and passion you show in the company will in the long-run pay off. The market place is quite transparent and consumers will be well-aware of the main competitors, their values and what they have to offer. However, the deﬁning characteristic of a competitor is the value set

the communities we serve and the employees we work with,” insisted Schultz during the speech, adding that his dream was to create the kind of company whose employees could say, “I’m proud of the company and trust what management is trying to do”. Schultz’s dream is one of a company which values every single employee individually, wants to make the employee grow in his/her career and embraces diversity. It’s the foundation on which Starbucks

A VISION

“DREAM BIG, SURROUND YOURSELF WITH THE RIGHT PEOPLE, LEAVE YOUR EGO AT THE DOOR AND, MOST IMPORTANTLY, SHARE YOUR SUCCESS.” which he/she decides to adopt as this will in turn determine who his/ her consumer will be: “Consumers will tend to choose that company whose values are compatible to their own”. Challenging the status quo is another important piece of advice he provided during his discussion with young entrepreneurs following his speech. “When you achieve success the worst thing you can do is rest on your laurels”, he afﬁrmed, stating that is always important to challenge what you take for granted and “push for self-renewal and reinvention. Innovation must be disruptive.” “We have to do much more for

has successfully constructed its corporate success worldwide. Schultz’s praise for the relationship built with Starbuck’s employees can be summarized by his belief that if the company exceeds the expectations of its employees, its employees will in turn exceed the expectations of customers. Sharing success in this way, there will be a sense of motivation and passion to do things for the company that they would do as if they owned it themselves. He also stressed that success is not an entitlement but needs to be earned every single day. Sometimes, despite your best intentions, mistakes will be made. In 2008, Starbucks encountered

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FOOD

hard financial times but “stuck to its guns” by continuing to provide its employees health insurance, notwithstanding the opportunity to remove it ($250 million in 2008) as a way to remedy the financial difficulty. Schultz even lost an important institutional investor who had suggested the move, but the final decision to maintain health insurance for its employees was a “defining moment”. “The foundation which has driven the success of the company is something for which we have no patent”, he declared, “it is simply the culture of trust, confidence and truth inside the company”. That trust could not be severed and was far too important to Starbucks than to heed the investor’s advice. That defining moment was what kept Starbuck’s in favor of upholding the company’s value system and framework of servant leadership.

SCHULTZ USED THE METAPHOR OF A COMPANY WHICH HAS TWO “RESERVOIRS”, one dedicated

to the values, trust, goodwill and non-tangible beneﬁts of the company, while the other reservoir is one where you need to maintain the company proﬁt and promote the company’s business. His suggestion is to keep the former as full as possible compared to the latter. The former will pay many more dividends, even more so in the long

term, and will guide a company to success. He cited the example of the Chinese market where, after 9 years of losing money and notwithstanding the 3,300 stores in the market, an important decision was made to reinforce the company’s value system which in turn helped motivate workers which, in subsequently, improved profitability. In 2017, Starbucks became the first American company in China to provide Chinese workers with health insurance that extends coverage to their parents, a unique offering by the coffeehouse chain that would be used by more than 10,000 people to treat conditions such as cancer, heart disease and Alzheimer’s. This was to demonstrate what he coined in a phrase: “we aren’t in the coffee business serving people, we are in the people business serving coffee”. In another example he cited the word “Ubuntu,” a South African word, means “I am because of you,”. In short, it implies that regardless of where you come from, you are destined to change the world. The same could be applied to Starbucks employees: Starbucks is because of you, you are because of Starbucks: “We are because of each other. Ubuntu.” He first learned the word in 2017, when he opened two Starbucks stores in Johannesburg, South Africa. During that time, Schultz met with 50 young employees who used it to describe

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their excitement about starting new jobs at Starbucks.

TODAY, STARBUCKS IS ONE OF THE WORLD’S MOST SUCCESSFUL COMPANIES,

valued at $77 billion, with more than 21,000 stores around the world, and 350,000 employees serving 100 million customers weekly around the world. In 2017, Starbucks announced that it would hire 10,000 refugees worldwide in response to Us President Donald Trump’s travel ban towards refugees from certain countries in which terrorists have been residing. Schultz’s move was an effort to uphold the values of America and what they stand for as he saw they were being undermined by Trump’s decision. Under Schultz’s stewardship, Starbucks has been an early proponent of corporate social responsibility, and its 2016 Global Social Impact Report outlined the company’s vision for the future with particular emphasis on sustainability, greener retail, and community engagements. In May 2016, Starbucks issued a $495.6 million sustainability bond to use its inﬂuence in the coffee supply chain to improve working conditions for farmers and combat the environmental risks to coffee farms around the world. More speciﬁcally, he said the coffee industry is now suffering from

Milan: a special place in Mr. Schultz’s career path Milan holds a special place in Mr. Schultz’s career path, as it was on a visit to the city in 1983 that he understood that coffee was more than a beverage, it was an experience, one based on relationships and bonding between people. It was here that the Starbucks journey actually began. It was here that he realized that the coffee business was indeed the people business as it is a product which tends to create a community and make people want to communicate. Schultz was convinced that the Italian experience of coffee beverages like lattes and cappuccinos, and the community that

develops around this shared passion, was a valuable formula ripe for international export. He departed from Starbucks and took his enthusiasm for coffee cultures to Il Giornale, a coffee bar chain that grew into a very successful brand. It was so successful in fact, that Il Giornale purchased Starbucks in 1987, and Schultz became President and CEO of the company that ﬁrst inspired him. Schultz announced that Starbucks will be opening its ﬁrst roastery in Italy in Milan in Piazza Cordusio in September 2018.

rust due to lack of rainfall. As a result, Starbucks is working on the following measures as a remedy: 2 million new trees are being planted worldwide, a 600 hectar coffee farm is being built and the company is working to share sustainable coffee best practice stories to farmers around the world.

and plant-based foods growing. He announced that Starbucks has a whole line of plant-based beverages now being sold in the United States. In breaking news, on May 7th 2018, the Swiss-based food giant Nestlé has decided to pay $7.15 billion for the rights to sell the US coffee chain’s products around the world in a global alliance aimed at reinvigorating their coffee empires.

ANOTHER PIECE OF ADVICE RELATED TO FOOD was his SUSTAINABILITY complete approval of 100% transparency of food ingredients

THE DEAL FOR A BUSINESS WITH $2 BILLION IN SALES

Howard Schultz Executive Chairman of Starbucks

REINFORCES Nestlé’s position as

the world’s biggest coffee company, with brands such as Nescafé and Nespresso. Starbucks, the world’s biggest coffee chain, said it would use the proceeds to return money to shareholders by speeding up a share buyback program. The transaction does not involve any Starbucks cafes and will involve selling Starbucks bagged coffee, drinks and Nespresso-style pods. Moreover, the Nestlé name will not appear on Starbucks products. “We do not want the consumer to perceive that Starbucks is now part of a bigger family,” a Nestlè source said. Starbucks is the secondmost-valuable brand in fast food, according to BrandZ’s Global 2017 report, which estimates it’s worth $44 billion. WEIE

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FOOD

MEETING GLOBAL DEMAND

CHOCOLATEâ&#x20AC;&#x2122;S SUSTAINABILITY CHALLENGE As demand for chocolate increases globally, companies that produce it are making sustainable sourcing a key part of their business strategy. For other companies with complex supply chains, the message is clear: sustainability means much more than brand management. Jeff King

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FOOD

ERSHEY, PA - In the 1970s and 1980s, when multinational ﬁrms ﬁrst linked sustainability to business success, the chief catalyst was vulnerability, not altruism. Consumer pressure, political boycotts, and costly lawsuits were damaging companies’ bottom lines, and environmental policies helped shield companies from bad publicity and protect shareholders from painful losses.

TODAY, CORPORATE SOCIAL RESPONSIBILITY AND SUSTAINABILITY ARE NO LONGER FEAR-BASED. Instead, sustainability

is viewed simply as a necessity for the future. This is particularly true for industries that depend on agriculture – such as the chocolate business. With chocolate consumption near historic highs, chocolate companies like the one I work for should be relishing our success. But we are facing a looming challenge. Unless we can help produce a more sustainable cocoa crop, the world may one day need to ﬁnd a new favorite treat. Cocoa trees thrive in just a thin band of countries along the equator, where the climate is warm and humid. Just two countries – Côte d’Ivoire and Ghana – produce the overwhelming majority of the chocolate that Americans eat. West African cocoa is an important part of Hershey’s unique ﬂavor, but in that region, cocoa trees are aging and becoming less productive. In the past, when cocoa farmers faced diminishing crop yields, they would simply clear forests

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and start over. But today this approach is environmentally and socially unacceptable. The only sustainable solution is to seed old cocoa farms with new trees. Unfortunately, population growth, urbanization, and weak land rights are driving up demand for land, thereby undermining many farmers’ ability to invest in and replant their property. As a result, farm rehabilitation is not occurring at the scale or pace that companies like mine need if we are sustainably to meet demand well into the future.

THE SCALE OF THE CHALLENGE WE FACE IS SIGNIFICANT. To

cocoa supplier in Ghana. Last year, we launched a small pilot program to help smallholder farmers increase cocoa production, eliminate cocoa-driven deforestation, and boost resiliency. In particular, the initiative is designed to address two challenges faced by every grower in West Africa: land tenure and ﬁnancing. According to Ghana’s Lands Commission, less than 2% of the country’s 800,000 cocoa farmers have a legal right to the land they cultivate. Instead, farmers access property through informal agreements with a chief or a landowner. Traditionally, these oral agreements have allowed farmers to clear forests and begin farming. But once cocoa trees stop producing after 30 years or so – or sooner if disease strikes – farmers must obtain permission from the original

this problem by eliminating some of the hurdles to replanting. ECOM has created an innovative ﬁnancing model that helps farmers remove old or diseased tree, and replant with resilient and more productive hybrids. Shade trees, maize, and plantains are also being planted to help diversify incomes and increase productivity. ECOM manages the farms for three years, giving a share of the proﬁts back to the farmers while recouping initial start-up costs.

AT THE SAME TIME, USAID IS MAPPING COCOA FARMERS’ LAND AND DOCUMENTING THEIR CUSTOMARY RIGHTS TO IT. Local chiefs certify the maps, thereby

meet global demand for 7.2 million metric tons of chocolate annually, multinationals like Hershey rely on millions improving the security of farmers’ tenof cocoa farmers, each of whom farms ure. Chiefs are also being trained in mea tiny plot, often 1-2 hectares (2.5-5 diation, to help support farmers’ land acres). Our complex claims. Because this A NEW APPROACH value chains reach approach manages deep into some of to tackle an issue AS POPULATION GROWTH INCREASES the most remote corhas long been DEMAND AND REDUCES THE LAND AVAILABLE that ners of the world. To viewed as almost too TO MEET IT, COMPANIES WILL HAVE TO keep the confections complex to manage. coming, we need INCORPORATE SUSTAINABILITY INTO THEIR it could become a new approaches to model for the fuOPERATIONS help those farmers ture. As population grow cocoa sustaingrowth increases deably. landowner to replant. At a time of mand and reduces the land available to If we in the cocoa sector handle the historically high demand for land, meet it, companies will have to incorpocurrent challenge well, we can help forge chiefs and landowners are increasingly rate sustainability into their operations. refusing farmers’ requests to replant. a way forward for more sustainable That means rolling up their sleeves and That leaves farmers with two options, sourcing of other agricultural products. helping to address stubborn local chalneither of them good: clear virgin That is the motivation behind Hershey’s lenges, such as land rights, that impede forests and start again or get out of the new partnership with the US Agency both economic development and the business entirely. The partnership with for International Development long-term health of international supply USAID and ECOM seeks to address (USAID) and ECOM, our biggest chains. WEIE

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ECONOMICS

MACROECONOMIC STRATEGIES

MAKING THE CASE FOR SOVEREIGN GDP-LINKED BONDS The crises that erupted in countries like Ireland and Greece a decade ago would not have been so severe had their debt been linked to their economic performance. And the same is true today: Investors around the world will continue to accept the risk, given the unlimited upside to investing in entire economies. Robert J. Shiller

ONDON - The time has come

for national governments around the world to start issuing their debt in a new form, linked to their countries’ resources. GDP-linked bonds, with coupons and principal that rise and fall in proportion to the issuing country’s GDP, promise to solve many fundamental problems that governments face when their countries’ economies falter. And, once GDP-linked bonds are issued by a variety of countries, investors will be attracted by the prospect of high returns when some of these countries do very well. This new debt instrument is especially exciting because of its monumental size. Although issues may start out small, they will be very important from the outset. The capitalized value of total global GDP is worth far more than

the world’s stock markets, and could be valued today in the quadrillions of US dollars. Now an authoritative open-source online handbook just published by the Centre for Economic Policy Research, Sovereign GDP-Linked Bonds: Rationale and Design, explains how governments can do this. I co-edited the book with Jonathan D. Ostry of the International Monetary Fund, and James Benford and Mark Joy of the Bank of England. The book draws on work commissioned by the recent Chinese and German presidencies of the G20, with the collaboration of 20 leading economists, lawyers, and investors. Its publication carries endorsements from Andy Haldane, Executive Director of Financial Stability of the Bank of England, and Maurice Obstfeld, Economic Counselor and

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Research Director at the International Monetary Fund.

I HAVE BEEN ADVOCATING SOMETHING LIKE GDP-LINKED BONDS FOR 25 YEARS. In my

1993 book Macro Markets, I described the world’s GDPs as the “mother of all markets” and emphasized a form of debt that I called “perpetual claims.” But I did not work out a real plan of implementation and advocacy. Sovereign GDP-Linked Bonds does just that. The basic idea is simple enough. Governments issue GDP-linked bonds to raise funds, just as corporations issue shares. By issuing such bonds, governments pledge to pay in proportion to the resources they have, measured by their countries’ GDP. The priceto-GDP ratio of GDP-linked bonds

ECONOMICS

tress. The crises that erupted in countries like Ireland and Greece a decade ago would not have been so severe had their debt been GDP-linked. And the same is true today: Investors around the world will continue to accept the risk, given the unlimited upside to investing in entire economies. And they can achieve the ne plus ultra of diversiﬁcation by holding GDP-linked bonds from around the world.

ONE MAY WONDER WHY COUNTRIES HAVE HARDLY EVER ISSUED GDP-LINKED SECURITIES. The reason is straightforward: is essentially analogous to the priceto-earnings ratio of corporate shares. The difference is that GDP is an order of magnitude larger than corporate profits represented by the stock market. As Sovereign GDP-Linked Bonds argues, the issuance of GDP-linked bonds will create “fiscal space” – a cushion for exigencies – for some countries. When government debt payments are fixed in currency terms, as they typically are today, countries get into trouble. In a financial crisis, they become over-leveraged, unable to borrow more, and forced to take drastic action that may impede recovery from the crisis. Taxpayers, rather than willing investors, are forced to become the final bearers of risk. Issuing GDP-linked bonds is akin to buying insurance against economic dis-

ﬁnancial innovation is difﬁcult. Financial inventions are as complex as engineering inventions, and many details must be worked out to make things work well. We have almost no examples of successful GDP-linked bonds for the same reason we did not see laptop computers until the late 1980s. It takes time and energy to innovate. The new book takes on the design problem, describing a term sheet for the debt. The answers sometimes focus on seemingly small but important questions. For example, how will the market deal with governments’ subsequent revisions of their announced GDP statistics? What will happen if the government somehow fails to produce a GDP number on time? What is the seniority ranking of GDP-linked bonds relative to other sovereign debt? How should collective-action clauses be written, and should they extend to the sovereign’s conventional debt?

Should GDP-linked bonds be issued in the national currency or in a reserve currency? Some worry that governments could manipulate their GDP statistics so that they will have less to pay. But that is unlikely, because lower GDP would be taken as a sign of the government’s failure. As Sovereign GDP-Linked Bonds points out, inflation-indexed debt is even more vulnerable to government cheating, because the monetary incentive for the government is to underreport inflation, which is in line with keeping up appearances. And yet inflation-indexed debt has not been plagued by dishonesty. The global economy is improving, but the aftermath of the financial crisis has left behind a mountain of government debt, leaving governments less able to rely on fiscal policy to respond to any new crisis. It is important to begin establishing GDP-linked debt now, along the lines described in the new book, so that the biggest risks can be managed, and policymakers can focus on maintaining economic stability. Debt instruments similar to GDPlinked bonds have been tried, but only when it is already too late: as an emergency component of a post-default restructuring process. Now, countries that are not in crisis have a chance to try the real thing. The biggest step forward will come when advanced countries issue GDP-linked bonds in relatively normal times. That will set the example the rest of the world has been waiting for WEIE

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ECONOMICS

RESTORING TRUST

THE NEXT PHASE OF FINANCE

Today’s strengthening economic recovery has not overcome the understandable but devastating loss of trust in the financial system that followed the crisis a decade ago. Restoring trust will require reasserting control over the financial sector, to ensure that it is serving the economy, not the other way around. Bertrand Badré

ASHINGTON, DC - The

decade since the global ﬁnancial crisis has been tumultuous, to say the least. True, no great war has erupted, and we have more or less avoided the mistakes of the Great Depression, which led in the 1930s to greater protectionism, bank failures, severe austerity, and a deﬂationary environment. But renewed market tensions indicate that these risks have not been eradicated

so much as papered over. In a sense, the story of the 2008 ﬁnancial crisis begins when the global order was created from the ashes of World War II. Initiatives like the Bretton Woods institutions (the World Bank and the International Monetary Fund), the Marshall Plan, and the European Economic Community supported the reconstruction of signiﬁcant portions of the world economy. Despite the Cold War (or perhaps because of it),

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they also re-started the globalization that WWII had brought to a halt. This globalization process was interrupted during the late 1960s and early 1970s, owing to the Vietnam War, the suspension of the US dollar’s convertibility into gold, the 1973 oil price shock, and the great stagﬂation. But the United States and the United Kingdom then underwent a kind of conservative revolution and a revival of neoliberal economic policies, in-

ECONOMICS

cluding widespread deregulation, trade liberalization, and unprecedented capital-account openness.

WHILE THIS REDESIGNED GLOBALIZATION PROCESS HELPED TO FUEL GROWTH AND DEVELOPMENT, its effects

were uneven, and the financial and economic changes it wrought outpaced legal and ethical adaptation. Particularly consequential, innovative financial instruments were used with abandon, subject to only loose supervision and weak regulation. As a result, finance eventually became the master of the world economy, rather than its servant. Given all of this, when the crisis struck, it was deep and far-reaching, and today’s strengthening economic recovery has not overcome the understandable but devastating loss of trust in the financial system that followed. This has been made apparent by political developments in the US and Europe. US President Donald Trump’s administration continues to tout an “America First” policy approach, reflected, most recently, in the imposition of large tariffs on steel and aluminum imports. The United Kingdom’s vote for Brexit reflects a similar backlash. Meanwhile, state-led capitalism offers China’s economy its own protections. But polarizing new models of competition and resistance to trade are not the way to restore trust. Instead, we need to reassert control over the financial sector, to ensure that it is serving the economy, not vice ver-

sa, by advancing a set of goals upon which the world agrees – beginning with those established at three momentous conferences in 2015. At the Third International Conference on Financing for Development, held in Addis Ababa, Ethiopia, participants set economic, social, and environmental priorities with which financing flows and policies for sustainable development should be aligned. At the United Nations Sustainable Development Summit in New York, UN member countries formally adopted an ambitious new global agenda. And at the UN Climate Change Conference (COP 21) in Paris, countries agreed to hold global warming well below 2° Celsius above pre-industrial levels. Articulating these goals was an important first step. But if the world is serious about achieving these shared goals, an effective mechanism for financing them must be established, supported by well-designed regulations that create the right incentives. And, so far, the world has not made nearly enough progress on this front, as the continued misallocation of capital shows.

STAKEHOLDERS MUST TAKE A LONGER-TERM VIEW OF BUSINESS OPERATIONS AND INVESTMENT STRATEGIES. Fi-

nance must be made genuinely useful, balancing progress toward agreed goals – guided by existing global targets – with the need to generate sufﬁcient ﬁnancial returns to ensure that

progress is sustainable. We must keep saying it, and keep doing it. There is no other option.

IN SOME QUARTERS, COMMITMENT TO GLOBAL GOALS HAS SO FAR BEEN TOO WEAK. In

the case of the US and the Paris climate agreement, that commitment has been rescinded outright. But, to succeed, everyone must be on board. This includes multilateral lenders, which need to revise old tools and rapidly develop new ones, in order to mobilize private-sector capital. The private sector, for its part, must be open to an updated approach to public-private partnerships. Simply paying lip service to change, while clinging to outdated modes of working, is not an option. More broadly, we need to work to ensure that the benefits of technology are shared by all. To that end, we should follow the advice of David Lipton, the IMF’s first deputy managing director, and move beyond the fashionable “OHIO” approach, focused on getting one’s “own house in order,” to the more demanding California – or “CA” – strategy of “collective action.” The path ahead will not be easy. But this is no excuse for apathy. As investors, consumers, voters, and citizens, we must make our voices heard, in order to ensure that finance is used to promote shared values and the common good. Only then can we go beyond merely avoiding another devastating crisis and build a better future. WEIE

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SPOTLIGHT

THE CEO SUMMIT

THE DIGITAL EVOLUTION IN HUMAN RESOURCES Le Fonti’s CEO Summit in Milan is The Venue to Learn More about Workforces’ Futures in Italy and Abroad. Claudia Chiari

ILAN - In an age of digital

disruption, technology is transforming every aspect of a company including employee recruitment and managing a 21st-century workforce. In order to keep up the evolution, HR and business leaders can no longer operate in their old paradigms. A CEO Summit was held on the topic and organized by Le Fonti in Milan on March 9th 2018.

WEIE was at the event to cover the summit and is pleased to provide you with a brief summary and complete transcript of the event. The participants at the summit included the emcee and 3 panelists: INTERVIEWER: Debora Rosciani (DR) - Emcee PANELISTS: Ragu Bhargava (RB) – Ceo, Global Upside, Usa

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Gabriele Fava (GF) – Partner, Fava & Associates, Italy Vincenzo Nnunziata (VN) – Ceo, Promagroup, Italy Each participant contributed from a different angle with suprising and intuitive remarks. Each comes from a different business area and this made the summit even more interesting and satisfying to the

audience: Global Upside (Services), Fava & Associates, Promagroup (Auto components). Below is the transcript with abbreviations for each of the participants as listed above.

are the challenges which lie ahead of you?

DR: Today we will be talking about human resources and its recent evolution not only in Italy but all around the world. It’s a disruptive phase concerning the degree to which digital evolution is impacting on human capital. Journalists around the world have been referring to the Gig economy, a term used to discuss the changing trends in labor, a market which is being impacted by the growing independence of the labor force from intermediaries, and how the digital evolution is changing productive processes while the roles which companies have been adopting to deﬁne those processes are also changing. Today we shall be talking about this and more with our panelists and we shall start with our ﬁrst panelist, Ragu Bhargava, CEO of Global Upside. They’ve referred to me that you are an extremely optimistic manager and that you are not afraid of any challenges in the workplace. They have told me that you believe there is apparently no problem that cannot go unsolved in the workplace. Is that correct? (agreed) So, Mr. Bhargava how is the world of human resources changing and what

an increase in our turnover, as is and has been the case with the majority of companies around the globe. What has been changing is the workforce overall, whose evolution is moving from a traditional, loyalty-based relationship with the employer to one which has been defined through the Gig economy as a relationship where the employee is not necessarily looking to develop a long-term relationship with the employer, or for the so-called job for a lifetime, but remains . The new generation of employees, the millenials and those who will be coming after them, are changing the expectations perceived by employers. Millenials have new requirements which cannot be overlooked by the employer and which have radically changed compared to those we had when we were 20 or 30 years old. Actually, the fact that the “millenial” employee is so flexibly mobile and not tied down to work in a particular location is certainly an advantage for the potential employer when recruiting. An employer will certainly benefit from the fact that the potential employee knows no boundaries, so a company based in

RB: FIRST AND FOREMOST, WE CANNOT DENY THE IMPORTANCE OF REACHING CONTINUOUS GROWTH through

Milan can seek out talent based in the United States or anywhere in the world and viably consider relocation as an option. The possibilities that a potential employee says no to an international offer diminish considerably. At the same time, however, employers must be aware of millenials’ needs and while it is not necessarily a disadvantage, both parties need to adjust to the new relationship. DR: Moving on from a strictly international perspective, let’s talk about the Italian market: Mr. Fava, we would like to address to you the first question about what is happening to our country in terms of changes in legislation related to human resources. As technology and the workforce grow together and become ever more interdependent, they also need to be followed more assiduously, particularly with regards to their legislation. In Italy, we have introduced smart working in businesses and have now also ratified the EU privacy law for the workplace. How have these two new evolutions of the workplace impacted on our society? GF: Hello, thank you and good evening. These are really important initiatives for today’s workforce and have completely changed the legal, human resources, and labor market panorama in general. Smart working could be defined the new frontier of labor because it correctly attributes the time

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SPOTLIGHT

workers should spend towards actually working and the time they should dedicate outside of the workplace, in other words a proper balance between the workplace and spare time. There is still a lot that needs to be accomplished because the legislator has only laid down the guidelines about smart working to which employers’ future decision-making on the part of companies should adhere. Legislators are well-aware that they are not in a position to interfere in the decisionmaking process which is entitled to the employer. The EU privacy law is extremely important because it has completely revolutionized the labor market determining a priori and not ex ante the organizational models referring to the labor market which have been adopted by companies, both larger industries and smaller SMEs. This topic is being studied intensely by the legal industry given that it will enter into force in the month of May. WE ARE

DOING OUR BEST TO PROVIDE OUR RECOMMENDATIONS

TO EMPLOYERS ABOUT HOW BEST TO DEAL WITH THE NEW LEGISLATION. A strategic and

preemptive approach has been adopted because as of May 25th, 2018 the legislation will indeed be adopted and the aforementioned models will need to be analyzed more carefully. The fact of the matter is that the organizational models have led us to understand that legislators have made sure that they have contextualized and enacted the norms with respect to the needs of employers and the labor market overall. Norms, which in any case need to be improved as with any form of legislation, but which will depend on how companies and workers will be making those norms effective right from the start and not a situation in which legislation is approved today and is applicable in 5 years-time. Norms need to be approved today for today’s needs, especially those of Italian entrepreneurs not just in larger industries but also SMEs because they are the ones which will be doing the hiring.

DR: We can’t even imagine where our children will be working and what they will be doing in 5 years, let alone 10 years. I can only imagine the difﬁculty of the Italian legislator in attempting to follow these changes, so I’m sure you have a lot of work that lies ahead of you. DR: Vincenzo Nunziata, CEO of Promagroup, an automobile parts producer and supplier, an Italian excellence is our next panelist. Are you worried about the US duties on foreignsourced parts which hopefully will not directly impact speciﬁc products as may be threatened by President Trump in the industry. Nonetheless, we were keen to understand how you are handling the challenges of digital innovation, what’s the impact in your industry and if, in any way, what is happening is an opportunity for you in your search of personnel. VN: Good evening. In order to better answer your question, I’d like to introduce to you our company: we are a tier 1 automotive parts supplier (in the EU scale of OEM suppliers) and work in the EMEA, NAFTA and LATAM regions. From my point of view, I can provide you with a technical analysis. WE CONSTANTLY LOOK

FOR CANDIDATES WHICH HAVE DIFFERENT SKILL SETS. For

example, looking at data sets in the automotive industry comparing two periods 1992-1997 and 2010-2015 (a data set including 2016 and/or 2017 would have been more appropriate), we can consider the fact that in the

SPOTLIGHT

first period, out of 100 workers, 40 factor contributing to the decline graduates with experience and technical were qualified (mostly in technical of the economy, contributing to the knowledge in the industry are also roles). Today the ratio is 80, thanks to talent drain, but at the same time we being sought by our company. For this the evolution of the robotics industry, also understand that they have indeed reason, we are in the process of building even though in the automotive parts become part of the global workforce an academy with a group of Italian subsector, the ratio is 60. It is just to and that this is the reality that we need companies. The objective is to prepare give you an idea that we are constantly to cope with. What can you say to this students with the knowledge and knowlooking out for qualified personnel regard? how of what companies are looking for because we are always going to be RB: THERE ARE CERTAINLY in the real-world marketplace. This will interested in working with personnel be a topic of organizational disruption. OPPORTUNITIES AND capable of operating complex The qualifications and experience DRAWBACKS WITH THE machinery and not just a simple worker. requested by plant managers will change EXISTENCE OF A GLOBAL A lot of problems and challenges facing too. Overall, our organization will need WORKFORCE. As mentioned, companies in our industry are related to talent can be sought around the world to adopt to the needs of society and its training. We have 24 productive sites, in and newly-hired employees are then technological evolution. 3 global commercial instrumental in areas, 3200 workers, FLEXIBILITY AND ADAPTABILITY providing economic and I strongly stimuli to the host THE IMPORTANT THING IS FOR COMPANIES believe that Italy has country where they a very strong training NOT TO FEEL SUBDUED BY TECHNOLOGICAL have relocated. On methodology. The the other hand, INNOVATION BUT TO BENEFIT FROM Italian university TECHNOLOGY AND MAKE TECHNOLOGY WORK the talent drain graduate is certainly is inevitably the FOR THEM ACCORDING TO THEIR NEEDS. at a much higher drawback, but only level in terms of initially. - Gabriele Fava, Fava & Associates worker quality The talent drain compared to other graduates from other is detrimental if only flowing in one DR: The Academy is an interesting regions. We still have issues about the direction, as it has been up to now, topic, especially in consideration of public sector working to build training from home country to host country. the difference between demand and models for companies, particularly in supply in some companies who can’t The case of the United States is our industry. The public sector should even fill certain roles, while in the perhaps the most eloquent. What we not be considered the only source of South of Italy you have abnormally have been realizing today is that once training for workers which provides high unemployment levels amongst the a worker has contributed his part to youth, so apparently something isn’t the branch or headquarters of a hostspecific training in a particular industry working. country based company, perhaps after like the automotive parts industry. WE I wanted to address this question to 5-10 years, the new tendency is for SHOULDN’T REALLY AGREE Mr. Bhargava and also ask him about him/her to return to his home country. WITH THE ASSERTION THAT the global workforce and what he This is especially true for growing JOBS ARE ONLY AVAILABLE TO thinks about the fact that employees home-country economies which ENGINEERING GRADUATES: mechanical and technical trade school are emigrating. We believe it’s a inevitably tend to create incentives for a

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SPOTLIGHT

relocated workforce to come back and contribute to their economic success. When resources move both towards the host country and subsequently towards the home country, the phenomenon becomes an opportunity to the employer and this newly-created opportunity is certainly emblematic of what the global workforce has to offer today and, especially, what its evolution has had to offer over recent years. DR: A very open approach indeed. Mr. Fava, I wanted to ask you about the term which Mr. Bhargava referred to in his discussion, ﬂexibility, which has an important connotation in the world

of the academy as discussed by Mr. Annunziata is certainly a topic which will allow students the opportunity to learn about the real-world problems. Nobody is there to tell them what’s happening in the real world are and very often they are at a loss to keep up with the changing roles in the labor market, a market subject to continuous and dynamic changes. New skills will need to be learned not just through public sector initiatives but also in partnership with the private sector. The academy is therefore an excellent initiative to allow students to be prepared and to learn about the new trades growing as a result

FUTURE CHALLENGES

A LOT OF PROBLEMS AND CHALLENGES FACING COMPANIES IN OUR INDUSTRY ARE RELATED TO TRAINING - Vincenzo Nunziata, Promagroup of Human Resources. As the digital evolution continues to impact the labor market, as we have attempted to discuss during our roundtable tonight, in what way have companies lacked in ﬂexibility, and that what might work abroad, notwithstanding what was declared by Mr. Bhargava, has not worked in Italy. Where and in what way have Italian companies remained resistant to change, also perhaps because of the difﬁculties they have had in understanding the opportunities available to them from the digital evolution.

GF: THAT’S A GREAT QUESTION.

Well in Italy with the introduction

of the digital evolution. Industry 4.0 is another topic which is often scaring persons into thinking that jobs will be lost and that our destiny is to become similar to “cyborgs”. The fact of the matter is that technology, if governed and managed correctly, is an important instrument to improve professional worker performance in the workplace. Jobs will change and certain roles will disappear. For example, the role of the physically robust warehouse manager whose function was only to lift heavy objects no longer exists, since most warehouses are now almost entirely interconnected and by means of digital

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technology and their sophistication has become cutting-edge. In other words, rather than relying on physical performance, companies will need to invest on training to keep up with the technological and digital evolution of our times. That same training will allow workers the opportunity to learn how to manage the warehouse by managing the highly technological robots and mechanisms which have substituted the old-style warehouse manager. This will certainly improve the competitiveness of companies not just domestically but also, and most importantly, around the EU and outside of the EU. This will also lead to a coattail effect with regards to employment where substantial longterm and gratifying work opportunities will become available both in Italy and abroad. DR: Let’s ask one last question to Mr. Annunziata. HOW CAN ITALY

CONTRIBUTE TO THE DIGITAL REVOLUTION? We talked about

the Industry 4.0 automation plan which our outgoing Italian Economics Minister Calenda has been working on and which has allowed companies to rebuild their machinery supply. Many companies might have considered the Industry 4.0 project as just a ﬁscal incentive but others are also beneﬁting from its measures and are beginning to reap the investment opportunities available which would have otherwise been lost. For your company, your industry, for Italy as a whole, what do you think are the implications of this revolution?

VN: I attended Mr. Calenda’s speech in Fiat Chrysler Automobiles (FCA) in Cassino last September 2017, announcing the Industry 4.0 plan, along with Minister Padoan and other top level FCA managers. They announced that they had already reached the Industry 5.0 phase. The automotive components industry has reached a very high level of technological development thanks to the fact that it is also highly labor-intensive. Research and Development has been underway to improve productive processes to make automotive products highly competitive. The Calenda Plan, introducing the Industry 4.0 strategy, is undoubtedly an excellent plan because it benefits companies that invest and as a means to reach company profitability. In my opinion, it is useless to provide economic incentives to companies who do not Invest, precisely because it does not contribute to profitability. Italy has lost its competitive edge in the automotive market compared to other national producers. Today, Sergio Marchionne, President of FCA, has demonstrated his efforts to help the Italian automotive market recover from recent years, as he mentioned

during the presentation of the plan, contributing to its recovery with the sale of more than 1 million automobiles over 10 years. Technological innovation, the Industry 4.0 plan and product innovation are not an option for our industry sector, where competition is quite ﬁerce. Trump’s protectionist approach on products in the industry has allowed him to take the international stage, but you should know that levels of protectionism in the industry occur often and around the world. The import duties that Trump is threatening to impose on the EU are not as high as those implemented in South American countries. In Brazil, for instance, importers who do not buy domestically produced autos pay a 40% duty. In Morocco, too, where we are involved with PSA, the automobile is being nationalized whereby 65% of the components need to be produced in the country. All of this is to say that the automobile industry is highly labor intensive: even today statistics show that for every 1 million autos produced, 800,000 workers are involved.

SPAIN IS THE SECOND LARGEST EUROPEAN PRODUCER OF AUTOMOBILES

with just over 3 million automobiles manufactured with 2.5 million workers. Germany and France are also keen to maintain local OEM production to beneﬁt German and French workers in the industry. Renovating and implementing technological innovation is fundamental to remain competitive internationally and as a means to preserve home country production levels. We are certainly in favor of initiatives like the Industry 4.0 plan and need to move ahead regardless if what is proposed originates from national government policies or EU initiatives. Ours is an industry with an eye on political economy and ﬁscal strategy measures from the public sector, but the real pragmatic efforts are being taken by companies themselves through hard work and planning. The public sector should continue to keep our industry sector in mind when considering strategic economic plans. Our last government has taken our industry sector further into consideration compared to the past, both for national and international economic policy measures, so we hope the next government will continue with the same approach. WEIE

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SPOTLIGHT

THE INTERNATIONAL INSTITUTE OF MANAGEMENT & LEADERSHIP (IIML)

A Learning Experience with a Global Reach Student Engagement and Innovation are at the Heart of a Superior Learning Experience Alessia Rosa

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SPOTLIGHT

INGAPORE The International Institute of Management & Leadership (IIML) is a for-profit learning entity with headquarters in Singapore and an offshore campus in Mumbai, India. IIML has been founded with a vision of imparting futuristic learning, training and growth solutions for individuals and organizations. It is spread across three business verticals: Education, Training and Consulting. IIML Singapore has gained international standing sustained by means of basic and applied research. By partaking in a European and global network of international centers of knowledge Management, IIML Singapore works on large projects with several likeminded worldwide universities and business schools. By cultivating close relations with the firms, agencies, their management and officials, IIML constantly interacts with the business and economic environment to assess new issues, implement new techniques, and start new research endeavors. WEIE took the opportunity to meet with the Shankar Iyer, Director and CEO of IIML, to let readers know about the extraordinary opportunities available for innovative learning. Mr. Iyer was also a panelist of the CEO Summit organized by Le Fonti, with coverage from WEIE, in which he contributed with suggestions about learning and the skills need to succeed in the real world.

WHAT DISTINGUISHES YOU AS A COMPANY FROM THE COMPETITION, PARTICULARLY IN ASIA? WHAT IS YOUR USP AND WHY SHOULD A POTENTIAL INVESTOR CONTACT YOU AS OPPOSED TO ANOTHER COMPETITOR?

We as International Institute of Management & Leadership (IIML) believe in powering the Gen-Next, and are convinced that education is one of the most powerful catalyzers to reach this goal. We strive to keep students constantly engaged and to approach real-world problems thinking “outof-the-box” which is often a required match in today’s ever-changing and dynamic corporate-world needs. We differ from the competition because we try to be creative and intuitive in terms of delivery of the educational content

the real world, thereby creating a value proposition for our clients and the industry.

WHAT IS IT THAT COMPETITORS RESPECT ABOUT YOU AND WHAT DO YOU RESPECT MOST ABOUT THE COMPETITION?

Competition is a key element for growth and success: we learn a lot of things from our competitors and strive to continuously inculcate best practices into our institution’s learning process and are sure that competition would do the same. We believe that learning exists everywhere.

YOU HAVE MENTIONED THAT THE THREE VERTICALS YOU ARE PURSUING FOR YOUR STUDENTS ARE EDUCATION, TRAINING AND CONSULTING. INTUITIVE LEARNING

WE STRIVE TO KEEP STUDENTS CONSTANTLY ENGAGED AND TO APPROACH REAL-WORLD PROBLEMS THINKING ‘OUT-OF-THE-BOX’ to students. We want to maintain the students’ full-time engagement in the learning process because in today’s world of information overload we realize that there are a variety of distractions which can contribute to the student’s learning gap. Our faculty and the Academic Board try to bridge the gap by incorporating essential skills in our didactic approach, i.e. skills required by industry and applicable in

IN WHAT WAY DO YOU PLAN TO DEVELOP THESE AREAS IN THE UPCOMING YEARS AND WHAT DO YOU FORESEE ARE YOUR STUDENTS’ EXPECTATIONS?

The training and consulting verticals help us to determine a lot of areas where there is potential talent to be developed. Our objective is to put industry in the position to cut down on the gestation period of developing

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SPOTLIGHT

EXECUTIVE PROFILE Mr. Shankar Hariharan Iyer is the CEO (Chief Executive Ofﬁcer) at International Institute of Management and Leadership (IIML). He is instrumental in driving the Institute’s strategy and guaranteeing its operational execution. He has a Masters in Business Administration (MBA) from the International Management Institute in Brussels, Belgium, which has ensured that he has developed the global business

and leadership capacity necessary for leading IIML. Having started his work in Mercator Lines Pvt. Ltd as a management professional, Mr. Iyer has gained ten years of successful human resources, senior management and academic professional experience within the Education, Consultancy & IT industries. He is recognized for being an inﬂuential business strategist, workforce and HR service delivery

expert in organizational effectiveness & talent management, and for his revolutionary ideas on leadership, management and business operations. His expertise is focused on deploying and delivering corporate training. For IIML, he has initiated, developed and executed multiple corporate training programs for corporate houses in Singapore and subsequently in India. He is the master trainer for IIML and is working to promulgate his training methodology worldwide through the International Institute of Management and Leadership.

a technology and go straight to creating the business model and taking it to market. This also allows us to better understand the development required within the existing curricula that we have. Our students are already being prepared to work with a global mindset through our multi-country study module. We are aware that students’ expectations are being satisﬁed by the way we enable them to keep up with their peers and even surpass them. In the future, we envisage that one of the key challenges to us as a learning institution will be our ability to maintain the right balance between the use of technology and human elements to deliver our curriculum.

Institute is to deliver our vision to various countries across the globe, and we see a huge potential in the tier twothree cities for the programs that we offer. Indeed, partnerships could play a crucial role in enabling us to achieve this vision while at the same time the main challenge would be to identify these potential partners.

economies are investing substantially in up-gradation knowledge and skills and market potential looks promising for our industry. The Asia-Pacific region has been developing as one of the key education hubs in the world for training and learning. Singapore in particular has been quite successful in attracting students from around the world. Widely touted as an economic miracle, Singapore is a key global business and financial hub and one of the most developed countries in Asia. It is also well recognized as one of the world’s freest, most competitive and business friendly economies, and is currently ranked first in Word Bank’s Ease of Doing Business Index and second in the World Economic Forum’s Global Competitiveness Index. For this reason, we believe that Singapore has been an additional asset for our organization, paving the way for improved prospects for digitalization and automated learning both for our organization and especially our students. WEIE

WHAT ARE THE STRATEGIC GOALS FOR YOUR ORGANIZATION IN THE NEXT 2-5 YEARS AND WHAT IS THE ROLE OF PARTNERSHIPS IN REACHING THESE GOALS? One of the key strategic goals of our

WHAT IS YOUR OPINION ABOUT LIFE-LONG LEARNING? WHAT ARE YOUR THOUGHTS ABOUT THE FUTURE OF TRAINING AND LEARNING IN YOUR REGION AND AROUND THE WORLD AND WHAT ARE THE PROSPECTS FOR DIGITALIZATION AND AUTOMATED LEARNING?

In general, we strongly believe that learning is a life-long process. Every day is a challenge in its own way, and we believe anybody could accept the statement that learning is a key element for exploring oneself. Developing

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SPOTLIGHT

HOTELS.COM

The Chinese Tourist

Market is Blooming A More Informed, Demanding and Affluent Chinese Consumer is Paving the Way to Revolutionizing the Online Tourism Market in Asia Simona Vantaggiato

ONG KONG - Hotels.com

has been a leader on the market for online booking for properties ranging from international chains and all-inclusive resorts to local favorites and bed & breakfasts. Customers get instant savings with “Secret Prices” through Hotels.com mobile booking app and Rewards members can earn and redeem free nights at hundreds of thousands of properties worldwide. Hotels.com is an affiliate of Expedia, Inc. a leading global lodging expert operating 90 localized websites in 41 languages with its award-winning Hotels.com Rewards loyalty program. China has become one of the most important and growing

markets for travel. WEIE took the opportunity to ask some interesting questions to Hotels.com not only related to the company and its services, but also the forecasts and expectations of Chinese travelers and market tendencies which the company has been able to monitor throughout the years.

WHAT INCENTIVES DO YOU OFFER TO TOURISM PROVIDERS FOR THE CHINESE MARKET?

Recognizing the growing importance of the Chinese travel market, Hotels.com launched a website in simpliﬁed Chinese in 2009. Apart from special deals and promotions targeting

36 World Excellence International Edition - April / June 2018

particularly at Chinese travelers, it also includes customer reviews and destination guides, as well as visa application information and a new starter guide (available in many languages) that teaches users to use the site. In addition, given that the CITM report reveals that many Chinese travelers are familiar with UnionPay and Alipay, Hotels. com has made these options now available for Chinese users. Hotels. com has many special smart device apps that are available in Chinese, which give customers the ability to research and book away from their laptop or computer. The apps also grant them access to thousands of last minute deals. In 2014, Hotels. com launched its Chinese name

SPOTLIGHT

“Hao Ding” which means easy and good booking experience. This Chinese name reﬂects our value and commitment to delivering the best booking experience for Chinese travelers. There is also a revamped homepage, featuring a more intuitive, search-based user interface that allows travelers to quickly and easily locate the hotel information they need to book the perfect trip. In addition, the Hotels.com call center has native Mandarinspeaking agents available to help Chinese-speaking bookers. Hotels.com also has a presence on major social media sites such as Sina Weibo, where it frequently updates travelers with travel tips and information. The hotel expert also uses social media to receive feedback from its customers. Hotels.com offers its customers hundreds of thousands of accommodation options around the world, many of them in

destinations popular with Chinese travelers across Asia, such as Hong Kong and Seoul, but also farther aﬁeld in Australia, Europe and the USA. The Hotels.com Rewards programme is available to Chinese travelers; it lets them enjoy a free night stay for every 10 room nights stayed (terms and conditions apply).

WHAT ARE THE STRATEGIC GOALS FOR YOUR COMPANY IN THE NEXT 2-5 YEARS AND WHAT IS THE ROLE OF PARTNERSHIPS IN REACHING THESE GOALS?

Hotels.com is committed to offering our customers an unsurpassed accommodation booking experience no matter how they want to book (phone, website, or mobile). Smartphone is revolutionising travel. We are constantly evolving our smart new features to maintain our appeal to the smartphone

generation. Our app is full of great tools and lets our customers read about thousands of hotels, genuine guest reviews, great deals, Secret Prices, plus grants them access to our loyalty program. Today at Hotels.com, approximately 45% of global transactions and 55% of trafﬁc come from mobile devices. At Hotels.com, we continuously focus on enhancing our loyalty programme – Hotels.com Rewards which allows our members to enjoy one free night for every 10 stayed. We hit a milestone with our Rewards programme with more than 29 million members who have redeemed over $1 billion in free rewards nights since the programme began in 2008. We hope to continuously enhance our loyalty programme that everyone else can enjoy hotel booking simply and easily. On the other hand, we have launched a handful of promotional campaigns to grow our business in

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SPOTLIGHT

local markets, including launching our customised mascot in Asia Paciﬁc in 2017 as our brand ambassador. Our effort is very well received in the markets. We are continuing to push different promotion deals according to local market needs as well as exciting marketing partnership opportunities to further enhance our offerings (e.g. Asia Miles/ PayPal partnership, etc.).

HOW HAVE YOU IMPLEMENTED BIG DATA ON YOUR WEBSITE AND WHAT BENEFITS DO YOU SEE?

Hotels.com is one of the world’s leading online booking services. The company has hundreds of thousands of bookable properties available worldwide, over 29 million Hotels.com Rewards members and over 25 million genuine customer reviews. Hotels.com success is a result of hitting the zeitgeist. The site offers customers a broad choice, reliable technology, and an intuitive user interface; creative marketing; and – perhaps surprisingly - a state-of-the-art data application and analysis platform. One of the most important success metrics for an online booking platform is to offer customers an excellent user and booking experience that is independent from the devices they are using or where they are. The continuous improvement of Hotels.com

SOMETHING MORE ABOUT

Hotels.com is an afﬁliate of Expedia, Inc. a leading global lodging expert operating 90 localized websites in 41 languages with its award-winning Hotels.com rewards loyalty program. Hotels.com was established in 1991 as the Hotel Reservations Network (HRN). In 2001, it became part of Expedia Inc. and in 2002, changed its name to Hotels.com. The company is operated by Hotels.com LP, a limited partnership located in Dallas, Texas, in the United States.

usability is based on analysis from various sources including clickstreams, reviews, personal preferences of users, and hotel proﬁles. App developers are able to improve the user interface and the algorithms behind the booking procedure by understanding the customer journey beyond just one session. The in-depth knowledge gained allows Hotels.com to provide consumers with a personalised user experience and custom-made recommendations.

WHAT DISTINGUISHES YOU THE MOST FROM THE COMPETITION IN ASIA AND WHAT

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KIND OF THREATS OR OPPORTUNITIES DO YOU PERCEIVE FROM COMPETITOR ORGANIZATIONS?

Hotels.com is easily one of the top three players in the global online hotel booking business. Our ambition however, is to become the undisputed number one. We’ve been in business more than 25 years, yet we combine the best parts of a fun, millennial startup with the resources from one of the largest tech travel companies in the world, Expedia. At Hotels.com, we are offering hundreds of thousands of bookable properties in more than 200 countries and territories, ranging from international chains and all-inclusive resorts to local favourites and bed & breakfasts, together with all the information needed to book the perfect stay. As the leading player in the market for more than 25 years, we understand our customers’ needs. Our teams around the world are dedicated to acquiring hotels to add into our inventory to fulﬁl the great range of customer demands. We also spend considerable effort to check thousands of hotel prices every day to make sure the consumers pay unbeatably low prices when you book with us. Apart from the holistic range of properties, we also understand that the smartphone is revolutionising travel, and at Hotels.com, we’re

SPOTLIGHT

constantly evolving smart new features to appeal to the smartphone generation.

CAN YOU TELL US A LITTLE MORE ABOUT THE ASIA-PACIFIC REGION AND THE TRAVEL HABITS OF CONSUMERS? ACCORDING TO YOUR STUDY, CHINESE TRAVELER’S SPEND ON AVERAGE 28% OF THEIR DISPOSABLE INCOME. WHICH AGE GROUPS, TRAVEL PURPOSES, AND TRAVEL METHODS DO YOU SEE AS THE MOST REPRESENTED IN THE GROWTH OF TRAVEL IN ASIA? HOW IS HOTELS.COM ADJUSTING TO THE CHANGES? According to the Chinese International Travel Monitor 2017

time traveling, more locations and more exotic experiences. The number of trips and number of days per trip increased in the past year from 3 to 4 and from 5 to 7 days, respectively. At the same time, Chinese travelers visit multiple cities per trip, with over 80% saying they would not just stay in a single city. Chinese travelers also spend an average of 28% of their income on international travel in 2016. 2- Exotic destinations in demand We observed that travel to EMEA has increased significantly – up 25% (Europe) and 11% (America) compared to 2016. As the numbers of educated, more affluent Chinese grow, they are travelling much farther from home, exploring new long-haul destinations in Europe, the Middle East, Australia, New

CHINESE TRAVELERS GO A LONG WAY

AS THE NUMBERS OF EDUCATED, MORE AFFLUENT CHINESE GROW, THEY ARE TRAVELLING MUCH FURTHER FROM HOME, EXPLORING NEW LONG-HAUL DESTINATIONS research conducted by Hotels.com, a few key trends and habits of Chinese travelers were observed: 1- Rise of the “More Generation” More educated and increasingly sophisticated in their tastes and expectations, Chinese travelers want more of everything – more

Zealand and the South Pacific. Latin America, while still having a reasonably low occupation rate of Chinese guests, has seen strong growth with hoteliers observing a 21% increase in Chinese guests. 3- Evolving behaviour and preferences of Chinese travelers

Shopping no longer holds the attraction it once did for Chinese travelers, dropping from 68% in 2016 to 33% in 2017. According to the China National Tourism Administration, the number of Chinese choosing island destinations and eco tours accounted for 30% of total outbound travelers in 2016.

WHAT DO YOU FORESEE AS THE FUTURE OF THE TRAVEL INDUSTRY IN ASIA AND HOW IS HOTELS.COM ADJUSTING?

We see the future of the travel industry in Asia as follows: 1) Mobile, online and social media rule the way people travel Mobile devices are becoming the most preferred medium for using travel technology. At Hotels.com, approximately 45% of global transactions and 55% of traffic come from mobile devices. Hotels.com sees opportunities for growth through mobile booking apps. 2) Travel is more about experience now: According to a recent research conducted by Hotels.com (the bucket list survey), the ultimate destinations include attractions / activities with once-in-a-lifetime experience e.g. See northern lights (49%) / Reach the North Pole (30%) / Take a helicopter ride over the Grand Canyon (29%) WEIE

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SPOTLIGHT

E-GLOBAL TRADE & FINANCE GROUP

Foreign Exchange Services Made Easy for Everyone Earnings Opportunities in a Growing International Business for both Seasoned Traders and Novice Learners Alessia Rosa

ANGKOK - E-Global Trade

& Finance Group is an international brokerage firm incorporated in the British Virgin Islands with state-of-the-art technology to assist clients in managing international investments and foreign exchange matters. The company has become successfully renowned worldwide for its flagship brand “Forex4you” and its complementary innovative “Share4you” brand. It has offices worldwide, from Latvia to Malaysia, and one of its most burgeoning branches is located in Bangkok, Thailand. WEIE took

the opportunity to interview Thailand Country Manager Janis Baltalksnis to learn more about the success of E-Global and, in particular about the Forex4you and Share4you products offered by the company.

WHAT SET OF EVENTS LED TO THE ESTABLISHMENT OF FOREX4YOU, AND HOW DID YOU GO ABOUT ACHIEVING YOUR INITIAL COMPANY OBJECTIVES?

By hard work! We were set up 10 years ago and in that time have served

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SPOTLIGHT

over 1.4million traders across many countries. In 2007, the Forex4you brand was initially launched by a small group of ambitious ﬁnancial experts and since then we have steadily grown and, thanks to all of our hard work, we successfully achieved our initial objectives. We went on to launch our social trading service in 2013, which was one of the most pioneering projects of its kind in the industry. We focus primarily on building our own technologies, giving our clients the ultimate in support and providing a deeply customer-oriented service with access to a wide range of investment opportunities.

IN THE EXTREMELY COMPETITIVE WORLD OF RETAIL FOREX, ENTERING THE MARKET AND GAINING SIGNIFICANT SHARE IS NOT AN EASY TASK. HOW DOES THE COMPANY VIE FOR ITS SHARE OF THE MARKET AND WHAT TYPE OF CLIENT DOES FOREX4YOU ATTRACT?

We are intensely focused on our objectives and we know that with a strong will and hard work we can continue to achieve great results. Our main vision has always been to work on developing long-term and lasting relationships with our clients. This comes from the knowledge we have built up since our establishment, in serving all kinds of traders from all over the world. We have achieved this, above all, through transparency in our relationship with the client and offering a gateway to all of those private

customers and company clients who wish to trade on the global markets. We supply user-friendly and innovative technology that is suited to both beginners and even professional traders.

RETAIL FOREX HAS UNDERGONE A CONSIDERABLE CHANGE OVER RECENT YEARS LEADING TO LOWER SPREADS AND HIGHER ACQUISITION COSTS. WHAT IS YOUR COMPANY’S METHOD OF REMAINING PROFITABLE UNDER THESE MARKET CONDITIONS AND HOW DO YOU ENSURE CLIENTS ARE STILL PROVIDED WITH LOW SPREADS?

Yes, the Forex industry is an everevolving industry. It’s true that it is harder for brokers to be as successful now compared to the past. Success can be achieved, but it does require a larger number of customers and transactions. This large trading volume can lead to a compensation of such low spreads and low revenue in trading volume. With intense competition all around and a tough marketplace, a broker’s emphasis must lie in the quality of his offering and that is what sets us apart from the competition. We continue to support product development, to provide a deeply client-oriented service and, of course, to be considered a hub for the creation and accessibility of investment ideas that anyone can get involved in.

COULD YOU TELL US A LITTLE MORE ABOUT YOUR COPY

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SPOTLIGHT

EXECUTIVE PROFILE

Marina Mikelsone – COO E-Global With a degree in Economics and Financial Management earned from the University of Latvia in 2007, Ms. Mikelsone gained her first work experience in the retail industry. However, it was not long before her international business acumen took her into the financial management industry with E-Global when, in 2011, she joined the company as B2B and Project Manager, working up to Chief Operating Officer in 2014. She has since covered the role for E-Global very successfully, contributing to the company’s landmark in January 2017 of reaching over 100,000 active users of the Forex4you and Share4you brands.

TRADING PRODUCT, SHARE4YOU, AND HOW IT IS COMPLEMENTING YOUR FLAGSHIP BRAND FOREX4YOU?

Share4You is our pioneering social autotrading service. Share4you was launched in 2013 by E-Global Trade & Finance Group, Inc. The company already possessed a great deal of expertise and know-how in the industry which became the foundation of the new project. We have launched this service in order to make trading and investing more accessible for users lacking in investment experience and give them the opportunity to participate in the ﬁnancial markets by simply copying the trades of more experienced traders. For the experienced traders it is great way to earn an extra revenue stream.

WHAT ARE YOUR CLIENTS’ MAIN GEOGRAPHICAL DISTRIBUTION? DO YOU HAVE ANY PLANS TO EXPAND YOUR PRESENCE IN EAST ASIA? HOW CRITICAL WOULD YOU DEFINE THE ASIAN REGION FOR YOUR BUSINESS?

We are moving steadily towards the Asian market and we have many plans for the region. In Asia we currently have ofﬁces in Thailand, Malaysia, Vietnam and India and that is just the beginning for us. The Pan-Asia region will be our main commercial and business focus over the upcoming years.

WHAT IS IT THAT COMPETITORS RESPECT ABOUT YOU AND

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WHAT DO YOU RESPECT MOST ABOUT THE COMPETITION?

We believe that our competitors respect our corporate professionalism and the fact that we focus on building and developing our own products, as well as our long company history. To stay as focused as we have, for such a long time, is not that easy. On the other hand, the things that we respect in our competitors are those on which we don’t necessarily place a major focus – these include aggressive sales & marketing orientation. We are not massive risk-takers; in other words, our business development and branching out into new regions and countries is accomplished in a slow and steady manner.

WHAT ARE THE STRATEGIC GOALS FOR YOUR COMPANY IN THE NEXT 2-5 YEARS AND WHAT IS THE ROLE OF PARTNERSHIPS IN REACHING THESE GOALS?

Our strategy in the past years and indeed over the course of the next 2-5 years remain the same: We plan to keep focusing on our own product development (to increase our share of revenue for these products), to diversify our share in different markets and countries (particularly to increase our share of revenue in the Asia region) and to increase our share of revenue for new trading instruments (CFD/crypto). Our partner program remains one of the key tools for achieving success to accomplish all of our goals and we intend to keep supporting it. WEIE

Author: Paul Pigeon

InstaForex Helps Convert News into Money T

he world has moved into a new geopolitical phase. There are tensions between the United States and Russia over Syria, the brewing US-China and US-EU trade wars, and the Nord Stream 2 energy project which has been tearing Europe apart. National currencies are highly sensitive to these political and economic events. The more political and economic leaders appear in the limelight, the more probable national military forces are put on high alert. This triggers higher volatility in currency pairs and provides better earning opportunities to make an immediate profit due to inflated exchange rate differences. The summer and autumn of 2018 will be full of international events, meetings, and crucial decisions. Heightened geopolitical tensions or, alternatively, reduced intensity of conflicts will continue to occur. Whatever the outcome, forex trading can be equally profitable. The only thing that matters is the presence of these events, which will definitely take place. News and market analysis are important drivers of trading and investment decisions. When the world is peaceful, traders tend to be focused on major central banks’ monetary policies and key economic data. However, when geopolitics tensions reign, successful investors shift their attention to news and market analysis, available to everyone, to better understand market tendencies. Thus, Trump’s quarrel with Angela Merkel about Nord Stream 2 could weaken the euro. Protracted Brexit

negotiations would do no good to the British pound. US-China trade tensions could lead to Beijing’s tweaking of the yuan exchange-rate mechanism. News portals, newspapers and TV are the sources where you can find this information. But where can traders get correct interpretation of the news and how can they monetize it? There is one answer. A recognized forex broker with a good reputation and a long history can turn a geopolitical boom into forecasts and money. InstaForex is undoubtedly such a broker. It provides millions of traders around the world with access to financial markets. In addition to an assortment of trading instruments and the most favorable trading conditions, InstaForex has perhaps the most solid analysis resources amongst all market participants. Every day a large staff of analysts conduct market research, preparing forecasts and real-time trading tips for InstaForex customers. With high-quality market analysis in your arsenal, your forex trading can be really effective. Moreover, analytical support from your broker can provide you with immediate forward-looking information, so you can start earning, while others are still waiting for market developments. Thanks to this competitive advantage,

InstaForex clients have the inside track in the pursuit of profit. In fact, InstaForex customers can pay off investments quite early on, without any technical analysis skills or extensive trading experience. A largescale analytical base, favorable trading conditions, and services like ForexCopy and PAMM accounts add to the traders’ success. ForexCopy is a user-friendly system that allows a subscriber to copy deals of an experienced and successful trader picked from a list on the monitoring page. The PAMM system can make users strong and efficient traders, by taking funds from hundreds of investors, using their own and other people’s money, and proportionally distributing the profit gained. It’s a breeze to be an investor in the PAMM system. In addition to its unique services, InstaForex promotes social marketing, supports professional sports clubs, individual athletes and helps to develop cutting-edge technology. Millions of people around the world put their trust in InstaForex, turning to them for advice on how best to make a profit. It’s time for you to make a profit too. Remember, the news you read every day can be transformed into your potential profit.

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SPOTLIGHT

THE CEO SUMMIT IN HONG KONG

Keeping Companies and Workers Engaged Le Fonti’s Ceo Summit in Hong Kong puts on Display Company Visions and Strategies for the Future in the Far East Eric Davide

44 World Excellence International Edition - April / June 2018

ONG KONG - Once again, WEIE provided full coverage of Le Fonti’s annual CEO Summit recently held in Hong Kong in March 2018. The summit kicked off Le Fonti’s event calendar for 2018 and WEIE was there to gather insight on Far Eastern companies’ visions related to digital innovation, leadership, and human resources growth. Indeed, the title of the Summit was “Leadership and Innovation: Skills and Visions for Growth”, where three esteemed companies answered questions about how they have managed the challenges of their companies and their strategic outlook for the 21st century. The participants were the CEOs of International Institute of Management and Leadership (IIML), Arvato Systems, and Zurich Sigorta, all winners of the prestigious Le Fonti awards for company and individual performance, and while their industry sectors were quite diverse, all had their say about how companies should approach challenges in the future. The ﬁrst panelist was IIML’s CEO Shankar Iyer, who provided interesting insights about the challenges facing future leaders, the importance of vision statements for both individuals and companies, and the role education is playing in guiding students in approaching these challenges. Notwithstanding Mr. Iyer’s very recent appointment at IIML in December 2017, he has spent over a decade in corporate and

SPOTLIGHT

education industry. He has been deﬁned a passionate teacher with an eye for detail and has been instrumental in building careers of thousands of young minds. His contribution to the summit was well-received and he stressed the importance of education in creating leaders of the future. He stressed to us that the main challenge for the education industry is to keep students engaged and wanting to continue learning. Since 21st century students are continuously bombarded with various stimuli, the role of the education industry is to guide students to focus on what matters and to avoid reaching the breaking point in their attention span. Mr. Iyer also pointed out that it is critical for individuals to adopt vision statements, as do companies, because this is what will guide them in reaching their long-term objectives. “It doesn’t matter whether big or small but without vision it’s impossible to achieve anything because you don’t know where you are going”, he remarked, emphasizing that IIML is a trendsetter for guiding students to follow the right path in reaching their goals.

THE SAME IS TRUE FOR INDIVIDUALS WHO ENTER THE JOB MARKET. In order to attract the

best minds, it is IIML’s job to attract job applicants to align their own individual vision with that of the organization: as a result, IIML and job applicant will automatically succeed together and be in a position to build a give-take

relationship based on trust. Mr. Iyer’s ﬁnal remarks regarding the role of education in guiding students to approach challenges pinpointed that experiential learning involving real-life situations and using an “out-of-thebox” thought process are fundamental for future leaders to remain engaged with corporate demands and objectives. “Education turns students’ minds towards what companies want”, he insisted, stating that IIML’s role is to guide students to achieve the “out-ofthe-box” mindset so that students who will subsequently enter the job market intrinsically understand corporate needs. Another challenge for education is engaging students to go beyond their need for high-paying salaries or working for Fortune 500 companies. IIML’s realistic business-life classrooms are geared to creating situations in which students are obliged to solve problems in corporate settings and this constitutes part of the testing methodology. “Students need to show particular attention to solving problems as this will let them build their leadership skills”, he declared “We need to go beyond theory and the traditional mindset. We need to bring out from the student a different perspective on approaching new challenges. Practicality is what is needed.” The next panelist, Dr. Thomas Kathofer represented Arvato Systems, a new participant at the CEO Summit of Hong Kong and winner of the company of the year best place to work, smart services. Mr. Kathofer is Managing Director of the IT company

whose German headquarters opened a branch office in Malaysia, which was well-received internationally, along with the other Arvato offices, as some of the best places to work on the part of its employees. Arvato Systems, a whollyowned subsidiary of the international media giant Bertelsmann, is a global IT specialist whose business focus is on solutions for digital transformation. Mr. Kathofer was asked about the benefits reaped by digitalization and the importance of the global market to allow for employee creativity, thinking freely, and flexibly as a means to succeed in the business place.

HE REMARKED THAT THIS IS ONE OF THE MOST IMPORTANT ASSETS OF THE PROCESS OF DIGITAL TRANSFORMATION FOR HIS COMPANY AND FOR HIS EMPLOYEES. “Digital

transformation implies the presence of digital natives and gen-y”, he declared meaning totally innovative set of expectations from the employee to the employer in the business place, particularly referring to Arvato Systems: “they are asking for trust, ﬂexibility, agility, and being a global workplace, this has become global cultural challenge”. Mr. Kathofer agreed with IIML’s CEO that employers need to ask about their employee mindset and about their capability to instill “self-motivation” and their ability to think “global” which is what Arvato Systems is looking for and what Mr. Kathofer highly recommends for other companies as a means to

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SPOTLIGHT

create an excellent work environment both from the side of the employer but also for the employee. Indeed, he was then asked how companies link people strategy with their business strategy and what kind of experiences and skills employees and managers need to be prepared to meet business goals and challenges. He stated there that there is really only one basic question facing all companies: “You can structure your company based on trust or on control.” He forecasted that, in the long-run, if a company wants to continue being competitive in the market they will need to be structured only on trust. “This means openness, listening to people but allowing them to inﬂuence help to build next level,” he stated and recommended “you want to look for people to be self-motivated and who will be able to organize on their own, who are capable of taking care of upcoming issues.”

whose Turkish subsidiary is based in Istanbul. The Zurich Insurance Group (Zurich) is a leading multi-line insurance provider with a global network of subsidiaries and ofﬁces in Europe, North America, Latin America, AsiaPaciﬁc and the Middle East. Mr.Yildiz commented that the main challenges facing companies and workers are what he called “intellectual laziness” or the willingness to continue learning, and “the screens” or our overall dependence on digital apparatus of the 21st century including PCs, smartphones, and tablets. He indicated that the evolution of

MR. KATHOFER’S MAIN THEME WAS TO HIGHLIGHT THE POWER AND INFLUENCE OF WORK GROUPS and how inﬂuential they can

technology has obliged us to continue learning about IT development to such a degree that sometimes we need to “unlearn” and “relearn” technological concepts every 3-5 years to remain competitive in the marketplace. “We should consider the fact that machine automation is the wave of the future” he declared, stating that some trades which once were created so that workers could progress based on repetition and continuity, will cease to exist. He also provided important suggestions about “the screens” and that their presence is challenging our intellectual curiosity: “It is scientiﬁcally recognized that we are

be in a positive way for the company. Accordingly, the delegation of authority to workgroups is also an exercise in building trust amongst workers but also between employer and employee. He emphasized that trust is what you need to pursue to make your company successful, most especially during the phase of digital transformation. The 3rd and ﬁnal panelist was Mr. Yilmaz Yildiz, CEO of Zurich Sigortha, a leading insurance company

not really analysing as much as we used to and we are using the information which we ﬁnd on internet as a basis for the analysis which is not really ours”.

MR. YILDIZ CONCLUDED BY STATING THAT COMPANIES AND WORKERS NEED TO MAINTAIN A CRITICAL ANALYTICAL MINDSET to avoid being absorbed by “intel-

lectual laziness” which may result from too much dependence on the “screens”. Moreover, expanding interpersonal physical work relationships should be intensiﬁed as a way to learn from each

HR STRATEGY

“TRUST IS WHAT YOU NEED TO PURSUE TO MAKE YOUR COMPANY SUCCESSFUL, MOST ESPECIALLY DURING THE PHASE OF DIGITAL TRANSFORMATION” - Thomas Kathofer, Arvato Systems

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other, remain engaged and alluding to the fact that we should rely less on the virtual technology which may sometimes lead to apathy. In conclusion, the 2018 edition of the Le Fonti’s CEO Summit in Hong Kong provided interesting insights on how to do business in the Far East but also how to adapt to the ever-changing needs of technology. All panelists agreed that the agility of a company in adequately using technology as a way to improve worker relationships and performance will be the most rewarding characteristic of digitalization and digital transformation. WEIE

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BUSINESS & FINANCE

CURRENCY FLUCTUATIONS

THE DOLLAR’S DOLDRUMS Economic commentators are better at rationalizing past exchange-rate movements than at forecasting future trends. So, when it comes to explanations for the dollar’s decline over the past year, we are confronted by an embarrassment of riches. Barry Eichengreen

ERKELEY - Donald Trump’s

ﬁrst year as US president has been, if nothing else, a bounteous source of surprises. One of the big ones in the circles I frequent is dollar weakness. Between January 2017 and January 2018, the broad effective exchange rate of the dollar fell by 8%, wrong-footing many of the pundits. I include myself among the wrong-footed (others can decide whether I qualify as a pundit). Tax cuts and interest-rate normalization, I expected, would shift the mix toward looser ﬁscal and tighter monetary policies, the combination that drove up the dollar in the Reagan-Volcker

years. Tax changes encouraging US corporations to repatriate their profits would unleash a wave of capital inflows, pushing up the dollar still further. New tariffs that made imports more costly and that shifted demand toward domestic goods would require offsetting effects in a near-full-employment economy in order to shift demand back to foreign sources. The most plausible such offset was, of course, appreciation of the real exchange rate, which could occur only through inflation or, more plausibly, a stronger dollar.

THE MARKETS, IN THEIR WISDOM, REJECTED THIS LOGIC

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FOR MORE THAN A YEAR. It is thus incumbent upon those who of us made such predictions to “mark our views to market,” as my Berkeley colleague Brad DeLong likes to say. Economic commentators are better at rationalizing past exchange-rate movements than at forecasting future trends. So, when it comes to explanations for the dollar’s decline over the past year, we are confronted by an embarrassment of riches. The most popular explanation for dollar weakness is that Trump, through incompetence or misdirection, failed to deliver what he promised. There was no across-

BUSINESS & FINANCE

appreciation. The dollar weakened, in this view, because the Fed fell behind the curve and risked losing control of the inflation process. Conceivably, this interpretation could prove correct. But it is not correct yet. There was no surge in inflation between January 2017 and January 2018. Currently, the fear in the markets is not that the Fed is behind the inflation curve but that it will raise interest rates even faster than expected in order to preempt overheating. And if higher interest rates are good for one thing, they’re good for the dollar.

BEYOND THIS, THERE ARE AT LEAST 17 OTHER NARRATIVES TO EXPLAIN DOLLAR WEAKNESS. Some are insightful.

the-board import tariff. There was no abrogation of the North American Free Trade Agreement. There was no $1 trillion infrastructure package. But there were, in fact, deep tax cuts. There were, in fact, interestrate hikes by the Federal Reserve. And there were, in fact, tax changes creating incentives for the repatriation of proﬁts. Other things equal, these developments should have propped up the dollar. So there must be more to its weakening than just Trump’s failure to deliver. Another popular explanation is that investors expected the real exchange rate to rise through inﬂation rather than currency

Others are entertaining. Most, however, overlook the most plausible explanation, which is Trump-related uncertainty. Investors have no way to forecast the impact of policies, because policies thought to be headed one way suddenly veer in the opposite direction. A big infrastructure bill turns out to be small. Withdrawal from the Trans-Paciﬁc Partnership trade agreement turns into a possible decision to re-enter TPP. Steve Mnuchin, the Treasury secretary, seemingly abandons the United States’ strong-dollar policy but then re-embraces it. Uncertainty is the order of the day, every day.

AND THERE’S NOTHING INVESTORS LIKE LESS THAN UNCERTAINTY. This is especially

true of investors in a currency whose strongest attraction is its safe-haven status. Investors traditionally ﬂock to the dollar not simply because it is stable, but also because it tends to strengthen in a crisis, given that its issuer has impregnable defenses and possesses the deepest and most liquid ﬁnancial markets in the world. But now that issuer also has a president who is casting doubt on his country’s defense alliances and who is, consciously or not, encouraging his Russian counterpart, Vladimir Putin, to build, or at least boast of, new offensive weaponry. It has a president who has encouraged the idea of a government shutdown, fueling doubts about the liquidity of the market in US Treasury bonds. More chaos in the White House would only depress the dollar further. Working in the other direction is the fact that some of the dollar-supportive measures that observers expected Trump to adopt, such as tariffs on steel imports, are now coming, like it or not. It may be indicative that on March 1, when Trump announced his steel and aluminum tariffs and the stock market tanked, the dollar strengthened. Uncertainty may continue to dominate, but it may also be that the dollar’s rise on March 1 was a harbinger of what is to come on foreign-exchange markets. WEIE

April / June 2018 - World Excellence International Edition 49

BUSINESS & FINANCE

THE NEGATIVE SIDE OF TRANSFER PRICING

A Better Way to Fight Corporate Tax Avoidance The recent corporate-tax cuts in the United States have intensified an ongoing global race to the bottom, in which countries compete for investment at the expense of the revenues needed to fund public programs. With past efforts to reform the current global system having come up short, it is time for a new approach. José Antonio Ocampo

50 World Excellence International Edition - April / June 2018

EW YORK - Over the past

few years, leaks of documents such as the “Panama Papers” and the “Paradise Papers” have exposed the dark underbelly of globalization, and provoked indignant denunciations of tax avoidance from people around the world. Ordinary workers have no choice but to pay their taxes. But, apparently, multinational corporations and wealthy individuals can get away with paying hardly anything.

THE MOST SHOCKING FEATURE OF TODAY’S CORP O R AT E -TA X - AV O I DA N C E SCHEMES IS THAT THEY ARE LEGAL. When multinationals create

subsidiaries, those entities are considered to be legally independent ﬁrms. A parent company can then set the prices of transactions between its subsidiaries to register its proﬁts in low-tax countries, rather than where the original economic activity actually occurred. This system of “transfer pricing” has fueled competition among countries

BUSINESS & FINANCE

to lower their corporate-tax rates. And now that the United States has slashed its rate from 35% to 21%, the global race to the bottom will likely intensify. In fact, politicians in India, Mexico, Brazil, and other developing countries are already calling for tax cuts of their own, in order to remain competitive, attract foreign investment, and create or save jobs. All countries have the right to ensure that they are competitive in the global economy. They can do so in a variety of ways, such as by investing in education, funding scientiﬁc and technological research, and building efﬁcient infrastructure. Tax competition is not the way to go, not least because it reduces the revenues needed to make such investments, particularly in developing countries, which, according to a 2015 International Monetary Fund report, lose out on more than $200 billion per year because of tax avoidance by multinationals. When countries create tax regimes that are effectively designed to steal

tax revenues from others, the result is also less money for education, health care, poverty-reduction programs, and measures to address climate change. This should not be allowed, and multinationals should stop adding to the problem by threatening to leave countries unless taxes are cut. After all, a basic principle of corporate social responsibility is that ﬁrms should pay their fair share of taxes wherever they operate.

THE ONLY WAY TO STOP THE RACE TO THE BOTTOM IS THROUGH GLOBAL COOPERATION. Three years ago, the OECD

and the G20 took a step in the right direction, by unveiling a package of reforms known as the Base Erosion and Profit Shifting project. The BEPS initiative introduced a system for reporting corporate profits and taxes paid on a country-by-country basis, and for facilitating exchange of information among countries. But the BEPS program has proved to be insufficient, particularly from developing countries’ perspective, because it failed to address the core problem: the transfer-pricing system. Multinationals are still allowed to salt their profits away in ultra-low-tax jurisdictions. The Independent Commission for the Reform of International Corporate Taxation, which I chair, evaluated alternative proposals to fix the current system. In a recent report, we found that the fairest and most effective

way to allocate and tax corporate profits is to treat multinationals as single firms doing business across international borders. Thus, a firm’s total global profits would be taxed according to factors such as sales, employment, and resource usage – all of which reflect real economic activity – in each jurisdiction. As it happens, the European Union currently is considering a similar proposal, whereby it would treat all multinationals operating within its borders as single firms. To be sure, under such a system, countries would still compete for investment and corporate operations by lowering their corporate-tax rates. That is why we propose that all countries agree on a minimum corporate-tax rate of at least 15-25%.

IN THE MEANTIME, THOUGH, DEVELOPING COUNTRIES SHOULD NOT SIT IDLY BY.

They will have to force change, starting with agreed minimum corporate-tax rates at the regional level. They can also take advantage of a system – already in place in Brazil – that establishes a minimum taxable income for local corporate afﬁliates, based on the gross margins of different types of transactions. Looking ahead, it is past time that the United Nations took up this issue. Only a truly global cooperative effort can ﬁx a broken system and end the destructive race to the bottom on taxes once and for all. WEIE

April / June 2018 - World Excellence International Edition 51

Unilever

Banca Generali

RAI

Cucinelli

Segafredo

Vodafone

LE FONTI AWARDS

UPCOMING

Awards Ceremonies and Gala Dinners MILAN Le Fonti Ceo Summit & Awards May 25th, 2018 | May 31st, 2018 June 7th, 2018 | June 21st, 2018 June 27th, 2018

NEW YORK Le Fonti Ceo Summit & Awards July 1st, 2018

LONDON Le Fonti Ceo Summit & Awards October 26th, 2018

SUBMIT YOUR CANDIDACY Philip Morris

www.lefontiawards.com

Carrefour

INNOVATION & TECHNOLOGY

LEARNING IN THE FUTURE

EDUCATION IN THE DIGITAL AGE While no human will be able to compete with intelligent machines when it comes to reciting facts or performing formulaic calculations, human ingenuity and creativity remain unmatched. We should make the most of that fact, and give young people the opportunity to use their advantages as effectively as possible. Koichi Hamada

OKYO - The Fourth Industrial

Revolution stands out from its predecessors in a critical way: rather than making it easier for humans to use their surroundings more effectively for their own beneﬁt, technology is displacing humans in the workplace. The question is who will beneﬁt now.1 Automated or otherwise technology-

enabled services can increase proﬁt margins for companies, while representing for users cheaper, more convenient, or more reliable options than those produced exclusively by humans. But, of course, this comes at a high cost for the humans who previously ﬁlled those roles. People all over the world have embraced ridesharing and transportation services

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like Uber, to the detriment of traditional taxi drivers. When artiﬁcial intelligenceenabled driverless cars become costeffective and reliable, Uber and taxi drivers alike will become obsolete. In stock trading, 79% of market transactions are now performed by software, according to Frank Zhang of the Yale School of Management, reﬂecting the hope that machines will be able to identify patterns more effectively than a human could – a hope that may have contributed to the recent stock-market correction.

IN ANY CASE, THIS DOESN’T BODE WELL FOR HUMAN TRADERS.

I myself have saved on translation costs since realizing that, with some edits by me, Google Translate can work just ﬁne, though this means lost income for the graduate students whom I used to hire the task. While simultaneous interpreters – who occupy a high-paid profession – may scoff at the notion that machines will threaten their positions any time soon, the success of machine learning in highly complex strategic games like Go suggests that machines’ ability to learn should not be underestimated. In short, the AI-driven revolution will have its winners and

INNOVATION & TECHNOLOGY

losers. To win, it is vital not just to avoid being displaced by new technologies, but also to capitalize on the new opportunities they present. This might mean investing in cutting-edge businesses like Uber, as the JapaneseKorean industrialist Masayoshi Son has done. Or it might mean acquiring the knowledge and skills needed to secure a job that takes advantage of this new economy. Such responses are good not just for individuals, but also for economies as a whole. In Japan, for example, human-capital development is crucial to support growth as the population ages and shrinks. And that process begins early: as the Nobel laureate economist James Heckman has shown, education of young children has a signiﬁcant impact on productivity. That is why Prime Minister Shinzo Abe has announced that half of the extra revenues raised from the consumptiontax hike that will go into effect in 2019 will be invested in pre-school education. To give young people the tools they will need to thrive in the changing digital economy, such investment must focus on improving the quality of education. That may mean transforming curricula to focus less on rote learning or straightforward calculation and more on skills like critical thinking,

communication, and leadership.1 Education in Japan today – and perhaps also in South Korea – is something like the game “Jeopardy”: the one who knows the most facts is the winner. The best-known means by which Japanese students are ranked is hensachi – literally translated as “standard deviation” – which reflects how far from the statistical mean a typical student admitted to a given institution scores on a test focused on memorized formulas and facts. Students with higher positive hensachi scores are admitted to more rigorous high schools and colleges, where they are often encouraged to study medicine, simply because the entrance exam is difficult, even if they have no interest in a medical career. Otherwise, they compete to become bureaucrats at the most influential ministries – for example, finance, economy, or foreign affairs – or they try to get on the fast track to the top of elite firms like Toyota or Sony.

HENSACHI SCORES THUS DETERMINE PEOPLE’S ENTIRE CAREER TRAJECTORIES. High

scores mean a comfortable life, all the way through retirement. Given this, Japanese students feel pressured to

memorize information from a very young age. Parents will go so far as to move to a district where the kindergarten is linked to a renowned university. This system did not begin in Japan. On the contrary, it is an outgrowth of the system for assessing and promoting Chinese bureaucrats that prevailed until the early twentieth century.While it is a form of meritocracy, and thus superior to nepotism, it fails to take into account the reality that a capacity for rote learning does not necessarily imply an aptitude for creativity or ingenuity. Even if it did, we might not ﬁnd out, because memorizing enough information to secure high scores on assessments leaves little time to learn to think – to develop skills or foster talents that could amount to a real contribution to one’s community and country. In fact, a system based on hensachi actively discourages those who do have valuable talents from developing them into useful skills. Yet, in the age of AI, those talents and skills are more valuable than ever.1 The Fourth Industrial Revolution will amount to a major test for a Japanese education system focused on reciting facts and performing formulaic calculations – precisely the areas where humans cannot compete with intelligent machines. With all of our technological developments, human ingenuity and creativity remain unmatched. We should make the most of that, and give our young people the opportunity to use their innate advantages as effectively as possible. WEIE

April / June 2018 - World Excellence International Edition 55

INNOVATION & TECHNOLOGY

DIGITALIZATION AND PERFORMANCE

IS TECHNOLOGY HURTING PRODUCTIVITY?

It is possible that new technologies are not just doing less to boost productivity than past innovations. They may actually have negative side effects that undermine productivity growth, and that reduce our wellbeing in other ways as well.

Jeffrey Frankel

AMBRIDGE - In recent years, productivity growth in developed economies has been stagnating. The most prominent explanations of this trend involve technology. Technological progress is supposed to increase economies’ productivity and potential growth. So what’s going on? Harvard’s Martin Feldstein has argued persuasively that productivity growth is actually higher than we realize, because government statistics “grossly understate the value of improvements in the quality of existing goods and services” and “don’t even try to measure the full

contribution,” of new goods and services. Over time, he asserts, these measurement errors are probably becoming more important. Northwestern University’s Robert Gordon is less optimistic. He has argued – also persuasively – that today’s innovations in areas like information and communications technology (ICT) cannot be expected to have as big an economic payoff as those of the past, such as electricity and the automobile. But it’s possible that ICT and other new technologies are not just doing less to boost productivity than past innovations; they may actually have some negative side effects that

56 World Excellence International Edition - April / June 2018

undermine productivity and GDP growth. One need not be a modernday Luddite to acknowledge the potential productivity pitfalls of technological innovation. The ﬁrst might seem obvious: technological disruption is, well, disruptive. It demands that people learn new skills, adapt to new systems, and change their behavior. While a new iteration of computer software or hardware may offer more capacity, efﬁciency, or performance, those advantages are at least partly offset by the time users have to spend learning to use it. And glitches often bedevil the transition.

INNOVATION & TECHNOLOGY

THE FAST-CHANGING NATURE OF TODAY’S DIGITAL TECHNOLOGIES ALSO RAISES SECURITY CHALLENGES. Spam,

viruses, cyberattacks, and other kinds of security breaches can impose major costs on businesses and households. Then there is the impact that connectivity has on our daily lives, including our ability to work and learn. Non-work emails, social media, Internet videos, and videogames can easily distract employees, offsetting at least some of the productivity-raising potential of that same connectivity. Such disadvantages may become even more pronounced when workers telecommute. Similarly, the smart phone has shaped the minds of young people, who barely remember what it was like before addictive activities – from video games to social media – were constantly at their ﬁngertips. According to one recent study, recreational computer activities partly explain a decline in labor supply among men ages 21 to 30. Moreover, research shows that laptops in the classroom slow student learning, even when used to take notes, rather than surf the web. Moreover, smart phones undermine physical safety in some contexts. In the United States, the National Highway Trafﬁc Safety Administration reports that 3,477 people were killed and 391,000 were injured in motor vehicle crashes involving distracted drivers in

2015, with texting being the biggest culprit, particularly among young people. Digital currencies like Bitcoin have also so far failed to live up to the hype surrounding them. Far from being more efﬁcient as a means of payment or store of value than conventional money, cryptocurrencies seem to encourage the diversion of resources away from productive uses. They also harm the environment, owing to the energy-intensive “mining” process, while the total anonymity they offer undermines law enforcement.

BEYOND NEW TECHNOLOGIES’ DIRECT AND INDIRECT NEGATIVE EFFECTS ON PRODUCTIVITY, there is a risk that they

are undermining people’s quality of life. Few people have positive feelings about, say, the automatic phone calls that have come to plague many of our lives. Then there is the ever-present “fake news” problem. The advent of digital “new media” was once heralded as a democratizing trend that would give ordinary people a measure of control over the “air waves,” at the expense of big companies or established institutions. But it has lately become apparent that “democratizing” information may not actually be good for democracy. For example, fake news has been found to spread faster on Twitter than true news. This has not only made citizens less informed in many cases; it has also enabled

public figures – most notably, US President Donald Trump – to dismiss the truth as “fake.” And these are just the downsides of information technology. Other technological innovations with major obvious drawbacks include opiate painkillers and increasingly advanced weaponry. To be clear, I am not suggesting that the net effects of recent technological advances are negative. On the contrary, many have delivered huge benefits, and that will probably continue to be the case. Technologies may have productivityraising potential that is yet to be tapped. Historians like Paul David and technology experts like Erik Brynjolfsson, Daniel Rock, and Chad Syverson argue that it has always taken time for major breakthroughs (like the steam engine, electricity, or the automobile) to yield net economic gains, because businesses, buildings, and infrastructure need to be reconfigured. Presumably the same will happen with recent technologies.

BUT THIS IS NOT A REASON TO IGNORE THE NEGATIVE CONSEQUENCES OF NEW INNOVATIONS. As a group of Sili-

con Valley technologists has warned, “Technology is hijacking our minds and society.” We must take back control, ensuring that we do not just make our world “smarter,” but also make sure we are smart about how we use it. WEIE

April / June 2018 - World Excellence International Edition 57

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To subscribe, please visit our websites:

HONG KONG Le Fonti Awards 2018 On March 23rd 2018, the world’s leading corporate stars reunited for a special occasion, the 40th Le Fonti Awards Gala and CEO Summit in Hong Kong. Le Fonti Awards are held annually recognizing industry leaders in banking, business, economics, ﬁnance, sustainability, law, healthcare, insurance and e-commerce. This year, the Hong Kong Gala & CEO Summit was held at the Sheraton Hotel & Towers, a luxurious venue located in the heart of Hong Kong, hosted by the prominent TV presenter and MC, Agnes Zee. The CEO Summit was called “Leadership & Innovation: Skills and Visions for Growth”. It focused on a discussion of the important drivers related to leadership skills and innovation and the skill sets required by employees to meet the challenges facing companies in the 21st century.

LE FONTI AWARDS

CEO & TOP EXECUTIVES AWARDS

Yılmaz Yıldız

Datò Chevy Beh

Zurich Sigorta

BookDoc

1 Sandy Nairn

Thay Mengly

Edinburgh Partners

Vito Rotondi

Borey Peng Huoth Group

3 60 World Excellence International Edition - April / June 2018

MEP Group

CEO OF THE YEAR INSURANCE EUROPE

CEO OF THE YEAR FOR INNOVATION HEALTHCARE PLATFORM SOUTH ASIA

Datò Chevy Beh

Yılmaz Yıldız

BookDoc

Zurich Sigorta

Mr. Yılmaz Yıldız has been recognized for the third time in a row for his pioneering approach to the insurance market. Thanks to his charismatic leadership, he has been able to lead the company to successful business results, becoming a model not only for Turkey, but for the whole European continent.

Mr. Beh has successfully expanded the workforce of his company, Bookdoc, from about 400 to more than 1,300 and has increased the number of business units in the company from 101 to 181, expanding the customer base to over 2 million. Mr. Beh leads an experienced team that encompasses healthcare, bankers, ICT and insurance professionals.

CEO OF THE YEAR FOR INNOVATION INDUSTRIAL MACHINERY ITALY

CEO OF THE YEAR INNOVATION & LEADERSHIP REAL ESTATE CAMBODIA

CEO OF THE YEAR INVESTMENT MANAGEMENT WESTERN EUROPE

Borey Peng Huoth Group

Edinburgh Partners

Vito Rotondi MEP Group

Mr. Rotondi has become renowned as a visionary CEO of the MEP Group, able to combine digitalization and automation of industry 4.0 with the needs of his clients. He has invested over 10% of R&D revenue in his company and has created the MEP Business School, a long-lasting initiative which the MEP Group is aiming to build its growth on the market.

Thay Mengly

Sandy Nairn

Mr. Mengly has become a renowned leader in Cambodian property development consolidating Borey Peng Houth Group as one of the most prestigious companies in the industry. He has demonstrated longlasting successful achievements throughout his career thanks to his entrepreneurial ventures which have contributed to his success in the industry.

Mr. Nairn has become well-known for his ability to identify successful investments and to focus on companies’ future earnings. He has demonstrated exceptional skills in identifying and buying undervalued companies and subsequently selling when their share prices reﬂect long-term earnings.

April / June 2018 - World Excellence International Edition 61

LE FONTI AWARDS

LE FONTI

CORPORATE

AWARDS

Ortho Clinical Diagnostics

Kerry Logistics Network

MobiWeb

1 Chow Tai Fook

3 62 World Excellence International Edition - April / June 2018

China Telecom

EXCELLENCE OF THE YEAR FOR INNOVATION & LEADERSHIP LOGISTICS SERVICES GLOBAL

EXCELLENCE OF THE YEAR INNOVATION & LEADERSHIP SMS MESSAGING PROVIDER ASIA

Kerry Logistics Network

MobiWeb

EXCELLENCE OF THE YEAR FOR INNOVATION & LEADERSHIP VITRO DIAGNOSTICS

Kerry Logistics Network has been renowned as Asia’s premier logistics service provider. The company has successfully implemented a far-reaching global network covering six continents and is committed to creating real value for its stakeholders through innovative solutions, sustainable results and long-term growth.

For being one of the leading global A2P end-to-end SMS messaging providers. Through one connection, enterprises connect to MobiWeb’s carrier-grade platforms and unlock enterprise messaging delivery to 6+ billion subscribers of 1000+ mobile operators. With an international presence, it provides high-quality TLC solutions to more than 2500 enterprises.

Ortho Clinical Diagnostics is recognized as a leading global provider of in-vitro diagnostics solutions. The company has been providing high-quality products and services for over 75 years and has been continuously committed to sustainability, supporting environmental efforts globally.

EXCELLENCE OF THE YEAR FOR LEADERSHIP LUXURY ASIA

COMPANY OF THE YEAR FOR LEADERSHIP & SUSTAINABILITY TELECOM ASIA

Ortho Clinical Diagnostics

China Telecom

Chow Tai Fook Chow Tai Fook has been renowned as a leading jeweler in China, Hong Kong and Macau since 1929. The company is recognized for trustworthiness and authenticity, and for its products’ superior design, quality and value. With an extensive global retail network the company has implemented onlineto-ofﬂine strategies achieving omnichannel retailing.

China Telecom has become a landmark and an innovative excellence in the telecommunications sector. The company has successfully executed IR and is continuously committed to respecting Corporate Social Responsibility, achieving leading international standards which are highly valued by investment professionals.

April / June 2018 - World Excellence International Edition 63

LE FONTI AWARDS

Arvato Systems Malaysia

6 Tai O Heritage Hotel

HGC Global Communications

Mobitel

9 64 World Excellence International Edition - April / June 2018

Melco Resorts & Entertainment

COMPANY OF THE YEAR BEST PLACE TO WORK SMART SERVICES

COMPANY OF THE YEAR OTT LEADERSHIP ASIA

BEST PROMOTIONS & EVENTS TEAM OF THE YEAR ASIA

Arvato Systems Malaysia

HGC Global Communications

Melco Resorts & Entertainment

Arvato Systems Malaysia has been supporting career development through continuous learning, favoring a supportive and empowering workplace environment. The company culture fosters interpersonal employee contact and creativity, which has contributed to successful HR talent attraction, high retention, low churn and exceptional company performance.

HGC Global Communications has evolved from being a traditional network operator into a total solutions provider, offering a rich portfolio of connected, digital, cloud-based services and one-stop solutions. The company has always believed that the continued expansion of Over-The-Top (OTT) players will contribute to future industry growth.

Melco Resorts & Entertainment has become renowned for promoting “innovative excitement in a new age” in the events they organize, involving the best actors and talents worldwide. The company has successfully represented the “City of Dreams” for all ages and a “next-generation” of “must see, must experience” leisure and entertainment experiences.

ICONIC HOTEL OF THE YEAR EAST ASIA

EXCELLENCE OF THE YEAR FOR INNOVATION & LEADERSHIP MOBILE TELECOMMUNICATIONS SRI LANKA

Tai O Heritage Hotel

Mobitel

Tai O Heritage Hotel has been recognized for its ability to combine native rural charm with a contemporary twist. It has become an international excellence and a leading company in the luxury and hospitality industries, while representing the vintage architectural charm of the late 19th century.

Mobitel is renowned for its strategy positioned around value innovation and customer-centric solutions, making the best out of the technology being used. The company is also recognized for its distribution systems, product portfolio, value-added services and for the aim to bridge the digital divide in Sri Lanka.

April / June 2018 - World Excellence International Edition 65

LE FONTI AWARDS

LE FONTI

SUSTAINABILITY

AWARDS

COMPANY OF THE YEAR FOR SUSTAINABILITY ASIA

HGC Global Communications HGC Global Communications has been successfully bringing connectivity to countries rarely served by other international operators. The company is committed to upholding sustainable economic development in Asia and is focused on driving development along the emerging trade corridors of the Greater Mekong Sub-region (GMS).

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HGC Global Communications

LE FONTI BANKING

&INSURANCE

AWARDS

Zurich Sigorta

Bank of East Asia

COMPANY OF THE YEAR INSURANCE EUROPE

EXCELLENCE OF THE YEAR FOR INNOVATION BANKING CHINA

Zurich Sigorta

Bank of East Asia

Zurich Sigorta is recognized for its combination of ﬁnancial performance, customer satisfaction, employee engagement and innovative approach to meet trends. Thanks also to various security coverage options, Zurich Sigorta’s customers can beneﬁt from the most innovative solutions to prevent cyberrisk.

The Bank of East Asia has become renowned as a leading ﬁnancial institution dedicated to providing comprehensive commercial banking, wealth management, and investment services. In particular, the company has successfully pioneered a BEA mobile app and a BEA digital branch, contributing to the bank’s strategic development in digitalization.

April / June 2018 - World Excellence International Edition 67

LE FONTI AWARDS

LE FONTI ASSET

MANAGEMENT

AWARDS

La Trobe Financial

INVESTMENT COMPANY OF THE YEAR ASIA PACIFIC

ASSET MANAGEMENT FIRM OF THE YEAR ALTERNATIVE INVESTMENTS ASIA

La Trobe Financial

Orchard Global Asset Management

La Trobe has shown a 43.8% growth in the volume of funds managed compared to the previous ﬁnancial year: the Fund’s continued performance in times of low interest rates continues to attract attention across the market. The company is also renowned for having pioneered a unique Executive Exchange Scholarship Program for future ﬁnancial leaders.

Orchard has become a renowned, global alternatives asset management firm with a focus on opportunistic fixed-income and structured credit transactions in four principal market segments, including a combination of comingled and single-strategy funds. Orchard’s investments benefit from superior risk-adjusted return across market cycles.

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Orchard Global Asset Management

LE FONTI BROKER

AWARDS

Olymp Trade

TRADING PLATFORM OF THE YEAR

Olymp Trade

Olymp Trade has successfully adopted the latest technologies and high-speed quotes, guaranteeing quality that is backed by a relevant license. The company is renowned as a reliable guide in the exciting world of ﬁnance, providing a seamless and ﬂexible trading platform and continuous free training support to clients.

April / June 2018 - World Excellence International Edition 69

LE FONTI AWARDS

LE FONTI FOREX

AWARDS

InstaForex

E-Global Trade & Finance Group

FOREX BROKER OF THE YEAR EASTERN EUROPE

BROKER OF THE YEAR FOR LEADERSHIP FOREX INVESTMENT BUSINESS

InstaForex

E-Global Trade & Finance Group

Instaforex is one of the most renowned and fastest-growing international forex brokers, providing customers with a wide range of cutting-edge services and technologies. The company is recognized for consistently providing safe, convenient trading conditions dedicated to customers who rely on their tailor-made solutions.

E-Global Trade & Finance Group has become well-known as a dynamic investment company specialized in brokerage services, including Internet online trading with currency contracts (Forex), stocks and commodity futures. The company offers lots of large information to introduce new users to Forex Trading and supports traders through training sessions.

70 World Excellence International Edition - April / June 2018

LE FONTI REAL ESTATE AWARDS

Tiger Synergy

Shui On Land

EXCELLENCE OF THE YEAR FOR INNOVATION & LEADERSHIP PROPERTY DEVELOPMENT MAINLAND CHINA

EXCELLENCE OF THE YEAR INNOVATION & LEADERSHIP REAL ESTATE MALAYSIA

Shui On Land has established a proven track record of developing mixed-use, sustainable development communities. The company has intensiﬁed its commitment towards innovation, quality and excellence, developing and operating high-quality residential, ofﬁce, retail, entertainment and cultural properties in the Chinese Mainland.

Tiger Synergy has become renowned as an international excellence in the Malaysian real estate industry, always delivering high-quality residential and commercial projects. The company’s commitment is to strive towards quality, integrity, building trust and value creation for all of its customers.

Shui On Land

Tiger Synergy

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LE FONTI AWARDS

Borey Peng Huoth Group

3 Asia Green Group

Metrics Global

SonKim Land

4 Carlos Lamas

6 72 World Excellence International Edition - April / June 2018

Alexander Wong Architects

EXCELLENCE OF THE YEAR INNOVATION & LEADERSHIP REAL ESTATE CAMBODIA

EXCELLENCE OF THE YEAR FOR INNOVATION & LEADERSHIP PROPERTY VIETNAM

EXCELLENCE OF THE YEAR REAL ESTATE INTERIOR DESIGN MALAYSIA

Borey Peng Huoth Group has become well-known as an world excellence and one of the most prominent property development companies in Cambodia. In particular, the company’s unique, masterful project “Greater EuroVille”, depicts an innovative emulation of the main European landmarks, making the developer one of the most inﬂuential in the region.

SonKim Land is a renowned international excellence in the Vietnamese real estate industry, creating world-class living and working spaces for Vietnam’s highend customers. In particular, the company has adopted a new concept “Luxury Boutique Home”, targeting buyers who possess both ﬁnancial strength and reﬁned aesthetic and artistic tastes.

From project planning, creative conceptualization to construction, Metrics Global has become renowned as a one-stop design and building ﬁrm in Malaysia to suit any interior. In particular, the company has developed a masterful interior design concept for the “Impiana Hotel Senai”, the very ﬁrst for a 4-star business hotel in Senai.

EXCELLENCE OF THE YEAR FOR INNOVATION & LEADERSHIP PROPERTY DEVELOPER MALAYSIA

EXCELLENCE OF THE YEAR FOR LEADERSHIP ARCHITECTURE SPAIN

EXCELLENCE OF THE YEAR FOR INNOVATION & LEADERSHIP INTERIOR DESIGN

Borey Peng Huoth Group

Asia Green Group

Asia Green Group has become well-known as an international excellence in the Malaysian property development industry and, in particular, for the exceptionally diversiﬁed business portfolio, the premium development of residential and resort villas, and the undisputed quality and highest design standards of its properties in Penang.

SonKim Land

Metrics Global

Carlos Lamas

Alexander Wong Architects

Carlos Lamas has been renowned as one of the most forward-thinking architects in Southern Spain, combining architecture and interior design into a global- styling concept. Mr. Lamas’ “Essenza Living” has become a quality brand in the design and construction of contemporary homes, making the architect a reference for cutting-edge modern architecture.

Alexander Wong Architects has been presenting the best of what the Asia-Pacific region has to offer and combining it with superior design, attention to detail, professional diligence, business acumen and cost-effective management. The company has been acclaimed for “Aqua Futura”, a revolutionary office hygiene project designed for the office of the future.

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AWARDING THE BEST IN CLASS Submit your candidacy today for the Le Fonti Awards

e Fonti Awards® is an annual awards ceremony recognizing organizations that demonstrate corporate excellence in the fields of business innovation, leadership, technological achievement and employee engagement. Now in its 8th year, it is recognized as one of the world’s leading ceremonies of business awards and personal honors support services. Each awards ceremony is held in a leading strategic financial center such as Hong Kong, Dubai, London, Singapore, Milan and New York. Moreover, each ceremony includes an exclusive roundtable discussion amongst panelists about topics ranging from leadership, to organizational skills, to business strategy and more. The nomination, selection and announcement under the awards winners section is completely free-ofcharge. LeFonti®’s scientific committee along with a team of legal, economic and financial journalists based in over 120 countries receive nominations in

various awards categories throughout the calendar year for the relevant countries, regions and sectors which are pertinent to the category. They can be written submissions or on-line nomination forms and surveys. Our research team will first examine a nomination for a company or individual candidate to ensure that it meets the award’s specific criteria in the selected category. Then, the judging panel, comprising the research team and editors of our magazines (World Excellence - Italy, Le Fonti LEGAL, Finanza & Diritto, Asset Management, New Insurance and our English language publication, World Excellence - International) will evaluate all suitable nominations received for that awards category, provide verdicts and select a winner. To nominate a company for one of our awards please complete our online nomination form by visiting our website, www.lefontiawards.com or send an email info@lefontiawards.com.

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