33 European Business Magazine Spring Edition 2019 by European Business Magazine

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SPRING EDITION | 2019

EUROPEAN BUSINESS

MAGAZINE Steve Durbin MD of Information Security Forum Talks best strategies across threat landscape, cyber security and emerging cyber risk for business

Blockchain / Cryptocurrency / Citizenship Investment Programmes / South Korea / European Manufacturing / Cyber Security / USA FDI / Iowa / European Tech Scene / Digital Transformation / Quantitative Easing / Medical Marijuana

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Table of Contents

CEO Shuffle

Security, Safety and Success

Latest Technological Gadgets 2019

Exhibitions themed around Humboldt and Napoleon

The United States is Open for Business – Your Business

Iowa - Your New Hub in America’s Heartland

Online spend

Your Brand: What’s at Risk?

Iconic Superjumbos Are Out – The New Airbus Whale Is About to Take to the Skies

Quantitative Easing: Controversial Tool for Boosting the Economy

How To Choose The Best Social Media Channels For Your Business

Brexit Fallout: Could Dublin Replace London?

The Magnetism of a Second Passport: Citizenship by Investment Programs are on the Global Rise

Steve Durbin

Where do Multi-Nationals call home?

Why digital transformation is rocking the business world

Second Homes

Eric Major

Thinking Out-Of-The-Box: The Case of ConsenSys, Ethereum and Joe Lubin

Dark Clouds Over EU’s Manufacturing Industry: Worst Numbers in Six Years

Tim Garner

What Can The ECB Do As Euro Area Faces A Bleak Future?

Going beyond technology: How businesses can foster a cloud mindset throughout their organization

Anthony Leslie and Lee McCarrick

The Revolution of 3d Printing

The New Gold Rush Is Here: the Case of Medical Marijuana

South Korea’s Economic Miracle

Europe’s Tech Scene and its Most Rapidly-Growing Sectors

Simon Tribelhorn

Changes Are Here and Here To Stay

62 Insane Facts About Bitcoin

Cyber Security: Get on Board

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EUROPEAN BUSINESS

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MAGAZINE

Publishers Note

Publisher Nick Staunton

elcome to the Spring Edion of European Business Magazine.

A lot has been going on since the last edi on was published – both in business and in world aﬀairs. The mess that is Brexit con nues to get messier, and there is s ll no clear plan from Theresa May who doesn’t seem to be able to steer her ship with any confidence at all. Whether a hard or so Brexit, there remains a mountain of work to be done and huge amounts of negotiation necessary before anything will be finalised. Two years seems not to be enough! Meanwhile, Ireland has become the default place to go for banks and other ins tu ons that want to avoid London as a result of the Brexit chaos. A subject we touch on in this edi on. We look at a number of other interesting subjects, from blockchain technology and banking to the rise in demand for second passports. We have a very engaging an in-depth interview with Steve Durbin - MD of Informa on Security Forum, with whom we discuss cyber security, the threat it poses for businesses across all industries, and how his company oﬀers solu ons to companies needing protec on from cyber crime.

We discuss foreign direct investment (FDI) in the States, the continued developments of 3D printing, and the booming industry of cannabis oil. Now the cat is firmly out of the bag regarding the health benefits of CBD oil, investors across the globe are looking to put their money into the new gold rush, but with so many companies now playing in this arena it is increasingly hard to identify which will be the best bet. Europe’s manufacturing and tech industries both get an in-depth analysis, we look at how South Korea has turned around its fortunes with trade agreements, show you how to choose the best social media channels for your business, and share some very interes ng facts regarding the Bitcoin phenomenon. A read, as ever, that we hope you enjoy.

Editor Katie Winearls Deputy Editor Anthony Gill Associate Publisher Brad Adams Features Editor Patricia Cullen Head of Production Paul Rogers Head of Design Vladimir Mladenovski Subscriptions Manager Rebecca Hill Head of Business Development Paul Matthews Advertising Sales Brad Adams Tara Duckworth Advertising Sales Tara Duckworth, Mike Ray, Andy Ellis, Mark Holburn Contributing writers Patricia Cullen, Richard Fitzpatrick, Bala Murali Krishna, Shilpa Meen, Argee Laraya, Aimee Ni Mhaolcraibhe, Gordana Ristic, Jonathan Hooker, Jose Ignacio Latorre Head of Digital Stephen Scott Photographer Ben Fisher

Nick Staunton Publisher

NST Publishing Ltd, 19 Leamington Spa (studio 1) Leamington Spa,Cv324tf, UK The information contained has been contained from sources the proprietor believes to be wholly correct however no legal liability can be accepted for any errors. No part of this publication can be reproduced without consent of the publisher.

CEO SHUFFLE

European Business Magazine gives the low down on some of the recent reshuffles amongst the highbrow in the business world A 7th CEO in the Company’s 50 years of Existence A er 7 months spent searching for a new CEO, Intel Corporaon has finally made its decision. The chipmaking giant announced that Bob Swan, who had been leading Intel on an interim basis a er the sudden departure of Brian Krzanich, will take the permanent lead role from now on. Bob Swan joined Intel in 2016 as a chief financial oﬃcer. Before that, he worked at many well-known financial companies, including eBay, General Atlan c, and Electronic Data Systems. 2018 has been good for Intel, as the company showed strong growth in numbers in its server chips business, as well as an unexpected boost in personal computer sales.

Bob Swan

Change of CEOs in the Google Cloud Google Cloud division has a new CEO — Thomas Kurian, who had to step in a er Diane Greene made a shock resigna on, announcing that she is quitng to focus on mentoring and suppor ng female business leaders with engineering or science backgrounds, just like herself. Thomas Kurian is a respected technologist and execu ve, who has spent 22 years working at a database giant Oracle, the world’s second-largest so ware maker. Most recently he was in charge of cloud product development there. And now he will get to do it again, as perhaps the biggest challenge that the new CEO will have to overcome is the cloud space, as analysts claim that Google Cloud is s ll seen as a ‘distant third’ in the US to Amazon and Microso in the market for running apps and storing data in the cloud. 12 europeanbusinessmagazine.com

However, the new CEO will have to handle a few challenges related to new tech trends (think smart home, connected cars and augmented reality) and figure out where to posi on Intel for the future.

Thomas Kurian

CEO SHUFFLE Tourism Veteran joins the Flight of Virgin Australia Virgin Australia, Australia’s second largest airlines, has a new man behind the airplane’s yoke. Paul Scurrah, a former CEO at DP World Australia and Queensland Rail boss, as well as Execu ve General Manager at Aurizon, Flight Centre and Tourism Queensland, is replacing John Borghe , who has led the airline since 2010. According to the company, the most important challenge for the new CEO will be to stabilize the airline’s finances a er 6 unprofitable years, as during this me Virgin Australia has experienced 1,6 billion dollar losses, while last year’s loss was 653 million dollars. The company’s share registry is dominated by such major investors like Singapore Airlines, E had Airways, and Chinese groups HNA and Nanshan, which each own about 20 percent of its shares. Richard Branson’s Virgin Group owns another 10 percent.

Paul Scurrah

Changes at Software services provider Cognizant Brian Humphries

Cognizant, one of the world’s leading professional services companies that provides IT services, including digital technology, consul ng and opera ons services, has a new CEO. Brian Humphries, who is currently the CEO of Vodafone Business, is replacing company’s co-founder Francisco D’Souza, who has been with the Cognizant since 2007, star ng April. The company also announced that its president Rajeev Mehta will step down eﬀec ve April 1, 2019, and will serve as an adviser to the new CEO un l May 1, 2019. Like its peers, the company has been focusing on cloud compu ng, cybersecurity and analy cs to reduce its dependence on IT services, where margins are falling as clients demand more work for less money. Before joining Vodafone, Brian used to work at Dell, where he held the posi on of President and Chief Opera ng Oﬃcer.

Victoria’s Secret hopes for a Turnaround

John Mehas

Victoria’s Secret has a new CEO, and he will have a lot of work to do this year. John Mehas has joined the business, replacing Jan Singer, who resigned a er 2 years in the posi on. Sales at the lingerie company have con nuously tumbled, with same-store sales recording a 6 percent drop last quarter and online sales pos ng a 2 percent drop. The company has also faced some cri cism for not being more inclusive, as the old ways that include flashy fashion shows and celebrity models aren’t drawing people’s a en on like they used to. In its prepared statement, Victoria’s Secret noted that their “No. 1 priority is improving performance at Victoria’s Secret Lingerie and PINK. In doing so, our new leaders are coming in with a fresh perspec ve and looking at everything — marke ng, brand posi oning, talent, real estate, costs, and merchandise assortments.“ europeanbusinessmagazine.com

Latest Technological Gadgets 2019 Gillette Heated Razor Un l now, innova on in men’s shaving has been seen associated with adding more blades. But Gille e Labs, company’s new innova on team, focusing on developing new, high-end Gille e products, decided to go the other way and…added heat. This might sound weird at first, but Gille e’s Heated Razor is actually a carefully considered and surprisingly well-made product. It has a metal gold-colored bar that heats up to 113 or 122 degrees Fahrenheit in less than a second, hea ng the shaving foam/gel/bar-of-soap lather, as well as your skin in the process, to oﬀer an amazing shaving experience. Presented as “the comfort of a hot towel with the push of a button“, it features a fully waterproof design, wireless magne c charging system and lasts up to 6 shaves depending on usage. Oh, and the blades used in special cartridges for this heated razor are the thinnest Gille e has ever created.

LG Signature Rollable OLED TV R9

Can you imagine having a TV that’s right there when you want it, and simply disappears when you don’t? With its new Signature rollable Oled R9 TV LG did just that, allowing users to enjoy products that seamlessly blend into their home. R9 is the world’s first rollable OLED TV, and the ‘R’ in its tle stands for ‘revolu on’ in home entertainment and redefining space through its ability to rise and roll-up at the touch of a bu on in just 10 seconds. 14 europeanbusinessmagazine.com

The new R9 has a 4k resolu on and is equipped with the second genera on of the Alpha 9 processor, and can be used in 3 states: Full View, Line View, and Zero View. LG has refined the base sta on on this one and added a 100-wa Dolby Atmos speaker for powerful built-in audio. It also supports Apple Airplay 2 and HomeKit, as well as Amazon Alexa, which also means that users can use their normal voice to get things done.

Harley-Davidson LiveWire Motorcycle The legendary motorcycle maker Harley-Davidson has started taking the preorders for the LiveWire, the all-electric motorcycle, which is the first in a new genera on of bikes. It comes with an impressive promise that “the loudest sound you hear will be your heart racing“, and features a high-voltage ba ery composed of lithium-ion cells surrounded by a finned, cast-aluminum housing. The ba ery provides 140 miles of city range or 88 miles of combined stop-and-go highway range. The company noted that its newest creation does 0-60 in “under 3,5, seconds“. LiveWire is also the world’s first connected motorcycle, as it allows you to connect remotely through the smartphone using the latest version of the Harley-Davidson App. Here you can check all the bike’s vitals, like ba ery charge status, see its loca on on a map, and even get security alerts if it’s been bumped or moved. It will be available star ng in August 2019.

KitchenAid Cook Processor Connect Boiling, frying, steaming, stewing, kneading, chopping, mincing, pureeing, mixing, emulsifying, whipping, s rring… Can you imagine that from now on — thanks to KitchenAid Cook Processor Connect — you will only need one small countertop appliance in your kitchen to do all those things? Backed by more than 95 years of quality cra smanship, Cook Processor Connect comes with a die-cast metal construc on and beau ful color finishes. Designed to decrease cooking and cleanup me, Cook Processor Connect comes with a 4,5L stainless steel bowl which fits into a base that is responsible for all the diﬀerent cooking op ons. If the main bowl is too big, you can opt for a mini-bowl and a mini-blade — both are included to handle those smaller tasks, like making pesto or chopping nuts. It also has a built-in scale that allows weighing all the ingredients right in the cooking bowl. You can use either the manual control or the special app that allows accessing 100 recipes with step-by-step guidance. Available in red and black colors. europeanbusinessmagazine.com

SHAPERS OF OUR MODERN WORLDVIEW

Exhibitions themed around Humboldt and Napoleon at Pforzheim’s Jewellery Museum in 2019 By: Isabel Schmidt-Mappes, English translation: Sabine Goodman

h year 2019 marks he k th the 250th anniversary of the births of both Alexander von Humboldt and Napoleon Bonaparte. This prompted Pforzheim’s Jewellery Museum to organize two exhibi ons themed around two personalities whose thinking and ac ons significantly shaped our modern worldview.

Unconfined Horizons – Treasures Retracing Humboldt’s Travel Routes The open-minded humanist Alexander von Humboldt took an unbiased approach to his research, and was interested in both the natural sciences and people. Two major expedi ons took him to South America and to Russia. Showcasing texts, pictures and measuring instruments, as well as a wide variety of artefacts and jewellery created along his travel routes and at the places where he lived, the exhibi on will be providing a holis c 16 europeanbusinessmagazine.com

picture of the famous researcher, who was born in Berlin 250 years ago and whose worldview, influenced by the ideals of the Enlightenment, has lost none of its fascina on. Humboldt had a special way of seeing and surveying the world. He observed both people and natural phenomena without any prejudice and related them to each other, seeking to understand the big picture, i.e. the interrelationships between things and the interac on of natural forces, thus opening up a new dimension of research and discovery. One par cular focus of the exhibi on will be on the indispensable measuring instruments so important to Humboldt, including sextants, microscopes and a theodolite (an angle measuring device). Maps will also be on display, because the courses of rivers or mountain ranges in remote areas were s ll far from being surveyed completely back then, and Humboldt himself drew maps or eliminated inaccuracies. Another focus will be on minerals and gemstones, i.e. materials used to create jewellery. Humboldt had a special interest in them because he had also studied mining, and he brought numerous specimens back from his expedi ons. The show will also be shedding light on the circumstances involved in

finding, transpor ng and processing these raw materials, and highlighting what magnificent treasures the researcher discovered. Last but not least, the exhibi on will also be spotligh ng jewellery worn during Humboldt’s era in the salons of Berlin or Paris, or at the courts he was invited to on his journeys.

A Newly Ordered World – Treasures from the Napoleonic Era Napoleon Bonaparte, who was also born in 1769, reorganized the European world in many respects, something that inspired Pforzheim’s Jewellery Museum to organize a special exhibition spotlighting the new kind of jewellery and fashion characteris c of the Napoleonic era. Back then, the Neoclassical “style

of the Revolution” and the decorative Empire style spread all over Western Europe well into Russia. The moral concepts developed during the Enlightenment called for an aesthe c inspired by reason, which met the taste of an increasingly powerful, self-confident and educated middle class, and influenced all areas of culture – star ng from architecture, painting, furniture, garments and jewellery all the way through to literature and music. The visual

arts were expected to s mulate the emergence of an intellectual aristocracy to break with the tradi on of hereditary aristocracy. Over the course of Napoleon’s imperial reign, the Empire style unfolded its representative splendour to perfection. Including several pieces created by Chaumet, Napoleon’s court jeweller, the exhibi on, on display from 19 October 2019 through March 2020, will also be showcasing jewellery worn in his social environment. europeanbusinessmagazine.com

Online spend

eople in the UK spending more online each year than residents from any other country in the world, research reveals. Using Stasta data, the study shows that Brits spend an average of £3,041 a year online. This is ahead of ecommerce giants the United States (£2,593) and China (£1,403). A surprise entry in the top ten ecommerce countries sees Israel (£1,029) make ninth place on a list, which is mainly dominated by Europe and Asia.

opportunities for online retailers around the world.

•

China - £1,403

•

Australia - £1,334

UK online spend averages at £ 3 , 0 4 1 p e r c a p i t a p e r y e a r. China has total highest ecommerce spend, worth £543.3 billion a year while India has the fastest growing ecommerce market, with a forecasted growth of 19.9% by 2022

•

Canada - £1,321

•

Japan - £1,126

•

Israel - £1,029

•

Germany - £970

•

United Kingdom - £3,041

The research was undertaken by digital marketing experts Search Laboratory to highlight ecommerce

•

United States - £2,593

•

South Korea - £1,960

•

France - £1,472

18 europeanbusinessmagazine.com

The full ranking for the top ten spenders per capita is below:

Nicola Winters, Head of International at Search Laboratory, says: “When looking to expand into international markets, it is important that a business conducts research to make sure there is a market for their product. Looking at the average capita spend should be a considera on for all brands,

of £69.4 billion, it’s some way behind China and the US. All of the top spenders per capita make the top ten list for total spend apart from Israel, which is replaced by India who place at eighth with revenue of £24.4 billion. The full ranking for the highest ecommerce total revenue can be found below: • but par cularly luxury companies or those who have a higher average purchase order.” When it comes to a country’s overall spend, China takes top place. The country has over a fi h of the world’s internet users, and they spend a total of £543.3 billion a year online. The United States ranks just behind China on total spend, accounting for £414.3 billion of the world’s ecommerce spends. Despite Brits spending the most online per person, a smaller popula on leaves the UK in third on total ecommerce spend. With a revenue

China - £543.3 billion

•

United States - £414.3 billion

•

United Kingdom - £69.4 billion

•

Japan - £65.1 billion

•

Germany - £56.3 billion

•

South Korea – £51.9 billion

•

France - £37.7 billion

•

India - £24.4 billion

•

Canada – £23.7 billion

•

Australia - £16.0 billion

These are the current top spenders around the world, but as the internet becomes more accessible worldwide, this list is expected to change. Search Laboratory can also reveal the fastest rising ecommerce markets.

Despite already being in the top ten for total revenue, India tops the ranking for expected growth – with a predicted market rise of 19.9% by 2022. Other notable inclusions are Indonesia (17.7%) and South Africa (13.7%). Spain is making a bid to chase its European rivals, showing an expected growth of 9.1%. When comparing the industries domina ng ecommerce, there are some clear winners: fashion is the biggest industry in five of our ten biggest spending countries, with other notable inclusions being toys, hobbies and DIY, food and personal care, and electronics and media. Rebecca Saunders, Managing Director of Saunders Retail, commented on the importance of businesses considering target audience in ecommerce: “It’s cri cal that a company seeking to grow their ecommerce business is aware of where their target customers tend to be online. Understanding this is the first step to focusing me and marketing spend across the most relevant channels, in order to improve return on investment.” europeanbusinessmagazine.com

Iconic Superjumbos Are Out – The New Airbus Whale Is About to Take to the Skies

ne of the biggest planes in the world, and perhaps the most adorable looking one, is almost here – the Airbus Beluga XL.

The Airbus A330-700XL has just completed a key round of tes ng, which included the 600 hours of flight testing over ten months that is necessary to gain Type Cer fica on, and its entry into service later this year. The Beluga XL program was ini ated back in November 2014 and is based on the Airbus A330. However, the newest version of Beluga oﬀers 30% more capacity than its predecessor and is able to carry two A350 XWB wings instead of one. This impressive super-transporter cargo plane is powered by two RollsRoyce Trent 700 engines – costing almost $700million each – and is capable of flying 2,500 miles per trip, carrying 50 tonnes in its upper cargo deck. Airbus noted that the XL’s bubble is six meters longer and one meter wider than the original, meaning its cross-sec on is eight meters wide. The company will build a total of five Beluga XL aircrafts between 2019 and 2023, opera ng them from 11 loca ons around Europe, and transporting large aircraft components 20 europeanbusinessmagazine.com

to final assembly plants in Toulouse, Hamburg and Tianjin. The new sky whale features a characteristic paint scheme of ‘beluga whale-inspired eyes and [an] enthusias c grin’, which was picked from a poll of 20,000 Airbus workers, gathering 40% of the votes. Beluga XL will be one of the largest aircra s roaming the skies, par cularly given that jumbo passenger aircra s Airbus A380 and Boeing 747 are already on their way out. Airbus recently released a statement announcing that after flying more than 500,000 revenue flights and carrying over 190 million passengers to date with more than 300 commercial flights a day, the company is ending deliveries of the iconic aircra , with the last A380 superjumbo due to be delivered in 2021. The company’s CEO Tom Enders said that ‘The A380 is not only an outstanding engineering and industrial achievement. Passengers all over the world love to fly on this great aircra . Hence today’s announcement is painful for us and the A380 communies worldwide. We’ve invested a lot of eﬀort, a lot of resources, a lot of sweat…but we need to be realis c.’

Although Airbus hoped that the A380 would revolu onise passenger air travel and there was ini ally high expecta ons for the success of the aircra , the project ul mately failed a er just 12 years of produc on. . The A380, the world’s largest airliner with two decks of spacious cabins and room for 544 people in standard layout, was designed to challenge Boeing’s legendary 747. Airbus hoped to sell 600 of the A380 model, but the final number was significantly smaller – just 313 orders. Its cost has o en been described as ‘outrageous’, which has been cited as one of the main reasons for its lack of success, but the produc on of the whole A380 programme was delayed and over budget, leading poten al customers including FedEx and UPS to abandon the programme, and the only carrier to ultimately place a significant order was Emirates, meaning the programme never turned a profit. The development of smaller, more fuel-eﬃcient long-range planes that have the ability to connect smaller airports – such as Boeing’s 787 Dreamliner – further impacted the demand for Airbus’ A380 superjumbo.

you’ll be able to prioritise which pla orms will be the ones you focus on first. Once things get easier, you may find you can add more into your mix. - What Are Your Goals For Social Media? What Do You Want To Achieve? Photo by Tim Benne on Unsplash

How To Choose The Best Social Media Channels For Your Business

hen it comes to running a successful business online it can be hard to know where to start, especially if this is something that is completely new to you. One of the best ways in which to market your product and services online is to use various diﬀerent social media pla orms to grow an audience of loyal followers. Whilst not all followers will become customers, you will find that the more you grow, the higher your sales are. If you’re struggling to decide which social media pla orms are best for your business, here are 7 ps to help you get started:

- Work Out Who Your Audience Are And What Pla orms They Use Most The first thing you need to do when deciding which social media pla orms are best for your business is deciding who are your target audience is. You need to go into as much detail as you possibly can, thinking about their interests, their likes and dislikes, their shopping habits and where they like to go for dinner. The more detail you go into, the more you will be able to understand what they want. For ps and tricks on crea ng an avatar, you can visit this site here. - Think About What Content Your Audience Will Want To See Once you know who your audience is you can start to think about the

content they will want to see. Think about whether they prefer long-form content, whether they want something they can share, whether they need advice or whether they like to tag their friends in posts. Once you have worked this out, you will be able to narrow down which social media pla orms are best for which of your target customers. - Think About What You Want To Share Although you will be posting a lot of what your audience wants to see, you also need to consider what you want to share too. Do you want to share your blog posts? Do you want to share your products and services? Will you be pos ng giveaways and competitions? Will you be sharing other peoples content on your feed? If you figure all of this out before you get started you will have a much better idea of which pla orms are the best for you. - Consider How Much Time You Have To Dedicate To Social Media If you don’t have a lot of time to dedicate to social media then the likelihood is you’re not going to be signing up to every single pla orm. Think about how much time you realis cally have and work out how much me you need to dedicate to each account. Once you know this,

When deciding which pla orms you want to use for your business, you need to think about what your goals are and what you want to achieve from social media. Do you want to increase your sales? Do you want to gain a loyal following? Do you want to build a community? Are you building awareness? Do you want to encourage email sign ups? No matter what your goals are, there will be some pla orms that are more geared towards each of your goals. For more informa on on se ng social media goals and using digital marke ng as a business, you can visit this site here: h p://www.rouge-media.com. - Think About How You’re Going To Create Your Content And If You Can Duplicate It Across Channels If you’re thinking of using a number of different pla orms to grow your following then you may want to consider how you can make your life easier when crea ng content. Although most platforms require different image sizes, there are lots of different apps and tools that will allow you to create an image for one pla orm and then allow you to resize it for another. For more informa on on this, you can visit this site here. - Think About Whether Or Not You Can Hire A Professional To Help You If you’re struggling to see how you’re going to manage all of the accounts you want to set up, you could consider hiring a professional to do the work for you. There are lots of freelance social media managers out there that will help you create accounts, develop a plan and schedule your monthly content. Whilst it may not be the most affordable op on, it’s definitely best for busy entrepreneurs. Are you thinking of se ng up social media channels for your business? What do you need to think about before you decide which pla orms are best? Let me know in the comments sec on below. europeanbusinessmagazine.com

Brexit Fallout:

Could Dublin Replace London?

ven as the debate over the UK’s future rela onship with the European Union con nues to rise, the costs are already being felt. Studies have found that Brexit has already cost the UK around £80 billion since the 2016 vote, and the economic forecast con nues to be gloomy.

Business leaders have long since cau oned against the risks of Brexit, threatening that lack of access to the EU would lead businesses to relocate to other countries in the European con nent. Unfortunately, these predicons have been shown to be merited, with London - largely regarded as the business capital of Europe before the 2016 referendum vote - in par cular suﬀering as a result of Brexit. As more and more companies leave, London’s status continues to falter, and it is unclear if even a full reversal of the Brexit process could halt the exodus. 22 europeanbusinessmagazine.com

However, while London struggles, numerous European cities have embraced the opportunity; Paris, Amsterdam, and Berlin are all set to benefit from companies seeking to relocate in order to remain in the EU - but could Dublin, the capital of Ireland, ul mately prove to benefit from Brexit the most?

Ireland’s reputation as a business-friendly country Ireland has long since established a reputation as a business-friendly country, an a tude that helped to lead to a long-term boom, which became known as the Celtic Tiger. However, even though the Celtic Tiger has long since waned - a vic m of the 2007/8 financial crash, among other issues - Ireland has remained determinedly open for business.

Ireland’s capital, Dublin, has undergone a substantial focus on ensuring the city is able to facilitate every need of a modern business. Not only has the city experienced significant regenera on, with a variety of business-friendly loca ons and conference spaces available, but innova ons such as Dublin Airport Central have helped to place Dublin on the map as an interna onal business des na on. In addition, Ireland as a whole has ensured that the entire country remains a favourable choice for businesses who may be seeking a permanent reloca on. Ireland’s corporate tax rate is incredibly low, at just 12.5%, which compares very favourably to the UK’s 19%. Even though the UK has pledged to bring corporate tax rates even lower, to 18% by 2020, the UK will s ll lag far below Ireland’s oﬀering.

the economy is strong enough to withstand any tremors to come.

The argument against Dublin replacing London as the EU’s business hub As we have seen, Dublin is an undeniably viable prospect as London’s replacement as the centre of European business - but there is a catch, and unfortunately, it’s a catch that is diﬃcult to address: geography. Both London and Dublin are located on islands, but London is far closer to the European continent than Dublin. What’s more, the opening of the Channel Tunnel transformed travel to and from Europe forever, with business executives now able to travel as comfortably between London and Paris as they would travel between two major ci es located in the same country. In contrast, Dublin remains isolated, with air travel the only realistic op on for those seeking to connect to the con nent - the sea routes are slow and infrequent, and the distances between the island of Ireland and the con nent are too great for a tunnel or bridge ever to become viable.

So could Dublin replace London?

It’s clear that many major businesses have sought to embrace the low taxa on levels, too; this is far from a case of a low tax rate being available but unused. Google, Facebook, and many more recognisable names have chosen Dublin for their European headquarters. What’s

more, the companies who have decided to relocate are currently experiencing a far brighter, more se led economic outlook: Ireland’s economy is amongst the strongest in the EU, and though Brexit will undoubtedly present a few problems in this regard, the consensus is that

It’s fair to say that following Brexit, ci es across Europe will be seeking to be seen as London’s replacement as the business capital of Europe. However, Dublin has a surprisingly strong claim to be London’s successor thanks to the strength of the Irish economy, the range of ameni es available, the fact that English - the lingua franca of the business world - is the na onal language, and attractive taxation rates. While there are a few dark spots on the horizon, particularly in terms of travel inconveniences, don’t be surprised if Dublin manages to overcome these, and emerge - a phoenix rather than a Tiger - as London’s replacement as the capital of business in Europe.

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This edition we caught up with

Steve Durbin

our front cover focus for our Spring edi on who is the Managing Director of Informa on Security Forum. Steve gives us the low down on all things cyber security related, the preventa ve measures that need to be addressed in order to protect against security risks and what to do, to avoid the risk of cyber crime.

This edition we caught up with Steve Durbin, Managing Director, Information Security Forum and our front cover focus for the Spring edition. Steve gives us the low down on all things cyber security related, the preventative measures that need to be addressed in order to protect against security risks and what to do, to avoid the risk of cyber crime. You have an impressive profile: it includes names like Gartner and Ernst & Young. And now you’re the Managing Director at Information Security Forum. Could you tell us about your path there? What were the main tipping points during your journey to ISF? I have been very fortunate throughout my career to have worked with some inspirational leaders and been part of exciting growth opportunities which have developed my career and experience in the UK and around the

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world. I have managed and grown start-up to £multimillion turnover technology and services enterprises, and been involved with mergers and acquisitions of fastgrowth companies across Europe and the USA. I’ve had the opportunity to advise a number of NASDAQ and NYSE listed global technology companies and have served as an executive on the boards of public companies in the UK and Asia in both the technology consultancy services and software applications development sectors. But I didn’t start out in technology – my degree was in French and I followed that up by studying for my Chartered Institute of Marketing qualifications to enhance my business knowledge. I have always been attracted to opportunities that allow me to make a difference – so at Gartner I was fortunate to be involved in starting their marketing consultancy business which I went on to lead from a

standing start to over 400 consultants worldwide in five years. I have always been fascinated by travel and other cultures and during my time at Gartner I developed the strategic market entry plans for Asia Pacific, managing existing operations in Japan and Korea and launching new offices in Hong Kong, Singapore and Sydney. I also led some major acquisitions – so I had a pretty varied career during my time there. At EY I was responsible for marketing the full range of EY products and services across the NEMIA region. I worked with fast growth companies, so I had the chance to work with some truly inspiring entrepreneurs such as Tim Richards at Vue Cinemas, Peter Cullum at Towergate, people who had a vision, a drive and a determination to succeed. One of the key takeaways from my time at EY was that irrespective of what you do, you need to follow your passion if you are to become truly successful.

My passion is change. My passion is working with growth and transformation focused companies – and with people who challenge you to be the best. The attraction of the Information Security Forum (ISF) originally was to work with another industry leader, the late Howard Schmidt, special adviser for cyberspace security to the Bush administration directly following 9/11. He was a leader in developing the U.S. National Strategy to Secure Cyberspace and later went on to serve in the Obama administration as the White House Cybersecurity Coordinator. Schmidt challenged me to help with the growth of the ISF, by introducing new services to meet the continually evolving needs of our members, some of the world’s leading companies. That opportunity still exists, and it is a challenge I continue to enjoy today. As the Managing Director of ISF, what is your role and the most important responsibilities for you right now?

I oversee the ongoing development and growth of the ISF worldwide. I also sit on the ISF Board and so have first-hand input into our strategy and ways of dealing with the evercomplex business world in which we operate. Legislation and regulation are key changes in our industry – issues such as GDPR and Brexit do not just impact our members, they also impact the ISF and navigating a path through these and other business issues is a key part of my role. The ISF is also continuing to grow and in our business that means we need to attract and retain people who both enjoy the challenge of working in a fast paced, dynamic industry and are able to hold the attention and respect of our members. For a small company that can be very challenging. What are the most important qualities that you need to work in this position? What do you feel are the biggest challenges that you face being in this position?

Every business leader today will tell you that technology has radically changed the way in which we operate. This presents challenges and I would say that agility, the ability to both anticipate and react to market demands, is one of the key qualities that a leader needs to bring to an organisation. But there are other challenges, particularly related to the cyber security space. We are seeing unprecedented demand for cyber skills and are all fighting to attract and retain skilled people. For the small business that is an even more acute problem – how do you compete with the larger enterprises? So for me it is about creating a differentiated employment proposition based on transparency, trust and mutual respect with everyone that works at the ISF. It is about understanding the career needs of our people and ensuring that we are all able to achieve our goals. Leaders have a direct influence on the personality of a business. Creating a consistent culture which is authentic and energizing in the face

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of daily challenges is an art; it cannot be achieved through policies and processes, it requires leaders to lead by example, to be consistent in both messaging and behavior and to create an environment that recognises its shortcomings and is prepared to adapt and change. I believe that the biggest challenge today for any leader is to create a shared mindset and shared ambition across the enterprise that takes into account the needs of the market, the clients but most importantly the people. It is about clarifying what great looks like and then creating an environment for the team to succeed; for me that is all about allowing people to define, understand and fulfil their passion. What in your tenure do you feel has been the biggest achievement with the ISF so far? The ISF turns 30 years old this year and we have never been more relevant than we are today. Our membership continues to grow and we continue to provide them with the tools and insights that are required to try and stay ahead in a world of increasing threat and transformation. ISF is an independent information security body. Could you tell us more about this body and what it does specifically? What is its specialty field and what are its objec ves as an organisa on? What specific aims do you see as the most important ones for the ISF? The ISF is primarily concerned with enabling our members to effectively manage and mitigate risks to their data and systems. It’s never been harder or more critical than in today’s hyperconnected world and our approach focuses on providing practical measures for member organisations. Our Standard of Good Practice for Information Security provides a comprehensive best practice blueprint. Our tools include a tangible methodology, industry benchmark and regular surveillance of the threat landscape. And our ongoing research programme, which 26 europeanbusinessmagazine.com

members participate in developing, ensures relevance in a fast-evolving arena. The ISF’s objectives are directly linked to this; going beyond discussion to actions, solutions and supporting our members who understand that information security has passed from being necessary to being essential. Information Security Forum works with many leading organisations that are featured on the Fortune 500 and Forbes 2000 lists. Why do you think companies approach ISF and want to join? The operating environment for organisations is becoming ever more volatile. Technological step changes are affecting entire business models as 5G, AI, drones, quantum computing and an expanding nexus of IoT devices receive significant investment. Ubiquitous digital interconnectivity and the benefits that brings is also creating an evolved and more complex threat landscape. Organisations must prepare for the arrival of such technologies by understanding how they will be used – those that get it wrong will find themselves compromised, their operations disrupted and reputations damaged. Quantitative risk assessment will increasingly become the norm for organisations seeking to justify security investments in an environment of increased volatility.

Few security departments are in a position to successfully address all the cybersecurity challenges and prioritisation around protecting critical assets – the organisation’s crown jewels – which will be essential. Continuing skills shortages will increase the need for smart targeting of security priorities in line with the business risk appetite and risk profile. So, the market is challenging - members value the depth and full spectrum approach to information security at the ISF. In addition to tangible information security measures members have access to expert consultancy and they like that we are here to help them with specific projects as well as help them to help themselves through the available tools and research. In a similar vein we take a “bedrock to boardroom” approach so that CISOs are supported in engaging with their whole organisation. Equally the Board and practitioners can easily gain a thorough understanding of both threats and cybersecurity best practice which underpins long-lasting resilience and growth with minimal risk in the digital era. Our footprint is global which enriches the collective insights we gain from members and feed into our research. Finally, Members value being able to participate in developing leading research and collaborative solution-finding. The ISF has a strong history of working with its members to spotlight issues such as supply chain

vulnerabilities, cloud, developing the security workforce and quantitative risk assessment. In addressing these issues, we help members target and begin to offset current and future stress factors. In your opinion, what are the main and biggest challenges that ISF faces everyday? The top concern is technology and society’s overdependence on it. Technology continues to enable innovative digital business models and society has become critically dependent on technology to function. The race to develop the next generation of super-intelligent machines is in full swing and technology will continue to be ever more intertwined with everyday life. This new hyperconnected digital era creates an impression of stability, security and reliability. However, it is an illusion which when coupled with heightened global mistrust and rising geopolitical tensions, will give rise to ever more sophisticated and pervasive cyber threats that are targeted and disruptive. The effect will be that the operating environment for business will continue to become increasingly volatile. The impact on society will be that technology will intrude into many aspects of personal and working life, creating a digitalcentric, always-connected society that raises fundamental questions

around social well-being. Add to that the lightning fast evolution of cybercrime – attacks increasing in number and sophistication and the pace at which dependency on technology is outstripping both regulation and cyber defense in most organisations, and you have more than enough challenges for any one organisation to deal with. That is one of the attractions of the ISF – we are a global collaborative community of some of the smartest minds in the security industry. What are the most exciting projects that you’re working on right now with ISF? We have a research agenda that is determined in conjunction with our members – so we have just released our annual Threat Horizon report which looks out two years to try to identify upcoming threats. We are building on our cloud research which we started many years ago and we continue to look at developing a board level toolkit that distills the essence of ISF tools. We are revamping our benchmark systems since it has never been a more important time to be able to assess your own security posture within the context of other organisations or standards. Can you say a few words about the future? What do you think the whole cyber, information security and risk management industry will look like 5, 10 years from now? And the Information Security Forum — what it will look like? Digital transformation is now top of the challenge list for many businesses and operating in the digital world is increasingly a matter for effective management of risk. The focus needs to be on how being safe in cyber can drive organisational growth and development – understanding cyber risk and building in appropriate cybersecurity from the start are fundamental to success. This requires businesses to implement means of maintaining situational awareness and cyber resilience, such as increased monitoring and gathering of threat intelligence. Overall, businesses will need to respond to

the challenge that cyber is not an IT or purely technical issue and that operating in the digital world is the new business as usual. The way in which many businesses manage cyber risks will change and this change will need to be owned in, and driven from, the boardroom to ensure engagement and eventual ownership by business leaders of digital. Whilst good cyberhygiene, IT security and operational risk management will continue to be core to being safe in the digital world, cyber is now a business issue and any mit- igation and preparation for the risks of the digital world will fail without the buy-in and ownership of business leaders. The onus will fall on them to identify critical business assets that must be protected and to make protection of the organisation an integral part of their business strategy and implementation plans. Over the coming years a range of damaging threats will materialise. Vulnerabilities will be shared across interconnected systems heightening the need for strong cyber security, defences and resilience across the extended supply chain; malware attacks will be amplified by superfast networks; critical national infrastructure (CNI), IoT manufacturers, businesses and citizens will all offer ripe targets for a wide range of attackers, from nation states aiming to cripple CNI to hackers spying on private networks. Ultimately, organisations will become even more digitally dependent, more interconnected, and will experience a more intense battle for data between organisations, criminals and nation states. AI and machine learning will have a key role to play, not in replacing people but in being used as effective tools that can help with the delivery of increasingly sophisticated cybersecurity strategies embedded both in digital transformation plans and daily, enterprise-wide activities. The ISF will continue to be at the forefront of helping organisations to develop and embed strategically aligned cyber resilience to protect their critical assets and data. www.securityforum.org europeanbusinessmagazine.com

Why digital transformation is rocking the business world D igital transformation has caught the zeitgeist. According to Gartner, the research firm, spend on digital transforma on will top $3.8 trillion by the end of the year. To put that figure in perspec ve, it’s about four mes the money that the US government will spend on its military in 2019. So what’s the beef with digital transforma on? Why has it been capturing the imagina on of businesses around the world? And what exactly does it mean?

Digital transformation is hot. Richard Fitzpatrick examines what it’s all about, tips for successful adoption and some of the myths about a way of thinking about business that is turning the world upside-down

Philip Martin, CEO, Cora Systems

In its truest form, it entails a radical overhaul of the way a business operates. It requires a fresh outlook. It’s more than just dropping in new technologies to speed up an exis ng business process. It’s about changing the founda on of a business – right across the operating model; the IT infrastructure; the business’s route to market; how it sells its product or, if it’s a sector like healthcare, how it delivers its service. It always entails significant cultural change. “A lot of the me when we think of digital transforma on, we just think we need to give a client newer tools so they can do things digitally. The challenge with digital transformation is to completely re-think the way we do business. That might mean processes, service oﬀerings. It might mean changing the market completely so there’s a level of innova on that goes along with digital transforma on,” says Dr Jen Frahm, an author and expert in organisaonal change. “To give you one example. A client I’m working with at the moment is embarking on a digital transformaon. It’s in the cemeteries and burials industry. Whilst improving their technology is putting in systems that help families find plot sites. It might be doing more things online, more self-service that they would have once gone into a funeral director for. Digital transforma on says 28 europeanbusinessmagazine.com

that, ‘Actually, we need to re-think the whole concept of burial and mortality.’ “You can see, for example, what they’re doing in Japan with holographic vaults because they’ve recognised that with an aging populaon and people not having families there is nobody to come and visit the departed. They want to make it easy for people who are living around the world to visit so you can log into a digital portal and you plug in biometrical details of yourself and it will recognise you as kin and it will bring up a holographic presentation of your loved one. That’s what I mean about transforming the way we think about whatever your industry is. Now try and introduce that concept to a gravedigger for 20 years. That’s a big change.”

The so ware solu on provider Cora Systems delivers digital transformaon projects to sectors like engineering and construction, life sciences and government; it has been at the heart, for example, of repurposing Ireland’s Health Service Execu ve, which is the biggest change transforma on programme in the history of the Irish state. One of their clients Honeywell Building Solutions operates on projects like, for instance, the reconstruc on of London’s Wembley Stadium. Cora helped to transform the insight Honeywell has into its por olio of projects, which number about 26,000 on a given day, as the first part of a digital transforma on ini a ve. Cora recognised that it has to take it one step at a me with an organisa on as large as Honeywell, which is a Fortune 100 company.

Jon Corner, Chief Digital Officer, City of Salford

Dr Jen Frahm, Founder, Conversations of Change “In a large organization like Honeywell, we recognize that change management is only about 50% of the overall solu on so we’ve made our product very configurable,” says Philip Mar n, CEO, Cora Systems. “Within the part of Honeywell we help out, it has over 12,500 employees. We’ve configured our product so they can use it according to the way that they manage their projects. It gives senior management roll-up informa on on the many thousands of projects that are on-going in that organiza on. With one consolidated view of projects, senior management are able to make be er decisions. “A senior management team is paid to make decisions. If the right information is in front of them, they’ll make very good decisions. If they have a lack of informa on or wrong informa on in front of them, they’ll either make lucky decisions or incorrect ones. With the right so ware solu on, you eliminate that random factor. It’s an essential ingredient when you’re dealing with enterprise-wide digital transformation programmes.” Global consul ng firms like Accenture, Deloitte and PwC often roll in teams of consultants to help companies implement their digital transforma on programmes. Tackling the cultural change inherent in a big change ini a ve can be daunting – even at the very top of the organisation. It’s something that

has struck Frahm with some of the CEOs she has worked with – they, too, can be gripped by fear at the magnitude of change required with large-scale digital transformation. Conversa on is impera ve when it comes to coaching hesitant leaders in grappling with change. “You have to be able to name the fears, build trust and talk it through,” says Frahm. “It’s only through having conversa ons and sense-making that you can have people either comfortable with what the future might be or comfortable with the fact that they’re holding fear. There’s nothing more powerful than the leader saying to their immediate team, ‘You know what? I’m a bit uncomfortable with this as well. But here’s how I see we’re going to move through it.’ It’s not, ‘Don’t be scared.’ Fear can be very useful. We want to honour fear, but you need to be able to hold it in balance with op mism and determina on.” The City of Salford is leading the way in the UK in terms of its achievements in digital transforma on, par cularly around three nodes – healthcare; its university; and its enviable Media City. It 2017, Salford bypassed London as the UK’s top city for percentage increase in start-ups. It has laid the founda ons for the realisa on of a genuinely smart city once 5G adopon becomes widespread. The City of Salford’s Chief Digital Oﬃcer Jon Corner believes you have to think big to succeed.

“You can spend so much me building integrated digital systems in order to do the same thing that you’ve always been doing only slightly faster,” says Corner. “It’s the bit that intrigues me. I do look at some ins tu ons and they are engaged in fantastic new integrated technology, Cloud pla orms, mobile working, but some mes when I look at the workflows, the same duplication, the same replication, the same analog mind-set is s ll in play. That’s a much bigger challenge – how do you accept that your way of working, your access to informaon, your access to your customers is poten ally going to change out of all recogni on within the next 10 years? That’s the real transforma on. “I was judging at an event in London recently and there was a company pitching a mobility as a service product. One of the judges said to the couple of young lads presen ng the pla orm: ‘Your idea for call-up transport and being able to shu le people around from one place to another is really fantastic. Do you think your product would work in bus stops as well?’ The two young lads presen ng the platform were really confused. One said: ‘If our pla orm is adopted we won’t need bus stops. You are the bus stop.’ That kind of encapsulated it for me. We have to embrace new paradigms.” For further insight into digital transforma on, see: www.drjenfrahm.com. europeanbusinessmagazine.com

Thinking Out-Of-The-Box: The Case of ConsenSys, Ethereum and Joe Lubin

he Founder of ConsenSys, and Co-founder of Ethereum, Canadian technology entrepreneur Joseph Lubin, believes that blockchain technology will change the world. He also believes in the idea of decentralisa on, especially when it comes to the Ethereum Project.

However, a recent ar cle in Forbes by Jeﬀ Kauflin has shaken things up, claiming that Cryptopia is in crisis, and “Joe Lubin’s Ethereum experiment is a mess”. ConsenSys reacted with an extensive sta s cal report, no ng that “Ethereum is strong. It is diverse, it is growing, and it is receiving attention from individuals and industry players across the world.” To understand the situation, it’s important to start from the beginning, 30 europeanbusinessmagazine.com

designed for any type of decentralised application that developers would want to build. This system was called ‘Ethereum’. A er Buterin unveiled his idea, other entrepreneurs wished to join the game: and Lubin was among them. They hoped that Ethereum would go beyond bitcoin in its ability to serve as the founda on for a host of other digital tokens, applica ons and cryptographically binding agreements. back in 2013 when Joe Lubin met Vitalik Buterin. Buterin, who was 19 years old at the time, had released a white paper, outlining his vision for a new blockchain network and cryptocurrency. It described an alterna ve pla orm

Lubin was in his mid-50- es at that time, often referred to as “one of the adults in the room”. He was also the one who put up 95 per cent of the funding for Ethereum. However, quite soon philosophical diﬀerences divided the team, and they decided to go separate ways. Buterin and a

few others wanted to make Ethereum a non-profit en ty, while Lubin and Anthony Di Iorio, fellow co-founder, imagined it as a for-profit enterprise. Following the split, in 2014 Lubin co-founded ConsenSys, a company that incubates crypto startups and helps them raise capital and grow. It became the first crypto conglomerate which unites for-profit companies supporting the biggest blockchain rival, Ethereum. In its four years of existence it proliferated: by November of 2018, it had 1200 employees and 19 physical oﬃce loca ons. It currently has more than 50 ventures under its umbrella, and its recent investments include a stake in the crypto trading pla orm ErisX, alongside companies such as Fidelity and Nasdaq. In the last months of 2018, ConsenSys also acquired Planetary Resources, an asteroid mining company. Why then did Jeff Kauflin call Ethereum a mess? As it turns out, people who used to work at ConsenSys have gladly shared their opinions. One former employee said that “Joe created the company in such a way that no one was able to make decisions without him. No one had the budget.” Jeﬀ Scot Ward, who worked at ConsenSys for three years, also shared his thoughts, “every day, it was so lax that I’d walk in and didn’t know if I had a seat. Literally, it was like Game of Thrones.” He also added that the company didn’t hire a human resources person for a year and a half.

company role-titles. It’s also true that there are no permanent desks. Another irk that caused public debate was the choice of projects — and how as a company they agreed on them. Most of the ideas came from the employees and once approved, Lubin would give the start-up 250500 thousand dollars, to begin. However, ConsenSys is not merely about acquiring new projects: the company also oﬀers consul ng services and assists other companies that want to become blockchain-literate. While the consul ng services bring “tens of millions of dollars” to ConsenSys, projects include working with UnionBank, and the company also helped to create Kongo, a consor um of 15 big banks that includes Ci , BNP Paribas and ABN AMRO. Despite this, Lubin’s choice of startups and projects for ConsenSys have been highly cri cised, o en describing him as a person who is not good at priori sing and wants to keep his options open by saying “yes, why not?” to almost everything, just because he can.

according to Lubin, adding more structure and more accountability within the company. He began by emailing employees and presen ng the new vision of what he called “ConsenSys 2.0”, asser ng that while the big-picture goals remain the same, the strategy for ge ng there must evolve for ConsenSys to succeed in the long-term. As a result, ConsenSys declared that the company was le ng go of 13 per cent of its staﬀ, followed by a statement that the company “remains healthy. We are crea ng transi ons for some projects that we believe don’t fit as well into the ConsenSys 2.0 vision as they did in ConsenSys 1.0.” While ConsenSys might lack tradional structure and may choose projects based on criteria that are only known to them, doing things diﬀerently doesn’t necessarily mean it’s wrong. Commenting on the future of his company, Lubin shared his thoughts:

Lubin has previously stated that “the inten on isn’t to create companies and send them out and make money. The inten on is to create an ecosystem.”

“The sky is not falling. From my perspec ve, the future looks very bright. I remain excited about scalability solutions that are available now or are becoming available for use in early 2019. Peeking into 2019, if you could see the landscape through my eyes, you’d have to wear shades.”

In December of 2018, ConsenSys announced a restructuring project which was “a refocusing of priori es”

Perhaps one day, if we keep an open mind, we’ll be lucky enough to catch a glimpse.

Another employee compared working at ConsenSys to being back in college — always dealing with various subjects that he is not familiar with, from finance to engineering. He meant it as a compliment, but Jeﬀ Kauflin and his ar cle in Forbes thought otherwise, poin ng out that ConsenSys has some problems with its organisa onal structure. There is perhaps some truth in this. Lubin didn’t want to have a typical corporate hierarchy in his company. There are no managers and no reporting structures, and decision making is decentralised, and, at one time, employees were able to choose their europeanbusinessmagazine.com

European Business Magazine catches up with

Tim Garner

the organiser and head of Even s, the events company behind the Canary Wharf Squash Classic which takes place annually in East Wintergarden in Canary Wharf London.The event has become an outstanding success being sold out months in advance to squash enthusiasts from the capital. Tim a former top 25 ranked player talks to us about the event and his future plans.

ust one of many bowâ&#x20AC;şs to his arrows, Tim has just completed a charity trip in Kilimanjaro, just a er helping organising the first million dollar squash tournament in Chicago. Very much integral to the PSA tour organisa on he organises many local leagues and events. He is also a former top ranked PSA (25) player touring the professional circuit for many years. You have been recently selling out the Canary Wharf Classic in East Winter Gardens. Why do you think it has become such a popular event? The venue lends itself perfectly to as squash event, with 600 crammed in to create an electric atmosphere. That and the con nuity of pu ng the event on in the same venue at the same me of year for many years How many years has it been going now and how the did the idea come about? Talk us through the concept and who was involved?

2019 was the 16th edi on of the event, that came about from a desire to host a squash event in Canary Wharf and ini ally Reebok Sports Club London (now Third Space) realising they had made an error in not installing squash courts in their new gym. We looked at pu ng a glass court in the basketball 32 europeanbusinessmagazine.com

court and this developed into a sugges on by the Canary Wharf Arts & Events department that we should look at a brand new building that would open that year. We took one look at the East Wintergarden and knew it was perfect. Would you say the original partners are involved in as much as the organisa on as you are or are you fully responsible for the day to running of the event. I have always been the main person involved in the event and am fully responsible for all elements of the event, including the lead up and the daily opera ons as the event unfolds.

How many months of planning does it normally take before the event itself? Ini ally events should look at 9-12 months of planning, having delivered the event on so many occasions the timeline now kicks into action about 6 months out with confirma on of the suppliers (court, sea ng, staging, AV, etc) and then the ckets go onsale the first week of October. And each year what would you say your biggest challenge is and what is your highlight?

Bringing on board sponsors and partners is always a challenge, but as the PSA tour con nues to grow and the media coverage improves this is getng (marginally) easier. The highlight is undoubtedly a full house each day of the event, par cularly when they give the players a standing ova on. You were formerly top 25 PSA player (many moons ago). What are the big diďŹ&#x20AC;erences that you see? is the money any be er? are there more tournaments? The PSA tour has become more and more professional, both in terms of player well-being (such as PSA Tour Physio onsite at all major events) and media coverage, particularly across social media pla orms where I think Squash really punches above its weight. The number and size of the events has also grown, for example we have had to double the prize money in the past 5 years to maintain a top 12 status on the PSA World Tour. You were involved with the recent first million dollar tournament in Chicago. Was it a success? Absolutely. Being based in Union Sta on, which was s ll fully operaonal as sta on was a challenge but gave the sport great exposure to the public. You recently gained a new sponsor -Ci gold Wealth Management? Is this a long term partnership or just one year? This was the first year of what we hope will be a long term partnership. I think they were pleased with their first involvement in a PSA World Tour event. Have you any further projects with Even s in the pipeline given the Canary Wharf has been so successful? We are always looking for new ventures and obviously in my role as Events Director for the PSA, I have a number of events coming up including in May the first Manchester Womensâ&#x20AC;&#x2122;s Open and Allam British Open in Hull. In terms of Even s we have the World of Squash Golf Day in September. europeanbusinessmagazine.com

Going beyond technology:

How businesses can foster a cloud mindset throughout their organisation

t’s one thing for a business to move its ERP data to the cloud, but it’s another thing en rely to adopt a cloud mindset within an organisa on. This involves convincing the workforce of the merits of the cloud and fostering a business culture that supports flexibility and the integra on of new technologies. Furthermore, it’s important to ensure that appropriate processes are in place to deal with a new set of expecta ons that the transi on to the cloud can bring, such as the ability to work away from the oﬃce. So, how can business leaders maximise the impact of the cloud throughout their organisa on?

Dispelling the misconceptions One significant barrier to achieving a cloud mindset is misconceptions surrounding the implementa on of cloud technology. 34 europeanbusinessmagazine.com

There’s s ll a view that migra ng a database to the cloud is an exhausting ordeal, that it requires an overhaul of processes, takes longer than expected, and ends up being more costly than useful for businesses. Of course, if not planned carefully and executed correctly, data migration has the potential to cause chaos. Thankfully, the key to sidestepping calamity is relatively simple. A detailed and considered plan of action, that identifies what data needs to be migrated and sets out a realis c meline, goes a long way to mi ga ng these poten al issues.

Highlighting the value In order to get the business on board with the cloud, it’s important to highlight the benefits it can bring. For example, migrating databases to the cloud allows for “bespoke” packages, where businesses can pick

and choose the func onali es they need, which makes it easier for them to scale on-cloud than on-premise solu ons. It also gives users the freedom to access data from any loca on. This means employees can have visibility of the business whenever it’s needed, allowing them to stay on top of today’s business challenges as and when they arise. In manufacturing, for example, cloudbased ERP systems bridge the communication gap between the shop floor, back end, and planning and control systems, forming an arterial route through which informa on can travel automa cally and instantaneously. The cloud is regularly touted as the one-stop-solution for greater efficiency and flexibility—and for good reason. It reduces costs, encourages innovation and delivers value to businesses by transforming internal prac ces.

Cultivating the culture

Andres Richter, CEO Priority Software

Cultivating a business culture that supports operational flexibility and embraces new technologies is another important step in achieving a business-wide cloud mindset. Perhaps the most striking feature of today’s technological landscape is its pace of change and, in a rapidly changing environment such as this, the most important traits are agility and adaptability. The ques on every manager is concerned with is not how to adapt to change a er it occurs, but how to prepare for changes further down the road. Alongside technological transformation, businesses must be prepared for the predicted transformation of organisational structures. In the future, it’s expected that businesses will employ only a few full- me staﬀ, assisted by a team of freelancers, ad hoc project managers, and many partme employees, most of whom will work remotely.

Laying the foundations By now, many companies have come to understand that there’s a lot to be gained from a cloud-based model. However, businesses also need to rethink building, maintaining and monitoring performance in their cloud environment. In order to foster a healthy and produc ve cloud mindset, it’s impera ve that businesses ensure they’ve laid the founda ons for the transi on to cloud-based ERP. Without the right expertise and processes in place to deal with a new set of expectaons that come with the transi on,

businesses are se ng themselves up for a poor return on investment. Generally, the older an organisa on, the more complex and knotted its processes and systems, and untangling that web can prove a diﬃcult task. Iden fying ac vi es and gaps that are ineﬃcient is a vital first step to becoming cloud-ready, and this can be done by carrying out a thorough, company-wide audit. Unless historical on-premise issues are resolved before cloud-first strategy gets underway, businesses run the risk of simply transferring those issues to a new environment.

The internal structure of a business will become far less rigid, moving towards a model that looks more like a loose and flexible network of satellites. In this type of system, embracing technologies such as the cloud, which support remote working and real- me data updates, becomes a necessity. The reliance on outdated legacy systems, or in some cases, no business management systems at all, is taking its toll on produc vity levels, and it’s also cos ng UK businesses billions. By not upda ng their technological arsenal with the latest cloud-based ERP solu ons, businesses are missing out on real- me assessment and repor ng, alerts of bo lenecks and preven ve opera ons, and a secure pla orm to store their data. Beyond this, though, it’s crucial that businesses are prepared to commit not just to a technological overhaul, but also to cul va ng the necessary mindset to accommodate this change. It might be diﬃcult to quan fy the precise monetary value of a cloud mindset, but this doesn’t mean businesses should disregard its centrality to successful digital transforma on. europeanbusinessmagazine.com

The New Gold Rush Is Here: the Case of Medical Marijuana

he medical Marijuana industry has it seems come from nowhere to one of such epic proportions that billions are now being now invested in the industry . Been around for literally years it, is not just making pot smokers happy as it becomes legal in many states and countries but it is help relieving many sufferers with different conditions and big pharma aren’t very happy. European Business inves gates.

Dosis, a California based company, specialises in medical marijuana and many innova ve products related to it. J. DeLand is one of the board members , and his opinion on CBD seems to right on key . “Right now, CBD is the chemical equivalent to Bitcoin in 2016. It’s hot, everywhere and yet almost nobody understands it.“ The truth is,many people around the world s ll have no idea what medical marijuana is, although it’s been around for a few years now it is not just ‘around’, but its becoming part of everyday life . And we dont mean for the smokers either as it’s been added to everything from skin cream to dog treats. CBD, which is short for ‘cannabidiol’, is the second most basic ingredient in marijuana. Medical marijuana research studies and trials have shown that CBD can be eﬀec ve in trea ng chronic pain, post-trauma c stress disorder, epilepsy and even the side eﬀects of chemotherapy. It is less addic ve than many pharmaceu cals, 36 europeanbusinessmagazine.com

and there is no risk of death from overdose. The wave of interest really started when GW Pharmaceu cals PLC and Epidiolex, which was the first — and the only — FDA approved drug which treats seizures associated with Dravet and Lennox-Gastaut syndromes, two of the worst types of childhood epilepsy syndromes that cannot be treated with regular anti-seizure medica on. The decision of Epidiolex approval was cheered as the beginning of a new era. B. Beatty, the founder and CEO of Bluebird Botanicals and director of the US Hemp Roundtable, said that “The findings of GW Pharmaceu cal’s research make it clear why CBD derived from American hemp has become a booming business in the natural supplement category, as well as a diverse array of other markets. The ability of a doctor to prescribe a CBD-based formula on will be an important part of human health around the world.“ And so, as this new era has begun, so did many researches and studies. Now medical marijuana is being studied as a poten al treatment for maladies as diverse as schizophrenia, insomnia and cancer. Currently , the Na onal Ins tutes of Health database lists about 150 of studies involving CBD as a treatment for various condi ons — from infanle spasms to Parkinson’s disease. Dr. E. Blessing, an assistant professor at NYU School of Medicine, who

is coordina ng a study of CBD as a treatment for post-trauma c stress disorder and alcohol use disorder, says that “CBD is the most promising drug that has come out for neuropsychiatric diseases in the last 50 years. The reason it is so promising is that it has a unique combina on of safety and eﬀecveness across of a very broad range of condi ons.“ Although now medical marijuana and its products have become a new staple, the situa on with this one is s ll a bit tricky regarding its allowance.

Marijuanaâ&#x20AC;&#x2122;s prohibition started 80 years ago, when the federal government banned the sale, cultivation, and use of the cannabis plant. Right now, in 2019, the topic of medical marijuana and its legalisa on is really a hot one.It is already legal in a number of European Union countries, and this fact was a stepping stone for Canada, as in October of 2018, Canada has finally legalised marijuana federally. Sebastien St. Louis, CEO of Hexo Corp., es mates that in a few years

the European market could be worth 110 billion dollars annually. In the US,in December, Donald Trump signed the bipar san Farm Bill law, which legalised hemp.Now, in 2019, marijuana for medical purposes is allowed in 33 states. 11 states have also legalised marijuana for recreaonal use for adults over 21 years. Despite this, pharmaceutical companies are not so happy about the legalisa on of medical marijuana, as it seems that over me this growing

industry could do some serious damage to their profit margins. Turns out that in 2017, the usage of medical marijuana instead of the usually prescribed drugs as an alternative treatment had cost pharmaceu cal industry a loss of almost 166 million dollars. If we look into the numbers a li le more you can see why big pharma is worried!Back in 1997, only 62 percent of people were open to the idea of using marijuana as a medical drug. The same survey was performed in europeanbusinessmagazine.com

Around the same me, Molson Coors announced a joint venture with Canadian cannabis grower HEXO Corp, “to pursue opportunities to develop non-alcoholic, cannabis-infused beverages for the Canadian market following legalisa on.“ About a month later, Bloomberg announced that Coca-Cola held talks with Aurora Cannabis, no ng in the oﬃcial statement that they “are closely watching the growth of non-psychoacve CBD as an ingredient in func onal wellness beverages around the world.“ And there’s more. Diageo, the global alcoholic giant best know for Guinness beer and Smirnoﬀ vodka, talked with at least 3 marijuana growers, and Heineken’s brand Lagunitas launched a THC-infused beverage in the summer of 2017.

2017, and the number has grown to 83 percent.

THC, although this fact was not listed on the label at all.

It’s obvious that the use of medical marijuana continues to expand greatly, and so does the number of people working in the medical marijuana industry. Sta s cs show that in 2018, the CBD industry employed between 125-160,000 people.

Despite such facts, its boom mes for marijuana industry right now. Canopy, Aurora Cannabis and Aphria have double their shares, while Tilray have absolutely skyrocketed.

Experts say that by 2020 this number will expand to almost 340,000, which equals to an es mated 21 percent growth in just 4 years. Which is impressive growth stats. However, there are s ll some loose ends in the CBD industry. Turns out that some products containing CBD are poorly regulated, and there is a wide varia on in content, safety and price. A study that was published in the Journal of the American Medical Associa on tested 84 CBD products purchased from 31 diﬀerent online retailers. The results showed that 7 out of 10 products had diﬀerent levels of CBD than it was announced on the label. Half of the tested products had more CBD than was indicated, and a quarter had less. Oh, and 18 products turned out to be posi ve for 38 europeanbusinessmagazine.com

When 4 out of 5 biggest marijuana stocks have reached such incredible heights so quick, naturally it caused discussions whether marijuana sector is already in a bubble — just like bitcoin. However, there is one big signal which indicates that marijuana’s boom may actually be sustainable: Large corporates are paying more and more a en on to this industry, as well as planning their investments towards it. The list is impressive. First, there’s Constella on Brands. A top performing Fortune 500 company, best known in the US as the distributor of the famous Corona beer, CB is a manufacturer of beer, wine and spirits. The company announced its interest in eventually making cannabis-based beverages, and took a 38 percent stake in Canopy in August 2017, inves ng 4 billion dollars into the pot grower.

There’s also tobacco giant Altria, who started discussions with Aphria, and even the Canadian division of Walmart, who announced that it was exploring selling CBD products. Essen ally global giants are inves ng billions of dollars in medical marijuana companies because they see a long-term opportunity in this market and with that there is a lot of posi ve press surrounding this industry too which will only bring it more mainstream. A recent headline in Glamour magazine read “I replaced my en re beauty rou ne with only CBD products“, perfectly showing how people around the world are ge ng more and more obsessed with this newfound staple which quickly became a part of our everyday rou nes. Although medical marijuana currently s ll faces the boundaries of legality in some countries and states, it’s really tricky to figure out how big exactly industry will become. Despite this, Hemp Business Journal announced that CBD is one of the fastest growing segments: the global legal marijuana market is expected to reach 146.4 billion dollars by the end of 2025. The future of this industry looks really bright and as opposed to Crypto , it is definitely not just a bubble!

Europe’s Tech Scene and its

Most Rapidly-Growing Sectors iGaming

Source: Pixabay

hile employment growth across the EU member states has been somewhat sluggish over the past year, this is not the case when it comes to tech jobs. The number of jobs within the overall high-tech industry in Europe has grown at a much faster rate than other sectors, with https://2018.stateofeuropeantech. com/ es ma ng that tech jobs grew by a whopping 4% in 2018 alone. It’s worth breaking this growth down to see which sectors within the tech industry are performing the best and what this might spell out for the future of the EU economy. Here are the rapidly growing sectors in Europe’s tech scene you should keep an eye on.

Fintech

Source: Pixabay Financial tech services are something of a European specialty, with many of the top-performing companies within this sector being based in the EU. London produces more successful fintech companies and a racts more investment in the sector than any other city in the world, while high-growth startups across the continent have been fuelling job crea on. One company to watch is Zervant, which you can check out here: h ps://www.zervant.com/ en. They oﬀer invoicing so ware for small businesses and have seen millions of orders since their recent launch.

Online gaming - or “iGaming” as it is called within the industry - is experiencing levels of growth that are almost unheard of in other sectors. The online gaming industry in Europe was a rela ve small-fry just a few years ago, but now employs hundreds of thousands of people and generates tens of billions in revenues. Fast-growth companies to watch out for include the UK-based pla orm Be air, or h ps://casino.be air.com/c/slots. Be air oﬀers a range of iGaming op ons, including dozens of online slots and live-stream casino games, which have proven hugely popular among consumers across the EU and beyond, wherever Be air is opera onal.

Artificial Intelligence Source: Pixabay

Tradi onally, the United States and China have dominated to global AI market, but that looks set to change in the years ahead. European countries such as the UK, Germany, and The Netherlands are making huge strides within the field, a rac ng top talent from across the world and launching a number of successful AI development startups. One par cular startup worth watching is Konux, a company based in Munich which is rolling out predic ve AI technology for infrastructure providers. Their so ware predicts errors, weaknesses, and damages in railway and road networks before anyone else can no ce them and has received billions in seed funding. Make sure to check them out at h ps://www.konux.com. Highly-specialized tech companies are becoming an increasingly vital fixture in the European economy. These sectors are currently changing the game, and will likely become much more important in the near future.

Internet of Things (IoT) Source: Pixabay

The public and private sector have been collabora ng across the EU to produce IoT infrastructures that are already improving the lives of people all over the world. Of the world’s leading smart ci es (the ones most connected to the global digital infrastructure), almost all of the top 50 are located in Europe. Capitals such as London, Helsinki, Copenhagen, Berlin, and Tallinn have been leading the charge and domina ng the IoT sector. europeanbusinessmagazine.com

Cyber Security: Get on Board With technology sophistication continuously developing, a significant reliance on connected devices and an ongoing lack of corporate awareness, cyber-attacks in the modern workplace are more prevalent than ever. Attackers are becoming more judicious, and companies must respond quickly to protect their assets from potentially imminent breaches. European Business Reports

n the UK alone, approximately 2.9 million companies are attacked by cyber criminals annually, with cyber-crime costing an estimated ÂŁ27bn every year. A lack of cyber security knowledge is an expensive mistake to make - Tesco Bank was fined ÂŁ16.4m for security failures after a cyber-attack in 2016.

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Throughout 2019 and beyond, cyber risk should be high on the business and boardroom agenda. Assessing your own risk is an important first step to mitigating it, and understanding the cyber dangers in your organisation will allow you to tailor your approach to cyber-security investment accordingly. The purpose

of a cyber risk profile is to measure your insurability, and can help businesses determine how vulnerable they are to cyber-a acks. Companies conduct a tradi onal risk profile to guide how investments are allocated, and in the same way, a cybersecurity risk profile outlines a companyâ&#x20AC;&#x2122;s known risks, policies and prac ces to

France, Australia, the Middle East and Southeast Asia. In the study, 960 respondents (26%) were recognised as high performers. How are these companies accomplishing this heightened level of cyber resilience? To sum up, the high performers have robust response plans in place, they address the skills gap and they have leadership that values these skills and acknowledge the importance of cyber resilience. Finally, these top companies are more likely to par cipate in threat intelligence and data breach sharing partnerships. Cyber fears con nue to haunt business owners, and the risk often begins within the company. Although employees are a company’s greatest asset, they are also potentially its greatest risk, and while that has always been true in the area of customer rela ons, it’s now equally applicable to data security. More than 25% of cyberattacks involve insiders, (inten onally or uninten onally) according to Verizon’s 2018 Data Breach Inves ga ons Report, and the snowballing number of connected devices together with the growth in remote working, has led to an increase in opportuni es for cyber-criminals, making it even more impera ve that employees are engaged, encouraged and equipped to spot threats. monitor how far you need to go to protect assets and data. Once you’ve looked at threats and determined your own exposures, an authority on cyber, information security and risk management, like the Informaon Security Forum, (ISF) can help you quan fy risk and tackle the extensive security challenges that eﬀect business today. Typically, many enterprises concentrate primarily on deterring cyber-a acks, but employing a resilience-based approach equips a company, enabling it to adapt to change. The Ponemon Institute released its fourth annual ‘The Cyber Resilient Organization’ report in April this year, including 3,655 IT and security professionals, covering 11 different global markets: the US, Canada, India, Germany, Japan, Brazil, the UK,

How can you protect your business? Human error in cybersecurity is s ll a leading cause of many data breaches, so educa on is vital. Organisa ons need to empower employees to take more personal responsibility for protec ng cri cal and confidenal informa on. Employees need to know the risk their online ac vi es pose and how to manage it, because a lack of awareness, responsibility and accountability simply facilitates cyber-crime. Engaging staff in the cyber-security discourse allows them to be more alert during early-stage phishing problems, and therefore more likely to report and stop a breach before it happens. Employees need to understand that they are a cyber-crime target, and be invested to recognise and avoid a acks. Partaking in cyber security exercises will help your employees and business in the following ways:

• • • • • •

Reduce errors Enhance security Increase compliance Protect reputa on Save me and money Maintain peace of mind

Business leaders can improve their ability to handle cyber-attacks by running cyber security exercises, increasing knowledge and reducing the impact should a real cyber-attack occur. ‘Performing cyber security exercises can help organiza ons improve their ability to detect, investigate and respond to cyber-attacks in a mely and effec ve manner, ‘said Steve Durbin, Managing Director, ISF. The ISF’s ‘Delivering an Effec ve Cyber Security Exercise’ report was released to ISF members, and provides a detailed overview of suitable cybersecurity exercises, how to deploy them effec vely and protect your company. On account of the introduc on of cloud solu ons and more advanced technologies, cyber-defence simply has to be a company-wide commitment. Employee engagement, from the bottom right up to the board, is essential for effective cyber-security. It must be viewed as a leadership problem, not just a technical problem, and establishments hoping to develop their cyber-security posture must give staff the right tools, knowledge and resources to protect the company. The board is responsible for governance and oversight of risk, so the development of a strategic framework should fall under their remit. While board members may not be cyber-experts, it’s their knowledge, exper se and general understanding of risk management coupled with their stewardship, which are essen al to nurture a cyber-resilient organisa on. Digitisation brings so much to the business table, but organisa ons will have to educate and adapt to reap the benefits. Cyber-security risk is s ll a significant board agenda item that shows no signs of aba ng, and maintaining resilience in this complex age comes down to the correct blend of people, processes and technology. europeanbusinessmagazine.com

Security, Safety and Success

hile business execu ves connue to grapple with uncertainty over Brexit, there is another persistent issue threatening corporate stability. From notorious data breaches like Facebook and British Airways to increasing sugges ons surrounding the recent German government data breach hack, security errors and heavy-duty cyber-criminals caused chaos last year, and in 2019, the stakes for protec ng your company are even higher. Patricia Cullen reports. According to the World Economic Forum’s Regional Risks for Doing Business report, cyber-a acks are the fi h biggest risk concerning global commerce, so it’s no wonder cyber security is on every business leaders mind. While the cyber threat landscape con nues to gain trac on, with new pressures emerging daily, the ability to prepare, educate and collaborate can strengthen organisa onal resilience, and this durability can be the diﬀerence between those businesses that recover from cybercrime and those that fall prey. Ransomware has quickly become one of the most infectious and feared threats in business, with predic ons that there will be a ransomware a ack every 14 seconds by the end of 2019. Data mega-breaches will con nue to make the headlines, but to survive businesses must concentrate on how to manage and mitigate cyber-risk. Understanding new threats and not just established ones

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is key for a strong security posture, especially while the universal shi to higher levels of connec vity brings with it fresh problems. Innova on can be the lifeblood of business, but it can also come at a cost. Employing technology like cloud-based storage and the Internet of Things can threaten security, and businesses need assistance to successfully navigate this new terrain. The Informa on Security Forum provides best practice guidance, tools and consultancy services in cyber, informa on security and risk management that meet the business needs of our Members who benefit from harnessing and sharing their in-depth knowledge and prac cal experience. The ISF Threat Horizon 2021 report is intended for business leaders who

want to understand and develop a forward looking digital cyber resilience strategy to mi gate cyber risks and their poten al impacts to their organisa on – it discusses: 1 Digital Connec vity Exposes Hidden Dangers The development of IoT and automa on generates new opportuni es for businesses. Yet, with addi onal connected devices comes new security risks across an organisation’s critical infrastructure, which can expose flaws. 2) Digital Cold War Engulfs Business: By 2021, the world will see a digital cold war that will significantly damage businesses such as state-backed espionage targe ng next gen technology, the the and mone sing of intellectual property and sabotaging cloud services.

business transforma on boardroom issue, dis lling ISF products and services, staying up-to-date with emerging threats and developments in this space and attending global events with industry experts. What are the main security and safeguarding issues lacking in organisaons today?

3) Digital Compe tors Rip Up The Rulebook: Businesses will find compe ng in the digital marketplace increasingly challenging as they develop new strategies that test existing regulatory frameworks, allowing threats to grow in speed and accuracy. Regarding the variety of cyber-security concerns last year - from compliance with the recently debuted GDPR to high-profile data breaches to the social media privacy scandal - it’s no surprise that the European Confedera on of Ins tutes of Internal Auditing’s (ECIIA) Risk in Focus 2019 report found that organisations labelled cyber-security as their greatest risk. ISF members can tackle this weakness and reduce threats by con nuing to view informa on risk as an ongoing

Cyber security training and exercises: Employing technological solutions to identify malicious code is important but educa ng employees on cyber risk is a key step. Since 2017, 88% of UK data breaches were caused by human error, not direct cyber-attacks, highligh ng the inherent need for employee training to be factored into budgets and be prioritised by decision-makers e.g. by running company-wide cyber security exercises

Shared knowledge: Collaboraon is vital when tackling cyber security, and working across enterprises and industries can keep the private data of companies and individuals safer. While it may seem counter-intui ve, working together can help pinpoint criminals and prepare organisa ons for the inevitable day when a disruption occurs, allowing them to respond quickly and appropriately

Understanding: The Cyber Governance Health Check report from the Department for Digital, Culture, Media and Sport and the National Cyber Security Centre found less than a fi h of boards at FTSE 350 firms had a comprehensive understanding of what impact a cyber incident would have, in spite of 96% of companies having a cybersecurity strategy in place

The frequency and the financial consequence of cybercrime is on the rise, with the typical cost of a breach reaching £934,000. With economic volatility and political uncertainly at an allme high, enterprises are looking to cyber insurance, to help manage the risk. The cyber security insurance market is expected to

reach $17.55 billion in 2023, up from $4.52 billion in 2017, according to the Global Cyber Security Insurance Market 2018-2023 report by Orbis Research. An increase in cyber risk awareness amongst high-level executives, the implementa on of legisla on regarding data security in emerging na ons, a rise in cyber data breaches and an increasing adop on of cloud-based services, are just some of the factors driving this growth in the cyber security insurance market. According to the Federal Trade Commission, insurance should cover data breaches resul ng in the of personal informa on, cybera acks on your data or your network, cybera acks anywhere in the world and terrorist attacks. Companies can protect themselves through association memberships, insurance and on-going training in the years ahead. “Our 2019 M-Trends report shows that no industry is safe from these threats, which is why it is posi ve to see breach response mes improving across the board. However, most a ackers only need a few days inside an organiza on to cause costly damage so the ba le on the front lines of cyber-a acks will con nue for the foreseeable future,’ says Jurgen Kutscher, Executive Vice President of Service Delivery at FireEye, an intelligence-led security company. “While it is clear cyber-attacks are here to stay, the good news is that companies recognise the threats they face and are discovering new ways to protect themselves, and associa ons like the ISF provide the support and expertise required to flourish. Businesses that are alert to new technologies and subsequent threats in 2019 and beyond will be best placed to make winning decisions”, says Steve Durbin, Managing Director, ISF. Cyber security is a universal business risk, not just an IT problem. To stay ahead, implement a strong risk culture, lead from the top and prepare your organisa on for the risks ahead. For more informa on on ISF membership and services, please visit h ps:// www.securityforum.org/. europeanbusinessmagazine.com

The United States is Open for Business – Your Business

h e h i s t o r i c re l a t i o n s h i p between the United States and European nations is one of the strongest in the world and presents immense opportunies for European firms looking to grow globally. Europe collectively remains the single largest source of foreign direct investment (FDI) in the United States, with a stock

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valued at an incredible $2.4 trillion. European companies continue to see the United States as a pla orm for global growth, and we welcome European firms choosing to look first to the United States when evaluating growth opportuni es. It is easy to see why European firms do end up op ng for expansion in America. As the world’s single largest

economy, the United States provides businesses with a wide array of resources that lead to success, from a highly educated and diverse workforce, to strong intellectual property rights that protect and spur innova on. America’s pro-business climate is keeping America compe ve in the 21st century – The Trump Administra on is con nually

decisions, connect to the right people at the local level, and navigate the federal regulatory system.

Brian Lenihan is the Executive Director of SelectUSA 137 countries for entrepreneurship in 2018.

working to maintain this fer le business climate, as demonstrated by the first major reform of the U.S. tax code in decades, coupled with regulatory reduc on designed to fuel further growth. The United States is open for business, a fact aﬃrmed by the world’s investors, and ranks as the easiest place to do business among countries with popula ons of more than 100 million, according to the World Bank’s Doing Business 2019 report. From startups to established multinational companies, businesses have found success in America – which is one reason why the Global Entrepreneurship Index once again ranked the United States first of

Companies large and small with operations in the United States have access to the most developed, liquid, flexible, and eﬃcient financial markets in the world. They also have proximity to the world’s most expansive consumer base. This allows companies to be more nimble, increasing access to capital and decreasing the me it takes to get their products to the marketplace. When Ireland-based engineering and construction firm Linesight looked to grow interna onally, execu ves selected San Francisco and New York. German aerospace company Winkelmann MSR Technology chose Auburn, Alabama for a $12 million facility in 2017. Both companies worked with SelectUSA and local-level partners to establish U.S. opera ons. SelectUSA is here to help European firms turn explora on into results. As the primary Federal program focused on promo ng FDI, SelectUSA works one-on-one with interna onal firms, helping companies of all sizes find the informa on they need to make

The annual SelectUSA Investment Summit is our most significant event. The Investment Summit brings the diversity of the United States together under one roof – enabling any business to find what it needs to be successful. Par cipants of past Investment Summits have announced $98 billion in greenfield FDI into the United States, supporting more than 150,000 U.S. jobs. Last year’s Investment Summit drew more than 3,000 business par cipants from 66 interna onal markets and 51 U.S. states and territories to Washington, D.C. In a historic first for the Summit, four companies announced more than $600 million in new projects across America. This year, the SelectUSA Investment Summit will convene at the Washington Hilton in downtown Washington, June 10-12. It goes without saying, but I’ll say it anyway: European companies are welcome to join us. The 2019 Investment Summit will draw high-caliber a endees to help you make connections and get started on business deals, including on-site economic development organizations, relevant service providers ready to help turn business poten al into business opportunity, as well as C-Suite execu ves and government oﬃcials who will discuss the latest policy and business trends. The U.S. economy is stronger and more vibrant than ever before. European firms can find investment success in all corners of the United States, and the Investment Summit is the perfect starting point. Visit selectusasummit.us to learn more about the 2019 SelectUSA Investment Summit, and I look forward to seeing you in Washington this summer. For more information on SelectUSA and its services, please visit selectusa. gov. Addi onally, follow @SelectUSA on Twi er and join the #SelectUSASummit conversa on to see the latest updates. europeanbusinessmagazine.com

IOWA

Your New Hub in America’s Heartland

By Debi Durham, Director, Iowa Economic Development Authority

ur coastal counterparts somemes describe Iowa and other states in the Midwest as “flyover country.” The underlying meaning of the phrase gives favor to the glitz, glamour, hustle and bustle of the United States’ more well-known East and West Coasts. But the reality is, America’s Heartland oﬀers equal if not more opportunity for interna onal business. Roughly 4,300 miles (or 7,000 km) separate Europe from Iowa, and on the surface, the two locations may seem dissimilar. But there are many shared ideals when it comes to business — an unwavering dedica on to innova on, a strong commitment to collabora on and an understanding of the value of renewable resources, just to name a few. Beyond our shared foundational beliefs, Iowa oﬀers tangible benefits that have consistently yielded dividends for our business partners. Plentiful resources, a business-friendly environment and low cost of doing business have not only bolstered the state’s economy, but supported the growth of Europe-based companies doing business in our state as well.

If you’ve never considered Iowa as a hub or outpost for your business, hopefully this ar cle will give you a be er sense of what the state has to oﬀer and who we are. Eventually, we hope you’ll fly over to see it for yourself. But for the me being, allow us to elaborate on why many European companies have already found success through their hubs in America’s Heartland.

Playing to our strengths Iowa’s international reputation is largely rooted in the state’s plen ful renewable resources and righ ully so — agriculture is at the core of who we 46 europeanbusinessmagazine.com

are. And as the world of agriculture evolves and intertwines with various other industries, Iowa remains deeply commi ed to cul va ng an environment primed for our partners’ needs. Global companies, such as BASF, OCI, DSM, Ajinomoto and CJ Bio, already have leveraged Iowa’s biomaterials to eﬃciently produce ethanol, biodiesel, pharmaceutical materials, plastics, animal feed, fer lizer and much more. Though not an exhaus ve list, these companies represent a handful of industry heavyweights that have

eﬀec vely combined Iowa’s resources, stable workforce and business-friendly regulatory environment with innovaon. And, with Iowa’s in mate familiarity with the complete supply chain — from raw ingredients to finished goods and byproducts — the state is well-posi oned as a des na on for companies to manage their process from idea on to produc on. Considering the growing need for clean energy, Iowa placed a strong focus on wind energy before its popularity soared to current heights.

community, state government and our aﬃliates across the pond. Iowa is commi ed to growing its existing European partnerships and forging new alliances as well. And even though the state’s natural resources, infrastructure and regulatory environment may be intriguing, it’s incumbent on us to ensure we are ready and wellequipped to meet any challenges that come our way.

Forward-thinking policy, augmented by Iowa’s business-friendly approach, resulted in Iowa generating more electricity from wind than any other U.S. state. It’s a primary reason why companies, such as Google, Facebook and Microso , have chosen Iowa for energy-intensive, yet green, facili es. In short, if low-cost, reliable, renewable energy is important to your company, Iowa is the location for your next expansion.

Pushing the boundaries For all you may hear about the value of Iowa’s renewable resources, what you may not know is that the state’s No. 1 business sector is advanced manufacturing. Iowa produces everything from heavy-duty construc on equipment and aerospace components to micro-plas cs used in medical devices and much more. More than 6,000 manufacturers are an important part of Iowa’s diverse economy and many play an important role in the global

marketplace — 88 percent of Iowa’s exports are manufactured goods. Not content to rest on our collec ve laurels in this arena, organizations across the state, such as Iowa’s Economic Development Authority (IEDA), have heavily invested in new advancements, including addi ve manufacturing technologies designed to improve produc on of cri cal metal and rapid prototyping polymers. Investments also have been allocated to a manufacturing network that includes some of the biggest and fastest tools available for 3D prin ng of fused metal prototypes — technology that’s proven advantageous for companies like John Deere and others.

A concerted effort The inroads European companies have made into Iowa is no accident. Our shared success is the result of more than 40 years of a concerted and collaborative effort jointly spearheaded by Iowa’s business

Toward that end, IEDA’s Interna onal Trade Office (ITO) regularly organizes trade missions to engage with potenal interna onal customers and provide ongoing training and marke ng support to help Iowa-based companies work more effec vely with interna onal audiences. Furthermore, financial incentives, such as Iowa’s Renewable Chemical Produc on Tax Credit (which incen vizes companies that produce renewable chemicals in Iowa by offering up to $1 million annually), are signs that our state government is ac vely fostering an environment designed to help businesses thrive. We’re excited about all Iowa has to offer and think you’ll agree it’s the furthest thing from a “flyover” state. If ever you’d like to discuss opportuni es in Iowa in further detail, please feel free to visit or contact our Western European office in Frankfurt. Iowa representa ves also will be a ending the World Bio Markets conference in Amsterdam (1-3 April, 2019) and K 2019 in Dusseldorf (16-23 October, 2019). In the meantime, visit https://www. iowaeconomicdevelopment.com for more informa on about how our state can benefit your business.

europeanbusinessmagazine.com

Your Brand: What’s at Risk?

uilding and maintaining a strong brand iden ty is not a simple task. It was not an easy job a few decades ago, and now, as we thrive in the digital age, it has become even more complicated. European Business Magazine Reports ( Nick Staunton) The internet, social media, mobile development — consumer expectaons have changed so rapidly in the last ten years that businesses need to find new ways to adapt — and keep up.

Today, people want to be a part of an experience. They want it all, and they want it immediately, and this is perhaps the most significant change to branding: it’s in real- me, and besides finding an emo onal connec on with their customers, brands need to pay considerable a en on to staying protected. 48 europeanbusinessmagazine.com

As businesses have moved online, so have the counterfeiters and pirates, causing significant risks for the supply chain, product integrity, as well as threats to revenue as well as the overall reputa on of the brand that took me to earn.

however online tools can help customers destroy a brands name in just a few seconds. In the age of the internet, words spread like a virus, and a single mistake can erase years of hard work dedicated to growing a reputable brand.

With this in mind, a brand’s reputaon is — without a doubt — one of the most important things to consider.

Cybersquatting, hacking, domain hijacking, intellectual property the — are all poten al threats for brands, and it doesn’t end there. Counterfeit products and pirated products online are an approximately 350-billion-dollar market — and it’s s ll a rela vely new phenomenon.

Research, commissioned by the Confedera on of Bri sh Industry (CBI), has shown that over half of customers are willing to pay a premium price for a product if it comes from a company they consider having a particularly good reputa on. However, the digital age has made it more challenging to keep brands and businesses safe online. Tremendous eﬀort, me and budget are spent on securing product integrity through the supply chain;

Typically, brandjackers set up fictitious social media accounts or hack legi mate accounts to spread an -commercial, misleading or provoca ve messages that are inconsistent with the brand’s communica on strategy. These ac ons have one goal: damaging the brand’s reputa on, and

not necessarily for financial reasons, although, there are many brands out there that have suffered financial losses due to spurious ac ons. Brandjackers create en re websites that look like the original ones but aren’t. A few years ago, yours truly was a lucky coffee break away from buying a luxury watch from one such site. As the price was quite high, I decided to ring them to confirm if I could pick up the watch in Spain, where they said they were based. When they explained that they had moved to Germany — alarm bells began to ring. Suffice to say a er a little more digging around and discovering more miserable customers; I realised that the website was merely a front for nothing! Brandjackers find ways to attract customers who find it difficult to tell the difference between the original brand’s website and the fake one. To make it believable, they add various supporting channels, including social media pages, claiming to represent the original brand. Step by step, many customers find themselves buying products from these fake websites, escala ng the severity of the problem, which is one of many reasons why it is impera ve to keep a brand’s iden ty and reputa on safe.

Thinking globally is impera ve: successful brands don’t merely focus on their home countries. On the contrary, they move into other jurisdicons and register their trademarks and patents, especially if the business is evolving and there’s a prospect of opening a foreign branch or division in the future which, over me, is used to protect the brand in building a strong brand presence. Building a powerful brand presence is where brands need to invest, crea ng a high-level consumer experience, especially online, which makes it harder to imitate the brand’s presence for pirates. Many brands nowadays respond to reviews, comments, and messages while always keeping a calm, collected, professional and polite tone. It’s all about ensuring customers know what to expect from the brand and how it communicates, once they do — it’s easier to spot if something is wrong or unusual. Another check-point for every brand to consider is developing a set of digital guidelines. Having clear guidelines makes represen ng the brand easier, while consistency in communica on helps customers to spot the possible iden ty the more quickly.

Then there are visual elements: using the brand’s logo and other visual design elements consistently — and everywhere, from physical products to social media pages — makes the identification process more manageable. Brands have regular checks on the main search engines from time to me, searching for your business taglines and other relevant keywords. Not only does it help to keep an eye on the market and your competitors, but it’s also an excellent tool for finding out if they are copying your brand’s visual elements or iden ty. If an idea or product has the potential to become the next big thing and informa on is leaked before the launch, huge revenues could be at risk as counterfeiters and pirates will act immediately and flood the market before the actual authen c product is on the market. Even after you’ve taken appropriate ac ons, it’s diﬃcult to remove the stolen product or service from the market en rely. There are thousands of examples of slightly redesigned logos, slogans, and designs of exis ng brands, and pirates manage to pass them oﬀ as an en rely new business.

So how can you protect your brand from the in this digital age? Firstly, it starts by registering the brand’s trademarks. Signs, logos, imaging, letter font, numbers, slogans and even sounds (the luxury brand Hermes has a horse sound when you ring their offices) — everything that distinguishes your brand from compe tors needs to be registered and trademarked with the competent authority in your country. Then there’s content marketing. With so many businesses building an online presence, content marke ng has become one of the most cri cal aspects to a ract consumers and turn them into ac on takers. It’s essen al to copyright a brands content, including images, wri en posts, and videos, to prevent plagiarists from stealing and using the material as their own, europeanbusinessmagazine.com

QUANTITATIVE EASING:

Controversial Tool for Boosting the Economy

o you remember 2007? The global financial crisis that began that year in July threatened to bring down banking systems in all major economies. Interest rates went down to zero, and it was crystal clear that in order to prevent a possible collapse of the world financial system something must be done. The crisis was followed by a global economic downturn. Hoping to get back on track during the long recovery from the recession, central banks around the globe turned to a new monetary policy tool — large scale purchases of assets, also known as quan ta ve easing (QE). Japan was the first country to use quan ta ve easing. It was one of the key instruments in country’s monetary policy in the period from 2001 to 2006. When S. Abe was selected as a Prime Minister for the second me, the usage of QE in Japan was restarted again. What about the rest of the world? Well, the story of QE and the US is an interes ng one.

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11 years ago, the US was in a deep financial crisis and Fed funds target rate (the rate that is charged by commercial banks to other banks who are borrowing money) was already close to zero. So, the US Central Bank used QE, adding almost 2 trillion dollars to the country’s money supply and that right there is known to be the largest expansion from any economic s mulus program in history. As a result, the Fed’s balance sheet doubled from 2.106 trillion dollars in November 2008 to 4.486 trillion dollars in October 2014. Fed oﬃcials claim that their “unconven onal policy ac ons saved the US from a crisis worse than the Great Depression”. Europe’s Central Bank started using QE in January 2015, a er 7 years of implemen ng austerity measures that were supposed to help lower budget deficits and avoid a debt crisis. The Central Bank agreed to purchase 60 billion in euro-denominated bonds, lowering the value of the euro

and increasing exports. However, in the end, the bank increased purchases up to 80 billion euros a month. At the end of last year, December 13, the European Central Bank announced that the QE program is going to an end in the Euro zone. Experts say that such decision indicates that Eurozone’s health a er a decade of recessions and financial crisis is finally improving. M. Draghi, President of the ECB, commented on this decision, saying that “at times quantitative easing was the only driver of this recovery“. In total, QE’s program added 2.94 trillion dollars into Europe’s economy. Let’s get technical for a second. You already know that quan ta ve easing is used to s mulate economies with increasing the money supply when standard monetary policies become ineffective. Basically, central bank implements QE by buying financial assets from commercial banks and other private institutions, using money it has simply created out of thin

air. But there’s more to it; in order to regulate the economy, central banks across the world would set the price of money using official interest rates. These rates are certain guidelines to the economy, as they affect the cost of loans paid by the companies, the cost of mortgages for households, and also the return on saving money. Higher interest rates make borrowing less a rac ve, because taking out a loan becomes more expensive. At the same me, they also make saving seem more a rac ve. And vice-versa: lower interest rates have the reverse effect. There’s one subtle catch to it: interest rates cannot be cut below zero. And so, when official rates get close to zero, the whole game changes and the effect of regula ng the economy simply stops. As you can imagine, even at mes like these banks s ll need to make profit. However, if mes are troubled, lenders usually show a desire of having a greater return for the addi onal risk of gran ng a loan. The gap between the official interest rates and the rates faced by companies and households can rise.

Here’s the trick: when these interest rates are close to zero, there is actually another way of effecting the money. Yes, it’s the quan ta ve easing. The aim remains the same: to bring down interest rates faced by companies and households. The most important thing when using QE is that the central bank can create new money and use them in the economy. However, there have been many public discussions about quan ta ve easing, and this topic has become quite controversial between economists and politicians around the world. While some say that this tool can save a struggling economy, other disagree, no ng that it can actually destroy one. At one point yes, cheaper borrowing would allow the central bank to encourage greater spending, put an addi onal demand into the economy and even pull it out of recession. New money is expected to raise consumer prices, giving people another incentive to buy now rather than later, but the risks also remain. First of all, QE can result in central bank loosing money on its purchases and

even worse — destroying the value of the currency, resul ng in infla on or hyperinfla on. The biggest problem when it comes to QE is that no one truly knows how much QE is too much, and how much is not enough. According to the University of Bath, the evidence suggests that quan ta ve easing was a valuable tool at the height of the financial crisis back in 2007-2008. It probably helped stabilise markets and contributed to preventing a recession becoming a depression. However, QE does not seem to be an eﬀec ve policy tool for bringing major economies out of stagna on. They performed a research, and the results turned out to be pre y interes ng: while QE has produced a limited, but temporary gain for the financial sector, it has been of praccally no help to the wider business community or individuals and families struggling against infla on and unemployment. What is more, despite the aﬀec on investors may have for it as a financial lever, QE looks unlikely to be the answer to the economic problems of the modern age.

europeanbusinessmagazine.com

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The Magnetism of a Second Passport: Citizenship by Investment Programs are on the Global Rise The citizenship by investment industry is booming right now.

very year, the demand for having a second passport con nuously increases by 25 percent, and the investment migra on industry is expected to hit 20 billion dollars by 2020. European Business inves gates the huge rise in the business of ci zenship investment programmes. The concept of ci zenship by investment (CBI) began in 1984 when St. Ki s and Nevis — a two-island na on in the Caribbean — introduced it to the world. It is now the longest-running CBI program, and is considered to be “the pla num standard” of CBI programs. Fast-forward to 2019, and there are 14 ci zenship by investment schemes currently running worldwide, with more countries expected to join the list in the near future. Today, the ci zenship by investment industry is es mated to be worth 5

billion dollars annually, with approximately 5,000 people obtaining ci zenship this way each year. The majority of CBI investors come from China, Russia, India, Vietnam, Mexico, Brazil, Turkey and the Middle East, but there is a growing demand for CBI programs worldwide. We have one more impressive number for you right here: the CBI industry is expected to hit 10 billion dollars annually by 2025. The basic idea behind the CBI program is pre y easy: inves ng or dona ng a certain amount of money in a country, in exchange for a passport in a relavely short amount of me. The investment cost can range from 100,000 dollars to 2.5 million dollars, and can include everything from non-refundable cash donations to investments in real estate, business or government bonds.

From a business perspec ve, a second ci zenship removes the need for tourist visas for a number of countries, opens up new markets and helps to increase business opportuni es, whilst at the same me providing much be er tax terms while fully complying with interna onal laws. Today, the second passport has become a must-have accessory for many successful businessmen, investors and mul millionaires. Usually, such high-net-worth (HNW) individuals have a great deal of income at their disposal, but are not able to put it to eﬀec ve use within their home country. Nuri Katz, founder of the internaonal fi nancial advisory firm Apex Capital Partners Corpora on, noted that “Generally, CBI programs draw individuals from countries whose passports offer very limited abilities europeanbusinessmagazine.com

to travel, such as China, Russia, and Middle Eastern countries. Most of the individuals making these types of investments are high-net-worth entrepreneurs with net worths of about two to fi een million dollars.” In 2018, Moldova and Montenegro joined the CBI program’s list, which also includes Cyprus, Portugal, Malta and other countries that offer individuals the opportunity to live, work and register their businesses in various jurisdic ons. Each government has different requirements for applicants, and everyone interested in CBI op ons should spend some me on analysis, as every country in the program has some unique s pula ons. For example, St. Lucia and Cyprus are the only countries offering CBI passports through government bonds and treasury bills, while St. Ki s is the only country that offers an accelerated applica on process within sixty days for an addi onal fee. Cyprus’s CBI scheme is limited to seven hundred applica ons per year, while Western Samoan and Bulgarian passports have a visa-free travel to Canada op on. Antigua is the only country that accepts Bitcoin and other cryptocurrencies for payment, and Malta is the only country that has the Visa Waiver Program with the United States. Hoping to make it all much simpler for the HNW individuals and investors, James McKay — a research analyst and consultant with more than a decade’s experience in the implementa on and execu on of complex research and data analysis projects — developed the CBI Index. This first ever up-to-date guide provides accurate data on all ci zenship by investment programs around the world, and measures important areas such as due diligence, freedom of movement, ease of processing, mandatory travel and residence. The newest CBI Index rankings showed that the Caribbean Islands’ CBI programs have reached an allme highest ranking with their popularity, crowning Dominica as the most 54 europeanbusinessmagazine.com

a rac ve program on the market for the second year in a row. St. Kitts and Nevis took the second place, leaving Grenada in the third. Close behind were An gua and Barbuda, and St. Lucia — the newest member of the Caribbean CBI program. Investors from all around the world, but especially from China, Russia, the Middle East and Africa, really like the concept of acquiring a second passport in these countries, one of the top reasons being their accessibility and a much cheaper price. When it comes to cost, it varies from programme to programme and

some more interes ng than others. For example, Malta’s CBI program, with its minimum investment amount of 816 thousand euros (about 921 thousand dollars), is considered to be the most accessible one in Europe while the minimum entry threshold for a Caribbean program is 100,000 dollars. This, along with the warm climate, low investment requirements and undemanding residency obligaons, has definitely helped the Caribbean CBI programs take the first five places in the CBI Index list. But there’s more. Caribbean countries don’t impose most of the taxes we are used to, and investors can

country, visa-free travel to 173 countries — including the UK, EU member states, Canada and Singapore, and an excellent educa on and health care system, Cyprus is a very attractive choice. However, Cyprus’s CBI program is quite expensive, especially when compared to the Caribbean, as a single applicant minimum outlay equals 2 million euros (about 2.258 million dollars) here. But with uncertain es caused by Brexit, Cyprus’s CBI has also become one of the top choices for Bri sh ci zens who are looking for new ways to keep their European ci zenship. According to the BBC, the number of Britons granted ci zenship of another EU country has increased by 159 percent since 2016. A few years ago, CS Global Partners conducted a survey in the UK among people between the ages of 18 and 50 about the importance of a second ci zenship. Results were interes ng: 89 percent said that they would like to own a second passport, and they are willing to pay more for it than they spend on monthly rent. Over 34 percent said they had looked into investing in a second ci zenship, with over 58 percent naming Brexit as the main reason for doing so. A decade ago, having a second passport and dual ci zenship was a rare case.

forget about all visa-induced problems, as the second passport here also unlocks borders of more than 100 countries — including Schengen and the UK where application processes are handled quickly and easily taking maximum three to five months. There are also no residency requirements for retaining the status, and Caribbean countries take confiden ality really seriously, as no informa on about the applicants to any third par es is revealed. However at mes this has given them nega ve coverage. But perhaps the biggest and most important reason why people like

Caribbean CBI programs is the fact that they are not as strict, especially when compared to EU CBI programs. Cyprus was a winning ci zenship by investment program in the European category, reaching seventh place in the overall CBI Index ranking. Launched in 2013, it is the biggest citizenship scheme in the EU with almost 4,000 foreigners from Asian, European and Arab countries obtaining a second passport here between 2014 and 2018. With political stability, high standards of living, low crime rates, no restric ons on applicants from any

Nowadays it has become popular to own two, three or even more passports, and ci zenship by investment programs can provide that quite easily. Besides the 14 current CBI programs, many countries around the world are thinking about joining the list. Montenegro, Georgia and Kazakhstan are all working on crea ng their own programs, and several other countries in the Balkans are considering them as well. Interest in CBI is enormous now and has especially accelerated in recent years, thanks to a combination of cuts in prices to the Caribbean CBI programs, visa-free travel, ease of doing business in a foreign country and friendly tax regimes. europeanbusinessmagazine.com

WHERE DO MULTI-NATIONALS CALL HOME? … Anywhere they want to. By Eric Major, CEO of Latitude Consultancy Limited

ax residency is becoming an increasingly popular topic among wealthy “Mul -Na onals”, a term coined to describe people who truly live an internaonal lifestyle, with family, friends, businesses, proper es and wealth peppered throughout the world. As these Mul -Na onals begin to age and consider the significant wealth they have amassed over a life me, inheritance and estate planning become important issues for them and their family, leading many to consider where best to make themselves tax resident for that concluding chapter in their rewarding life. As many Europeans already know, na onality and tax residency are separate ma ers. You could, for example, be a German na onal but be tax resident in Cayman Islands or Anguilla. Indeed, this is an appealing concept for a growing number of wealthy Europeans who like to spend their summer months in the Mediterranean, yet flock to the Caribbean for the remainder of the year. And if it comes with significant tax advantages, then why not?

Tax Residency

Eric Major

The defini on of tax residency is quite broad. Some countries outlined it in their tax code. Other jurisdic ons have their tax authori es use a variety of criteria for handling the ques on on a case-by-case basis. Some places might not even define it at all, such as states that do not raise personal income tax, such as Qatar or the UAE. Others, like Hong Kong and Singapore, rou nely tax certain localsource incomes but ignore everything else, e.g. what you earn from investments abroad. And yes, it is possible to be a tax resident in more than one country, but thankfully many governments have entered together into a DTA (Double Taxa on Avoidance agreement) to ensure such residents are not be taxed on the same income twice. Where a person ul mately is a tax resident is o en decided by factors such as the place of your permanent home(s), where the centre of your vital interests ul mately lies, the place of your “habitual abode”, how many days you physically spend in a country, etc. In today’s inter-connected world, with its growing number of Mul -Na onals with

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foo ngs all around the globe, it is becoming more and more difficult for na ons to determine where one’s vital interest ul mately lies, so this has led to countries sharing informa on under a new regime called Common Repor ng Standards (CRS). In an effort to combat tax evasion and protect the integrity of the interna onal tax regime, governments around the world have introduced CRS, an informa on-gathering and repor ng requirements for financial ins tu ons. CRS is promp ng an automa c exchange of informa on regarding bank accounts on a global scale. As such, this is further promp ng anyone with mul ple properes and assets in different countries to nominate a specific country as their primary tax residency. Fortunately, it’s not too challenging for some Mul -Na onals to shi their “centre of vital interests” away from their home country and bring it to a more “tax friendly” jurisdic on, such as Anguilla, Jersey, Guernsey or Singapore. Indeed, individuals who typically do not spend more than ninety (90) days per year in any one country can structure their lives around establishing a tax efficient residency base. As there is a need to self-cer fy under the CRS regime, a tax residence programme allows this profile of person to properly establish a tax residence and ensure they are compliant with CRS requirements.

New Tax Residency Opportunity La tude is headquartered in Jersey, an island with a strong track record of a rac ng high net worth individuals to their shores. However, Jersey isn’t alone in the tax residency space. Guernsey, Jersey’s sister island, oﬀers a similar tax regime, with no capital gains tax or inheritance tax. Even Italy created in late 2017 new provisions designed to a ract foreign na onals in becoming tax resident in Italy, for an all-in annual tax collec on of only €100,000 per year.

Anguilla – Reclusively Exclusive In October 2018, La tude won a 10-year Public Service Concession with the Bri sh Overseas Territory of Anguilla to promote inward investment to the island and a ract an interna onal network of Mul -Na onals to their shores.

Anguilla now oﬀers wealthy individuals the opportunity to transi on to a low-tax jurisdic on that boasts slower paced living, a clean and safe environment with a reclusively exclusive se ng amidst a tropical climate, excellent food, people and beaches. Its new residence provisions will appeal to those who have busy lifestyles and spend less than 90-days in any other country yet desire an alternate country of residence for themselves and their family members for tax planning purposes. The loca on of Anguilla in the Caribbean is an a rac ve solu on for applicants from La n America, Canada and Western Europe. It is quite common for these wealthy nomads to spend significant me in the Caribbean during the winter months. As such, the opportunity to make Anguilla their tax residence would fit into their lifestyle, especially as they will be required to spend a certain amount of days each year.

About Latitude A new genera on of wealthy elite have ambi ons that reach far beyond the limita ons of na onal borders. They live in a connected world, with a global outlook. La tude’s team of specialists oﬀer leading insight and experse to investors who are prepared to make an important economic contribu on to gain residency or ci zenship privileges in a selected country. La tude also provides government advisory services by helping na ons create residency and ci zenship-by-investment programmes that a ract this privileged segment of the world popula on to their shores. Our interna onally recognised team have over 75 years of combined experienced in the Investment Migra on industry. An unrivalled interna onal network of clients and ins tu onal rela onships, combined with complementary ancillary services from our global financial services partner, provides a uniquely compelling proposi on for our clients. But what makes us really stand out from the crowd is our approach: genuinely innova ve products, compe vely priced services and customer-driven, hands-on delivery. Our clients expect the world – we deliver it. Welcome to your world. www.la tudeworld.com europeanbusinessmagazine.com

Second Homes In the eighties and nineties passport sale scandals rocked countries like Belize, Dominica, Grenada and Costa Rica, and the citizenship by investment industry was largely unformed, unknown and unregulated. Today, by contrast, the sector is an established part of the economic landscape and has secured a better reputation with enhanced respectability. European Business Reports.

ccording to a 2017 survey published by CS Global Partners, 89% of Britons would like to own a second passport and approximately 34% said they had looked into a scheme that would let them obtain one. Should any type of social, poli cal or economic unrest unfold in one’s home country, a Plan B is the most secure way to protect family and finances. Elimina ng the time consuming process of applying and reapplying for visas, while gaining various benefits offered by other na ons, dual ci zenship oﬀers a greater level of freedom and mobility. The global market in ci zenship by investment programmes – or CIPs as they are commonly known – is booming. Many na ons around the world 58 europeanbusinessmagazine.com

offer CIP packages, but the differences in the investment required varies wildly. The Caribbean has always been a popular destination among holidaymakers, and the appeal to the 3,000 millionaires who moved there in 2017 seems obvious. However, there’s more to these beauful islands than sun, sea and sand – and that’s what makes An gua and Barbuda so popular with global investors. Favoured over St. Ki s for exclusivity and reputation, Antigua and Barbuda is a popular des na on for celebri es purchasing holiday houses, boos ng real estate values and it is also one of the world’s more sought a er op ons for second ci zenship. In today’s vola le global environment,

the value of certainty and security cannot be underes mated, and An gua and Barbuda, an independent state in the Eastern Caribbean, known as the land of 365 beaches, oﬀers an ideal geographic posi on. Just three hours from Miami and eight hours from London, the positioning provides the ul mate reloca on des na on alongside a luxurious lifestyle. The An gua & Barbuda Ci zenship by Investment Program is ranked #1 in the Caribbean by the Global Residence and Ci zenship Program Report (GRCP) 2017–2018. This tropical utopia is home to almost 90,000 people, and with a straigh orward, transparent applica on process and a fast turnaround, it’s no wonder that the number

of submissions is steadily increasing. An An gua and Barbuda passport is a coveted one for numerous reasons. It provides exceptional global mobility, offering visa-free access to approximately 150 des na ons including the UK, Europe’s Schengen area, Singapore and Hong Kong. In 2009, the An gua and Barbuda government signed a visa waiver agreement with the EU which allows an An gua and Barbuda ci zen to visit the Schengen countries without a visa for a period of three months within any six month period following the date of first entry into any EU country. There is a stable political environment and an a rac ve tax regime, with no capital gains or inheritance taxes. Personal income tax was abolished effective April 2016, and the corporate tax rate is 25% with a generous 50-year exempon programme for IBCs. The An gua & Barbuda government allows ci zens to hold dual ci zenship, and the acquisi on of ci zenship is not reported to other countries. Foreign investment has contributed to the rapid development of the economy, resulting in Antigua and Barbuda having one of the highest GDPs per capita in the sub-region. The quickest way to gain ci zenship

is to invest in a business, a real estate project, or the Na onal Development Fund (NDF) of An gua and Barbuda. The An gua and Barbuda Ci zenship by Investment Act was passed in April 2013 and gave jurisdic on to the Citizenship by Investment Unit, and by 2017 global leaders in residence and ci zenship planning Henley & Partners ranked An gua and Barbuda as the Caribbean’s best CIP des na on. Programme requirements: There are four investment levels to apply for citizenship, and these investment possibili es gives you the choice over how and where to invest. -

A contribution of US$200,000 to the NDF. Until 31st October 2019, there is a Limited Time Oﬀer. The threshold for the NDF op on has been reduced by 50% from US$200,000 to US$100,000 for a family of up to four persons, and from US$250,000 to US$125,000 for a family of five and over An invest m ent of at least US$400,000 into one of the approved real estate projects and to be held for a minimum period of 5 years. Un l 31st October 2019, there is a Limited Time Oﬀer. Two applica ons from related par es can make a joint investment, with

each applicant inves ng a minimum of US $200,000 -

An investment of a minimum of US$1,500,000 directly into an eligible business as a sole investor or a joint investment involving at least 2 persons in an eligible business totalling at least US$5,000,000 and each of those persons individually invests at least US$400,000

An investment of a minimum of US$150,000 into the University of the West Indies Fund. Par cipa on in this op on will en tle one member of the family to a one year, tui on only, scholarship at the University of the West Indies.

Many Bri sh ci zens have concerns about what’s going to happen postBrexit, and clearly, there is a great, and growing demand for CIPs. An gua and Barbuda, an idyllic setting with breath-taking beaches, buzzing fleets, scuba diving, snorkelling and coral reefs, could become your second home in just 3 months. Globalisa on has created a new class of ci zen, one that has more than one na onality, and as the world is on the move, global ci zens and their businesses are able to traverse countries and con nents with ease. europeanbusinessmagazine.com

Citizenship-by-Investment Programmes with

Eric Major

CEO of Latitude Consultancy

Latitude Consultancy Limited is a British based investment migration firm with an international presence spread across 12 countries. Latitude combines their innovative solutions with a global reach and a transparent approach to provide exceptional service to its private clients with both Residence and Citizenship-by-Investment Programmes. Our Government Advisory Team has over 20 years’ direct experience shaping the most successful residence and citizenship programmes worldwide giving rise to our unique perspective. We caught up with Eric Major its CEO who gave us an insight to the company’s operations. Why do you believe there has been a huge increase in people applying for ci zenship programmes? A number of factors are driving demand for Citizenship-by-Investment Programmes (CIP). Certainly, the fact that more wealth exists today than ever before is helping to fuel this demand. The growth of both the Chinese and Indian markets is tremendous as they represent 1/3 of the world’s popula on alone. In addi on, we live in an increasingly connected and digital world and there is a greater awareness and access to informa on about these programmes that enable a person to improve their lifestyle, travel freedom, access new business markets or top- er educa on for their children. More than ever those with the financial means are no longer burdened by the limita ons of where they were born. Many clients are looking ahead to the future while considering their tax planning, inheritance, and providing their children the mobility to study and work almost anywhere. They view this as part of their family’s global legacy and holding a second ci zenship allows this. 60 europeanbusinessmagazine.com

Where, in your opinion, is the most sought a er ci zenship programme and why? Within Europe, the Malta Ci zenship Programme is the most desirable option due to the high standards for acceptance coupled with a significant capital requirement, which make it a very exclusive programme. Once a client is a ci zen of Malta, they have the right to live and work anywhere in the EU which also drives demand. The passport itself aﬀords visa-free travel to over 180 countries including the USA – the only CIP with such access. Within the Caribbean, there are five Ci zenship-by-Investment Programmes: An gua & Barbuda, Dominica, Grenada, St Ki s & Nevis, & St Lucia. These programmes cost significantly less than the MIIP, but s ll oﬀer many of the same benefits with visa-free access to as many as 151 countries. What type of people normally apply? We are seeing a shi in the market. Tradi onally, it was wealthy Baby Boomers who were applying for these programmes. However, a new genera on of wealthy elite have emerged with a growing number between 30 and 40

years old that are applying. Interes ngly, there are many younger millennials applying from China and Europe vs. the North American market. We also see high demand from clients coming from countries with very li le visa-free travel. For example, a Chinese passport affords visa free travel to 74 countries or even a South African passport is limited to 100 countries. For those who travel frequently it is very inconvenient to consistently be sending your passport away to obtain a visa. These CIPs solve that inconvenience while at the same me provide a Plan B in mes of poli cal or economic unrest. What exactly does your company provide for people wishing to apply for a second residence or ci zenship? We provide a complete, comprehensive and customized client experience throughout the en re process to make it as smooth and easy as possible. When we first meet with a client, we listen to their needs to be er understand their profile and mo va ons. From this, we present in detail the most compa ble programmes and ensure they have a thorough understanding of their op ons. This allows them to make the most informed decision based on their unique circumstances. Prior to accep ng them as a client, La tude performs ini al due diligence checks to ensure that there is nothing in their background that could nega vely impact an applica on. By iden fying any issues at the beginning, we can determine if they are a good fit for both our firm as well as for their country of choice. Assuming the client passes our due diligence checks, we move to the Client Agreement and, once retained, start to work on compiling their applica on. In Malta for example, the client can complete most of the applica on during their first visit with our team. Our team will even help to arrange the necessary medical check-ups and transla ons of documents. Once the applica on is complete, we submit it to the government body responsible for the programme and monitor it to ensure it is moving forward in a mely manner un l the passports or residency cards are issued. Do you offer a one stop shop for people looking to apply for these programmes or do you offer a specific service? Yes, whether the client is selec ng a contribu on (government dona on) or real estate op on, we assist with all aspects of the residence or ci zenship applica on. We also have offices or partners in all of the des na on countries, so we are able to offer personalized support all the way through the process. How long has your company been opera ng in this field? La tude officially launched in January 2018. While we are a relatively young company, our senior executive team have well over 75 years combined experience in this industry and is assembled from an elite group of former colleagues and other investment migra on firms.

La tude’s CEO, Mr. Eric Major, is a pioneer in the industry and a trusted advisor to governments around the world. We also recently merged with RIF Trust, one of top investment migra on firms in the UAE and Africa, who have been opera ng since 2014 out of their base in Dubai. How do you see the future of this industry? Some programmes have been ge ng nega ve press on this in Europe – how do you see your company expanding over the next few years? The future of the industry is very bright. More and more countries are realising that these programmes are a means to generate much needed revenue and a ract the global elite to their shores. Many of these programmes, especially in the Caribbean, are significant economic drivers as they spur hotel and resort development. This in turn has a longterm benefit to the country as it creates solid infrastructure for growth in the tourism industry. Moreover, the government revenues generated from the programmes are a vital part of the country’s GDP. While some programmes have received nega ve press, it is important to recognise that these immigrant investors only represent a small percentage among all the other immigration streams. Malta is truly the gold standard when it comes to the ve ng of their applicants and it is important other countries emulate this thoroughness and strict adherence to high standards. Further, it is important for government bodies such as the EU parliament to engage with the industry stakeholders, including the Investment Migra on Council (IMC) which is the governing body that sets the standards and ethics for our industry. La tude is the regional representa ve oﬃce in the Caribbean for the IMC and has been assis ng with the harmoniza on of the region’s programmes. La tude con nues to grow at an incredible pace opening three new oﬃces this year in Vietnam, Malaysia and South Korea. We will con nue this expansion throughout Asia in the coming year. Addi onally, La tude was granted a mandate from the Government of Anguilla to establish both a residence and a tax residence programme and this will be launched in June 2019. europeanbusinessmagazine.com

Dark Clouds Over EU’s Manufacturing Industry:

Worst Numbers in Six Years

‘Horrible’. This is how Claus Vistesen, Chief Eurozone Economist at Pantheon Macroeconomics, has described the fourth quarter of 2018 for the Eurozone’s manufacturing industry. 62 europeanbusinessmagazine.com

Felix Huefner, Senior European Economist and Chief German Economist at UBS noted that ‘[the] weakness is no longer confined to the car sector, but it’s ge ng broader.’

The manufacturing industry has perhaps long been the most important one in Europe, genera ng 14% of the con nent’s GDP. From automobiles to food, it is Europe’s manufacturing

hit its lowest point since 2013 in March this year, marking a fall down to 44.5. If you’re wondering what this really means, the answer is simple: a reading of between 50 and 55 shows that the sector is balancing near the line of recession, while any reading below 50 indicates an ac vely shrinking industry. According to the survey, Germany’s manufacturing PMI was finalised at an 80-month low with 44.1, Italy reached a 69-month low with 57.5 and Spain hit a 63-month low with 49.9. France has shown a slight improvement, but the overall growth remained historically weak with the manufacturing PMI increasing to just 51.5 in February, from 51.2 in January. Chris Williamson, Chief Business Economist at IHS Markit, which compiled the Index, commented on the results saying that, ‘With factory order books deteriora ng at an increased rate, the rate of contracon in the goods-producing sector will likely worsen in coming months.’ With Germany, France and Italy taking the front row with the most drama c declines, mul ple economists around the world say that it looks as though Europe is heading into recession.

capacity that supports and drives a large number of businesses across the Eurozone, whilst also making the con nent an a rac ve trading partner for other markets such as the US and China. However, recent numbers have revealed that Europe’s manufacturing industry is in real trouble, and is shrinking at its fastest rate in six years. The IHS Markit Purchasing Managers’ Index (PMI), a key economic indicator for the manufacturing industry,

Analysts at both the Ins tute of International Finance (IIF) and Oxford Economics have come to the same conclusion regarding the big queson of ‘why did it happen in the first place?’, highligh ng that the drama c drop in the manufacturing industry is ac vely connected to one core political choice made by EU governments in recent years: austerity. Governments eﬀorts to reduce the deficit spending, to cut the fiscal s mulus and to balance their budgets in the 10-year a ermath of the 2008 financial crisis has shrunk the poten al size of the European economy and seriously damaged its ability to grow again. But wait, there’s more!Oxford Economics analyst Rosie Colthorpe says that “since 2008, Europe has lost economic ac vity equivalent to Spain’s en re GDP. By making its economy

smaller, Europe has become less able to handle its debts.” IHS Markit noted that there are a number of reasons behind such a dramatic fall, including uncertainty over Britain’s exit from the European Union, as well as concerns over the global trade slowdown and tariffs war with China. Chris Williamson commented on this, saying that ‘the downturn is being led by Germany and Italy, but Spain has also now fallen into contrac on and only modest expansions are being seen in France, Austria and the Netherlands. In addi on to widespread trade war worries – o en linked to US tariffs – and concerns regarding the outlook for the global economy, companies report that heightened poli cal uncertainty, including Brexit, is hi ng demand and driving increased risk aversion.’ Talking about the future of the EU’s manufacturing sector, the latest data from the Manufacturing Industry Output (MIO) Tracker predicts that the manufacturing economy will grow by just 0.7% in 2019, compared to the 2.5% that was projected in May 2018. So faced with the biggest ques ons right now – can the European manufacturing industry recover, and how – experts tend to have different opinions. Nick Andrews, Senior Analyst at Gavekal Capital, says that Europe has no control over its future anymore, whilst Paul Miller, Senior Analyst at Forrester Research, believes that the future of Europe’s manufacturing industry relies on large-scale changes in terms of both skill sets and industry structure, for which governments, employers and employees all share responsibility. What is clear is that EU policymakers need to find a new, effec ve approach to control a situa on that seems to be worsening every month, and experts say that in order to stabilise the manufacturing industry, officials in Brussels have to focus on developing a clear plan to counter the challenges posed by weaker interna onal trade, a possible ‘no-deal Brexit’, and structural woes in the Eurozone’s financial sector. europeanbusinessmagazine.com

What Can The ECB Do As Euro Area Faces A Bleak Future? By Peter Tabener

he president of the European Central Bank (ECB), Mario Draghi, has made clear that it will take all the ac on necessary to boost euro area economies as it con nues to ba le against the headwinds of poli cal and global economic uncertainty. In its latest economic outlook report, the Interna onal Monetary Fund has slashed the growth forecast of the euro area for this year to 1.3%, a 0.3% fall since January’s growth predic on. At the recent ECB Governing Council mee ng on 10 April, the news didn’t get any be er, as Draghi warned that the euro area’s economic progress has slowed since the last council mee ng in March, blaming external factors. Italy has already significantly cut its economic growth expectations for this year, down to 0.2% from a previously expected 1%, although Draghi has said that the risks that the euro zone was falling into recession were low. In the mean me, the ECB will connue to do what it can to ensure that there is no downturn, and will be exploring every op on at its disposal. The Governing Council meeting revealed that interest rates will remain unchanged for the main refinancing opera ons and the marginal lending facility, at 0.00% and 0.25% respecvely. Also, the ECB’s nega ve interest rate policy will stay intact, with a -40% rate for the deposit facility in order to encourage bank lending.

64 europeanbusinessmagazine.com

Furthermore, it is now expected that the interest rates will stay in place un l the end of this year, as long as infla on is below – but close to – the 2% level the ECB favours. The ECB’s survey of professional forecasters for the second quarter an cipated that infla on will be stable at 1.8% over the longer term. At the last Governing Council meeting in March, the ECB commi ed to s mulus measures, including a third version of the targeted longer-term refinancing operations – TLTRO III. The series of quarterly targets, launching in September this year and comple ng in March 2021, will each have a maturity period of two years. If the commercial banks lend this capital into the real economy, they will receive a cash incen ve as a reward, in contrast to having to pay interest on the loans. Draghi seemed to play his cards close to his chest on this issue at the council mee ng, saying that it was too early to decide the terms for the TLTROs. The banks’ president also made a call for structural reforms in the euro area and to strengthen the monetary union, but this was a parfor-the-course statement. Ken Wa ret, a European economist with IHS Markit, reflected on the options on the table for the ECB, saying, ‘The ECB’s policy stimulus remains supportive of euro area growth, though we are probably

looking at marginal gains from further tweaks in its policy stance… Draghi is keen to make clear that the policy tool box is not empty, but most of the op ons which the ECB would be willing to deliver are unlikely to make a material difference to euro area growth prospects.’ One route for the ECB to take would be forward guidance – providing informa on over its future monetary policy, which influences policy rate expecta ons and, in turn, long-term interest rates, thereby reducing the cost of borrowing for households and businesses. Wa ret argued, ‘The addi onal longterm funding for banks announced in March in part reflects changes

down by 0.8% in contrast to the same me last year. James Watson, Economics Director for Business Europe – a campaigning group for growth across Europe, said, ‘Recent months have reminded us of the fragility of the European economy. Temporary factors, including changing car emissions requirements, political uncertainty in Italy, and public ac ons – notably in France, as well as longer-running trade tensions, appear to have had an important impact on both business and consumer confidence.’ He added, ‘Whilst the impact on the UK economy of a no-deal Brexit would clearly be more significant than on the EU, the impact on the EU business community should not be underes mated.’ Companies have been preparing for a no-deal outcome, but there are many uncertain es and very limited me to put in place all con ngency measures, despite the extension un l the end of October 2019 to agree a Brexit deal.

to regulatory requirements, which had threatened to impact adversely on banks’ funding condi ons… The ECB’s ini a ve is welcome but probably needs to be viewed as avoiding a problem, rather than delivering substantially more growth-friendly lending condi ons.’

sector for six years, which has broadly been declining since the la er part of 2017. The construc on industry did rise slightly for March, but the growth is slowing down. New orders have expanded at a slower pace, in both commercial and infrastructure construc on.

He added, ‘A more radical path for the ECB to go down would be changes in the structure of the Asset Purchase Programme, for example to target purchases where sovereign debt is more plen ful, including in Italy.’

Eurostat, on the other hand, have reported mixed figures recently for the euro area, showing that in the fourth quarter of last year business investment rose by 23.7%, a 0.3% rise on the previous quarter. Industrial production has also risen by 1.4% in the euro area for January compared to the previous month, but has decreased 1.1% year on year, and unemployment was stable in February month on month at 7.8%, but is

Looking elsewhere, IHS Markit’s recent data would suggest that the euro area is heading towards a downturn. Its Purchasing Managers’ Index (PMI) for manufacturing in March found the deepest contrac on in the

Business Europe feels that it is essenal that an arrangement is reached between the UK and the EU over Brexit, including a transi on period to avoid a chao c exit, so as to provide a much-needed confidence boost to businesses across Europe Watson further commented that, ‘Similarly, ongoing trade tensions – notably between the US and China, as well as a slowdown in global manufacturing demand, have weighed on the EU economy, which has been parcularly exposed to the regions and sectors in ques on.’ Adding, ‘A reduction in trade tensions and consequent pick-up in global trade growth would provide an important boost to EU growth prospects.’ The ECB will have to sit ght for now and see how its s mulus measures unfold, but it may well need to examine its op ons further at a later date.

europeanbusinessmagazine.com

WE CAUGHT UP WITH

Anthony Leslie and Lee McCarrick the new partnership which is www.anthonylee.uk Both spent over ten years each working on Savile Row where they styled literally some of worlds leading singers and actors. One look at their instagram (Bornontherow) and you can see why. AnthonyLee is a private tailoring service where these two experienced tailors will design and measure your tailored suit so you can look and mix it with the very best. Your new venture looks very stylish. What is the idea behind the concept? The idea was simple; to bring what we know to be a Savile row product directly to the client, whether that be in their oﬃce, home or even members club. Can you tell us a bit more about how the two of you met and how the business came about? We first met over a decade ago on Savile Row, hence the birthplace of A/L and our signature #bornontherow. We learnt our cra working for Spencer Hart and our love for Tailoring basically stemmed from there. The business itself wasn’t born un l 10 years later! What are the objec ves for the business for the first few years? Firstly we just want to establish ourselves as a genuine high end Tailoring brand. Our idea is to bring a luxury bespoke service to gentlemen all over the UK and eventually even further afield to Europe. Have you had any investment from outside sources or is it all your own money? No outside investment. In truth we started the business as a way of keeping our hand in, so to speak, it’s naturally developed from there. What would you say your USP is? Why would people come to you as opposed to going to Saville row? Our USP is definitely that we can combine industry knowledge with a Savile row product and bring it directly to our client. Our customer benefits from our years of experience on the Row but doesn’t have to pay the high end price because we don’t have the costs of a shop front. 66 europeanbusinessmagazine.com

Lee McCarrick - founding partner

Where do you source your materials from?

Anthony Leslie

Predominantly the UK, o en Yorkshire Mill houses but we do have some Italian suppliers too. Who does the measuring or is this what you do as a team? This is something we do collabora vely. We both have diďŹ&#x20AC;erent skill sets that combine naturally together. What do you find star ng oďŹ&#x20AC; as a new business has been the hardest challenge? Well business development is always a tricky task from the outset for anyone. Reassuring our client base that they really are ge ng a Savile Row product for a lot less money. Where do you take your inspira on from when it comes to designing the suits? Our style stems from Icons like Steve McQueen and Sean Connery as Bond. We have developed the product in me to reflect the needs of our market - businessman to ar sts. europeanbusinessmagazine.com

The Revolution of 3d Printing

anufacturing as we know it will never be the same again, and 3D prin ng is the phenomenon responsible.It is es mated that the global 3D prin ng market will be worth $17.7 billion by 2020, $30 billion by 2022 and $55.8 billion by 2027 – the significant growth illustra ng just how important it is now becoming. European Business Reports.

Although it originally appeared as though it would be a niche market, 3D prin ng started to hit the headlines a few years ago, fascina ng people all around the world with a visually stunning crea on process. Now, it is used everywhere – aerospace, fashion, food, automotive, healthcare… the list goes on. What’s more, 3D prin ng is expected to drastically change several more industries. Famous NASCAR driver Brad Keselowski, the owner of Keselowski Advanced Manufacturing (KAM), commented on using 3D prin ng in his business, saying, ‘The capabili es of new technologies are limited only by our imagina ons and willingness to act. Un l now, much of this new advanced manufacturing technology was considered too complex and too expensive for production level 68 europeanbusinessmagazine.com

applica ons. By combining addi ve manufacturing with subtrac ve capabili es, the goal of KAM is to lead the way for the next industrial revolu on by making these technologies more accessible.’ But let’s go back to the basics for a minute. 3D printing, also known as additive manufacturing, is a manufacturing process whereby a 3D printer creates three-dimensional objects by depositing materials, layer by layer, in accordance with the object’s 3D digital model. 3D prin ng techniques have in fact been around for decades. However, it was in 2009 that a consumer-friendly version of 3D printing called FDM (fused deposi on modelling) became publicly available, after its patent expired. This was the pping point for 3D prin ng becoming more mainstream, as it led to a boom in aﬀordable 3D prin ng devices. Nowadays, many people even have 3D printers in their homes. We live in mes when it has become cheaper, faster and more customisable to 3D print something at home than to find and buy it from a store. Companies around the world have also started to embrace this technology.

Giants like General Electric (GE), Boeing, Bombardier, Launcher, Stryker, Adidas and General Motors (GM) have perfectly illustrated how 3D prin ng can be used to print highly specific, expertly designed parts of airplanes, cars and spaceships, as well as joint replacements, dentures, bicycles and much more. Another three powerhouse companies – Siemens, Johnson&Johnson’s and BMW – have announced the construction of their own additive manufacturing facili es. Such a move is expected to posi on these companies and their partners at the very front of the manufacturing revolu on. Another company that wants to strengthen its position on the 3D printing market is Henkel, a large mul na onal with successful brands in both the consumer and industrial sectors; the company has announced a series of partnerships for the joint development of new industrial 3D prin ng solu ons. And believe it or not, these companies are just the p of the iceberg. There are many more players embracing this technology that you should be familiar with, as they are in fact the biggest companies in the 3D prin ng industry by market cap.

Hewlett-Packard (HP), with a market cap of $40.79 billion, is making inroads with Mul Jet Fusion – a new 3D prin ng technology oﬀering more possibili es for lower-cost, complex parts, and in 2017 the company unveiled the world’s first state-ofthe-art laboratory to help companies develop, test and deliver the next genera on of materials and applicaons for 3D prin ng. Then there’s Proto Labs, a company that won a Manufacturing Leadership Award by Frost & Sullivan, and that has a market cap of $4.36 billion. It was founded in 1999 and has eight manufacturing loca ons across three con nents. Other leaders topping the bill with the adop on of this technology are 3D Systems, Stratasys, Materialise, SLM Solu ons Group and Nano Dimension. In the last four years, over $13 billion has been spent on 3D prin ng. Looking ahead, however, GE estimates that $280 billion will be spent on this technology in the next ten years. Jason Oliver, President and CEO of GE subsidiary GE Addi ve, once said, ‘3D prin ng is about redesigning processes and rethinking produc on lines. It’s about remaking the manufacturing process for a modern society. This is the digitalisa on of manufacturing.’

And in fact, 3D prin ng has the power to change more aspects of our lives than we could have ever expected.

makes it possible to change the shape of 3D printed object a er it’s been published.

Many companies around the world are star ng to invest in con nuous photopolymer systems. Gartner, the world’s leading research and advisory organisa on, predicts that the growth in photopolymer 3D printers will be in the region of 75% over the next few years.

Companies such as Airbus, Autodesk, HP and Stratasys are already working on 4D prin ng.

Then there’s healthcare, an industry that 3D prin ng is set to revolu onise in several diﬀerent ways, with the biggest impact expected to be in bioprin ng. Such prin ng of 3D objects using biological material could lead to the crea on of replacement organs – manufactured from a pa ent’s cells, ssues and more, to poten ally overcome organ rejec ons risks. 3D printing even gets us one step closer to a pharmaceu cal revolu on, as 3D printed pills that are tailored to treat the unique ailments of each pa ent are about to become a reality as well. And there’s one other exci ng predicon for 2019. As manufacturing industries, healthcare providers and supply chains accelerate their prac cal uses of 3D prin ng, another technology is making an appearance: 4D prin ng, which

The current market share of 4D printing is $28 million, and is expected to reach $537 million by the end of 2025. Gartner also predicts that by 2023, start-up companies working to commercialise 4D prin ng will a ract $300 million in venture capital. 4D prin ng has already contributed immensely to the field of medicine. To minimise the procedures involved in carrying out surgery, doctors use 4D prin ng to put self-transforming components into the pa ent’s body. It is expected that 4D printing will bring further previously unimaginable capabili es in industries such as construc on, aerospace, health and automo ve. There is no denying that 3D prin ng and its eﬀect on human lives is vast. At this very moment, 3D printers around the globe are creating new shapes, innova ng products and giving eco-friendly alterna ves to other produc on methods. It has brought the future closer – and it’s definitely here to stay.

europeanbusinessmagazine.com

South Korea’s Economic Miracle

n l recently a very poor country, South Korea has – almost overnight – achieved an economic miracle thanks to new freetrade agreements. The wonder of the South Korean economic revival appears even greater when considering that this country has almost no natural resources. It has also been struggling with an overcrowded popula on on its small territory for many years. However, from its weaknesses, South Korea has built its largest opportunity – the export-oriented economic strategy of the country’s development – rapidly becoming the seventh largest exporter in the world. So how did South Korea reinvent itself?Euopean Business reports.

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The Source of South Korea’s Economic Revival As a former state-controlled economy, South Korea first had to transform its socio-economic system and stabilise its poli cal situa on. It also had to increase the mo va on of its popula on to work harder, whilst not expec ng to witness ini al results for at least the first few years. At first, South Korean exports relied on low-cost products and services, un l it realised that the only way to compete with China’s cheap labour and Japan’s high-tech and capital-intensive industries, was to focus on innovation and fast technological development in order to support

its export-oriented strategy for the country’s development. This also required the reform of its educa on system, so as to develop a high-tech skilled workforce that can support this strategy. In order to increase its export compe veness but also a ract investment, South Korea has con nuously increased its research and development spending as a share of GDP and has, over me, even surpassed the US and Japan, who have tradi onally been the global leaders in innova on. As presented in Figure 1., the intensity of South Korea’s research and development spending has grown by 88.5% since the 1990s, from 2.3% up to 4.3%, whilst the same period for

What Is Next? Today, South Korea is the global leader of mobile broadband, smartphones, LCD TVs and consumer electronics, with annual exports of $483bn. It is one of the fastest growing economies in the world: the fourth largest Asian economy, and the eleventh largest world economy. South Korea is also ranked as the fourth country in the world for ease of doing business, compared to, for example, the US which is ranked as sixth, and the UK as seventh.

the US saw just 14.4% growth, from 2.4% to 2.8%. A large role in South Korea’s rapid economic development has been played by the Korean conglomerates, or ‘chaebols’, such as Samsung and Hyundai. They have become global technological leaders in a very short me by pooling their resources and entering the western markets through mergers and acquisi ons, which has additionally increased their global high-tech leadership. However, although there are many factors that have contributed to the rapid economic growth, the main engine behind South Korea’s economic miracle is the free trade agreements that South Korea has signed – first with its neighbours in Asia, and then with other countries around the world.

South Korean Free Trade Agreements South Korea has signed or negotiated 38 free trade agreements with countries all over the world. Among the most important are the Asia-Pacific trade agreement, the ASEAN-Korea Comprehensive Economic Coopera on Agreement, and the free trade agreements with the US, EU and China – which is its main trading partner.

There are also very important free trade agreements in place with Canada, Australia, New Zealand, Colombia, Peru, Chile, India, Turkey, Vietnam, Singapore, Russia, the European Free Trade Association of Norway, Switzerland, Iceland and Liechtenstein, and others.

However, despite its economic miracle, South Korea currently faces a declining economic growth rate compared to its average rate over the past decade of 3.5%, to the current rate of 2.7%. Its exports rate has also dropped to 8.2%, largely because of the trade war between the US and China, but even more so due to the slowing of China’s economic growth, which has increased the fragility of South Korean producers and retailers due to high debt and dependence on exports to China.

Furthermore, South Korea is a member of the World Trade Organiza on (WTO), the Asia-Pacific Economic Cooperation (APEC) Forum, the Organiza on for Economic Coopera on and Development (OECD), and the Regional Comprehensive Economic Partnership ini ated by China.

South Korean responses to this are new economic measures that include providing $13bn in financial incenves to small companies, and reducing fuel taxes by 15% in order to encourage job crea on and increase consumption. There are also other measures that should accelerate market deregulation and boost further investment in the country.

However, although free trade agreements have enabled South Korea to boost economic growth, expand business opportuni es for its companies and reduce unemployment within the country, it s ll considers joining the Trans-Pacific trade pact (TPP), signed by the 11 largest world countries with markets worth $500m. The main reason being the US’s withdrawal from it, and its bilateral trade deals with almost all TPP’s members.

However, there are also other challenges for South Korea, such as its ageing popula on and, in par cular, the unstable political situation in North Korea that s ll represents the main risk for investments in South Korea, and thus for its further economic growth. A shift in China to higher value-added manufacturing, and low-cost manufacturing in Vietnam and India can also pose further risks for its con nued growth.

On the other hand, if the US – with whom South Korea also has a free trade agreement – were to re-join the TPP, their trade would be in great trouble – particularly compared to Japan who would, in this case, gain a great trade advantage. Thus, South Korea should wisely consider its decision on this ma er.

Thus, although a lot can be learned from its economic miracle, South Korea should wisely adapt to new circumstances, primarily by diversifying its economy – focusing more on highvalue innova ons that will increase its global compe veness, reduce internal challenges, and further enhance its economic growth. europeanbusinessmagazine.com

WE CAUGHT UP WITH

Simon Tribelhorn CEO of the Bankers Association in Liechtenstein who talked to us about the plans for Liechtenstein, blockchain and climate change. A new ‘Financial Centre Strategy’ of 2019 just came out in February. What are the main goals in the finance and technology sectors for this year?

The main aim of this governmental strategy is to strengthen Liechtenstein’s a rac veness as an internaonal and innova ve financial centre and its percep on as a stable and reliable financial centre for the long term. The strategy builds on the path embarked on in recent years. The interna onal percep on of Liechtenstein as a financial centre has improved significantly in recent years as a result of its consistent alignment with interna onal standards. Today, the financial centre stands for stability, long-term thinking, and innova on. Since posi ve external percep on is an important loca on factor, a public-private partnership will be established to intensify financial centre communica on. However, it goes without saying that a consistently high level of compliance with interna onal and European standards is of crucial importance to the implementa on of Liechtenstein’s financial centre strategy and has to be con nuously maintained. Based on the convic on that in the future, the a rac veness of the financial centre will depend even more on its framework condi ons, the Government a aches great importance to value crea on as another key component of the strategy. This shall be achieved through suppor ng innova on and new technologies namely such as blockchain and increasing eﬀorts towards sustainable finance as a key concept of the financial centre. In addition, Liechtenstein wants to further strengthen its dialogue with key partner countries as well as its interna onal network and, for example, strive for membership in the IMF. As LBA, we have welcomed the strategy paper of the Government since it sets out the guiding principles and forms the basis for a successful development of our financial centre in the future. You once said that sustainable investments will be the norm in just a few years’ me, men oning that long-term thinking is a part of Liechtenstein’s DNA. What is the main focus for Liechtenstein in this ‘long-term thinking’ part and what do you think the main challenges will be? Sustainable investments will soon be ‘mainstream’ or ‘The New Normal’. It is important that sustainability is embodied in the corporate culture and at the strategic 72 europeanbusinessmagazine.com

level. The tone must come from the top. This is precisely where I see the great strength and opportunity for our financial centre, since sustainability has long been one of our core values. Consequently, living and ac ng in a long-term oriented and responsible manner is a disnguishing feature for Liechtenstein. We have already achieved some things, but we are certainly not yet where we would like to be, let alone where we want to go. A major challenge ahead of us for instance is how to use technological change to transform the economy in the direc on of greater sustainability. The young genera on will play a key role in this respect. This genera on is driven less by material wealth than by values. It wants to change the environment and society. Millennials are not only interested in short-term performance, but also in the ques on of whether their money is being invested in a meaningful and responsible way. For this genera on, the daily use of digital technologies goes without saying. Besides that, sustainability is increasingly becoming a ques on of credibility. It must be ensured that if something is labelled sustainable, it really is sustainable. There’s no room for greenwashing anymore. We impera vely need more transparency. Prac ce-oriented and smart regula on as well as a globally uniform taxonomy would provide guidance and legal certainty.

Liechtenstein and Blockchain. Despite the so-called ‘crypto-winter,’ a number of blockchain related companies in Liechtenstein has con nued to rise! In your opinion, what are the main reasons for this? It’s true that Liechtenstein recognized the trend towards digitalisa on at quite an early stage. And we are fortunate that not only the banks themselves have realised the poten al of digitalisa on early on, but also the Government and the Financial Market Authority (FMA), which have launched two ini a ves to encourage that potenal. The FMA’s Regulatory Laboratory is a first point of contact for FinTech companies to enter into a dialogue on regulatory, licensing, and supervisory issues. The goal is to facilitate innova on without weakening customer protec on. And with its Innova on Clubs, the Government is providing a public innova on process for start-up companies wan ng to gain a foothold in Liechtenstein with new business ideas. Both initiatives also benefit tradi onal banks by helping important exper se to enter the country and by encouraging the local development of coopera ve business models. And last but not least, with the so-called Blockchain Act, the Government has even done pioneering legisla ve work, which has also a racted considerable international attention and ensured that Liechtenstein remains a rac ve for young companies. The objec ve is to create legal certainty and to prevent abuse. They go hand in hand and both is very important for the reputa on and a successful development of Liechtenstein and its financial centre. Liechtenstein is the only country in the world that has an “energy country“ tle. Could you comment on Liechtenstein’s banks at this point?

Primus-Ethics asset management solution from Neue Bank – to name just a few. What business model do they apply and how do they help to achieve goals of the 2015 Paris Agreement on Climate Change? The Paris agreement brought the discussion on sustainability into the spotlight for the financial sector in 2015. There is an urgent need for ac on. Without the proac ve engagement of the financial industry as intermediaries, the 2-degree target of the Paris Agreement cannot be financed. To achieve this, an addi onal investment volume of about EUR 180 billion will be needed in the EU alone. However, the challenges we face as a society are far more mul -layered and complex. Also in 2015, the United Na ons therefore adopted 17 Sustainable Development Goals (SDGs). According to the consul ng firm PWC, the annual global investment volume required to achieve these goals is even USD 7 trillion. Currently, only one seventh of this amount is financed by public funds. This means a substan al por on must come from the private sector. The financial sector and banks in par cular can and must therefore play a central role in mobilising and channelling these financial resources. This brings with it a great opportunity, especially for our financial centre. Liechtenstein’s banks are with one excep on predominantly ac ve in interna onal asset management and private banking. Through balance-neutral transac ons, their investment process as well as ac ve engagement, asset managers and private banks can generate a much greater leverage eﬀect than through bank lending for example, incen vizing companies towards a more sustainable behaviour.

Of course, we all in Liechtenstein are very proud of this label. The label symbolises how sustainability is broadly enshrined in policymaking and the population and it reflects very well that Liechtenstein has traditionally placed par cular importance on ac ng in a sustainable and responsible way taking into account environmental aspects. Having said that, we at the LBA and hence represen ng the common understanding of our members consider sustainability as a cross-cu ng topic aﬀec ng the en re value chain and all levels of hierarchy. Only if sustainability is integrated and put into prac ce across all areas can an ins tu on act in a credible way. The business models of our member banks also dis nguish themselves from short-term banking. Hence, for our member banks, sustainability has become an integral part of their corporate culture; this is demonstrated not just by the wide-ranging commitment through their own charitable founda ons, the membership of all three large banks in the two climate founda ons Switzerland and Liechtenstein, a wide range of energy eﬃciency measures including climate neutrality, or the high corporate governance standards. It is also firmly anchored in the core business of the banks. Examples include the LGT Sustainability Ra ng for equi es, bonds, funds, and ETFs for private investors, the LLB’s ecological and renova on mortgage, and the europeanbusinessmagazine.com

What are your thoughts on the Blockchain Act and Liechtenstein’s sustainable finance strategy? Could you say that one complements the other?

In a few words — what is token economy, what does it mean for Liechtenstein’s banking and why it’s important to the country? The token economy allows the ownership and other forms of rights of use of a wide range of assets or services (e.g. pictures, vintage cars etc.) to be split up and distributed among many by means of blockchain technology. It is s ll very hard to assess how the fast progressing digitaliza on will develop. However, I think that everyone agrees that blockchain technology has the poten al to revolu onise the en re financial services industry. Blockchain offers banks the opportunity to get to know clients and their needs even be er and to do banking in a completely different way. And blockchain is ideally suited to making transac ons less expensive, more traceable and thus more secure and transparent. Even though due cau on and risk awareness are called for, this reflex must be reconsidered. Innova on should not be nipped in the bud because of fear of the unknown or poten al risks. It is important to manage them properly and appropriately. But we are also convinced that the opportuni es offered by the new technology outweigh the risks. And last but not least, to stay competitive as a financial centre – and this is true even more for small financial centres like Liechtenstein –it is crucial to acquire know-how and to be technologically neutral in regulatory terms. If a small country misses ground-breaking trends, it will be difficult to make up lost ground.

bsolutely. We are the first genera on which destroys our planet, and we are the last which can save it.The ques on will soon no longer be, why sustainable?, but rather, why not? However, it has been an obstacle for a long me that the eﬀec ve impact of an investment or por olio in terms of ESG factors has been diﬃcult to quan fy and measure. With the help of digitaliza on, this will be much easier and be er in the near future. The availability of a comparable data set will allow asset managers to translate the data into financial investment metrics. The ongoing digitalisa on of the financial industry is undoubtedly playing an increasingly important role. Sustainability is the WHAT, while digitalisa on and especially blockchain technology will in future heavily influence and facilitate the HOW. Thus the two belong together like Siamese twins. In 10 years, what aspects do you see as the most important ones in transforming the economy towards being more sustainable? Asset owners will be cri cal for a more sustainable future. Their preferences ul mately decide how capital is channelled into the economy. At present, there is no commonly agreed defini on as to when an investment can be considered as sustainable. The taxonomy which is currently being developed under the leadership of the European Commission aims to overcome this lack of comparability and the inherent uncertainty by establishing an EU-wide classifica on system. It will be essen al that we will get this right. With a robust and workable taxonomy banks and other stakeholders will be be er able to enhance awareness, to deliver on the investors’ preferences and to improve investment advisory and suitability. Furthermore, it is my convic on that in order to overcome the challenges we are facing and to achieve the SDGs by 2030, a coordinated approach across sectors and coopera on between the public and private sector is as much needed as poten ally never before. This includes as well blended finance as a cri cal tool that can mi gate early-entrant costs or project risks, helping re-balance risk-reward profiles for pioneering investments and to unlock the trillions and as a result close the funding gap.

About the Liechtenstein Bankers Association Established in 1969, the Liechtenstein Bankers Associa on is the domes c and interna onal voice of the banks opera ng in and out of Liechtenstein. It is one of the country’s most significant associa ons and plays a key role in the successful development of the financial centre. Member interests are pursued in accordance with the principles of sustainability and credibility. As a member of the European Banking Federa on (EBF, www.ebf.eu), the European Payments Council (EPC, h ps://www.europeanpaymentscouncil.eu) and the European Parliamentary Financial Services Forum (EPFSF, www.epfsf. org) the Liechtenstein Bankers Associa on is a member of key commi ees at the European level and plays an ac ve role in the European legisla on process. Since 2017, the LBA has also been a member of the Public Aﬀairs Council (PAC, www. pac.org) with oﬃces in Washington and Brussels and since April 2018 of the interna onal network Financial Centres for Sustainability (FC4S, www.fc4s.org). Registered in the EU Transparency Register with number: 024432110419-97 74 europeanbusinessmagazine.com

BLOCKCHAIN TECHNOLOGY AND THE BANKING INDUSTRY:

Changes Are Here and Here To Stay The world of banking as we know it is changing, and the biggest reason is blockchain technology.

europeanbusinessmagazine.com

et us ask you one simple queson: What do you know about the global financial system?

It moves trillions of dollars a day and serves billions of people around the world. But that’s not all. It’s also slow, incredibly complex, and expensive – as inter-bank transacons need to rely on a trusted third party to maintain a central ledger as the record of authority.

Perhaps this would have con nued to be the case for many more years, but in 2008 blockchain technology was developed, and this has been changing everything. Originally created as the technology behind cryptocurrencies such as Bitcoin, it is in fact responsible for the massive disruptions in every industry around us, such as the Internet of things (IoT), the government, healthcare, banking and payments, and many others. It’s no secret that in the early days of its appearance, banks and financial ins tu ons around the world treated it with scep cism. According to P. V. Singh, Carnegie Bosch Associate Professor of Business Technologies, the original hope for blockchain technology was that it would simply reduce transaction costs and make micropayments possible – as a result, bringing underbanked or unbanked individuals into the system. Now, in 2019, we’ve seen it disrupting and revolu onising many diﬀerent industries and sectors, but despite that, we keep coming back to the same ques on – wondering just how useful it really is for the banking sector, and whether it is here to stay for good. Blockchain technology supporters believe that it can be used to create secure and convenient alterna ves to me-consuming and o en expensive banking processes. An interesting example of which comes from Capgemini’s Digital Transforma on Ins tute, who released a report sta ng that consumers could save up to $16 billion on banking and insurance fees each year via blockchain-based applica ons. 76 europeanbusinessmagazine.com

Blockchain is s ll considered to be a young technology. Despite this, however, Harvard Business Review claims that, ‘it will do to the financial system what the Internet did to media.’ And it looks as though we really are headed in this direc on, as up to 99% of banks and investment companies around the world are now either exploring blockchain technology, or already u lising it, and according to Accenture, a global management consul ng company, the world’s banking sector will save up to $20 billion by 2022 through the implementa on of blockchain. In terms of the adoption of blockchain technology to date, the Bank of America is currently a leading company based on the number of blockchain patents it holds, along with such

giants as IBM and Alibaba. JPMorgan Chase & Co has created a separate division that is purely responsible for exploring the poten al of blockchain technologies, and Goldman Sachs is already known as one of the most crypto-friendly banks. In Europe, Santander Group – a mulna onal commercial bank in Spain, was one of the first to start using the blockchain network RippleNet to power its ‘Santander One Pay FX’ service, responsible for conduc ng cross-border transactions. Russian banking giant Sberbank has been in the blockchain technology game since 2017, and the biggest Polish banks are right behind it, currently tes ng blockchain-based pla orms for storing and managing customers’ personal data. In 2018, Deutsche Bank also joined the party, star ng

being recognised as the only technology that may be able to reduce fraud in the financial world, where 45% of financial intermediaries, such as stock exchanges and money transfer services, are prone to being targets of financial crimes every day. The combination of these features can help banks and financial ins tuons around the world save billions of dollars, by substan ally reducing processing costs. However, there’s another important thing to note. As previously mentioned, blockchain technology is s ll considered to be going through the very early stages of its development, which means that it also faces some specific challenges in the banking industry: There is no global coordina on, no common standards between banks and financial institu ons worldwide that can help u lise the technology, and no proper legal framework around the use of this new technology, meaning that it is not always clear what to expect in terms of protec on, privacy, and poten al risks.

a collabora on with IBM and tes ng bank transfers that are powered by blockchain technology. Even more interestingly, the European Union has just – in April 2019 – launched the newly formed Interna onal Associa on of Trusted Blockchain Applica ons (INATBA), the main goal of which is to bring blockchain and Distributed Ledger Technology (DLT) into the mainstream so as to unlock and harness the full potenal and benefits for businesses. Over 100 companies have joined so far as founding members, including names such as IBM, the IOTA Founda on, Ripple, ConsenSys, and many more. Blockchain technology is on the rise in the rest of the world as well. As reported by the Economic Times in February of this year, Asia, the Middle

East, Africa and La n America have also started to adopt blockchain technology in the banking industry. The demand for the adoption of blockchain technology in the banking industry is in fact growing so fast that the trend has led to the crea on of a completely new generation of banks – 100% blockchain-powered banks, such as FOTON Bank, Celsius Network and Bankera. Banks and financial ins tu ons are exploring blockchain technology for several reasons – namely cost savings, eﬃciency, interna onal transfers and be er data quality. However, not only is this technology capable of enabling transparent network infrastructure, decentraliza on, and a reduced cost of all opera ons, but it also provides a high level of safety in storing and transmi ng data. Blockchain is thus

The fact that blockchain technology is s ll a rela vely new phenomenon also means that not everyone understands it. According to a PwC report, only 24% of execu ves in the banking industry are familiar with blockchain technology. Such lack of awareness leads to controversial opinions, so while some believe that blockchain technology is capable of replacing the tradi onal banks altogether, others think that it will only supplement the traditional financial infrastructure, making it more eﬃcient. One thing is clear – blockchain technology and the banking industry are colliding, making financial markets more eﬃcient, secure, and transparent. The Business Blockchain author W. Mougayar once aptly said, ‘The blockchain cannot be described just as a revolu on. It is a tsunami-like phenomenon, slowly advancing and gradually enveloping everything along its way by the force of its progression.’ And we are right in the centre of this ac on. europeanbusinessmagazine.com

62 Insane Facts About Bitcoin

itcoin is a virtual currency that uses Blockchain technology for secure payments and storing money electronically, without requiring a bank or a person’s name. Satoshi Nakamoto created this cryptocurrency back in 2009. The biggest advantage of Bitcoin is that it’s not under control of central authority, government or private company, so people are free from paying transac on fees. It can be used for booking a hotel or flight, or purchasing products online, as many online stores and companies accept Bitcoin now. Today, there are 1354 Bitcoin ATMs in 55 countries around the world and about 5.8 million users that have digital wallets. The price for one Bitcoin at the moment is $5,602 and it’s growing con nuously, propor onally with the interest for digital money. Take a look at this infographic, created by the team behind BitcoinPlay, that illustrates in details some interes ng facts about this incredibly popular virtual currency.

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