38_European_Business_Magazine_Summer_2020

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SUMMER EDITION | 2020

EUROPEAN BUSINESS

MAGAZINE Romain Gerardin-Fresse “The star advisor and strategist of the year talks about globalization”

The Great Reset / Iowa State / Google Competitors / Innovation / Pexip / Irene Valenti / Cashless Wallets / Search Engines / Female start ups / Bermuda / Digital Confidence

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Table of Contents 8 12 14

Latest News Bumper year of sport to boost air charter industry in 2021 The World Economic Forum Suggests a Different Post-Covid Future for The World 16 James Storie-Pugh, Founder of Mellow 18 Digital Confidence Will Play A Critical Role In Allowing Businesses To Bounce-Back Post-COVID 19 20 Social media: Are we in control?

22 Mass exodus from the UK 24 Why The Moroccan Pharma Industry Matters To Europe 26 What is the Future of Money and Are We Ready For It? 28 Safe-Haven Assets: Coronavirus Market Crash Make Investors Turn to Gold and Bitcoin 30 Can Industries Bounce Back after the Coronavirus Outbreak?

34 Iowa: A Smart Investment in America’s Midwest 36 Cloud, cyber security & leading in a threat environment without decelerating innovation 38 Why Iceland is the Perfect Spot to Do Business 40 Post-Pandemic Economic Recovery and New Market Space in China 44 Tens Of Thousands Protest Pandemic Restrictions In Berlin 46 Max Studennikoff, Ceo and Founder of CC Forum 48 Work from Home Revolution: Video-conferencing is About to Get Exciting 50 Odd Sverre Østlie, CEO of Pexip 54 Building a finance function from the ground up 56 Romain Gerardin-Fresse, Ceo and Founder of GFK Conseils-Juridis 65 What happens to innovations in a crisis?

74 Why Dating Apps are Old News and Matchmaking Services are Booming 76 Irene Valenti, founder of Valenti International 79 European App Developers Create New Service to Help Struggling SMEs Post Lockdown 80 5 European Google competitors to watch 82 Why You Should Consider Starting a Business in Bermuda, Too 84 Refinitiv battle reveals unease over power of modern stock markets 86 US vs Europe: Tensions Rise 88 Ten years in compliance: Reflecting on the UK Bribery Act 90 Can Europe Overcome The Next Wave Of The Pandemic 92 Reframing ‘Work / Life Balance’ 94 Businesses are paying the price of stressed staff as pandemic money pressure takes its toll 96 How to conduct risk assessment of your receivables 98 HOW SEARCH ENGINES REALLY WORK 105 9 Female-Led Start-ups 111 Almost one fifth of SMEs don’t think they’d survive another lockdown 112 Do Black Lives Matter in Business?

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EUROPEAN BUSINESS

MAGAZINE Publisher Nick Staunton Editor Patricia Cullen Deputy Editor Anthony Gill Associate Publisher Brad Adams Features Editor Katie Winearls 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 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.

Latest News Kodak scores major loan to make generic pharmaceuticals Eastman Kodak shares reached some impressive heights a few days ago: it skyrocketed about 1200 percent in 2 days, boos ng its market capitaliza on to $2,6 billion from under $150 million. At this point, Kodak stock was trading at $60, compared to last month’s $2,77.

The main reason behind these numbers was the fact that Kodak announced that it won a $765 million government loan to launch Kodak Pharmaceu cals, which will produce generic active pharmaceutical ingredients to reduce America’s dependency on foreign drug makers. The company will hire 359 workers, most in New York state, and create approximately 1200 indirect jobs. This is not Kodak’s first me ge ng involved in the drug sector: back in 1990, Kodak was engaged in the produc on of drug ingredients, and consumers are familiar with Kodak because of aspirin.

Since announcing the news, cri cs have started ques oning why the Trump administra on awarded the loan to Kodak, which is s ll primarily a technology company, rather than giving it to a pharmaceu cal company.

However, at that point, Kodak’s whirlwind wasn’t over just yet: the company’s shares recorded a big drop on the very last day of July, leaving everyone wondering what comes next. Shares went down about 20 percent to $23,95 in midday trading, cu ng the week-to-date gain to more than 1000 percent.

Many investors believe that Kodak’s shares went too far too fast, and it looks like the company’s stock is in its own universe for now.

Microsoft confirms plans to buy TikTok The US tech giant Microso has confirmed that it is not only in talks to buy US operaons for the video social media pla orm TikTok, but also in Canada, Australia, and New Zealand. The company discussed its plan with President Trump, as the White House threatened to blacklist the hugely popular Chinese-owned app, as he believes that the app poses a na onal security risk because it could be used to collect American’s personal data.

In a blog post, Microso noted that the company is exploring a preliminary proposal to purchase TikTok service in those countries with the pla orm’s owner ByteDance, which “would result in Microso owning and opera ng TikTok in these markets.“ It added that Microso “may invite other American investors to par cipate on a minority basis in this purchase.“ Microso emphasized that it would ensure that “all private data of TikTok’s American users“ was transferred to and remained in the US. What is more, it would ensure that any data currently stored or backed up outside the country would be deleted from servers a er it was transferred to US datacenters. It also said that Microso “appreciates the US Government’s and President Trump’s personal involvement as it con nues to develop strong security protec ons for the country.“ Short-form video app TikTok is thought to have about half a billion ac ve users worldwide, and about 80 million in the US, with a huge propor on of these in their teens or early 20s.

The discussions should be completed no later than 15 September this year.

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Barry Manilow sells song catalog to Hipgnosis Veteran manager and recording execu ve Merck Mercuriadis’ Hipgnosis Songs Fund Ltd. has added Barry Manilow’s catalog to its $1 billion-plus por olio. In a statement issued at the very beginning of August to the London Stock Exchange, Hignosis said it has acquired 100 percent of Manilow’s worldwide recording royal es in his catalog, comprising 917 songs.

Manilow, a Grammy, Tony, and Emmy winner, is one of the most successful recording ar sts of the 1970s and 1980s, with 50 Top 40 singles to his name. He released his self-debut album back in 1973 and first reached the top of the US chart 2 years later with ‘Mandy’. He sold more than 85 million albums worldwide.

Recently, Manilow has been back in the news and the charts: in June 2020, his ‘80s recording ‘When the Good Times Come Again’ worked its way up Billboard’s Adult Contemporary chart, making Manilow the first ar st to span reaching the top 20 of the chart from the ‘70s to the ‘20s.

Mercuriadis, the founder of Hipgnosis Songs Fund Limited and The Family (Music) Limited, noted that “Barry Manilow is an interna onal treasure. He’s an incomparable ar st, songwriter, arranger, musician, and performer.“ The veteran singer also commented on the recent news, saying that “Merck has created a new type of music company and I’m looking forward to being part of the family at The Family Music and Hipgnosis Songs.“

Gold hits new record and posts best numbers since 2016 July ended with some interes ng numbers: on the very last day of the month, gold hit a new all- me high. It was gold’s best month since February 2016, and its 5th straight posi ve month. Rising poli cal tensions between the US and China, combined with the uncertainty caused by the coronavirus, boosted the spot price to $1,944 an ounce. Some observers s ll predict that $2000 could be broken in the nearest future.

BBC noted that as the interest rates are currently near zero and dividend returns from companies are uncertain at best, with so many struggling, as well as lacking in returns, many investors tend to think that inves ng in gold is one of the best op ons: not only it does not pay dividends or earn interest, but its price tends to rise in troubled mes.

So far this year, gold prices have risen by 28 percent.

Meanwhile, due to the pandemic, the dollar was on track for its biggest monthly drop in almost a decade. Suki Cooper, an analyst at the Standard Chartered, mul naonal banking, and financial services company, noted that “the extreme weakness in the dollar has helped buoy gold prices further.“ The price of fellow precious metal silver was also higher.

It rose more than 6 percent to $24,36 per ounce — its highest since September 2013.

HSBC to accelerate 35,000 job cuts HSBC, Europe’s biggest bank, is to accelerate plans to cut 35,000 jobs globally a er the coronavirus crisis forced the bank to put aside another $3,8 billion to cover bad debts.

The bank noted that the bad loans linked to the Covid-19 pandemic could reach $13 billion in total.

HSBC chief execu ve Noel Quinn said that HSBC will “accelerate“ an earlier restructuring plan, which included axing 35000 jobs, as the “opera ng environment has changed significantly since the start of the year.“ He also added that the bank would examine “addional ac ons“ to strengthen its business.

To be more specific, HSBC reported a 65 percent drop in pre-tax profits to $4,3 billion for the first half of the year, and, according to the BBC, this number is much steeper than analysts had forecast.

Back in February, HSBC announced its plan to cut 35,000 jobs from a global workforce of 235,000 as part of a major restructuring. But the job cuts had ini ally been put on hold during the coronavirus outbreak. Now, as the bank is dealing with several challenges, including tensions between China and the west, HSBC chairman Mark Tucker is overseeing the program to shrink the bank’s opera ons in Europe and the US. “Having paused parts of our transforma on program in response to the Covid-19 outbreak, we now intend to accelerate the implementa on of the plans we announced in February,” Quinn said. “We are also looking at what addi onal ac ons we need to take in light of the new economic environment to make HSBC a stronger and more sustainable business.” europeanbusinessmagazine.com 9

Virgin Galactic and Rolls-Royce join forces Space tourism venture Virgin Galac c announced it signed an agreement with Rolls-Royce to develop an aircra for supersonic travel, giving a first look at the coming vehicle’s design.

George Whiteside, Virgin Galac c’s Chief Space Officer, commented on a statement, saying that “We are pleased to collaborate with the innova ve team at Rolls-Royce as we strive to develop sustainable, cu ng-edge propulsion systems for the aircraft, and we are pleased to be working with the FAA to ensure our designs can make a prac cal impact from the start. We have made great progress so far, and we look forward to opening up a new fron er in high-speed travel.” He also added that the recruitment of Rolls-Royce, which provided the engines for Concorde, the world’s only civil-cer fied supersonic aircra to date, is aimed at devising a propulsion system that’s both cutng-edge and sustainable.

Bri sh aerospace company Rolls-Royce has a notable history-making aircra engines and is a leader in the cu ng-edge technologies that deliver clean, safe, and compe ve solu ons to the planet’s vital power needs. “We are excited to partner with Virgin Galac c and TSC to explore the future of sustainable high-speed flight,” said Rolls-Royce North America Chairman and CEO Tom Bell. “Rolls-Royce brings a unique history in high-speed propulsion, going back to the Concorde, and offers world-class technical capabili es to develop and field the advanced propulsion systems needed to power commercially available high-Mach travel.”

A er unveiling the high-speed aircra design and announcing the deal with the Rolls-Royce, Virgin Galac c recorded a 4 percent rise in shares in the premarket trading from its previous close of $22,45.

A $100 billion opportunity for Amazon Amazon has received US approval to build its ambi ous satellite internet system, which would compete with SpaceX’s Starlink network. The company announced it will invest more than $10 billion to build a network of 3,236 satellites that will provide highspeed broadband internet services to people around the world who lack such access.

“There are s ll too many places where broadband access is unreliable or where it doesn’t exist at all. We will change that. Our $10 billion investment will create jobs and infrastructure around the United States that will help us close this gap,” Amazon senior vice president Dave Limp said in a statement.

Amazon’s announcement was released right a er the Federal Communica ons Commission’s (FCC) approval of the plan, also called ‘Project Kuiper’. The plan was approved by the unanimous vote of 5 FCC’s commissioners, giving the project the paperwork it needs to get off the ground. “We conclude that grant of Kuiper’s applica on would advance the public interest by authorizing a system designed to increase the availability of high-speed broadband service to consumers, government, and businesses,“ the FCC wrote in its order, released on July 30.

The company has not outlined a meline for the project and the FCC said the company has not finished the satellites’ design. However, the FCC authoriza on requires Amazon to launch half of its satellites no later than mid-2026 and build out the rest of the constella on by mid-2029. Morgan Stanley has declared the high-speed internet network has the poten al to be a ”$100 billion opportunity” for Jeff Bezos’ company.

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Japan’s Seven & I Holdings seals the deal with Marathon Petroleum Marathon Petroleum, the largest US independent refiner, announced that it had sold its Speedway gas sta on chain to the Japanese retail group Seven & I Holdings for $21 billion in cash. The sale of Speedway, one of the country’s largest convenience store chains with nearly 4,000 outlets, is the biggest corporate deal in the oil sector since the coronavirus cut the demand for fuel early this year. A er-tax proceeds from the sale, approved by the boards of both companies, are es mated at $16,5 billion. Marathon Petroleum noted that the company will use the proceeds to pay exis ng debt.

“This transac on marks a milestone on the strategic priori es we outlined earlier this year,“ said Michael J. Hennigan, Marathon’s president, and CEO. “Our announcement crystalizes the significant value of the Speedway business, creates certainty around value realiza on, and delivers on our commitment to unlocking the value of our assets. At the same me, the establishment of a long-term strategic relaonship with 7-Eleven creates opportuni es to improve our commercial performance.“ The deal, which is expected to close in the first quarter of 2021, includes a 15-year fuel supply agreement for about 7,7 billion gallons per year associated with the Speedway business, said Marathon. The agreement also rises 7-Eleven’s store count to about 14,000 loca ons in the United States and Canada.

Apple faces a $1,4 billion lawsuit in China Chinese ar ficial intelligence company Shanghai Zhizhen Intelligent Network Technology, also known as Xiao-i, has filed a lawsuit against Apple Inc, alleging it has infringed on its patents. The company expects to get $1,43 billion in damages and demands that Apple cease “manufacturing, using, promising to sell, selling, and impor ng” products that infringe on the patent, it said in a social media post. Xiao-i also argued that Apple’s products violated a patent the Chinese company owns for a virtual assistant whose technical architecture is similar to Siri. To be more specific, Siri, a voice-ac vated func on in Apple’s smartphones and laptops, allows users to dictate text messages or set alarms on their devices.

If successful, the suit could block Apple from selling some of its most popular products to the Chinese market, its most significant source of income outside of the US. Xiao-i argued that Apple’s voice-recogni on technology Siri infringes on a patent that it applied for in 2004 and was granted in 2009.

According to Reuters, Apple did not respond to a request for comment.

This latest filing marks a new step in a legal dispute that has con nued for almost a decade. Xiao-I ini ally sued Apple for patent infringement in 2012, and China’s Supreme People’s Court ruled in July that its patent was valid.

Google partners with ADT on smart security in a $450 million deal ADT, a leading provider of security and smart home solu ons, and Google announced they are entering into a long-term partnership to create the next generation of smart home security offerings.

Right a er the announcement, shares of ADT surged as much as 97 percent in premarket trading, reaching an all- me high of $17,21.

Google will invest $450 million in the deal and own a 6,6 percent stake in the company. The deal, which is expected to close in the 3rd quarter of this year, will see ADT’s technicians selling and installing Google’s Nest smart home devices, such as cameras and smart displays, as early as this year.

Both companies have also commi ed $150 million each — provided they reach certain milestones — for co-marke ng, product development, and investment in technology and employee training.

Rishi Chandra, Vice President and GM at Nest, noted in a blog post that over me, Nest’s devices will enhance ADT’s security monitoring and become the “cornerstone of ADT’s smart home offering.“ He also added that “The goal is to give customers fewer false alarms, more ways to receive alarm events, and be er detec on of poten al incidents inside and around the home. It will also provide people with more helpful no fica ons that make everyday life more convenient, like package detec on. ADT customers will also have access to Nest Aware, a service that keeps people informed about important events at home, including intelligent alerts and event history recording for up to 30 days.“ europeanbusinessmagazine.com 11

BUMPER YEAR OF SPORT TO BOOST AIR CHARTER INDUSTRY IN 2021

S

ports travel is pped to be the fastest-growing sector in the air charter industry in 2021 thanks to a bumper year of high-profile events plus new health protocols imposed by governing bodies and federa ons.

Major events postponed because of the Covid-19 pandemic during 2020, including the Olympics, golf’s Ryder Cup and soccer’s Euro 2020 and Copa America, have been moved back 12 months.

That means squeezing them into a calendar which already included an Ashes cricket tour, a British Lions rugby tour, a T20 Cricket World Cup and the usual array of Super Bowl, tennis Grand Slams, NBA Finals, Champions League, Premier League and golfing majors.

The hope in the air charter industry is that teams, corporate sponsors and even fans (once they are eventually allowed back into stadia) will choose

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to charter rather than travel with a scheduled airline in a bid to have greater control over mings, des naons and health risks.

At Chapman Freeborn, a global aircra charter specialist which was first established in 1973, the opportunity has prompted the appointment of its first ever Group Director of Sport.

Former cricketer Nick Lamb (pictured ) took on the role in August 2020 and has high hopes for the future.

“When you look at the schedule, 2021 has the poten al to be a fantas c year for sport and also for our industry,” he said.

“Chapman Freeborn has been heavily involved in sport before, but we see it as poten ally the fastest-growing sector in the charter industry with real room for growth.”

It is not only the number of major tournaments taking place which provides an opportunity for passenger air charter. The Covid-19 pandemic has

led to sports teams and organisa ons being far more aware of the health risks around travel and determined to keep their players in a bubble.

Nick added: “Only recently UEFA, the governing body for European football, provided a long list of protocols for teams travelling to Portugal for the Champions League quarter-finals, semi-finals and final.

“It included an edict that the use of charter flights was ‘strongly recommended’, which highlights the way forward for sports teams when travelling abroad.

“The benefit for teams, and for sports organisa ons, federa ons and corporate sponsors, is that chartering a flight enables people to stay together in their bubble without the need for public interac on at the air terminal or on the plane.

“It is also possible to personalise health and safety measures on board – whether that is leaving empty seats between passengers, extra personal protec ve equipment, such as visors, for the crew or a Covid19 kit for passengers including personal mask, gloves and an -bacterial wipes.”

Nick believes the passenger charter will not only be a rac ve to Premier League soccer clubs and American spor ng giants but also to new customers.

He added: “It might be time for smaller teams to find out what it’s like to charter. Perhaps it’s an op on they haven’t explored before because it seems very easy to travel by scheduled airline.

“But with the times we’re in, people are star ng to look more closely

because there’s a lot of anxiety around travelling abroad.

“Chartering allows teams to segregate from others and enjoy a more private experience – and they may also find it’s easier to get direct to their des na on at a me of their choice.

“I know, for instance, in Euro 2020 next year several teams - including Wales and Switzerland - are drawn to play group games in Baku. But it’s not easy to get to Baku direct by scheduled airline.

“In cricket, the West Indies team flew by charter for the first me this summer to play in England, which the ECB, the England & Wales Cricket Board, helped to organise. There are certainly new markets opening up.”

The prospect of fans travelling by charter is also a possibility – if, and

when, restric ons are li ed on spectators a ending spor ng fixtures.

Nick said: “Nobody knows when that will happen but you’d like to think that fans will be back inside stadia at some point; and for clubs, sponsors or travel companies organising group fan travel the same advantages of chartering apply.

“And when you take into consideraon the way scheduled airline prices rise in the case of high demand – for instance when thousands of Liverpool soccer fans are trying to get to the same des na on – it can also be cost effec ve.

“Even if we have to wait longer for fans to return, however, the market for teams is going to be significant. From our point of view, and from a spor ng point of view, 2021 is a big year.” europeanbusinessmagazine.com 13

A GREAT RESET:

The World Economic Forum Suggests a Different Post-Covid Future for The World

T

he most popular topic in recent months, without the doubt, has been the one about the coronavirus and its impact on our healthcare systems, economies, and everyday lives. Hundreds of thousands of people have lost their lives, hundreds of millions of people have lost their jobs, more than a billion children have been shut out of schools, and trillions of dollars of economic ac vity have disappeared, leaving everyone guessing and wondering what comes next.

Klaus Schwab, founder and Execuve Chairman of the World Economic Forum (WEF), gave us an answer on this one: “Many of us are wondering when things will return to normal. The short response is: never. The world as we knew it in the early months of 2020 is no more,“ he noted, adding that while at this early stage there is no way of knowing how things will turn out in the end, there are some things that can be done to navigate the uncertain journey ahead.

A lot has been talked and written, deba ng on how we should respond to the current crisis, and the World Economic Forum also suggested one way to cope with it: a Great Reset of capitalism. According to WEF, since “it is a crisis unlike any other, it also requires a response like no other — a balanced and inclusive response that makes our economies and socie es future-proof.

We need a Great Reset, not just a restart or a reboot.“ The idea of the Great Reset was declared at a virtual WEF’s mee ng by HRH The Prince of Wales and Professor Schwab, followed by statements by UN Secretary-General

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António Guterres and IMF Managing Director Kristalina Georgieva just a few months ago, in June 2020, when global leaders from the United Nations, United Kingdom, United States, Interna onal Monetary Fund and mul na onal corpora ons joined together for yet another discussion. It was announced that the Great Reset will be the main topic of the upcoming World Economic Forum’s event in January 2021, and organizers hope that it would shed some light on the unaddressed problems that leave the world less sustainable, less equal, and more fragile — such as climate change, sustainability, social jus ce, and, of course, the Covid-19 outbreak.

Speaking about the coronavirus pandemic, the World Economic Forum took an interesting point of view.

No ng that the world will spend trillions of dollars on repairing our economies from this disaster through debt relief programs, income support programs, fiscal s muli, and other interven ons, WEF says that it would be a wasted opportunity to then only focus on a restart, as we have fundamental issues in our society, our economy, and our environment to address as well. In other words, today we should have more ambi on than to go back to the pre-pandemic days, and instead of simply restar ng, we must find ways to reset and reform our socie es.

To be more specific, WEF defines the Great Reset as a “commitment to jointly and urgently build the founda ons of an economic and social system for a more fair, sustainable, and resilient future.“

The purpose of it is to use the coronavirus pandemic as a jus fica on — a endees of the discussion repeatedly referred to it as an “opportunity” — to completely overhaul the en re global economy, including the US economy, to make a more “equitable” world and to fight climate change, which was on numerous occasions iden fied as the world’s next great “crisis.”

Elaborating further, in an article published on the World Economic Forum’s website, Klaus Schwab noted that “The world must act jointly and swi ly to revamp all aspects of our societies and economies, from education to social contracts and working condions. Every country, from the United States to China, must par cipate, and every industry, from oil and gas to tech, must be transformed. In short, we need a ‘Great Reset’ of capitalism.“ He also added that “This global pandemic has

also demonstrated again how interconnected we are. We have to restore a functioning system of smart global coopera on structured to address the challenges of the next 50 years. The Great Reset will require us to integrate all stakeholders of global society into a community of common interest, purpose, and action. We need a change of mindset, moving from short-term to long-term thinking, moving from shareholder capitalism to stakeholder responsibility. Environmental, social and good governance have to be a measured part of corporate and governmental accountability.“ Other members of the WEF had similar opinions: Prince Charles, one of the WEF’s leaders, noted that “We have a golden opportunity to seize something good from this Covid-19 crisis. Its unprecedented shockwaves may well make people more recep ve

to big visions of change,” while António Guterres, Secretary-General at United Na ons in New York added that “The Great Reset is a welcome recogni on that this human tragedy must be a wake-up call. We must build more equal, inclusive, and sustainable economies and socie es that are more resilient in the face of pandemics, climate change, and the many other global changes we face.“ One of the managing directors at the WEF, Olivier Schwab, also stressed that “With the pandemic, a great opportunity can be seized to put some of the big themes on the table to make the world more sustainable,“ no ng that to seize this opportunity, everyone has a role to play, and asking us to join them.

Speaking about joining them, the upcoming 51st WEF summit will be a bit different: it will include both in-person and virtual meetings,

connec ng key global governmental and business leaders in Davos with a global multistakeholder network in 400 ci es around the world for a forward-oriented dialogue driven by the younger genera on. WEF wants to ensure that the Great Reset discussion will be pushed beyond the boundaries of traditional thinking, therefore, the summit will interconnect thousands of young people with a powerful virtual hub network to interact with the leaders in Davos. Each of those hubs will have an open house policy to integrate all interested ci zens into this dialogue, making the Annual Mee ng open to everyone. In addi on, global media and social media networks will mobilize millions of people, enabling them to share their input while also providing them with access to the Annual Mee ng discussions in Davos. europeanbusinessmagazine.com 15

James Storie-Pugh, Founder of Mellow talks to European Business Magazine industry wide regula on to further legi mise our industry.

In the UK, legal CBD products must contain ‘no trace’ of the psychoac ve compound tetrahydrocannabinol (THC), guidance which causes confusion as there is no standard tes ng regime to meet this requirement. For comparison, in Germany the threshold is 0.2% and in Switzerland it’s 1%.

As part of our onboarding process, we make sure the brands we curate as part of the mellow marketplace adhere to the highest level of quality control and industry tes ng.

Were there any other legal issues in the UK? There are a few obstacles to overcome. The latest legisla on classes CBD as a novel food and all products containing CBD which are consumed by humans must be approved to be placed on the market by 31 March 2021.

CBD products for use by animals is a grey legal area in the UK. CBD for use in pets can currently only be prescribed by veterinarians and CBD pet products should be approved by the Veterinary Medicine Directorate.

There are also restric ons on CBD adver sing. Classificaons can differ depending on whether they are food, food supplement, novel food or medicine and so unsupported health claims have to be avoided. Google also bans ads with any CBD-related keywords, and Facebook/Instagram do not allow paid adver sing of CBD products. So marketing plans need to take into considera on what’s possible.

What is mellow’s USP? How did mellow start?

Mellow is a fully managed, curated online marketplace for global CBD (cannabidiol) brands. Myself and Neil (co-founder) set up mellow earlier this year when we realised the huge poten al for the growing CBD market in the UK. We wanted to provide a pla orm where consumers could have the confidence to make smart and confident purchasing decisions and enjoy the poten al benefits of CBD including pain relief and help with sleep concerns, and also connect premium CBD brands with a global audience. We’re also hoping to with expand into other (nonCBD) sectors that promote wellness as a key part of a posi ve healthy lifestyle.

Is the pla orm legal in the UK? Our marketplace pla orm is 100% legal in the UK. The legali es surrounding CBD itself are complex and are at infant stage – something we are really mo vated to educate consumers and investors on, and encourage more 16 europeanbusinessmagazine.com

Our key USP is the technology offered to our premium brands, integra ng tools that allow them to successfully sell, reach a global consumer base, and grow their demand.

These tools include a fully func oning mul -merchant pay-out capability, bespoke merchant onboarding, scalable business intelligence and seller data analysis tools, and mul -currency banking and pay-out solu ons, a par cularly significant differen ator in our sector.

Our own personal experience also sets us apart from our compe on; myself and Neil have a combined forty years of experience working with and around marketplaces.

Is mellow the first CBD marketplace in Europe?

Our marketplace is the first in the UK to offer consumers’ access to global brands that have been fully ve ed to ensure their quality and that otherwise wouldn’t be easily accessible. It is also unique – for example, contrary to popular belief, Amazon does not sell CBD products, allowing us to serve a growing consumer demand that the marketplace giant cannot.

Digital Confidence Will Play A Critical Role In Allowing Businesses To Bounce-Back Post-COVID 19

By Ka e Fisher

W

hile the economic consequence of COVID-19 con nues to unveil itself, we can’t help but watch the transforma on of consumer confidence.

Consumer confidence denotes positivity towards the economy and personal financial situa on. It is the driving force behind all economic activity. However, in the aftermath of a global pandemic, when

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consumer confidence is at its lowest, digital confidence becomes equally as cri cal. The widespread call for public social distancing impacted every aspect of daily life.

From hospitality, retail and food businesses to medical and banking services, the coronavirus transformed virtually every business into a digital one. As a result, digital confidence will play a cri cal role in allowing businesses to bounceback post-COVID 19.

What Is Digital Confidence?

Digital confidence refers to both businesses and customers having highly posi ve a tudes towards engaging through web pages and mobile applica ons. For businesses, this means trusting that your digital platforms will provide flawless user experience every me. Customers too want to share in that confidence. They want to have full faith in the ability of organisa ons to deliver services via digital

pla orms. But before you can establish digital confidence amongst your customers, you must first develop it within your own team.

Why Is Digital Confidence Important?

When your business provides poor digital experiences, it undermines the validity of your products or services. On the other hand, digital confidence can even enhance an otherwise average product. Aled Miles, CEO of Sauce Labs, discusses the importance of digital confidence in our society. He states: “Let’s think back to the early stages of the 2020 U.S. Democra c primary elecon. You had a has ly assembled and even more has ly rolled out digital voting applica on delay and quite nearly undermine the results of the Iowa caucus. The immediate reac on from both

poli cal organisers and voters alike was to say this is why you can’t trust digital applications for important things like vo ng. In reality, the exact opposite is true. Digital applica ons hold great promise as a means to improve the way we do things in the public sphere, and that includes making it easier for more people to vote. Since the onset of the pandemic, we’ve seen that extended to equally cri cal causes like food delivery, telemedicine, and distance learning.

The more confidence we have in organisa ons’ collec ve ability to deliver services via digital pla orms, the more apt we are to take advantage of them.

But when you have experiences like the one in Iowa, that confidence is eroded.

Instead of using the mobile vo ng app, maybe you don’t vote at all next me. If you have a poor experience with a telehealth platform, maybe you ignore a symptom and don’t call the doctor next me. If your child has trouble logging in to the e-learning module, maybe they just skip school altogether the next day.

In the absence of digital confidence, progress gets stalled. That’s why it’s so important to ensure every company can deliver it.”

When developing digital confidence within your business, you must focus on agility and modernisa on. Con nuously monitoring customer experience and applica on performance will ensure that quality is always improving. And digital confidence will follow closely behind.

How Can Businesses Build Digital Confidence?

Why Is Digital Confidence Cri cal Post-Coronavirus?

To create digital confidence within your business, you want to be sure that your customers trust the web and mobile applica ons you are providing. Consider the risks a company might face in the post-COVID world if they are not providing a strong user experience.

Digital confidence starts from the top. Business leaders need to recognise the importance of ins lling digital confidence in both their team and their customers. The resolu on to put user experience at the forefront must first be made before digital trust can begin to be built. The paradigm shi caused by the COVID pandemic means that digital change has had to happen at a rapid pace. It is now necessary to place quality user experience above func onality when it comes to creating a great digital experience.

In order to build digital confidence, businesses must encourage team

As we begin to bring ourselves out from the plummeting lows of the pandemic that shook the world, it is essential to recognise the changes to business and the consumer. The importance of digital confidence has extended itself further toward cri cal causes like food delivery, digital medicine, and distance learning. The more confidence we have in organisa ons’ collec ve ability to deliver services via digital pla orms, the more apt we are to take advantage of them.

Our reality has transformed, and the push for businesses to engage with customers via digital pla orms has become a requirement for the restora on of consumer confidence. In an unprecedented economic scene, businesses and consumers alike will use digital confidence in a critical role to propel us out of instability.

Digital confidence is crucial in allowing enterprises to bounce-back postCOVID 19.

members to step out of their silos and work together to create quality digital capabili es. When teams can work side-by-side, and developers, engineers, product designers commit to building that quality, the silo mentality is broken down. Everyone should be ready to take responsibility for moving toward being a digital business.

And finally, always remember to take feedback into account. A business should work with the mindset of delivering the best possible user experience for its’ customers. Take their opinions above your own and value how your customers feel about your applica on and digital presence.

You should create a process of connuous feedback which is available to everyone in the business.

europeanbusinessmagazine.com 19

Social media:

Are we in control?

Social media has swept across modern culture, but are we really in control?

Behaviourist psychology says otherwise.

Kieran McMullan reports

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sychologists and scien sts confidently say there are processes in our body and minds that we have no real control over; of which, actually have control over us. It’s these processes which can be commandeered, hacked or worked upon.Behaviourist psychology presides on a simple truth: we are drawn to pleasant things, and withdraw from unpleasant things. It could be argued then that all sen ent things seek pleasure, and avoid pain.

The act of being drawn or withdrawing from a thing is called a response; and the sensa on is called the s mulus.

Our brains have stores of self-produced neurochemicals that mollify

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the struggles and unpleasantries in life—turning these into pleasure, or at least making the brain register it that way. As a direct result of evoluon, biology dictates that everything necessary for our survival makes us feel good and that life inside the human body is designed to be harmonious.

For many the no fica on symbol that so readily features in our daily lives seems harmless. Today, a modern person’s device will undoubtedly feature a range of apps, easily downloadable and acquired within an instant. But stop for a moment and think about how many thousands of hours have gone into the concep on and development of these apps.

Social media activates the reward centres in our brains, directly affecting the release of dopamine — the neurochemical which regulates feelings of pleasure and desire. This process is why social media arrests our consciousness and feels so utterly irresis ble.

The s mulus of social media is the experience we take from using an app. The response is our interac on with the app, in other words, our a en on.

It’s important to establish social media’s influence on its users as something voluntary; it’s an act of will to use social media. But this by no means so ens the pernicious effect social media has on many users. Thus

promp ng the s mula on-response hook we’re unable to resist.

Over me our rela onship with the app deepens, its s mulants become more impactful in our daily lives.

Therea er our gravita on toward the app is soon replaced by a cloak and dagger bubble of supposed interests; and herein is where the learning part of behaviourism psychology takes place; each time you interact with the app, you are learning to expect a certain kind of experience or reac on from the app.

Upon tuning into social media, the li le red no fica on circle is being associated with those en cing, irresistible, reward emotions that you have condi oned yourself to require above all else.

A telling point in this symbio c relaonship is when the user no longer views the arbitrary no fica on associated with rewarding stimulus as important enough to sustain this conditioned habit. Put simply: you will con nue using social media, regardless of no fica ons or lack of. All for the despairingly flee ng serotonin high.

In me, whether consciously or not,

you may start believing that the no fica on symbol, imperfectly arbitrary, truly did create real emo ons inside you. Charlie Brooker has pulled on social media’s pernicious and unnatural influence on humans in Black Mirror; it’s not difficult to see why.

The behavioural allure of social media is pigeonholed in three categories: the reward, the response, and the arbitrary trigger; of course addic on is much more complicated in reality.

Subsequently addic on to apps has proven problematic in our complex modern world, and like anything, runs deeper than loosely categorising how we feel. How accessible or usable an app is; how emo onally rewarding the content proves; and how poignant the informa on is all have an impact.

Addi onally, to what degree an app fights for our a en on in an economy of a en on-grabbing technology, and how far the app is willing to go are unse ling factors inherent in social media addiction. Perhaps the most salient is how far we are willing to go for the pseudo-emo onal rewards.

Suicide rates among teenagers have doubled in the last eight years according to research; and data compiled by the Office for Na onal Sta s cs (ONS) show suicide rates in children and young people aged 15-19 have increased. ONS published data show that 1,413 self-inflicted deaths were recorded in the last three months of 2019. Studies show that suicide a empts in young people less than 19 years can be directly linked to heavy social media or internet use. Causality as ever remains complex and variegated in our growing modern world.

More sobering yet the fact suicide is the second leading cause of death in youth aged 10-24 years old globally.

Current evidence in psychiatry says heavy or problematic use of social media does impact suicide risk in young people, sadly increasing the risk of suicide a empts.

Should psychological techniques be employed on the public to influence in ways they might not want to be influenced — is a ques on many are concerned about; regre ably, these techniques are universal in modern culture today.

Many have raised specific ques ons on freedom, agency, a en on, psychological (and physical) health, and limits to free capitalism.

In capitalist-driven socie es the techniques used for greater influence, sales, and engagement have been in mo on for quite some me. But the bi ng problems lie in what new technologies, like social media, have on our health mid to longterm — par cularly in unprecedented ways. Specific interventions will be needed more than ever as apps and internet platforms jostle for our attention and consciousness.

As of July 2020, there are 3.98 billion social media users worldwide which equates to over half of the total global popula on, as researched by datareportal. Every day new users of social media are increasing at frightful speeds. Our most-loved social media apps claim more than 1 billion monthly ac ve users. Facebook has 2.603 billion monthly users; Youtube has 2 billion; and Instagram has 1.082 billion. Yikes.

Dopamine is namely responsible for reward-driven behaviour and pleasure-seeking, to which all social media has a direct impact upon. Many of today’s drugs such as cocaine and methamphetamine trigger responses of dopamine chemicals in the brain.

When society was addicted to drink driving, global campaigns ba led to full effect on how best to eradicate the problem, and have been largely successful. Similarly the same happened with smoking, albeit with the help of Coronavirus. Governments must acknowledge the addicve prowess of social media and the health, and indeed lives, of young people at risk from over-use.

We as a culture are distracted by the dazzling, waltzing portraits billions contrive via social media; when in reality we are subordina ng ourselves to a dopamine prison of FOMO (fear of missing out), vanity, and no fica on rewards which do li le other than feed our egos. Social media spins fantasy out of reality, whipping up untold power and influence; moving the masses like pu y.

Best to unfollow. europeanbusinessmagazine.com 21

Mass exodus from the UK

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he number of British people leaving for the EU is at an allme high. A new study confirms that there has been a large exodus from our shores, to EU member states.

The study conducted by Daniel Tetlow, Oxford in Berlin, also, Daniel Auer, a research fellow at the WZB's Migra on, Integra on, Transna onalisa on unit, stated that the migra on to the EU (from the UK) is at a 10 year all- me high. Nicholas Bishop reports The study reads: "OECD figures and na onal government sta s cs have shown that the number has risen con nuously since 2010 with an exaggerated spike since the Brexit referendum in 2016,".

Daniel Auer, one of the researchers involved in the study suggests that many Britons have left because of uncertainty. Uncertainty, about the future of the UK once we have le the EU later this year. Also, many Brits already living in EU nations have become ci zens of those countries. Of course, it's not only Brits leaving the UK for the EU but many Europeans going home. That also is caused by the uncertainty of how welcome Europeans living in the UK will feel once we are out of the EU. Other Europeans, however, have been applying for Bri sh ci zenship.

Home OďŹƒce figures show that 3.5 million EU na onals resident in the UK has applied for the 'EU Se lement Scheme'. These figures were published by the Home Office in May, this year.

The 'EU Se lement Scheme' was created for EU, EEA and Swiss ci zens living here. In other words, those wishing to apply for se lement here because they have family and a job here. There is a deadline date for those wishing to take advantage of the scheme, that is December 31. The scheme enables those eligible to connue living here a er June 30, 2021.

In Germany, a popular destination for many Brits, 1000 more British

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people became German citizens in 2017. However, in the rest of the 27 EU na ons, Bri sh applica on for citizenship has increased six mes, compared to 2015.

Those Brits with dual nationality, however, will have to give this up.

This is for Britons living in the EU-27.

They will have to give up their duality of na onality and become ci zens of the European na on they are residing in.

Last years general election was about, whether we like it or not, Brexit.

It was what won Boris Johnson a landslide win. It is easy to say with hindsight had Jeremy Corbyn been more pro-leave, perhaps, the Tories would not have had such a thumping majority. However, Mr Corbyn chose to be right down the middle of the argument and so Labour leave voters punished the Labour party accordingly.

New leader, Sir Keir Starmer, has hit the ground running with 'YouGov' giving the Labour leader a surge in popularity. Not since the days of Tony Blair before the '97 general elec on has a Labour leader been so popular. Many prefer Sir Keir's forensic approach in holding Boris to account at 'Prime Minister Questions' as opposed to Boris' bumbling buoonery.

Sir Keir Starmer, was never an ardent Brexiteer but now has come to terms with the UK leaving the EU. The ques on has to be asked though was Boris really a hard Brexiteer? Or, was he just playing to the gallery of hardright Tories and their an -EU credenals?

Certainly, with the COVID outbreak that has blighted our na on, this has overshadowed trade deal talks with the US. Despite assurances from the Johnson administra on that the NHS is not for sale, there remain worries about this issue.

Of all the na ons the UK has been nego a ng trade deals with it seems the Japanese are very happy to do business with us in the post-EU UK. The UK has also been talking to

China, Australia, etc. The ques on remains though, will the UK secure a trade deal with the EU itself? It appears that the EU is not very impressed by the UK's lack of "ambition" in getting a trade dea donel with the bloc.

European Commissioner for Trade, Phil Hogan, has said the EU side is willing to show compromise in order for a trade agreement to be realised. Mr Hogan has said the same

compromise cannot be seen from the UK side.

Mr Hogan believes a deal is s ll doable before the UK leaves the EU, at the end of this year. Michel Barnier, EU Chief Negotiator, recently visited the UK to discuss terms encompassing things like a fishery policy in a post-EU-UK. The EU was and s ll could be a major trade partner should the UK establish a trade deal. That's not to say though, that any trade

deals we do with the US, China, other Commonwealth na ons, etc, will not be worth it. The happy medium for the British economy would be to have a viable trade deal with the EU and other important trading na ons around the world.

Meanwhile, for those leaving the UK for the EU they have their reasons for doing so. Obviously, as discussed one reason is the uncertainty but what other reasons could there be? Could

it be that many are leaving because the UK is in decline and broken?

People are fed up with an incompetent government and their policy of austerity since 2010. A land where the richest in our land have go en richer and the poorest even poorer.

Many former UK ci zens have voted with their feet and declared the UK is not for them. Frankly, who can blame them and good luck to them with their new lives in the EU-27. europeanbusinessmagazine.com 23

COVID-19:

WHY THE MOROCCAN PHARMA INDUSTRY MATTERS TO EUROPE

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uring the past six months, the Moroccan pharmaceutical industry has shown a high degree of reliability and resilience.

Put under extreme stress by a strong demand, especially for treatments included in the therapeutic protocol for Covid-19, the Kingdom’s local pharma manufacturers doubled their eorts to ensure na onal supply for essen al drugs.

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Under the leadership of King Mohammed VI, The Moroccan Pharma Industry mobilized all of its production capacity from the outset to maintain its ac vity in the best condi ons and secure the supply of raw materials and finished products in order to avoid any possible shortage.

Thanks to the agility and an cipa on of Moroccan manufacturers in this strategic sector which employs more

than 50,000 people, no stock shortage of locally manufactured drugs has been recorded, par cularly for molecules that are part of the treatment protocol against Covid-19, including Paracetamol, Vitamin C, Hydroxychloroquine, Azythromycin, Heparin, or Amoxi-clav. The production and distribu on of several million boxes have been ensured con nuously for the benefit of the Ministry of Health,

main hospitals and health establishments in the Kingdom as well as wholesalers and pharmacies spread across the country.

Agility and An cipa on Representing more than $1.68 billion in sales in 2019, including 17% from exports, the Kingdom’s Pharma Industry aims to posi on itself as a new regional “Hub” between Africa and Europe, based on a recognized exper se of over 60 years and cutting-edge ecosystems in logistics, transport and technology.

A month ago, Lamia Tazi Director General of Sothema and Secretary General of the Moroccan Associa on of Pharmaceu cal Industry (AMIP), highlighted the mul ple assets of the Kingdom as “a stable ally in the south of the Mediterranean able to ensure security and Health prosperity of the whole region”, in an Op-Ed published in Parliament Magazine. She explains in par cular why Morocco meets all the condi ons to become the best production platform for Europe to

address the 400 million consumers of the large North and West Africa – Southern Europe zone.

Thanks to this policy, the region as a whole will be able to benefit from an industrial base for the “Best Cost” drug mee ng European quality standards, which will contribute to maintaining or even crea ng thousands of jobs, in Morocco but also in Europe and Africa, as well as a possible leverage effect towards the Middle East.

A “Hub” between Europe and Africa To capitalize on the gains made in this area, Moroccan industrialists in the sector are calling for an intensification of efforts by increasing the incen ve ac ons, including the strengthening of the criteria of the status of industrial pharmaceu cal establishment (PPE), co-location, accelera on of technology transfers, encouragement of research and innova on, specific incen ves for local manufacture and the development of generics, as well as the expansion of health insurance.

Bringing together the 29 main players in the sector, AMIP unveiled its

ambitions and new strategic direcons on June 19 in Casablanca. Considering the global reconfiguration of drug value chains caused by the coronavirus, as well as the rise of a Euro-African export offer of which Morocco would be the center of gravity, the associa on chaired by Ali Sedra reiterated its commitment to improve the accessibility of innovative and generic drugs in Morocco and Africa.

Classified by the World Health Organiza on in the “Europe” zone, Morocco has developed a local drug producon considered to be one of the most efficient on the continent, having notably contributed to the eradicaon of several pathologies and commi ed to suppor ng Africa in facing Covid-19 as well as the preven on of future pandemics.

As a reminder, last April, the members of the Associa on founded in 1987 made substan al dona ons including large stocks of medicines and protecve equipment, as well as a contribuon of 55 million dirhams (5 million €) to the special solidarity fund ini ated

by King Mohammed VI.

europeanbusinessmagazine.com 25

Cashless Wallets:

What is the Future of Money and Are We Ready For It?

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erhaps it is not too far fetched a thought that not so far from today, money as we know it — banknotes and coins that we carry with us — will be considered outdated or even collec ble?

“We’re living through an incredible global social experiment that is forcing governments, businesses, and consumers to rethink their operating models and norms for social interac ons,” said Morten Jorgensen, director of RBR, a consulting firm based in London, which specializes in banking technology, cards, and payments. “We have a world in which there is less contact. People’s habits are changing as we speak.“ Before the coronavirus pandemic, cash was used for as much as 80 percent of the transac ons in Europe.

However, the fear of handling paper

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money that may be contaminated with Covid-19, as well as an immense growth of e-commerce, has accelerated the trend towards a cashless society. As a result, Visa reported that ATM use is already down by 32 percent, and 63 percent of consumers say they’re using less cash. At the same me, the number of ac ve Visa cards being used for e-commerce jumped by 30 percent. Brian Cole, head of North America products and solu ons for Visa noted that “It's just been like 3 years of digital commerce growth being pulled forward into 3 months. People are making purchases that they would have made in person, but they’re making them online now.“ The fear of using banknotes and coins due to the coronavirus pandemic was so real that some countries — like

South Korea — went even further: banknotes have been disinfected and placed in quaran ne, basically leaving no other solu on rather than use cashless payment methods.

However, as people believe that contactless payments can help promote social distancing during the pandemic and save from ge ng bacteria, there are a few disadvantages of a cashfree world to keep in mind.

For starters, electronic payments are not as private as cash payments: the more informa on you have floa ng around online, the more likely it is to get in bad hands. In a cashless society, everyone is more exposed to hackers. Also, various technical problems could leave you without the ability to pay for things and services when you need it the most. What is more, the

poor and unbanked people will have a really hard me integra ng into the cashless society.

And there’s one more thing: when all money is electronic, nega ve interest rates could become a real problem for consumers, as they would feel a direct effect on them. Denmark, Japan, Switzerland, and other countries have already experimented with nega ve interest rates, and the results were not that promising. According to the Interna onal Monetary Fund, negave interest rates reduce bank profitability, and banks could be tempted to hike fees on customers to make up that deficit. In 2020, banks are limited in their ability to pass on those costs because customers can simply withdraw their cash from the bank if they don’t like the fees. But in the future, if

customers can’t withdraw cash from the bank, they may have to accept any addi onal fees and not be able to do anything about it.

The case of Japan, which we just menoned, is actually an interes ng one.

Once it was a pioneer in cashless transactions: back in 1990, the Japanese company Denso Wave developed the first QR codes that are now frequently used in cashless payments, and Sony has introduced a chip, which was used on public transport and for payments since the 2000s. But today, as the world’s biggest economies increasingly embrace electronic payments, Japan’s aging population prefers physical money, and 4 out of 5 purchases here are s ll made in cash. To compare, in South Korea as much as 96 percent of transac ons are digital today, and Sweden aims to become a cashless society by early 2023. Yuki Fukumoto, an analyst at the NLI Research Ins tute, noted that “With Japan becoming the first super-aged society with more than 28 percent of people 65 or over, it is harder to persuade consumers to take up new technology. The challenge from now on is how to mo vate people to change their habits.“ Having in mind that most small shops in Japan will only take cash to avoid high transac on costs, this becomes a difficult challenge.

One other reason why Japan seems to be sluggish in adop ng cashless transactions today is the fact that people here simply trust in cash. The crime rate is low here, and people feel safe carrying it in their pockets. And although large retail stores and retailers accept cashless payment tools that come with reward points, many customers s ll pay in cash.

Despite the current situa on, Tokyo s ll wants more consumers to get into the habit of using cards and engage in cashless transac ons, and the government aims to double the ra o of cashless se lements to 40 percent by 2025, and to 80 percent eventually to spur labor produc vity. Experts note that country’s transi on to digital transac ons would help Japan cope with a shrinking popula on and a ght labor market.

What is more, cashless payments

would also allow stores to automate sales es mates and banks to cut back on costly automated teller machine networks. Satoshi Kumagai, senior vice president in charge of financial services and digital business at convenience store chain operator Lawson Inc, noted that “It would be ideal to see all the transactions go cashless given labor shortages and the need to boost convenience for our customers. On the other hand, we’ll need to find a way to help those elderly who may find it hard to go shopping without cash.”

To compare, in China, where the trust in cash is low and costly, smartphones have been a popular payment tool for quite some me now. Such mobile pla orms like Alipay and WeChat Pay have been domina ng the market. To be more specific, China is already the world’s largest mobile payment market and is also a leader in peer-topeer payments, in which people can pay each other by text.

According to GlobalData, a leading data and analy cs company that has forecasted which countries will most likely be the leaders in moving towards a truly cashless society, “one area where China has seen extreme developments is the rapid adoption of mobile payments. Here, one of the most popular ways to pay by phone is QR code scanning, and this method has been successfully adopted by mainstream society. One proof that China is rapidly moving towards a cashless society is its undisputed leading posion in e-commerce. As of 2019, China recorded an es mated 80 billion cash transac ons.“ Right behind China, according to the GlobalData, ranks South Korea, followed by the UK. Then there’s Sweden, Finland, and Australia.

Speaking about the cashless future, according to the global management consul ng firm Kearney, which analyzed data from close to 100 banks across Europe, over the next few years, 1 in 10 banks will no longer be in business due to customers using digital banking services like Starling, Monzo or Revolut. This trend, it says, will drive the shi to a cashless society at pace resul ng in a significant change in the financial sector. europeanbusinessmagazine.com 27

Safe-Haven Assets: Coronavirus Market Crash Make Investors Turn to Gold and Bitcoin

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hat started as a health crisis, the coronavirus pandemic has caused global economic and financial turmoil rather quickly, on a scale that’s not been seen during any previous infec ous disease outbreak, including the Spanish Flu back in 1918. Closed economies, prolonged lockdowns, mass unemployment, disrupted international trade — it’s no wonder that stock markets crashed, leaving everyone guessing and worrying what’s next for the global economy.

Seeking for some certainty, since mid-March, when the first wave of lockdowns began, people have been turning to the so-called “safe-haven assets“. To be more specific, during mes of global economic crisis, investors tradi onally look to secure their holdings in precious metals (gold and silver), currencies (US dollar and Swiss franc), and non-vola le assets. Today, one more safe-haven asset has joined the list: the bitcoin.

Both bitcoin and gold have risen sharply throughout 2020, mostly

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driven by relentless fiat money printing by governments and central banks, keen to keep their economies afloat in the wake of the coronavirus pandemic. August 2020 started interes ngly, as on the very last day of July bitcoin rallied to its 2020 high of $11,392. And that is not all: as the bitcoin rallied up, its correlaon with gold also increased, as gold broke through $1,900, recording a new high. According to data from Kraken, a US-based cryptocurrency exchange, the increase in correla on represents a trend shi as the relaonship between the two had previously been falling.

Explaining the current trend shift, MagnifyMoney, a leading consumer-facing media property that helps consumers understand personal finance with comparisons and perspec ve on money news, published a report, which revealed that millennials are leading the rush to buy gold and cryptocurrency stocks as the virus spreads. To be even more specific, 1 in 6 consumers have been inves ng

in gold or other precious metals over the last 3 months. Gold has a storied reputa on for being very stable and resilient, regardless of how the stock market turns, and that’s why many people, hoping to keep their money safe, invest in gold rather than stocks. What is more, millennials also hope to make money during the stock market’s rollercoaster ride, so they’ve been going digital and inves ng in bitcoin as well.

Commen ng on the bitcoin and gold correla on, James Li, a research analyst at CryptoCompare, the independent global cryptocurrency market data provider, says that while previous correla ons between gold and bitcoin led to surges in the bitcoin price, the context is different this me. He noted that “Last me bitcoin had a moderate correla on with gold — around 0,5 — was towards the end of 2018. That was when a month earlier in November 2018 bitcoin suffered a 50 percent drop at the height of the bitcoin cash war and made some subsequent rebounds. Gold was recovering from a somewhat cyclical drop a couple of months earlier. The moderate correla on back then was perhaps a bit of a coincidence.” To be more specific, data analy cs firm Skew noted that this August, prices of bitcoin and gold have reached a monthly average correla on of 70 percent — an all- me high.

What is more, according to a research paper from Bloomberg, called “June 2020 Edi on: Bloomberg Crypto Outlook“, the same forces supporting gold could posi vely affect bitcoin, resul ng in bitcoin’s upsurge.

Bloomberg researchers noted that “Increasing companionship with gold is a bitcoin-price tailwind, in our view. At the highest-for-longest 52-week correla on and beta ever versus the metal, the first-born crypto should con nue to advance for reasons similar to gold, fueled by unprecedented global central-bank easing.”

Interes ngly, since March, bitcoin’s gains have outstripped any other major asset and risen 4 mes faster than the Dow Jones Industrial Average. Therefore, Wall Street veterans and experts have their own opinions on this one.

Michael Novogratz, billionaire, founder, CEO, and chairman of a crypto merchant bank Galaxy Digital, says that, in his opinion, bitcoin will con nue to outperform gold in the upcoming months. He noted that “Gold has been around for 3,000 years.

It’s pre y easy to buy. Bitcoin is a better long-term bet than gold,“ highlighting that bitcoin is more worth as an investment because it is more difficult to purchase than gold. Other Wall Street veteran and CEO of a financial media company Real Vision, Raoul Pal, believes that bitcoin will be the best performing asset in the next 2 years. Although bitcoin’s price has struggled to stay above $12,000 twice this month, he thinks that the world’s first cryptocurrency could rally to $100,000 soon, even menoning the $1 million thresholds. “Bitcoin is currently realizing its reputa on as a form of digital gold,“ noted Nigel Green, CEO of deVere Group, one of the world’s leading independent financial advisory organiza ons. “Up to now, gold has been known as the ul mate safe-haven asset, but bitcoin

— which shares its key characteris cs of being a store of value and scarcity — could poten ally knock gold from its long-held posi on in the future as the world becomes ever-more tech-driven.“ On the other hand, Peter Schiff, a notable economic forecaster, and investment adviser says that gold’s price will con nue increasing in the next 12 months as well. What is more, Morgan Stanley, JPMorgan, and Goldman Sachs all foresee the gold price rallying by 2021, poten ally rising to as high as $2,000 per ounce.

The industry group World Gold Council noted that the leading reason for the likely desire to buy gold is fear of another financial crisis. With the coronavirus pandemic disrupting supply chains, forcing large-scale corpora ons across all major sectors to struggle to sustain their opera ons, investors tend to consider gold as a hedge against the economic uncertainty, making it the preferable op on from other tradional assets like cash and bonds.

Goldman Sachs analysts said historically, the demand for gold rose amid a

lack of clarity around the early phase of an economic recovery. Interestingly, during a period of expansion, gold prices remain steady or lower.

On the other hand, during recessions, the price of gold rises. For example, in mid-September 2008, at the height of the financial market crash, the price of gold dipped below $740 per ounce.

But in August 2011, gold rose to over $1,900 per ounce.

But Peter Mallouk, president and chief investment officer of wealth management firm Creative Planning, says that the current tendency is not exactly the right one, no ng that investors turning to specula ve assets like bitcoin or gold and silver are be ng on the wrong investments.

“You have incredible companies that we know are not going anywhere, selling for half off. There is no need to go over into the specula ve world,” Mallouk noted.

According to him, investors should instead focus on buying the stocks of tradi onally stable companies that are trading low because of the coronavirus shutdown.

europeanbusinessmagazine.com 29

Dealing with Consequences:

Can Industries Bounce Back after the Coronavirus Outbreak?

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assive layoffs, bankruptcies, complete closures, billions in lost revenue… Since the beginning of the coronavirus outbreak, global sectors and industries have been facing overwhelming challenges. Travel and transporta on, automo ve, manufacturing, electronics, retail, oil, and gas — the spread of the virus have forced many industries to stop or slow down their physical opera ons, and while each of these industries is juggling with its own

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specific set of struggles, many of their challenges are shared ones. What is more, as the number of infec ons in different countries is beginning to rise again, businesses and industries are facing some more bad news and uncertain es about the future. Let’s take a closer look.

When you think about it, few industries have fallen as far and as fast as tourism. Before the pandemic, the industry counted as much as billion trips per year. But the coronavirus

outbreak managed to erase more than a decade of growth, returning the industry to 2006 levels.

The Interna onal Air Transport Associa on (IATA), which has 290 member airlines, predicts a global loss of $84,3 billion this year. The global industry group expects airline revenues to plunge as much as 50 percent, to $419 billion this year from $838 billion in 2019. Alexandre de Juniac, CEO of the group noted that “Financially, 2020 will go down as the

worst year in the history of aviation.

There is no comparison. On average, every day of this year will add $230 million to industry losses.“ To illustrate this even be er, we have one more impressive number for you right here: about 17,000 aircra — or more than 60 percent of all planes — are currently grounded due to the coronavirus pandemic. The passenger numbers are also in decline by 50 percent — to 2,25 billion — in 2020, roughly matching the level seen in 2006. Roger Dow, president and CEO of the US Travel Associa on, said that “The impact on travel is 6 or 7 mes greater than the 9/11 a acks.“ Many airlines haven’t survived the coronavirus pandemic: Virgin Australia, LATAM, Thai Airways, Flybe, Miami Air Interna onal, SunExpress Deutschland, Level Europe, South African Airways, Compass Airlines, RavnAir… And others are facing uncertainties about the future: for

example, the Middle Eastern operator Emirates Group noted that they “expect it will take 18 months at least before travel demand returns to a semblance of normality.“ Those airlines that managed to survive the coronavirus pandemic, on the other hand, did it mostly because of the ability to access government support. In May, IATA estimated governments had provided around $123 billion in financial aid to airlines during the crisis, which $67 billion has to be repaid.

Hoping to take the first steps towards jumpstar ng air travel and tourism, a growing number of countries have allowed the travel industry to promote the so-called ‘travel bubbles’ and ‘corona corridors’. Basically, these agreements with neighboring regions allow travel across borders for non-essen al trips without having to stay in quaran ne once arrived. Peter Cerda, the Regional Vice President in the Americas for IATA, says that “We are at a period of me where we need to learn how to co-exist with the virus. We are confident we can transport passengers safely, efficiently, and ensure we are not a vector of the virus.” However, passengers are not so eager to come back to planes just yet: IATA released public opinion research, which showed that 55 percent of passengers say they’ll wait at least 6 months before traveling again, and 66 percent noted that they would travel less for leisure and business in the post-pandemic world.

Despite these numbers, commen ng on the current situa on, Cerda noted that “We have to slowly start reopening air travel. It’s not only about people but about helping to generate economic prosperity again and getting the economic engines going in each country.”

Speaking about the future, IATA says that the worst of the coronavirus crisis may be over for the airline industry, provided that another and more damaging wave of COVID-19 infections is prevented. However, even under its most posi ve outlook, IATA s ll projects passenger traffic in 2025 will remain 10 percent below the levels originally an cipated before the crisis. The revenues are projected to rise to $598 billion in 2021, reducing the industry’s net loss that year to $15,8 billion.

Another industry that has been hit extremely hard by the coronavirus pandemic is energy, specifically oil and gas. With demand falling off the cliff, the markets have been thrown into turmoil, with a barrel of crude dropping to just over $22, it’s lowest level in almost 18 years. To compare, at the beginning of 2020, crude indices were trading at $60-$70 per barrel. The spread of the virus has forced many oil and gas companies to either stop or slow down their physical opera ons, and the impact of the pandemic is s ll very real in this sector, as companies are struggling with declining demand, ensuring employee safety and business stability, as well as oil price war between Russia and Saudi Arabia.

Speaking about the future, the International Energy Agency (IEA) says that it did not expect oil demand to return to pre-pandemic levels before 2022 due to a slump in air travel. Fa h Birol, the head of the IEA, noted that “In a few years’ me when we look back on 2020, we may well see that it was the worst year in the history of global oil markets.“ However, Ben van Beurden, Royal Dutch Shell’s CEO, has a different view on the current situa on. In April, in the very midst of the coronavirus pandemic, the company set an ambition of becoming ‘a net-zero emissions energy business’ by 2050. Van Beurden noted that such a crisis was “a moment of opportunity“ for people to re-evaluate what was important in their lives, “and emerge more united in tackling the urgent challenge of climate change.“ He also added that “Society must remain focused on the longer-term challenge of climate change. Because it hasn’t gone away. It s ll needs urgent ac on.”

But just like with every industry, the pandemic did not hurt every player in this field equally. Smaller companies are struggling to survive and many of them are deeply indebted a er years of producing oil at a loss.

Analysts es mate that many of those small companies could go bankrupt even with prices at $20 per barrel.

At the same me, bigger players may emerge with greater market share and greater profitability, as some europeanbusinessmagazine.com 31

of their biggest compe tors will be gone. Mark Haefele, a chief investment officer of UBS, a Swiss mul naonal investment bank and financial services company, noted that “Current low prices will force some companies out of business, but we are also convinced that the global oil industry will survive this crisis.“ One of the most interes ng aspects when it comes to the coronavirus impact on different industries is the fact that the effects of the pandemic can vary significantly from sector to sector, product to product and service to service. This is what’s been happening in the retail industry lately.

For example, some companies are reporting negative trends in one branch of their business, while reporting positive numbers in the other.

John Frigo, an affiliate manager for My Supplement Store, noted that “While tradi onal sports nutri on supplements like fat burners, prohormones and pre-workouts are down in sales, vitamins and immune-boos ng supplements are up, we’re having some of our biggest sales weeks ever.“ According to data from IMRG, UK’s online retail associa on, a few sectors that have recorded impressive online growth in the retail industry are the beauty sector, followed by electricals, home and garden, and alcohol.

In the mean me, the clothing market saw online sales drop 20 percent year-on-year.

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While we’re speaking numbers, Emarketer, an independent market research company that provides insights and trends related to digital marke ng, media, and e-commerce, es mates that worldwide retail sales are expected to hit $23,4 trillion in 2020, down 5,7 percent from 2019, no ng that both the magnitude of the downturn and the pace of the recovery will be harder on the retail market than the 2008 financial crisis. Recovery of the industry is expected to be slower not only because consumers have changed their habits, but also because of disrupted supply chains, slow exports, and high unemployment. Richard Lim, chief executive of Retail Economics, an independent economics research consultancy firm, noted that “Clothing retailers were the hardest hit as the absence of social interaction, whether that's going to work, seeing friends or heading off on holiday, decimated demand for new outfits.“ For example, in China, physical retail loca ons have already

reopened, but consumer spending is nowhere near where it was before.

One case study shows that nearly 90 percent of H&M loca ons in China were open by mid-March, but sales were still down 79 percent yearover-year, according to Inside Retail Asia, Asia’s leading authority on retail industry news and trends. And when demand does rebound, it might be too late for some retailers, keeping in mind that many of them were already struggling even before the pandemic, mostly because of a long-term shi to online sales.

When you think about it, the challenges caused by the impact of the coronavirus pandemic are unprecedented. Different industries are put under abnormous pressure by the current crisis and have to find new ways to cope with the upcoming uncertain es. Some of them will probably bounce back more easily than others, but, as Machiavelli once said, we should “Never waste the opportuni es offered by a good crisis.“

IOWA:

A Smart Investment in America’s Midwest

By Mark Laurenzo, Business Development Manager, Iowa Economic Development Authority (IEDA)

A

s we reflect on lessons learned in the year 2020, many words come to mind that encapsulate a year unlike any in our life mes.

But the word that stands out in my mind is transforma onal. The collective impact of the COVID-19 pandemic has truly transformed not only how we live, but how we do business. Many newly implemented ways of working will remain well a er the pandemic has come to an end and ul mately become part of whatever normalcy looks like moving forward.

In the midst of these unprecedented circumstances, the state of Iowa (centrally located in North America) has gone the extra mile to support impacted businesses through relief grants, tax deferrals, assistance with access to federal resources, workforce development initiatives and other targeted programs designed to sustain businesses in the early days 34 europeanbusinessmagazine.com

of the pandemic. And as businesses have reopened and resumed operaons over the past few months, we've seen countless examples of Iowan ingenuity and our state’s indominable work ethic in the effort to push forward safely and efficiently.

Though this year has presented a series of unusual challenges, there have been bright spots, including this month’s announcement that Iowa was named as European Business Magazine's Best State to Invest for the second year in a row. We’re apprecia ve of the editorial board and subscribers for gran ng us with this great honor that we could not have achieved without our top-ranked workforce and the ongoing partnership of nearly 450 interna onal employers operating in Iowa.

This incredible recogni on demonstrates that though the business landscape has changed, Iowa’s low cost of doing business, skilled workforce and efficient infrastructure continue to cement our state as a great place for

industry. Even in the face of adversity, we’re commi ed to fostering an environment where businesses achieve sustained growth and people enjoy a rewarding quality of life. Read on to learn more about why Iowa may be a smart investment for your business.

A research-driven and businessfriendly environment As a state that’s home to top-ranked research-based universi es, high-tech startups and a dogged commitment to innova on, companies and ins tu ons opera ng in Iowa are tackling tomorrow’s challenges today. In fact, Iowa has emerged as a bioscience epicenter through unique research and development special es in bio-based products, animal health, precision agriculture and immunotherapies.

Beyond our research-first approach, companies and ins tu ons opera ng in the state have access to abundant raw materials and a pipeline of world-class talent stemming from the University of

provides for a transporta on infrastructure that can support mul-modal logis cs in an efficient and cost-effective manner. Two major coast-to-coast, border-to-border interstate arteries travel through Iowa, and the state boasts more public road miles than the en re United States Interstate System. This vast network of roads, highways and interstates connects to more than 3,800 miles of rail freight track as well as 60 barge terminals on the nearby Mississippi and Missouri rivers. Through the air, more than 616 million pounds of cargo make their way through Iowa’s airports each year.

Affordable sustainable energy

Northern Iowa, Iowa State University and the University of Iowa.

Coupled with one of the United States’ lowest costs of doing business and a trained workforce, Iowa offers a business-friendly regulatory environment where innova on and growth aren’t only encouraged, they’re incenvized. Iowa’s Renewable Chemical Produc on Tax Credit (which benefits companies that produce renewable chemicals in Iowa by offering up to $1 million annually) was named by the U.S. Department of Agriculture as the strongest state incen ve for the biobased chemical industry in the na on.

Iowa offers innova on-based incenves as well — the Research Ac vies Tax Credit alleviates the potenal financial risk associated with R&D investments, and ul mately, improves the poten al for profitability.

Infrastructure that ships globally Iowa’s central geographic location in the heart of the United States

As industrial energy costs increase, the demand for cost-efficient energy solutions has never been greater.

Compounding this challenge is the need for companies to implement sustainable prac ces across all operaons given the ever-changing regulatory landscape and premiums placed on limited natural resources.

Thanks to an abundant supply of raw materials, Iowa is the na on’s leader in renewable fuel produc on with 43 ethanol refineries capable of producing more than 4.5 billion gallons each year. Additionally, Iowa is home to 10 biodiesel facili es with the capacity to produce more than 428 million gallons annually.

Iowa also ranks first in the nation in wind energy (as a percentage of total power output), and numerous companies have invested heavily in the state’s wind power to fuel their opera ons. Both the public and private sectors are committed to furthering investments in wind energy with more than $19 billion allocated to wind-related projects and an additional 1,211 MW to wind capacity planned by the state’s u li es.

Development-ready sites When considering opera onal expansion, me is of the essence as companies typically don’t have the luxury of inves ng significant amounts of me into the site selection process. As

business needs rapidly change, scaling up quickly can be a game-changer for long-term profitability. With that need in mind, Iowa’s Cer fied Sites program offers sites with large square footage op ons that are well-suited for fast-tracked projects.

The Certified Sites program considers national site location standards, Iowa’s natural assets and the needs of key business sectors, including advanced manufacturing, finance and insurance and biosciences. Unlike some states that cer fy shovel-ready sites by their own criteria (which can vary widely), Iowa’s cer fica on program leverages na onally recognized standards and an independent, thirdparty site selec on firm.

To become cer fied, sites go through a rigorous review process and all resulting issues must be mitigated within a pre-determined meline. The outcome is a “risk-free” site which accelerates the development schedule for today’s fast-moving business environment.

Though the number of Iowa’s cerfied sites has steadily grown since 2012, having the most cer fied sites is not the state’s goal. “We’re using the most robust cer fica on program in the country,” said Amy Kuhlers, IEDA’s Cer fied Sites program manager. “Our focus on quality, not quanty, is driving the program’s success.”

A smart investment A unique combination of innate characteris cs and strategic ini aves have posi oned our state as a premier option for international businesses. A vibrant economy provides the ideal climate for business growth and innova on, while our central North American locaon, na onally recognized research centers and low cost of doing business give companies opera ng in the state a huge compe ve edge. For all of the great success we’ve experienced with our European counterparts thus far, we’re looking forward to con nued growth and new opportuni es in the days ahead and invite you to give our state a closer look.

For more informa on, please contact opportuni es@iowaeda.com or visit www.IowaEDA.com. europeanbusinessmagazine.com 35

CLOUD, CYBER SECURITY & LEADING IN A THREAT ENVIRONMENT WITHOUT DECELERATING INNOVATION

Wri en by: Heath Muchena

I

n this Q&A, Heath Muchena talks to Ihor Feoktistov, the CTO & co-founder of Relevant Software which operates across Europe & USA offering services ranging from so ware developments, cyber security, ar ficial intelligence & machine learning to DevOps. Feok stov shares his wealth of experience from his so ware engineering advisor background and explores issues around Cloud, cyber security, and how to lead agile teams. Excerpt: What are your top 3 ongoing priori es as CTO in your organisaon?

Today I can note the following priori es:

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• Building a competency control system to ensure the highest quality of our services. Technology and the market are changing, customers come with various requests so this task is ongoing. A skilled team is the core of our company, so it’s the first priority.

• Development of new and improvement of our exis ng services. As the tech world is rapidly changing, we should too. Now we are increasing focus on cybersecurity as our services and as a way to secure our own assets.

• Knowledge sharing within the company. To grow a strong team, I’m working on crea ng a knowledge sharing culture with internal lectures, mentorship, and upskill programs.

What are your top 3 ps for leading remote workforces?

• Create defined workflows. By that, I mean crea ng clear project guidelines for KPIs, teamwork, and repor ng, describing your tasks in detail, se ng precise tasks, and giving detailed answers.

• Communica on. Leverage faceto-face mee ngs. Live face-toface mee ngs play an essen al role in building a solid rapport and personal connec on with a team.

• Avoid micromanagement. Communicate project goals and pain points instead of solutions to them — unless you are specifically asked, or you can see that the team is failing.

What is changing most profoundly in the threat environment and what is your top cyber security best prac ce p?

I believe phishing and social engineering are the main threat, the recent case with Twi er proves it. To prevent that from happening to our company, we provided employees with security awareness training. We also created a guide on email security that we shared with a team and clients.

Our company provides software development services and we include security in the SDLC process. We recommend our clients to implement DevSecOps or hire cybersecurity consultants for part- me at least to perform threat modeling and penetra on tes ng to secure their applica ons early on. We also encourage companies to develop ISMS. This is one of the common prac ces that helps minimize security risks.

Any thoughts on how cybersecurity solu ons for businesses will evolve over me?

I think cybersecurity will become more automated, especially with the rise of AI. The system will be trained to automatically detect and block the a ack with big data and machine learning.

Is your business using Cloud?

Who is your preferred cloud provider? Why? Our company mostly builds SaaS soluons, and, of course, we host them in the Cloud. I prefer AWS as it provides a wide variety of tools and fully covers our needs. Here is a list of the tools we mostly use:

• AWS EC2 Elas c Container Service and AWS Lambda Serverless Compu ng • Secure Storage (Amazon S3) and Amazon Elas Cache • Amazon RDB, Amazon Aurora, Amazon DynamoDB and dozens more • Amazon Service Discovery and AWS App Mesh, AWS Elas c Load Balancing, Amazon API Gateway and AWS Route 53 for DNS • Amazon SQS for message queuing and SNS for publishing and no fica ons • AWS Cloudtrail for API monitoring and Amazon CloudWatch for infrastructure monitoring • Amazon Container Image Repository (Amazon ECR) and other DevOps tools for enabling CI/CD workflows.

• Amazon Cognito for user management.

What are the cri cal points that enterprises need to remember when they consider data storage?

They should at least consider threat analysis and risk assessment.

Where are you on your DevOps journey and how much of it is done in-house and how do you select technology partners for your projects?

We have excellent DevOps and DevSecOps exper se in-house, and we provide DevOps services to our clients while building so ware for them.

Right now, we are focused on implementing security in all areas of our work, including DevOps (DevSecOps), and bringing more automa on to CI/ CD pipelines. As for our clients, we

always recommend building DevOps\ DevSecOps based on business needs and cost-benefit analysis. So, some small pilot projects and concepts can be developed and released without any DevOps specialist, and on another our projects can be fully automated with CI\CD and cybersecurity checks.

How do you measure a good Agile team?

I measure the performance of Agile teams by well-known best prac ces and KPIs: • Sprint burndown. It helps us meet our sprint es ma ons and stay on top of it.

• Velocity. This metric shows how quickly a team can complete tasks in the backlog, which helps make more precise forecasts.

• Planned-to-Done Ratio. It’s another metric that trains predictability for be er sprints planning.

• Escaped Defect Rate. With this KPI, we track the quality of the Agile team work. It shows how many bugs we produced during the development. You can close tasks quickly, but if you do it with bugs, it makes no sense.

• Code Coverage. Another indicator of code quality, which is crucial for us. The code has to be fully covered with tests to minimize bugs on the produc on.

How do you successfully determine efficiency, reliability, or compa bility with exis ng systems of hardware and software and what are some effec ve methods you use to monitor and analyse system performance?

Regarding this, I strongly recommend check Site Reliability Engineering (SRE) topic and read books which Google recommends.

Author bio: Heath Muchena is the Publisher of Tokenised Africa, a decision informing, discussion shaping, Africa crypto market data & analysis report. He is the founder of Proudly Associated which advises interna onal tech companies developing technologies that have use cases focused on emerging economy development, par cularly in Africa. He is also the brains behind Block Patrol – a technology adop on and business development startup that pushes the value of innova on upstream to leverage new opportuni es and foster growth. He is a startup investor and venture partner in several other enterprises. An author of 15 books, he is also a tech journalist.

europeanbusinessmagazine.com 37

Halfway Between Europe and the US:

WHY ICELAND IS THE PERFECT SPOT TO DO BUSINESS

O

en referred to as “the land of fire and ice“, Iceland is known for its stunning landscapes. It’s a country of extreme geological contrasts: Iceland holds some of the largest glaciers in Europe, as well as some of the world’s most ac ve volcanoes.

But there’s more to Iceland than just its sweeping nature.

Iceland is actually one of the most innova ve countries in the world and is responsible for quite a few ‘firsts’: the first elected female president, the first country to force employers to address the gender pay gap, etc.

This small Nordic country with a popula on of fewer than 400 thousand people is also a perfect place to do business.

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“Once every decade or two, I come across a market overseas which is most a rac ve and is worth considering,” said Gervais Williams, a por olio manager at London-based Miton Group, an investment management company. “That last happened in 1995 in Ireland and Iceland is the market I now like.“ And there are more than a few reasons for that for sure.

Iceland is known for its economic compe veness, as it’s regularly ranked among the 30 most compe ve countries in the world. It also ranks 5th globally regarding the quality of the educa onal system and is the world leader when it comes to the availability of the latest technologies in companies and firm-level technology absorp on. Besides,

Iceland is the only country in Western Europe that s ll has considerable resources of compe vely priced, renewable energy remaining to be harnessed.

The country is very open to investment and the business environment there is highly efficient.

In fact, Iceland’s business environment is so good, that in 2020 Doing Business ranking by the World Bank, Iceland ranks 26th out of 190 countries.

It’s rela vely easy to start a business there, and in this category, according to the World Bank, Iceland is also one of the top countries in the world.

And there’s a good reason why: when establishing a business en ty in Iceland, you are required to complete a fairly simple task of applying for a VAT ID number by filling in a twopage form. The process usually takes 2-3 days. What is more, Iceland’s corporate income tax of 20 percent is one of the lowest in Europe and among the OECD member countries.

In order to make things even be er, the government aims to encourage foreign investment in the country, and offers incen ves to companies that are inves ng in commercial opera ons. The investment must meet certain requirements, such as being beneficial for the Icelandic economy and society. This requirement could be met through the crea on of jobs, rural development, export, tax revenues, and knowledge.

Although back in 2008 the country was struck by a financial crisis, Iceland’s clean energy, its marine resources, strong infrastructure, and well-educated workforce provided a solid basis to overcome the economic difficul es and implement all the necessary reforms.

As a result, in recent years, Iceland has demonstrated high and consistent economic growth rates, low infla on, and unemployment.

Although fisheries have been the single most important part of the Icelandic economy for a long me, in the last decade it has been diversifying into manufacturing and service industries, par cularly within the fields of so ware produc on, biotechnology, and tourism, which is the largest Iceland’s export sector by far.

Aside from tourism, Iceland’s data center and technology sectors have been some of the fastest-growing areas of the Icelandic economy. Iceland has a small but vibrant tech scene crea ng innova ve solu ons in gaming, biotech, fintech, tourism, and even the fishing industry.

What is more, Island’s abundant geothermal and hydropower energy sources have attracted considerable foreign investment in the aluminum sector, boosted economic growth, and magne zed some high-tech companies, looking to establish data centers using cheap green energy.

To be more specific, Iceland is recognized as a world leader in the u liza on of geothermal energy. The Swissbased Interna onal Ins tute for Management Development (IMD) considers Iceland’s hydro and geothermal electricity infrastructure to be the most reliable in the world.

Iceland has all the necessary components to ensure and provide certain advantages for the interna onal business community: strong export industry, favorable taxa on system, modern and efficient infrastructures, and a qualified workforce. Speaking about the last one, the labor force in Iceland is rela vely young compared with neighboring countries, with 67 percent of the popula on aged between 15 and 64. It’s also an incredibly safe country to live in. Crime rates and drug use are low compared to most European countries, and more than 95 percent of the police force is unarmed.

What is more, Iceland has an extensive Free Trade Agreement (FTA) with China. Combined with Iceland’s membership of the common European Market, its ideal locaon between North America and Europe, as well as an advanced business environment and infrastructure, this FTA opens up a range of new opportuni es for investors from the US, Canada, and Europe, interested in the dynamic Chinese market. europeanbusinessmagazine.com 39

Post-Pandemic Economic Recovery and New Market Space in China 40 europeanbusinessmagazine.com

O

n July 16, the National Bureau of Statistics released economic data for the second quarter and the first half of 2020. According to a preliminary calcula on, China's GDP in the first half of the year was RMB 45.66414 trillion, represen ng a year-on-year decline of 1.6% in the first half of 2020 based on comparable prices. On a quarterly basis, it fell 6.8% in the first quarter and grew 3.2% in the second. In the second quarter, the economic growth rate turned posi ve and reached 3.2%, a fair growth considering the impact of the COVID19 pandemic.

In terms of investment, from January to June, fixed asset investment (excluding rural households) nationwide reached RMB 28.1603 trillion, down 3.1% year-on-year and 3.2 percentage points less than that from January to May. Private investment in fixed assets reached RMB 15.7867 trillion, down 7.3% or 2.3 percentage points. In terms of consump on, the total retail sales of consumer goods reached RMB 3.352.6 trillion in June, down 1.8% year-on-year (down 2.9% a er deduc ng the real price factor), a decline narrowed by 1.0 percentage points than that of the previous month. Of this amount, retail sales of consumer goods other than automobiles amounted to RMB 2.9914 trillion, down 1.0%. From January to June, the total retail sales of consumer goods reached RMB 17.2256 trillion, down 11.4% year-on-year. Industry con nued to recover in the second quarter. In June, the value added of the industrial enterprises above designated size increased by 4.8% in real terms year-on-year, 0.4 percentage points faster than that of May. From a month-on-month perspecve, the value added of the industrial enterprises above designated size increased by 1.30% in June over the previous month. From January to June, the value added of the industrial enterprises above designated size fell 1.3% year-on-year. Foreign trade has picked up. In renminbi terms, exports rose 4.3% in June from a year earlier, the third consecu ve month of posi ve year-on-year growth.

In dollar terms, exports rose 0.5% in June from a year earlier, a posi ve change from -3.3% in May. On the import side, in renminbi terms, imports rose 6.2% in June from a year earlier, compared with -12.7% in May. In dollar terms, imports rose 2.7% in June from a year earlier, compared with -16.7% in May and -6.8% a year earlier.

According to the data, China's economic recovery in the second quarter was reasonably good, which is more op mistic than the market had expected. Both industrial added value and foreign trade showed posi ve growth.

However, consumption and investment remain weak, with consump on growth remains a concern, and private investment growth has fallen more than the overall rate, indica ng that business condi ons remain poor.

What these figures shown are within expecta on; a er the pandemic, China's economy is at a set pace of slow recovery. Industrial produc on, in par cular, has been significantly promoted by the resump on of work and produc on policy.

From the perspec ve of China's current and future economy, the notable issue is consump on. China is a production-oriented country, but consumption growth in europeanbusinessmagazine.com 41

recent years has become the most important pillar of the economy. In 2019, final consump on expenditure contributed 57.8% of GDP growth, higher than total capital expenditure by 26.6 percentage points. Judging from the data in the first half of the year, domes c consump on is gradually recovering, but the pace is s ll slow (-1.8%). If the impact of the pandemic is brought under control, consump on is expected to return to posi ve growth in the second half of the year. Unlike investment, which has immediate eect, the cul va on and growth of consump on is a long-term work, which cannot become a new support for the Chinese economy a er the pandemic in the short term. It is precisely because the development of consump on is a slow process that we must take a long-term view. China must focus on consump on now and con nue to do so. Only in this way can consumption support China's economy in the future.

During the pandemic this year, the central government of China emphasizes the domestic-international "dual circula ons". With the deteriora on of the external economic and geopoli cal environment, China has taken promo ng the "internal citcula on" as the main direc on of economic development. Researchers at ANBOUND believe that to promote the economic "internal circula on" is to find new impetus to support China's economy in the new economic environment of an -globaliza on.

How can China find new impetus for its economy? In the past, China have 42 europeanbusinessmagazine.com

focused on the development of export processing industries, economic development zones and "railway infrastructure" in the southeast coastal areas.

In recent years, the focus has shi ed to technological innovation, urbanization, consumption and the "new infrastructure". But frankly, none of this is enough to support new growth for China right now. Chan Kung, a scholar at ANBOUND, suggests that China should rethink the geo-economic value of the "Yangtze River Economic Belt" and make adjustments in the strategy of development, spa al arrangement and ming of development in the overall "inward" development strategy in the future.

Chan Kung b elieves that the key strategy beyond the environment for China's economic development is: to resume the construc on of Yangtze River Economic Belt on the basis of high standards environmental protec on; to promote economic development in the west of the Yangtze River Economic Belt; and to build a balanced economic space along the Yangtze River Economic Belt to hedge the huge impact of external environment change on China's economy.

These key strategies will help balance China's economic growth, expand consumption space and drive consumption growth, while promoting and achieving a healthy economic and social transforma on in China.

Es mates by ANBOUND show that the GDP added value gap between the east and west ends of China's Yangtze River Economic Belt is about RMB 12 trillion. However, the

development gap also brings policy space. Once China achieves basic balanced development at both ends of the Yangtze River Economic Belt, the market space in China's central and western regions will burst into a huge momentum of development. Once the market of western regions is fully developed, its added value of GDP in three years is expected to be almost equal to the total size of the local government debt in China. This will provide an eec ve solu on to the troublesome local government debt problem. The development space and poten al are huge and the prospects are promising.

It is an important to develop the Yangtze River Economic Belt in a new way in the context of the deterioraon of the external economic environment and the expiration of the period of the internal massive policy easing. To put it simply, the proposal of developing the Yangtze River Economic Belt is to expand internal demand from a geostrategic perspec ve. Today, China is facing situaons such as an -globaliza on, containment, flood, internal circula on, consump on, etc. Can China's consumption problem be solved without crea ng new market space? Can excess capacity be absorbed? The big push for Belt and Road Ini a ve in the past few years has been to seek outside market space. Whereas, the restart of the development of the Yangtze River Economic Belt is to open up domes c market space. This is a new space worthy of serious considera on by decision-makers.

Final analysis conclusion: China's economy slowly recovered amid the pandemic, revealing an urgent need for new market space.

Large-scale resump on of the construc on of the Yangtze River Economic Belt is an effective way to expand the future market space.

Mr. He Jun takes the roles as Partner, Director of China Macro-Economic Research Team and Senior Researcher.

His research field covers China’s macro-economy, energy industry and public policy

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TENS OF THOUSANDS PROTEST PANDEMIC RESTRICTIONS IN BERLIN

By Ka e Fisher

A

n estimated 38,000 protestors took the streets in Berlin on the last Saturday of August in opposi on to German restric ons to contain the coronavirus pandemic.

Police made around 200 arrests during the two rallies, which took place near federal government buildings.

While the protest was mostly peaceful, violence occurred as police forces clashed with about 3000 far-right ac vists. Law enforcement also had to forcibly remove protesters from restricted areas at the Reichstag building as they reportedly tried to storm the Parliament. On Twi er, the police force stated that several people had entered the staircase of the Reichstag but did not manage to gain access to the building.

Demonstrators marched through the German capital with signs reading 'End the coronavirus dictatorship' and 'Stop the coronavirus madness'; Some also waved far-right banners.

Protesters could be heard chan ng, "Angela Merkel must go" during the heated picket. Police broke up the march near the Brandenburg Gate a er marchers breached coronavirus guidelines, refusing to wear masks or respect social-distancing regulations. Berlin police took to Twitter to announce the decision to break up the protest, stating: "Unfortunately, we have no other option.

We've approached the leader of the demonstra on and informed him that his assembly will be dissolved by the police. All the measures taken so far have not led to compliance with the 44 europeanbusinessmagazine.com

condi ons." The news sparked confronta ons with some demonstrators tossing bo les at police, according to the DPA. One hundred arrests were made. The larger rally, taking place nearby, was not disbanded in accordance with a local court ruling, which declined to prohibit it.

Earlier in the week, city authori es had tried to stop the march from taking place. Due to the fear that all safety measures would be breached in such an environment, Berlin announced a ban on mass protests. This came a er a previous demonstra on by the same organisers did not comply with safety precau ons when rallying at the beginning of August. The ban ini ally sparked outrage from organisers Querdenken 711, a Stu gart-based movement with more than 16,000 followers on Facebook. They pledged to protest despite the ban, with some supporters even calling for violence. One leading rightwing organiser called for protesters to "storm Berlin". However, a German regional court rejected the city's concerns about security and social distancing. On Friday, judges permitted the mass demonstra on in Berlin, overturning the capital's ban. This came with strict instruc on to abide by health and safety rules, including barriers in front of the stages where speeches will be held and reminding par cipants to socially distance. The judge's guidelines for the protest did not include wearing masks.

Leaders of the ini a ve celebrated the court's decision. Michael Ballweg of the Querdenken 711 said "This is a success for our basic rights" in a YouTube video. He urged supporters to

come together for a peaceful protest, sta ng that "those who call for violence are not with us."

Some amongst the many, varied groups that participated in Saturday's rallies called for the resigna on of Chancellor Angela Merkel's government. One of Berlin's top police officials, Andreas Geisel, described the protesters as a vast-ranging group of people with one uniting similar interest. The group included libertarians, far-right extremists, an -vaccine

activists and Reich Citizens (those who deny the legi macy of Germany's modern-day democracy). Geisel explains: "their only common denominator is the sense of uncertainty related to the coronavirus debate".

As COVID cases rise in Germany, the prospect of stricter measures or a second lockdown has created a wave of protest. While the numbers have not reached the overwhelming peaks recorded in some surrounding countries, the infec on rate is on the rise.

The latest case sta s cs show a recent acceleration that has surpassed the numbers seen in April. On Friday, Chancellor Merkel made a statement forewarning the worsening state of the virus in Germany as the summer months end and people are forced indoors. Merkel also appealed to all German ci zens to refrain from any non-essen al travel, sta ng: "This is a serious ma er, as serious as it's ever been, and you need to carry on taking it seriously." Regional authori es

announced â‚Ź50 fines for breaching mask regula ons. The organisers of the Berlin rally, Querdenken 711, say that these virus restric ons are an infringement on cons tu onal freedoms.

The French and Bri sh capitals saw smaller protestors over the weekend. In London, the Telegraph reports thousands of protestors took to Trafalgar Square opposing lockdowns and vaccina ons. In Paris, around 300 people rallied together against government requirements on masks. europeanbusinessmagazine.com 45

European Business Magazine catches up with

Max Studennikoff Ceo and Founder of CC Forum (www.cc-forum.com). The upcoming event will be held in Monaco on 23rd to 25th of September and is much anticipated event that will be focusing on sustainability and we will be looking at the global response to the coronavirus crisis.The event will be looking at existential challenges we are all facing today including climate change, carbon-based economies, overpopulation and poverty to name a few and so the global investment forum will be totally dedicated to sustainability connecting the brightest startups to the savviest of investors.

CC Forum started in 2018, and this year marks its 3rd event and 4th successful edi on. Could you go back a li le and tell us about the very beginning of the CC Forum — how was it born and what was the main pping point for it?

Indeed, the concept of CC Forum was born quite some me ago, but only materialised in 2018 with our first London edi on sub tled "Economy.

Environment. Ethics". A er a ending and speaking at a number of conferences around the world, I have gradually come to believe that there is a sheer need for a new event. A one that would be new in its concept and approach, and so, CC Forum was conceived. The mission and the ethos of CC Forum is convening the world's movers and shakers, global transformers who are united in their zeal to make the world a be er place. Getng them together for regular brainstorming sessions on some of the existen al issues mankind is facing today including climate change, the current state of macroeconomy, government strategies, figh ng poverty, social inclusion, philanthropy etc. In other words, CC Forum is a global pla orm, a club, if you want, for leading impact investors. As such we have o en been accused of eli cism, we have even been tagged as a "green Davos" due to a dense propor on of high net worth individuals a ending.

46 europeanbusinessmagazine.com

I personally see nothing wrong about the forum being referred to as 'elitist' as long as it helps crack down or at least approach cracking down on global problems. One should not forget that CC Forum is essen ally an investment forum focusing on sustainability.

Today, CC Forum is considered to be one of the most an cipated events of the year. In your opinion, what’s the secret behind the CC Forum’s success?

I do not think this would be up to me to judge. And there is hardly any secret involved at all. Whatever recogni on we may have achieved, has been due to a combina on of cri cal factors. First and foremost, the forum's overall vision as reflected in our content including carefully chosen topics and cherry-picked speakers. Secondly, hard collec ve work including by the team, the Organising Committee and the Advisory board alike without whose dedica on none of that would have been possible. And lastly, a bit of sheer luck, as everything should come together at the right place and at the right me.

CC Forum is known for its unique program, and this year’s program in Monaco is no excepon. Could you tell us more about the process of crea ng each year’s program? How do

you come up with the Forum’s workshops and decide on the venue, speakers, etc.?

Last October we held our successful London edi on which saw a twoday conference and a number of networking events. These included inter alia our tradi onal black- e investors' Gala and a dedicated Reception at the House of Lords of the Bri sh Parliament. We also received a wri en royal gree ng by HM Queen Elizabeth II which gave us a considerable moral boost.

Crea ng the content of each edi on is a painstakingly careful process, but also the most exciting. One has to take into account a whole variety of aspects like the expecta ons, aspirations, conceptions and misconcepons of the audience, current state of economics, modern trends etc. etc To draw a parallel, it is akin to the cra of a chef who is making a dish.

The recipe has to be observed and all the ingredients have to come in the right propor ons, the dish does not have to be either two salty or two spicy or too sweet.

What is special about the Monegasque edi on of CC Forum?

In fact, everything is . Or, rather unusual. First of all, the global context. Now, as we are talking at the end of August with only four weeks to go before the event, the current

health and economic crises are clearly leaving their mark on the Monaco edi on. However, there are both nega ve and posi ve aspects to that. The nega vity is that we are an cipa ng a much bigger proportion of high profile speakers than usual to be zooming in. We should also see a larger amount of last minute dropouts. Any sort of governmental regulations may be introduced at any point in me. These are definitely the contras.

However, paradoxically, it is this unprecedented global crisis that can and should be considered as a catalyst for rethinking the world's paradigm. Never in the recent history of mankind have we been able to see how interconnected and interrelated everything is. Covid19, like many other viruses, takes its deep origin in the consumerist approach humanity has, sadly, adopted towards nature. This is my profound convic on. We should act accordingly and without delay if we want to preserve our planet for younger genera ons. A new type of entrepreneur, a one who would be concerned with a wider agenda than making profit, has be fostered.

Under the circumstances we have recently been tagged by journalists as a 'global emergency forum'.

It has not been by chance that His Serene Highness Prince Albert of Monaco has been supporting CC Forum's Monegasque edition as Patron and a keynote speaker. We are extremely privileged and proud to have his backing as he has been a globally recognised figurehead in environmentalism and sustainability.

Could you tell us more about the programme of CC Forum Monaco?

Gladly. It is essen ally a several-day event that consists of a two-day conference including a new format - the shark tank session, networking events (even though we are likely to be wear) and ing Hitchcock-styled masks our traditional black-tie Investors' Gala Dinner and Awards Giving Ceremony. We are privileged to share that the legendary Maestro Placido Domingo has been confirmed to perform at CC Forum's Gala on Friday 25th September.

The coronavirus pandemic had an impact on many big events that were scheduled this year. What challenges did it bring to this year’s CC Forum event?

I would refer to event organising as work rather than a job. Certainly in my case, as I do not happen to have worked for any employer throught my career, but, on the contrary, both employ and hire people who take care of various aspects of our events.

I am busy literally 24/24 7/7 as CC Forum global conferences encompass people from all over the world, in different locali es and me zones. So, one has to be stress-proof .

The biggest lesson I have learnt a er years of organising global events is that one should never rest on one's laurels and that it takes years to build a reputa on.

Speaking about the coronavirus outbreak, you once men oned that “We are now in a sensi ve phase in human development that calls for ac on to be taken imme-

diately.“ In your opinion, what opportuni es could this recent crisis bring to our lives?

In all honesty, organising an event amid uncertainty caused by Covid19 has never been more challenging.

People are s ll cau ous about travelling because of the pandemic, even though we have a trusted health safety partner in place - a company which will be making sure through using their patented and WHO-approved ozone technology enabling to reduce a probability of contagion to zero. So, the a endees are likely to be mainly coming from within Europe. It is s ll very much like walking a ghtrope .

Let’s talk about the future.

What’s your vision for the CC Forum over the next few years?

What do you hope it will become in 10 years?

We have been working hard on making CC Forum the number 1 investment forum on Sustainability, an event that would be indispensable on the annual agenda of any leading impact investor and it is safe to assume that we have tentatively gained this goal. Our long term goals include further posi oning CC Forum as a global platform for companies to make global announcements, for governments to reveal their strategies and for the brightest startups to connect to the savviest of investors. This might well take us another 10 years europeanbusinessmagazine.com 47

WORK FROM HOME REVOLUTION:

VIDEO-CONFERENCING IS ABOUT TO GET EXCITING

H

ealthcare, mobility, entertainment — since the coronavirus outbreak our daily lives and everyday rou nes have changed tremendously. Jeffrey Cole, a research professor at the University of Southern California noted that “Without prepara on or permission, we’re parcipa ng in the greatest social science experiment of all time. In the future, we’ll talk about ‘BC,’ before corona, and after.“ Governments, citizens, and companies have pooled all their collec ve resources to minimize the nega ve impacts of the pandemic while simultaneously working day in and day out to stop the spread. As we’re s ll learning to adapt to new habits — some physical, some digital — there are some aspects that we had to master faster than others and accept as the new normal, perhaps the biggest being telecommu ng.

Tom Eagle, senior research director at Gartner, the world’s leading research and advisory company, believes that

48 europeanbusinessmagazine.com

the COVID-19 crisis will be a “catalyst for transformative work cultures and prac ces that will be significantly characterized by remote work,” no ng that video-conferencing will become an indispensable tool for workforce collabora on and communica on.

Inves ng in digital technologies has become a vital move for many businesses around the globe: since the lockdowns began, we have witnessed an emerging dependency on business conferencing tools, e-commerce, digital learning, VR-based training, and business apps supporting remote workers. Business Wire, a global leader in news release distribution and regulatory disclosure, pointed out that in March alone, video-conferencing apps — think Zoom, Slack, Microso Teams, Pexip, and others — saw a record 62 million downloads. When you think about it, the benefits of video-conferencing tools are mutual for both businesses and workers. According to independent market research

and analyst firms Wainhouse and Lifesize, companies save $11,000 annually per employee by using video-conferencing so ware, while employees save an average of $2,000-$7,000.

Video-conferencing can also reduce travel costs by up to 30 percent and has reduced the need for business travel by as much as 47 percent.

We have a few more impressive numbers for you right here. According to the ResearchandMarkets, the world’s leading source for interna onal market research reports and market data, the global video-conferencing market accounted for $3,85 billion in 2019 and is expected to reach $9,65 billion by 2027, growing at a CAGR of 9,9 percent during the forecast period.

The good news for today’s business leaders is that there are many op ons to choose from: Zoom Mee ngs, GoToMeeting, Google Hangouts Meet, Cisco Webex Mee ngs, CyberLink U Mee ng, Lifesize, BlueJeans Meetings, Pexip, to name a few.

Speaking about the last one, Norway’s Pexip Holding had an interesting year so far, as in May 2020 the video-conferencing company made its stock market debut a er an ini al public offering (IPO) that was more than 12 mes oversubscribed. Pexip is now valued at $942 million — not far off unicorn status.

Pexip, which is used by the US military and German government, has registered a jump in demand for its services since the start of the coronavirus crisis and is already known as a leader in the field when it comes to pu ng data security and privacy first. The Oslo-based startup has been a big favorite for several organizations around the world not only because of its comprehensive security, but also its flexibility. The Irish Court system has been using it during the lockdown, hos ng hearings virtually where a endees can link up via other video-conferencing services, according to Ireland’s na onal broadcaster RTÉ. Giles Chamberlain, chief technology officer of Pexip, noted that Pexip is “the only company that provides Google Meet interop and one of three cer fied companies providing

Microso Teams interop and specializing in the standards-based interop from people like Cisco and Huawei.“ Having the two specialties in one service gives Pexip a unique advantage. Customers can either use it as a tradi onal video-conferencing service or, just like the Irish Court, they can self-host Pexip’s infrastructure and take on responsibility for security themselves. Both use cases have a racted the a en on of Vodafone, Intel, Amnesty International, and many more. “We’ve been going a er the large enterprises from day one, that was always the target,” Chamberlain explained. “We sell to the US military and the US Federal Government. That means we’ve been through something called Joint Interoperability Test Command (JITC) cer fica on, which is a very elaborate cer fica on process saying this stuff is fit for purpose.“ Speaking about the future, many companies and businesses are beginning to realize that the post-pandemic world will be a very different place.

Twi er has already announced that its employees will be working from home forever, while Google and Facebook noted that their employees will

be working from home until 2021.

Hoping to stabilize the coronavirus crisis, many other companies are expected to follow this path as well.

What is more, video-conferencing is going to be a bit different in the future, accompanied by new technologies. One of them, Artificial Intelligence (AI), will join our meeting rooms as a facilitator. Tech leaders are creating machine learning programs that can transcribe audio, count a endees, and provide insights into a endee engagement, helping to focus on the most impac ul pieces of the mee ng. AI is also expected to cut out a lot of noise in the mee ngs, as machine learning algorithms will be able to discern which speaker should be ac ve and ensure that their voice is fully heard, minimizing background disrup ons. Also, with the emergence of 5G, it is very likely we will begin to see AR and VR technology entering the video-conferencing industry.

Commenting on this idea, Magnus Willner, founder, and CEO at ARcall, augmented reality-based remote communica on solu on, noted that “People often get bored when they are on video calls, especially with the volume of video calls which take place per day, it can become quite tedious. However, AR improves and enhances the feeling of remote presence. Using AR could ensure that the person you are cha ng with will appear in a Hologram in your very own physical space. When you put on the AR glasses and connect them to your phone, you will see your room through the glass and when your friend connects. They will show up in your very room and it is a completely different experience.“ And on this note, while we’re s ll trying to adapt to the new normal, workplace expert and futurist Alexandra Levit, whose goal is to prepare organizations and their employees to be competitive and marketable in the future business world, perfectly concluded the situa on, no ng that the new reality of working from home is one we’d have faced in the next decade or so anyways — the pandemic has simply accelerated the process.

And that is a good thing, as it had forced us to face a challenge we were always going to face as hybrid work becomes the new normal. europeanbusinessmagazine.com 49

European Business Magazine catches up with

Odd Sverre Østlie CEO of Pexip where he has been at the helm since March 2018.Pexip is the result of a merger in 2019 between a company called Pexip (founded in 2012), specializing in video infrastructure and Videxio (founded in 2011), a cloud video service provider. The aim was essentially to make video conferencing easy , less expensive and more accessible to everyone on the planet and has now become a key player in the business world of video conferencing which has a dramatic rise on the back of the Covid Pandemic.

Let’s start at the very beginning.

Could you tell us more about Pexip and how did the company reach the tle of “a leading independent technology provider in the video communica ons market“?

The Pexip we know today is the result of a merger in 2019 between a company called Pexip (founded in 2012), specializing in video infrastructure and Videxio (founded in 2011), a cloud video service provider. The respec ve companies were started by a group of industry veterans who saw the need to break down the barriers that were making enterprise-grade video conferencing expensive, and difficult to 50 europeanbusinessmagazine.com

use, manage and scale. The two companies had complementary technology and similar company cultures and as result, I think it’s safe to say that the merger was an unmi gated success. In May 2020, Pexip was listed on the Oslo Stock Exchange, raising 100 MUSD to accelerate both product development and sales coverage.

Pexip offers a 100% software and cloud based mee ng solu on that allows users to “Meet the world with video communica ons as it should be”. That is a bold claim, but customers tell us the reason they chose us was because we have the best solution to enable video to work

everywhere for everyone, making it easy and flexible for both users and IT. This is the reason both larger companies and the public sector prefer our solu ons.

Joining the Pexip’s team a few years ago, you’ve men oned that “it feels like coming home“.

Could you tell us a bit more about those last few years in Pexip? Which aspect of your job do you personally like the most?

It has been a fantas c journey so far - and we’re just ge ng started! The Company has gone from strength to strength due to a combina on of

factors - a talented and passionate team, great technology, a strong partner community - and the world waking up to the benefits of videoconferencing. I have a technology background, both in terms of my educa on and my career path, and I think the thing I personally like the most is seeing how technology like videoconferencing really can have a posi ve impact on the way we work and live. Having been in this industry for several years, this is something which I, and the rest of the Pexip team, have been well aware of for a while. While we would rather have been without Covid-19, the posi ve effect that it has had is that a wider audience has now also seen what we have known for years and we are finally seeing more of a pull rather than push in the market.

That is exci ng, and opens up all sorts of new possibili es for the applica on of our technology. We see that most especially in ver cal markets such as healthcare which has rapidly adopted video of the last months, using it in a way to increase effec veness within healthcare administra on as well as improve pa ent care.

Just a few months ago, in May 2020, Pexip made its stock market debut, which has been more than impressive; the company a racted investors from Europe and the US. How did the opening bell ring feel — for you personally and for the whole team?

It really felt like the beginning of a new chapter. As I mentioned, we raised 100 MUSD and the lis ng was oversubscribed early, showing that videoconferencing is top of mind for investors right now.

One of the most fun things about the ringing of the bell was that we did it virtually. As a result of the Covid19 situa on, it made sense that the CEO of the Stock Exchange ran the bell in person while the Pexip team rang it on video at the same moment.

We had ki ed out the whole company globally with bells at home so that they could join on video and take part in the bell ceremony. Rather than a small group being present at the Stock Exchange as is common

prac ce, we were able to include the whole company, suppor ng one of our core company values, One Team.

I think it is also worth men oning that we completed more or less the whole IPO process by video, really demonstra ng the power of our technology.

IPOs usually involve analysts, investment bankers, and company executives traveling around the world for presentations, creating a hecc and intense schedule. Conducting this IPO process on video significantly increased the produc vity and the reach of the team. Meetings were conducted with investors in over 15 ci es worldwide and working on video allowed for last minute changes and flexibility in a packed agenda. The fact that 100% of the virtual 1-1 mee ngs on the roadshow led to subscrip ons to the IPO also demonstrates that virtual mee ngs can be just as impac ul, even when they involve complex nego a ons. In addi on, our calcula ons show that we saved over 1700 hours -- more than 70 days -- of travel me alone, and over 80 tons of CO2 -- roughly the amount that ten Norwegians use in an en re year!

You once said that “Pexip’s success is due to talented people and a disrup ve product.“ As every success comes with having to overcome certain challenges, let’s talk about that a bit more: up to this day, what were the biggest challenges that the company — and you, as the CEO — had to overcome?

The biggest historical and current challenge comes in fact with the group of talented people we have in Pexip. How do you empower people to decide as much as possible, bring out the best of themselves and their team and be aligned with company strategy? We have codified our approach to this in our company culture, specifically with “Freedom and Responsibility”. In prac ce, it is about leading with joint ambion and the se ng of targets versus trying to micromanage how people reach their goals. It also means removing silo thinking and avoiding

using hierarchy in problem solving and coordina on - let the best people in relevant func ons work and decide directly together. So a lot of freedom, but combined with responsibility to keep others informed and in the loop in order to achieve success.

Are there any new projects on the way that you’re par cularly excited about?

Goodness, there are so many. Our mission is to “empower people to be seen and to engage with each other in a be er way”. At the core of this is our desire to create an outstanding user experience so if I need to highlight one project, it is our explora on of the use of AI to put people at the heart of the mee ng experience.

One example of this is the recently launched Adaptive Composition, which enables real- me face detecon, auto-framing, and op mized use of screen real estate, pu ng every person in the mee ng on an equal foo ng, ensuring that everyone can be seen and heard. While others are a empting to achieve this from a room perspec ve (e.g. zooming in at the camera level), Pexip is solving this at the platform level to provide a device-agnosc solu on that works with the technology you already have, whether our users join a mee ng with a video room system, or from a browser, or app.

This is just the first feature we have on the roadmap using AI and our plan is to con nue to launch technology innova ons which deliver on our mission.

The company’s mission statement is “To make virtual meetings be er than in-person“. As there are many compe tors in this field, in your opinion, what are the main things that make Pexip different?

There are several things I would like to highlight here.

The first is user experience, where we believe we bring an unparalleled quality to virtual mee ngs - pure video and audio quality, but also beyond that in actual engagement with the other par cipants. The use of AI and adap ve composi on in our layouts europeanbusinessmagazine.com 51

is an example of this. User experience is also about reach, where users can be confident an invite to a Pexip mee ng ensures that most people on most types of devices will be able to join the mee ng. This is due to our leading interoperability and bringing devices and so ware from vendors like Cisco, Poly, Lifesize and many others together with Microso collaboration tools, Google Meet and audio conferencing pla orms.

The second is our focus on security, data privacy and transparency.

This has been at the heart of our operations and development since day one and we offer security-first, enterprise-grade video conferencing solutions using industry-standard encryp on and security protocols to maintain privacy and security. We do our utmost to protect the interests of our customers, partners and employees and have extensively documented our security and data compliance principles.

The third is the flexibility we offer to our customers. Pexip can be consumed and deployed in the way that best suits an organiza on’s technology and infrastructure requirements - as a service, in a company’s own instance of Microso Azure, Google Cloud Platform, or AWS, entirely on-premises, or a hybrid solution.

This allows customers to move to the cloud at their own pace and complement or extend their exis ng video conferencing infrastructure or service.

One topic that is inevitable today — the coronavirus pandemic and its impact on various businesses and industries.

What’s it like for Pexip so far?

In your opinion, what were the biggest challenges for the company? And what new, exci ng opportuni es did it bring?

We have touched on aspects of this in the previous ques ons.

In terms of creating new opportuni es, the demand for our technology went through the roof as the crisis hit. Existing customers needed to expand their capacity and new customers were looking for a solution to help them ensure business 52 europeanbusinessmagazine.com

con nuity. Following the immediate spike in demand, we see new customers becoming more aware of what is really important for them to tackle the new normal - the ability to offer a secure, hybrid solu on to their employees who are combining working from home with working from the office. We also see the expansion of video into new business to consumer applica ons in sectors such as healthcare, financial service and government, presen ng a range of new possibili es.

In terms of challenges, brand awareness is a challenge in certain geographies, something we are working to address. In addition, from the perspective of running our own company, we are used to having a video-first form of communica on - but we also see the need to work harder to ensure that the larger propor on of our employees who are now working from home, s ll feel socially connected with their fellow team mates.

That means happy hours, quiz nights and virtual coffee meet-ups have become more prevalent. We do miss the opportunity to meet up for kick offs and other celebra ons in person and video will never en rely replace that need.

Let’s talk about the future.

Where do you see Pexip in 5 years? And the video communica ons market — in your opinion, how it will evolve over the next 5, 10 years?

In five years, our goal is to have augmented Pexip’s posi on amongst the leaders in the collabora on business.

While aiming, of course, to be used by as many as possible, our primary focus is to be really relevant for the customers that value user experience, privacy and security, as well as flexibility and control of their solu on. If we do this right, we should also be able to surpass our financial ambitions of 6x revenue growth within 2025.

The video communications market will evolve over the next decade into addressing more and more use cases for people interac ons.

First, we will see richer and better solutions for “knowledge workers”.

In the “new normal”, people will use video as a primary communication tool, also when they are back in the office.

Furthermore, we will see video being embedded into more workflows, including a lot in B2C. Examples here are anything including remote experts or richer customer service.

Personally, I am very enthusiastic about healthcare and telemedicine, from improving the frontline doctor-pa ent interac ons all the way to advanced surgery.

Not to men on the impact video can have on sustainability...

In summary, I am really op mis c and passionate about video improving our quality of life - and even saving lives in the years to come.

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Business success is often achieved through adaptability.

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Protect your business against bad debts, go to atradius.com europeanbusinessmagazine.com 53 Credit Insurance | Debt Collections | Business Information

Building a finance function from the ground up

G

ood financial management is critical to the success of any business. Yet small business owners o en handle their own bookkeeping for reasons ranging from fear of sharing sensi ve financial informa on, keeping staff costs in check, or wan ng complete control.

These reasons, while undoubtedly valid for start-ups and smaller opera ons, grow increasingly imprac cal as your business grows, explains Carlo Gualandri, Founder and CEO, Soldo.

The most successful entrepreneurs learn quickly that accounting and finances are the lifeblood of business and deserve to be treated as such.

Se ng up a finance func on is therefore cri cal for planning, especially forecas ng on financial ma ers and predicting cashflow – an indispensable requirement to remain profitable. But when is the right time and where do you start, especially if you’re a start-up about to enter a growth phase?

Do the basics first The three essen al building blocks for an emerging finance func on are a bank account, payroll and accounting so ware. They will form the founda on for the subsequent work your finance department will build upon and should, therefore, cater for your business’ current and anticipated future needs.

Apart from being a legal requirement, a dedicated business bank account makes it easier to manage cash flow, pay suppliers, sort out taxes, and calculate profits. It’s therefore sensible to use it to its fullest poten al. However, before setting up your financial func on, determine whether your current business account is compatible with the technology you want to use, offers the services and integra ons you need, and whether the banking fees are compe ve.

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Treat finding a business bank in the same way as you would any other business supplier. Research the market and shop around for the best price, service, and benefits for your business.

To supplement your business cash account to help you do more, consider addi onal tools such as so ware for payroll and accounting.

Take the me to examine the various so ware offerings to find a soluon that best aligns with your needs.

Cloud pla orms, for instance, make it easy to collaborate online with your team from anywhere, while staying on top of your business’s cash flow in real- me.

Small business, big data Mining the trove of financial data your firm generates daily can yield useful informa on for managing your business more effec vely. Ensuring your finance team has accurate, and even real- me data at its disposal will enable them to iden fy opportuni es or inaccuracies and act on it quickly.

Reliable data is also a prerequisite to attract potential investment. Having an accurate picture of the money flowing in and out of the business can be the key to demonstra ng financial health and organisa on, o en making it easier to convince investors of the viability of your proposi on. Investors will be more willing to part with their cash if the business has an efficient and prepared finance department.

Managing spend A way to track and regulate expenditure is the next item the fledgling finance department would need.

Many start-ups overlook spend management early on and track expenses through employees only, which could

quickly spin out of control as the company spends more and employs more staff.

Opera ng without an efficient spend management solu on is a setup for failure and can severely hamper decision making. Research by Soldo found that nearly a third (29%) of growing businesses in the UK and Ireland struggle when choosing what business priori es to spend on. Almost a fi h (18%) said that they didn’t have

enough financial insight to make effec ve spending decisions.

Setting up the finance department presents the ideal opportunity to address spend management and get complete financial visibility. Forward-looking businesses should also consider spend automation, since automa ng repe ve tasks will free up me for the finance department to focus on more complex, analy cal tasks.

It’s all about scalability Although it feels challenging to predict what’s coming next in the current climate, businesses can s ll make decisions while se ng up a finance department to ensure it can scale alongside a growing business. The first point is to select so ware that is likely to be supported for the foreseeable future.

Cloud-based pla orms present a big advantage here since they are much

more likely to receive ongoing a enon and even regular updates. Automaon is another necessity for scalability as it takes care of many of the tasks that scale linearly with a growing workforce, such as data input and receipt tracking.

Without an effec ve finance func on, a business is much more at risk of failure. A slick finance department running at full lt can increase profitability, streamline processes, spur growth, and ensure long-term sustainability. europeanbusinessmagazine.com 55

EUROPEAN BUSINESS MAGAZINE INTERVIEWS

Romain Gerardin-Fresse (front cover image) Ceo and Founder of GFK Conseils-Juridis talks about globalization and how his firm advises governments and multinational companies globally about strategy. GFK Conseils-Juridis has corporate clients in numerous countries throughout Europe, the US, and the Middle East, and today is known as a “real solutions maker“.

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Today’s world is changing. Geopoli cal developments are complex no ons that have shaped the modern world. The last century has brought about a new paradigm; that of globaliza on, and in par cular through a technological advances. You are a pure product of globaliza on, with a presence on the 4 corners of the globe. What is your take on this?

You are totally right. The term globaliza on corresponds to the free movement of goods, capital, services, people, technology and informa on. So, ye we are a pure product of globaliza on! But to perfectly understand it, we have we need to do some socioeconomic history. The technological dimension of globalisation is undoubtedly able to demonstrate the impact on the evolu on of internaonal affairs throughout history.

Indeed, the emergence of new technologies has constantly influenced international relations and has brought about a new dimension to globaliza on many mes before. And this is fascina ng.

The installment of a universal time measure, such as the 1884 Greenwich meridian is a perfect example of this; sailing conven ons became uniformized and everyone now referred to their own meridian in universal me.

This is an evolu on which is similar to a technological revolu on, even though it is rather an intellectual one.

A unanimous decision allowed for this revolu on to apply to all na on states.

In a similar manner, the 1891 trans-border phone call between Paris and London revolu onized the status quo.

It is now possible to exchange informa on in real me even from a distance of 500km, for example , place an order in a different country without sending an emissary ahead of me. It was a major advance in technology, a new great step for the globaliza on.

Similarly, the facilita on of the movement of people and goods by air saw the light in 1903, with the first successful flight ini ated by the Wright

brothers, which was followed in 1919 by the democra sa on of trans-border air services.

This innova on significantly reduced the me taken for the transport of goods and workers and removed the iner a caused by physical and geographical distance. A major advance?

In the same way, the rea on of the television in 1927 allowed for a true opening to the world and drove a different percep on of geographically removed communities. This is the free circula on of ideas, of information and the discovery of new cultures. Subsequently, the invention of the microchip in 1959 and the ARPANET in 1969 brought about a new era, that of mul media and digital technology, which in 2004 led to the crea on of Facebook.

Something that s ll seemed surreal decades ago, and that played a role in the evolu on of civil socie es The technological revolution also touched the healthcare industry.

Indeed, the discovery of penicillin

by Alexander Fleming on therd September 1928 transformed the history of medicine.The geopoli cal context of England was not favourable at the me, and he le for the United States, where the American laboratories Merck, Pfizer and Squibb began with his adventure.

Production on an industrial scale allowed medicine to cure many diseases such as tuberculosis and syphilis, having a worldwide impact which is also fascina ng.

More recently, containeriza on, intermodal freight transport system using containers, started in the 1960s, reinforced globaliza on. Using containers with standardized dimensions, has considerably contributed to the strengthening of interna onal trade.

Knowing and studying these past examples, one learns about the evolu on of the globaliza on and allows us to an cipate and orient our current strategies intelligently.

Take the example of France. GFK Conseils is headquartered there, supports many business leaders, and mul na onals wishing to set up there. Would you say that

the country is well governed, and remains fully integrated in the process of globaliza on?

The World Bank defines governance as “the way in which power is exercised in the management of a country’s economic and social resources for development”. Kemal Dervis, former Minister of Economy in Turkey, administrator of the United Na ons Development Program (UNDP) and vice-president of the World Bank, wrote that good governance is essen al for the growth of a country, because it “determines whether people deploy their talent in the pursuit of innova on, or in lobbying for poli cal protec on”.

The 2019 Doing Business Full Report notes that France carried out certain reforms in 2017 and 2018, and notably cites those rela ng to the digi za on of land and property registraon systems.

These are not the only reforms that have been carried out, but are likely to help facilitate procedures, thus attracting foreign investors to the na onal territory.

The moderniza on of land and property registra on was also the subject of a report submi ed on November 12, 2018 by the Commission for Land and Property Registra on Reforms.

It is explained that “Land registration originates from a simple idea: the acquisi on of a right to a building (property, mortgage ...) and is effecve when it is made public.”

This process must be transparent, making it synonymous with good governance, according the defini on by the World Bank, which indicates that it is “the way in which power is exercised in the management of economic and social resources’.

With technological globaliza on, it is unthinkable that such a service would not become accessible online.

The lack of modernity of such a service cons tuted a real obstacle and was not compa ble with the modernity imposed by globaliza on.

For many years, the bureaucracy and iner a of the French system was a real barrier to foreign direct investment (FDI), and greatly dissuaded investors. europeanbusinessmagazine.com 57

These reforms are therefore essen al for France to maintain its compe ve posi on in the context of globalizaon, which depends in part on the “effectiveness of governments and the quality of policy development and the delivery of u li es ” as Kaufmann et al. said.

However, the country s ll has major reforms to carry out in this direc on.

Like any crisis which accentuates the difficul es of a country, the Covid19 crisis revealed what President MACRON himself described as “flaws and inadequacies”, referring directly to the scandal which occurred with the supply of masks, indica ng that “lessons would be learned”.

These “loopholes” are partly induced by a hyper-centralization of power from which France has suffered for centuries, which the Decentralizaon Law of 1981 began to address.

Indeed, this law aimed to give more flexibility to local communi es.

Likewise, the report I quoted to you above indicates that France has iniated reforms aimed at lowering its taxa on.

It is true that the crea on of the CICE by the amended Finance Law of 2012 was a real relief for the companies that could benefit from it, and was intended to reduce the labor cost of French companies - very high - compared to foreign companies.

This measure was therefore intended to ensure that the public authori es, through a tax reduc on, bear the cost of compe veness while maintaining the social benefits of employees.

Extremely onerous for public policies (its cost is es mated at 100 billion euros in total), the CICE was abolished on January 1, 2019 and replaced by a reduc on in social contribu ons for employers.

Since October 1, 2019, the general reduc on in employer contribu ons applies to unemployment insurance contribu ons.

But this measure has its limits.

If it has an impact on low-wage sectors and where the cost price is strongly impacted by labor costs, on the other hand, it is much less effecve in high added value sectors.

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Also, with progressive contribu ons proportional to salary, employers might be tempted not to increase their employees.

There is therefore a limit of these indicators.

They only reason in the abstract, and do not take into account the perverse effects that may result.

GFK Conseils-Juridis has worked with many foreign governments.

Could you comment on this parcular experience a bit more — how do you approach new clients like these, how do you operate and help them? What are the main challenges for the company when it has to navigate through different poli cs and interna onal rela ons challenges?

For the foreign governments in which we intervene, we are developing new governance strategies.

Our greatest pride stems from certain texts that we have helped to dra , in order to bring out innova ve entrepreneurial or ecological protection schemes, which had not yet been iniated.

I am thinking of a specific example, where we developed a tax system which was submi ed to a vote at the Na onal Assembly of the concerned country, to encourage the emergence of infrastructure, and was therefore of great public u lity for projects in the country.

It’s an accomplishment.

For example, we are also responsible for promo ng the crea on of a free digital zone in Obock, in the Republic of Djibou , and we are working with the Prime Minister on the establishment of banking ins tu ons in this country which has joined the OECD. Generally speaking, a well-applied legal system that establishes and defends property rights, increases the a rac veness of FDI (Foreign Direct Investments). Strong property rights, which offer protec on against expropria on, encourage investment.

Distribu ng produc on factors more efficiently (land, labour, capital and business) as well as financing start-ups

and enabling them to enter the market and grow the economy, is our role in the governments we advise.

Maintaining democracy, characterized by the separation of legislative, judiciary and executive powers ensures effective procurement through the rule of law.

GFK Conseils-Juridis also helps mul na onal companies with their strategies for interna onal expansion. How do you find the best op on for each company and help them enter a new arena? Do they always trust the firm and agree with the prepared strategy?

Dunne and Schmidt said that free trade promotes peace and can create mutually beneficial economic partnerships for all states. And they are right.

Transna onal coopera on can bring mutual benefits.

First of all, we carry out an in-depth audit which is a ma er of economic intelligence, to understand the corporate purpose of the company, its sector of activity, and its desire for expansion.

I will not tell you how exactly we assess and es mate the poten al threats and opportuni es of se ng up a business in a given geographic area.

But what I can tell you however, is that we pay particular attention to the development of international rela ons and the orienta on of public policies in the states concerned.

States that have far-sighted poli cal strategies and resilient institutions have, as Robinson and Acemoglu point out, be er results in managing the forces of globaliza on. The rise of what has been called the “compe ve state”, adapted to meet the demands of globaliza on, is embodied in countries with open, state-run market economies.

It is the case of Singapore.

Take the example of Djibou , a country that I know well. The governement has undertaken many reforms since 2017, including the establishment of a central office for business start-ups, the reduc on of regulatory fees , the

supervision of sale and tax administration, as well as easing access to credit, through a broadening the scope of assets which can be used a guarantees in a way that now let it include future assets as an extrinsic guarantee in and of itself.

They are elements which encourage the FDI. An addi onal element that strengthens confidence in the country’s ins tu ons, is the establishment of a specialized division within the court with the sole purpose of resolving commercial cases. Adop ng a new Code of Civil Procedure which regulates voluntary concilia on as well mediaon procedures in cases of conflict is something that further strengthens confidence in the ins tu ons.

The definition of strict timeframes regarding legal proceedings and the strengthening of accessibility and par cipa on of creditors to resolve conflictual situa ons is highly valued by entrepreneurs for its added security. It makes the environment more attractive and more favourable for eventual expansion strategies abroad.

The companies we advise follow our recommenda ons, because they know that we integrate all paradigms, including the security of their assets, before giving our “green light” to their interna onal expansion plan.

Being an effec ve crisis-management company also means having strong collaborators and partners when it comes to law, taxa on, communica on, and other important aspects. How do you find the necessary partners in different countries? Also, what is the secret of keeping strong rela onships with them?

The collaborators - internal or external - on whom we rely are chosen with care and are part of the added value of our business model which allows us to provide “a high-level legal-financial all-inclusive package”.

The quality of the links created with private banks, large firms, influen al groups and investment funds are all assets that strengthen our actions and our credibility.

We have been able to diversify, and as you pointed out, do not limit ourselves solely to the legal aspects.

In reality, we have become an operaonal “Swiss Army knife” for our customers.

The recogni on of our values and our reputa on has enabled us to forge solid links with people in the world of private banking, management funds, and with big names in lobbying.

From Monaco to Luxembourg via London, Geneva or Hong Kong, our firm has nego ated partnerships with historic and renowned financial decision-making centers.

These partnerships open the way to unprecedented opportuni es for our clients, who are assured of benefi ng from the best investment, a finely tailored development strategy for their assets, a high level of return and above all, the efficiency that they are looking for.

Ironically, we have even been called by these same banks and investment

funds to advise on legal, legisla ve or strategic aspects. This helps to forge privileged rela onships and to maintain the excellence of our services.

To be the best player in the field, always staying on top of current events and geopoli cs is an absolute necessity. How does GFK Conseils-Juridis manage to do that? Do you have certain tac cs when it comes to immediate es ma on of the new, unexpected situa ons?

This is a very relevant remark.

We carry out an exhaus ve watch, we keep ourselves constantly informed, we are in regular contact with influen al members in “authorized circles”.

Geopolitics is a variable in its own right in our profession. An cipa ng and adapting our strategies in real me is an absolute necessity.

Decisions, and posi ons taken by governments, a er having been advised to do so by interna onal organizaons can shape the world.

I will give you a concrete example of transna onal coopera on in solving a major problem which has changed the landscape of economic rela ons.

Since May 2000, the World Diamond Council (WDC), the Civil Society Coali on (CSC), the Diamond Development Initiative (DDI) and the African Diamond Producers Associa on

We have always put the utmost importance on being available and responsive, and we carry out constant monitoring in all of our ac vity sectors to be able to offer a cu ng-edge service.

This is the leitmo f that we repeat to each of our collaborators.

General administra on, taxa on, dispute resolu on, handling of day-today affairs are all tasks that must be accomplished with speed, efficiency and confiden ality. europeanbusinessmagazine.com 59

(ADPA), work together to address the issue of conflict diamonds, also called “blood diamonds”.

Rough diamond is arguably one of the highest value-to-weight commodi es in the world. For example, the “Lesedi la Rona”, discovered in 2015 in Botswana, weighs 1,109 carats and was sold for 53 million dollars (45 million euros) to a Bri sh jeweler.

For nearly 100 years, the extraction of these stones has allowed the rebels present in different conflict zones of Africa to finance their policy of destabiliza on of the power in place, causing geopoli cal repercussions on a global scale, which then leads to political instability, insecurity, famine, and more.

The United Nations has therefore decided to curb this phenomenon by encouraging, the crea on of a cer fica on process rela ng to the origin of rough diamonds, which they called the Kimberley process.

It aims to ban diamonds from conflict zones.

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This strategy worked rather well, and in zones where this was previously a major issue such as Sierra Leone, Angola, Liberia and the Democra c Republic of Congo (DRC), things have improved significantly, and the situation has become more controllable. This is par cularly truly in Angola, where blood diamonds served as funding for the rebel groups during the civil war. A serious brake was put on the access to funds through this process and helped calm the situa on.

Likewise, Sierra Leone has seen its legal exports increase 100-fold since the end of the war in 2002.

Like any process, this system has its limits.

The first comes from the fact that there is no way to chemically trace a stone.

Control relies on the full contribu on of local actors, who are responsible for checking the legality and veracity of the informa on and documents transmi ed, from the mine to the diamonds’ departure for export.

Inefficient controls in certain zones mean that some diamonds are still extracted from mines located in conflict zones and are smuggled into neighbouring countries, where a cerficate is issued to them, allowing to “whitewash” their origins. Corrup on is also an issue, and fragilizes the process in Zimbabwe for example.

When suspicions about compliance with the process in his mines were voiced, Zimbabwe’s President Robert Mugabe threatened to withdraw from the Kimberley process altogether.

Ian Similie, who par cipated in establishing the Kimberley process said himself that the project had in away, failed. He states “ The Congolese government has no idea of the provenance of 40% of its diamonds. They could be coming from Angola, Zimbabwe or even Mars”.

The limita on of this kind of “common interest” agreement is that it must be respected by all who have adopted it, in order for it to be effec ve.

For example, if we consider that the United States is the largest importer of diamonds in the world, one could think that it would be enough for them to demand strict compliance with the process, and then follow it up with inspec ons that would penalize countries that do not respect it.

I gave you this example because it covers - like diamonds! - several facets; What was authorized becomes prohibited on the influence of international organizations, which entails a need to adapt its method. But as always, some manage to defy the prohibi on by circumven ng it. However, penal es for negligence can be significant. We must therefore be vigilant.

In addition, the beneficial effect is the investment opportunity offered by countries that benefit from this new regulation. Finally, be careful, because the process has its limits, and it is necessary to analyze the whole so as not to overreact posi vely, which could have an opposite effect on the recommended investments.

This is the role of GFK Conseils-Juridis holds: understanding geopolitical developments, to optimize the results and minimize the impact on clients, depending on the situa ons.

The outbreak of Covid-19 has impacted nearly every industry out there. What about the consul ng and crisis management industries? In your opinion, can this outbreak bring some new, unexpected challenges that the GFK Conseils-Juridis has not faced before? Émile de Girardin, a 19th century French poli cian, said that “To govern is to foresee; and to foresee nothing is to run to ruin ”.

Effec ve crisis management is considerably improved if you an cipate various situations and outcomes ahead of me. This is where constant legal, poli cal and economic monitoring is par cularly useful and effecve, saving me and efficiency on the long term.

Let’s take the example of certain large groups that we have supported during this crisis: we have been in contact with suppliers in order to temporarily

suspend financial obliga ons under Force Majeure, solved the issues regarding salaries in accordance with relevant legisla ve texts, and established clear communica on pathways for customers.

Simultaneously, we reorganized the structure of work, rethought applicable schemes, whilst also strengthening their cash flow. A crisis can cause major changes if parameters aren’t properly controlled.

The key is to maintain composure and to carefully plan each step of the strategy: secure assets, contain the damage and prepare for the a ermath.

Defining the direc on of the strategy to be adopted is essen al, as is considering the specifici es of crisis itself, and of the customer’s profile.

I don’t think we will necessarily face different challenges than those we have encountered so far. Crisis management is constantly evolving in the way it addresses problems, but the pa ern remains the same; counter the immediate consequences, resolve, repair, and prevent in order to preserve.

But I do think that this crisis will perhaps lead to the emergence of new pa erns, driving a different approach to management, produc on and consump on, which will allow for similar situa ons in the future to be avoided.

And it is, by the way, absolutely necessary.

The planet cannot support the current modes of production, and an alternative mode must be developed. If at first glance it is a ma er of a responsibility towards humanity, an unstoppable financial logic is added to it; There will come a day when producing according to our current methods will become much more expensive than producing with the help or with renewable and clean energy. If even Saudi Arabia, home to one of the world’s largest oil reserves, seeks to produce most of its electricity from renewables and nuclear power by 2040, that’s fine. that the stakes are high and that the argument can prosper.

There is a plethora of studies showing the cost of climate change; A CitiGroup study found that rampant warming could reduce global

gross domestic product by up to $ 72 trillion, while another report by the journal Nature found it could reduce average global incomes by almost A quarter. A four degree Celsius jump would also hit sectors like agriculture, real estate, mber and emerging market equi es. All in all, it would create a toxic environment for businesses large and small.

A report from the University of Cambridge suggests that equity por olios could drop as much as 45% as climate fears spill over into global markets.

I think this “ this new order of things” should be seen as a real opportunity.

An IFC report, for example, found that Eastern Europe, Central Asia, the Middle East and North Africa could support up to $ 1 trillion in investments related to the climate by 2020.

Renewable energies are not the only climate-related sector poised for growth. Businesses can find opportunities in green building and help ci es prepare for climate change. By 2050, more than 6 billion people will live in urban areas, crea ng a pressing need for a mul tude of infrastructure services, such as water and sanita on. In addi on, 400 million homes are expected to be built by 2020, a poten al boon for construc on companies that can incorporate green technology into their construc ons.

A recent study that looked at a sample of 1,700 large interna onal companies found that the money they invest in reducing greenhouse gas emissions has an internal rate of return of 27%, demonstrating the great potential related to it.

As an expert in interna onal rela ons, how do you consider things to have evolved since 1990?

With end of the Cold War, and with the collapse of the Soviet bloc in 1991, ended 46 years of a bipolar world, where the established order was a division into two blocs with the United States on one side and the USSR on the other. Since that period, three economic spaces have gradually been shaped.

The first is a capitalistic and open space, mainly Western. The second is europeanbusinessmagazine.com 61

a socialist and closed space, and the last is a “third world economic order”, halfway between the two other precepts. As this change took place, globaliza on became the major concern of the United States.

This concern was not unfounded.

President Bill Clinton had realized that there was a serious connec on between market expansion and promoting democracy. Theory stated that globalization would make the world more prosperous, but also more stable, freer and more liberal.

Since then, America’s so power has grown considerably. In the 2000s, the US was s ll the most powerful military power in the world and the “American style” was also becoming an increasingly a rac ve benchmark to reach. However, realists like Christopher Layne were convinced that 62 europeanbusinessmagazine.com

such homogeneity could only be temporary, and events proved him right.

September 11th, 2001 ended America’s sense of untouchability.

Unprecedented in history, and of a psychologically trauma c scale, the terrorist a ack led by al-Qaeda ushered a shi in US poli cs.

The Republican President Georges W. BUSH has ly decided to launch a “war against terrorism”, with ill-defined outlines. This caused a new “evil” to emerge in the eyes of Americans: Iraq, Iran and North Korea.

Even if the campaign in Afghanistan had been unanimously approved, the invasion of Iraq in 2003 as a response to alleged possession of weapons of mass destruc on - received a mixed a reac on by the interna onal community and caused disagreements within the European Union. On March 18,

2003, Jacques Chirac, the French President, declares that “Iraq does not represent an immediate threat to jus fy a war. To privilege force over law, would be taking a heavy responsibility.”

This started the decline of American soft-power, which worsened with the financial crisis of 2008 which had global repercussions and shook up exis ng pa erns.

Even if a er the 2008’s crisis the mentali es have not really changed, the cau ous behaviours gained ground.

Yet, the importance of the US is always economically phenomenal at the worldwide scale. For example, when US consumers began to spend less and save more, global growth fell drama cally, demonstra ng the importance of the US in the world economy.

In the 1990s, the fall of the Berlin Wall and the disappearance of the Communist party also raised ques ons about the need bring a new dimension to the European project. The Dublin European Council of June 1990 set up two Intergovernmental Conferences, one on the “Economic and Monetary Union”, the other on a “Poli cal Union”.

A year later, on December 9th and 10th of 1991, the Maastricht European Council was held. After more than thirty hours of negotiations, on the night of December 10 to 11, 1991, twelve countries managed to agree on a treaty establishing a new entity, “The European Union” (EU).

Going beyond the European Community’s ini al objec ve of achieving a common market, the EU had a political voca on.

The Treaty of the European Union was therefore signed on February 7, 1992. The European Union is based on three “pillars”: • the first pillar, from of the European Community (which replaces the EEC), is made up of the integrated policies of the existing Communi es, and has extensive suprana onal powers; • the second pillar lays the foundaons for a common foreign and security policy (CFSP) • the third pillar relates to coopera on in jus ce and home affairs (JHA).

The European Economic Community (EEC) loses its economic connota on and becomes the European Community (EC). This modification implies a change of overall perspecve, including the ability to move and reside freely within the countries of the European Union. Later, in 2009 during the Treaty of Lisbon, this was pushed further, addressing subjects such as immigra on, criminal law and police coopera on.

The E.U has since then con nued to integrate new countries. This created some tension, especially when the E.U began to integrate Romania and Bulgaria, whilst talks with Turkey were at a very advanced stage.

These disagreements, as well as the 2008 crisis, encouraged the rise of na onalism and Euroscep cism.

These behaviours led to Brexit.

The fact that Boris Johnson, a notorious Euroscep c, became Prime Minister of the United Kingdom, says a lot about the evolu on of the percep on of the European Union since the 2010s.

I remember that on the front page of the newspaper Libera on on January

2020, the writer and philosopher Bernard-Henri Lévy has wri en “Europe is in danger”.

Before him, one year sooner, Mario Vargas Llosa, Nobel Prize for Literature, stated in The Express “’Na onalism can destroy Europe”.

However, the EU remains of center of the most compe ve economies in the world (6 out of the top 10 in the world), and the home of several world-class companies (30 out of the top 100 in the world).

Whilst this is all going on, a new power is rising: China.

China has become the second largest economy in the world and is expected to become the largest in terms of GDP at some point in the 21st century.

Its method is clear: besides undergoing important economic reforms, it attracts foreign capital while expor ng increasing quan es of goods to the enormous markets of the West.

In 2011, the Asian Development Bank predicted that if Asian economies could sustain growth for another 40 years, adapt to the global economic

and technological landscape, and continue to create comparative advantage, Asia would not only play a larger role in the global economy, but it would no longer be home to poor countries.

This is fascina ng to know that actually, chinese manufacturing workers now earn more than their Brazilian, Argen nian and Mexican colleagues, and have a wage which reaches half that of a Portuguese worker ($ 4.50 / hour).

The Financial Time exposed in 2017 that between 2005 and 2016, the average hourly wage of a Chinese manufacturing worker rose from $1.2 to $3.6, an increase of 300%.

However, China must avoid Thucydides’ trap, and is well aware of it.

It is quietly developing important diploma c rela ons with many countries in Africa and South America, and is establishing, in its own way, a Chinese so power.

Thus, it can be asked whether the U.S and “the European empire”, do not risk gradually fading away, in favour of Chinese domina on.

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What happens to innovations in a crisis?

(Lothar Stadler, August 2020)

How entrepreneurial innovation programs count during times of adversity – a European perspective.

T

he Covid-19 pandemic is making its mark throughout the world, serious economic consequences can hardly be es mated, companies introduced short-time working and many draw comparisons with the period of reconstruction work after the Second World War. Nevertheless, op mism is also no ceable, and it is o en said that every crisis also offers opportuni es. But does this also apply to innova ons?

1) What impact does a crisis have on innova ons?

Crises generally have a negative effect on economic development.

Let us take the financial crisis of 2008/2009 as an example for comparison. With the beginning of the financial crisis in 2008, many countries and companies around the world faced financial challenges (Dona ello & Ramella, 2017). Although countries

reacted with investment incen ves in a first step, many companies were forced to follow suit with cost cu ng and restructuring.

Globally, the economic output (GDP) of the most important economic na ons, comprising 37 OECD countries, fell by just under 2% between 2008 and 2009. In Europe (EU28) a decline of 2.1% was recorded. In 2010, the values of 2008 had already been caught up again, in Europe they even were 1.45% higher than in 2008.

But what are the implications of drawing a parallel with innova on?

Expenditure on research and development can be used as indicators of innova ve strength and technological progress.

Figure 1 shows the impact of the financial crisis in 2008/09 on global R&D. Star ng from 2008, 1,093 billion USD were spent on research and development worldwide. In 2009, this was reduced to 1,079 billion USD, a

decrease of 1.13%. In 2010, global R&D spending was already back at the previous level of 2008. In the US and Europe, R&D spending remained virtually unchanged during the crisis.

Compared to the decline in global economic output, R&D spending therefore declined only slightly during the financial crisis. The ques on therefore arises as to whether crises are really a strong barrier to innovaon, or perhaps even an accelerator of it. We therefore look at a second comparison parameter: patent applica ons.

Patent applica ons are an indicator of the degree of innova on. It is therefore necessary to analyse how the financial crisis of 2008/09 specifically affected the development of patent applica ons at the European Patent Office. In Figure 2 we see the steady development of European patent applications from the 28 EU home countries of inventors. Over the last 15 years, patent applica ons from all EU28 na ons averaged 65,000 per year.

It is par cularly interes ng to see how visibly the financial crisis of 2008/09 had an impact on patent applica ons. europeanbusinessmagazine.com 65

As if signalled, patent applications fell by 5.7% in 2009, rose by 7.6% in 2010, and then fell again un l the figures in 2013 se led at pre-crisis levels. The picture was similar in the US. There were fewer patent applica ons in 2008 and 2009, and then sharp increases again.

The data show that the financial crisis had a nega ve short-term effect on the number of patent applica ons. In a long-term view, patent applica ons worldwide rose again over the last decades. In 2019, the total number of patent applica ons in Europe reached a record high of 181,406, with about 45% origina ng from European countries. 72% of patent applica ons came from large companies, 18% from medium-sized companies and 10% from universi es. The leading technical fields in 2019 were digital communica on, medical technology and computer technology (figure 3).

Thus, crises also have an effect on patent applica ons, which leads to the following conclusion: First, patent applica ons are mainly borne by large companies. Secondly, inven ons need 66 europeanbusinessmagazine.com

a lot of me for development, but also for the formula on of patent claims.

Therefore, crises can have a temporal effect on patent applications, as can be seen in the spike of the application curve. The curve also shows that many innova ons were launched during the main crisis period in 2009, which was reflected in the number of patent applica ons shortly a erwards.

Based on the previous figures alone, the hypothesis that times of crisis have a par cularly posi ve effect on innova on is not supported. Rather, it is shown that European patent applica ons are roughly parallel to economic development, both in terms of gross domes c product (GDP) and R&D expenditure. Thus, it can be seen that all curves rise slightly again over the years and that crisis effects compensate each other over decades.

The OECD (Organisation for Economic Co-operation and Development) concluded that although the global financial crisis of 2008/09 had a nega ve impact on business innovation and R&D, there were many different degrees of varia on in the

performance of countries, industries, companies and types of innova on.

(OECD, 2012).

However, despite all economic and cyclical adversi es, crises contributed significantly to extraordinary developments. Numerous pieces of evidence show that periods of extreme difficul es also led to innova ons and the founding of new companies. For example, 18 out of 30 companies in the 2010 Dow Jones Industrial Index were founded during an economic downturn (Chakravor , 2010). Disney, Microso , Hewle -Packard and Oracle were also founded during an economic downturn. (OECD, 2012) The Kauffman Indicators of Entrepreneurship (Kauffman.org) shows that the number of start-ups in the US was higher in the deepest recession of 2009 than in the 14 previous years, including the technology boom of 1999-2000.

Sco D. Anthony, a leading US strategy consultant, said in a 2009 Harvard Business Review that he was grateful for the 2008 crisis, because instead of killing the innova on wheel, it forced

a state of mind that made it turn even faster. He argued that the years 20052010 would go down in history as years of truly important innova ons (Scott, 2009). Historic innovations from 2009 included (Su er, 2009): • SpaceXFalcon1: the first satellite of a private operator was successfully launched into space • Smartphone technologies were connected to “real- me” internet • Pra &Whitney: 15% more fuel-efficient aircra engines • iPS cell technology - Reprogramming of cells gave hope in cell therapy Moments of crisis have historically always contributed to giving strong impulses for innovation. This can be seen when looking back further in history, be it the Manha an Project, the first moon landing, problem-driven innova ons in the wake of the energy crisis of the 1970s, or the emergence of environmental inia ves in the last decade (Chakravorti, 2010, Taalbi, 2017). They all have one thing in common: they have always produced radical innova ons that dominate not only companies but en re economic sectors.

2) Radical innova ons challenge established technologies As early as 1939, Joseph A. Schumpeter, one of the most important economists of the 20th century, came up with the concept of "Business Cycles", which are supposed to explain the appearance of innovaons according to cycles of different lengths. His theses were widely discussed in the field of economics.

They s ll find significance today in the explana on of global economic cycles; even the a en on paid to the start-up scene for structural change has its roots in Schumpeter's theories.

In fact, many hypotheses have been examined as to when innovation occurs in par cular. Some explain the occurrence of innova on by the fact that it is driven by hardship in economic crises or by economic downturns in long waves. Other theories on the emergence of innova on tend to assume rising demand and a posi ve

outlook during deep recessions. General statements on the development of innovation always have to face criticism, because they can hardly be clearly proven by economic history. Although individual hypotheses have been proven on the basis of economic data, in fact innova on is always simultaneously dependent on a large number of influencing factors. (Taalbi, 2017; Archibugi, Filippe , Frenz, 2013) Studies on the driving forces of innova on were largely carried out on the basis of case studies, which of course also provided insights. In summary, we can name four types of incen ves for innova on: (1) problems, (2) technological opportunities, (3) market opportuni es, and (4) ins tu onalised search for performance improvement (Taalbi, 2017).

During the financial crisis of 2008/09, especially emerging economies in Asia, such as Korea and China, seized their opportuni es and showed their innova on strengths. They con nued on their consistent path and outperformed other industrialized na ons by building on their structural strengths.

Unfortunately, the last interna onal crises have always had particularly nega ve effects on Southern European countries. Nevertheless, Italy, Portugal and Spain show a par cularly interes ng innova on paradox: despite the weaknesses of instituonal systems and defensive policies of governments, companies have been able to innovate even in the

hardest years of recession. (Dona ello & Ramella, 2017) How can this " Southern European paradox " be explained? A study in 2017 showed that by intensifying compe on and innova ve efforts, companies are likely to trigger addional proac ve forces in the fight for survival. In other words: "necessity is the mother of all innova ons" (Taalbi, 2017). Harsh crises in these countries led to "crea ve destruc on", which forced many older companies to close down, while at the same me many new, more efficient companies were founded, including many innovave start-ups. (Dona ello & Ramella, 2017).

In Italy, Portugal and Spain, 70% of manufacturing employment is concentrated in medium-sized enterprises and in the low-technology sector. Produc ve structures are seen as one explanatory approach. Here, innova ons develop in the form of efficiency optimisation and further development of exis ng structures.

These innova ons arise from practical experience during production (learning by doing), during experiences with customers (learning by using) and during interac on (learning by interac ng). This con nuously strengthens the innovative power, even under difficult conditions.

(Dona ello & Ramella, 2017) In such systems the opera onal logic is very different from that in systems where radical and disruptive innova ons are sought, because the

Figure 1: global R&D expenditures (OECD, 2005-2013) (Source: Gross domes c spending on R&D, Total, Million US dollars, 2005 – 2013, Source: Main Science and Technology Indicators, h ps://data.oecd.org/rd/gross-domes c-spendingon-r-d.htm, 2020-07-14)

europeanbusinessmagazine.com 67

investment. Unstable macroeconomic situa ons can delay investment in innova on. Under such conditions, large firms and banks are traditionally busy stabilising their debt levels and react with a certain hoarding of liquidity, which is detrimental to all types of investment, including innova on.

Financial restric ons arise as a result of crises and lead to an additional weighing of investments.

Figure 2: European patent applica ons of the EU28 (European Patent Office, 2004-2019) (Source: Patent applica ons to the European Patent Office, Source of data: European Patent Office (EPO), online data code: SDG_09_40), 2020-07-13, h ps://ec.europa.eu/eurostat/ databrowser/view/sdg_09_40/default/table?lang=en)

produc on sector is less exposed to science and technology.

European innova on leaders such as Sweden, Denmark, Finland, Germany and the Netherlands can make be er use of their ins tu onal innova on systems in mes of crisis and drive more disruptive and radical innova on.

Disruptive innovations describe a process in which new players challenge established companies, o en with fewer resources. This can be done using two different strategies.

A new player can ini ally focus on a small market segment, even with simpler and cheaper solu ons than customers would typically be used to from established companies, and later tries to conquer the large market by means of product improvements. Alternatively, new players create a new market that does not yet exist and try to win customers for it. Disrup on is not just technology alone, but a combina on with a business model innova on. (Hopp, Antons, Kaminski, Salge, 2018) A typical disruptive innovator was Netflix. Founded in 1997, Netflix plunged into the niche market of film distribu on by mail order. With the help of new technologies, including streaming over the Internet, and a new business model, Ne lix opened up new opportuni es for on-demand films very early on. Netflix is now a acking other entertainment providers and disrup ng en re industries.

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While addi onal innova ons, such as a 5th razor blade, only bring competitive advantages in the short term, radical innovations have a long-term effect and may replace other products, change customer relationships and bring new business opportuni es.

Radical innovations create new knowledge and market completely new ideas and products. Studies on radical innova ons show that they are related to changes in organisa onal structures and behaviour to market new ideas. Radical innova ons transform a market and the way people act in the market, but also require completely new technical skills and new organisa onal structures. One example of a radical innovation by established companies is the joint car sharing business model of BMW and Daimler (Share Now), where joint forces were bundled and a completely new mobility pla orm was created.

(Hopp, et al, 2018) “Change is the greatest source of business opportuni es" (Peter Drucker)

3) Which developments emerge in the current situa on?

Typical pa erns of previous crises are also evident in the current situa on.

Uncertain es as barriers to investment In general, uncertain es about market conditions act as barriers to

At the beginning of a crisis, companies are usually concerned with completely different issues than innovaon or new business models. At first glance, it is all about keeping the system running, es ma ng declines in turnover, implementing optimisaons, stabilising tense situa ons and op mising produc on plans.

Surveys of companies in various industries in May/June 2020 confirmed that in the first months of the Covid-19 pandemic, managers tended to priori ze issues such as safeguarding and stabilizing the core business and increasing efficiency rather than focusing on innova on (Bar Am, Furstenthal, Felicitas, Roth, 2020). Nevertheless, there are increasingly more reports that now might be the right me to invest in innova on.

Pre-crisis weaknesses reveal themselves If countries or companies already struggle with structural weaknesses before a crisis, crises o en exacerbate them. The financial crisis of 2008/09, for example, revealed the pre-crisis weaknesses of countries (e.g. Greece, other South/Eastern European countries), sectors (e.g. automo ve sector) and types of innova on (e.g. financial innova on).

Even before the current pandemic, the German automo ve industry was already under considerable pressure from new technologies such as digitalization and electric mobility. A decline in demand due to the Corona crisis is intensifying the sense of crisis further. Deep cuts have now become public at Daimler, for example, and many traditional jobs are under threat. (Daimler, 2020)

Courage in investment is rewarded "One cannot rely on compe tors cutng back their R&D spending in a crisis" (Klaus Marhold, Vienna University of Economics and Business).

Studies do not show a clear picture of the automatic reduction of investments in companies during crises. O en, budgets for R&D in large organiza ons are set for years ahead.

Companies with a clear focus on the market and strong knowledge of their customer needs invest in mes of crisis. These companies hope to achieve a dispropor onate effect. For example, 19 out of 50 Austrian companies with the highest R&D expenditures increased them between 2008 and 2009. In Germany, about one third of all companies increased their innovaon ac vi es counter-cyclically during the financial crisis of 2008/09.

High-tech companies that relied heavily on innova on were rewarded by the financial crisis. This successful trend then con nued in the following years. (OECD, 2012; Bar Am, et al, 2020; Dachs, Peters, 2020; OECD, 2012).

The current crisis as a driver of new ideas In April 2020, the peak me of the first wave of the Covid-19 pandemic, the sudden crisis triggered a global innovation process that delivered ultra-rapid results in a variety of technologies, from 3D prin ng for protec ve equipment, to rededica ons of en re households to home offices, sports equipment used for medical purposes, to tech-based innovaons in contact tracing (Marhold, Fell, 2020).

Based on applica ons from Korea and Singapore, many European countries followed with the development of their own Corona Apps. These ini aves produced many different types, including distance meters and contact warning vests. Whether these developments will be transformed into "post-crisis solutions" remains open to ques on.

A long-term study of the driving forces of innova on in Sweden during the third industrial revolu on 1970-2007 shows that innovations are not so much the result of con nuous efforts,

but rather arise from responses to individual events, historically specific problems and new technological possibili es (Taalbi, 2017).

Milton Friedmann, one of the most important economists of the 20th century wrote: “Only a crisis - actual or perceived - produces real change. When that crisis occurs, the ac ons that are taken depend on the ideas that are lying around.“ Of course, the question arises whether these are temporary perspectives, or whether such effects will transform into normality a er the end of the crisis. Take online shopping, for example - the pandemic has given it an enormous boost. Ebay reported an increase in sales of 18% compared to the same period last year. It can be assumed that these developments will not decline and will transform this consumer behaviour to a new normality.

Online retailers, who have emerged as winners from the current pandemic, are focusing on sales automaon and new genera on marke ng and are consistently pursuing their

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projects for new logistics centers, which can be deduced from the ac vi es of general planners.

The trend towards digi za on is further strengthened As early as the beginning of the 2000s, many industrial companies realized that digi za on would dras cally change en re branches of industry. General Electric CEO Jeff Immelt said as early as 2014: "If you went to bed last night as an industrial company, you'll wake up this morning as a so ware and analy cs company."

Meanwhile, sensors, data genera on and networks influence a large part of the world popula on. This crisis accelerates digi za on efforts of the last years. Out of necessity, many applicaons that had been in the pipeline for some me were quickly implemented during the "lock down" period. Business processing in the cloud, working remotely and video conferencing became standard prac ce in today's business world.

Everybody is now familiar with video conferencing software from zoom, google meets, teams, etc., up to smaller video chat providers.

These were already created before the current pandemic, but experienced a real "boost" during this me and today it is impossible to imagine daily work without them. Video production companies have had an extremely high demand for live productions with streaming for a few months.

Due to the Covid-19 pandemic, it is prac cally impossible to hold larger events like in recent years. Trade fair organisers, event technicians and event companies are facing completely different general condi ons since the outbreak of the pandemic.

Necessity is the mother of invenon and so many switch to virtual possibili es. Media technicians have found solu ons to make such events run flawlessly over the internet. In just a few months, great innova ons have been made, which at least create a li le new perspec ve in this industry. New providers for virtual event technology are for example: Hopin.to; Onevents.at; Meetyoo. com, etc.

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O en it is simple so ware adaptaons that create great added value in mes of a pandemic. As a digi zaon partner for Salesforce, Salesfive adapted the CRM system for some customers, such as a large Swiss hairdressing chain. Addi onal func ons in the exis ng CRM system enable them to record their customer contacts with the hairdresser in charge exactly according to me and place so that any Covid-19 infec on chains are easier to trace, while complying with official regula ons.

Another example of digi sa on are online tutoring portals, which experienced a par cular hype during the Corona crisis and got new investment funding recently. (GoStudents, 2020).

4) What can be done to promote innova on?

The spirit of innova on as corporate culture Companies with a strong culture of innovation can benefit from their mindset in phases of economic downturn. Many execu ves are aware that innovation has never been more important than it is now. And the speed at which the economy is spinning today has con nued to accelerate. A corporate culture that strongly encourages innova on sees innovaon as a discipline in its own right with six interlocking components: 1. an innovation strategy detailing objectives, tactics and required resources 2. an innovation process that iteratively finds new business opportunities and shapes them into growth 3. structures that foster the promotion of new ideas and provide a suitable place for innovation 4. a supporting process that helps to look beyond the core activities of the company 5. a generally known understanding of innovation for a common orientation 6. dashboards that help executives manage innovation efforts Table 1: Components for the development of an innova on culture (based on: Sco , 2009)

The world's most innovative companies of 2020, such as Alphabet, Apple, Amazon, Microso , Samsung, Huawei, Alibaba, Tesla, Cisco, Nike, Salesforce, etc., may differ substanally from their compe tors due to their dis nc ve innova on cultures.

Their success confirms the argument that innova on is not only important, but even essen al for survival in the medium term.

Using the crisis as an opportunity In June 2020, the Ins tute for Entrepreneurship & Innova on at Vienna University of Economics and Business has conducted a survey among 130 Austrian managers on how to get through the crisis with new innova ons, and 90% of the respondents answered that they had iden fied at least one business opportunity during the crisis. Even more than one third of the managers iden fied several new business opportunities.

Especially innova ons and flexibility of employees and customers helped companies to overcome the challenges of the COVID19 crisis (E&I Survey Report, 2020). It remains to be seen whether the business opportuni es iden fied have subsequently been realised.

In a McKinsey study from June 2020 with 200 US companies from different industries, more than 90% of the execu ves interviewed said that they expected the Covid-19 pandemic to fundamentally change the business over the next 5 years. Almost as many assume that customer needs will change rapidly due to this pandemic (Bar Am, et al, 2020).

The US University Tufts examined hundreds of companies that were founded during crises or recessions or reinvented under difficult circumstances. The Dean of the Business School, B. Chakravorti, published answers to emergencies in the business world in 2010, in a me of severe recession, in the Harvard Business Review. He defined 4 main types of opportuni es and prospects that entrepreneurs usually see and seize in an adverse business climate. All those who operate in today's complex business environment can learn from these simple principles.

Opportunity 1: Combine unused resources with unmet needs Opportunity 2: Surround yourself with extraordinary people and form unorthodox coalitions Opportunity 3: Find small solutions to big problems Opportunity 4: Think in platforms, not just products Table 2: Ac on pa erns for entrepreneurs (Chakravor , 2010) Enabling innova on with fewer resources?

Giving employees the freedom to realize their dreams may motivate them additionally, drive innovation and poten ally saves money.

A crisis must weld employees even closer to their companies and companies must provide incen ves through special framework condi ons.

If there is less budget available for "in-house" developments, spin-offs with employee participation are a possibility. Even necessary staff reduc ons may be used by companies to support employees in the establishment of new companies and to retain them as future partners. Nokia has set a benchmark here in recent years and used the crisis of its own company to develop many spin-offs from the group.

Iden fying customer needs – crea ng value This crisis affects the collective, namely everyone in the world. Soluons o en do not lie with one company, but must be found first. To find solutions, one must be open and innovative, and listen to customers, because those affected are also changing and may have ideas about how they would like to have certain things solved in prac ce. Companies should be open to innova on topics right now. Sales and customer service people should take part in innova on processes because they should know the needs of their customers best. In the current situation companies should ask their customers, whether their requirements have changed and if exis ng solu ons are s ll up to date. The resul ng informa on must be integrated into the

innova on process. The video conference tool zoom for example added all new features such as recording, chat rooms, etc. because of customer sugges ons.

Great things can be achieved through coopera on The solution often lies in cooperation, because cooperation creates new forces and opens new horizons.

Cooperations with research institu ons some mes add the missing specialised know-how to the company. Coopera ons between companies and universi es repeatedly led to product developments, new business models and innova ons. Many big businesses today started as university projects and many graduates of research ins tutes can be found in well-known start-ups.

An unconven onal example of coopera on between two powerful rivals in the current crisis is the cooperaon between Apple and Google to define a common Bluetooth standard for tracing apps.

A coopera on of direct compe tors offers a special strategic op on as a possibility to develop radical innovaons in dimensions that might otherwise never be achieved. A recent experimental study on "coopetion" in the field of self-driving cars

with Volkswagen, Daimler and Tesla shows that managers in search of solu ons for radical innova ons prefer network coopera on. The prerequisites for this are clear formal rules of the game, within the framework of "open source" projects or subsidised cluster programmes that offer an intensive exchange of progress and can even increase core competencies (Czakon, Nobody, Guest, Kraus, Breakfast, 2020).

Many countries have established government incentive programmes to promote innovation. In crises, these programmes are also on top of the political agenda. Countries that ac vely promote innova on at na onal level can take posi ve steps to steer a country through a crisis. It is also apparent that countries with strong innovation programmes are better able to get through crises (Dona ello, et al, 2017).

Start-ups as a driver of innova on For established companies the crea on of addi onal innova ve capabilities can be achieved through a start-up mindset. Start-Up based innova ons are less a acked by crises. Why? Needs and constraints are drivers of innova on. Small teams are faster than large teams. Teams with limited budgets make decisions faster

Figure 3: Top 10 of technical fields of patent applica ons 2019 (EPO, 2020) (Source: Trends in Paten ng 2019, Source: EPO. Status: 27.1.2020. epo. org/patent-index2019, h p://documents.epo.org/projects/babylon/eponet. nsf/0/26767BC3D0AEB95AC125852300359E0E/$FILE/epo_patent_index_2019_ infographic_en.pdf, 2020-07-21)

europeanbusinessmagazine.com 71

than teams with open budgets. Tight milestones force teams to ques on cri cal assump ons faster and facilitate reorienta on. (Sco , 2009) Start-up hubs and accelerators successfully offer programs to match companies and start-ups. They offer established companies a community and an ecosystem that promote exchange among like-minded innovators, provide access to start-ups as well as inspira on for new ideas.

Outside input can help companies to innovate by genera ng ideas, structuring them and looking into the big world of innova ons.

of employees temporarily dedicate their me to an innova on project.

People from different disciplines formulate goals, validate assumptions and define roadmaps. “Rapid prototyping" and pre-tes ng can help to achieve faster innova on results. Typically, during five days, developers, sales representa ves, customer service representa ves, engineers, corporate strategists, students, etc. meet in a relaxed atmosphere and proceed according to the "design sprint" scheme (figure 4).

The involvement of customers, key accounts and "early adopters" in innova on programs offers possibili es for "open innova on" and provides opportuni es to develop new business models. Mentoring and modera on from experts help to achieve results quickly and efficiently.

CONCLUSION Many factors influence innovation.

Historical events, such as crises, initially appear to pose a certain risk

In search of innova ons intrapreneurship programs may offer a possibility for innovations with a start-up community and a new mindset for established companies. Currently intrapreneurship mentoring programs experience a sharp increase in demand. Start-up collabora on is more popular than ever before among many established companies. “In mes of crisis, speed is of the essence and collabora on with start-ups helps enormously with innova on.” (Anton Schilling, Pioneers) Design Sprints offer an innovation method from Silicon Valley, inspired by Google, in which teams 72 europeanbusinessmagazine.com

Figure 4: Design Sprint Scheme (Pioneers, 2020) (Source: Pioneers.io, 07/2020)

to innovation. However, if looking back in history, it becomes clear that extraordinary events have always led to radical innova ons and major developments. Today, developments from these periods dominate companies and entire industries. Even in the present situa on, opportunies are opening up - despite all the tragedy. Clearly, digi za on is drawing further development dimensions.

Small steps are evident in many sectors. Perhaps there are already great innova ons in the making, which are not yet obvious. Right now, there are many unconventional ways to promote innova on, from design sprint to coopera on with innova ve ecosystems or the crea on of new innovation cultures. It takes courage, commitment, persistence and a good por on of op mism!

SOURCES Archibugi, Daniele & Filippe , Andrea & Frenz, Marion, 2013. "The impact of the economic crisis on innova on: Evidence from Europe," Technological Forecas ng and Social Change, Elsevier, vol. 80(7), pages 1247-1260.

Chakravor , Bhaskar (2010). Finding Compe ve Advantage in Adversity, Harvard Business Review, 10/2010. ht t p s : // h b r. o rg / 2 0 1 0 / 1 1 /f i n d ing-competitive-advantage-in-adversity.

Czakon, Wojciech, Niemand T., Gast J., Kraus S, Frühstück L. (2020). Designing coope on for radical innova on: An experimental study of managers'

AUTHOR Dr. Lothar Stadler, 44, is an entrepreneur from Austria, a former sales executive in the machinery and railway industry, and lecturer at Vienna University of Economics and Business. He provides services in global sales for technology-driven customers and adds value in innova on programs.

Lothar.stadler@explorvent.com www.explorvent.com

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Institute of Entrepreneurship and Innova on, WU Vienna, June 2020.

GoStudents (2020). 8,3 Milionen Euro Investment für E-Lerning-Startup GoStudent, der brutkasten, 2020-0623. h ps://www.derbrutkasten.com/ gostudent-investment/?ref=scrolled1 Hopp Chris an, Antons David, Kaminski Jermain, Salge Torsten Oliver (2018). What 40 Years of Research Reveals About the Difference Between Disrup ve and Radical Innova on, HBR, April 2018. h ps://hbr. org/2018/04/what-40-years-of-research-reveals-about-the-difference-between-disruptive-and-radical-innova on?registra on=success Jordan Bar Am, Laura Furstenthal, Felicitas Jorge, and Erik Roth (2020): Innova on in a crisis: Why it is more critical than ever. McKinsey&Company. 2020-06-17. https://www. mckinsey.com/business-functions/ strategy-and-corporate-finance/ our-insights/innovation-in-a-crisiswhy-it-is-more-cri cal-than-ever Kauffman Indicators of Entrepreneurship, Kauffman.org; h ps://indicators. kauffman.org/ Marhold, Klaus and Fell, Jan, (2020).

Format Wars Hampering Crisis Response – The Case of Contact Tracing Apps During COVID-19 (May 16, 2020).

OECD (2012) : Innova on in the crisis and beyond, OECD Science, Technology and Industry Outlook 2012; https://www.oecd.org/sti/sti-outlook-2012-chapter-1-innova on-inthe-crisis-and-beyond.pdf Schumpeter J.A. (1939). Business Cycles. A Theore cal, Historical and Sta s cal Analysis of the Capitalist Process, Vol. 1, McGraw-Hill Book Company Inc, New York (1939) Sco , D. Anthony (2009). A er Lehman: How Innovation Thrives in a Crisis, Harvard Business Review, 09/2009. h ps://hbr.org/2009/09/ how-innova on-thrives-in-a-cr?referral=03759&cm_vc=rr_item_page.bottom#comment-sec on.

Sutter John D. (2009), The Top 10 tech trends of 2009, CNN, 200912-23, h p://edi on.cnn.com/2009/ TECH/12/22/top.tech.trends.2009/ index.html Taalbi, Josef (2017). What drives innova on? Evidence from economic history, Research Policy, Volume 46, Issue 8, October 2017, Pages 1437-1453. europeanbusinessmagazine.com 73

The Business of Love: Why Da ng Apps are Old News and Matchmaking Services are Booming

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hey say that it’s so easy to fall in love, but hard to find someone who will catch you.The idea that a da ng pool can be analyzed as a marketplace or an economy is both recently popular and very old: People have been describing newly single people as “back on the market” and analyzing da ng in terms of supply and demand for genera ons.

One of the world’s oldest professions is matchmaking, and given the role of technology in our everyday lives, it’s no surprise that the da ng industry is booming. We have a few numbers for you right here. According to the Reportlinker, an award-winning market research solu on, the da ng services market size was valued at $6,7 billion in 2018 and is expected to reach $9,9 billion by 2026, registering a CAGR of 5,2 percent from 2019 to 2026. The online da ng services market is also on the high-rise right now and is es mated to grow by $2,01 billion during the 2020-2024 period.

However, more and more people start to acknowledge the hard truth that finding true love and a significant other online is extremely difficult. “You need a lot of swipes to get a match, a lot of matches to get a number, a lot of numbers to get a date and a lot of dates to get the third date,” explains Sco Harvey, editor of Global Da ng Insights, the online da ng industry’s trade news publica on. While almost half of the adults under 35 living in the US and the UK have tried some form of digital da ng, and the mul billion-dollar industry increased by 11 percent in North America between 2014 and the start of 2019, there are growing signs that people get more and more tired of this particular

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da ng method. A BBC survey in 2018 found that da ng apps are the least preferred way for 16-34-year-old Britons to meet someone new. What is more, according to SurveyMonkey, the world’s leading provider of webbased survey solu ons, roughly 56 percent of adults view dating apps and services as either somewhat or very nega ve.

As people have been turning away from dating sites and apps, the demand for professional matchmaking services has been increasing.

Today, this seemingly outdated concept is flourishing among wealthy, time-poor professionals in the US, Europe, and par cularly in Asia, where matchmaking phenomena have been taking the single’s market by storm over recent years. It is rumored that the top Chinese matchmaking agency charges as much as $650,000 to find prospec ve spouses.

However, John Madigan, an industry research analyst at IBISWorld, noted that “It isn’t likely that matchmaking services will overtake the online and mobile da ng market.“ To be more specific, da ng apps like Tinder, Hinge, and Bumble, as well as da ng sites like Match.com, eHarmony, and chemistry.com have comprised the biggest part of the industry’s market share, leaving matchmaking just 12 percent.

But Madigan has no ced that “dating app fa gue“ is driving demand for matchmakers.

Professional matchmaking for people with high standards and far more money than time has become an a rac ve alterna ve for a good reason: using a third party to help find love guarantees one-on-one, highly customized, and personalized matchmaking services. Interes ngly, back

in the days, personalized matchmaking services looked different compared to now: matchmakers worked exclusively with male clients, and the standard business model was largely built on the premise of bringing potential brides to rich, single men. But not long after, the trend shi ed, and women began to turn to matchmakers to make their romanc dreams come true as well. In fact, industry sta s cs report that women typically comprise 60 percent of matchmaker customers, according to the Matchmaking Ins tute, the only state-licensed matchmaking school in the world.

Speaking about why more and more wealthy individuals decide to turn to professional matchmaking services, Kailen Rosenberg, CEO, and founder of The Love Architects, the elite matchmaking consultancy firm,

noted: “Think of it this way, mass amounts of people are happy driving Toyotas. However, a select few want a Bentley. In the end, people truly commi ed to finding their soulmate will turn to the services that support them.”

Elabora ng further, online da ng for the masses can jus fiably be likened to a marketplace without regula ons, where anyone can create whatever impression they want, without scruny or consequences. “Matchmaking is a whole different story. Online da ng is not secure, people can profile themselves however they wish and there’s no screening whatsoever. Effectively, you have to find a needle in a haystack,” noted Inga Verbeeck, Managing Director of high-end matchmaker agency Berkeley Interna onal. “What we do is completely the opposite, we get to know our clients, we filter for our clients to search for compa ble quali es,

and, while chemistry is something we can never foretell, you generally have a certain intui on about who will fit with whom.”

Matchmaker and rela onship expert Irene Valen , the founder of Valen International, a company that has been serving the world’s most eligible singles for more than 30 years, offered her perspective previously no ng that “The more that you have to offer, the more difficult it is to find the right partner.” And some mes, you just have to admit that a li le help in the overwhelming, unse ling, intriguing da ng scene is the best solu on.

Romance and relationships don’t come easy nowadays, and this is the exact reason why the da ng services industry has become so popular.

Matchmaking has a precise process of matching two people together, usually for possible marriage. To achieve

that, professional matchmakers, who are experts in the field of helping people find love, really take me to get to know their clients one-on-one, coordinate dates, and will guide them in the process of finding and being in a right rela onship. Turning to a professional matchmaker company also means that people working there have studied and been trained for their job — to help single individuals explore romance and find love without fear or hesita on, leading them to the path of a roman c rela onship.

“It’s not about eli sm, it’s about commonality,” said Ryan Law, founder of BluesMatch, a company based in London that matches Oxford, Cambridge, and Ivy League graduates. “If you speak the same language, use the same points of reference, and share a similar understanding of politics and the world, it just makes a big difference.“ europeanbusinessmagazine.com 75

European Business Magazine catches up with

Irene Valenti pioneer of high-end, traditional matchmaking and founder of Valenti International. With the pace of life becoming increasingly busier, many are finding it harder to meet that special someone. This is where Valenti International excels, with a matchmaking process that is highly refined, classy, and personalized.

Valenti International has just won the International Matchmaker of the Year award for 2020 from our executive readers and below we find out the secret to their success.

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Let’s start at the very beginning. Valen Interna onal was founded back in 1990 and successfully operates to this very day. Could you tell us how did you come up with an idea of star ng this business? What was the very beginning like for you, what challenges did you have to face and overcome at that me?

Irene Valen (IV)During my travels in 1989, I con nuously heard amazing women and men similarly talk about their difficul es in mee ng the right partner. From this, the entrepreneurial light came on for me and I set my sights on finding the solu on. What I found was that there were many high quality individuals searching for a life partner, the true challenge however was in pairing them together. How would they ever meet each other?

Would their paths ever cross? This is how Valen was born, became a huge success, and great opportunity to do something that I really love - which is helping people.

Growing up in my family, matchmaking was a natural part of my life. It was talked about and conducted - in fact, my father matched my siblings and I to our partners. Having matchmaking in my blood, a strong intuition, and determined nature, I felt confident that I could take this idea and make it successful. My experience as an entrepreneur and mother and robust people skills further for fied my op mism about this.

Getting off the ground was not easy, as I had just relocated to California from Canada and had limited resources. Also, when I originally talked about the idea of crea ng a high end matchmaking service, most tried to discourage me. However, matchmaking was a foreign idea to most at that me. Through various friendships, I was introduced to the Rancho Santa Fe community, which happens to be one of the most desirable zip codes (92067) in the country and where our worldwide headquarters is located to this day.

I will share more details about this, some of the joys and pains of starting a new business idea and building an empire in my new book, coming early-2021.

Today, Valen Interna onal features the Valen Equestrian Club, Valen Matchmaking, and the Valen Founda on — 3 completely different, but successful businesses. What’s the secret formula for making them all so successful?

IV-Giving back is always on my mind and heart - especially when it comes to children and the elderly. Children are so o en vulnerable and powerless and the elderly are o en lonely and le behind. This inspired me to start a 501c3 non-profit in 2003, which benefits both popula ons.

We were looking for a new home in the RSF area, as we had outgrown our original office spaces. The solu on was a beau ful and tradi onal mansion with enough space to house our en re team which had grown from one to over twenty in a short period of me. The bonus was this property had a huge equestrian facility.

This solu on turned into something amazing for the brand and resulted in having a beau ful property for fundraising events as well as a strong presence in the horse community.

Valenti Matchmaking, the Valenti Founda on, and the Valen Equestrian Club complement each other in every way due to similar clientele.

It is a handful but juggling and multitasking is so much fun when you are surrounded by such beauty and love. However, Valen Matchmaking always comes first and our clients are our number one priority.

Looking at the business empire that you’ve created over the years, do you think that there are some par cular skills that you need more than others in your job?

IV- At the inception of Valenti, I already had years of experience as an entrepreneur with a strong background in marke ng and business and the ability to build a business empire from ground up. A vital big part of the Valen recipe is how matchmaking is in my blood. It is something that is difficult to learn, yet came natural to me, due to being born with into it.

This is complimented by great intuion, love of people, and great people

Irene Valen and the Valen Ambassadors at the Breeder’s Cup World Championships in 2017. europeanbusinessmagazine.com 77

skills and ed together with a sense of responsibility, passion, self belief, and a never give up a tude.

Valen Matchmaking has been the leader in professional matchmaking for more than 30 years now. Its core philosophy is ‘Matchmaking in The European Tradi on’. Could you tell us more about the company’s philosophy and what does it mean?

IV-Matchmaking in the European Tradi on is a philosophy based on old world values. In previous mes, families would commonly seek out the services of a village matchmaker to find a suitable partner for their unwed daughters and sons. The matchmaker’s task would be to pair these individuals based on key elements of personality, educa on, class, family background, values, and life goals.

I have melded the flavors of this tradi onal approach with a modern and intui ve touch to create a process that is both me-tested and has also thrived in this progressive and digital era.

Tell us more about the Valen Matchmaking clientele — who usually decides to turn to the company for help and what do they all have in common?

Over the years, what was one experience with the client that you remember as a good lesson to this very day?

IV- Our clients are atypical and have everything except that special someone to share life adventures with. Self made men and women of all ages who 78 europeanbusinessmagazine.com

are accustomed to hiring the best assistance within their professional and personal lives. Furthermore, they typically arrive at Valen when they are most interested in finding a special rela onship and willing to invest in themselves for this.

A wonderful memory is my first day in business with my very first client.

I explained to her that she would be my first and only client to start. Her response was “I am not doing great on my own and trust that I would have a much be er chance at finding love with you.” The spirit of this memory holds true to this day, in that our clients rely on us and trust us to make the right choices for them in finding romance.

Having a team of true professionals is extremely important in your business. How do you find the right people to join you in the company? Tell us more about the team that surrounds you.

IV- Having a team of trusted, loyal, capable, and commi ed professionals is a vital component of Valen . Members of my team have come aboard through various avenues including tradi onal searches as well as referrals from business associates, staff psychologists, clients, and other friends of the company. All members of my team were ve ed in a thorough manner, in a similar fashion to how we carefully screen our clients. As a testament to the close knit and dedicated group that I have assembled, many team members have been with the organiza on for extended tenure.

Part of the reason why I have survived

challenging mes, is the strong support from my founda onal team.

The company is structured in a manner that allows us to provide an unparalleled level of service to our clients. Our consulting team provides detailed informa on regarding our process to prospective clients.

Our matchmaking team thoroughly screens prospec ve clients, me culously cra s new introduc ons, and provides coaching and guidance.

Finally, our concierge team coordinates all details related to introductions, with input from our clients.

This for fies an already strong partnership and ensures a first class experience from start to finish in all areas.

Let’s talk about the future. In your opinion, how will Valen Interna onal evolve over the next 5 years? What’s your vision for it for the next 10 years?

IV- I envision Valen as a household brand with worldwide recognition.

Valen will con nue to own the highest position in the industry, which I founded and was created in 1990. This will be elevated even further by building a team of super stars worldwide that align with the Valen core values.

I plan on wri ng several books - one of which is already in the works and will be poten ally life changing for millions of individuals across the globe.

The expected launch me frame is early-2021 if not sooner. Keep an eye out for the prelaunch on Amazon coming soon as well as it’s arrival on the NY Times Best Sellers list.

The Valen style of matchmaking is the future.

European App Developers Create New Service to Help Struggling SMEs Post Lockdown European app developers, Voosh, have created a new service to help small businesses that have been struggling since lockdown Voosh intends to help small businesses remain on the high street, in a safer and more efficient way Voosh will offer their brand new bespoke service, to help businesses who are looking to transform their business from offline to online

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his month, Voosh, a European app developing company, have created a new service for small business owners who are looking to develop an app. Voosh will work with small businesses in a flexible process, to fit a range of budgets.

The flexible service comes after a surge of small businesses folded over lockdown, as Voosh wants to help them get back on their feet and into the online sphere. Voosh are offering design, product consulta on, website development, digital branding and services that transform businesses from offline to online.

Voosh are also encouraging small business owners to consider an app for more efficient restaurant service and

shopping experiences. As opposed to replacing the services provided, Voosh wants to show business owners how apps can enable their business, making them more profitable and efficient.

Entrepreneur and Co-Founder of Voosh, Abdulelah Al-A yah said, “As small business owners ourselves, we have been totally empathe c for everyone who has been struggling over lockdown. We want our services to be more affordable for small business owners, regardless of what stage their business is at. Crea ng an app should be exci ng so we want to take the stress and confusion out of the process for our clients.”

The developers are committed to supplying ongoing support and are with their clients every step of the way. Voosh take the difficulty out of app development and turn visions into success, whilst ensuring their clients enjoy doing it.

About Voosh Voosh are an Applica on development company who will work with clients to bring their ideas to life.

Voosh launched in June this year and they are more than just developers.

Voosh can help with the full catalogue of business set-up tasks, taking just a kernel of an idea and making it happen. h ps://www.thevoosh.com/ europeanbusinessmagazine.com 79

European Google competitors to watch

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have a question for you. Have you spent a day in your life without Google-ing something? I know I haven’t and I believe you will agree with me as well. The reason is that Google is an unques onable leader on the search engine market and we love the idea of instant informa on.

However, as privacy concerns grow, people have been slowly shifting towards more privacy-focused search engines and other benefits which are not on Google’s menu.

It’s also worth mentioning that we recently ran a poll on Twitter,

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asking you ‘Do you have the feeling that #Google search results improved within the past 3 years?‘. While 45% said ‘Yes’, the winning answer at 55% was ‘Definitely not’. While this option didn’t win by a huge margin, that’s s ll 55% of par cipants that could be open to finding a new search engine solu on.

If search engine privacy is important to you, we looked into some alternaves and prepared a list of 5 privacy-focused search engines, all tried and tested.

Ecosia Known for its commitment to the environment, the Berlin-based ecofriendly search engine was founded in 2009 to grab a part of the billion dollar search engine industry, with a very interes ng USP – using its profits to plant trees around the world. The company donates 80% of its surplus income to tree plan ng programmes all over the world. What started as a social enterprise, has now turned into an organiza on who has planted more na ve and biodiverse tree species globally than any other. As of

adding plenty of new features such as maps and business lis ngs. On top of that, Mojeek is also proud of its environmental creden als, having its servers hosted at the UK’s greenest data center, Custodian.

today, Ecosia enjoys over 15 million ac ve users and has over 9,000 planting sites for its trees. Going back to its original func onali es, Ecosia can handle your search queries, using Bing’s search technology, enhanced with their own algorithms. And if you’re concerned about data privacy then, rest assured, it’ll never sell your data on to third party adver sers or track your internet activity. In July 2020 the company reached an important milestone towards their mission to make a greener world: 100 million trees planted. This year we interviewed founder Christian Kroll on how he started Ecosia, in case you’d like to check it out.

Mojeek Back in 2009 Mojeek was the first search engine ever to state that it doesn’t track its users, and has been committed to privacy ever since.

Based in Brighton, England, the company puts focus on providing independent, alternative and unbiased search results, free from user tracking. Its compe ve advantage is that it doesn’t rely on other search engines for its results and remains the only British built crawler-based search engine to index over a billion pages.

This provider never collects any user data, including IP addresses, click behavior, or search history. Backed by a significant cash injec on from a private investor at the end of 2019, Mojeek is planning on improving the quality of our search results, and

Qwant Qwant is another privacy-oriented search engine that is based out of France. Launched in 2013 by Jean Manuel Rozan, financier, and Éric Leandri, a specialist in IT security, Qwant delivers all its results on a single web page. Websites, social networks, pictures, videos, shopping, music… all is easily accessible through a single search. Its compe ve advantage is privacy. It protects users’ privacy by not tracking what they’re doing or searching for online.

Qwant doesn’t use cookies, collect browsing data, or do any kind of data profiling. A search engine for children called Qwant Junior is also up and running. Adapted for a touchscreen use, Qwant Junior removes the results of inappropriate sites and puts forward results that have recognized educa onal value. In October 2018, the French National Assembly announced that all government computers and devices would adopt Qwant as the default search engine as part of efforts to reclaim European “digital sovereignty”.

Swisscows Swisscows is Switzerland’s answer to Google. Launched in 2014, Swisscows presents itself as the first intelligent “answer engine” based on seman c informa on recogni on coupled with intui ve search assistance. In its mission to provide a protected space for internet users, Swisscows does not record your IP address or the browser

you are using. Addi onally, no search history is saved, the search engine does not record any sta s cs on its visitors and does not use geo-targe ng. As an added bonus, all of its servers are in Switzerland, where privacy protec ons laws are rather strict. Users can choose to display only region-specific results, translate text from one language to another and instantly look up the meaning of words and sentences with Digest. The company also puts great importance on family-friendly Internet content and filters all pornographic and violent results from searches.

Algolia Originally from France, Algoria developed a search-as-a-service pla orm, enabling companies to quickly and seamlessly implement search within their websites and mobile applications. The search engine of this Y Combinator-backed startup offers full-text, numerical, and faceted search, capable of delivering realme results from the first keystroke, in under 100ms. As of today, more than 8,000 companies including Stripe, Discovery, Medium, LVMH, Lacoste, Zendesk and Birchbox rely on Algolia to manage 70 billion search queries a month. In October 2019, the startup closed a Series C round of around €93 million, bringing Algolia’s total funding to around €155 million to date. Investors include Accel Partners, Alven, DAG Ventures, Founders Circle, Owl Rock Capital, Point Nine Capital, SaaStr Fund, Salesforce Ventures, Storm Ventures and World Innova on Lab. (republished form Eu-start ups)

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A Hub for the Global Enterprise:

Why You Should Consider Starting a Business in Bermuda, Too

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f you mention Bermuda to most people, chances are they will either think of its famous beaches or its high standard of living. However, these two elements do not tell the full story, as striving for a unique profile has always set Bermuda apart from other interna onal financial centers.

For many decades, Bermuda’s pursuit to meet high standards and align itself with the best prac ces worldwide has dis nguished it from other offshore centers. It’s all about reputa on and quality over quan ty, and such companies like Airbus, Boeing, BMW, Land Rover, Sperry and Bremont, 82 europeanbusinessmagazine.com

Louis Vui on and Moet & Chandon chose to register in Bermuda for all the same reasons.

The offshore financial centers in the Caribbean have become economically successful in the last 30 years.

Today, the Cayman Islands, Bermuda, Bri sh Virgin Islands appear in the most important ranking worldwide, the Global Financial Centres Index (GFCI), which is the main tool that points out how a rac ve financial centers are around the world and allows us to understand their growth and compe veness over me. The factors taken into account include

evidence on the compe veness of the telecommunica ons infrastructure, informa on on how favorable are the regula ons for companies, government effec veness indexes, and indexes on the perception of corrup on, among others.

According to the latest GFCI ranking, Bermuda is now the third-highest ranked financial center in the La n America and Caribbean region, having been overtaken by the Cayman Islands and the Bri sh Virgin Islands.

One of the reasons why Bermuda dropped in this list was the fact that

the Council of the European Union added it to its blacklist of non-coopera ve jurisdic ons for tax purposes.

Being added to this list amounts to a move to “name and shame“ rather than to impose prac cal measures.

However, Bermuda immediately took some steps towards changing this situa on and introduced economic substance rules, expressing hope and expecta on that it will be removed from the blacklist on the next evalua on.

The efforts did pay off, and Bermuda was removed from a European Union list of non-coopera ve tax jurisdicons in May 2019, with the EU council saying Bermuda had taken posi ve steps, and that it “remains commi ed to addressing EU concerns in the area of collec ve investment funds.”

Today, Bermuda’s a tude is crystal clear — “Quality rather than quan ty of the financial transactions.“ Curtis Dickinson, Bermuda’s Finance Minister, noted that Bermuda has a strong message for those who see this offshore financial center just as a perfect place to hide misdeeds: “We will rat you out, plain and simple as that, because our reputa on is a cri cal part of our calling card, and unless we can demonstrate how serious we are about this, then people will not take us seriously.“ As one of the leading offshore financial centers, Bermuda has all the essen al components necessary for a robust interna onal business community. There are many advantages of doing business here — think progressive regulatory regime, lower tax jurisdic on, the wide availability of experienced service providers, modern infrastructure, a stable poli cal and economic climate, and the quality of life that is enjoyed on the Island.

One of Bermuda’s biggest a rac ons is its tax-neutral jurisdic onal status, with zero tax on profits, income, dividends, or capital gains.

What is more, it is rela vely easy to start a business here, as company registra on is a fast and simple process.

The length of me it takes to incorporate in this country is about 3 to 5 days, and it is typically affordable to run a corpora on, as there is only an annual government and agent fee.

Ross Webber, CEO of the Bermuda Business Development Agency (BDA), which has been pro-ac vely engaged in assis ng start-ups, multinationals, and other corporate ventures since it was established in 2013, says that “We are committed to keeping interna onal business here. We are pro-ac vely advising the sophisticated international business community about our conducive business environment and we are con nually refining, augmen ng, and simplifying the process to start, relocate, or grow a business here. Now is the perfect me to come to Bermuda. We are con nuing to build on our success and well-deserved reputa on as a jurisdicon that caters superbly to the global marketplace.”

Bermuda’s loca on is also an important component of the list. Ideally located between Europe and the US, Bermuda is easy to get to with daily direct flights to and from London and US gateway ci es. Webber noted that “As an international financial center, Bermuda is par cularly well-posi oned for European companies looking to add an offshore component.“ What is more, Bermuda has its own stock exchange (BSX), which is one of the largest offshore electronic securi es markets in the world. It specializes in the lis ng and trading of equies, debt issues, deriva ve warrants, funds, hedge funds, insurance-linked securi es, and other capital market instruments.

Dickinson noted that “In as much as you have an interna onal business that needs an offshore presence, we would argue that Bermuda is a great place to put it.“ And we have a few related numbers for you right here.

Today, there are as many as 18000 Bermuda-based exempted and international businesses on this 20,6 square miles Island. Bermuda is ranked Number 1 in the world as an offshore center for insurance and reinsurance, with approximately 1500 businesses in this industry. The sector also consistently accounts for about 85 percent of the Island’s GDP. To be even more specific, in the global insurance and reinsurance sector, Bermuda is second only to London and New York. It’s also in the

Top 3 for shipping and investment.

More than 75 percent of the Fortune 500 companies have some presence in Bermuda.

Bermuda is also a top destination for private jet travelers. Aoife O’Sullivan, partner with the Air Law Firm noted that “The main reason is flexibility.“ And even though the travel industry has been exposed to the sudden drop in the tourism sector due to the coronavirus pandemic, the private jet industry has been on a roll, especially in the Caribbean.

Anthony Tivnan, President at Magellan Jets, one of the leading private jet providers, noted that “The Caribbean Islands are extremely popular right now: Puerto Rico, the Turks, and Caicos, Barbados, Bermuda… Island travel is extremely active, and we’re coun ng on it to replace some of the European travel we typically do in the summer months.“ What is more, today Bermuda has earned a global leader in fintech and innovations involving blockchain title. Over the past several years and with the leadership David Burt, the youngest Premier ever elected to this posi on, Bermuda’s government agencies passed a string of new regula ons aimed at crea ng infrastructure and ecosystem for innova on and technology with a specific focus on the applica ons of blockchain. The legisla on, which included leading-edge fintech regula ons for digital assets, has put Bermuda at the forefront of the blockchain revolu on and made it a sought a er des na on for companies in the industry.

On the end note, Ross noted that “While (re)insurance is our domicile’s most prominent industry, the strength of Bermuda’s economy is its mul -sector scope. The Island is a thriving center for investment management, trusts, private client and family office structures, as well as a global aircra & ship registry, ship-management firms − plus new-economy ventures ranging from marine-sourced pharmaceuticals to e-commerce and technology start-ups.

Bermuda’s sophis cated infrastructure and the corporate synergy it engenders have made the jurisdic on a hub for the global enterprise.“ europeanbusinessmagazine.com 83

LONDON STOCK EXCHANGE VS EU:

Refinitiv battle reveals unease over power of modern stock markets

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elations between London and Brussels have been be er. While Brexit dominates the headlines, another cross-channel development has recently captured the a en on of financial ins tu ons. It concerns the the London Stock Exchange’s proposed US$27 billion (£21 billion) acquisi on of US financial company Refini v, into which the European Commission is carrying out an in-depth an -trust inves ga on.

With a ruling due in October, the commission is likely to reject the deal in its current form. To win approval, the LSE recently declared it was selling either the whole of Borsa Italiana or its bond-trading pla orm, MTS. Why does the EU care about the LSE’s acquisi on of a US financial data company? And why would the LSE sell the Italian stock exchange to quell these concerns? The answer lies in the fact that stock exchanges have transformed fundamentally over the last 25 years, as I demonstrated in a recent paper.

This has largely gone unno ced and public percep on clings to an outdated understanding of what exchanges are.

crucial for na onal economic development. But they have in fact become powerful global corpora ons which actively shape the development of capital markets around the world – with important implica ons for investors, companies and states.

How exchanges changed

Mo s t d e m u t u a l i s e d a n d co n verted into listed companies. As one exchange official noted, they were now independent actors “fully in charge of their own des ny”. At the

Stock exchanges are o en s ll viewed as quasi-public marketplaces – icons embedded within na on states and 84 europeanbusinessmagazine.com

As an ar cle in The Banker put it a few years ago: “Until the 1980s, exchanges would … have been recognisable to a merchant who was trading in the 14th century – the me of their incep on.”

Exchanges used to be non-profit organisations, controlled by their members, with li le agency of their own. They usually monopolised trading in their area, and were physical trading loca ons, such as the Chicago Mercan le Exchange, pictured below.

This has changed in various ways.

Financial liberalisation reforms such as the EU Investment Services Directive (1993) created competion between exchanges. No longer monopolies but a marketplace for marketplaces, they were forced to modernise and become more efficient and customer-focused.

same time, they also became profit-driven companies.

The shi towards globalisa on also meant more cross-border financial integration. Alongside the growing competitive pressures, there were opportunities to scale up, acquire competitors and venture into new markets. From Chicago to Singapore, futures exchanges started buying stock exchanges and vice versa, plus trading venues for bonds, carbon emissions and commodities.

Former NYSE CEO John Thain had once observed that “every country has an army, a flag and an exchange”, but now exchanges were forming huge organisa ons spanning the globe.

Finally, exchanges turned from physical trading locations into financial technology companies. Faceto-face interaction on trading floors was gradually superseded by

electronic markets. The manager of one exchange noted in an interview: “We are of course known as a US exchange but that’s only about 10% of our revenue.” Digi sa on had fundamentally changed the game as market technology, data and indices increasingly drove exchanges’ profit.

Exchanges are now actively creating, regula ng and shaping markets around the world. They control the very infrastructure of global finance data, indices, financial products, trading pla orms and clearing, essen ally deciding how markets work for companies, investors and states.

Why LSE-Refini v ma ers A hierarchy has also emerged, with LSE one of a handful of global players that now dominate capital markets, along with CME, ICE, Cboe,

Nasdaq and Deutsche Börse. These groups run the largest, most pres gious and profitable markets, and own the most important products, indices and technological know-how. While there are over 100 exchanges worldwide, these six companies account for over 50% of industry profits, and trading in stocks, futures and op ons.

LSE is now a central node in global and, importantly, European capital markets. It owns FTSE Russell, one of the leading index providers that steer investments by deciding which companies and countries are included in the indices tracked by global investors - essentially acting as a gatekeeper for global finance.

LSE owns LCH Clearnet, the world’s largest clearing house. Clearing houses act as middle men (or central counterpar es) between buyers and

sellers in trades to transfer money and assets back and forth and act as guarantors for each transac on.

They require investors to put up collateral, whereby clearing houses basically decide which assets they deem safe enough to back financial transactions. During the eurozone crisis, for instance, these significantly impacted countries’ refinancing operations as some government bonds were no longer deemed safe.

LSE also owns several European trading pla orms for stocks, bonds, deriva ves and exchange-traded funds – including Borsa Italiana and with it the MTS pla orm. As Bloomberg recently noted, MTS is a cri cal piece of European bond-market infrastructure with average daily trading volumes exceeding €100 billion (£90 billion).

It is a key venue for trading Italian and other European countries’ government debt. Refinitiv (previously the financial unit of Thomson Reuters) owns Tradeweb, an even larger bond-trading pla orm.

Together with the MTS bond trading pla orm, FTSE Russell’s bond indices and LCH collateral rules, LSE’s acquisition of Refinitiv would have created a quasi-monopoly in the European government-bonds trading infrastructure. With European sovereign debt already highly poli cised in recent nego a ons on the EU’s coronavirus recovery fund, an ins tu on with the power to shape this market that will probably be outside of the EU’s regulatory reach come December is hardly acceptable for EU regulators. The EU already blocked a proposed merger between LSE and Deutsche Börse in 2017 for similar reasons.

With the threat of LSE’s market dominance averted, the EU might allow the LSE-Refinitiv deal to go through a er all. But what this episode demonstrates is that as crucial building blocks of global finance, exchanges have become important counterparts to states. What they own and what decisions they make have become ma ers of interna onal poli cal importance – and has added an extra layer of complexity for governments trying to set the rules for global finance. europeanbusinessmagazine.com 85

US vs Europe: Tensions Rise A US-Europe confrontation has emerged after Republican senators’ letter threatens legal and economic sanctions on completion of German pipeline importing Russian gas to Europe.

By Ka e Fisher

O

n the 5th August, Republican senators Ted Cruz, Tom Cotton and Ron Johnson sent a le er to Fährhafen Sassnitz GmbH, which operates Mukran Port, aler ng them to their exposure to sanc ons related to the Nord Stream 2 pipeline project. US Senator for Texas Ted Cruz's press office released the following statement: Mukran Port provides services to vessels that Russia has indicated will be used for the project, and reportedly stores pipes to be installed as part of the pipeline. There is a bipartisan, bicameral, and intra-agency consensus in the United States government that has produced a range of sanc ons authori es and mandates that will

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be leveled against any company that par cipates in the project.

In the le er, the Senators wrote: "This le er serves as formal legal no ce that these goods, services, support, and provisioning risk exposing Fährhafen Sassnitz GmbH and Mukran Port, as well as your board members, corporate officers, shareholders, and employees, to crushing legal and economic sanc ons, which our government will be mandated to impose. These sanc ons include poten ally fatal measures that will cut off Fährhafen Sassnitz GmbH from the United States commercially and financially. The only responsible course of ac on is for Fährhafen Sassnitz GmbH to exercise contractual op ons that it has available to cease these ac vi es."

"Your provisioning of the Fortuna or Akademik Cherskiy will certainly have become sanc onable the instant that either vessel dips a pipe into the water to construct the Nord Stream 2 pipeline, or engages in any pipe-laying ac vity relevant to the project, but your exposure extends to any ac vies related to goods, services, or support of the pipeline. The law requires that 'the President shall' issue the designa ons."

The US has long-since taken issue with the almost-completed Nord Stream 2 Bal c pipeline project. Officials have a empted to perpetuate the notion that such relations will increase European dependence on Russia. Berlin has resolutely resisted these claims, relaying firmly that it will self-determine all na onal policy, in conjunc on with the EU. The issue, however, has been turned into a full-on US-Europe conflict by the senators' le er.

The le er makes claims that the project poses a "grave threat" to US security, jus fying "crushing legal and economic sanc ons" for the con nua on of the pipeline. This may cause severe and irreparable detriment to the region's economy as a huge amount of residents make their living from the port. The harsh a ack would see all Sassnitz companies, shareholders and employees face asset freezes and travel bans ordered by the US Government similar to those placed on North Korea and Iran. Naturally, there has been fierce outrage. Sassnitz is infuriated, and accusations against America have since been flying.

While the US takes the stance that these ac ons were taken in an honourable and earnest effort to protect Europe, it isn't difficult to believe with some convic on that it has more to do with the expensive gas Cruz would rather sell to Europe from his home

state of Texas. Protecting Europe becomes a less likely motive when you consider that Trump recently withdrew a little more than half of the US troops sta oned in Germany - a crucial part of Nato defences against Russia. The EU's foreign policy chief, Josep Borrell, described his "deep concern at the growing use of sanc ons, or threat of sanc ons, by the US against European companies and interests". The US is accused of trea ng Germany like an enemy, or a colony, as opposed to an ally. Such behaviour reveals a fundamental disrespect for European rights and sovereignty.

Chancellor Angela Merkel's rela onship with President Trump seems to have gone from icy to hostile. The German chancellor has received disrespect and insult from Trump for several years. Trump made repeated rude remarks about Merkel during his 2016 presiden al campaign, accusing her of "ruining Germany" and being a "catastrophic leader" and even began an an -Clinton hashtag campaign "#AmericasMerkel". More recently, in June, he was reported by

CNN to have told Merkel that she was "stupid" after accusing her of being in the pocket of the Russians.

Merkel reportedly took the a acks gracefully. When ques oned at her recent summer news conference about Ric Grenell's statement that "As US Ambassador to Germany... I've watched President Trump charm the Chancellor of Germany", the chancellor's bemused response "He did what?" sparked laughter. It is clear to say that the German leader had not, in fact, been at all charmed by the President.

Merkel has not faced Trump's imprudence alone. In June, CNN reported that Trump called former British Prime Minister Theresa May "a fool" and spineless in her approach to Brexit, NATO and immigra on policy.

The CNN report also describes how Trump "bullied and disparaged" other world leaders, including French President Emmanuel Macron and Canadian Prime Minister Jus n Trudeau.

The contention between Germany and the US and America's increasing use of in mida on tac cs may begin to reignite broader resentments.

Europe has become disgruntled with Trump's tari wars, climate crisis denial, and eorts to divide the EU by seeking favour with conserva ve eastern states. Once again, last week's events saw the US make disrespectful and accusatory remarks against their closest allies. US secondary sanc ons nega vely aected European companies in trade with Tehran, so when the US came to the UN looking to reimpose sanc ons on Iran, it was vehemently rejected. Secretary of state Mike Pompeo's almost laughable reac on heard him classify Europe as "siding with the ayatollahs".

US ambassador to the UN, Kelly Cra chose to describe US allies as "standing in the company of terrorists".

If Trump is re-elected in November, can Europe expect to face more sancons? Will US foreign policy con nue to morph into bullying bru shness?

Even if Trump does not triumph in the elec on, the possibility of such unrestricted treatment in future should be enough to urge Europe to strengthen its protections against the economic and financial blackmail seen in Sassnitz. europeanbusinessmagazine.com 87

Ten years in compliance:

Reflecting on the UK Bribery Act I

n 2010 the UK Bribery Act was unveiled to a mixed reception. 1 While there was some debate at the me about whether the legislaon would have a “real” impact, the Bribery Act was recently described in a Parliamentary review as the “interna onal gold standard” of an -bribery legisla on. We thought it would be appropriate to reflect on how bribery and corruption compliance has changed over the last decade.

the OECD’s 2009 Good Practice Guidance, there was li le guidance for companies looking to establish or improve their compliance program.

Defining what ‘good’ looks like

Following the introduction of the Bribery Act, discussions about bribery and corrup on compliance programs have become more sophis cated. In late 2012, the US Department of Jusce issued its “Hallmarks of Effec ve Compliance Programs” which largely

By 2010, the US Foreign Corrupt Practices Act (FCPA) had been in force over 30 years. Yet, aside from 1 The UK Bribery Act subsequently became effec ve from July 2011 88 europeanbusinessmagazine.com

The “Adequate Procedures” guidance released by the UK Ministry of Jusce following the UK Bribery Act contributed to a change in this dialogue by encouraging organisa ons to consider what compliance measures are appropriate given their resources and risk profile and emphasized tone and communica on.

echoed the Adequate Procedures.

Others followed including SAPIN-II in France and the Clean Company Act in Brazil, which reinforced the emerging consensus around best prac ce approaches to compliance.

A broader view of compliance While there are differences in approach between countries, a shared view of some of the key building blocks of a compliance program has provided a helpful star ng point for many organisa ons. Guidance associated with the different regimes will con nue to change, but it is hard to see agreement on the need to maintain risk-based compliance programs changing any me soon.

Embracing technology

The net effect has been to raise “best prac ce” expecta ons and promote an increasingly familiar view of the key pillars of a robust compliance program. While greater clarity over what good looks like does not guarantee the right result, it’s an important step along the way.

This broader interpretation of the essen al components of an effec ve compliance program has also encouraged a renewed focus on the human factors that contribute to bribery and other conduct risk. Today, we see increasing adoption of behavioural science in the design and delivery of compliance programs, with more sophisticated training, communication and incentives designed to engage people and drive changes in behaviour.

Over the last decade the use of data analysis and review technology as an essen al component of risk management has been completely accepted.

For example, ten years ago, red-flag data analysis was considered rela vely sophis cated and not rounely performed. While challenges remain, both in managing the various data sources that are a feature of most organisa ons and in naviga ng data privacy obliga ons, redflag analy cs are now seen as standard for many compliance monitoring ac vi es.

More generally, the last decade has seen an explosion in the range of technology at the disposal of compliance teams. Developments in ar ficial intelligence and machine learning are now being used to analyse increasingly complex and extensive data more efficiently. Over me these tools have also been embraced by regulators and enforcement agencies and are now considered a core part of the compliance toolkit.

Persistent challenges Unfortunately, despite these developments, the stream of record-breaking penal es across the world demonstrates the corrup on problem has not been solved.

In our experience, organisa ons connue to face fundamental challenges

in dealing with bribery and corrup on risk. To take one example, risks arising from third party rela onships s ll cause problems for many. Compliance teams are expected to find prac cal solu ons tailored to local opera ng condi ons, not only for third par es but all aspects of bribery and corrupon risk, and they must do this with ght budgets and limited resources.

Conclusion Reflecting on the changes in corporate compliance over the last ten years, many aspects look and feel different.

While thinking around compliance programs has converged, there is moun ng public pressure to address corrup on, fuelled by the proliferaon of social media and leaks of sensitive data. However, there remain differences in legisla on and, more significantly, enforcement activity, across the world.

Combined social and regulatory pressure will be essential to drive further change over the next decade.

We hope that with increasing use of collec ve ac on, organisa ons can continue to influence the political, economic, and enforcement condions that sustain corrup on. It will be interes ng to see what the next ten years have in store.

Michael Zimmern & Lorynn Demetriades europeanbusinessmagazine.com 89

Can Europe Overcome The Next Wave OF THE PANDEMIC

By Ka e Fisher

W

hether you dub it 'the coronavirus comeback' or the 'second wave', there is no denying that most of Europe is seeing a resurgence of coronavirus cases. In France and Spain, new COVID cases soared in August, and many other European countries are not far behind. Germany, Greece and Italy are seeing a slow but steady rise.

We are now faced with many doubts: Are we ready for the next wave of the pandemic? Have we learned from experience? Will Europe be able to cope?

In the EU and the UK, Norway, Liechtenstein and Iceland, 158,134 people have so far died from coronavirus according to ECDC data. The UK has seen the most deaths in Europe, with

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35,341, followed by Italy and France (32,169 and 28,022 respec vely).

Back in January, the ECDC warned governments of the extremely contagious nature of the virus, advising that they strengthen the capacies of their health care services. The fear at the me was that health services would become overwhelmed by the surge in sick pa ents requiring a bed. Shortly a er, this fear became a reality, first in Northern Italy and then Spain. Despite seeing how the healthcare systems were suering, much of the rest of Europe failed to prepare for what was to come adequately. The hospital preparedness in the UK and France was not enough to face the return of skiing vaca oners in the first week of March, a catalyst for the spread of Covid-19 into Europe.

However hopeless the situation may have presented itself, Europe undoubtedly tackled it head-on. The initial success of Europe in dealing with the virus showed impressive resilience and adaptability. The capital of Italy's worst-hit Lombardy region, Bergamo, was ini ally overwhelmed by the eects of the virus. In March, the crematoria couldn't cope with the spike in deaths, and army trucks were called in for support, transporting the corpses to other ci es. However, the rapid responses untaken by the region proved triumphant - announcing on the 24th May, zero coronavirus deaths across the region. The success seemed to extend itself through the European Union, and some believed the ba le was nearly won. For comparison, The EU (including the United Kingdom) saw fewer than 5000 new

coronavirus cases daily in early July.

Whereas, during the same period, the United States, with less than three-quarters of the popula on, saw 50,000. From a global perspec ve, Europeans were at the forefront of defea ng the virus. Many of us were able to put the pandemic to one side and enjoy a relatively normal summer. Relief-seeking travellers began to use 'holiday corridors' to soak up the Mediterranean sun.

And yet, virologists are warning that we risk of gambling away our success.

Most of Europe is seeing a resurgence. Countries like Croa a, Greece and Malta who saw few cases at the height of the outbreak have recently faced far higher numbers than during the first wave. Spain is also reporting close to 10,000 cases a day, more than it had in Spring. Madrid and Barcelona, which originally suffered terribly are seeing high-rising figures.

France recently reported the highest number ever recorded, 7,379 new cases on 28th August. French Health Minister Olivier Veran has called for France to remain "extremely vigilant" and brace for "an increase in

the number of severe cases and in the number of people hospitalised and in ICU units". The Netherlands registered 914 new cases last Tuesday, the highest number seen since April. In Germany, numbers are s ll comparatively low but continue to rise steadily.

Belgium, Italy and the UK – some of Europe's worst-hit countries – are also seeing a resurgence but, so far at least, nothing like March and April.

The Bri sh Prime Minister called for renewed caution, saying "we now face, I'm afraid, the threat of a second wave in other parts of Europe and we just have to be vigilant, and we have to be very mindful." Currently, the rising case numbers have not met those seen in the first wave partly because of daily tes ng.

While Europe initially rose to the challenge, the second wave may point to show that measures were relaxed too quickly. Others blame people's wearying enthusiasm to stay vigilant and s ck to regula ons. The reopening of schools and workplaces in many countries also contributed to climbing figures. However, in much of Europe, the resurgence is driven by young people partying and forgetng about social distancing measures.

Health officials around the con nent have also pointed towards Spanish and Greek party islands as a possible virus spreader.

Whatever the cause may be, the queson becomes, will Europe be able to

cope? Countries are posi vely be er prepared this me around and have a greater understanding of viral spread.

Widespread tes ng helps to track the movements of the virus. Face masks are now universally recommended and, unlike during the outbreak, available interna onally. Use of contact tracers in restaurants and bars around many EU countries and the development of apps has further helped tracing efforts.

Another fear in EU preparedness for this next wave is that doctors are s ll trying to work out the effects the coming flu season will have on the pandemic. As Europe faces its first COVID winter, an advantage over the United States is much less controversy surrounding coronavirus control measures. While protests against social distancing and masks have broken out in many European cities, including Berlin, London and Paris, they are on a much smaller scale. Overall acceptance for health and safety regulaons is far higher.

Recent days have seen new cases decline in Germany and Sweden and remain level in Belgium, Italy and Ireland. Croa a, however, con nues to have a clear rising trend. While only me will tell how COVID 19 will connue to adapt and affect our lives, Europe is currently facing a second wave. It is clear that the coronavirus is well adapted to humans, and the fight against it is far from won. europeanbusinessmagazine.com 91

Reframing ‘Work / Life Balance’ The Tradi onal Model ‘Work / Life Balance’ has existed as a buzzword for many years now. A quick Google trends search shows that the use of the phrase has been steadily rising in the last two decades, and anecdotally, the phrase has creeped slowly into the Lexicon of workplaces to the point in which it’s now an everyday phrase.

It refers to managing the separate resource of our working and non-working lives, with only a finite number of hours in the day. One thing is becoming increasingly obvious - the 92 europeanbusinessmagazine.com

current way of thinking simply isn’t working. All major mental health bodies have online sec ons devoted to coping with this balance and how to deal with it, and figures from recent years have shown that only ⅓ brits feel happy about their current ‘work / life balance’.

So why is ‘Work / Life Balance’ so difficult? And why do we feel so negavely about it? It may sound counter-intui ve, but I firmly believe a lot of this stress comes from the fact that we see them as two separate en es that we have to juggle.

Our culture conditions us to separate our different roles, iden es and ac ons into different contexts - like work and life. It can feel overwhelming when we try to juggle lots of different things at the same me. In reality, we’re just trying to shi between our ‘roles’ in quick succession - our working role and our non-working role.

Now that both roles have become largely digital, it’s more difficult than ever to switch off from them.

It requires a lot of effort and is incredibly hard to get right. Over the past 50 years, cogni ve scien sts have closely studied mul tasking and role

Credit: Valeria Leonardi, Interna onal Advisor, Lifeed conflict. Numerous research studies have shown that none of us can truly do mul ple things at the same me. If we try to do so, it actually reduces our productivity by up to 40%. We actually get less done, feel more stressed and spend more me doing things overall.

It’s like we see ourselves as cakes, with each role taking a slice. The more slices we cut up, the smaller the pieces have to be. It’s as though each conflic ng role we take in life requires us to give something of ourselves, and if we are lucky, there will be something le for us too. But that’s not the case.

We’re more like concentric circles: each role strengthens another. The more identities we have, the more resources we have available to us and the stronger we are.

A new idea - ‘Transilience’ This term may help you think more posi vely about juggling your different roles. It’s based on the changes that happen to you as you transi on into different roles in life.

We can unlock resources and soft skills from one role in life and ac vate them in another. For example, perhaps your child has been training your persuasion skills at home as you’ve helped them to navigate

their own priori es and daily tasks.

Those same persuasion skills could be applied when presenting a new project to your boss, or vice-versa.

By seeing the two as connected, we reduce the strain on ourselves and make our ability at that skill stronger.

Transilience refers to how during mes of stress and change, the learning of these skills is greater. Rather than trying to see work and life as separate, perhaps we can focus on the common ground in order to become stronger.

We regularly promote transilience as a concept to users of our digital training programs, and our recent survey of over 1400 users revealed that 56% of people felt that transilience allowed them to use more of themselves at work, with 1 in 2 people discovering ‘hidden’ talents that they hadn’t previously considered using in the workplace. Over time, this new way of thinking has a tangible impact on team wellbeing too, with 87% of people feeling less stressed and 90% of people saying they have more energy. Inevitably, this causes a posi ve ripple effect through the business, playing to their strengths as they build an inclusive and welcoming environment.

There’s other benefits, too. Studies show that this unleashes a whole wealth of resources and opportunities for businesses, increasing produc vity by up to +12% and saving 1220 euros per employee per year.

The Role of COVID-19 It’s inevitable that COVID-19 has disrupted the en re working world as we know it - which has some significant effects on how we manage the different roles in our lives as individuals and how companies start to see this from their perspec ve as well.

And there’s evidence that one silver lining from the pandemic may be a greater push towards this new way of thinking about transilience from companies.

Working from home has ended the practice of going physically from one location to another, moving the roles towards each other with

an inescapable force. In many ways, this has been an intensely stressful and difficult me for workers everywhere, but perhaps one posi ve has been allowing people to experience firsthand how their different roles are connected? Research conducted this summer shows that ⅔ Americans say their work-life balance is in a better place than it was before the pandemic.

Some more of our own research has also shown that lockdown has allowed people more me for reflection. We conducted research of over 1,500 employees, from European companies such EY and KIA, about their a tudes towards work in lockdown. We found that many indicated taking a fresh approach to work - 60% were ‘ready to start work with renewed energy’, and almost half said they had gained new skills during the lockdown, that could be applied to the workplace. These findings might seem surprising to you.

Again, is it because we’ve been able to see directly how our roles are connected?

How can I embrace this?

The most efficient way to embrace this way of thinking about work and life, is to constantly reflect and force yourself to see the connections. If you’ve gone through complex problem solving training at work, the learnings could help you to calmly resolve conflicts within the family context. Or maybe you’ve divided and shared housekeeping tasks with your partner, and now you can apply those same delega on skills when organising your team’s workload.

For employers - this means understanding the value of your employees' life experiences and how it can make them stronger. HR teams should encourage workers to talk openly about such experiences to them - if they feel comfortable.

Essentially, the more you see your roles as connected, the more it will improve your efficiency and relieve your stress. What’s more, it’s freely available to everyone and can be honed anywhere and any me. europeanbusinessmagazine.com 93

Businesses are paying the price of stressed staff as pandemic money pressure takes its toll

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ith some staff understandably anxious about money, many businesses are feeling the knock-on effect as the recession hits – and it’s up to the c-suite to save them. Four in 10 (41%) employers surveyed say that increased financial stress amongst employees has negatively impacted their business this year - almost three mes the 15% who reported experiencing this challenge before 2020. And with eight in 10 (78%) concerned about the impact of this year's economic environment on employees' financial wellbeing, this problem is only set to grow.

That’s according to new research from financial wellbeing pla orm nudge, which is urging businesses to open up the conversa on about money and help staff upskill and take control of their finances, to alleviate addi onal workplace stress and reduce business disrup on.

Seven in 10 employers agree that employees' financial wellbeing has become more of a priority to them since Covid-19. But more clearly

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needs to be done, as two thirds (66%) of employees surveyed feel that their company provides li le or no support for their financial wellbeing. In fact, only 7% feel like they can talk openly to their employer about money problems.

A lack of commitment from the top may be hindering progress, to the detriment of business performance. While more than half (53%) of employers agree that they would like to do more but don't know where to start, the majority (88%) believe their organisa on`s board or upper management could better support them when it comes to promo ng the financial wellbeing of their employees, within that by providing HR with more autonomy to implement appropriate solu ons (44%).

And with 75% of those surveyed agreeing they feel comfortable talking about an employee's financial situaon and wellbeing, businesses would also benefit from leadership teams promo ng a more open culture that encourages people to communicate

about money worries (42%) and leading by example by talking openly about money themselves (35%).

Jeremy Beament, co-founder of nudge commented: “This year’s events have had a huge impact on many aspects of people’s lives, including their financial wellbeing – and this is taking a toll on business performance and produc vity. There are powerful ac ons that employers can take right now to help employees feel more in control of their finances, from opening up the conversation about money within the workplace to helping them develop the right skills and knowledge. Not only will this improve their general wellbeing, it will enable them to dedicate more me and a en on to their job – boos ng overall company performance. But these initia ves must be driven from the top.

Leadership teams have a responsibility to empower every level of their business and ensure their teams feel supported as we navigate this uncertain period.”

With half (52%) of the UK’s workers surveyed worrying about money at least once a week and almost one in five (18%) doing so on a daily basis, financial stress is having a tangible impact on the workplace. 40% of employers say employees have lost concentra on and made mistakes as a result of money worries, while 35% have no ced staff being unproduc ve at work. A quarter (26%) of employers believe that members of their team have called in sick due to money worries.

In fact, employers who report poor financial wellbeing amongst their teams are seven times more likely to have seen a drop in produc vity this year, and eight mes more likely to have seen a drop in performance, compared to those reporting good financial wellbeing.

A new level of urgency has emerged around this problem, as almost half (44%) of employers report a parallel rise in mental health issues amongst their teams over the past six months.

With financial wellbeing closely linked to mental health – 25% of employees claim their mental health has suffered as a result of money worries – it’s important for employers to dial up support in this area now.

Susanne Jacobs, founder of The Seven and expert in trust, psychological safety and intrinsic mo va on, added: “When we lack financial security, our brains switch us into threat mode. This diminishes our cogni ve performance, increases our error rate and nega vely impacts our wellbeing. All-consuming worry can play out in behaviours such as presenteeism, absenteeism, working longer hours and affected sleep and eating patterns. With the pandemic amplifying financial concerns, employers need to act now and support their staff to avoid a second epidemic of burnout.

Prac cal tools that help employees improve their skills and knowledge and take be er control of their money will pay dividends in health and performance.”

When it comes to improving the financial wellbeing of employees, the good news is that businesses don’t have to boost financial rewards to

do so. More employees consider it to be important to have the skills and knowledge to manage their money (85%) and to feel in control of their finances (87%), when it comes to their financial wellbeing rather than earning as much as possible (64%) with 87% sugges ng they only need enough money to live comfortably.

Employers with a financial wellbeing solu on in place believe it has a tangible impact on their business, with 43% sta ng that it helps with employee reten on and makes employees happier. 37% suggested that it helps increase employee engagement and makes them look like a more responsible employer, while 34% said it makes employees more financially literate, which increases their effecveness in their role. 33% agree that it increases employee produc vity.

Vodafone case study Commen ng on Vodafone’s approach to managing financial wellbeing within the workplace, the company’s reward manager Georgia Rule said: “The wellbeing of our staff is hugely important to us. It impacts everything from productivity and engagement to reten on, which is why we invest so much me and resource in promo ng it – and that includes helping our team to feel comfortable and in

control of their finances, par cularly during this difficult me.

We’ve worked hard to limit financial stress for our own employees during the pandemic, but we’re s ll mindful that other members of their households may have been impacted – another poten al source of financial worry. So we provided educa onal resources and offered Financial Wellbeing webinars to give basic support around budge ng and how they could use Vodafone’s flexible benefit platform to make their money go further.”

“Vodafone also introduced a Wellbeing newsle er to support employees not only with their financial wellbeing but also their physical and mental wellbeing. And we let them know about other forms of support available, such as our Employee Assistance Programme and our flexible working arrangements that enabled employees to juggle work with caring responsibili es, for example. These measures, coupled with regular staff surveys, gave us valuable insight into what our employees needed, thereby enabling us to support them appropriately.”

To help businesses support their employees’ financial wellbeing, nudge has published a new report – “Elephant in the workplace”. To download a copy, please visit h ps://bit.ly/3bvYgco europeanbusinessmagazine.com 95

How to conduct risk assessment of your RECEIVABLES

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ssessing your receivables has become more important than ever during the Covid-19 pandemic, with increased levels of insolvency and other factors such as the interrup on of supply chains impacting businesses globally. During such periods of economic uncertainty, you should assess your receivables regularly. Early detec on of risk will help you avoid or minimise poten al losses.

An assessment of outstanding invoices and the risk ofnon-payment will help you iden fy any weak points and guide you to take decisive ac on to minimise risk and protect your business.

Here are a few tips to help you to complete a risk assessment of your accounts receivable and secure yourcash flow during this me of economic uncertainty.

Sort your customers into groups Sor ng your customers into groups will help you iden fy pa erns and 96 europeanbusinessmagazine.com

establish a risk profile. For example, if a customer stands out in a group for demonstrating poor payment prac ces, they may present a higher payment risk. Or you may find indicaons of stress in a specific geography or sector. You can use this exercise to note how evenly your customer base is spread. If a high concentraon of your turnover is limited to a small number of customers, you may be at a higher risk of insolvency if that key source of income is lost.

Conversely, customers that represent just a small part of your overall receivables should not make a great impact if they fail to pay you.

Consider organising your customers into groups, such as domes c customers, or customers from a parcular region or country, trade sectors. You could also sort them into order using the size of the customer base, the percentage of your overall receivables they represent, or whether or not they have guaranteed payment.

Limit your exposure to bad debts In addi on to iden fying which customers or areas pose greater risk to your cash flow, it is useful to iden fy and list what security arrangements and guarantees your business uses.

These may include: • l Bonds • l Comfort le ers • l Credit insurance • l Factoring • l Le ers of credit • l Lien • l Reten on of tle • l Transfer of assets • l Transfer of receivables Analysing your security arrangements and guarantees can help you shed light on how high the share of total losses could be and what percentage of your por olio is protected.

Assess your history of unpaid invoices Looking at the history of losses incurred through insolvencies allows you to draw conclusions about general default risks. Is there a pa ern?

For example, are the bad debts clustered in a par cular sector or geography? Can you iden fy a group that has a greater need for security arrangements and guarantees than other customer groups? In addition to helping you identify areas to approach with caution moving forward, analysing past bad debts can also help you assess the quality of your company’s receivables management.

Plot out the history of bad debts over the past five years. Differen ate individual insolvencies, e.g. according to sector, size, region. From there you can assess future poten al risks inherent to individual segments and put in place processes to minimise the risks.

It is also worth paying a en on to any insolvencies in your sector. Has there been an increase in insolvencies and is your sector more vulnerable following the outbreak of the Covid19 pandemic? It may be worth seeking guarantees to help protect your accounts receivable from the risk of customer insolvency.

Calculate DSO The average time in terms of days between invoicing and payment is your DSO (Days Sales Outstanding) and is a good indicator of the efficiency of your receivables management.

To calculate your DSO first divide your total accounts receivable by the total value of your credit sales.

Then mul ply this figure by the number of days in the period you are assessing. Many businesses calculate their DSO on a regular basis, monthly, quarterly or annually.

Regularly checking your DSO will help you check how the ratio has changed within the past years/ months. You will be able to assess your ra o compared to your industry’s average, how many customers pay within the agreed credit period and how many fall in arrears. Andmost importantly, How successful

your business is at cashing in invoices.

It may be that the greatest risk to your accounts receivable is not a customer, but rather your business’s internal collec on processes. An improvement in this area could result in a lower DSO and reduced risk.

Complete an aging report An aging report can help assess the financial health of each customer.

Reviewing your own business can help you to understand whether your sector is slowing down, or whether your sales department are giving longer credit terms or even extending them.

Iden fy future risks to your cash flow When assessing your debtors’ creditworthiness, future developments and planning processes should be taken into considera on. Aspects to be taken into account should include: New products/target groups – Moving into a different customer base, or launching new products or services can give rise to new payment risks. You can try to minimise these with, for instance, credit insurance, factoring, or bonds, at least un l the new service or customer has become established.

New regions – Entering a new geographical market can be fraught with risk including unfamiliar trade laws or prac ces, varying rules on imports and customs duties and potential poli cal instability. A thorough risk assessment for each market you trade in will help you iden fy and take steps to minimise risk.

Expanded sales – If your business has experienced growth in sales, it is wise to inves gate whether your debtor structure base has remained u n c h a n g e d o r w h e t h e r m a rket changes or new products have affected the rise in sales. Does your sales team operate with due diligence parameters? Does sales growth represent higher risks to your business?

New customers – Comple ng thorough due diligence and seeking letters of credit or trade credit insurance on every proposed new customer will

help you minimise the risks associated with taking on a new customer.

It is also a good idea to consider each customer individually when assessing the risks posed to your accounts receivable. For example, an individual customer may present very li le risk despite being located in a region regarded as high risk. If you dismiss them because of their loca on, you could miss out on a valuable sales opportunity.

Assess the impact of your payment terms on your receivables Make a critical assessment to find out if your payment terms meet your company’s requirements or if they need to be adjusted. Often, many individual clauses can result in too many varia ons and lead to delayed payments. You could seek to reduce the number of clauses in your payment terms or find ways to enhance their a rac veness e.g. with the help of payment incen ves like bonuses, discounts, period of payment.

Enhance the skills of your credit management team The risk of losses can be reduced by qualified credit managers and related staff. In times of economic stress, such as the current situa on caused by the Covid-19 pandemic, you can help protect your company’s cash flow by appoin ng a team dedicated to monitoring your accounts receivable through weekly reviews and empowering the team to act quickly.

Start with an audit of the skills of your credit management team and then build on this with addi onal staff as needed, plus a programme of professional development to plug any skills gaps and support your team’s knowledge and mo va on. In addi on, you could encourage your receivables management team to become involved in cash flow focused events like seminars, conferences and other occasions. Or internet forums and webinars, with the current global situa on in mind.

Further information: https://group. atradius.com europeanbusinessmagazine.com 97

HOW SEARCH ENGINES REALLY WORK

By Jeff Ferguson

T

he Internet and the World Wide Web we know today would be utterly unnavigable without search engines. But how do Google, Bing, and the other search engines really work?

The short answer: Search engines work by filling a database, or index, of billions of web pages through crawling. During the crawling process, computer programs called web crawlers, also known as bots or spiders, download the content and the links to other web pages found on these pages. Search engines analyze these web pages using algorithms for factors such a topicality, quality, speed, mobile-friendliness, and more to determine the posi on, or rank, in the search engine results presented to users.

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But let’s dive a li le deeper. In this study , you will learn: • About Machine Learning • What is a Search Engine?

• How Do Search Engines Obtain Their Results?

• How Do Search Engines Understand Your Query?

• How Do Search Engines Rank Web Pages?

• Pulling It All Together: How Google Really Ranks Web Pages • Summary

FIRST LET’S TALK ABOUT MACHINE LEARNING Before we discuss how search engines work, you should understand a little about Machine Learning. According to Jim Stern, author of Ar ficial

Intelligence for Marketing, “Machine Learning is the automated crea on of predictive models based on the structure of the given data.” To say that Machine Learning is a computer teaching itself how to do something is an oversimplification, but it’s an excellent place to start for this discussion.

While Machine Learning lives under the Ar ficial Intelligence (AI) canopy, it should not be confused as being the same thing. Machine Learning is already in use daily in a myriad of computer systems; AI is the name given to a variety of technologies, some of which are s ll the stuff of science-fic on.

Some Machine Learning systems can run on an Unsupervised basis, s ll requiring data to get started to find pa erns in data and reveal correlations. There is also Supervised

Machine Learning, whereby we ensure the algorithms are doing their jobs properly like a teacher grading a student’s homework. Lastly, there is what is known as “Reinforcement Learning,” automated systems that op mize marke ng campaigns, such as Google Ads op mizing a handful of variables to get as many conversions as possible at the right price.

The big takeaway here is that these systems, while fixed in their purpose, are not fixed in their modeling, and evolve as they consume more data.

Know that modern search engines are using Machine Learning systems of all three types in their a empts to organize the world’s knowledge.

WHAT IS A SEARCH ENGINE? At this point in history, I’m sure just about everyone knows what a search engine is in theory; however, let’s talk a li le about what a search engine is from a technical standpoint.

The concept of a database, that is, a structured collection of informaon stored in a computer, has been around since the 1960s. That’s basically what a search engine is, a vast database of web pages combined with a set of algorithms, that is, a collec on of computer instruc ons, that decide which web pages to return and in what order they should appear when someone asks that database a ques on, or query.

HOW DO SEARCH ENGINES OBTAIN THEIR RESULTS? That database is filled through the process of crawling, whereby a computer program visits a known web page and downloads the informaon found on that web page, a process known as parsing, into the database. The data collected during this process is not only the contents of the web page itself but also the links found on that page, which point to other web pages. The links found on that web page get added to a list of web pages for the crawler to visit at another me.

Despite the name, crawlers, also known as bots or spiders, do not

move from page to page by way of the links found there; instead, it’s more like the parser adds the newly discovered pages to a sort of “to-do list” to visit later. This to-do list is what’s known as a scheduler, and itself is an algorithm that determines how vital those newly discovered web pages are in comparison to all the other web pages on the internet the crawler knows about already.

The parser then sends the informaon it obtained from the web page to what is known as an index (a process known as, well, indexing), which itself is a kind of database. However, an index is more a database of loca ons (or cita ons) of informa on along with brief descrip ons of that informa on (called abstracts). These cita ons and brief descrip ons are basically what search engines provide to you when you query them for informa on about a given topic.

channel, one of the first questions that you should ask is, “Is our web page even indexed?”, that is, is the web page in question even in the search engine at all. If it’s not, then either the search engine crawlers simply haven’t reached your website yet, or there is something technical in nature keeping your web page from being crawled or indexed.

Once included in a search engine’s index, the search engine must then determine when and where that web page will appear to its users when they search for something. That is, the search engine needs to decide which keywords and in what posi on your web page will appear, or rank, in a search result. This process is where a search engine’s ranking algorithms come into play.

Every search engine’s ranking algorithm works a li le differently; however, since Google dominates the search engine market in most of the English-speaking world (and beyond), we’ll focus on its ranking process for this discussion.

HOW DO SEARCH ENGINES UNDERSTAND YOUR QUERY? If you would like to learn more about this process, I suggest Andrew Hogue’s excellent tech talk at Google from 2011 called, The Structured Search Engine.

Just ge ng your web page into a search engine’s index is a substantial process, and search engines perform this ac on thousands and thousands of mes a day for new and old web pages alike. Google and the other search engines have made this job of discovery a bit easier for themselves by allowing website owners to provide a list of web pages to them, a file known as a sitemap. Addi onally, you can submit new individual pages to both Google and Bing via the Google Search Console and Bing Webmaster Tools websites, respec vely.

As a website owner, it’s essen al to understand this process. When the me comes to determine why your website may or may not receive any attention from the Organic search

Before Google can show you any results for your query, it must first determine what your question is about, that is, not only understanding the words in the query but the intent of those words as well. According to Google, “This involves steps as seemingly simple as interpre ng spelling mistakes and extends to trying to understand the type of query you’ve entered by applying some of the latest research on natural language understanding.”

This task is more complicated than you may think. The English language is, frankly, a mess, and Google’s ability to decipher that mess has improved steadily over the years. Google continues, “For example, our synonym system helps Search know what you mean by establishing that multiple words mean the same thing. This capability allows Search to match the query ‘How to change a light bulb’ with pages describing how to replace a light bulb.” europeanbusinessmagazine.com 99

During the process, Google a empts to determine if the informa on you are looking for is broad, or very specific, or if the query is about a local business. Google also tries its best to determine if your ques on requires more recent, or fresh, informa on.

“If you search for trending keywords, our freshness algorithms will interpret that as a signal that up-to-date information might be more useful than older pages,” Google con nues. “This means that when you’re searching for the latest’ premiership scores’, ‘Strictly Come Dancing’ results or ‘BP earnings’, you’ll see the latest informa on.”

And you thought Google just read your ques on as entered, didn’t you?

Now that Google has figured out what you’re asking, it needs to determine which web pages answer that queson the best, a process known as ranking. Again, this is no simple ma er.

HOW DO SEARCH ENGINES RANK WEB PAGES? Google reviews hundreds of traits, or signals, of a web page to determine when and where it should appear in its index. Despite what anyone might tell you, no one outside of Google knows all these signals, nor do they know if any signal has a higher priority or importance than another.

Although, when Google introduced RankBrain, one of their engineers admi ed that it was the third most important ranking signal, but, as you’ll see, that isn’t all that helpful.

Google has been kind enough to define some of the groups of signals, which in and of themselves are algorithms dedicated to specific areas of interest by Google.

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The groups of signals in the above image were shown to me and a small group of SEO professionals by Google spokesperson, Gary Illyes, at the Search Marke ng Summit in Sydney, Australia, in early 2019 in what was supposed to be a closed-door session. Gary’s one request was that we didn’t share this informa on, which is supposedly taught to Google’s engineers “on day one,” on Twi er or any other social media platform. However, this request was honored un l just slightly after the session was completed, so I assume it is safe to share it here as well.

Not shown in this collec on of algorithms is Personaliza on and Localiza on, which Google some mes calls “Context and Se ngs.” Personalizaon is the dynamic adjustments to the search engine results page (SERP) based on your Google usage history.

Similarly, Localiza on is the proac ve adjustments to the SERP based on, well, your loca on. These two factors alone are enough to make tracking your web pages’ posi ons on Google frustra ng.

Let’s look at the individual algorithms that make up Google’s ranking process.

honest to goodness, an SEO strategy for years, it’s essen al to understand this next sentence. Google’s modern Machine Learning based algorithms use a variety of signals beyond just a word’s appearance in a piece of content to determine if a web page is a relevant answer to a ques on. Thanks to this collec on of signals, the concept of “keyword density” no longer ma ers, if it ever did at all.

Counter to what some SEO bloggers have published, this does not mean that Google looks at engagement metrics such as click-through rate or bounce rate for every page to help determine its rank. Instead, Google’s Machine Learning system has used similar informa on for thousands of web pages in aggregate over me and then looks for similari es in other content. While this doesn’t mean you shouldn’t concern yourself with metrics such as click-through rate and bounce rate for your content, it does mean that Google isn’t tracking these metrics for every web page in its index to determine that web page’s rank. Instead, focus on these metrics because it is a good indicaon that the readers of that content find it useful.

TOPICALITY Some mes also referred to as “topical relevance,” this algorithm group’s func on is perhaps the most crucial concepts you must understand in Search Engine Op miza on. If you, as the creator of a web page, want your content to appear for a given search result, then your web page must be about the topic searched for in the first place.

This concept, for some, is Earth-shattering news.

Again, Google tells us precisely what they mean here, “The most basic signal that information is relevant is when a webpage contains the same keywords as your search query. If those keywords appear on the page, or if they appear in the headings or body of the text, the informa on is more likely to be relevant.”

However, before you run out and start stuffing your content with the same words repeatedly, which was,

QUALITY When I took some of my first computer science classes in high school, one of my teachers attempted to demonstrate the complexities of a computer program by having her students tell her, ac ng as a computer, how to make a peanut bu er and jelly sandwich. The teacher would sit at the front of the class with jars of peanut bu er and jelly, a knife, and a bag of sandwich bread, and say, “Where do I start? Tell me, the computer, what to do.”

The first student to take on this challenge would usually say something like, “Ok, first put the peanut butter on the bread,” only to have the teacher grab the entire jar of peanut bu er and place it on the bag of bread. A er a few giggles, the students would understand that they first needed to tell the computer to open the bag of bread, take a slice of bread from the bag, open the jar of peanut bu er, use the knife to obtain

some peanut bu er, and so on. Even now, I’m simplifying these instructions, as she would sometimes get hung up on using the twist e on the bread bag.

My point here is that ge ng a computer program to replicate human ac vity is incredibly complex. So, you can imagine how difficult it is to try and teach an algorithm the defini on of something so mul faceted as quality. Google’s Machine Learning systems are once again used to bridge the gap between our human opinions on the subject of quality and a machine’s interpreta on of that opinion.

A er it was leaked onto the web in late 2015, Google released its Search Quality Evaluator Guidelines to the public in its entirety. Leaks of this document had occurred a few times since 2008. In 2013, Google even released an abridged version in response to the con nued leaks; however, this was the first me that Google responded by publishing the en re 160-page guide to the public.

When the Guidelines were released, some SEO professionals treated them like the Dead Sea Scrolls. To calm the SEO community down a bit, Google’s Ben Gomes stated in a 2018 interview with CNBC, “You can view the

rater guidelines as where we want the search algorithm to go. They don’t tell you how the algorithm is ranking results, but they fundamentally show what the algorithm should do.”

It is incredibly important here to point out that the Search Quality Evaluator Guidelines are not ranking signals.

Instead, these guidelines are used by actual humans to check the accuracy of Google’s algorithms so that the Machine Learning systems used to assess the complicated concept of quality can con nue to learn and improve their results.

Once again, does this mean you shouldn’t concern yourself with the ma ers we’re about to discuss? Of course not. As you will see, what Google is looking for here is solid advice for anyone trying to create quality content. You, as a web page creator, may try your best to follow all the guidance provided in those quality guidelines, like you were checking items on a to-do list, and s ll not end up on the first page of results. Google’s Machine Learning algorithm doesn’t have a specific way to track all these elements; however, it can find similari es in other measurable areas and rank that content accordingly.

Let’s discuss what those elements are in more detail.

Beneficial Purpose – Although not added to the guidelines un l 2018, this aspect has become the top priority in the process of determining quality content at Google. It specifically states that “websites and pages should be created to help users.” If your page is trying to harm or deceive Google’s users or to make money with no effort to help users, then Google’s quality raters are not going to rate your content well. Chances are Google’s algorithms wouldn’t like it much either.

Google is not against your website selling products or services; it’s just that you need to be helpful in the process. As Google’s John Mueller stated in a 2011 Webmaster Central blog post, content creators should focus on providing “the best possible user experience” rather than trea ng the various aspects of Google’s algorithms as a checklist.

Your Money or Your Life (YMYL) – Google has stated in its guidelines that the accuracy of some content must be judged more cri cally than other content. This type of material, which they refer to as “Your Money or Your Life” pages, can “impact a person’s future happiness, health, financial stability, or safety.”

Quo ng directly from Google’s guidelines, this content takes the form of the following: • News and current events: news about important topics such as international events, business, poli cs, science, technology, etc.

Keep in mind that not all news ar cles are necessarily considered YMYL (e.g., sports, entertainment, and everyday lifestyle topics are generally not YMYL). Please use your judgment and knowledge of your locale.

• Civics, government, and law: informa on important to maintaining an informed citizenry, such as informa on about voting, government agencies, public institutions, social services, and legal issues (e.g., divorce, child custody, adop on, crea ng a will, etc.). europeanbusinessmagazine.com 101

• Finance: financial advice or information regarding investments, taxes, re rement planning, loans, banking, or insurance, par cularly webpages that allow people to make purchases or transfer money online.

• Shopping: information about or services related to research or purchase of goods/services, parcularly webpages that allow people to make purchases online.

• Health and safety: advice or information about medical issues, drugs, hospitals, emergency preparedness, how dangerous an ac vity is, etc.

• Groups of people: information about or claims related to groups of people, including but not limited to those grouped on the basis of race or ethnic origin, religion, disability, age, na onality, veteran status, sexual orienta on, gender or gender iden ty.

• Other: there are many other topics related to big decisions or important aspects of people’s lives which thus may be considered YMYL, such as fitness and nutrion, housing informa on, choosing a college, finding a job, etc.

Please use your judgment.

To sum this up, if you’re trying to share facts, not opinions, about a topic, Google is going to take the evalua on of this content seriously, and so should you.

Expertise, Authoritativeness, Trustworthiness (E-A-T) – A close, yet less up ght cousin to the YMYL content mentioned above, the concept of E-A-T has become a source of considerable discussion in the SEO community since its release. Research on the ma er will reveal numerous explana ons of the idea along with a few well-meaning articles on “How to Write E-A-T Content for Google” and the like. If you don’t understand the words “exper se,” “authorita veness,” and “trustworthiness,” feel free to seek these blog posts out as defining (and redefining) the words themselves seem to be their favorite pas mes.

That said, the lesson you should learn from Google’s inclusion of these terms in their Guidelines is 102 europeanbusinessmagazine.com

that Google is looking at more than your ability to construct a proper sentence when it comes to the concept of quality. Therefore, your content must then prove that you have a respectable level of understanding of a given topic (Exper se), that others in your industry or community agree with your understanding by ci ng you as an expert (Authorita veness), and that few disagree with that authority (Trustworthiness).

E-A-T is a dynamic concept. Someone wri ng a guide on foods you can grill during BBQ season doesn’t need to meet the same content standards as someone writing about cancer research. As Google states in their Guidelines, “Keep in mind that there are high E-A-T pages and websites of all types, even gossip websites, fashion websites, humor websites, forum and Q&A pages, etc.”

As I stated earlier, there are numerous blogs and slide presenta ons that try and turn E-A-T into a checklist of tac cs (SEO professionals love a good list); however, the best way to learn about this concept is through example.

Luckily, you can read the same standards that Google provides to its quality raters in the Guidelines itself (specifically, sec on 4.6, “Examples of High Quality Pages” in the 2019 edition of Search Quality Evaluator Guidelines).

Just remember that these examples were wri en by humans, for humans, who are a emp ng to teach a computer to do their job. Avoid ge ng overly fixated on certain details or try to attach a specific quantity to the quality rates ac ons. For example, when some SEOs read the section header, “A Satisfying Amount of High-Quality Main Content” from these Guidelines, they try to assign a

specific number of words that need to be wri en or prove that “longer is be er,” but that is simply not the case.

As Google’s John Mueller and a bevy of other Google employees will tell you, “Write for the readers, not us.”

PAGERANK One of Google’s oldest algorithms, PageRank, is charged with evalua ng the quality of inbound links to a website. Google’s long-held idea that “if other prominent websites link to the [web] page, that has proven to be a good sign that the informa on is well trusted,” is one of the things that has set the search engine apart from its compe tors.

While many SEO tools and bloggers love to ques on the importance of links in Google’s algorithms, according to Google, it is s ll very much a part of the equa on. Occasionally, in

blog posts on the ma er, an SEO will state that links have a “high correlaon” to ranking, which is kind of a silly statement when Google has already indicated that they use inbound links in their algorithm since 1998. Claiming you confirmed this is like saying you figured out a Manha an cocktail uses bourbon when there are recipes readily available.

RANKBRAIN Introduced in 2015, RankBrain is, well, complicated. According to Danny Sullivan, when he s ll worked for Search Engine Land (he works for Google now), RankBrain is “mainly used as a way to interpret the searches that people submit to find pages that might not have the exact words that were searched for.”

Every day, Google processes something like three billion searches. Of

those searches, anywhere from fifteen to twenty-five percent have never been done before. Let that sink in a li le. That means that every day, there are 450 million to 750 million searches done every day that Google sees for the first me. While that may seem daun ng, many of those previously unknown searches are close to inquiries made before. That’s where RankBrain gets involved.

Google had systems in place before to help with this sort of thing. Early in its history, it was able to start understanding the similarities between words like “bird” and “birds” through a process called stemming, that is, reducing a word down to their word stem, or root form. Additionally, in 2012 Google introduced the Knowledge Graph, which is a database of known facts like, “Who was the third President of the United States?” (Thomas Jefferson) that it could quickly answer without having to refer you to a website. The Knowledge Graph also allowed Google to understand the connec ons to other facts. For instance, as Sullivan illustrated, “you can do a search like ‘when was the wife of Obama born’ and get an answer about Michelle Obama… without ever using her name.”

RankBrain was designed to take these concepts even further by looking for similarities between new and old searches, or, as Greg Corrado, a senior search scien st at Google, put it, “That phrase seems like something I’ve seen in the past, so I’m going to assume that you meant this.”

Some SEO bloggers claim that the introduction of RankBrain to the algorithm set was the point when Google first started understanding what SEO professionals call “search intent,” that is, Google’s alignment of search results with users’ purpose for searching. However, nothing that was ever officially reported by Google upon the release of RankBrain confirms this theory.

There is also a lot of conjecture in the SEO community if you could really “op mize” for this algorithm or not. Addi onally, many SEO professionals focused on this algorithm’s importance in the overall collec on of algorithms. A quoted Google representa ve said it was the third most europeanbusinessmagazine.com 103

important a er “links” and “words,” as Sullivan put it, which we can safely assume to be PageRank and Topicality, accordingly. I wouldn’t concern yourself as much with these theories, and instead, just be thankful that you don’t need to write content with every possible varia on of a word to appear for relevant searches.

SITE SPEED/CORE WEB VITALS In 2010, Google first started using how quickly a web page loads on a desktop computer as a ranking signal. Why? Because slow loading web pages are bad for business for both Google and the web page owners. In 2018, Google expanded this focus on site speed to include mobile web pages as well, further proving that they are not messing around in this area.

In early 2020, Google introduced a new set of tools to its Google Search Console, called the Core Web Vitals, and stated explicitly that the metrics found there would become ranking signals star ng in 2021. Core Web Vitals absorbed the site speed metrics looked at previously and expanded into new areas that thankfully needed to be addressed (such as the sloppy way some web pages load adver sements and other images).

MOBILE Depending on which study you read, anywhere from 60%-70% of all searches start on a mobile device. Google has been pushing mobile-friendliness as a ranking signal since at least 2015; however, in 2018, they made it official by focusing on what they call the “Mobile-First Index” process. “Mobile-First” does not mean “mobile-only,” but instead that Google now looks at the mobile version of your website first during the process of evalua ng your website.

A er the introduc on of this algorithm, the days of website owners not concerning themselves with mobile-friendliness were officially over. While the “Mobilegeddon” update wasn’t the bloodbath that the SEO press made it out to be, the importance of mobile cannot be undersold here. There have been numerous ar cles wri en on the subject on mobile op miza on, most of 104 europeanbusinessmagazine.com

them by the legendary Cindy Krum, who literally wrote the book on the subject, so I won’t spend any time on what to do here. Just know that it needs to be done.

Google’s focus on Site Speed and Mobile are great examples of the search engine forcing website owners to do what they should have been doing for years, making their websites easier to use. This requirement is kind of like the government telling you to wear a seat belt when riding in an automobile – you should do it because it keeps you safe and is a smart thing to do, but some mes, people just want their “freedom” (to be ejected through the windshield of their car).

As a website owner, you should want to make your website fast loading and functional on mobile devices because your customers want that, but that wasn’t happening as much as it should. So, Google said, “if you want to show up in organic search results, you should do these things,” so now more website owners concern themselves with these ma ers.

PULLING IT ALL TOGETHER: HOW GOOGLE REALLY RANKS WEB PAGES Now that you know all the various aspects of Google’s ranking system, here’s the most important lesson: How Google combines these mul ple algorithms to determine the rank of a given web page. While most would assume that Google assigns a score for each of these areas then simply adds them up for a total score that equates to rank for a given query,

they would be using the incorrect arithme c operator.

In fact, according to Gary Illyes, on that beau ful day in Sydney, Google assigns a score for each of these areas then mul plies those scores for a total score that determines the rank for a web page in the results for a given query. To see why this is important, one has only to remember the difference in outcomes for 1 plus 0.1 versus 1 mul plied by 0.1, which is 1.1 and 0.1, respec vely.

This mind-blowing news means that there is no specific priority for these various algorithms in the grand scheme of things. One could spend all their me making sure that their website was the fastest amongst their compe tors but get dragged down by low-quality content. You could spend all your marke ng budget on the best writers for your content only to be ranked lower because your website wasn’t op mized for mobile devices.

There is no silver bullet when it comes to Search Engine Op miza on.

In summary , If you learn anything from this discussion of how search engines work, remember this: Search Engine Optimization is about doing all the marke ng, website design, and public rela ons tac cs that roll up to form SEO. These tac cs aren’t about wri ng a specific number of words in an ar cle or a emp ng to trick Google by abusing canonical tags, but about crea ng excellent content for your target audience on a properly built website.

Search Engines are incredibly complex systems, but they are systems designed to bring out our best efforts.

SEO is work and lots of it.

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Almost one fi h of SMEs don’t think they’d survive another lockdown Almost one fifth (17%) of UK SMEs don’t think they’d survive another lockdown and would be forced to stop trading permanently if one came into effect, according to a new report by small business insurer Simply Business.

are more reliant on technology now because of coronavirus.

Just under half (47%) are using messaging apps more (such as Facebook Messenger or Whatsapp) for business, a third (33%) have increased their use of social media, 36% have introduced contactless or online payment systems, and a quarter (25%) have started to use online delivery services.

Alan Thomas, UK CEO at Simply Business, commented: “The na onwide lockdown has had a significant effect on all businesses – from the very largest to the smallest.

And our research has highlighted the potentially fatal impact that further lockdowns could have on many small businesses in the UK.

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imply Business spoke to over 500 SME owners across the UK and also found that a third (32%) feel they’d be impacted worse than the first lockdown but would survive. A further third (34%) feel a second lockdown would have the same impact as the first and just 5% think they would cope be er than the first.

When looking at business recovery, around a quarter (24%) of businesses think it will take 12-18 months to recover the money lost during Covid19. One in five (19%) think 6-12 months and one in 10 (12%) think 18-24 months. A further tenth (12%) think it could take a staggering 2-3 years.

In terms of customer numbers, the report found that a quarter (24%) of small businesses also believe it will take between 6-12 months for their customer numbers to return to normal. Well over a tenth (14%) think it could be over a year.

Employment numbers Encouragingly, 68% of small business owners expect their employee numbers to remain the same.

However, one in five (21%) expect it to decrease, the majority of which

(13%) expect it to decrease significantly, pu ng a risk to employment levels across SMEs.

Business confidence The study also showed that 62% of SME owners feel less confident about the long-term prospects of their business.

The majority do, However, feel comfortable about resuming trading whilst adhering to government guidelines. Within this, 43% say they are ‘comfortable’ and a further 30% are ‘very comfortable’.

Posi ve outcomes Despite the overall challenges, there are some positives to come out of lockdown. A quarter (25%) of SME owners say their staff have learnt new skills, one in five (21%) have found new customers, and 19% of SMEs have adopted new technologies.

Almost one fifth (17%) have even expanded to offer more products or services.

Technology has arguably had the biggest impact on how well a business has been able to survive lockdown, with 42% of SME owners saying they

“Few have been financially harder hit than SMEs, small businesses, and the self-employed, and it’s telling that many live in fear of another lockdown and the consequences it would have on their business.

“It’s promising to see the level of resilience and innova on in the small business community – the greater adopon of technology, and learning of new skills is a real posi ve and bodes well for the future.

“However, whilst business owners are innovating, they are still reliant on macro-economic policy. Government’s decision to implement local lockdowns could decide the fate of many small businesses.

“SMEs account for 99% of all UK businesses, and contribute a combined £2 trillion annually. Put simply, we need small businesses to bounce back if we’re to recover economically.

“This is why we’ve launched a £10,000 Business Boost grant. We’ll be giving away £10,000 to one entrepreneur – to help them start or revive their business – providing a financial boost, and poten ally a lifeline, in these economically challenging mes.”

Small business owners can apply for the Business Boost grant here. Applications are open until Monday 28 September and the shortlist will be announced by 9 October The winner will be announced in early November. europeanbusinessmagazine.com 111

Do Black Lives Matter in Business?

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olin Kaepernick. George Floyd.

Defund the Police. In 2020, the debate on racial inequality has never been a more constant pressing issue in global society and one of the largest cultural debates of our me. However, while the focus is currently in America, the protests and social media response have made it abundantly clear this is a truly global problem. Wri en by Ma hew Meehan.

Within the European business community, numbers of household names from every market sector as well as the regional and local companies have stated their support for the cause and even pledged money to help the Black Lives Ma er campaign or independent civil rights organisa ons in their pursuit of equality.

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Yet, racism is s ll prevalent in workplaces and industries even some 200 years after the abolition of slavery with some such supporters having had race-based issues within their own company culture. So, do black lives actually matter in business or is this simply a PR stunt at their expense?

The sta s cs suggest not.

Image vs Reality The concept known as brand ac vism is be er understood as publicly suppor ng or denouncing a cultural issue in order to match the consumer behaviour of its audience, with independent studies highligh ng its eecveness as 64% of this group would

actively support companies who looked to make a difference in the world.

For the benefits of driving up the corporate image and increasing percep ons of a brand in touch with its customers simply by making a public statement and twee ng out the relevant hashtags this is an incredible opportunity that costs nothing.

The reality is that for all those companies who made this eort, a study by the University of Manchester showed that 70% of black/ ethnic minority workers have reported to have faced discrimination over the past five years, and of these people 40% claim to have either been simply ignored or now gain a nega ve reputation for causing trouble that

that 12.9% of the black community is without work compared to 6.3% of white ci zens with the possibility of jobs much harder considering the findings of a employment opportuni es study which showed that white criminals were considered more mes than a black applicant with a clean record.

Within work, there is hardly any differences as when employed there is almost double the number of white professionals who are managers or directors at 10.7 % vs 5.7% with them also being paid 14.3% less. In the top echelons of corporate success, of all the FTSE 100 companies, 47 of that 100 has no black board members with only one having the lead role.

This also trickles down through the corporate culture to a substantial degree, with such causes as globalisation, neoliberalism and austerity being blamed for causing a detrimental and dispropor onate effect on the ‘white working class’ who therefore seek to reject diversity and inclusion in order to protect their culture from being taken away. There is also evidence that in some corpora ons their work to empower the women and promote gender rights is mostly due to the fact that this keeps a white majority while s ll mee ng new inclusivity standards.

has led to 1 in 10 actually punished or forced out of their jobs as a consequence. Law suits a empted by the vic ms have risked either retaliaon or literally been dismissed based on the fact that ‘they were not discriminated against enough’ to be able to gain the jus ce they sought from their employers with this being seen across both major and minor companies within the UK and Europe.

White Privilege According to statistics, this kind of treatment has also not changed in the past 50 years even with the Race Relations Amendment Act 1968. In direct comparison to the white working popula on, Government unemployment sta s cs show

Poli cal Pacifism A key factor behind the continued existence of such business strategy is seen as the lack of governmental intervention due to the existence of voluntary laws that mean those responsible for making the changes can put the responsibility onto the companies who without any legal obliga on do not see an incen ve or a reason to change. While businesses are ul mately responsible, if the government do not care about the equality and success of the black business community then this provides a platform for corporate ignorance of the issue.

The biggest example of this comes from the Brexit debate, where now as a result of the EU withdrawal agreement people of colour are becoming

much less desirable due to a perceived racial bias that was perpetrated throughout the campaign. In a me when we ask the ques on about black equality, na onal public figures have created an environment where across Europe racial incidents rose 16% and 52% of the black business community fear for further damage to their careers and their business prospects.

When faced with such damning evidence, it is clear that in the current climate that black lives do truly not matter in business and in fact provides a comparison to see just how engrained into our society the issue of racism and inequality is throughout the business community.

This isn’t to say that this is all nega ve, there are many large companies whose workers talk about how strong their racial corporate culture is and where they feel supported and without reprimand, and there are now even more that are being forced to wake up and make the changes within their own companies now that the world has spoken up and fights back against injus ce.

But how will these companies be able to ensure that they provide equality?

Simply through changing the narrave. Most major companies do not keep major sta s cs on such issues as race or even considered the ways in which they have to equalise the field, especially when the populaon is generally lower than in companies such as America. This will not be acceptable any more. The organisa ons must bear the responsibility of pu ng in strong legisla on that protects all workers at every level and it is these leaders that must ensure the government finally moves to intervene when such protec ons are not applied whether that be in the applica on process, in the role or through any discrimination legislation that may follow.

Now that the people have spoken and are united behind the cause, simply showing ac vism will not pacify their global consumers at any B2B or B2C level. Those at fault have shown that black lives don’t ma er, and now is the me to make sure they do. europeanbusinessmagazine.com 113

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