NETWORK LONDON / NEW YORK
F U T URE OF WORK IS SU E
Barclays – Cyber Security and Protecting Your Business From Fraud
Delta Air Lines – Interview with SVP Corneel Koster M A RCH 2 018
BABC ANNUAL TRANSATLANTIC CONFERENCE 2018
6th - 8th June 2018 Birmingham UK Gathering 250 global thought leaders from across North America, Canada and the United Kingdom
e info@babcmidlands.com
Connect. Support. Grow.
w greaterbirminghamchambers.com @BABCMidlands
Contents
6
Cyber-security and Fraud
Why you shouldn’t fear digital transformation
16
Delta Keeps Climbing: Connecting the US and UK
10
Distributed Ledger Technology
14
London Event Highlights
28
Upcoming Events
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2 Welcome from our Chief Executive Officer 3 New IAB and Board Members Meet The New Members 5 60 Seconds with Duncan Edwards
16 Why You Shouldn’t Fear Digital Transformation
Insight
18 How to Keep Calm and Carry On
25 US Expansion and Tax Reform
20 The Power of Data
Policy
Cover Stories
21 The Future of Work
26 US Tariffs on Steel and Aluminium: Will it Help American Workers?
22 Brexit and a Decade of Uncertainty
6 Cyber-Security and Fraud 10 Delta Keeps Climbing: Connecting the US and UK
23 Digitalisation and the Future of Intelligent Mobile Working
Features
24 4 Things Every Innovative Company Looks For (and Finds in Flanders)
14 Distributed Ledger Technology
Office Address
London Staff
BritishAmerican Business
Duncan Edwards Chief Executive Officer dedwards@babinc.org Emanuel Adam Director of Policy and Trade eadam@babinc.org John Adam Office Manager, Accountant jadam@babinc.org Theo Bachrach Public Affairs and Policy Manager tbachrach@babinc.org Rita Davids Esat Membership Assistant rdavids@babinc.org Anna Doherty Events and Marketing Manager adoherty@babinc.org
London 12 Phillimore Walk West Wing, 2nd Floor London W8 7RX Tel: +44 (0)20 7290 9888 ukinfo@babinc.org New York 52 Vanderbilt Avenue, 20th Floor New York, NY 10017 Tel: +1 (212) 661 4060 nyinfo@babinc.org Editor Tim Horan
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Events 27 New York Event Highlights 28 London Event Highlights 29 London Events Calendar
Sherry Dolatshahi Executive Assistant sdolatshahi@babinc.org Jillian Gable Events and Marketing Manager jgable@babinc.org Tim Horan Communications Manager thoran@babinc.org Jon Kudlick Director of Membership and Communications jkudlick@babinc.org Alice Mount Director of Events and Marketing amount@babinc.org Dominic Parker Events Assistant dparker@babinc.org
Silvia Rizzo Trade and Investment Manager srizzo@babinc.org Lindsay Walker Member Relations Manager lwalker@babinc.org
Get Social @BritAmBusiness
“BritishAmerican Business”
BritAmBusiness
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Chief Executive Officer I BritishAmerican Business
Welcome
Duncan Edwards I dedwards@babinc.org
Let me start by saying how happy I am to be writing to you as Chief Executive Officer of BritishAmerican Business. This is a fantastic organisation, representing some of the most successful and innovative companies in the transatlantic marketplace with a clear and relevant purpose to protect and enhance the environment for trade and investment between the USA and the UK. As a members’ organisation, we are here to provide first class networking opportunities for our members at every level in their company and we do this through our varied and broad events programme that we run throughout the year. At a time when the settled positions around trade and investment between the UK and US are being reviewed for the first time in decades, it’s critically important for an organisation such as BritishAmerican Business to speak with a strong voice about the enormous contribution our members make to the largest and most valuable trade and investment corridor in the world. But we know our members also face challenges and as the leading transatlantic membership organisation it is entirely appropriate for BritishAmerican Business to take strong positions on some of these matters. Our members expect thought provoking business intelligence briefings, fantastic networking opportunities and relevant and timely policy engagements and we must not shy away from taking a firm stand on issues that affect the transatlantic business relationship. And we need to do this very publicly and in unison with our members. You’ll be hearing much more from me about plans to ensure BAB is actively and energetically promoting the interests of our members and we always welcome member feedback so please do reach out to either our London or New York office and let us know what we can do to support your business. This edition of NETWORK focuses on The Future of Work, and ties in with a six-part series of events currently being run in London. In this Series we are looking at how businesses are adapting and staying relevant and engaged in a market place where consumers are constantly evolving. 2
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There is a feature article from Barclays highlighting ways in which businesses can protect themselves against cyber fraud and we speak with Delta Air Lines Senior Vice President Europe, Middle East, Africa and India, Corneel Koster on the ever-changing aviation industry and what Delta are doing to stay ahead. We also feature contributions from great companies including Reed Smith, Bynder, CHG-MERIDIAN, Sermelo, King & Spalding, Right Management, Flanders Trade & Investment, US Tax and Financial Services and Alvarez & Marsal who all provide their own take on the future of work. Last week in London I was thrilled to officially announce the winners of the BAB TransAtlantic Growth (TAG) Awards. In its inaugural year, the TAG Awards highlight the achievements of micro, small and mid-sized businesses turning to the transatlantic marketplace for their next phase of growth. We were thrilled to have Barclays join with us as Title Sponsor of the TAG Awards and also recognise the contribution of Gold Sponsor Delta / Virgin, Hospitality Partner Grange Hotels St Paul’s and prize donor Club Wembley. Congratulations to all of the TAG Award winners. And in New York we were pleased to host UK Secretary of State for International Trade, Dr Liam Fox, who addressed BAB members on his ongoing discussions with US Trade Representatives, Members of Congress and business. Finally, I would like to take this opportunity to welcome all of the new International Advisory Board Members and Board Members who have joined BritishAmerican Business in recent months (listed opposite). Our IAB and Board play a vitally important role within our organisation and I would like to recognise the efforts of all of these individuals who give up their time to support our organisation. Warmly,
Duncan Edwards CEO www.babinc.org
New Members New Board and IAB Members BritishAmerican Business (BAB) is governed by a transatlantic Board of Directors, led by our Chairman Christopher Perry, President Global Sales, Marketing & Client Solutions, Broadridge Financial Solutions. The Board’s active support and commitment to BAB and its objectives are important to ensuring our continued success as an organisation. We also enjoy strong support from our International Advisory Board, consisting of Chairmen and CEOs from more than 100 major multinational companies. We are delighted to announce that the following new members have recently joined our Board of Directors.
NEW INTERNATIONAL ADVISORY BOARD MEMBERS Raghu Sundaram Dean NYU Stern School of Business
Steven R. Swartz President & CEO The Hearst Corporation
Charles Woodburn CEO BAE Systems plc
Brian A. Ruane CEO BNY Mellon Government Securities
Gavin Patterson Chief Executive BT Group plc
Bill Thomas Global Chairman KPMG
John Flint CEO HSBC Holdings plc
Matthew Eatough Founder & Executive Chairman Proxima Group
Craig S. Kreeger CEO Virgin Atlantic Airways Ltd
John Haley CEO Willis Towers Watson
François Ortalo-Magné Dean London Business School
Keith Barr CEO InterContinental Hotels Group
Duncan Edwards Chief Executive Officer BritishAmerican Business
Denise Peet UK Government Affairs Director Caterpillar
Alex Towers Director of Policy and Public Affairs BT Group
NEW BOARD MEMBERS Tom Carey President Broadridge International
Antony Phillipson British Consul-General, New York & Director General, International Trade North America
New Members
www.clubwembley.com
www.gilead.com
Club Wembley is the dedicated hospitality tier of Wembley Stadium, playing host to over thirty major sporting and entertainment events a year. Club Wembley offers a range of membership packages designed to provide you with the best experience in one of the most iconic stadiums in the World.
Gilead Sciences, Inc. is a research-based biopharmaceutical company focused on the discovery, development, and commercialization of innovative medicines.
Michael Cheesman, Marketing Executive michael.cheesman@wembleystadium.com
Neil Mulcock, Vice President Government Affairs and Policy EMEA neil.mulcock@gilead.com 2 Roundwood Avenue, Hayes, Uxbridge UB11 1AF
Wembley Stadium, London HA9 0WS
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New Members
www.tottenhamhotspur.com A professional football Club based in North London, very much on the ascendance in recent years. In August 2018, Spurs will open the newest and most revolutionary stadium in the UK, where it will play host to Premier League football, the NFL and a variety of other events. Unique, exciting and beneficial hospitality offerings are available. Conor Dixon, Senior Sales Executive conor.dixon@tottenhamhotspur.com 748 High Road, London N17 0AP
www.altairglobal.com Altair Global has been helping companies strategically align their talent around the world for over 28 years. We deliver impact to your bottom line by offering customised solutions with our full-service global assignment and relocation management services. Our focus is to enhance your talent mobility initiatives. Barry Potter, Senior Vice President EMEA barry.potter@altairglobal.com
pgcgroup.com
16 Pepper Street, London E14 9RP
Precision Global Consulting (PGC) is a technology and workforce management business operating out of offices in London and across the US. We provide an integrated workforce management platform for employers across the United States and Canada. Through our platform, Precision™, clients are able to manage all aspects of employment and compliance whilst maintaining total flexibility and control over their workforce. Jeremy Wastall, Director UK and Europe jeremy.wastall@pgcgroup.com 84 Ecclestone Square, London SW1V 1LP
www.starbucks.com Our story began in 1971. Back then we were a roaster and retailer of whole bean and ground coffee, tea and spices with a single store in Seattle’s Pike Place Market. Today, we are privileged to welcome millions of customers through our doors every day, in more than 17,000 locations in over 50 countries. Our mission: to inspire and nurture the human spirit – one person, one cup and one neighbourhood at a time. Maria Sebastian, Senior VP Brand, EMEA msebasti@starbucks.com Building 4, Chiswick Park, 566 Chiswick High Road, London W4 5YE
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Feature
60 Seconds with Duncan Edwards
CEO, BritishAmerican Business
Announcing the appointment of Duncan Edwards as the new CEO of BritishAmerican Business, BAB International Advisory Board Chairman Sir Martin Sorrell stated, “Duncan will provide the leadership that ensures BAB will have a crucial and influential role in ensuring the continued success of transatlantic trade and investment.”
What attracted you to this role? After a long time in one industry I was looking for a different kind of challenge. The importance of the core purpose of BAB in protecting and enhancing the environment for trade and investment between the US and the UK is stimulating, and I felt that I could make a difference.
While he has only been in the role for two months, Duncan has already been able to meet many members on both sides of the Atlantic while attending a number of events in both London and New York.
What is your vision for the type of role that BAB should play in the transatlantic business relationship We need to do two things well: First we must be a fantastic members organisation which creates, through its events and programming, opportunities for members to meet people that they might otherwise not, from which many good things can come. Second, we have to be an effective and influential policy and advocacy organisation which reflects our members’ desire to make sure that brilliantly
With an incredibly busy 2018 programme, we spoke to Duncan about his life, his goals for BAB and what he enjoys about spending time in the UK… Can you tell us a little bit about your career leading up to this new role with BAB? I spent thirty one years as an executive in the media business starting in sales and moving quite early into general management. Twenty seven of those years were spent with the great American company, Hearst, where I held positions including UK CEO and Country Manager and President and CEO of the international magazine and digital media business.
successful US-UK trade and investment story continues into the future. You are a Brit who has spent much of your career living and working in NY. What’s the one place you love to visit when back in the UK? I’m a keen runner so am often on Hampstead Heath and when I can I like to run in the hills of Cumbria. I am also a keen sports fan and try to get to Twickenham for the rugby, Lords for the cricket and Vicarage Road to watch Watford play football. Best business advice you have ever received? I have had lots of mentors and colleagues who I have admired and each has given me something different. The advice to be insatiably curious has always seemed to be helpful.
You have previously had an association with BAB as a member, can you tell us a little bit about that? At my suggestion, Hearst joined BAB in 2010 and I was invited to represent Hearst on the International Advisory Board chaired by Sir Martin Sorrell. I attended events when I could and was also able to host the occasional thing for BAB at the Hearst Tower on 57th St in New York. www.babinc.org
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With financial fraud costing the UK more than ÂŁ2m each day, and the threat of cyber fraud rising, Head of Specialist Client Solutions at Barclays, Andy Simpson, looks at what you need to know to protect your security online.
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Cover Story
By Andy Simpson Head of Specialist Client Solutions, Business Banking, Barclays
Cyber-Security and Fraud: Protecting Your Business for the Future Human error
In 2016, the UK lost £2 million each day as a result of financial fraud1, and the threat of cyber fraud is growing year-on-year. Cyber fraud can result in major financial losses, and data breaches have the potential to profoundly damage trust in a company; fraudsters monetise stolen information by selling it on online, and the impact this has on businesses’ reputations can be severe. This is why it’s so important that the future workplace is alert to, and protected against, these threats. Social engineering The threat of cyber fraud can seem a difficult one to combat. However, it’s important to remember that most cyber fraud attacks depend heavily on human interactions – fraudsters have long identified that the easiest way to breach an organisation’s defences is to target its people, not its systems. Social engineering is the method by which fraudsters aim to trick people into breaking normal security procedures. Fraudsters are usually looking for the victim to give up sensitive information, such as bank login details, or for them to enable malicious software to be installed onto their device. They may also trick the victim into carrying out a fraudulent payment themselves. In social engineering cases, fraudsters often have thorough knowledge of the company, which enables them to build trust with the victim. They may be aware of regular payments that are due or of the structure of teams within the company, enabling them to impersonate employees. The most common forms of social engineering for businesses are: • Telephone scams • ‘Phishing’ and email scams • Invoice fraud • CEO impersonation fraud • Pop-ups. For international clients, invoice fraud and email scams are a key threat, with fraudsters hacking email accounts and altering bank account details on invoices.
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is the most common single
factor that businesses see Digital attacks as having led to their most disruptive breach A key method of cyber fraud is transferring malicious software – ‘malware’ – to your device, in order to disrupt your technological operations and access confidential information. Malware can be installed into your computer through clicking a link in an email, opening an attachment to an email, using a removable device (such as a USB pen), or by downloading software from a malicious source. Two prominent forms of malware are: • Trojans: Trojan programs are a type of malware that enter your computer on the back of other software. They act as back doors to the computer, granting a fraudster remote access. Once inside your device, a trojan can give a stranger access to your personal details by taking screenshots or capturing keystrokes • Ransomware: Ransomware enables a fraudster to gain control of your system in order to encrypt your files, demanding a fee to unlock them. Without the decryption code, it is very unlikely that you will be able to access your files again. The risk of ransomware is one of the crucial reasons why companies should back up their information and keep it on a separate network. In May 2017, there was a significant global cyber security attack dubbed “the biggest ransomware outbreak in history”2. The attack, dubbed WannaCry, used hacking tools believed to have been developed by the US National Security Agency, and more than 300,000 computers were infected – hitting the NHS, and international shipper FedEx, with widespread impacts to Russia, Taiwan, Ukraine and India3. Keeping software and operating systems up-todate is even more important to protect against ransomware and mitigate the risks. The impact on the NHS from WannaCry would have been significantly reduced if their operating systems had been patched, and it recently emerged that tech companies, including Apple, have been racing to fix the Meltdown and Spectre bugs, which could allow hackers to steal data.
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Cover Story
Network attacks pose another form of cyber threat. This is when a third party intercepts communications sent over an unsecured network. Emails are the main communication method for most companies, yet it is often forgotten how unsecure the communications can be. An email can be thought of like a postcard – it can be read as it moves across networks. It’s important that sensitive information is sent over encrypted networks. Secure Sockets Layer (SSL) is the standard security technology for establishing an encrypted link between a web server and a browser. Protecting your business from cyber fraud Different scams can be combatted in different ways. As an example, CEO impersonation fraud has become easier due to the growth of social media. Criminals can easily find personal details of senior employees online – for example, when they are out of the country – and use this information maliciously. This means that an important mechanism to prevent CEO fraud involves being careful about what information is made available online. To combat invoice fraud, you should always confirm requests from alleged suppliers or distributors via a known contact number. Here are ten simple steps that can help to protect your business from cyber fraud: 1. User education and awareness: educate all of your employees about the potential channels cyber fraud may take, regardless of their level or role 2. Network security: avoid connecting to untrusted networks 3. Monitoring: constantly monitor inbound and outbound traffic 4. Malware protection: ensure you have the most up-to-date version of your chosen software 8
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5. Information risk management: embed an information risk management regime across your organisation 6. Incident management: establish an incident response and disaster recovery plan 7. Managing user privileges: manage the access your employees have to programmes and spend/approval thresholds 8. Secure configuration: remove or disable unnecessary functionality 9. Home and mobile working: protect data using an appropriately configured virtual private network 10. Removable media controls: limit removable devices such as USB drives. “Please note that the following information is not a comprehensive guide to cyber security and keeping your and your customers’ information safe. There can be no replacement for having the expertise of a cyber security professional and regular testing of systems and networks. We always recommend seeking out professional expertise to ensure you are compliant with all legalities and requirements from a data protection perspective.” Credit CESG For more information, visit: • https://digital.wings.uk.barclays/for-everyone/ – our platform to educate all staff members in all things digital. Please log on and complete the cyber security module to enhance your understanding • www.cyberaware.gov.uk – HM Government site – Be Cyber Aware is a cross-government campaign funded by the National Cyber Security Programme • www.cyberaware.gov.uk/cyberessentials – Cyber Essentials – Government-backed and industry supported scheme to guide businesses in protecting themselves against cyber threats • www.ncsc.gov.uk – working with partners across industry, government and academia to enhance the UK’s cyber resilience • www.actionfraud.police.uk – the UK’s national fraud and internet crime reporting centre • www.barclayscorporate.com/fraud – a list of videos explaining the types of social engineering fraud used by cyber criminals • w w w.pcisecurit ystandards.org/pci_securit y/small_ merchant – information for small merchants According to official figures released by Financial Fraud Action UK (FFA UK) on 16 March 2017 2 Mikko Hypponen, chief research officer at the Helsinki-based cyber security company F-Secure 3 According to Czech security firm Avast 1
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BritishAmerican Business recently sat down to speak with with Delta Air Lines Senior Vice President Europe, Middle East, Africa & India Corneel Koster to look at what’s ahead for the airline.
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Cover Story
Delta Keeps Climbing: Connecting the US and UK Corneel Koster Senior Vice President, Europe, Middle East, Africa & India, Delta Air Lines
You’ve only recently joined Delta Air Lines. Can you tell us a little bit about your career leading up to your new role? I’ve been at Delta almost eight months, but my career in aviation began more than 20 years ago as a corporate management trainee for KLM. Over the years, I’ve held various global and regional roles in aviation, based in the U.K., Mexico, Japan, Hong Kong and The Netherlands. In fact, coming to Delta felt like a natural step, as I’ve worked for three key Delta partners: Air France-KLM, Virgin Atlantic and Aeromexico. What attracted you to Delta Air Lines? Delta is leading the industry on a number of fronts, both financially and operationally, by its relentless focus on delivering customer-centric innovation while being a great place for employees to work. I’ve seen first-hand how successful Delta has been at forging global partnerships with international airlines and how it is constantly finding new ways to use technology to take the hassle out of travelling. So there’s a lot that attracted me to Delta, and a top priority is to raise Delta’s brand presence in the UK – we’ve a lot to offer customers here and I want them all to know about it. Can you tell us how significant the transatlantic routes are for Delta Air Lines? The transatlantic region is hugely important to Delta – we cover 95% of the demand between the United States and Europe, the Middle East, Africa and India either nonstop or with a one-stop connection. In the summer we’ll operate 176 daily flights to 32 cities in 19 countries, including the major financial hubs of London, Paris, Frankfurt, Brussels and Zurich. This makes us the largest transatlantic airline operator in summer. This year marks two important milestones for Delta in the U.K., our 40th year of flying to London and our 10th anniversary at London Heathrow. Flights between the U.K. and the United States are some
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of the most significant business routes in the world, especially Heathrow to New York-JFK. Thanks to our joint venture partnership with Virgin Atlantic, we can offer up to 28 daily services from Heathrow to the U.S., including eight to New York. Together we offer a fantastic schedule and a quality customer experience. How has the airline industry changed over the past 10 years? There’s been a shift from ‘going it alone’ to forging airline partnerships – a trend Delta has pioneered. The industry-leading joint venture between Delta and Air France KLM and Alitalia now accounts for nearly a quarter of transatlantic capacity. We have in-depth global partner experience and by working closely together with like-minded airlines including Virgin Atlantic, Korean Air, Aeromexico and GOL, we can offer customers a lot of options to enjoy our comfortable services with many more destinations, convenient joint schedules and competitive fares. On a local level, 10 years ago Delta operated four daily flights from London to three U.S. cities. We’ve now got 12 daily Heathrow services to eight destinations. We also operate from Edinburgh and Glasgow to New York-JFK over the summer, all possible because we’ve strengthened our U.K. network through our proud partnership with Virgin Atlantic. What is Delta Air Lines doing to remain at the head of the incredibly competitive global aviation industry? To remain ahead of the competition, we’ve made significant investments in our customer experience. We put forward-facing, flat-bed seats, with individual aisle access on all long-haul international flights, full fleet Wi-Fi, award winning inflight entertainment and added functionality for hassle free travel in our award winning Fly Delta. We also brought in awardwinning chefs to develop our menus. How we run
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our operations is critically important and we are proud to offer our customers the highest operational reliability, with the best on time performance in the world. Our efforts have been recognised widely. Delta was named ‘Most Admired Airline’ in Fortune’s Most Admired Companies list and the ‘Most On-Time Global Airline 2017’ by Flight Global. We talk a lot about the ‘Delta Difference’ and these achievements are down to our amazing people. Our company culture is truly people-centric, because we realize that our employees are Delta’s best brand ambassadors and the key to our success. Can you tell us about ‘The Hangar’ and why this type of innovation is important for Delta Air Lines? Are there any plans for a similar facility in the UK? Delta has always been looking at ways to innovate to improve the customer experience and The Hangar – Delta’s global innovation centre launched in 2016 – has really helped us to up our game. We’ve a team of tech experts looking for opportunities to solve business problems and deliver a smoother travel experience. Delta is a truly global airline, so the team at the Hangar is developing technology that drives results globally, not just the United States. 12
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To the extent you are able, what should Delta customers expect to see rolled out in 2018? We’ve got off to a great start already in the U.K., having brought radio frequency identification (RFID) bag tracking technology to Heathrow Airport at the start of February, as part of a global roll out. Customers flying between London and the United States can intuitively use the Fly Delta app to track their checked bags at key points throughout their journey, via automatic push notifications in the palm of their hand. Meanwhile, Delta One customers will soon be able to pre-select their meals on flights from New York-JFK and Atlanta to Heathrow and other key transatlantic markets. The technology to enable this has been developed at The Hangar and will roll out on all international routes later this year. Furthermore we are proud to offer Wi-Fi on board of all of our aircraft – which we are increasing the speed and bandwidth of – and we now have free mobile messaging, which is a great benefit for all our customers. Delta is also excited to be flying our A330 aircraft on routes from London to Atlanta, New York-JFK and Detroit from March 24. It’s a great plane that will offer an elevated travel experience. These are some of the exciting things for Delta customers in the U.K. this year, but you can be sure there are more on the horizon.
A Smarter Partnership With convenient, seamless connections to over 200 destinations in the US, Virgin Atlantic and Delta Air Lines offers customers great benefits
– Easier, convenient travel planning due to combined schedules – Co-location at London Heathrow, New York JFK and LAX for seamless transfers – Award winning hospitality with warm, personal, intuitive service – Fully flat beds in premium cabins for luxurious comfort and undisturbed sleep – Mutual loyalty programmes for priority boarding, lounge access and reward flights
Feature
By Claude Brown Partner, Reed Smith
Distributed Ledger Technology, Blockchain and Cryptocurrencies The Three Musketeers or Three of the Horsemen of the Apocalypse? There are three key points to be made when considering distributed ledger technology (DLT), blockchain and cryptocurrencies. The first is that they are not synonymous. DLT can exist independently of blockchain, although it would be challenging to make DLT function in a viable manner without it. Similarly, blockchain can operate as an independent technology, as can be seen by the fact that blockchain is used in some centralised ledger systems (although, like the use of random shuffle on an iPod when listening to Beethoven’s Fifth, it does beg the question “why use it?”). Cryptocurrencies need neither DLT nor blockchain to exist but their utility is greatly enhanced by their inclusion in a currency’s infrastructure ( or ‘ecosystem’ in today’s crypto parlance). The second point is that not all cryptocurrencies are structured in the same way or perform the same function. Some, such as Bitcoin, operate as quasimoney in that they act as medium of exchange and a store of value. Others operate as a “utility token” to provide their users with privileged access to services, apps, or even goods or enable them to be obtained at a discount. These are rather like the tokens that 19th century mill owners used to pay their workers, which could only be redeemed for goods sold in the mill owners’ shops. The third category perform more like equity in that they give the holder a financial stake in the cryptocurrency platform so that holders can benefit from the upside of the platform’s success. Of course, the other two types of non-equity coin or token are also acquired for investment or speculative purposes by those anticipating (or hoping) that the cryptocurrency’s success will result in an increase in its value but they are not stakeholders in the project. The third point is that the decentralised nature of the DLT, the pseudo-anonymity of blockchain and the global nature of most cryptocurrencies are, for many market participants, amongst the most attractive features of these new technologies, creating an
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alternative economy and financial marketplace, free of the controlling hand of centralised governmental oversight and control. The absence of constraints imposed by the vagaries of nations’ fiscal policies, the alternative nature of the market and the lack of established supervision creates new groups of stakeholders which are not found in the more established conventional markets. However, such Elysian fiscal freedoms can also attract the darker side of human endeavour; the criminals, the terrorists, the money launderers, the fraudsters and the con-artists. Of course, it can always be argued that this conundrum is no different to that facing social media today and is part of the debate as to whether the medium is (or should be) neutral as to the purposes to which it can be put. After, all when John Logie Baird invented a means of transmitting moving images wirelessly over long distances, he didn’t foresee its primary use being the broadcast of the “X Factor” and “Dancing with the Stars” on Saturday evenings. So it is with the introduction of cryptocurrencies; it is doubtful that the inventor(s) of blockchain intended cryptocurrencies to be the transaction medium of choice of the denizens of the dark web. The upshot of all this is that there is much confusion in the mainstream financial world as to the nature, the benefits and perils of these new technologies. True, that is a key indicator of a disruptive technology but it doesn’t help in forming a coherent and coordinated approach to these three phenomena within the conventional financial markets. The timing of their appearance is also challenging. After the global financial crisis, the governments, central bankers and regulators collaborated on an unprecedented scale to devise and implement a coordinated global approach to inducing stability in the world’s financial system. Whilst this is still playing through and there may be bumps in the road and anomalies between the various countries’ approaches, by and large the www.babinc.org
implementation has followed the roadmap set out by the G20 in Pittsburgh. Cryptocurrencies, blockchain and DLT all appeared post crisis and sit outside that global framework of coordinated policy making engendered by the events of 2008. As a result, responses to their appearance and growth have been mixed; some countries have banned cryptocurrencies outright, others have sought to create legal and fiscal environments to nurture their growth as an engine for national economic growth. Many sit somewhere in between. Regulators worry about the possible criminal nature of some of the activities conducted on these platforms, whilst amongst the central bankers there are mixed views on the benefits of blockchain and the threats posed to the world’s monetary systems by cryptocurrencies. Even if there was a coherent unified view, the tools available to regulate and supervise these new markets are not available. Laws and regulations that have been designed to deal with cash or, at best e-payments, credit cards and internet banking do not lend themselves readily to dealing with decentralised, pseudo anonymous, self administering financial ecosystems. Besides, the intrusion of the ordered, hierarchical, centralised old world order of financial supervisors and their enforcement agencies is resented by many stakeholders, whether for philosophical or nefarious reasons. So existing regimes will need to be amended or new ones devised if they are to be
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applied effectively to these new, disruptive markets. Despite the assertions of some authorities, the old regimes do not fit the new environment sufficiently well to work efficiently. The other consequence of the timing of their appearance is that it coincides with a period of sluggish world economic growth, low yields and disillusionment with conventional savings and investment instruments. Investment in products offering double (or even triple) digit returns in a single (or no) digit interest rate environment is attractive. In a period where conventional businesses struggle to raise capital either by way of debt or equity, the effervescent nature of initial coin offerings and their capital raising capabilities are attractive, not only to investors but also to governments looking for stimuli to prod their moribund economies into life and as a means of transforming their ageing industrial heartlands into the cradles of new technologies. So are DLT, blockchain and cryptocurrencies this century’s Klondike gold rush or the most significant watershed in world trade since the barter system was abandoned in favour of money based transactions? Just as we will never know whether John Logie Baird envisaged the world using his invention to watch Saturday night television, so we may have to wait and see whether these technologies survive and if they do, what they morph into. Even with disruptive technologies, hindsight is a wonderful thing.
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Feature
By Russ Barr Managing Director, Bynder UK and Ireland
Why You Shouldn’t Fear Digital Transformation Digital transformation can be a scary term for many modern-day organizations. It implies venturing into the unknown, taking risks, and embracing something that you’re often not familiar with. Yet in this digital age, it’s a necessity. Any companies failing to keep up with the evolution of technology will soon get left behind by both their competitors and customers. Being part of a tech scaleup, embracing new technology is part and parcel of the job. But digital transformation is so much more than installing the shiniest new tech and expecting it to work miracles on your company productivity. Digitizing your company successfully relies on not only technological change, but cultural change of your whole organization too. While everyone can agree that technology is shaking up all aspects of modern business, how organizations react to that realization has a huge impact on the success of digital transformation within a company. Research carried out by Microsoft in the UK reveals that 61% of modern employees feel some sense of anxiety when a new form of technology is introduced into the workplace. And this is not really surprising; humans are often creatures of habit that all too easily get stuck in
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their typical routine. That’s exactly why business leaders can’t afford to be passive about digital transformation and expect the IT department to work miracles. It should be advocated as a companywide initiative, headed by one clear vision for the whole company to rally around. I always ask myself and my team when introducing any new technology: what exact purpose will this tech serve, and how will it help to achieve our company goals? With research revealing only around half of organizations have a formal digital transformation strategy in place, it suggests that many companies hold the belief that technology alone will solve their problems. Yet digital transformation is as much about transforming attitudes towards technology than it is about the technology itself. For the initiative to succeed, you need to work in an open culture that encourages the exchange of ideas and informationsharing – while communicating that through all levels of management – to help foster a mindset in the company that views change not as a threat, but a real opportunity to innovate. At Bynder, we have a designated R&D team to promote this culture of forward-thinking innovation that is not constrained by departmental barriers.
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Comprised of employee ‘squads’ that come from various departments, the aim is to provide a breeding ground for innovation, creativity and idea-sharing without the bureaucratic constraints of hierarchies and departmental structures. The ‘ragtag’ nature of the squads then allow us to better recognize how any upcoming changes may affect each and every area of the organization, how new digital technologies fit within the goals of the business, and take proactive steps to tackle these challenges. Once a clear strategy has been established, the R&D squad members promote this strategy through their respective departments. By advocating change as a company-wide initiative with one clear vision, the average employee is less likely to feel alienated by change, and more likely to see it as a challenge that they are actively involved in. As the world-leading psychologist Carol Dweck puts it, change in a company needs to be seen as “a shared struggle where mistakes are inevitable and your team members and company have got your back.” This idea of a shared struggle that allows employees to make mistakes when implementing new technology is so important to eliminate the fear of digital disruption and prevent stagnation. Working in the tech industry, speed is everything. Amazon CEO and technology entrepreneur Jeff Bezos describes it best: “Our customers are loyal until they get a better offer.” With technology moving forward at lightning speed, www.babinc.org
businesses need to establish a working culture that can adapt to the latest and greatest tech on the market, or their competitors soon will. Here at Bynder, navigating these rapid changes has been made so much more seamless through the power of integrations. As a Software as a Service (SaaS) provider, the rise of cloud-based servicing and big data has created endless opportunities for collaboration with third-party solutions to drive technological innovation, create new opportunities, and boost brand awareness. We’re not haughty enough to presume that all of our technological needs can be solved by us alone. By recognizing solutions that compliment our own, we can improve our capabilities more quickly and cheaply than if we were to build those capabilities internally. Which is exactly why we’ve partnered with top tech solutions such as Slack, Salesforce, and Shutterstock to create a better service for both our customers and employees. Clearly advancements in tech isn’t about to slow down any time soon. In this era of digital transformation, you need to adopt an ‘opportunist’ mentality that doesn’t wait for change, but looks for change – and as business leaders, you should seize any chance you can to promote this culture throughout your organization. By eliminating the fear of digital growth and rallying around one central mission for where you’re heading, your employees are much more likely to see the future as a challenge, not an obstacle.
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How to Keep Calm and Carry On By Jonathan Jordan Senior Partner, Sermelo
Jonathan Jordan discusses the value of a communications database in keeping your communications agile and flexible in a digital world. What is a communications or ‘issues’ database? It’s a crucial tool in your communications kit to ensure you can react to any developing issues in your business’ ecosystem that may threaten to cause disruption. It can also provide the platform for media outreach, when there is a topic trending on which your company has an interesting spokesperson or comment to contribute to the debate. For all the threats and opportunities your organisation faces, everyone in your communications team needs to know who is the subject matter expert, what is the position, what assets can we as a company deploy and how do we deploy them. That is where the issues database comes in. The basic anatomy of an issues database Any organisation can develop a simple issues database, using a variety of tools, although our preference is an excel spreadsheet. Issues are denoted by different sheet tabs; for instance a commercial property insurer might be documenting its expertise on the issues of risk, fire, cybersecurity, hurricane and flood. Each tab will then denote spokesperson or people to put forward on this issue, pre-worked organisational messaging, assets to be deployed when the topic is trending and links to further information (often on the company’s ‘owned’ channels). Depending on the level of IT and data capabilities in an organisation, more complex versions of this basic template can be formulated. These tabs can be strictly related to the sector within which your company operates, they could relate to sectors within which your customers operate and they could even relate to top line trends that transcend sectors and are of wider societal interest. This latter category is perhaps best suited to gaining ‘thought leadership’ style coverage in the media, to give your brand a more authoritative voice and build the profile of a particular spokesperson.
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Only one weapon in your arsenal An issues database is just one facet of forward planning for a comprehensive communications strategy which recognises a business’ entire ecosystem, rather than just the immediate operating environment. To truly be effective, an issues database should be used in conjunction with a range of other communications tools including robust crisis planning and simulation, media training for spokespeople and development of a wide range of assets tailored for use through different channels. Strategic value The value of an issues database is that everyone can be aligned on a topic-by-topic basis. However, that only works if it is part of a holistic strategy as rapid response media engagement must be aligned with proactive media relations, public affairs and internal communications, even if the messaging is tailored for different audiences. Deploying the issues database for rapid response Proactive As stated before, building the issues database is only one part of the equation. Traditional, and social media monitoring is absolutely crucial to ensuring you pick up pertinent issues as they develop; communicating early in the lifecycle of an issue, if done correctly, can boost exposure for your company and build your profile in a particular area. The media monitoring can be done manually in-house, externally or outsourced to an automated service. We find that whether it’s done internally or externally, combining automatic updates with human quality assurance is the best way to guarantee a source of news that is both time efficient and ‘newsworthy’ to your business. Once you are established with a qualitativelyselected news stream, you are ready to deploy the issues database in rapid response mode. In the earlier example of a commercial property insurer, this could www.babinc.org
mean contacting the news desks of major broadcasters after a major extreme weather event to propose a spokesperson on the topic of physical resilience in buildings. Reactive The flip side of this is that you can accelerate your response to any crisis or issue, as it develops in real time. The ‘kangaroo courts’ of social media are quick to pass judgement as stories are republished, shared and re-reported at high speed. Your response needs to be equally quick to show that the situation is in hand and minimise reputational damage; an issue managed at source is far less damaging than one allowed to run, giving rise to damaging speculation. Without an issues database, there could be a lengthy process of sign off to approve correct the spokesperson and messaging. This could waste valuable hours in response time, encouraging the media and individuals to contemplate the nature and extent of the problem, exacerbating the crisis further. While ideally you would never have to deploy the issues database in ‘passive mode’, it is always better to be prepared than be caught on the back foot when it comes to a hot button issue. www.babinc.org
How can this tool help make communications more relevant to the C-suite? Here at Sermelo, our big communications theme for the year of 2018 is C-suite relevance. Communications has sometimes struggled for a voice in this environment, but with corporate scandals and reputational issues seemingly on the increase, there has never been a better time for business leaders to see an issue as opportunity to demonstrate they are listening to concerns and act accordingly. The issues database is an excellent integration tool, as it encourages cooperation between different functions (whether internal or external) and regional or group management, to ensure everyone is ready and aligned to communicate when the need arises. C-suite job functions will need to be briefed into their role as prospective spokespeople and this gives communicators an excellent opportunity to build the necessary connections informally and push for best practice at the highest level of an organisation. Of course, an issues database is not a perfect solution in and of itself; it requires the necessary active management by capable communications practitioners to drive the value inherent in proactive media outreach, rapid response and the tool as a source of value for senior management.
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The Power of Data By Gareth Cummins Senior Director, Alvarez & Marsal
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In Dell’s Digital Transformation Index study, with 4,000 senior decision makers across the world, 45% say they are concerned about becoming obsolete in just 3-5 years, nearly half don’t know what their industry will look like in just three years’ time, and just to top it off the study identifies that eighty five percent of jobs that will exist in 2030 haven’t been invented yet1. What is clear is that our working lives and the jobs we perform are changing at a pace not seen before. Data, and how we us it, is partially driving this radical organisational and cultural shift. Smarter use of data will continue to increase our power to automate tasks currently done by human beings. Robotic Process Automation, Artificial Intelligence and Machine Learning are its building blocks, and rather than being a threat, should be seen an opportunity for both the enterprise and the development of the individual. The analysis of exponentially growing data, using multiple techniques from multiple formats, provides insight allowing businesses to innovate products and services, and improve decision-making through intuitive data presentation. The power of data manipulation and analysis transforms employment and should be a career game changer, enabling employees to focus on innovation and improvement instead of operational execution. Data science has been reducing human involvement in back-office tasks for many years. In the last two decades, organisations leveraged labour arbitrage by nearshoring and offshoring work to low-cost locations. Today a digital workforce performs backoffice tasks with virtual agents, chatbots and cobots replacing human beings, for example in claims processing, procure-to-pay or human resource management automation. It’s a trend that cannot be reversed. Beyond the automation of routine tasks, Robotic Process Automation (RPA), Artificial Intelligence (AI) and Machine Learning (ML) are also important data science building blocks. They perform cognitive activities normally associated with human intelligence, generating insight and improved decision-making that transform services and products. Consider delivery logistics and best routes and times to ship; prediction of flight delays; debt analysis through customer profiling; inventory forecasting or work order planning as perfect use cases for these more advanced data science techniques. Furthermore, as data science
tooling is increasingly more affordable, AI and ML adoption is a practical step for most organisations. To maximise the impact of data science it is critical to put trust in the algorythms behind it and embed it in employee’s DNA and across the culture of the organisation. With the focus changing from “executing” to “added value” the emphasis is on creating new services and products thus providing a platform and opportunities to elevate job satisfaction. The user experience of data analytics tools is also improving. Neither coding or statistical skills are required, however analytic know-how and increased market orientation is a must. Departments and project teams must be given the necessary training in basic data science and analytics to exploit dataled opportunities across the organisation and future talent management needs, to focus on building a data-savvy workforce driven by innovation and creativity rather than execution. For organisations wanting to mature from RPA to AI and ML, start with strong business involvement, select the right use cases, adjust business processes and implement tooling. It is critical to implement joint business and information technology governance boards to identify and start AI and ML pilots to gain business buy-in, ensure compliance and identify and develop opportunities and areas for continuous improvement. All this must be supported by the necessary organisational and cultural change where data as a critical asset permeates the organisation and is reflected by the skills and capabilities of the employees who work there. It is clear that our working lives will change dramatically in the coming years and the jobs of today are not the jobs of tomorrow. As with all historical revolutions many roles will disappear, but just as sure is the fact that they will be replaced by other jobs, many of which we can’t even conceive of yet. What is certain is that data and technology such as AI and ML will be at the heart of the changes and we must ensure that they are used to empower our creativity and innovation rather than attempt to simply automate it. 2017 Institute for the Future for Dell Technologies – EMERGING TECHNOLOGIES’ IMPACT ON SOCIETY & WORK IN 2030
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The Future of Work By Jules Quinn
Partner, King & Spalding
What will the world of work look like as move through the next decades? Will the notion of employment evolve? We live in a world where Uber, the world’s largest taxi company, owns no vehicles. Facebook, the world’s most popular media owner (at present), creates no content. Alibaba, the most valuable retailer, has no inventory. And Airbnb, the world’s largest accommodation provider, owns no real estate.1 Scientists and thinkers who try to predict the future often find themselves looking foolish in hindsight. Nevertheless my top five predictions for the next 10 years are: Less could mean more There will be less work – so many of the jobs we currently do will be automated. It is not just driverless cars but the ability of technology to predict and satisfy our needs and requirements. As automation increases we will move towards a global solution of a universal basic income (UBI) which is already being tested in numerous jurisdictions. Where it has been tested, there is no more than a minor drop in the population’s desire to work. Proponents of UBI highlight an increase in overall wealth due to a drop in poverty, benefits fraud and the reduction of costs in the Welfare State. The result is a potential increase in creativity and entrepreneurialism. Society will require a fundamental change to the way its views the notion of employment. Your Public/Private Brand The courts already have a hard enough time trying to draw this distinction in social media and discrimination cases particularly. The distinction is becoming more and more artificial as so many employers ask employees to endorse products and generally promote and publicise their businesses on line and in their personal lives. In the US it is already possible to raise a formal grievance via Facebook; questions of ownership of contacts and LinkedIn networks are already being argued over in the courts. Employees, already get sacked if they criticise their employers products to their private followers. Companies are already demanding that their employees and even legal advisers dress in their clothes, use their technology or drink their products.
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We will all be part of the advertising campaign of our employer in both our professional and personal life. Virtual People On the basis that office space will become prohibitively expensive at the same time as more of us demand flexibility and less business travel we will inevitably see the rise of the virtual worker. Meetings will take place using haptic gloves to shake hands and virtual reality rooms instead of the humble video-conference. What is to stop any of us adopting an on line personality or an avatar which is a different sex, race or age? As such, much of the existing discrimination legislation will need to adapt and much more will be made of perceived characteristics. Taking your corporate data hostage Data – digital gold – is the currency of business and will either be hacked with a view to extracting a ransom or simply as a result of corporate vandalism. We have already seen the catastrophic fallout from data breaches. The constant battle between hacker and corporate will also focus on the weak link in any data security – the disgruntled employee – creating challenges in the management of workers in this key area. The survivors in business will be those organisations that can best protect data. Destination Workplaces We have already seen this trend in retail on the high street. Workplaces will follow this example and become a place reserved for social interaction and physical collaboration. Small firms may only have a few key individuals who are employed in the traditional sense. These smaller firms may create larger networks through virtual collaboration on a project by project basis. Change is coming and those involved in managing human resources will need to be nimble in how they react to it. Not only will the HR professional need to understand the changing nature of work but must harness the technology itself to help create a culture which is beneficial to those involved in the business, measure more accurately performance and manage retention. 1
Tom Goodwin Techcrunch 2015
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By Ian Symes Executive Vice President, North America and Europe, Right Management
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Brexit and a Decade of Uncertainty Brexit is a process, not an event. The referendum in June 2016 wasn’t “Brexit” itself, and the conclusion of the Article 50 process in March 2019 won’t be either. Instead, Brexit will actually be a multi-year process – lasting at least five years, more likely 10 – with several different phases of impact over that time. In short, it will generate a decade of uncertainty for employers and employees across the UK. We are still in the first phase of the Brexit decade of uncertainty. The environment is highly unclear, political negotiations are still in a relatively early stage, and little planning is possible from a business perspective. Lots of businesses are currently experiencing a certain level of inertia as they don’t know what they are planning for. Given that there are only 18 months of the Article 50 negotiation process left, the clock is ticking. Within another six months this pre-planning phase will expire. By then, with a year to go before the UK leaves the EU officially, businesses will have to start moving into the more practical phase of publicising and implementing their Brexit plans. Both company and personal resilience is going to be tested during this time. Businesses don’t have the luxury of sitting back and waiting for the storm to pass. Uncertainty is already filtering down to an employee level. As such, now is not the time to lose focus on people and their careers. There is a real risk that employees will act on this uncertainty and vote with their feet if they feel like their organisation does not have a clear plan both for the business and its workforce. The impact of this could hit the organisation long before Brexit takes full effect. Right Management’s first ever Brexit and Careers Survey investigated the current mood from UK workers on Brexit and how they feel it will impact on their career opportunities, worryingly finding that 67% of respondents believe Brexit will have a negative impact on career opportunities. The survey highlighted an incredible level of uncertainty around the UK’s decision to leave the EU and the resulting impact on organisations and its workforce. 77% of respondents don’t know if organisations expect to increase or decrease their workforce as a result of Brexit, 84% said that Brexit is having ‘low or no impact on their
organisations ability to develop workforce planning strategies’. Just over 40% of respondents said they recognise the need to take action to ensure employees remain engaged in the build up to and after Brexit. Preparing for a decade of uncertainty Given such anxiety in the workplace, it’s never been more important for UK businesses to better understand their people issues, and continually prepare for both the career development and talent management challenges that will emerge. People will always be the most important aspect of any company. Training, upskilling and supporting staff was crucial before, but is becoming even more important when staff could be expected to change and adapt within a moment’s notice. Regular career conversations with staff that aim to understand their perspectives on their future, and offer plans and advice on how they can stay prepared during such uncertain times, will make employees feel valued. Psychometric assessments, cognitive ability tests, virtual learning modules and real-time online business simulations can be highly useful as part of this, not only with helping businesses accurately monitor their employees’ capabilities and potential for the company, but also ensuring they have a clearer indication of how best to steer career progression in the face of such an unpredictable business climate. The results benefit both parties in equal measure: businesses find what they need to drive desired business outcomes, employees are given the appropriate mentorship and support they need for their career progression at a time when anxieties on this subject are much higher than usual. Today’s business environment is already challenging, competitive and fast-paced enough without Brexit causing far greater complications. Flexibility and agility will remain key, and the people working for these businesses will have to embrace these values like never before. By consistently listening to employees, and supporting their progress with appropriate planning, businesses can ensure that whilst Brexit rumbles on to an unforeseen conclusion, their own outlook can remain far more positive and promising. www.babinc.org
Feature
Oliver Schorer Chief Information Officer (CIO) and member of the Board of Management, CHG-MERIDIAN
Digitalisation and the Future of Intelligent Mobile Working Oliver Schorer, Chief Information Officer (CIO) at CHGMERIDIAN, talks about how digitalisation and the impact of intelligent mobile working is changing our future workspace. In what way is digitalisation not only relevant to IT managers and company directors but also to end users? Today, digitalisation is also used to refer to modern workplace arrangements and the ‘mobile workspace’. This means finding the best possible way of using digital technology to meet the needs of all users. Nowadays, employees want the flexibility to be able to work from home or when travelling – and that’s why they want to be involved in designing their own mobile workspace. What then is the motivation for businesses to become more mobile themselves? Businesses can and must do much more to help their own employees make greater use of new digital technology. The increased flexibility that mobile working can offer is providing organisations with the opportunity to boost employee productivity. Thanks to the rise in modern mobile working the workplace no longer solely consists of an office, a desk and fixed working hours, we now have the ability to transform coffee shops, airports and trains into our own personal workspace. Is the popularity of cloud services with customers a key reason for the general decline in wanting to purchase hardware? We are witnessing a shift away from desktop PCs, with employees now preferring to use a variety of mobile devices. It is not uncommon for employees to use several mobile devices, such as smartphones and tablets, alongside conventional PCs, thereby tailoring their ‘next-generation workspace’ to suit their own requirements. We are already seeing organisations getting rid of their telephone systems completely and, instead relying on mobile devices combined with web-based voice-over-IP applications. What trend in mobile technology is making you sit up and take notice? The focus is shifting from hardware to apps, software and services. The end devices are simply the means
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to an end. Users should be given the choice of their preferred device that enables them to be as productive as possible. But at the end of the day it’s all about the efficient and secure provision of apps and services and how they are used. What role should IT play? Ideally, a company’s IT department should deliver the service that end users expect it to deliver. End users generally inform the IT department of the specific features that they require from a mobile workspace. These features are heavily influenced by what they are used to in their private sphere, and are seen as the ‘minimum requirement’. IT departments will therefore have to implement requirements more quickly and efficiently in future. Otherwise, they will quickly end up with the notorious ‘shadow IT’ situation. This can be very risky, not least in terms of data protection and compliance. What is involved in enabling people to use end devices both privately and for work purposes? Some organisations separate the business and private spheres on the end devices themselves, which is something that is technically possible. Others work with blacklists and whitelists, i.e. they specify which apps users may and may not install. In the first instance, ‘corporate-owned, personally enabled’ means that the employer decides which apps and mobile services are permitted. Furthermore, when employees place their orders, they are told how the company’s IT department will access their mobile devices – for mobile device management (MDM) purposes. They are thus fully aware of this from the outset. What do you see for the future of mobile working? Mobile working allows organisations to offer a more flexible environment then was ever thought possible. A key factor in this generational shift is the convergence of desktops and mobiles. With mobiles providing access to email, web browsers and the Microsoft Office package employees can now complete 90% of their tasks on their mobility device.
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By Ben De Smit Economic and Commercial Counsellor, Flanders Investment & Trade
4 Things Every Innovative Company Looks For (and Finds in Flanders) What do innovative companies have in common? Besides not shying away from risks, they have an unrelenting tendency to look beyond company walls. Here are the top 4 things they’re eager to find, and how Flanders – Belgium’s northern region – fits their needs. No. 1 – A direct line to knowledge Tuning into the latest scientific and technological insights is crucial to staying ahead of the pack. Links between knowledge institutions and businesses should therefore be as tight as possible. This is a matter of course in Flanders – which ranks #1 for industrial-academic linkages in the European Commission’s Innovation Scoreboard. Flanders’ four strategic research centres, for example, work with companies in some of the most advanced niches: life sciences and biotech (VIB); energy, materials and chemicals (VITO); nano- and digital technology (imec); production and process technology (Flanders Make). Case in point: Ghent University backs Lithuanian advancements in photonics Brolis Semiconductors delivers a telling example of how knowledge and business go together like salt and pepper in Flanders. In 2017, the Lithuanian company set up its R&D centre in Ghent after years of collaboration with Ghent University’s photonics research group. This paves the way for novel silicon photonics chip technologies, such as small remote laser sensors for smart healthcare wearables. No. 2 – Employees that think like innovators The war for talent rages at its peak in innovative industries. Rather than relying on résumé screening, businesses should scout for people who have learned to think like innovators. In Flanders, for example, they’ll find the world’s 3rd-most talented workforce according to the 2017 IMD World Competitiveness Ranking. Talk about an ideal pool of bright minds.
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Case in point: Johnson & Johnson places its trust in Flanders’ workforce In early 2017, US-based pharma giant Johnson & Johnson decided to channel more than USD 42 million into a new laboratory in Flanders. But it’s the investment in people that makes the project truly stand out. The facility will unite no fewer than 250 scientists and lab technicians to develop new medicines and therapies. No. 3 – Strong shoulders to innovate on Beside every great company is a great partner. Innovative companies treat innovation as a continuous process that marries internal and external insights from communities, customers and sector peers. In short, to step up your game, you’ll need an interactive business ecosystem to thrive in. Nurturing ecosystems is at the heart of Flanders’ cluster policy, which ties together the private, public and academic realms for R&D collaborations. This is most evident in Flanders’ 5 spearhead clusters: for breakthroughs in chemicals (Catalisti), materials (SIM), energy (Flux50), logistics (VIL) and food (Flanders’ Food). No. 4 – Readily available support Innovation brings rewards but also comes at a cost. Companies are increasingly looking for financial support to bolster their R&D endeavours. In this respect, Flanders has made no secret of its ambition to boost R&D expenditure to reach 3% of its GDP. The region offers various tax incentives to empower companies in being more innovative. Three stand out in particular: the innovation income deduction, the R&D investment tax credit and the payroll tax incentive for employing academic staff and researchers. Taking innovation through the roof is easier said than done. But by tapping into an ideal pool of knowledge, talent, clusters and support, companies are equipped to take the plunge in Flanders. Flanders Investment & Trade (FIT) is there to assist businesses in setting up shop in the region. Get the full scoop at www.investinflanders.com www.babinc.org
Industry Insight
US Expansion and Tax Reform: How Will the New Law Affect Your Business? For businesses looking to expand into the United States, the prospect of navigating a new regulatory landscape can present a daunting challenge. Taxation is consistently described by executives as one of the biggest concerns in setting up US operations. This has led to the current environment, where companies doing business in the US are incentivised to characterise themselves to the largest extent possible as a non-US company. The Tax Cuts and Jobs Act of 2017 (TCJA) seeks to reduce the incentive for this type of practice through a series of substantial statutory changes. The headline feature is the reduction of the Federal corporate tax rate from 35% to 21%. This, combined with the total repeal of the corporate Alternative Minimum Tax, will result in a significantly reduced tax burden on a company’s US operations. Of potentially even greater consequence is the switch from a global system of taxation to a territorial system for corporate tax purposes. For a business expanding into the United States, this potentially means less downside to keeping your business within the country, and therefore within the US tax net. In practice, whether this actually has an impact on a company’s plan for expansion depends on the specific circumstances of that company. It must also be considered that as Federal law, these new reforms will not mitigate the issues of state and local taxation. This still remains a significant onus, particularly for overseas businesses unfamiliar with the unique quirks of this multi-layered tax system. In addition, taxpayers intending to set up a US corporation as the top holding in a group structure will need to be aware of certain new limitations imposed by the TCJA. These include a minimum tax on “global intangible low-taxed income” (GILTI) and the new “base erosion anti-abuse tax” (BEAT). Measures such as these could, in theory, increase the effective tax rate of the US corporation. The fundamental question remains the same: do the benefits of doing business in the United States outweigh the burden of taxation as a US company? Under these new rules, that burden has been reduced. However, that does not necessarily mean that the answer to this question has changed.
By James Debate Corporate Senior Tax Associate, US Tax and Financial Services
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The 15th Annual
CORPORATE CITIZENSHIP AWARDS DINNER
Putting Values Into Action 6 June 2018 Merchant Taylors’ Hall Honourees Jim Barber, Chief Operating Officer, UPS Jayne-Anne Gadhia, Chief Executive, Virgin Money
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Policy
US Tariffs on Steel and Aluminium: Will it Help American Workers? Emanuel Adam
Director of Policy and Trade eadam@babinc.org
On Thursday, March 8th, the US President signed a declaration that the United States would impose tariffs of 25% on steel imports and 10% on imported aluminium for all but two countries world-wide. The announcement did not come as a surprise. In February, US Commerce Secretary, Wilbur Ross, had presented several options to restrict imports of steel and aluminium. The Secretary had launched the investigations months ago at the request of the President under Section 232 of the 1962 Trade Expansion Act, which allows the President to restrict imports in the face of a national security threat. The US Commerce report as well as public comments made by US Government officials stated that imported metals are threatening the American manufacturing and defence industrial base and are therefore justified. Protecting the American steel industry and its workers was a core element of the President’s campaign and the current US Administration. Indeed, a widely-cited study by the American Economic Association shows that three-quarters of jobs in the steel industry had indeed disappeared between 1962 and 2005; having left many workers and entire regions behind. Efforts by any political leader to protect workers and increase jobs are very welcome. Equally welcome are efforts that help counter unfair global trade practices. Yet, in the case of the tariffs on steel and aluminium, the overall response, including from corporate America, has been rather less cheerful. In fact, in an unusually bold statement, the International Monetary Fund (IMF) warned that the import restrictions announced by the President would not only hurt countries outside of the US, but the US economy itself; particularly the manufacturing and construction sectors, which are the major users of aluminium and steel. In a world that depends on global trade, the prospect of a growing trade conflict is concerning. Equally concerning, however, is that trade, yet again, is blamed for the job losses in manufacturing industries of the past. Yes, it is true that partners, particularly in the West, find a joint answer to the over capacity of steel and trade distortion by China. But will protectionist measures really help the American workers?
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The IMF and other evidence do not support such an argument. It is evident that trade does put pressure on workers in traditional industries; but in some cases, we learn that it is rather technology that changes the landscape of jobs than increased global competition. In the case of the US steel industry, this became particularly visible. The same study cited before suggests that the massive decline in steel workers’ jobs was less a consequence of increased global competition, but because of improved production technology and therefore changes in how we work. Indeed, technology has raised the output by a worker five times over the period studied for the analysis. A report from the independent economist network Econofact predicts that the proposed trade protection may actually increase employment much less than the President hopes; a message widely echoed by US steel-using industries. The debate on trade over the past few years has clearly shown that Governments (and businesses) need to respond better to the potential negative impact trade can have on workers and regions. We must be careful though to not use protectionist measures as a simple solution to a complex problem. A trade conflict as it appears on the horizon would be detrimental to businesses and our global trading system. But most importantly, it will most likely not have the desired effect, which is supporting workers.
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Event Highlights New York
Experts from sponsor and host company, Gibney Anthony & Flaherty LLP, Magrath Sheldrick, Thomson Reuters and Citigroup lead a panel discussion on the critical issues of immigration and employment in the age of Brexit to open the New Year on January 16.
Industry experts from host, AT Kearney, BAE Systems and eleven– time sponsor company, Alston & Bird, discuss the latest trends in cybersecurity, data and information at New York’s annual program, Washington Insight.
EU Ambassador to the United Nations, Joao Vale de Almeida, addresses members in New York on his economic and political forecast for 2018 at the first Ambassadorial Briefing of 2018. Sponsored and hosted by KPMG.
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Event Highlights London
With thanks to all the companies who donated prizes for the BAB Annual Christmas Luncheon BAB welcomed more than 300 people, representing 100 UK and US companies, to our Annual Christmas Luncheon at The Dorchester.
BAB Chairman Chris Perry and US Ambassador Robert “Woody” Johnson at a joint event with British-American Parliamentary Group in Westminster. Event sponsored by BP.
Our panel of speakers from the second in our six-part Future of Work Series looking at creativity as the new productivity. L-R Alice Mount, BAB; Kev O’Sullivan, FleishmanHillard Fishburn; Madelyn Hankins, Steelcase; Matt Meyer, Taylor Vinters; Diana Bannister MBE, University of Wolverhampton. Event hosted by Steelcase.
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Events Calendar London March 2018
April 2018 ACROSS THE POND
B ritish Trade & I nvestment S uccess S tories
Future of Work – Business Transformation Tuesday 20 March 6pm – 9pm Sponsored by Philip Morris International, Hosted by Steelcase
Young Professionals Speed Networking Tuesday 17 April 6:30pm – 8:30pm Hosted by Albert’s
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Across The Pond Launch Wednesday 18 April 6pm – 8pm Hosted by Barclays
May 2018
Chairman’s Lunch Monday 23 April 12:30pm – 2:30pm
CEO Roundtable with Martin Gilbert, Chief Executive Standard Life Aberdeen Thursday 26 April 8am – 10am Sponsored by Standard Life Aberdeen
Future of Work – Distributed Workforce Tuesday 1 May 6pm – 9pm Hosted by Steelcase
BABC Annual Transatlantic Conference The Future of Transatlantic Trade Wednesday 6 – Friday 8 June Birmingham, UK
International Business Festival Tuesday 12 – Thursday 28 June Liverpool, UK
June 2018
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Annual Corporate Citizenship Dinner Wednesday 6 June 7pm – 10pm Merchant Taylors’ Hall
View both London and New York’s full events calendar at www.babinc.org/our-events www.babinc.org
NETWORK
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