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ISSUE 3-2017 / YEAR 21st - PRICE 10,00 € / $12,00

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WHAT NEXT FOR PRESIDENT MACRON? Opinion

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FAKE NEWS: EUROPE NEEDS A PLAN

CHINA’S NEW SILK ROAD. WHAT YOU NEED TO KNOW

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What next for President Macron?

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A smart policy for the EU: reindustrialisation and the role of European champions

A view from China on the future of innovation and education

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Balkans & Black Sea Countries on path of growth

Turning the linear circular: the future of the global economy

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HIGH REPRESENTATIVE/VP FEDERICA MOGHERINI ALSO COMMANDER-IN-CHIEF OF THE EU ARMY By N. Peter Kramer

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istening to the martial language used by the highest ranked EU dignitaries such as Juncker, Tusk, Tajani and Mogherini, their EU has many enemies: Donald Trump, Vladimir Putin, Recep Erdogan and, after Brexit, maybe even the UK. Consequently, for those in Brussels ivory towers, an EU Army seems more appropriate than ever! Donald Tusk, the EU Council President, called it an historic moment when the Council decided unanimously in June to accept the Commission’s EU Defence Plan. The plan is intended to strengthen EU military cooperation, soon to transform into EU Battle groups! Although nobody knows quite yet what that means. High Representative/Commission VP Federica Mogherini, speaking in the Euro Parliament about the European Defence Plan, was already assuming the stature of a future EU Defence Minister. ‘Binding commitments between Member States to jointly develop and deploy military capabilities should pave the way for… a Permanent Structured Cooperation’. Mogherini mentioned the establishment of a command centre in Brussels for operational planning and conduct of military training. Whilst some of Mogherini’s colleagues deny the ambition for an EU army, she was talking in the EP as if it already exists, referring to the activities of ‘men and women in EU uniform serving under the EU flag’. Mogherini made clear to the EP, that she has more than two hats: VP of the Commission and High Commissioner member of the Council, as everybody knows, but also a third one, as head of the European Defence Agency! In other words, she is The Commander-in-Chief of the EU Army! What about the money? And what about the relationship with NATO? Proud Commission President Juncker presented the EU Defence Plan and mentioned the price tag - €5,5 billion! Naturally born by the member states. The money will be redistributed to them by the Commission, of course after deducting the costs of Brussels bureaucracy and probably a new palace, a HQ for the EU Army. The UK Conservative Defence Spokesman in the EP, Geoffrey Van Orden MEP, commented: ‘Instead of supporting the Commission the Member States should put their efforts into rejuvenating their armed forces and revitalising NATO’. He called for interoperability between all NATO nations, the US and its European allies. What he probably meant to say was let NATO members first keep their financial commitments to NATO, and pay their 2%of GDP contribution * instead of following the megalomaniac dreams of the Commission and its President who dared to claim that the EU Defence Plan iswhat the EU citizens are waiting for… * 22 EU Member States are NATO allies, only four of them pay the agreed 2%: Estonia, Greece, Poland and the UK.

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WHAT NEXT FOR PRESIDENT MACRON? by Ariane Bogain* If a week is a long time in politics, what about a few months? Back in March, the European Union was bracing itself for drama: would the powerful wave of discontent that had swept over the United Kingdom and the United States in 2016 engulf the Netherlands and France? With the staunchly anti-EU Marine Le Pen riding high in the polls for the presidential election, the bet was on France plunging the EU in turmoil. And then came Emmanuel Macron - the man with no party to his name, the youngest candidate who nobody had bet on, pipping everyone to the post in the first round and going on to win handsomely in the second round. And now, here he stands, with an absolute majority following his convincing victory in the June 2017 parliamentary election, a feat very few people thought possible only a few weeks ago. Far from being the lame-duck President with no majority that many had predicted, he has emerged as a strong leader with a majority that owes him everything. So, what now for Macron and France? Three main areas are likely to make or break Macron’s presidency.

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On top of the list is the labour reform Macron promised during his campaign. Reforming the labour market is, without a shadow of a doubt, an explosive issue in France. Millions of people took to the streets in 2016 to oppose the reforms of Macron’s predecessor, François Hollande, known as the El Khomri law. The precedence it gave to potentially less favourable local agreements over collective sectorial agreements on working time was deemed an intolerable attack on workers’ rights. And yet Macron wants to go much, much further, by promoting local agreements over their sectorial counterparts in all areas, including wages and working conditions. He argues that France needs to make its labour market less rigid by giving more flexibility to individual companies, to encourage job creation. Critics say that workers will be left to face far worse conditions. The parties on the Left, along with some workers’ unions, have already warned about a summer of industrial action. Considering the long pattern of mass demonstrations defying and defeating countless French governments, Macron has a huge battle on his hands. It is too early to tell its outcome, but his presidency will be defined by his ability - or inability - to implement the most contentious plank of his programme. With France under a state of emergency since Novem-


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ber 2015, terrorism will also be high on Macron’s agenda. But he is caught between a rock and a hard place: keep a regime that is supposed to be for exceptional times only and be accused of illiberal practices; end it and be accused of gross negligence if another attack occurs. That’s why the state of emergency has been called a political trap. Macron is planning to put an end to it by incorporating its main measures, criticised by many for curtailing civil liberties, into law. By effectively making the state of emergency permanent, Macron risks turning the criticisms into widespread anger, as already witnessed in the call from French jurists and human rights organisations to withdraw his proposals. He might find solace in being supported by a large majority of French citizens, who yearn for security, but does he really want to be dubbed illiberal and tarnish his reputation of being at the vanguard of liberal progressive values? Finding a way out of this trap certainly won’t be easy.

‘Merkozy’ couple of (still) German Chancellor Angela Merkel and former French president Nicolas Sarkozy. But this time it will be without the counter-balancing act traditionally provided by Britain. Many countries in the eurozone are also wary of losing sovereignty to a more integrated zone, however tempting the possibility of Eurobonds might be. And the idea of Eurobonds is not popular in Germany. And yet, following the Brexit referendum, the mood has changed in the EU. Pro-European sentiments are on the rise and the EU has more confidence to push its integration forward, as seen in the pledge to enhance EU defence cooperation. At this point, it is too early to tell whether Macron can reshape the EU. Nothing substantial will happen anyway until the German election in September, and the Brexit talks might well consume all of EU’s energy for the foreseeable future. But Macron is certainly the most pro-European French president since François Mitterrand, and his future role in the EU deserves to be closely monitored. President Macron holds all the cards in his hands. He has an absolute majority and he has radically redefined the whole political landscape. Out the two traditional juggernauts of French politics, the Socialist party is facing extinction and the Republican Right is licking its wounds. Marine Le Pen’s National Front is in full in-fighting mode over its future direction and Jean-Luc Mélenchon’s hard Left only has 17 MPs. But before anyone jumps to the conclusion that Macron is now set to radically change France, let’s not forget that despite his outstanding electoral successes, he can’t take popular support for granted. He might have won very handsomely indeed but with a record high abstention rate in June, at 52% in the first round and 57% in the second, France was clearly not swept by a wave of Macronmania, and its deep divisions have not suddenly disappeared.

And then there’s the EU. Leaving Brexit aside - after all, no one really knows what Britain wants - Macron’s priority is a strong France in a strong EU. His ambitions are bold and wide-ranging, from deepening EU integration and re-igniting the Franco-German engine to strengthening the Eurozone with its own parliament, budget and finance minister. The question remains how feasible all of this will be. Many states fear Franco-German hegemony, in a re-enactment of the

Concentration of power can easily lead to a sense of complacency, but the French ‘street’ has a knack of biting back. Macron is all set, but the road to reforming France will be long and winding, with pitfalls at every corner. * Ariane Bogain Senior Lecturer in French at Northumbria and Senior Lecturer in French and Politics at Northumbria University

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FAKE NEWS: EUROPE NEEDS A PLAN by Gary Machado and Nicolas Vanderbiest*

Fake news is now the buzz word across Europe and the wider world. But how do we fight it? Nicolas Vanderbiest and Gary Machado warn that censorship is not the solution Many think that fake news was the key to the success of Donald Trump and the Leave campaign. Lately, there isn’t a single week in Brussels without a conference on fake news, misinformation and disinformation but it is hard to see what European plan is being devised to tackle these threats in a comprehensive way.

get much traction at that time; maybe some could not realise what was at stake and how much impact it could have during a major election. This work served as a basis which helped me source very rapidly the rumours on Emmanuel Macron, including the supposed offshore bank account in the Bahamas and the #MacronLeaks.

In the US, Jack Posobiec – a serial-propagator of fake news including the #MacronLeaks – is now accredited to the White House briefings.

In my opinion, we have to go deep to the source of the rumour, and to do so very quickly. Fact-checking is important but too slow. The communities spreading fake news have one weakness; they live in information bubbles and it takes some time for fake news to spread outside their community.

Over the last five years, I developed multidisciplinary techniques to analyse how information spreads on social media and how communities get themselves organised. Rumours and false news were not born during the recent elections. For many years, the corporate world had to deal with the online spread of false information. Before the French elections, I published a paper on the influence of the pro-Russian media outlets and their proximity with the far-right. This article didn’t

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We need to exploit that weakness by fighting them at the same time before the contamination of the other communities on social media. When elections are held in two days, we need to act and to tweet rapidly with the relevant information showing that false news is being once again shared by the same serial propagators of rumours.


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This is what I did during the #MacronLeaks, before the legal deadline to end the campaign on 5 May. Fact-checking by the media is also crucial; but it takes time and we have to acknowledge that. If we really want to combat misinformation, we need a plan and a puzzle. We need organisations to quickly source the rumour (i.e. where it comes from and who is spreading it – this can be done quickly) and others to fact-check (i.e. to verify the veracity of an information – this takes more time). But to understand who is spreading rumours, we need to identify their accounts. The overly simplistic answer proposed by the German government – which basically requires social media platforms to ban accounts promoting hate speech and fake news – is not the right answer. Serial-fakers will create another account once their previous account has been banned; they will continue sharing misinformation; they will be presenting themselves as being censored by the governments; and instead of monitoring these accounts, debunkers like me will have to waste their energy into mapping new communities of social media accounts. So instead of doing our work, we will have to start from scratch over and over again. WE NEED A PLAN It is fair to say that the EU institutions don’t have a plan. They navigate between the opinions expressed in the member states and flood the debate with commonplaces and clichés. The institutions need to seriously consider the topic. Fake news is not new; they didn’t start with social media. In the UK, you will find misinformation about the EU daily in printed newspapers. To understand the context and its scope, there are about 4 million tweets about Brexit each month, with their fair share of disinformation. We need to have a plan. And we need to move fast. Censorship is not and will not be the answer. This does not mean that there should not be a regulation but a regulation or any action should focus on giving the tools to the ecosystem so that they can better source and combat fake news. What should be done?

NGOs, foundations, academics and media organisations should be given better access to social media data to be able to better source and combat fake news; Furthermore, the Parliament’s proposal for an EU-funded anti-Russian propaganda pilot is an excellent idea and should be supported. The Commission is expected to send its feedback in the coming next weeks. Anything but a positive answer would be a sign of defeatism; Lastly, the EU institutions must get themselves organised internally to debunk ‘Euromyths’. They also have to provide the necessary support – including financial – to an ecosystem of external organisations who know how to source, debunk and fact-check. It is surprising to observe that many member states and other countries around the globe are moving much faster on this matter than the EU. In a recent answer to a parliamentary question, the Commission said it “encouraged industry to step up voluntary efforts to prevent trust-diminishing practices and recognised the need for greater transparency for users to understand how the information presented to them is filtered, shaped or personalised, especially when it influences either purchasing decisions or participation in civic or democratic life”. We should expect more than such a vague response. Let’s work on a plan and implement it.

* Nicolas Vanderbiest is a PhD assistant at the University of Leuven and a social media expert. He wrote this opinion piece with the help of Gary Machado, co-founder of SaperVedere, a social-media analysis company based in Brussels.

** First published in EurActiv.com

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TIME FOR THE EU TO ACT IN THE ARCTIC by Ville Cantell* As the saying goes, “what happens in the Arctic does not stay in the Arctic”. And even though the President of the United States, Donald Trump, has said that the country will withdraw from the Paris climate change agreement, no one can escape the effects of global warming.

same time, we ambitiously want to take Arctic cooperation to the next level.

If there were ever a time for the European Union to assume leadership, this is it. Finland, as the Chair of the Arctic Council for the next two years and the northernmost EU member state, is trying to achieve just that. We want to turn the focus of the EU to the Arctic, and for the EU to assume leadership in tackling the challenges of climate change.

Environmental protection remains a key task for Arctic cooperation. As for connectivity, economic development is directly linked to the adoption of modern communications technology.

We in Finland are fully aware that this will not be easy. We can’t, and won’t, tackle the issue alone. Our Arctic Council chairmanship slogan - ‘Exploring Common Solutions’ - reflects the need for constructive cooperation between all Arctic stakeholders. At the

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Our four priorities include environmental protection, connectivity, meteorological cooperation and education.

Meteorological cooperation is a new focus of the Arctic Council, and work is carried out jointly with the World Meteorological Organization (WMO). Meteorological cooperation is becoming increasingly important for the development of ice and weather services, as well as for the real-time assessment of scientific research on climate change. And last but not least, education is the key to sustainable development. The Arctic region is no exception in this respect.


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For Finland, the Arctic Council chairmanship and the new focus of the EU on the Arctic, are opportunities to showcase our world leading expertise - known as ‘snow-how’ - and technology. The objective of the Finnish government is that Finland provides practical solutions to Arctic challenges. Twothirds of the world´s icebreakers have been designed in Finland, and as our Foreign Minister Timo Soini has joked, “all the best ones” are of Finnish making. The High North and Arctic are the ultimate testbeds for anything and everything functional, and therefore one can well say, “if it works in Finland, it works anywhere”. To work here, ideas must be Arctic-proof – and withstand the challenges of the changing seasons. Finns are born with an Arctic attitude and Finland is one of the leading countries in the world because we have to cope with, and get to enjoy, an Arctic climate. As the EU as a whole holds a leading position in science, it should increase its participation in large-scale scientific cooperation. Research and education are central to the EU’s Arctic Programme. When it comes to project funding, the EU should put its money where its mouth is. The objectives of Finland for the Arctic Council chairmanship are supported by the EU’s growing interest in northern investment, infrastructure development and innovation. But more funding is needed for projects that focus on the connectivity and logistics in the North, thereby improving the lives of the people and giving an economic boost to the region.

Engagement of all stakeholders, both public and private, is needed. A high-level event, entitled ‘A Sustainable Arctic – Innovative Approaches’, was co-hosted by the Finnish foreign ministry, the European Commission and the European External Action Service, in the city of Oulu on 15-16 June. Timo Soini, EU High Representative for Foreign Affairs and Security Policy Federica Mogherini and European Commissioner for the Environment, Maritime Affairs and Fisheries Karmenu Vella all stressed the importance of deepening the cooperation in the Arctic region between local, regional and national authorities and with the representatives of the indigenous peoples. Despite geopolitical tensions rising in the last years, the Arctic region has remained one of peaceful cooperation. We must continue to ensure cool heads prevail in the future as well. It is in the interests of the EU, and the whole world, that the Arctic remains a region where constructive international cooperation is conducted and that solutions to complicated Arctic questions are resolved peacefully together.

* Ville Cantell Director of Europe and Neighbouring Areas at the Ministry for Foreign Affairs of Finland

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A SMART POLICY FOR THE EU: REINDUSTRIALISATION AND THE ROLE OF EUROPEAN CHAMPIONS by Stefan Vuza*

In the ongoing debate over the future of the European project, one dimension is all too often overlooked. A strong European Union needs solidarity and political will, but jobs and economic growth are equally important If the old Continent will continue to experience low growth, increasing inequality, and stagnant wages, the political answers will not suffice. This is why reindustrialisation is such a key policy topic; despite all the Cassandras, the battle is not yet lost and the industry and manufacturing jobs do not represent an outdated solution to Europe’s predicament.

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My plea is that Europe should become serious about reindustrialisation and think about supporting European industrial champions. It is not only economically smart, but also politically appropriate, given that, in the last two decades, more and more of the workers’ vote has fed populist parties.


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The world is changing and is changing fast. To come out ahead, it is well understood that the European Union requires excellent science, research, and innovation. For the industry to increase its contribution to the development of the European economy, a series of factors and elements have to be considered, taken care of or aligned: new business models, value chains built on strategic industrial innovation, proper supply of raw materials (both at the EU and global level) and material replacement, focus on clusters and technological ecosystems, implementation of advanced robotics and automation industrial symbiosis, more attention to secondary material resources and resource recycling technologies. Obviously, future industry is also about adequate skills and financing. The success of reindustrialisation will depend on lifelong education and periodic training of the existing workforce, as resilience and adaptation in face of major changes will be the new norm. Moreover, a critical point in building the right infrastructure for the industrial recovery refers to the availability of financing opportunities at the European, regional, and national level. I am well aware of the reluctance of European leaders to engage in discussions and bring forward policies which specifically address the topic of national industrial champions. This is perceived as a dirigiste approach, as something going against the free market and open competition principles so dear to the European policymakers. But solutions are necessary if Europe wants to show that it understands the current wave against globalisation and free trade. If national champions are off the table, then why not European industrial champions? The ongoing trend towards service-based economies should not prevent one from understanding the benefits of a strong industrial sector and from acting to strengthen its role, especially in those countries most hit by the crisis and where the potential exists. In 2012 the European Commission rightly set the target of increasing the industrial sector’s share of the European economy from 16% to 20% by 2020. The decline of the weight of this sector in national economies is not equally distributed across the UE, with Germany and the Nordic countries remaining highly competitive; therefore, a one-size-fits-all approach cannot work. If the words are to be matched by concrete actions, the policy-makers should go beyond analysing the price-related factors which affect the European industry and pay closer attention to the

efficiency of institutions, financial markets, product markets, and labour markets. Only by putting in place supportive conditions for companies, they can compete against non-European rivals. This will necessitate investment in education, research and infrastructure, as well as an investmentfriendly climate, affordable energy and intelligent regulation. My hope is that the Brussels leaders will acknowledge how big is the today’s gap between aspiration and reality and will act swiftly and pragmatically by engaging more with the business sector. A critical point, especially in the Central and Eastern European countries, concerns the need for more public infrastructure investment. The basic principle applied to infrastructure at both EU and national level should ultimately be the tried-and-tested formula that these scarce resources should increasingly be allocated to those areas that offer the greatest value for money. The closer involvement of the private sector in the planning, construction, operation and funding of infrastructure could help to realise desirable and economically beneficial projects more quickly. I salute the opportunities offered by the Juncker plan and I hope that they will really help in advancing the reindustrialisation agenda. As an entrepreneur whose companies are active in the Central and Eastern European chemical industry and are responsible for hundreds of millions of Euro in turnover, I strongly believe in the potential and benefits of a pan-European reindustrialisation policy. In views of the recent economic crisis, the idea that, in Europe, industry is a relic of the past should be once and for all abandoned. I invite the European policy-makers to think big, not in terms of national industrial champions, but European ones. We should seek to keep or regain our competitiveness at the world scale and this cannot be done with laissez-faire policies. A public – private dialogue and partnership matched by vigorous policies in favour of reindustrialisation should become reality if we are to prevent isolationist trends and to grow again. * Stefan Vuza is a Romanian industrial entrepreneur. He owns Chimcomplex, a leading chemical company.

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CHINA’S $900 BILLION NEW SILK ROAD. WHAT YOU NEED TO KNOW by Anna Bruce-Lockhart*

You’ve probably heard of the Silk Road, the ancient trade route that once ran between China and the West during the days of the Roman Empire. It’s how oriental silk first made it to Europe. It’s also the reason China is no stranger to carrots And now it’s being resurrected. Announced in 2013 by President Xi Jinping, a brand new double trade corridor is set to reopen channels between China and its neighbours in the west: most notably Central Asia, the Middle East and Europe. According to the Belt and Road Action Plan released in 2015, the initiative will encompass land routes (the

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“Belt”) and maritime routes (the “Road”) with the goal of improving trade relationships in the region primarily through infrastructure investments. The aim of the $900 billion scheme, as China explained recently, is to kindle a “new era of globalization”, a golden age of commerce that will benefit all. Beijing says it will ultimately lend as much as $8 trillion for


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infrastructure in 68 countries. That adds up to as much as 65% of the global population and a third of global GDP, according to the global consultancy McKinsey.

geopolitical heavyweight, stepping into the breach left by the United States on matters of free trade and climate change.

But reviews from the rest of the world have been mixed, with several countries expressing suspicion about China’s true geopolitical intentions, even while others attended a summit in Beijing earlier this month to praise the scale and scope of the project.

"As some Western countries move backwards by erecting 'walls', China is contriving to build bridges, both literal and metaphorical," ran a recent commentary by Xinhua, a Chinese state-run media agency. Bridges are key to China's strategy, says Kevin Liu, Chairman of Asia, Partners Group.

The project has proved vast, expensive and controversial. Four years after it was first unveiled, the question remains: WHY IS CHINA DOING IT? One strong incentive is that Trans-Eurasian trade infrastructure could bolster poorer countries to the south of China, as well as boost global trade. Domestic regions are also expected to benefit – especially the less-developed border regions in the west of the country, such as Xinjiang. The economic benefits, both domestically and abroad, are many, but perhaps the most obvious is that trading with new markets could go a long way towards keeping China’s national economy buoyant. Among domestic markets set to gain from future trade are Chinese companies – such as those in transport and telecoms – which now look poised to grow into global brands. Chinese manufacturing also stands to gain. The country’s vast industrial overcapacity – mainly in the creation of steel and heavy equipment – could find lucrative outlets along the New Silk Road, and this could allow Chinese manufacturing to swing towards higher-end industrial goods. A NEW GLOBAL SUPERPOWER Some Western diplomats have been wary in their response to the proposed trade corridor, seeing it as a land grab designed to promote China's influence globally, but there’s little evidence to suggest the route will benefit China alone. The scheme is essentially a “domestic policy with geostrategic consequences, rather than a foreign policy,” Charles Parton, a former EU diplomat in China, told the Financial Times. There's no doubt that China is growing into a

He explains: "The superpower status the US has achieved is to a great extent grounded on the security blanket it offered to its allies. Geopolitically, China decided a long time ago that security was too expensive an offer to make. Instead, this new superpower may offer connectivity." If combined with enhanced global connectivity, China's enormous gravity could become an even more meaningful engine for the global economy," Liu adds. WHICH COUNTRIES STAND TO GAIN? Sixty-two countries could see investments of up to US$500 billion over the next five years, according to Credit Suisse, with most of that channelled to India, Russia, Indonesia, Iran, Egypt, the Philippines and Pakistan. Chinese companies are already behind several energy projects, including oil and gas pipelines between China and Russia, Kazakhstan and Myanmar. Roads and infrastructure projects are also underway in Ethiopia, Kenya, Laos and Thailand. Pakistan is one of the New Silk Road’s foremost supporters. Prime Minister Nawaz Sharif said the trade route marked the “dawn of a truly new era of synergetic intercontinental cooperation”. Unsurprising praise perhaps from a country that stands at one end of the China-Pakistan Economic Corridor, where it is poised to benefit from $46 billion in new roads, bridges, wind farms and other China-backed infrastructure projects. Support has come from further afield as well, with Chile’s president, Michelle Bachelet, predicting the route would “pave the way for a more inclusive, equal, just, prosperous and peaceful society with development for all”. WHO’S AGAINST IT? Perhaps the route’s most vocal critic so far has been

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India’s Prime Minister Narendra Modi. Vehemently opposed to the $46 billion China-Pakistan Economic Corridor, which runs through a part of Kashmir claimed by India, he has called the route a “colonial enterprise” that threatens to strew “debt and broken communities in its wake”. He even boycotted the recent One Belt One Road summit in Beijing. Modi wasn’t the only leader notably absent from the gathering. No officials from Japan, South Korea or North Korea made an appearance, and of the Group of Seven (G7) industrialized nations, the only representative to attend was Italian Prime Minister Paolo Gentiloni. “While countries welcome Beijing's generosity, they are simultaneously wary of its largesse. China's growing influence is a concern for nations whose political interests do not always align with Beijing's," explains Paul Haenle, director of the Carnegie-Tsinghua Centre for Global Policy. While China’s growing influence is a concern for nations whose political interests aren’t aligned with Beijing’s, Chinese spokespeople have repeatedly denied charges of a play for global dominance. The New Silk Road is “not and will never be neocolonialism by stealth”, China announced recently in state media. WHO’LL FOOT THE BILL? The One Belt One Road project already has $1 trillion of projects underway, including major infrastructure

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works in Africa and Central Asia. Ahead of the Beijing summit earlier this month, the China Development Bank had set aside almost $900 billion alone for more than 900 projects. China’s Big Four state-owned banks extended an estimated $90 billion in loans to the economies related to the initiative last year alone. The Asian Infrastructure Investment Bank, which was set up in 2014 to help fund the trade route, has $40 billion in capital from China’s foreign exchange reserves and policy banks. Despite this largesse, though, the AIIB has provided less than $2 billion in funding over the past year. The bank’s president, JinLiquin, told the World Economic Forum summit in China last year: "We will support the One Belt, One Road project. But before we spend shareholders' money, which is really the taxpayers' money, we have three requirements." What were these? The new trade route would have to promote growth, be socially acceptable and abide by environmental laws, Jin said. How well the project fares against these three criteria has yet to be seen.

* Anna Bruce-Lockhart Editor, World Economic Forum

** First published in www.weforum.org


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A VIEW FROM CHINA ON THE FUTURE OF INNOVATION AND EDUCATION by Xu Jinghong*

Many years ago, I sat in a classroom at Tsinghua University, staring at Euler’s formula on the blackboard and marvelling at its mathematical beauty. This is a formula that relates mathematics’ most famous constants (pi, zero, Euler’s number “e”, and imaginary number “i”) in one equation; its beauty lies in the infinite possible functions and exponents that can be created.

parallel between Euler’s formula and human life; just as bringing mathematics’ important constants together can create endless possible functions and exponents, uniting humanity’s most promising gifts can create boundless potential for human progress.

Today, I came across this formula once again, after years of engagement in promoting innovation in technology, industry, and culture. I now understand the

We have been blessed with nature’s resources and a strong innovative spirit; these things have enabled all of our scientific, technological and social progress,

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leading us to a tomorrow of infinite possibilities. In tangible form, this can be seen in our high-speed railways, our colossal cruise ships, our instantaneous communication systems and our artificial intelligence.

in a more stabilised society, increased protection of vulnerable groups, improved environmental conservation, and the potential for more sustainable development in underdeveloped nations and regions.

Leonard Euler lived in the midst of Europe's Enlightenment, at which point the gifts of the Renaissance and the scientific revolution had begun to introduce to human history a tide of modernisation that eventually made way for the industrial revolution. The beginning of the 16th Century birthed many important scientists, philosophers, and inventors. From the age of discovery through to the information age, human development and scientific innovation have merged together to form the thriving glory that is modern life.

Innovation is at the heart of creating value - and there are three important factors that encourage innovation. Firstly, the creation of science parks, industrial parks, innovation communities and incubators creates platforms for entrepreneurs to connect meaningfully with innovation resources. Secondly, sufficient financial resources, including venture capital funds and parent funds, prop up innovation. Lastly, developing vast networks through international cooperation facilitates innovation amongst enterprises worldwide.

While mathematics is the universal language of communication, it is innovation and the human spirit which provide the path to sustainable and inclusive human development. Currently, the developmental state of different cultures, nationalities, and regions remains unbalanced. We need both scientific innovation and human spirit to give more people access to modern technology. In this way, diverse cultures can communicate and develop better relations, resulting

Technological innovation leads us towards a better life. We gather together because technology is making the world smaller and more accessible. The mass application of information technology gives people in less-developed areas access to the internet, connecting them to the outside world, sharing the convenience of the new digital age. Advances in technology improve our health and

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thus offer us a better life. Innovative biochip-related products and clinical applications have succeeded in addressing human health needs, such as hereditary hearing loss, Down’s syndrome and thalassemia. Viewed in economic terms, innovation can of course create unicorn companies (start-ups valued at more than $1 billion); but more importantly it builds subsidiary sectors within the advanced technology innovation industry. These sectors have delivered state-of–theart public safety and security technologies as well as emergency management solutions to national-scale disaster relief, urban public safety, hazardous chemical safety and risk-detection methods. An advanced security inspection solution has been created, as well as products that serve the needs of civil aviation, customs, railways, highways, and national conferences. The purpose is to enhance safety for the people. Human spirit, meanwhile, is the key to promoting inclusive growth. To offer a better education to as many people as possible has always been a major challenge. How can innovation accelerate the impact of education? It’s heartening to see the new trend of massive open online courses (MOOC) succeed in integrating internet thinking into education and providing affordable learning. As long as you want to learn, access is available to the knowledge you need. In three years, a MOOC platform provided educational services to nearly 160 countries and regions, reaching 7,500,000 subscribers. Human spirit is no doubt everywhere in life, from the buildings in which we live and work to our preferred

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holiday destinations. Human settlement science perfectly interprets how we apply science, arts and humanity to a holistic approach aimed at creating a better life. Due to the advanced technology and knowledge we acquire in virtual and augmented reality, the restoration of historical heritage through digitalisation now is a dream coming true. Urbanisation and architecture with the core sense of human spirit have lead us to be able to build parks over old waste-water treatment sites, to rebuild historical communities bursting with vitality, and to upgrade traditional industries with new technologies and new ideas. We strongly believe that our future prosperity will be and must be inclusive, shared by all nationalities and cultures. The common values of humanity teach us to embrace differences, and differences give birth to innovation. At Tsinghua Holdings, we initiated the Star Clustering Plan with the aim of connecting global innovators, capital, and cooperation. If we take life as Euler’s number ‘e’, and innovation and human spirit as imaginary number ‘i’, it is certain that we will continue to create new chapters for history. Life is limited; innovation is infinite.

* Xu Jinghong Chairman of Tsinghua Holdings, is one of the Co-Chairs of the Annual Meeting of the New Champions 2017


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BALKANS & BLACK SEA COUNTRIES ON PATH OF GROWTH by N. Peter Kramer On the cross section of governmental and business sectors, the Balkans & Black Sea Cooperation Forum** served as think-tank to outline the current situation, quote political indicators, navigate to growth and cooperation, and monitor the perspectives and the SDGs towards 2030 on annual basis. Rotating annually at a different State of the region, it also included to open to the public areas; the Business HUB (exhibiting zone for companies & organisations to the promotion of their core activities) and the Cultural Zone for two honorary countries at showcasing their cultural heritage. One quote illustrates very clearly the state of the region: “The BBSC region is on path of growth, but due to market volatility and high risk perceptions, capital inflows from abroad remain subdued”, said Mr. Ihsan Ugur Delikanli, President of the Black Sea Trade and Development Bank. And “the Region is diverse in resource endowment,

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economic structure, level of development, it represents a centrally located geographic continuum of enormous strategic importance and economic potential, possessing significant resources and high quality human capital�. Please find in this EBR Special Report four interesting contributions, written by journalists Aria Koutra, Nikos Lambropoulos and Sarantis Michalopoulos.

**The Balkans & Black Sea Cooperation Forum concerns Albania, Armenia, Azerbaijan, Bosnia/ Herzegovina, Bulgaria, Croatia, Georgia, Greece, Macedonia (FYROM), Moldova, Montenegro, Romania, Russian Federation, Serbia, Slovenia, Turkey and Ukraine.

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IHSAN UGUR DELIKANLI: THE REGION OF BLACK SEA IN THE PATH OF SUSTAINABLE DEVELOPMENT by Aria Koutra & Nikos Lambropoulos

The President of the Black Sea Trade and Development Bank, MrIhsan Ugur Delikanli, forecasts medium growth in the region even though he concerns that: “ the Region is diverse in resource endowment, economic structure, level of development, it represents a centrally located geographic continuum of enormous strategic importance and economic potential, possessing significant resources and high quality human capital”.Regarding Greece, Mr. Delikanli said that since the start the Bank has signed 18 operations in Greece for over EUR 335 million and he also underlined that the Bank does not exclude Greek banks from its pool of potential clients. WHAT IS THE OUTLOOK OF THE AREA AND ITS PERSPECTIVES ACCORDING TO YOUR BANK’S ANALYSES? ARE THERE ANY DIFFERENCES BETWEEN EU AND NON-EU

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MEMBER STATES? After several years of steadily declining economic outturns that resulted in recession, 2016 represented a


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turnaround for the Black Sea Region, with collective growth reaching 1.0%, and most countries experiencing notable upturns relative to output levels achieved the year before. Given the stable macroeconomic environments achieved by BSTDB member countries, indications are that moderate, positive growth should prove sustainable, although financial and geopolitical uncertainties from outside the Region will continue to affect the Black Sea Region. With higher global growth expected in 2017 (2.7% according to the World Bank and 3.4% according to IMF) and in 2018 (2.9% and 3.6%), emerging markets and developing economies continue to grow faster than advanced ones. In the Black Sea region, the average GDP growth projections increased recently and now stand at 2.3%. Lower volatility of commodity prices, and in particular a moderate increase in the price of oil would also be helpful for some regional economies. There are differences, but the EU non-EU distinction is not determinant. Although the Region is diverse in resource endowment, economic structure, level of development, it represents a centrally located geographic continuum of enormous strategic importance and economic potential, possessing significant resources and high quality human capital. The outlook for the Region as we move forward is largely positive, although some downward risks persist. The Region is well integrated in the global markets, and is therefore vulnerable to sudden shifts in interest rates, commodity prices and world trade patterns. HOW DO YOU SEE THE ROLE OF THE LOCAL AUTHORITIES IN THE AREA, REGARDING CROSS-BORDER COOPERATION AND INTER-REGIONAL PROJECTS IN THE PUBLIC AND PRIVATE SECTOR? DOES YOUR BANK SUPPORT DIRECTLY PROJECTS FOR REGIONS AND CITIES? We work with public entities and plan to expand the share of public sector operations in the Bank’s portfolio in the future. Municipalities and local authorities more generally, are some of our preferred cooperation partners for promoting development at the local level. Local authorities have responsibilities for the wellfunctioning of local institutions and promotion of investments in social and physical infrastructure that provide quality services for the local population. We would be happy to contribute to financing of operations that are economically sustainable and financially viable. Cross-border cooperation and support for intraregional projects is part of the raison d’être for BSTDB,

and we have a good record of financing such operations. YOU ARE SUPPORTING SMES, THROUGH LOCAL FINANCIAL INTERMEDIARIES, BUT YOU HAVE LOCAL PARTNERS IN ALL COUNTRIES EXCEPT GREECE. IS THERE A PARTICULAR REASON FOR THAT? Cumulatively from the start of operations in 1999, BSTDB has approved over 100 SME operations for a total amount of EUR 974 million. Today, we have 39 SME operations for a total of EUR 232 million, representing 20% of the outstanding portfolio. Given the fact that we are headquartered in Greece, which facilitates our contact with locally incorporated commercial entities, we used to enter into direct contractual arrangements with Greek partners. Since the start the Bank has signed 18 operations in Greece for over EUR 335 million, apart from financial support provided to Greek companies expanding their activities in other member countries. However, the Bank does not exclude Greek banks from its pool of potential clients. On the contrary, we have explored various possibilities to engage with Greek banks in the past, and we are currently considering financing opportunities. YOUR BANK HAS BEEN AWARDED AS THE “BEST REGIONAL DEVELOPMENT BANK” IN SOUTHEAST EUROPE FOR 2017. HOW DIFFICULT IS IT TO SUPPORT GROWTH AND INVESTMENTS IN THIS AREA? To its core activity of providing financing to new investment and trade operational activities, BSTDB also places great importance to promotional and knowledge raising activities that improve understanding of the Black Sea Region and its many assets and opportunities. The Bank needs to be flexible, in order to be able to adapt in ways that continue to fulfill the institution’s dual mandate to promote regional cooperation and economic development. This requires adjustments to the often rapid changes in our operating environment and to the evolving demand for our products. Regional conditions are favorable for Bank operational activity - BSEC region is on path of growth, but due to market volatility and high risk perceptions, capital inflows from abroad remain subdued. This paradoxically favors IFIs like us, which become attractive partners for investors. With trade flows recovering, the Bank may wish to pursue more aggressively opportunities to increase trade finance activities via intermediaries, but also directly.

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RICARD SCOUFIAS: TAP IS A PROJECT OF GREAT IMPORTANCE FOR SOUTH-EAST EUROPE by Aria Koutra and Nikos Lambropoulos

TAP’s Director in Greece, Mr. Ricard Scoufias, highlighted the strategic importance of the Trans Adriatic Pipeline (TAP AG) for Europe's energy diversification and security, arguing that “the wider South East Europe (SEE) area is one of the regions that could benefit the most from the opening of the Southern Gas Corridor”. He stated that pipeline’s construction is progressed according to schedule, despite some delays in Italy, noting that a 41% of the project has been completed so far.Concerning Greece, he said that “between Greece and Albania, TAP has now cleared and graded nearly 50% of its corridor” and “at the same time, line pipes continue being delivered to the ports of Kavala, Thessaloniki and Alexandroupolis.”

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IS IT POSSIBLE THE POLITICAL TURMOIL IN THE BALKANS AFFECT THE FUTURE ENERGY PROJECTS IN THE REGION? DO YOU HAVE A SPECIAL CONCERN FOR THE SITUATION IN TURKEY? The wider South East Europe (SEE) area is one of the regions that could benefit the most from the opening of the Southern Gas Corridor. Some of these countries are virgin markets with no gas in their energy mix, which means that they are still using significant amounts of coal. So, given that TAP is committed to facilitating connections to several gas markets in this region, its implementation is an opportunity to decarbonise the energy mix and bridge to a more sustainable energy future. That said, I would like to stress that TAP is not responsible for building the physical infrastructure into SEE, just the Trans Adriatic Pipeline traversing Greece, Albania and Italy. I reiterate, however, TAP’s commitment to facilitating connections to strategic infrastructure, such as the Ionian Adriatic Pipeline (IAP) and the Greece-Bulgaria Interconnector (IGB). Additionally, we remain committed to contributing to the Albanian Gas Master Plan by providing technical expertise and enabling gas exit points for all three of our host countries. With regard to your second question, I would like to note that TAP is underpinned by a long-term gas transportation agreement for a period of 25 years. In September 2013, the Shah Deniz consortium announced it signed sales agreements for just over 10bcm/a of gas to be sourced by the Shah Deniz field in Azerbaijan, because of the development of Stage 2 of the Shah Deniz project. HOW IS THE PROJECT EVOLVING IN GREECE AND ITALY? IS YOUR COOPERATION WITH THE CENTRAL GOVERNMENT AND LOCAL AUTHORITIES SMOOTH AND IN LINE WITH THE TIMEFRAMES AGREED? Construction activities in all three of TAP’s host countries began in May 2016 and to date its progress advances according to schedule. In terms of overall project progress, we are approx. 41% complete – including all engineering, procurement and construction scope.In Greece, by early May, almost over 270 km of our Rightof-way had been cleared, 234 km line pipes strung, approximately 203 km welded, 102 km back-filled and approximately 21 km were being reinstated. At the same time, line pipes continue being delivered

to the ports of Kavala, Thessaloniki and Alexandroupolis. So far, approximately 66% of the 32,000 line pipes needed to build the 550km Greek section have been delivered.In Albania, approximately 109 km have been cleared and graded along our route, 95 km line pipes strung, 78 km welded and approximately 58 km backfilled. This means that between Greece and Albania, TAP has now cleared and graded nearly 50% of its corridor (ca. 380km out of 765km). Additionally, we have welded over 35% of steel line pipes and around 20% pipes are already in the ground. In Italy, in line with the Single Authorisation Permit granted by the Ministry of Economy and Finance on 20 May 2015, TAP continues its progress regarding secondary permitting activities. Over the summer of 2016, the project has carried out the unexploded ordnance (UXO) and archaeological surveys, as well as phytosanitary treatment (spraying of olive trees along TAP’s route, in preparation of moving them). Along with the geological studies conducted on the San Foca beach and the native vegetation ‘maquis’, all preparation has been concluded for the construction of the 1,5km-long micro-tunnel within the year. TAP has received strong support from the governments and competent authorities of our three host countries – support that has been integral in the project’s successful progress. And we are grateful for their collaboration and continuing support. More locally in Italy, permitting has lost its momentum due to the lengthy procedures of the regional permitting system. We do remain confident, however, that TAP will continue its activities as planned. THERE ARE EFFORTS TO REVIVE COMPETITIVE PROJECTS TO TAP IN THE AREA. DO YOU THINK THERE IS SPACE FOR COMPETITION? DO YOU BELIEVE THEY CAN POSE A THREAT TO YOUR PROJECT? TAP does not comment on other pipeline systems. With regard to its own purpose, TAP is a project underpinned by a long-term gas transportation agreement of 25 years, and a project that is strategically important for Europe so to diversify and ensure its energy supply. In that context and as the European leg of the extensive Southern Gas Corridor, TAP is fully committed to building a ca. 880km pipeline that will transport natural gas –initially 10 bcm/a– from the Shah Deniz phase II in the Caspian Sea to Europe, via Greece, Albania and Italy.

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FRANCOIS LAFOND: MORE COOPERATION AND LONG-TERM PROSPECT IN THE BLACK SEA AREA by Aria Koutra and Nikos Lambropoulos

The president of Blue Networks and Opportunities and assistant professor at Sciences Po Paris, Francois Lafond, stressed the need for better interconnection of infrastructure in the region in order to offer the economic operators the best networks possible.He also commented the outcome of the French presidential election and the importance of Macron’s victory to the French business world. HOW IS THE ELECTION OF THE NEW PRESIDENT, EMMANUEL MACRON, PERCEIVED BY THE BUSINESS COMMUNITY IN FRANCE. DO YOU BELIEVE HE WILL BE ABLE TO MEET THE EXPECTATIONS EUROPE HAS FOR HIM TO REFORM THE FRENCH ECONOMY AND SUPPORT A NEW APPROACH FOR EUROPE? The election of Emmanuel Macron has been well perceived by the business community in France, but also

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beyond it, in the whole European Union. During the last week of the electoral campaign, the chief representative of the French business community explicitly call to beat Marine Le Pen and to vote for Emmanuel Macron. Before that, when Mr. Macron was minister for economy, industry and digital, he was already appreciated by them, despite belonging to a centre-left government. During his governmental period, he had also expressed


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some criticisms to decisions promoted by colleagues, which brought him finally to quit the government. Indeed, he was explicitly recognizing the vital importance to offer a more favourable legal framework allowing private companies and in particular small and medium enterprises to create wealth and jobs. Some of the political proposals Emmanuel Macron has made during the campaign aim to decrease the cost of the labour, to reduce by 60 billion € in 5 years the public expenses, to modify the fiscal framework in favour of the business community and to invest in key future sectors. Many economists mentioned how his economic program was the most equilibrated, respecting the EU rules (public deficit under the 3% in 2017 and beyond during his mandate), an open market with a fair (but not naïve) trade. The European partners (Germany in particular), and the European Commission were looking for such cooperative attitude. Once the legislative elections mid-June done, and according the majority President Macron will get, he will then be able to implement quickly such program and propose to be a new positive, and dynamic member of the EU. DO YOU CONSIDER THAT BLACK SEA REGION AS FAR THE PORTS AND LOGISTICS SECTOR IS CONCERNED, HAS THE ADAPTIVE CAPACITY TO TAKE ADVANTAGE OF THE BLUE GROWTH INITIATIVE? DO YOU SEE AN INTERCONNECTION BETWEEN THE SECTOR AND CONSTRUCTION OF THE PIPELINES? The Black Sea region has the capacity to develop a much better cooperation among ports and infrastructures in order to offer the economic operators the best networks possible. Spontaneous initiatives are of course welcome but they will be more efficient with some coordination and long term perspective. This is what the Blue Growth initiative is offering to most of the countries. Transportation goods, energy or information need obviously that interconnection exist and give the economic agents the best quality possible in reducing time and cost. The more coordinate and connected the regions will be, with a clear geo-spatial scheme, the better it will be for everybody. And these local initiatives are also the best tool to overcome historical, territorial or ethnical susceptibilities. HOW WOULD YOU ENVISAGE THE FUTURE OF THE BALKAN AND THE BLACK SEA AREA REGARDING THEIR EUROPEAN PERSPECTIVE? DO YOU THINK THAT THESE COUNTRIES MAY BE INCLUDED IN A FUTURE EN-

LARGEMENT PROCESS? The European perspective for the Balkans is still an EU commitment. Last March 2017, the Rome declaration of the EU27 at the occasion of the 60th anniversary of the Rome Treaty reaffirms such objective: “We want a Union which remains open to those European countries that respect our values and are committed to promoting them”. “The Eastern partnership” is also an articulated and comprehensive tool that the EU has promoted more than ten years ago, and which is recalibrated to the specificities to each country. Then, Turkey remains an essential partner, for obvious economic and strategic reasons, in the membership negotiations, despite periodical problems. As the European Union will need to digest the UK decision to leave the Union, we may have to think a different European institutional constellation, giving to each country of the continent the role they really want to assume, and the degree they accept to pool their national sovereignties with their partners. In front of the numerous current challenges, this is surely a new step to think about.

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INNOVATION AND ENTREPRENEURSHIP ARE THE ANSWER TO THE AGRICULTURAL CRISIS by Nikos Lambropoulos and Sarantis Michalopoulos

“Promoting innovation by supporting agricultural research and the diffusion of new ideas through knowledge transfer networks and operational groups is one of the directions which will improve the overall productivity of the sector rather than simply redistributing jobs from other sectors of the economy” stated Mr. Panagiotis Hamakiotis, Regional Director of Europe, Middle East and Africa of COMPO EXPERT, about the direction of CAP after 2020. WHAT SHOULD THE NEXT CAP BE IN ORDER TO BRING YOUNG PEOPLE BACK TO THE FARM? SOME BELIEVE THAT THE INTRODUCTION OF NEW TECHNOLOGIES COULD WORK OUT TOWARD THIS DIRECTION, DO YOU AGREE? The authors Petrick&Zier in 2012 concluded that investment aid of €1 million was required to create 20 jobs in the short run and 83 jobs in the longer run. General speaking, subsidising employment and specially youth employment, in low-productivity agriculture is neither a sensible nor sustainable job-creation strategy.

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Promoting innovation by supporting agricultural research and the diffusion of new ideas through knowledge transfer networks and operational groups is one of the directions which will improve the overall productivity of the sector rather than simply redistributing jobs from other sectors of the economy and will help mostly young farmers who are more familiar with the new technologies to overcome specific barriers and constraints to improving their productivity, rather than relying on generalised income support which may or may not have a positive impact on agricultural youth employment.


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Global challenges to achieve food sufficiency in the coming decades in my opinion backed up by the philosophy "more with less". So, I believe that there are two pillars that should be promoted by the new CAP if we want to embrace this direction by attracting at the same time young people in the field of Agriculture. The first has to do with the empowerment of youth entrepreneurship and the second with cutting edge technologies e.g. as precision Agriculture. Both pillars are very close to the perception of new farmers and of new agronomists so to the human dipole which will be invited to collaborate in the coming years. We -as COMPO EXPERT GROUP- already have been involved in projects in precision agriculture and in the development of youth entrepreneurship (start-ups) in various areas in which we operate. HOW COULD THE EUROPEAN COMMISSION’S PROPOSED POST-2020 BIOFUEL STRATEGY AFFECT FARMERS IN EASTERN AND SOUTH-EASTERN EUROPE CONSIDERING THAT FIRST GENERATION BIOFUELS ARE GRADUALLY PHASED OUT BY 2030? (WHEAT, CORN, BASICALLY ETHANOL) Approaching the end of the decade, the current EU strategy that requires each EU member state to use in transportations fuels with origin at least 10% from renewable energy sources not seems that can be easily achieved. Biofuels today play an important role in this equation and from 2020 onwards the future of biofuel crops will accept an equivalent reduction because European Commission –although came under heavy criticism- has decided to kick start its plans to phase out conventional biofuels by 2030. Nevertheless, it seems that the industry will be able to react as the global biofuel will continue to employ both the states and businesses. Regarding the origin, biofuels based on crops which their fruits produce food (or animal feed) will result in a dramatic decline with bioethanol-producing crops (e.g. corn) to be hit hardest. This is because the argument "we take the food from the mouth of people to just fuel their cars ' is very powerful now in the EU. The phasing down provisions in the proposed EU legislation, however, do more than simply raise a red flag: they are essentially signalling to EU producers and investors that first generation biofuels are on their way out the EU energy door and raises concerns for jobs could be affected through a linear phase out between

2020 and 2025. The decision to gradually reduce the rate after 2020 certainly gives greater possibilities to enterprises engaged in managing not only the fruit but crop residues as well and this change of the status quo will be an important business opportunity for non-EU countries and particularly those of the Black Sea areas. HOW HAS THE RUSSIAN BAN ON AGRICULTURAL PRODUCTS AFFECTED THE FRUIT AND VEGETABLE SECTOR IN THE REGION? HAVE YOU MANAGED TO FIND ALTERNATIVE MARKETS? In this “lose-lose” game - the EU-Russia trade war has severely impacted the income of EU farmers (according Copa-Gogeca the ban is estimated to have affected 4.2% of total EU Agri-food exports and farmers have lost their main export market overnight worth €5,5 billion) but also significantly impacted the Russian economy, with food prices increasing, and quality declining. In parallel, a range of EU actions to mitigate its effects have been pursued like measures dealing with the internal dimension e.g. the use of market stabilization tools under the common agricultural policy (CAP), private storage aid etc. but also measures dealing with the external dimension, involving efforts to access alternative export markets, including those which are at present hampered by sanitary and phytosanitary barriers. So both directions contributed to the promotion of products either on the EU internal market or in third countries, as well as to improve communications actions. In that sense, fruits and vegetables significantly participated in the trade surplus that had formed before the Russian embargo. Consequently, to impose the Russian ban on agricultural products by EU countries created huge problems to the exports of Southern Europe agricultural products, especially fruits and vegetables the dominating export activity but in short term markets backlashed with defense actions in already existing markets but also acted imaginatively with fast expansion into new as the Asian countries/markets (South Korea, China, India but also in Middle East countries like Egypt) in order to try overcome the bottleneck. Both winter fruits (oranges, tangerines, lemons, Kiwi) and summer (peaches, apricots, strawberries, nectarines melons) recorded growth trends also in "shadow" markets such as in the countries of Belarus and Lithuania which acted as ‘bridges’ to the Russian market.

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THE ROLE OF INTEGRATED NATIONAL PLANS IN BUILDING AN ENERGY UNION by Paula Pinho & Leonardo Zannier* Energy – its origin, cost, use and security – impacts on global sustainability, on citizens’ health and wellbeing and on industry’s competitiveness. The world is currently transitioning from a traditionally fossil fuel-based system to an increasingly diversified energy mix. The European Union, through its 2020 and 2030 energy and climate targets, its leading role in creating the Paris agreement, and the launch of a comprehensive Energy Union Strategy, is fully engaged in Europe’s energy transformation. This transition requires appropriate tools, and one of the main tools for the decades to come will be the governance of the Energy Union. The principal objective of the proposed Regulation on Governance of the Energy Union, proposed by the European Commission last November, is to ensure the collective achievement of the Energy Union goals of sustainability, energy security and competitiveness, and the targets defined in the framework of the 2030 energy and climate agreement.

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Together with other Commission initiatives, the Governance proposal will also ensure that international climate commitments made under the Paris agreement are fully achieved in a timely manner. The proposal further establishes a coherent legal framework aimed at preserving and enhancing long-term regulatory stability and certainty for investors while reducing the administrative burden for member states. To attain these aims the proposal includes several innovative elements. Foremost among them is the first ever obligation for member states to define their integrated national energy and climate plans. Covering an initial ten-year period whilst also including a longterm perspective, these plans will offer long-term certainty to investors on national policy priorities and will play a crucial role in ensuring the achievement of the Energy Union objectives. A comprehensive template for the plans is proposed in the Regulation; this will provide investors with a clear picture of member states’ planned objectives, policies


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and measures across the five dimensions of the Energy Union. In the areas of renewables and energy efficiency, national trajectories will offer full visibility on member states’ priorities in terms of technology and sector preferences. A strong analytical foundation, together with proposed requirements for regional cooperation, will further translate member states’ visions into credible, reliable and cost effective objectives. National consultations on the plans will promote participation from citizens and stakeholders in defining national priorities, thereby enhancing local acceptance and ensuring an inclusive and informed debate in all member states. The 2030 energy and climate framework has introduced a new and challenging approach by setting renewables and energy efficiency targets for the whole EU, replacing the previous system that was based also on national targets. Member states are now free to define their level of ambition based on their national priorities, cost effectiveness and geographical constraints. This bottom-up approach leaves member states with a great deal of responsibility: through definition of their national plans, member states are expected to adequately contribute to the 2030 targets agreed by heads of state and government in October 2014. But the national plans as such may not be enough. How can we ensure that we reach and maintain a sufficient collective level of ambition across the five dimensions of the Energy Union? How can we stop a fellow diner leaving the restaurant without paying their share of the bill? To address this issue, the proposal introduces its second innovation: a set of articulated provisions aimed at guaranteeing both the initial agreement of a sufficient collective level of ambition and sufficient progress towards long-term goals at the EU and national levels. The Commission will play a central role in ensuring that a sufficient collective level of ambition is reached, and in guaranteeing the timely delivery of the Energy Union objectives. For that, the Commission will have at its disposal several instruments, including recommendations to member states and the introduction of additional EU-level measures to ensure an adequate level of ambition across Europe. For instance, the proposal lists a number of possible

specific instruments to ensure the deployment of renewables across the continent and strengthen energy efficiency policies. In the area of renewables, member states can be asked by the Commission to introduce additional national measures, with the introduction of a new financial platform rewarding early movers. For the new governance system to work, it will be important for member states to be ambitious and not to abuse the trust, flexibility and responsibility the proposed Regulation grants them. While active and detailed discussions on the legislative text are currently ongoing in the Council and Parliament – discussions that will determine the law’s final details – we can already see that member states are delivering on their shared vision. By now more than half of member states have created national working groups and structures specifically dedicated to the preparation of their national plans. More than two-thirds have also started the political processes needed to define their plans’ priorities and objectives, and several EU countries are actively engaging in discussions with their neighbours on the subject. Positive momentum has to be maintained and increased if the integrated plans are to be ready by 2020. The Commission stands ready to facilitate their swift development, notably by supporting forms of regional cooperation and assisting technically with the preparation. But the commitment of the Commission alone will not be enough. If we want to maintain our goals in terms of both timelines and ambition, we need the commitment and engagement of all European institutions and the support of European citizens and stakeholders. Ultimately, the pace of the energy transition is not determined by Brussels or by European capitals, but by the daily commitment of all citizens in Europe.

* Paula Pinh is Head of the Energy Policy Coordination Unit at the DirectorateGeneral for Energy in the European Commission

Leonardo Zannier is a Policy Officer in the Energy Policy Coordination Unit at the Directorate-General for Energy in the European Commission

** This article reflects only the personal opinions of the authors and does not reflect the official position of the European Commission.

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EXCLUSIVE INTERVIEW WITH ALEKSEI LEONOV, THE FIRST MAN TO WALK IN SPACE by Margarita Chrysaki*

EBR had the honour of interviewing, on May 11 in Brussels, the heroic cosmonaut, former Commander of the Soviet Union’s space missions and an exceptional selftaught artist Aleksei Leonov during the special launch event of Starmus IV** festival. He is one of the main speakers of the festival. Leonov shared for the first time his views on different matters related to space. He was the first man to walk in outer space, stepping out of the Voskhod-2 spacecraft on March 18, 1965. The purpose of his mission was to show that man could survive in open space and therefore landing on the moon could become a viable next step. Moreover this pioneer was going to open the door to exploration. However, among a series of unexpected events, no one could have predicted the following. In the vacuum of space, a deformation developed in Leonov’s spacesuit. As a result he could not get back to the spacecraft. With only one hand available, as he was trying to keep close to the spacecraft with the other, he managed to open the

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pressure valve. He vented the pressure from his suit and just about managed to float into the airlock. The spacewalk may have only lasted for 12 minutes and 9 seconds but it was enough to increase Leonov’s core body temperature by 1.8°C. This could have caused heatstroke, which would have been a serious threat to his life. The pioneer gave more details of his experience outside the Voskhod-2 spacecraft and surprised the audience with honest statements: “The stories about living on Mars are for the media. The truth is that we don’t know how the human organism would survive in an area without the magnetic field. In our solar system, only Earth and Jupiter have got magnetic fields and only on Earth we can find intelligent life”.


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Communicating science is one of the main goals of the Starmus festival and Leonov underlines how important it is for children at a very early age to gain at least the basic knowledge about space. Therefore, he believes all education systems must include it in their syllabus. “In modern cities children don’t see the night sky and they don’t know anything about stars. Unfortunately, schools have no such courses and now there is no possibility for a child to look at the night sky and dream”. He strongly suggests that a special subject should be introduced to every school syllabus, which teaches children about the stars and the sky. In this way, children will get answers to seemingly simple questions, that only a few know the answer to: • What the stars are? • How many are there? • What are they like? • What are the other solar systems apart from ours? “They will be surprised to know that there are billions of galaxies which include more than 400 billion stars”, he concludes. He also believes that schools need to highlight to children the great progress made in the area of space research which is why people nowadays can stay in space for up to one year: “Tell them why Gagarin is the first man in space and why Armstrong is the first man on the Moon. We must bring space closer to them and make it accessible. Out of 6 billion people there are only 500 that were out in space”. Regarding the night before the famous spacewalk where the eyes of the entire world were on Leonov, he talks about his emotional state and the procedures that needed to be followed: “The night before the launch, we were staying at the same house where Gagarin and Titov stayed and I got to sleep in the bed where Gagarin slept! When I was flying as a pilot, I could have all the instructions written down. Now it was different as I had to memorise every single detail in my head for the following day’s performance. This is how I finally fell asleep”. Nonetheless, he was not going to ‘sleep’ easily‘. The night before flying into space, all astronauts were connected to a system that was monitoring their sleep. According to Leonov, that system caused a lot of tension, as it didn’t allow them to get proper rest. In his case, he had dreams that he was spinning and tumbling down but he woke up in the same position as he was in upon falling asleep. After that mission and having taken up the role of Commander for the next one, he was able to remove that system once for all, to the benefit of the next generations of astronauts. For the fourth time, the Starmus festival will engage

two values of our world, sciences and arts. Leonov is an exceptional example of someone who combines both, having physically encountered the laws of space and also being a gifted painter. As painting was his primary love, EBR asked him what he would choose if he wanted only one wish to come true: to create the most beautiful painting of all time or to be the first man to land on Mars? He pondered the question for a couple of seconds and then replied, smiling: “I have some experience of seeing the landscape and colours of the Moon and Mars but”, he continues, “it will be always preferable to go there and then come back in Earth and create the most beautiful and huge painting for Mars!” * Margarita Chrysaki is a Brussels-based scientific journalist and political analyst. Currently, she is making a profound research in the field of space activities and EU strategy on Space. Svetlana Skrynikova made the total translation of the interview with AlekseiLeonov.

** The Starmus IV festival will celebrate under the slogan ‘Life and The Universe’a synthesis between science and music from June 18th till 23rd in Trondheim, Norway. The festival aims are to bring these two worlds together and make them accessible to the public through the participation of the world’s most influential and renowned scientists, Nobel Prize winners, astronomers along with superstar musicians. Highlights will include also keynote speeches from Steven Hawking, Larry King, Oliver Stone, Brian Cox, Joseph Stiglitz and many others, along with other talks and debates. For more information and booking, visit the website: https://www.starmus.com/

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OFF-SPACE by Gianni Skaragas

You don't have to be an ardentl fan of the dernier cris in visual arts to visit On.Off in Winterthur, Switzerland. Run by Nicole Seeberger and Lydia Wilhelm, the old kiln is a spanking new “off-space” which sprung up in the old industrial area of the city. Lydia and Nicole joined forces doubling their abilities to defy the cliché of art looking best in sanctifying, white-walled galleries and museums. At the far end of Lagerplatz, where upscale apartment buildings are rising and rents are escalating, On.Off isn't afraid to experiment featuring an intriguing mix of cerebral installation art and avant-garde work that puts us on intimate terms with the complexity of the artistic experience. HOW DID YOU DECIDE TO OPEN ON.OFF, AND WHAT ARTISTS DO YOU FEATURE? We didn't like the idea of a conventional art gallery. We wanted an off-space, an independent, artist-run exhibition space. There are not many opportunities for younger, up-and-coming artists in the museum scene of Winterthur. We wanted to create an alternative besides other art spaces in the city, such as oxyd and Kunstkasten, for all artists based there. WHY CHOOSE THE NAME, ON.OFF? The name refers to the space itself, which used to be

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a Sulzer AG company kiln. Our wordmark is an old power switch symbol, which also conveys the concept of our exhibition activity. IS THERE A NEW GENERATION OF GALLERISTS? It has never been harder to get your art into galleries. On.Off is not a gallery, of course, but an off-space, and like most of them, it has structures different to galleries when it comes to the temporary use of space, or the financial support from the state or foundations. I don't think there is a new generation of gallerists. There is probably an artist-run culture about the future of


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spaces and their models of operation and connectivity. WHAT DO YOU THINK IS THE MOST MARKED CHANGE YOU’VE WITNESSED IN THE ART WORLD IN THE PAST TWO DECADES? The globalization. Everything goes, everything is possible if you have the right network and enough money. Everybody can be a curator. LYDIA WILHELM IS AN ARTIST, AND NICOLE SEEBERGER IS A PHD ART HISTORIAN WORKING AT A MUSEUM OF ART. HAS THIS EXPERIENCE SHAPED YOUR APPROACH TO RUNNING ON.OFF?

Lydia and Nicole are not comfortable with the idea that artists and their worlk are brands that need to be marketed in established exhibition spaces. It bores them rigid. Their off-space is an industrial-cultural hybrid giving meaning to the notion that a dysfunctional urban leftover can be an answer to the dilemma of the variety of spaces required by contemporary art. The current show, ONOFF 10, is curated by Catrina Sonderegger, and features the work of Philipp Hänger and Michael Etzensperger.

We are experienced in curating exhibitions, assembling shows, as well as in project management. We both have a big network in the Swiss art scene, and an extensive knowledge of the mechanics for achieving our artistic goals. HOW DO YOU VIEW THE ART SCENE IN SWITZERLAND AND WINTERTHUR AT THE MOMENT? The Swiss art scene is following international trends and the lead of the new forces at play in the art world. We have one of the most important art fairs in Basel every year. Zurich and Geneva play an important role in the art market, too. We have an enormous diversified museum scene between Bâle and Lugano, between Geneva and St. Gallen, in the heart of Europe. Winterthur is gaining respectability and legitimacy, facing a better future, especially now that Konrad Bitterli has been appointed new director of Kunstmuseum Winterthur. What were hard lines between traditional art-world roles and responsibilities no longer exist. Recent years have seen art professionals blur the museumgallery divide, galleries hire specialists for their expertise, artists make gallerists, Mark Rosenthal leave the National Gallery in Washington to become an independent curator. While many in the art world speculate about the endurance and stability of the future artistic spaces, can we really envision the new concepts and partnerships, and the ways in which museums, galleries and spaces are going to have to change? Modern art has been as concerned with redrawing the boundaries of human creativity as with reinventing the spaces of contact and formats. Will the art world be even more liberated to make use of more spaces as sites of constant transformation?

Lydia Wilhelm

Nicole Seeberger

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CONNECTING CARS IN EUROPE: AN EMERGING DATA ECONOMY ON FOUR WHEELS by Joop Hazenberg* The telecoms industry has the ambition to connect everything and everyone. In Europe, telecom operators and vendors work together with the automotive sector to get connected cars on the roads. This cooperation fits in the dramatic digitalisation of Europe’s society and economy in the next decade. It will also alter the telecoms industry itself. In the not-so-distant future, we will be able to get in a car in Lisbon and drive to Copenhagen, without stopping ever, without touching the steering wheel. Gliding past mountains and rivers, through landscapes of corn fields and over sky-high bridges. Before the self-driving car hits the road though, we have to overcome many hurdles – technical, regulatory, political. The world’s telecom players have a crucial role to play in this extremely complex ball game. The most wondrous acronyms fly around in the policy circles of the stakeholders making connected cars a reality, such as IEEE802.11p/ETSI-G5, LTE-V2X, CSMA/CA and LIPA/ SIPTO. Though these acronyms alone are already mind-boggling, the technical processes behind making cars ‘smart’ are the exclusive playground for engineers. Why is the telecoms industry getting involved in the car industry? Because we have the ambition to connect everything and everyone. Within the next ten years, the Internet of Things will have up to 1 million devices connected per square kilometers. Billions of these

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devices will have cellular connections, and millions of them will actually be on four, or even more wheels. Already up to one in four new cars being sold is connected, for instance, for use cases such as telematics, infotainment and WiFi hotspots in the car. But this revolution will go much further. PAY WITH YOUR PHONE As The Economistwroterecently, the automobile industry faces the huge wrench of adapting to a future of electrification and self-driving cars. Software and electronics are displacing mechanical parts as the most important components of a car. You could also say that cars will be data centres on four wheels. This means business, though nobody yet fully grasps what kind of business this will look like. For mobile network operators, there is opportunity not only in connecting more vehicles on the road but in offering a broader platform of services to car owners and passengers. The telecoms industry is extending its relevance to other sectors. Think digital health, with doctors providing consultations, prescriptions and in the near future even operations through high-speed, ultra-reliable and realtime connections. Think digital banking: in Belgium you can now pay with your mobile phone. Think smart energy: the transition towards a decentralised power grid with countless windmills and solar power panels requires an extremely smart grid that can distribute


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electricity in smart networks. The sexiest, most tangible example of digitisation of our economy is of course the connected car. The GSMA’s Mobile World Congress was full of them, with dozens of stands at the venue in Barcelona from leading car manufacturers such as BMW and Ford who were aisleto-aisle with stands showcasing radio antennas and the latest Nokia not-so-smartphone. With good reason: the connected car market will be worth $250 billion by 2025. TALKING ROAD SIGNS Automation and connectivity go hand in hand as they facilitate the trend from “dumb” to self-driving cars, which has been divided into six phases, or levels, of automation. A self-parking car is one thing, but if you talk about truck platooning, highway chauffeuring or driving in dense urban traffic with pedestrians and cyclists, then the challenge becomes enormous. The car cannot rely solely on its sensors and cameras, by which it builds a picture of what’s happening around him. It also needs to anticipate, to know what’s happening in

ty-related use cases, connectivity of cars is a must. Smart cars can only be so smart by themselves, but if they collaborate with each other, they can actually become real whiz-kids and decimate the number of road fatalities. The collective wisdom of connected cars is the real prize that we’re looking for. Compare it maybe to a nest of ants. They take decisions locally, but together; they work in harmony. For this ‘cooperative driving’ to becoming a reality, a lot of stakeholders in the emerging ecosystem of the connected car need to make a lot of sound decisions. We don’t only need the carmakers, suppliers and the telecom companies around the table, but also the EU institutions, member states, road authorities, insurance companies and many others. This is a very complex puzzle. And as withany puzzle, there are struggles. For instance, the automotives are divided on the issue of which technology for shortrange communication should prevail. Also the policy cooperation between EUMember States needs improvement. Consider for instance the handover of roaming signals when you cross a border. The storage of data, with many member states opting for data localisation instead of a free flow of data. Or the road signs: the arrows on the road differ from country to country. Within the European Automotive-Telecoms Alliance, we are openly addressing all these regulatory issues. The European Commission is very active with initiatives like the ITS platform, GEAR 2030 and an upcoming masterplan for connected and automated driving. And the EU Member States are now also on board in their own high-level meetings on smart cars. Compared to other regions and continents, Europe really is ahead of everyone else on the complex road to connected cars. It may take years before you can drive from Lisbon to Copenhagen without touching the steering wheel, but the groundwork for such relaxed and effortless driving is being laid as we speak.

the next several hundred meters ahead of the car. Is there an ambulance coming from the right, beyond the sight of the cameras? What does the infrastructure say? Yes, road signs will also be talking to the connected car, for instance, informing the vehicle on an upcoming road hazard. Such information needs to be exchanged in gigantic volumes, at an incredible speed, and it needs to be processed in realtime. Especially when it comes to safe-

* Joop Hazenberg is Senior Manager European Advocacy at the GSMA. GSMA represents the interests of mobile operators worldwide, uniting nearly 800 operators with more than 300 companies in the broader mobile ecosystem, including handset and device makers, software companies, equipment providers and internet companies, as well as organisations in adjacent industry sectors.

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TURNING THE LINEAR CIRCULAR: THE FUTURE OF THE GLOBAL ECONOMY by Mark Esposito*

Institutions, both in the private and public sector, can always reap the public relations benefits of doing good, even while still accomplishing their goals. As resources become scarcer, a major way to enhance social performance is through resource conservation, which is being underutilized

become more circular. The economic shift toward CE will undoubtedly be hastened by the already ubiquitous presence of IoT, its profitability, and the positive public response it yields.

Although the traditional model of the linear economy has worked forever, and will never be fully replaced, it is essentially wasteful. The circular economy, in comparison, which involves resources and capital goods reentering the system for reuse instead of being discarded, saves on production costs, promotes recycling, decreases waste, and enhances social performance. When CE models are combined with IoT, internet connected devices that gather and relay data to central computers, efficiency skyrockets. As a result of finite resource depletion, the future economy is destined to

The Internet of Things is the inter-networking of physical devices through electronics and sensors which are used to collect and exchange data. The main value drivers of IoT are the ability to define (1) location (2) condition (3) availability of the assets they monitor. By 2020 there are expected to be at least 20 million IoT connected devices worldwide.

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Unlike the linear economy which is a “take, make, dispose” model, the circular economy is an industrial economy that increases resource productivity with the intention of reducing waste and pollution. The main value drivers of CE are (1) extending use cycles lengths of an asset (2) increasing utilization of an asset (3) looping/cascading assets through additional use cycles (4) regeneration of nutrients to the biosphere.

The nexus between CE’s and IoT’s values drivers greatly enhances CE. If an institutions goals are profitability and conservation, IoT enables those goals with data


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big data and analysis. By automatically and remotely monitoring the efficiency of a resource during harvesting, production, and at the end of its use cycle; all parts of the value chain can become more efficient. When examining the value chain as a whole, the greatest uses for IoT is at its end. One way in which this is accomplished is through reverse logistics. Once the time comes for a user to discard their asset, IoT can aid in the retrieval of the asset so that it can be recycled into its components. With efficient reverse logistics, goods gain second life, less biological nutrients are extracted from the environment, and the looping/ cascading of assets is enabled. One way to change traditional value chain is the IoT enabled leasing model. Instead of selling an expensive appliance or a vehicle, manufacturers can willingly produce them with the intention of leasing to their customers. By imbedding these assets with IoT manufacturers can monitor the asset’s condition; thereby dynamically repairing the assets at precise times. In theory the quality of the asset will improve, since its in the producers best interest to make it durable rather than disposable and replaceable. Even today, many sectors are already benefiting from IoT in resource conservation. In the energy sector, Barcelona has reduced its power grid energy consumption by 33%, while GE has begun using “smart” power meters that reduce customers power bills 10–20%. GE has also automated their wind turbines and solar panels; thereby automatically adjusting to the wind and angle of the sun. In the built environment, cities like Hong Kong have implemented IoT monitoring for preventative maintenance of transportation infrastructure, while Rio de Janeiro monitors traffic patterns and crime at their central operations center. Mexico city has installed fans in their buildings which suck up local smog. In the waste management sector, San Francisco and London have installed solar-powered automated waste bins, that alert local authorities to when they are full; creating ideal routes for trash collection and reducing operational costs by 70%. Despite the many advantages to this innovation, there are numerous current limitations. Due to difficulty in legislating for new technologies, Governmental regulation lags behind innovation. For example, because Brazil, China, and Russia do not have legal standards to distinguish re-manufactured products from used ones, cross-border reverse supply-chains are blocked.

Reverse supply chains are also hurt by current lack of consumer demand , which is caused by low residual value of returned products. IoT technology itself, which collects so much data people’s private lives, generates major privacy concerns. Questions arise like: who owns this data collected? How reliable are IoT dependent systems? How vulnerable to hackers are these assets? Despite the prevalence of IoT today, with 73% of companies invest in big data analytics, most of that data is merely used to detect and control anomalies and IoT remains vastly underutilized. Take an oil rig for example, it may have 30,000 sensors, but only 1% of them are examined. Underutilization of IoT in 2013 cost businesses an estimated 544 billion alone. Even with these current barriers, because of the potential profits and increased social performance, the future implementation of an IoT enhanced CE is bright. As government regulation catches up and technology improves, recycling and conservation will become more profitable and reverse supply chains can proliferate. When the ownership of collected data is finally clearly defined by laws, then the interoperability of IoT data can take hold to increase its efficiency. As the CE expands into different sectors of the economy: farmers may remotely monitor their crops and use GPS guided tractors to perfectly plow and harvest, Governments can prevent depleting fish stocks by tracking fishing boats with IoT, energy companies can share their energy production responsibilities by attaching a connectivity-enabled solar panels on city roofs, in the infrastructure sector GPS guided driver-free smart cars can reduce congestion by taking optimal routes, in health care $1.1 trillion a year of value can be created with remote health care in monitoring chronic-disease patients, etc. Estimates are that the potential profits from institutions adopting CE models could decrease costs by 20%, along with waste. The increase in efficiency combined with the goodwill generated by conservation is a winwin proposition for innovation, even with costs implementation, future monetary profitability will make it a no-brainer.

* Mark Esposito Fellow, Judge Business School, University of Cambridge

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WATCH OUT FOR THE WELL-TRAVELLED by William Maddux, Jackson Lu and Adam Galinsky*

Sampling a wide array of cultural norms can blur people’s moral vision Candidates with international experiences are highly sought-after in the global talent wars. Multinational corporations view diverse cultural experiences as essential to success in an increasingly globalised world. Academic research confirms this, with studies by us as well as others finding that minds broadened by living or working abroad are more likely to show heightened creativity and devise innovative solutions to complex problems.

our recent research paper published in the Journal of Personality and Social Psychology (co-authored with Jordi Quoidbach, Francesca Gino and Alek Chakroff). Hopping between many moral frameworks can loosen the ties that bind people to the most basic values, such as fair play. Put simply, cognitive flexibility may be accompanied by moral laxity.

Specifically, research shows that overseas travel promotes “cognitive flexibility”, the ability to see problems and situations from multiple vantage points. Exposure to different customs and mores, the thinking goes, liberates and expands one’s mental repertoire. Simultaneously, the process of assimilating diverse information gleaned from other cultures sharpens one’s imaginative vision. As a result, one becomes adept at envisioning and implementing alternatives to established ways of doing things. However, the mental benefits of extensive foreign experiences may have a moral downside, as detailed in

In the first of our studies, we surveyed a group of French high-school students before, during and after a 6- or 12-month study abroad programme. In all three phases, the students were offered a chance to win an iPad by completing a series of anagrams—but, unbeknownst to participants, one of the anagrams was impossible to solve. Thus, anyone who reported having solved it was cheating. Before going abroad, 30.1 percent of the students cheated on the task; after 12 months abroad, the incidence of cheating rose to 47.7 percent.

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“THE DARK SIDE OF GOING ABROAD”


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Subsequent studies more closely investigated the link between foreign experiences and immorality. In one study involving MBA students, we noted that the number of countries participants had lived in—as opposed to the amount of time they had lived abroad—positively predicted their willingness to use immoral negotiation tactics. We also found that participants who temporarily reflected on personal experiences that occurred across foreign countries were more likely to cheat on the anagram task than those who temporarily reflected on a lengthy stay in one foreign country. They were less bothered by moral lapses as well. This appeared to suggest that the breadth, not the depth, of overseas experience was the factor related to immorality. MORAL RELATIVISM We hypothesised that because the well-travelled are accustomed to being immersed in different cultural environments, they tend to develop a more flexible sense of right and wrong. In other words, they are more susceptible to moral relativism, which has been found to result in immoral behaviour. Indeed, our final set of studies found that moral relativism statistically explained why participants’ breadth of foreign experience predicted their tendency to behave immorally. CLASS AND CORRUPTION Keen-eyed observers might point out that people’s extent of foreign experiences is roughly in step with their social class. At first glance, our results might seem to be a rehash of past research showing a higher prevalence of immoral behaviour at the upper reaches of the social scale. But they remained robust even after explicitly controlling for education and income, suggesting that participants’ foreign travel—rather than their social status—was responsible for the increase in immorality. Also, we controlled for the Corruption Perception Index and the Crime Index for all countries concerned—both participants’ home countries and the countries they travelled to. In other words, the change in morality appears not to be due to the influence of a particular culture, but rather to the effect of wide travel. RESTORING ABSOLUTES Ambitious professionals shouldn’t let the potential

moral hazards dissuade them from going overseas, however; the cognitive benefits of living abroad are still well worth pursuing. Most importantly, our results suggest that international experiences can help individuals appreciate and understand the different moral codes found in other cultures. But how can companies guard against the moral slippage that can come with broad overseas travel? First, they should think carefully before assigning several overseas postings to the same manager in close succession. The danger may stem from a moral rootlessness and relativism that can set in when an expat professional can’t settle down in any particular place. Second, organisations should reinforce moral absolutes by committing to values and codes of conduct. There should be no confusion about what does and does not constitute acceptable behaviour; consequences should ensue for those who transgress moral boundaries. In this way, sojourners will be more likely to stay within the moral grid, without compromising their creative energy. * William Maddux is a Professor of Organisational Behaviour at INSEAD.

Jackson Lu is a doctoral candidate at Columbia Business School.

Adam Galinsky is a Professor at Columbia Business School

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1ST YES TO SEA TOURISM FORUM AT POSIDONIA SEA TOURISM 2017 The 1st YES to Sea Tourism Forum was held during the 4th POSIDONIA Sea Tourism, on Wednesday 24 May 2017 at the hall «Nikos Skalkotas» of the Megaron International Conference Hall, with the initiative of the YES Forum Team The 1st YES to Sea Tourism Forum was held during the 4th POSIDONIA Sea Tourism, on Wednesday 24 May 2017 at the hall «Nikos Skalkotas» of the Megaron International Conference Hall, with the initiative of the YES Forum Team, consisting of 40 young executives and students managed by Mrs. Danae Bezantakou, Managing Director of the NAVIGATOR SHIPPING CONSULTANTS. YES to Sea Tourism Forum was organised under the

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Auspices of the Ministries of Shipping, Education, Tourism and GNTO (National Organization of Tourism) and the majority of Hellenic Universities as well as the participation of more than 600 students and executives from the sea tourism & shipping industries. Speakers stressed the need for launching a Platform of Open Dialogue between the young generation of shipping and sea tourism and today’s executives of the above sectors, recognizing simultaneously the


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with the shipping community, especially in terms of training program Studies. According to a survey conducted by Focus Bari exclusively for the YES to Sea Tourism Forum, 82% of the respondents ranked from 7 to 10 (excellent) sea tourism in terms of their professional prospects, while in terms of salaries, 66% believe they are in satisfying level in comparison with other professions. However, 80% believe that information on employment is limited. The Vice President of Royal Caribbean, Mr. Ukko Metsola, alongside with his speech, held a dialogue with the participants, referring to key features of the cruising and yachting sector. He underlined also that basic prerequisites for the development of a young individual are will and persistence. Among the topics raised by the speakers were that the sectors of sea tourism, cruising and yachting in Greece are filled with opportunities for young people, which they should not be afraid to pursue and exploit. At the same time, issues such as the problems and challenges involved in finding managers were discussed, advice was given on the steps a young individual has to follow at the beginning of his/her career, and all of them insisted that the right conditions in order to “stay in Greece” have to be created first by us. Mrs. Danae Bezantakou, Managing Director of the NAVIGATOR SHIPPING CONSULTANTS. contribution of the organization towards this goal. The welcoming addresses were made by Mr. Dimitrios Tryfonopoulos, General Secretary of GNTO, Mrs. Evridiki Kourneta, Secretary General of the Ministry of Tourism and Mr. Pafsanias Papageorgiou, General Secretary of Lifelong Learning and Young Generation. Worth mentioning is that during the Forum, the collaboration of the Ministry of Education and Ministry of Tourism was announced, regarding the upgrade of the Higher Schools of Touristic Education and the further modernization of the education provided in the 8 Public IEK (Institute of Professional Training) for Tourism. Following YES to Shipping 2016, the Ministry of Education underlined the necessity to upgrade maritime training, to develop the level of study in shipping-related schools and to bring them in contact

It was an honor for the organisers to participate at the Forum, among others, Professors from the biggest University Institutes of the country, Senior Executives of Sea Tourism and Shipping, representatives of major organizations as well as representatives from the entire Maritime Press. YES to Sea Tourism closed with executives from shipping industry participating in 4 networking corners with the following topics: “Chartering, Crew and Operations Departments of a Shipping Company”, “Startups, Innovation & Save Time in Shipping Agencies”, “Technical and Finance Department of a Shipping Company” and “Marine Insurance and Classification Societies”, giving advice to young people and answering their questions in reference to the above mentioned sectors/ areas. Concluding this very successful Forum, Mrs. Danae Bezantakou invited everyone who contributed and supported YES to Sea Tourism Forum to continue this successful dialogue next year, at the 2nd YES to Shipping Forum, on 8th of June 2018 during Posidonia 2018.

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FORGET DRIVERLESS CARS: SAILORLESS SHIPS ARE ABOUT TO MAKE WAVES by Charlotte Edmond

Sea change ... unmanned electric cargo ships could be with us in three years Tech companies from Google to Apple may be ploughing resources into driverless cars, but on our oceans, automated ships could be making bigger waves by the end of the decade. Norwegian company Yara will launch the world’s first electric cargo ship next year. Initially manned, the vessel will move to remote control in 2019, before becoming totally autonomous in 2020. Named YaraBirkeland, the vessel will sail between Yara’s main factory facility in Norway to some of the country’s bigger ports, carrying cargo which is currently transported by road. It’s estimated that the battery-powered ship will remove the need for 40,000 truck journeys a year. MAKING ‘DRONE’ SHIPS A REALITY Although advances in driverless cars are getting more media attention, major advances have already been made in bringing artificial intelligence to the shipping and freight industries. Rolls Royce is also working on making autonomous ships a reality by the end of the decade, in conjunction

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with ship builders and researchers in Finland. Meanwhile, research body MUNIN - or Maritime Unmanned Navigation through Intelligence in Networks - has been part funded by the European Commission to develop the technology needed to make robotic ships. Back on land, Singapore earlier this year signed an agreement with trucking companies Scania and Toyota Tsusho to design, develop and build self-driving freight lorries to haul containers from one port to another. The idea would see one truck with a driver leading a convoy of driverless trucks; it's being billed as a way to reduce congestion and boost productivity in the country’s already efficient ports. In 2016, a fleet of trucks from a host of leading manufacturers including Volvo and Daf drove their freight across Europe largely without drivers as part of a mission under the Dutch presidency of the EU to prove the potential of AI in the haulage industry. In a report into the driverless car revolution, the World Economic Forum estimated that $2 billion worth of value would shift from traditional cars to self-driving ones, and these would make up 5% of vehicle sales by 2025.


EUROPEAN BUSINESS REVIEW OPINION

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OPINION EUROPEAN BUSINESS REVIEW

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European Business Review (EBR)  

Issue 03/2017

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