41_European_Business_Magazine_Summer_2021 by European Business Magazine

EUROPEAN BUSINESS europeanbusinessmagazine.com

SUMMER EDITION | 2021

MAGAZINE Bridget Walsh, EY EMEIA Managing Partner, Tax, Discusses a New Business Model for a New Era of Global Business

Durban FDI / Data Analytics / Sustainable Transformation / Taxing Big Tech / Gym Shark / Future Currencies / Driving Sales In a Transformed world

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Table of Contents 10

News

Hattie Whiting, ForwardPMX

What is the Future of Money and Are We Read for it?

First Stop Shop

A Rainbow in the Rain

Delusion, Deceit or Neither?

Hybrid working will create a resurgence in data analytics. Here’s how to get on board

European Business Magazine catches up with Oliver Werneyer

Why businesses need to be focusing on sustainable transformation, not digital transformation

Italy may have no unicorn startups - but you shouldn’t be fooled by it

Tax: Rewriting the Rules

Taxing Big Tech

A New Global Business Model for A New Era of Global Business

The Best Tax Software Available And Why Multinationals Are Using Them For Cross Border Payments

Gymshark: The Fitness Brand Phenomenon

How have business priorities changed pre- and post-Covid?

UK calls for independent consultants to help drive pandemic recovery

Big Tech Gets Bigger

Is The Future Of Currency Centralised Or Decentralised?

Driving sales in a transformed business world

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

Building a finance function from the ground up

HOW SEARCH ENGINES REALLY WORK

Post Covid: To Inflate or Deflate?

Why Is Big Data So Important?

Global Debt at Risk of “Qualitative Change”

How the Union is stifling economic development and why Europe will never flourish under the EU

AI In Banking: Hype Or Revolution

Does Central Bank Currency Spell The End For Crypto?

As cities fill tech gaps, power of smart cities unleashes, report finds

Almost half of consumers are ‘scared’ of open banking

Why manufacturers should now plan their Covid exit strategy, and what to consider

18 thousand people in the world have left extreme poverty thanks to impact Market, a new blockchain startup for social impact

Global Digital Business Identity Initiative Launches to Boost Financial Inclusion for African Businesses

The Rise of The Female Fin-fluencer

How to design and build a ‘sticky’ app

Cambridge Judge Business School Collaborates with Esme Learning to Launch Executive Education Online Programmes in Startup Funding, RegTech

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EUROPEAN BUSINESS

M AG A Z I N E Publisher Nick Staunton Editor Patricia Cullen Deputy Editor Anthony Gill Associate Publisher Brad Adams Features Editor Katie Winearls Head of Production Paul Rogers Head of Design Vladimir Mladenovski Subscriptions Manager Rebecca Hill Head of Business Development Paul Matthews Advertising Sales Brad Adams Tara Duckworth Advertising Sales Tara Duckworth, Mike Ray, Andy Ellis, Mark Holburn Contributing writers Patricia Cullen, Richard Fitzpatrick, Bala Murali Krishna, Shilpa Meen, Argee Laraya, Aimee Ni Mhaolcraibhe, Gordana Ristic, Jonathan Hooker, Jose Ignacio Latorre Head of Digital Stephen Scott Photographer Ben Fisher NST Publishing Ltd, 19 Leamington Spa (studio 1) Leamington Spa,Cv324tf, UK The information contained has been contained from sources the proprietor believes to be wholly correct however no legal liability can be accepted for any errors. No part of this publication can be reproduced without consent of the publisher.

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Tesla has made a profit from car sales for the first time in almost two years, as it passed $1 billion in quarterly profit for the first time.

Overall, Tesla saw $11,98 billion in revenue from April to June this year, with a record net profit for the quarter of $1,14 billion, or $1,02 per share,

Jeff Bezos momentarily forfeited his title of “richest person on the planet” on July 20 when his Blue Origin spacecraft reached suborbital flight for a few minutes. Now, the multibillionaire is once again without the title, but this time because his net worth actually tumbled — by $13,9 billion in one day. Bezos’ net worth fell because Amazon’s stock price took a hit, sliding 7 percent after the company reported less-than-anticipated second-quarter growth. The drop in Bezos’ net worth allowed for French tycoon Bernard Arnault to claim the No. 1 spot of the ultrawealthy. Arnault heads the luxury goods conglomerate LVMH, whose subsidiaries include Louis Vuitton, Sephora, Moët & Chandon, and Tiffany & Co. He remarkably grew his wealth by nearly $100 billion during the first year of the pandemic. In total, there are 2,755 billionaires worldwide, 86 percent of which are richer than they were a year ago for a combined $5 trillion increase in wealth in 2020. 10 europeanbusinessmagazine.com

compared with $104 million or 10 cents a share, a year ago. The company’s revenue surpassed analysts’ expectations, driven by strong sales of its more affordable Model 3 and Model Y vehicles. “Public sentiment and support for electric vehicles seem to be at a never-before-seen inflection point,“ Tesla wrote in its second-quarter letter to investors. The better-than-expected earnings results come amid Tesla’s increased scrutiny in China, the delayed rollout of its revamped Model S sedan and Model X SUV, and the ongoing impact of a global semiconductor shortage and port congestion. Musk noted that the “big struggle“ in the quarter was procuring modules that control the airbags and seat belts in Tesla’s vehicles. “Obviously you cannot ship a car without those and that limited our production severely worldwide in Shanghai and Fremont,“ Musk said. Looking ahead, Tesla continues to expect 50 percent average annual growth in vehicle deliveries, but noted the rate of growth will depend on “equipment capacity, operational efficiency, and the capacity and stability of the supply chain.“

Rihanna is now officially a billionaire and the wealthiest female musician in the world. The pop star is worth $1,7 billion, with an estimated $1,4 billion coming from the value of her cosmetics company. Fenty Beauty — which comes from the singer’s last name — is currently valued at about $2,8 billion, and was founded in 2017 with luxury goods giant LVMH. At the time, she said the aim of the line was to appeal to “every type of woman“ and launched 40 different foundation shades, which at the time was largely unprecedented. It led to the so-called “Fenty Effect“ where rival brands broadened their shade ranges for make-up products. The line brought in more than $550 million in annual revenue in its first year, LVMH said. Rihanna also owns Fenty Skin and the lingerie line Fenty x Savage, which is worth $1 billion. She is second only to Oprah Winfrey as the world’s richest female entertainer. However, earlier this year, the 33-year-old agreed with LVMH to shut down her Fenty fashion label after less than two years in production.

Chinese technology giant Huawei suffered its biggest-ever decline in revenue in the first half of 2021 after the US imposed sanctions that battered its smartphone sales around the world. The drop marks the third straight decline in quarterly revenue for Huawei, the world’s largest maker of telecom equipment and formerly one of the world’s biggest smartphone sellers, and the declines have accelerated since the end of 2020.

Huawei’s smartphone sales, once a top revenue driver for the company, have fallen dramatically since the Trump administration imposed restrictions last year blocking the company from buying the most advanced semiconductors. Revenue from telecommunications equipment sales has also dropped, although less dramatically, amid a US campaign pressuring allied countries to drop the Chinese company as a supplier of 5G equipment.

Huawei’s priority is to stay resilient in the face of US pressure. “Our aim is to survive, and to do so sustainably,“ said Eric Xu, Huawei’s rotating chairman, in a statement on the results. “We’ve set our strategic goals for the next five years.“ The company started rolling out its Harmony operating system in June, meaning it is no longer wholly reliant on Google’s Android platform.

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Virgin Galactic has reopened ticket sales for its space flights at a starting price of $450,000 a seat. It comes after the company, led by billionaire Richard Branson, completed its first fully crewed flight to the edge of space in July. The firm hopes to start commercial flights next year after completing several more test missions. It had previously sold tickets at $250,000 a seat but stopped in 2014 after a fatal accident. In a statement, Michael Colglazier, CEO of the company, said last month’s successful test mission had renewed public interest in the firm’s offer. “Leveraging the surge in consumer interest following the Unity 22 flight, we are excited to announce the reopening of sales effective today,“ he said. “As we endeavor to bring the wonder of space to a broad global population, we are delighted to open the door to an entirely new industry and consumer experience.“ Unlike other private space companies, Virgin Galactic doesn’t launch rockets straight up from the ground. Instead, its spacecraft are flown roughly 50,000 feet up by a special jet. The vehicle then detaches before firing up its rocket boosters and starting a near-vertical ascent. Passengers

experience a few minutes of weightlessness before the vehicle glides back to Earth for a runway landing. Roughly 600 people have already purchased tickets worth $200,000-$250,000, Virgin Galactic has said, and another 1,000 have placed deposits for future seats. Tourist flights are set to begin in 2022.

Sales at Crocs soared by 93 percent year-on-year to $641 million, in the company’s second-quarter to 30 June 2021. The shoe brand, which has collaborated with celebrity Justin Bieber, and has been worn by singer Nikki Minaj, reported that revenue growth was strong in all regions: US sales were up by 135,6 percent, Asia-Pacific 27,1 percent and Europe, Middle East, and Africa, rising by 52,6 percent on a constant-currency basis year on year. “We continue to see strong consumer demand for the Crocs brand globally,“ said Andrew Rees, chief executive of the company. “On the back of record second-quarter results and continued momentum, we are raising our full-year 2021 guidance. We are also committing to net zero emissions by 2030, enabling us to provide “comfort without carbon“ to our customers worldwide. I believe we can deliver sustained, highly profitable growth while having a positive impact on our planet and our communities.“ However, the CEO also expressed concern about the short-term impacts of Covid-19 on the shoemaker’s supply. He expects Covid will lead to temporary factory closures in Vietnam, the company’s most significant manufacturing location. Rees told analysts that “global logistics remain challenging and volatile” as the world emerges from the pandemic. 12 europeanbusinessmagazine.com

German sportswear company Adidas raised its outlook for full-year sales and profitability as demand soared in most of the world, but took a hit in China where Western brands

faced a boycott of their products in late March. Adidas said its confidence was underlined by the planned launch of products such as new versions of its

Tobacco giant Philip Morris International says it will stop selling cigarettes in the United Kingdom within the next decade — including the company’s iconic Marlboro brand. “It will disappear,“ noted CEO of the company Jacek Olczak. “The first choice for consumers is they should quit smoking. But if they don’t, the second-best choice is to let them switch to the better alternatives.“ The development is part of Philip Morris International’s reinvention as it abandons traditional tobacco products. Olczak became the company’s CEO back in May 2021 and plans to lead the company’s “smoke-free“ transformation.

He said the company’s new mission is to find and provide “less harmful alternatives to cigarettes“ to the millions of people who would otherwise still smoke. In May, he said, “Our ambition is that more than half of our net revenues will come from smoke-free products in 2025.“ Philip Morris International is not affiliated with Philip Morris USA, which sells Marlboro in the US, where the

popular NMD sneakers, as well as sports events like the Olympics and the start of the club soccer season in Europe. Currency-neutral sales almost doubled in North America and Europe, Middle East, and North Africa in the quarter, but fell 16 percent in Greater China, in part because the region saw a strong recovery a year ago as it emerged from coronavirus lockdown. Western brands, including Adidas, faced online attacks in China in late March over past statements saying they would not source cotton from Xinjiang after reports of human rights abuses against Uighur Muslims. Beijing denies any such abuses. Adidas said in May it had initially seen a steep drop in demand in China but sales had since recovered slowly but steadily. It did not comment on the tension, beyond referring to the “geopolitical situation”.

brand has more sales than the next seven leading competitors combined. The company’s efforts are part of a much wider societal change in attitudes toward smoking, especially in the United Kingdom. The government recently announced its goal to make England smoke-free by 2030. The UK will be considered “smoke-free“ when the nation’s smoking rates are less than 5 percent. europeanbusinessmagazine.com 13

Levi Strauss & Co. and Beyond Yoga, a fast-growing, premium athletic and lifestyle apparel brand based in the US, announced that they have signed a purchase agreement for the sale of Beyond Yoga to LS&Co. The transaction will be financed with cash and is expected to close during the fourth quarter of 2021, subject to customary closing conditions. Through the acquisition, the American denim company will make its entry into the booming activewear segment after a pandemic year that saw job cuts and weakened sales. Levi Strauss expects the all-cash transaction to add more than $100 million to its net revenue by the end of next year. It plans to expand the mostly digital, size-inclusive Beyond Yoga — which, according to Harmit Singh, the chief financial officer of Levi Strauss, more than doubled its revenue and profitability in the last three years — to a wider, more global audience.

South Park co-creators Trey Parker and Matt Stone have signed a renewal deal that will not only 14 europeanbusinessmagazine.com

Beyond Yoga co-founder, Michelle Wahler will continue as chief executive of Beyond Yoga, a standalone

division within the company, and report to Levi Strauss president and chief executive Chip Bergh.

extend their popular show’s run through 2027 but will also see the creation of 14 South Park movies. A

new deal with US media giant ViacomCBS Inc. will pay them more than $900 million over the next six years and is one of the richest deals in TV history. “Matt and Trey are world-class creatives who brilliantly use their outrageous humor to skewer the absurdities of our culture and we are excited to expand and deepen our long relationship with them to help fuel Paramount+ and Comedy Central,“ Chris McCarthy of MTV Entertainment and Paramount+ said in a statement. The first two films are set to premiere on Paramount+ later this year, and the streamer plans to roll out two more each year through 2027. The deal with Parker and Stone is the clearest sign yet of ViacomCBS’s growing commitment to Paramount+. The streaming service trails the likes of Netflix and Disney+ but has added millions of subscribers since it rebranded in March. ViacomCBS is looking to the addition of “South Park” movies to accelerate its growth. The series remains the most popular TV show on Comedy Central.

Hattie Whiting, ForwardPMX

London, United Kingdom – Tuesday, July 27th, 2021: Global data and technology-driven marketing services company, ForwardPMX, has appointed Hattie Whiting as its first Chief Growth Officer for Europe. In this new role, Whiting will lead ForwardPMX’s growth strategy in EMEA and oversee the region’s business development opportunities and wider expansion plans for the remainder of 2021 and beyond. Whiting brings more than 20 years of business growth, digital transformation, data-driven marketing, and media experience to ForwardPMX,

with a focus on building a proactive culture that puts the customer experience at the heart of growth strategy. In her previous role as UK Chief Client Officer at PHD, Whiting was part of the leadership team driving a substantial period of growth for the agency, from new and existing clients. Prior to PHD UK, Whiting has held senior roles at Digitas, Chemistry Communications, and EHS Brann, where she also implemented highly successful methods for growing both agency and client business. A recognised industry leader, Whiting is also Chair of the DMA UK Media

Council, a newly formed body that is currently driving the DMA’s agenda around new ways to measure marketing effectiveness unifying an approach across digital and offline channels. ForwardPMX Global Chief Growth Officer, David Hughes, commented on Whiting joining the team: “Hattie has developed impressive expertise over her 20-year career. She has a unique mix of experience in digital transformation and data-driven marketing, which makes her extremely well-positioned to help ForwardPMX prepare for and activate its next phase of growth.” Hughes added, “We have ambitious plans at the agency to not only diversify into new markets but also to accelerate the growth of our current operations. Hattie brings an inventive attitude and undeniable energy, and we’re excited to bring her into the agency to lead our Business Development teams across Europe.” Based in London, Whiting will work as part of ForwardPMX’s senior management team to drive the agency’s wider growth strategy in Europe, including offices in Manchester, Hamburg, and Paris. Kate O’Mahony, Managing Director of EMEA, added “We’re thrilled to have Hattie join the team and lead our growth strategy across Europe. She brings unrivaled expertise and we look forward to seeing what opportunities she unlocks for us at ForwardPMX.” On joining ForwardPMX, Whiting said, “ForwardPMX attracted me thanks to its ambition and sharp focus on helping clients find the right ways to change to fuel fresh growth. The agency’s combination of strategy, data, technology, and media activation skills are much needed by brands – especially in the wake of COVID-19 – and I’m hugely excited about joining the team to deliver innovative and impactful solutions for clients across Europe and beyond.” Whiting added, “I’m also delighted to join an agency whose inclusive culture and support for their people align closely with my passion for supporting positive mental health in our industry.” europeanbusinessmagazine.com 15

European Magazine – Cashless Society:

What is the Future of Money and Are We Read for it? August 28, 2020

erhaps it is not too far-fetched a thought that not so far from today, money as we know it — banknotes and coins that we carry with us — will be considered outdated or even collectible? “We’re living through an incredible global social experiment that is forcing governments, businesses, and consumers to rethink their operating models and norms for social interactions,” said Morten Jorgensen, director of RBR, a consulting firm based in London, which specializes in banking technology, cards, and payments. “We have a world in which there is less contact. People’s habits are changing as we speak.“ Before the coronavirus pandemic, cash was used for as much as 80 percent of the transactions in Europe. However, the fear of handling paper money that may be contaminated with Covid–19, as well as an immense growth of e-commerce, has accelerated the trend towards a cashless society. As a result, Visa reported that ATM use is already down by 32 percent, and 63 percent of consumers say they’re using less cash. At the same time, the number of active Visa cards being used for e-commerce jumped by 30 percent. Brian Cole, head of North America products and solutions for Visa noted that “It’s just been like 3 years of digital commerce growth being pulled forward into 3 months. People are making purchases that they would have made in person, but they’re making them online now.“ According to Nayax, a recent survey shows the growth in the amount of businesses whose cashless payments account for 95 percent or more of all transactions in Australia, Canada, UK and the USA.

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Country

Before

After

36%

48%

10%

60%

31%

The fear of using banknotes and coins due to the coronavirus pandemic was so real that some countries — like South Korea — went even further: banknotes have been disinfected and placed in quarantine, basically leaving no other solution rather than use cashless payment methods. However, as people believe that contactless payments can help promote social distancing during the pandemic and save from getting bacteria, there are a few disadvantages of a cash-free world to keep in mind. For starters, electronic payments are not as private as cash payments: the more information you have floating around online, the more likely it is to get in bad hands. In a cashless society, everyone is more exposed to hackers. Also, various technical problems could leave you without the ability to pay for things and services when you need it the most. What is more, the poor and unbanked people will have a really hard time integrating into the cashless society. And there’s one more thing: when all money is electronic, negative interest rates could become a real problem for consumers, as they would feel a direct effect on them. Denmark, Japan, Switzerland, and other countries have already experimented with negative

interest rates, and the results were not that promising. According to the International Monetary Fund, negative interest rates reduce bank profitability, and banks could be tempted to hike fees on customers to make up that deficit. In 2020, banks are limited in their ability to pass on those costs because customers can simply withdraw their cash from the bank if they don’t like the fees. But in the future, if customers can’t withdraw cash from the bank, they may have to accept any additional fees and not be able to do anything about it. The case of Japan, which we just mentioned, is actually an interesting one. Once it was a pioneer in cashless transactions: back in 1990, the Japanese company Denso Wave developed the first QR codes that are now frequently used in cashless payments, and Sony has introduced a chip, which was used on public transport and for payments since the 2000s. But today, as the world’s biggest economies increasingly embrace electronic payments, Japan’s aging population prefers physical money, and 4 out of 5 purchases here are still made in cash.

be more specific, China is already the world’s largest mobile payment market and is also a leader in peer-to-peer payments, in which people can pay each other by text. According to GlobalData, a leading data and analytics company that has forecasted which countries will most likely be the leaders in moving towards a truly cashless society, “one area where China has seen extreme developments is the rapid adoption of mobile payments. Here, one of the most popular ways to pay by phone is QR code scanning, and this method has been successfully adopted by mainstream society. One proof that China is rapidly moving towards a cashless society is its undisputed leading position in e-commerce. As of 2019, China recorded an estimated 80 billion cash transactions.“

To compare, in South Korea as much as 96 percent of transactions are digital today, and Sweden aims to become a cashless society by early 2023. Yuki Fukumoto, an analyst at the NLI Research Institute, noted that “With Japan becoming the first super-aged society with more than 28 percent of people 65 or over, it is harder to persuade consumers to take up new technology. The challenge from now on is how to motivate people to change their habits.“ Having in mind that most small shops in Japan will only take cash to avoid high transaction costs, this becomes a difficult challenge. One other reason why Japan seems to be sluggish in adopting cashless transactions today is the fact that people here simply trust in cash. The crime rate is low here, and people feel safe carrying it in their pockets. And although large retail stores and retailers accept cashless payment tools that come with reward points, many customers still pay in cash. Despite the current situation, Tokyo still wants more consumers to get into the habit of using cards and engage in cashless transactions, and

the government aims to double the ratio of cashless settlements to 40 percent by 2025, and to 80 percent eventually to spur labor productivity. Experts note that country’s transition to digital transactions would help Japan cope with a shrinking population and a tight labor market. What is more, cashless payments would also allow stores to automate sales estimates and banks to cut back on costly automated teller machine networks. Satoshi Kumagai, senior vice president in charge of financial services and digital business at convenience store chain operator Lawson Inc, noted that “It would be ideal to see all the transactions go cashless given labor shortages and the need to boost convenience for our customers. On the other hand, we’ll need to find a way to help those elderly who may find it hard to go shopping without cash.” To compare, in China, where the trust in cash is low and costly, smartphones have been a popular payment tool for quite some time now. Such mobile platforms like Alipay and WeChat Pay have been dominating the market. To

Right behind China, according to the GlobalData, ranks South Korea, followed by the UK. Then there’s Sweden, Finland, and Australia. These countries are a head of the game in turning cashless by minimizing paper money production and microchip payment solutions. Then there are countries who may not be in the running but are trying to implement programs in order to turn the country into a technologically liberated society. Take India for example, where the government has developed The Digital India Program with the motto: “Faceless, paperless, cashless”. Or South Africa, where mobile phones are made accessible and affordable in order to promote cashless transactions via mobile phones. As we can see in Nayax’s article, countries all over the world, no matter their technological advancement, are trying to pave a way to a cashless tomorrow. Speaking about the cashless future, according to the global management consulting firm Kearney, which analyzed data from close to 100 banks across Europe, over the next few years, 1 in 10 banks will no longer be in business due to customers using digital banking services like Starling, Monzo or Revolut. This trend, it says, will drive the shift to a cashless society at pace resulting in a significant change in the financial sector. europeanbusinessmagazine.com 17

First Stop Shop

nvest Durban was recommended by the Durban City Council and organised private business as the “First Stop Shop” to stimulate new investment in the Durban metropolis. We act as a partnership between the Metro City Council and the private business sector, offering a free investor advisory service, plus key promotion, facilitation, and aftercare services between all investment stakeholders. Invest Durban delivers a world-class Metro based investor support service, encompassing our four part Business mandate, namely investment promotion and marketing; foreign investment identification, attraction and facilitation; FDI aftercare and expansion, plus investment advocacy. Invest Durban works together with organisations such as the Department of Trade & Industry including Invest SA, Trade and Investment KZN (TIKZN), the Durban Chamber of Commerce and Industry, the KZN Growth Coalition, and State-Owned Enterprises such as Dube TradePort, the DBSA, IDC, ACSA and others.

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Categories The thrust of Durban’s proposition to attract investors can be put into three broad categories: 1. Premium destination; a business and lifestyle environment most conducive to profitable, sustainable investments, with ample land available. 2. Catalytic Projects, which have the potential to shift the socio-economic landscape and trigger a series of investments across several sectors 3. Priority Sectors, which receive the focus of planners in a variety of ways, including the creation of clusters and the development of value chains to promote new ventures and investment opportunities.

Catalytic Projects Durban is working on a number of large-scale projects that have the potential to make a regional impact. The location of these projects is vital.

They must either be on national trade routes or they should help to break down the old apartheid living/working dynamics. Projects are selected for their scale in terms of job creation, investment size and potential revenue creation. Ideally, the projects should include a combination of uses (retail, commercial and housing, for example) and they should fit in with the United Nation’s Sustainable Development Goals. The Point Waterfront Development, for example, fits very well into the category of a catalytic project. Some projections put the potential investment value at R40-billion and the number of permanent jobs to be created at 6 750. It is an ambitious plan that is already linking the city’s beach promenade and the harbour. The Point Waterfront Development offers a property use mix of office space, retail shops, residential dwellings and leisure options. The 55 ha site has already seen significant investment. A new cruise line terminal in the harbour, backing on to the Point will dovetail well with

the new atmosphere of the precinct. Other major projects include, amongst others the: • GO!Durban Transport Oriented Development, which has already received major road upgrades and will be an even greater enabler of trade • Centrum Government Precinct which would formalise the relationship between buildings such as the International Convention Centre (and extensions) and a related hotel, the library, council chambers and the redevelopment of Gugu Dlamini Park • Cornubia integrated human settlement development north of Durban, on 1 300 ha, a partnership between Tongaat Hulett Development, the human settlement departments at national and provincial level and eThekwini municipality • Dube TradePort, the multi-modal facility at King Shaka International Airport

Cluster initiatives Durban has a very diverse economic landscape, within which there are some large-scale enterprises. Cooperation between the public and private sectors is formalised by the large number of cluster initiatives which aim to draw to together

experience and expertise from commerce and industry, labour organisations, government and academia. Under manufacturing, the following clusters or programmes are active: • KZN Clothing and Textile Cluster (KZN CTC) • Durban Automotive Cluster (DAC) • Durban Chemical Cluster (DCC) • eThekwini Maritime Cluster (EMC) • KZN Furniture Incubator • Agro-processing development programmes Research aims to find out how best to grow particular economic sectors, and in-depth discussions are held about how to develop and grow value chains. The wealth of KwaZulu-Natal is mostly consumed or exported in its raw state - much more could be done to add value through processing. The priority sectors are: • Automotive and allied industries • Logistics and logistics management • ICT and BPS (Information & Comm’s Tech, plus Business Process Services) • Agri-processing • Life sciences (incl. Pharmaceuticals, medical device manufacturing, plus Health Facilities) • Tourism asset development

Some of these initiatives play to the existing strengths of the regional economy, some seek to exploit newer avenues as in the emphasis on the environment and a growing interest in the oceans’ economy. A variety of projects link tourism, renewable energy generation, recycling and job creation. There are various other broader programmes which have their own goals, but there will be positive spinoffs for the targeted sectors. These schemes include the drive to increase local content, boosting metal fabrication across sectors, the promotion of black industrialists, promoting exports and the over-arching eThekwini Industrial Development Policy Action Plan. Companies operating in these key sectors are invited to contact Invest Durban and benefit from these initiatives! CONTACT DETAILS Head Office Physical Address: 41 Margaret Mncadi Avenue, 11th Floor, Durban, 4001 Postal Address: P.O. Box 1203, Durban, 4000 Tel: +27 (0)31 311 4227 Fax: +27 (0)31 311 4092 E-mail: invest@durban.gov.za Website: www.invest.durban www.durban.gov.za

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SOUTH AFRICA:

A Rainbow in the Rain

he impact of the coronavirus pandemic on investing continues to reverberate across the globe. Last year the macro economy contracted by 4.3% and international foreign direct investment (FDI) levels came to an abrupt halt. Fortunately, despite heightened investor caution, the FDI slump is unlikely to become a lasting feature of the global economy. However, uncertainty is still at an alltime high, and investors continue to delay or cancel projects as countries face the prospect of re-closing borders. Furthermore, threats of new virus variants have further dampened hopes that vaccines will lead to a longterm solution or a permanent return to normality any time soon. Africa recorded a FDI total of $38 billion in 2020, representing a drop of

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18% from $46 billion in 2019, according to the United Nations Trade Association. Nevertheless, thanks to the continent’s innovative spirit, the COVID-19 crisis has also prompted positive change and development across Africa. An increased allocation of capital from corporates to their corporate VC activities, acquisitions of African tech companies, intensified FDIs and major initiatives such as the ‘Enrich in Africa’ programme, shine the spotlight on what the region has to offer. South Africa in particular, is renowned for its strategic location, varied topography and great natural beauty, and is on the cusp of transformative and long-lasting growth. Geographically situated to service international markets, South Africa boasts excellent infrastructure, sound

public finances, a developed financial market, valuable innovative capacity, a highly skilled workforce and a steadily growing consumer market. Nicknamed the Rainbow Nation, reflecting the country’s multicultural diversity, South Africa has experienced rapid change and regeneration in the last few years, and is ranked as an ‘upper middle-income country’ by the World Bank. Of the approximate 400 companies on the continent earning more than $1bn, about half are based in South Africa. More specifically, Durban paves the way over other South African locations, offering a southern gateway to and from Africa, an attractive social environment and a rising economic development rate. The main obstacle that South Africa faces in becoming a leading investment destination, is the backlog of infrastructure development and the slow turnaround in administrative procedures and approval times. Consequently, South African cities are making huge efforts to improve, develop and stimulate enterprise, and

have implemented reforms, making it easier to do business. FDI in South Africa fell by almost half last year, in line with the world-wide downturn, according to the United Nations Conference on Trade and Development. The country attracted R2.5 billion in new investments in 2020, a 45% decline from the 2019 amount of R4.6 billion. Fortunately, with many of the COVID-19 restrictions being lifted, FDI is making a comeback. With a good business climate, a strong focus on production and financial services and a tourism and retail sector showing great potential, South Africa is attractive to investors. The country remains a prolific host country, gaining two large investments last year – an undersea fibre optics cable by Google that is set to boost the country’s internet speed and the announcement that US multinational PepsiCo was acquiring Pioneer Foods. There was also a major investment in telecommunications, namely the Teraco Data Environments’ R4.4-billion JB4 data centre. The facility is being built in Ekurhuleni, Gauteng, and will become the largest single-site data centre in Africa.

South Africa experienced a sharp decline in FDI in 2019, with FDI inflows falling by 15.1% to US$4.6 billion. This fall is in stark contrast to the FDI inflow increase of 446% in 2018, which was largely driven by President Cyril Ramaphosa’s push to attract US$100 billion in new investments, intended to energise the country’s lagging economy. Fortunately, the crisis is accelerating trends such as digitization, market consolidation and regional cooperation, creating important opportunities including boosting local manufacturing which has experienced a significant focus on new investments, reinforcing the role of business and developing urban infrastructure. FDI is key for South Africa’s recovery. There are huge opportunities in the employment-intensive, export-oriented or green sectors. Additionally, new waves of tech expertise are rising beyond the usual powerhouses, and Africa is one of the fastest-urbanizing regions in the world. It is also one of the most entrepreneurial areas on the planet. Reports from the African Development Bank showed that 22% of Africa’s working-age population

are starting businesses - the highest rate of entrepreneurship in the world. Home to Naspers, one of the world’s largest investors in tech companies, South Africa recorded the second-highest number of start-ups behind Nigeria. The COVID-19 crisis could just be the stimulus required to accelerate the digital transformation in sectors such as financial services, retail, education and government. The region saw promising developments before the pandemic, and will continue to improve the domestic investment climate, adapting policies and strengthening regional collaboration through the African Free Continental Trade Agreement. Up to 1 billion people could live in Africa’s urban areas by 2050. The winning combination of human resource, connectivity and the significant growth potential will secure positive long-term returns for investors. If you want to increase your market share, lower your costs and gain an edge on competitors, look to South Africa. The country is looking over the rainbow - opening up, aiming high and thinking big. europeanbusinessmagazine.com 21

UK’S ‘GLOBAL BRITAIN’ VISION:

Delusion, Deceit or Neither?

evident in Gao Jian’s commentary in Global Times. Coining the ‘Global Britain’ vision as a strategic deceit of the Johnson government, Gao’s scepticism is based on the three rationales from economic, diplomatic and strategic domains. Economic wise, Gao sees Britain caught within its domestic economic crisis and as such, lacks the material basis to push such global vision. In terms of diplomacy, the UK is not only having an uneasy relationship with the EU, but also facing deteriorating ties with China (second’s largest economy) as well as mired in disadvantageous alliance with the US. Such challenges, to Gao, is not working in favour of the UK’s ‘new’ role within the ‘Global Britain’ vision. As far as strategic domain is concerned, Gao considers the UK as losing its own strategic autonomy in its alliance with the US and this, in turn, hampers its strategic manoeuvring in responding to the volatile international environment today. Chee Leong Lee April 27, 2021

he first discourse draws from the European-centric perspective in which Jeremy Shapiro and Nick Witney published their piece in Foreign Affairs magazine. Calling the ‘Global Britain’ vision as a delusionary promise, both authors see the Johnson government not facing the reality of which the UK is in. From COVID-19’s economic and public health impacts to the nation’s financial constraint, the two scholars view the UK as a middle power that is short of having the

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necessary conditions in pulling out an expensive plan as the ‘Global Britain’ vision. Instead, both suggest that the Johnson government seeks its strengths closer at home and for that purpose, charts its economic and foreign policy paths through close cooperation with the EU. In other words, Shapiro and Witney see no basis for the UK to engage Asia or Indo-Pacific independently since its economic, cultural and geographical fortunes lie with the European continent and not the other part of the world. The second discourse comes from the Chinese-centric perspective that is

The Three Realities Regardless of either of these two discourses, these scholars have yet to take into account the three stark realities in Asia or Indo-Pacific (as coined by the US-led alliance and the UK) region. First and foremost, Asia or Indo-Pacific is the future in which the global economy will revolve around. In particular, the fast-emerging ASEAN region has the potential to be an even bigger economic driver in spite of the COVID-19 pandemic. For example, the total e-commerce market size of six Southeast Asian

Chee Leong Lee Chee Leong Lee is currently the Collaborative Fellow with Anbound Malaysia, an independent think tank based in Kuala Lumpur. Previously the Taiwan Fellow and Visiting Scholar for China, his research includes China’s sub-national diplomacy in the ASEAN region, Taiwan’s soft power in Southeast Asia and ASEAN affairs in general. He holds a PhD from Monash University. countries (Indonesia, Malaysia, Thailand, Vietnam, Singapore and the Philippines) is slated to expand to US$53 billion in 2023 – making these countries among the most dynamic future economies in Asia or the Indo-Pacific. Even during the COVID-19 pandemic era, their potential as their future economy continues unabated. In fact, the pandemic accelerated the realisation of such potential, with digital consumers increasing by 36% from 2019 to 2020 alone. Of course, this has not taken into account the potentials in other technological sectors such as artificial intelligence (AI) and machine learning (ML), in which Southeast Asian nations (except Singapore) have yet to tap effectively as compared to their Chinese counterpart. Considering these hard facts, it is perfectly logical for any power, whether superpower, middle power or even small nations, to engage this part of the world as external partners. This is even more crucial for the UK’s case as it faces challenges in its economic relations with the EU in the postBrexit era. With free hand in charting its economic and diplomatic course today, a ‘Global Britain’ vision is timely to prepare the nation for a new age that will surely involve the diversification of its international trade and adjustment to its foreign/security policies vis-à-vis Asia or the Indo-Pacific. Second, Asia or Indo-Pacific is much bigger than China in terms of the economy and as the matter of fact, the US in the diplomatic domain. Arguably, within Asia or the Indo-Pacific, there are Southeast Asia (ASEAN bloc), Indian sub-continent (especially India) and East Asian nations that belonged to either developing or developed countries in the world economy. While Gao emphasizes China as the second largest

economy that the UK must engage, the story does not end there for sure. Indeed, the dynamism of other Asian or Indo-Pacific economies rarely feature prominently in the analytical equations of many scholars around the world. This is despite the fact that Southeast Asia for instance, continued to import more goods from China than the other way round – resulting in the former running trade deficits with the latter for many years. Without such recognition of Southeast Asian nations as actors with agency, any analysis will fall into the conventional insight that postulates the Chinese market as the ‘sole’ supporting pillar of global consumption without its neighbours. On the other hand, the US, while being the prevailing world’s superpower, continues to face hurdle in imposing its strategic agenda in the region. Without ASEAN’s participation and support, most of Washington’s Indo-Pacific push will be far from successful in Southeast Asia. Given such reality, Washington has no choice but to cooperate with ASEAN in an array of regional forums to which the Southeast Asian bloc is at the driving seat. As of today, the East Asia Forum (EAF), ASEAN Regional Forum (ARF) and (ADMM Plus) are among those regional forums in which both the US and China participated as external partners to the Southeast Asian bloc to articulate their respective agendas. By all means, these two economic and diplomatic realities in Asia or the Indo-Pacific, are virtually missing from Gao’s assessment that situates the ‘Global Britain’ vision solely within the context of US-China rivalry. Finally, the UK has a long-standing presence in several Southeast Asian nations that spanned beyond the EU’s

formal establishment of ties with ASEAN in 1972. While Shapiro and Witney are right to point out that EU remained to be the UK’s main external partner that is closer to home, they certainly overlook the cross-domain foundation in Asia or the Indo-Pacific that the UK already possessed. In fact, the British colonial legacies in Southeast Asia have left the UK with strong economic stakes in Malaysia and Singapore while at the same time, retained special defence arrangements with Brunei, Malaysia and Singapore. This is not to mention the Commonwealth of Nations in which these Southeast Asian countries and the UK working together to tackle global issues – ranging from poverty, economic inequality to racism – ever since the signing of Singapore Declaration in 1971. Surely, such cross-domain foundation is facilitative to the British government’s push for a ‘new’ role in Asia or the Indo-Pacific region.

Operationalisation is the Issue By all means, the ‘Global Britain’ vision is neither a delusion nor a strategic deceit as articulated by Shapiro, Witney and Gao. As far as Asia or Indo-Pacific is concerned, it is a vision that has a logical rationale, with a specific focus on certain countries of the region and is predicated upon the UK’s long-standing presence in this part of the world. The real issue, however, will be about operationalising the ‘Global Britain’ vision within Asia or Indo-Pacific region. This will entail follow-up questions: How much resources to be distributed in achieving the four objectives as outlined in the vision and how to distribute them? Which government agencies taking charge and how will they push such vision? Who are the British government’s local and international partners (private sector and non-governmental organisations (NGOs)) as well as how to coordinate all these actors into a collective action that earns the UK a ‘new’ global role in the next decade? Without detailed planning and execution, the ‘Global Britain’ vision will remain as a concept waiting to be operationalised on the ground. europeanbusinessmagazine.com 23

European Business Magazine:

Hybrid working will create a resurgence in data analytics. Here’s how to get on board

Nikolas Kairinos, CEO, Soffos.ai

reating a business that remains relevant in the long-term is no simple task. More often than not, organizations will have to reinvent themselves several times over throughout their lifespan to stand the test of time. Never has this been truer, as we approach the age of hybrid working. It goes without saying that throughout the pandemic, most firms have had to make some difficult decisions and adjustments regarding the way they do business. Even now, as organizations look set to adopt a hybrid

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work model to succeed, many will be looking to invest funds in the technical infrastructure needed to make this a reality, ensuring employee productivity and business growth while teams are divided. Of these investments, data analytics will be a vital component to anticipate market dynamics and aid smart decision-making. Put simply, before making any radical changes needed to keep a business fresh, business leaders require crucial insights and data to provide some clarity about what is actually happening internally, and within their industry. Given that more than half (52%) of the businesses surveyed recently

by Soffos.ai plan to invest more funds in data analytics over the coming 12 months, it seems like organizations are beginning to tune into the fact that actionable business insights can often result in improved staff retention, more structured policies, and better informed investments. So, where should businesses look to first when implementing a new data strategy?

The importance of creating a data-driven culture Firstly, change must start within, and business leaders should look

to equip their training managers and HR departments with sophisticated learning management systems (LMSs) that make the most of data to support consistent employee development. Although many teams may have become accustomed to group videoconferencing sessions, break-out rooms and webinars to plug the training gap throughout the pandemic, for many employees, these sessions have left a lot to be desired. Indeed, one third (33%) of the workers surveyed by Soffos.ai said that online learning solutions provided by their employers through the pandemic were too generic to help their professional development. Consequently, businesses should look to leverage sophisticated LMS technologies to find out what their employees truly require from learning and development (L&D) opportunities, so that they can flourish. For example, platforms augmented by artificial intelligence (AI) and natural language processing (NLP) capabilities can conduct Q&A style assessments to determine what staff do and don’t know - extracting critical data from both verbal and written responses. Sophisticated systems will flag up the areas that specific individuals and teams need to develop, and the areas that they are more confident with. From there, learning leaders should be able to tailor future training initiatives based on this data, to account for any learning gaps, key competencies that staff wish to expand, and the real needs of employees. Likewise, based on engagement levels and metrics to measure progress, businesses should be able to make consistent, lifelong learning more of a priority. For instance, by pushing out call-to-action notifications via the LMS when employees need to learn changing industry standards or new regulations, this will ensure that individuals are always keeping up with their personal development. As data and analytics are constantly changing and becoming more refined, employees too need to move with these changes. As such, consistent

Nikolas Kairinos is the chief executive officer and founder of Soffos, the world’s first AI-powered KnowledgeBot. The platform streamlines corporate learning and development (L&D) to deliver seamless professional training for employees. You can follow him on LinkedIn and Twitter.

training should be mandated in data strategy and carefully spelled out in any model of hybrid work – doing so should ensure that employees have the ability to interpret ever more complex data sets and help their business operate as competitively as possible.

Looking to AI and ML for more efficient data Out of the realm of corporate L&D, once businesses acclimatize to an increased focus on data to propel their operations, business leaders can then go on to utilize these technologies more widely. That said, there are some obvious limits to the amount of data any individual or team can handle alone, but thanks to emerging analytics tools that utilize artificial intelligence (AI) and machine learning (ML) technologies, businesses should be able to let the technology do the talking. First and foremost, businesses stand to gain plenty by migrating their data over to the cloud. Put simply, this will enable firms of all sizes to scale up in a cost-effective manner, as the volume of data being captured grows, while paying only for what they use. As an added bonus, any data collected will be readily and easily accessible to all members within the organization, which will no doubt make for an important weapon in their armoury when it comes to agile and informed decision-making. In some cases, it won’t be immediately obvious which input variables a manager needs to use to arrive at the conclusions required to make smart

business decisions. ML-powered analytics offer a solution to this problem as they work from the ‘outside in’ to learn from data, beginning with the outcome, rather than working from past data to establish links between variables. Machine learning technologies, which are an important sub-division of AI, also consistently improve their output based on new data and learned experiences. This means they can equip businesses with increasingly accurate insights and predictions as they are fed more and more information – helping businesses forecast patterns like changing customer behaviour and needs, and even the organization’s exposure to fraud and cyber-attacks. This means that businesses should be able to come up with a robust supply of data to anchor their decision-making – whether this is as small as adapting existing policies and workflows internally, to informing the development of new product offerings and investment activities. Ultimately, organizations should be putting people at the centre of their decision-making, as well as data. Although some employees might still be inclined to fall back on their business nous and gut instinct when it comes to making big changes, so long as managers lead by example, they should be able to ensure that all voices are heard, and not just the visible few. In doing so, businesses should be able to combine the power of data and human intelligence to make way for some real, transformative change. europeanbusinessmagazine.com 25

You recently raised 10 million in a Series A, how will this affect Imburse, and in turn what impact do you see that having on the wider fintech sector? Imburse offers an end-to-end solution that tackles the problem of single-integrations- a huge barrier for traditional large enterprises that need to remain competitive in a highly techdriven market. Our platform offers connectivity to all payment providers and technologies across the globe, effectively enabling companies to expand their services, open up to new markets and continue to exceed customers’ expectations. Imburse will use these funds to continue to invest in our product, people and market expansion across Europe. The demand and need for our solution is exploding and we need to keep pace with the evolving and growing clients’ needs, continue to deliver exceptional quality for enterprises and pick up and deliver on all the leads and opportunities. For the wider Fintech sector, it shows that European startups can raise funds from the biggest VCs worldwide, build and grow ambitious and relevant solutions globally. There are still massive structural problems for enterprises to solve, and great financial rewards to be unlocked. Imburse will continue pursuing its mission to enable companies to unlock these financial rewards, expand to new markets and deliver excellent customer service at all times. What were some funding challenges you faced in the beginning and how did you overcome them? Early stage startups struggle to raise bigger tickets initially, as the European funding environment is still 26 europeanbusinessmagazine.com

fundamentally more conservative. Immediately globally ambitious startups often struggle for initial funding and are slower to build bigger teams and race the solution through their territories and into new markets. We overcame this by focussing on engaging with and getting intros from like-minded investors and actors in the Fintech ecosystem. Engaging with and targeting hyper-scale-minded people, working through the messaging and taking onboard great feedback has put us in a better shape for a hyper-scale path. Why are digital payment transformation and hyper-personalised banking so critical for the future of the banking sector? There is a continuing trend for people to conduct business digitally. This is even true where services are rendered in person or physical shops. The payments aspect is most affected by digitalisation as merchants and users are always looking for the path with the least friction and lowest cost. Traditionally, the lowest cost methods are the most unsuited for digital business, but this is now rapidly changing (e.g. PSD2, open banking, alternative payment methods, etc). More technologies are made available all the time to offer better customer journeys, better security and lower transaction costs. All of this can then, in a digital world, be delicately balanced and deploys for the overall best proposition for the company and customer. Digitalisation and hyper-personalisation are particularly critical for banks, as they have been more and more dis-intermediated from financial services- everything from accounts, cards, FX, and now also payments. It is absolutely essential for banks to continue to invest in and participate in the wider financial services ecosystem.

However, they have a serious technical debt to overcome in order to be attractive. Also, as many of the bank’s core products are becoming commoditised, banks need to generate value differently for clients and the only way to extract more margin from commoditised business is through a significant level of personalisation and value creation for the customer. How can the implementation of real-time payment options reduce costs and ensure greater value services to customers? Real-time payment probably increases the actual transaction costs (at least in the medium-term future). This is seen as an advanced feature that carries a higher cost and higher risk. The massive cost savings really come from working with technology partners to better leverage more modern payment technologies (such as many of the real-time payment rails) to drive operational process enhancement and automation. By connecting to Imburse, for instance, companies can quickly access and connect to real-time payment schemes across the globe, which saves them valuable time and costs. The huge savings on the cost side truly balance out the inevitable increase in transaction costs. Also, in most cases, quickly paying out to customers in need of funds reduces the risk

of secondary costs for both the client and the company. The faster money is made available, the more companies can avoid on unnecessary customer management friction (such as calls to call centers), other costs arising from delayed service engagement, or regulatory/ombudsman issues in client service issues. Thus, as a way to reduce cost as well as maximise customer perceived value, the implementation of real-time payment capabilities is essential. What are your predictions for how businesses in the finance and insurance industry will operate once the pandemic is back under control? A great leap forward has been made around transformation and digitalisation projects. Once the pandemic is over, I expect to see a temporary slow-down in some of these activities as incumbents will look to rest

on their laurels and take a quick breather, try to shore up some profitability to shareholders, and build out new “post-pandemic” strategic plans. There will be a few, more modern companies, who will continue at full steam with the broader transformation, digitalisation, and modernisation of its offering and will be able to carve out a clear early-mover advantage. Meanwhile, laggards will again have to invest a significantly higher amount of money and start delivering new strategies to try to keep up with these tech-driven companies. Nevertheless, once the pandemic is back under control, the industry will be in a better position to leverage technology partners more flexibly. How do you expect the adoption of these technologies to evolve in Europe? We have seen first-hand how European companies are racing to refresh

their tech stacks and architectures in order to leverage more of the moderns tools and services now available in the market. They are hard-pressed to grow market share, increase margins and reduce costs, all against the American, British and Asian markets that are coming in with their own solutions. These international players come with very technologically advanced solutions but often lack the local knowledge and nuanced understanding of the European market (fragmented) to succeed. However, their much bigger budgets and much lower costs are a huge advantage and can really enable them to disrupt the market. European companies have recognised this, they have seen the opportunity to also compete more across Europe and are becoming increasingly bold on internationalising their own solutions, technologies and services to other markets.

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Why businesses need to be focusing on sustainable transformation, not digital transformation By Junta Nakai, Global Industry Leader, Financial Services and Sustainability at Databricks

any restrictions in the UK have been lifted and everything has now almost completely opened up. While companies are still waiting for a full return to the office and are currently battling with implementing hybrid working contingency plans, this new phase also offers an opportunity to reflect on general business practices and other lessons learned in the pandemic. After more than a decade of businesses grappling (and in many cases failing) with digitalisation projects, it is Covid-19 that has accelerated the call for digital transformation. But at the time when digital transformation seems to have finally become a reality for more organisations, it is in fact also becoming outdated. As companies look to rebuild and grow in the wake of the pandemic, they need to be looking at the next wave of transformation – sustainable transformation.

that are essential for digital transformation, such as the cloud, big data and artificial intelligence (AI), are also the foundations for building up sustainable transformation. The key differences boil down to a re-alignment and adjustment in thinking, approach and priorities. The other most critical difference is that sustainable transformation needs to happen much faster. Companies don’t have the luxury of a decade to turn this around. Investors, consumers and regulators demand it today. Digital transformation boiled down to the need for efficiency, agility and ultimately, retiring those legacy IT systems. This is essentially about profit maximisation – in the short term. Sustainable transformation builds on top of this need for efficiency and agility but also expands out to changing operational requirements, restructuring the organisation and strategic planning. Sustainable transformation leverages the digital and tech infrastructure from digital transformation but then requires layering on those different priorities and mindsets.

Building on the digital foundations

Thinking about the wider picture

Firstly, before outlining what sustainable transformation is and how to make this shift, it’s important to highlight that this does not mean digital transformation is wholly obsolete – in fact, digital transformation is the necessary precursor to sustainable transformation. The same elements

With digital transformation focusing on profit maximisation, shareholders are satisfied. Sustainable transformation on the other hand looks at maximising benefits for all stakeholders – from shareholders to customers, employees and importantly, the environment. This notion is otherwise

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known as ‘stakeholder capitalism’. The goal is not quick wins but sustainable profits and in fact, formulating business models and making informed business decisions to avoid actions that may in fact later damage the business. A mining company is a good example to illustrate this. To maximise profits, a mining company could solely dig in the most efficient manner but this would mean that all minerals would quickly be extracted. When the last of the materials is extracted there would be no more source of profits and shareholders would lose out. This is before you even begin to consider the impact on the environment, the land for local inhabitants and indeed, the wealthfare of employees working on the mines. For the case of a mining company, a more sustainable approach would consider other

factors such as local health outcomes, environmental impact and the potential of sites being archaeologically significant. Sustainable transformation is not only about maximising profits for shareholders, but also maximising the interests of employees, consumers and communities as well. Companies can no longer be thinking months ahead but need to be planning years, if not decades ahead. Rather than just the immediate effects, businesses also need to be modelling the possible secondary, even tertiary, fallout and consequences of their actions – considering just how far reaching the impact could be.

Re-wiring approaches This is of course quite a step away from previous practices, but there

are means for businesses to make this shift – and they are similar to those needed for digital transformation. Firstly, utilise the tech that was enabled through digital transformation. In the same way new data tools helped implement greater efficiency and agility, these same tools can now be used for a new purpose to analyse ESG data and the potential multi-faceted impact of any business decision. This requires pulling on even more data to simulate different scenarios and taking into account those elements that would not normally have been considered. Over the duration of a 30-year fixedbank loan, for example, the risk for a mortgage lender might no longer be the ability for the borrower to pay, but rather how climate change might impact the value of the home. A bank

that can analyse and mediate this risk will be more likely to succeed and thrive in the future.

Conclusion Luckily, digital transformation has set down the foundations for sustainable transformation. With a little investment and leadership, many companies can also possess the ability to build sustainable businesses to serve multiple stakeholders. But now it is up to business leaders to start building them up - and fast. The luxury of many years trying to push through digital transformation projects is one businesses can no longer afford with sustainable transformation. It is time to take action and now is the perfect opportunity. europeanbusinessmagazine.com 29

Italy may have no unicorn startups - but you shouldn’t be fooled by it

n a recent statement, Italy’s prime minister Mario Draghi declared that the country will surpass growth expectations, in its economic recovery from the pandemic. Jamie Dimon, chairman and ceo at JP Morgan, agrees: “I think that this is the right time to have trust and invest in your country,” he said to economic newspaper Sole 24 Ore. As a matter of fact, the current figures depict Italy as an increasingly fertile land for investment opportunities. The digital fuel is running fast and so does the venture capital and innovative startup scenario. The data collected by the P101 SGR Observatory Report 2020 by BeBeez over the past five years is an encouraging testament to this. Specifically, it highlights a remarkable increase in the overall Italian startups investment turnover, which has quintuplicated since 2016 up to 2020. These are the figures: 165 million euros spread over 128 rounds in 2016; 605 million euros spread over 244 rounds in 2019, up to 780,5 million euros spread over 306 rounds in 2020, the biggest numbers Italy has ever reached. Most certainly, the pandemic has crucially contributed to boost the investments recorded in 2020. This is evident especially among startups specialized in e-commerce services, a sector which has boomed as it probably never did before. While the overall figure of 780,5 million euros collected in 2020 come from a variety of players, among which venture capital firms, investment holdings, business angels and crowdfunding platforms, the venture capital sector has played a major role towards both the corporate and innovative startup businesses in Italy. As illustrated by the Venture Capital Barometer 2020 (EY with VC Hub Italia), the fintech still represents

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the most attractive sector, having recorded the 30% of total operations (32 rounds) and having reached 244 million euros in 2020. It is followed by the pharmaceutical bio-tech industry, where startups have been allocated the 15,5% of total funds, (120 million euros, 56 rounds), and by the growing food-tech sector, raising 11,3% of total amounts (88 million euros, 44 rounds). If we place these figures on the international stage and compare them with other countries ($300 billion is the value of venture capital investments worldwide), it will be evident that the sector in Italy still records a pretty humble size. Weighing on this situation are the lack of a more efficient and investment-oriented bureaucracy, and also objectively limited funds. However, you should not be fooled, as the thousands of small and medium-sized enterprises (PMI) operating in the field of mechanical engineering are a proof of an ongoing evolution which began a decade ago. Their elevated quality standards, in fact, have enabled them to outdo their giant competitors by providing unique

technological solutions to the global leading companies spread all over the world. Despite the limited investments they get, it is crystal clear that the added value they ensure is the key of their success, making Italy home to a great technological avant-garde. In the end, Italian venture capital firms are extremely selective when it comes to invest. In turn, this forces startups to excel in order to access VC funds. So eventually it is this very shortage of resources that makes our local startups even more fierce to gain opportunities. Finally, the remarkable push to digitalization given by the Next Generation EU funds (Italy is to invest 46,3 billions € in the sector) represents a crucial opportunity for further growth. So, while they might not be unicorns (valued more than $1 billion in the marketplace) be certain: Italian startups represent rather valuable gems which should be looked closely at, in the context of Italy becoming an increasingly strategic market to invest in. Andrea Di Camillo, P101 Venture Capital founder and managing director

TAX: REWRITING THE RULES

he digitalization of the international economy has generated opportunities for companies to sell goods and services to anyone, anywhere. Change is afoot as current tax laws may not capture all relevant revenues, and digital services companies need guidance to ensure they remain compliant. A corporate minimum tax seems all but certain. The investment landscape is complicated, mainly due to various rates, rules and regulations across countries, and multinational companies have long since used creative

ways to decrease their tax bill. While the corporate tax rate varies significantly around the world now, implementation of a universal tax would impose a fixed rate of 15%, requiring companies to pay at least that wherever they operate, not just where they are headquartered. Every day, 650 million online searches are carried out in the EU, demonstrating how much the internet has changed our lives. Yet, global corporate tax rules are more than a century old and are out of step with the boom in the digital economy. Both the way a business sells

to a customer and the way customers buy has shifted and a revamp of taxes is long overdue. Countries have begun instilling unilateral digital services taxes—another country-specific move that complicates an already intricate landscape. With all the global uncertainty that Europe is facing with the COVID-19 pandemic and Brexit, there was a danger that the Organisation for Economic Co-operation and Development (OECD) global tax reforms – the other main risk to European business and economy – would be forced further down the corporate agenda. europeanbusinessmagazine.com 31

However, originally proposed in 2019, finance leaders have now reached a global tax deal aimed at ending profit shifting, signalling a welcome return to a multilateral approach, following various scandals around the use of tax havens by global tech companies. Much of the focus of reform looked at the tax affairs of global technology giants such as Facebook, Amazon and Google. Europe has attracted healthy levels of foreign direct investment over the past 30 years, with the multinational community contributing significantly to its economic success, and Europe is now cooperating at both a political and corporate level. Governments worldwide are desperate to raise extra revenue to rebuild their pandemic-ravaged economies, and corporate taxation has become an obvious target after decades of decline. It is no secret that companies employ a litany of techniques, both domestic and international, to keep their tax bills low and with new business models emerging, the tax system must adapt. Over the past 35 years, the average corporate tax rate has been more than halved, falling from 49% in 1985 to 23% in 2019. New global tax requirements to combat low corporate tax rates present a fundamental change for multinationals, and with new rules are on the horizon, businesses must get ready. The deal encompasses a two-pillar approach outlined by the OECD and aims to tackle the challenges arising from an increasingly globalized and digital economy. Under Pillar One, the largest and most profitable multinational firms will be required to pay tax in the countries where they do business, rather than simply where the countries have headquarters or hold intangible property. The allocation formula set out is that a company gets an allowance of 10% of their revenues. Any profit above this is a “super-profit” and 20% of these super profits are reallocated to countries where they operate. Under Pillar Two, there will be a global minimum corporate tax rate of 15% operated on a country-by-country basis. The OECD estimated that the reforms should raise as much as £57bn in additional tax revenues annually. 32 europeanbusinessmagazine.com

Advocates of the change say it will create a level playing field and protect vital tax revenue, while critics warn it will harm smaller economies and encourage countries who are not part of the agreement – namely, China and Russia – to use lower corporate tax rates to their advantage in global trade. Europe offers excellent conditions for taxation on capital gains, income and corporations, and multinational companies like Apple and Google have been able to legitimately decrease their global tax bills by taking advantage of these tax rates. Several critics have argued that the former global taxation system allowed big companies to save billions of pounds in tax

bills and major digital companies are making money in multiple countries and only pay taxes at home. It’s true, global corporate tax rates have dropped in an international ‘how low can you go’ competition, allowing big multinationals to funnel profits through low-tax jurisdictions. Nonetheless, times and tax laws are changing. The COVID-19 pandemic and supply chain disruptions have already led companies to reconsider their global supply chain policies and business models. Innovative, contemporary companies nurture a ‘think global make local’ model – moving away from manufacturing items in low-cost countries and transporting

them elsewhere. The new tax rules might accelerate this change. Yet, some smaller countries whose low corporate tax rates have enticed scores of multinational companies are still fighting to maintain their national levies in a last-ditch attempt to stop the global minimum corporate tax rate from undermining their ability to woo international firms. For example, Ireland’s Deputy Prime Minister Leo Varadkar vowed that Dublin would defend the country’s current 12.5% rate. However, US Treasury Secretary Janet Yellen stated that all EU countries would agree to the upcoming deal, a potential ploy to persuade reticent EU governments to support it.

The deal sees a substantial change to the existing global tax rules, namely unparalleled restrictions on the use of tax havens and a new system of allocating profit made by large multinationals between countries to ensure greater public transparency. It will also tackle the use of shell companies through new anti-tax avoidance measures. The Commission will also present practices to ensure fair taxation in the digital economy with a proposed digital levy which will serve as an EU own policy. The agreement charges an additional tax on some of the largest multinational companies, potentially forcing technology giants like Amazon, Facebook and Google as well as other big global businesses to pay taxes to countries based on where their goods or services are sold, irrespective of whether they have a physical presence in that country. Although largely applauded by tax campaigners and deemed a moment that would ‘change the world’ by G7 finance ministers, months and possibly years of discussions still need to occur before the rules become reality. It is time to rethink taxation in Europe, which currently has 27 different tax systems. The European Commission plans to use the OECD deal as a steppingstone to more unified rules for business taxation across the EU, driven by social trends like the COVID-19 pandemic, an ageing population, climate change and the transformation of the labour market. Alongside the global disruption in the world of corporate tax, the EU is scaling up tax cooperation. Business in Europe: Framework for Income Taxation (BEFIT) will support further administrative simplifications and minimise tax avoidance opportunities. Full details are promised by 2023. The lack of any immediate ruling makes planning a particularly complex process. Like the global effort to curb tax base erosion, BEFIT will combine multinational companies’ profits and parcel them out across EU countries. With so much shifting and little clarity, multinationals are in a muddle. How to prepare for changes that are almost certainly coming without any real idea about what those changes will be, all while trying to manage

global tax compliance and recovering from a pandemic, is a hard ask. Still, the global corporate tax landscape is experiencing a major shift, and international business cannot afford to be caught by surprise. Uncertainty isn’t good for tax planning. Companies need some level of stability to make the correct commercial choices and remain compliant. European businesses that pinpoint which changes are most relevant to their business and where to take action can prepare effectively. As always when it comes to taxation, understanding, planning and implementing are key. It is important that firms have the right tools and technology in place and leverage the benefits of greater automation. Consultants like EY can help global businesses navigate this new landscape, build on opportunities and manage risk to produce growth. Businesses must rethink how their operations are being taxed internationally. This will result in strategic conversations that go further than the tax department, affecting the way businesses operate. As multinational companies adapt to new supply chain models, the ability to adjust to evolving tax laws is also critical. Companies that use technology and innovation to negotiate the changes within the business, while embarking on tax and trade planning, will benefit. The recent revisions will make the tax system fit for the digital age and make sure that the right companies pay the right tax in the right places. Tax will always be one of the most crucial factors for businesses when considering different business models, and if business models change, policy makers will modify their application of taxes to access different ways of generating income. It is time for European businesses to take a holistic approach to ensure their global operations are compliant in all jurisdictions in which they operate. Looking ahead, if the last year or two have demonstrated anything, it’s that businesses need to prepare for the unpreparable. European companies can get ready by watching developments, anticipating opportunities and developing various responses. europeanbusinessmagazine.com 33

TAXING BIG TECH

ow to tax big tech firms? This question has been a major source of transatlantic tension and international friction, with various loopholes supporting global tech giants for years. Taxation is currently a hot topic in Europe and understanding and unravelling the complex structures used by multinationals to reduce their tax rates is the aim of the game. These firms make billions of pounds from European citizens every year, yet the tax paid does not reflect the astronomical profits. For example, in the UK, Amazon paid just £14.4m corporation tax in 2019, despite generating a revenue of £13.7bn in the country. In the absence of a complete overhaul of the entire international tax system, a few European nations have introduced new taxes aimed specifically at targeting these companies.

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The growing frustration directed at tech companies generating profits in countries where they don’t have a physical presence has ensured that digital tax has been a huge talking point, especially since the COVID-19 pandemic. The Organisation for Economic Co-operation and Development has been hosting negotiations with more than 130 countries to reassess the global tax system. The current proposal requires multinational businesses to pay some of their income taxes where their consumers or users are located. The European Union was also planning to propose a 0.3% tax on the goods and services sold online by all companies operating in the EU with annual sales of at least €50m, but this idea has been temporarily shelved.

Digital companies have increased their profits during the COVID-19 crisis, yet current tax rules are obsolete and are unable to tax multinational tech companies appropriately. The global tax system needs to be fit for purpose for a digital age, and importantly, needs to be fair and realistic. From a dramatic increase in app use to taking window shopping online, how consumers buy products and services is shifting. The existing international tax system does not properly capture the digitalization of the economy, and the COVID-19 pandemic has brought this huge misalignment into even clearer focus. Tech giants rack up big profits but pay little into government funds. Now things look like they may be shifting. The UK imposed a 2% digital services tax last year – and is far from the only

country to have taken steps to capitalise on taxing companies generating huge sums from online sales and activities, with Austria and Turkey imposing a higher 5% tax. The tech giants are passing on the cost. Google has told its clients that from November it will charge an additional fee for ads served on Google and YouTube further knocking ad spending that has already been hit hard by the pandemic. Amazon also announced it would increase seller fees on its platform. The COVID-19 crisis accelerated the rise of e-commerce and social media marketplaces to a record high and the growth of the digital economy both before and during the pandemic, is showing no signs of slowing down. The digital economy is equivalent to 15.5% of global GDP and is growing

two and a half times faster than global GDP over the past 15 years, according to the World Bank. Governments hope to tax the resulting revenue. Nevertheless, after the G20 finance ministers agreed to international corporate tax system of 15%, the EU put its own digital plan on hold. Brussels has delayed campaigns for an EU-wide digital tax that would target tech giants like Amazon, Facebook and Google, after the United States specified that the EU’s levy has been made redundant by the separate, landmark agreement to reform the international tax system. Washington has threatened to enforce unilateral tariffs against EU exports if EU countries go ahead with a digital levy. They believe that the tax would unfairly persecute American companies. While the United States has appealed

against the levy on digital sales - likely to hit Silicon Valley giants’ business in Europe - the EU had pledged to introduce the levy if there is no progress in a sweeping effort to tax corporations more consistently. If successful, new tax regimes could make it easier for countries to collect revenue generated within their borders from companies like Amazon, Facebook, Apple. If things don’t go to plan, an amalgamation of digital-specific taxes could trigger trade wars and quash innovation without generating enough money to matter. Ultimately, the aim is to establish a level playing field between traditional and digital business models. There should be no more room for paying low or no taxation, causing market distortions and tax uncertainty.

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A NEW GLOBAL BUSINESS MODEL FOR A NEW ERA OF GLOBAL BUSINESS By Bridget Walsh, EY EMEIA Area Managing Partner - Tax and Matthew Mealey, EY Global International Tax and Transaction Services’ Innovation Leader

he global tax landscape has undergone significant shifts in the past decade, driven by a range of political and economic factors, including the need for governments to close significant tax gaps by increasing revenues. As a result, tax has risen steadily up the boardroom agenda, with the tax function integral to corporate strategy, business operations and workforce planning. Tax costs, including access to tax reliefs and incentives offered by governments, are but one of many variables corporations consider when designing business models. For many decades, the traditional principal company model, where multi-national corporations centralize ownership of assets and business functions in certain locations, has been favored or being the most cost-effective. However, rising tax costs as a result of tax legislative and regulatory change, as well as the expense of managing rising tax controversy around transfer pricing and permanent establishment issues in some jurisdictions, is causing a re-examination of the value of existing models. This phenomenon, occurring in the wake of the OECD’s Base Erosion and Profit Shifting initiative (BEPS) is affecting industries as diverse as consumer products, life sciences, technology, media and advanced manufacturing. The combined effect is that there is a growing rationale for multi-national companies to rethink and reorganize their global businesses, with multi-hub operating models proving to be a compelling business alternative. This approach involves sharing assets and centralized functions across more of the countries and jurisdictions that represent an organization’s

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These pressures have also led to a range of public policy initiatives. These include the EU’s new industrial strategy, “Made in China 2025”, “Buy American” executive orders on US supply chains, and the UK’s changing trading relationships with the EU post-Brexit.

The advantages of a multi-hub model

most critical business locations. This multi-hub framework can deliver financial, operational and intangible benefits, both today and in the future.

Drivers of change BEPS brought together 139 countries and jurisdictions to implement a raft of actions designed to improve the coherence of international tax rules and ensure a more transparent tax environment. The ongoing implementation of the BEPS initiative globally, combined with the recent historic agreements made at the G7 in June and the OECD and G20 last month to further reform international corporate taxation accelerates the need for multi-national organizations to re-evaluate their business operations. These tax changes have been taking place against a backdrop where globalization has been evolving, a trend which began following the global financial crisis of 2008. Protectionism, populism and pragmatic pandemic nearshoring are among the factors now combining to accelerate this trend.

In the face of such change, large multi-national organizations are increasingly questioning the status quo, and are exploring new business models, better suited to the current economic and political environment. A review of a global business through tax, trade and regulatory lenses is guiding many to consider a fundamentally different approach and the adoption of a multi-hub model where key business functions and activity are relocated to the larger economies in the G7. The benefits of this model include: • Reducing tax controversy. The BEPS initiative has been accompanied by an increase in global tax complexity and controversy. In some cases, this controversy has led to reputational damage. A multi-hub operating model can limit cross – border tax controversy, simultaneously reducing risk mitigation costs and making regulatory compliance less onerous. • Creating more stable, sustainable tax costs. Tax controversy management and closer alignment with the new tax architecture should reduce tax rate volatility, creating more predictable and stable tax costs. • Bridging the talent gap. Multi-hub models can improve talent

recruitment and retention by reducing the limits on workforce locations that are inherent in traditional single country centralized models. The pressure for change here has been strengthened by the COVID – 19 pandemic and the emergence of new ways of working, including remote and hybrid work. With a multi-hub framework, companies can recruit with fewer restrictions across the G7/ G20 economies and the largest talent hubs, as well as in traditional lower tax locations such as Ireland, Dubai, Switzerland, Luxembourg and Singapore. • Improving operational flexibility. In the world of centralized business models, companies often create processes and controls to ensure business risks are controlled from the hub location. Such controls are necessary consequences to comply with the framework of international tax law. Multi-hub models allow those limits and restrictions to be reduced or eliminated in order to increase operational flexibility and reduce cost.

There is an assumption that the traditional, highly centralized, single-hub operating model is more cost effective. However, our experience of working with early movers to a multi-hub operating model suggests this is frequently not the case and that when all factors are accounted for, the cost of the multi-hub approach is comparable to the alternative. Whilst early movers in many sectors have already implemented a multi-hub model, traditional models are still commonplace. One reason may be inertia. The traditional single country principal model has served businesses well for a long time, making it familiar and comfortable for many executives and tax and trade professionals. By doubling down on what they know, however, companies risk being left behind. Side-by-side analysis of traditional - versus multi-hub models suggests

that companies often underestimate the value of the reduction in tax controversy; underestimate the benefits they might get from incentives that are now available in larger developed countries; and underestimate the impact of penal provisions that increasingly apply to traditional models. When coupled with the strength of doing business in major economies and the broader benefits that this can bring, such as access to talent, supply chain agility and greater operational flexibility, exploring alternative business model options is a good first step. Change is rarely straightforward, but as the pandemic continues to make clear, existing trends are accelerating and this is necessitating the rapid evolution of well-established business structures. Those who lead the charge may be in the best position to thrive in the future.

Disclaimer The views reflected in this article are the views of the authors and do not necessarily reflect the views of the global EY organization or its member firms. This Publication contains information in summary form and is therefore intended for general guidance only. It is not intended to be a substitute for detailed research or the exercise of professional judgment. Member firms of the global EY organization cannot accept responsibility for loss to any person relying on this article. europeanbusinessmagazine.com 37

The Best Tax Software Available And Why Multinationals Are Using Them For Cross Border Payments

he development of tax software has been a huge innovation in the financial sector, due to its ability to manage and organise a business’s tax payments without the need for costly accountancy fees. The ability of such programmes goes further than simply providing filing management with governmental bodies such as the HMRC, with such factors as tax allowances, deductions and all other expenses that require detailed and consistent management all taken care of while being compatible with local legal legislation. The most public accessible software is provided by companies such as Sage, QuickBooks and Xero as their systems are designed for simple yet effective functionality that is easy for any

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business to utilise. Sage has a large profile in the UK, where it offers many levels of service at different price points that also allow such services as PayPal functionality and a strong support system. QuickBooks actually offers many different services, while keeping it all simple with dedicated mobile integration, while Xero provides a limit of 5 invoices and quotes unless you pay for the premium version which handles multiple currencies and provides a comparable service to that of the other two. These types of software have a mass market appeal; however, they provide scalable options for any business that may need to integrate their taxation into one easy use platform. Despite this, often larger companies such as

multinationals need to do much more complex organisation of their responsibilities, leading them to consider these options whilst also looking to find companies that may also handle their immense needs more efficiently. A more corporate alternative to these is provided by such companies as Thomson Reuters. They use software known as ONESOURCE, which is designed to provide larger capabilities than others by focusing on the most complex elements of taxation and seeking to address them. While working within the traditional interface, you can use the add-on options to adapt and grow your services with the business, providing web-based solutions and high-level encryption. The foreign expertise of the system,

and its one-time data entry make it a strong solution that is specifically engineered to meet the needs of larger companies rather than to provide an all-encompassing provision. There are also new developing companies who are seeking to address these needs at a much higher level. One such company is Taxdoo, a company whose aim is to only expand their offerings with a focus on cross-border e-commerce companies, specialising in the provisions of an automated platform for financial compliance that has already raised $21 million to achieve this goal as of December last year. They aim to provide access to tax advisors for collaboration and efficiency. Their typical client base earns revenues of up to £10 million per year, with a portfolio including some companies 15 times bigger. When considering options in this specific sector, Taxdoo and similar companies are tailor made to address the needs and issues faced by companies trading internationally. Multinationals are using such methods, especially for cross-border payments and other costs that involve different international laws due to the sheer complexity involved in handling

all the ways they have to respond and act lawfully. With the advantage of automation, there is a much better control over performing these processes by eliminating the margin of error and streamlining the entire workload. The burden provided by businesses operating internationally is also increasing due to the ever-rising complexity regarding VAT, accounts management and the laws around compliance which requires information and figures to be spread alongside many different systems. By merging these into one, this makes the process almost automatic with transactional data, tax calculations, adjustments, and filings across Europe and the world being synced and stored together. This is also in response to the shift in international product sales, where selling has become much easier and demand has grown for the new options, leading to the confusion or possible violation of rules without digital support. Automation of the entire chain allows for the data to be instantly recognised when it comes through the different

channels into the systems, leading to thorough analysis that compares and investigates all relevant requirements before being filed on behalf of the company. One of the largest factors for this new move into tax software is down to the acceleration of the digitalisation process caused by the Covid-19 pandemic. With the inability to access physical retailers, e-commerce grew exponentially changing the way the world shopped and resulting in many corporations either collapsing or moving fully online whether due to their own change in strategy, or because of the need of new investors/takeovers that automatically changed the company at its core. Some of the latest data on the rise of cross-border transactions details that this now forms around 25% of all the e-commerce transactions throughout Western Europe and Scandinavia with this figure only set to continue growing into the future. As this happens, companies will only look to continue to develop their methods, leading to the creation of more multinationals as companies look to take advantage of the sector.

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Gymshark:

THE FITNESS BRAND PHENOMENON

hen Ben Francis created Gymshark out of his bedroom in his parents’ house, he never imagined that he would revolutionise fitness apparel forever. In 2012, aged just 19, Francis had already tried and failed with several enterprises, from selling licence plates to developing iPhone tracking apps, all while working as a Pizza Hut delivery driver to raise the capital to fund his entrepreneurial ambitions. Gymshark began as a health supplement brand, when as a full-time student, he had no funding and began to dropship products from other retailers until realising that the profit margins made his latest endeavour collapse before his very eyes. Undeterred, he discovered a gap in the market when he realised that the kinds of clothing he wanted to wear did not exist, so set about gathering his brother and friends, buying a screen printer and a sewing machine, building a global leader in the nights after work. Creating form-fitting workout clothes that were aimed at the general population versus the original clothing targeted specifically large bodybuilders was an innovation that gym-goers everywhere were screaming out for. Today, the company is a billion-dollar brand with year-on-year growth that has attracted investment interest from across the globe. But what was the secret to their success? In basic terms, Gymshark became the trend of the sportswear world. Taking advantage of the emergence of influencer marketing, the company utilised social media to find popular names in health and fitness, approaching trainers, athletes and personalities who were willing to spread the word in exchange for free clothing.

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While the reputation grew, they invested time and money into their own channels that saw their content connect with the target audience that identified with the need and the image the brand represented, feeling a personal attachment as the ‘aspirer’ type of customer now needed to wear the same, modern apparel that their heroes were now promoting online. Gymshark’s lack of physical locations means that all purchasing happens online, allowing them to react quickly to changing trends and guarantee their customers maintain their status as first adopters, also ensuring that they never have to raise prices to account for costs. This is all backed up by products which represent premium quality, rival any big name in the market and are loved by over 130 different countries globally. Financially the brand was always successful, with Francis and his then business partner Lewis Morgan making £250,000 in revenue after just the second year of trading, forcing the

pair to drop out of Aston University to focus on the business. Following this, in 2016, Gymshark was recognised as the UK’s fastest-growing company, with it featuring well on ‘The Sunday Times Fast Track 100 and making shrewd business endeavours by hiring industry experts who could help navigate and develop the growth of the business, such as former sports brand owner Steve Hewitt who was

Defying pandemic conditions, The Sunday Times has also announced that the company will feature on its ‘Fast Track BDO Profit Track 100’ for the fourth year in a row, with further achievement noted by Hype Auditor, who announced that in the last quarter of 2020, Gymshark was a market leader in its Influencer marketing strategy with an average engagement of 4.36%, that gave an average cost of £0.11 per engagement when factoring in criteria such as rate of engagement, audience quality, influencer quality and reach. Further analysis showed that while the major brands had a higher quality of audience, Gymshark had a better quality of influencer, due to their use of real people and personalities who while famous live attainable lifestyles and so relate more in the eyes of the customer versus the big global star, who while admired are considered to be out of touch with modern society. Such influencers as the Rybka Twins, Antonie Lokhorst, David Laid, Youtube’s Ethan Payne and Nelly London show an expansive contrast that appeals to every shape and size that exists within the fitness community. These factors relate to why in the space of just a calendar year, the company reported £260.6m in turnover for 2020, an increase of £83.9m with pre-tax profit increasing from £18.4m to £30.5m. The vision of the brand has been truly unparalleled, and this is evidenced by a constant desire to pursue any idea no matter how big or small, to not just react to the needs of the future, but to become that future instead.

brought on as a managing director before being appointed chief executive in 2017. Such persistent growth is why, in 2020 the private equity firm General Atlantic purchased a 21% stake in the still developing brand, elevating the worth to over £1 Billion. Ben Francis as a result, possesses shares worth £700 million through being the majority shareholder.

Despite all this success, and its international offices in key sports markets such as Denver and Hong Kong, the company has stayed loyal to its roots through its head office in Blythe Valley Park in the West Midlands, with potential for further locations as the business continues to challenge global icons such as Nike and Adidas for their market share.

The dream of creating a legacy, sharing every part of your journey with customers who feel a sense of belonging, and building long term relationships with influencers that embody your brand is an important framework that any business should strive to replicate. Their constant development, always trying to innovate to make the community aesthetic a hallmark of their success has made them a billion dollar company, which is sure to only grow as they continue to redesign the next steps in British fitness apparel. europeanbusinessmagazine.com 41

How have business priorities changed pre- and post-Covid? The global pandemic has dramatically refocused business priorities for businesses across the UK.

Francois Lacas, Deputy COO at Yooz

n a life before Covid, businesses prioritised factors such as increasing operational productivity, communicating better with other departments, and gaining better control over dayto-day financial processes. Post-pandemic, however, the outlook is very different. According to a new survey of UK finance leaders, the top priority now is being able to adapt to Digital Transformation. The technologies of old simply can’t cut it in today’s agile working world, and businesses simply have to invest in better support if they’re to grow in the future. Twinned with a new reality of hotdesking between home, office and remote locations, the strengthening of cyber security practices has also climbed to second in the ranks of business priorities.

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But how do businesses protect files, data and private records while people are on the move and out of sight? Business priorities have changed. Both of these factors were never really a priority before. Both reflect the challenges businesses face in a future full of long-term changes to working practices.

Technology, not processes, a priority One just needs to look at the rising stock of companies such as WeWork, Zoom and Slack to see that the old way of working simply isn’t working any more. The majority of Europe’s workforce want a flexible working environment, which only increases the amount of, and demand for, new technology. Employees are dotted across the world now, and tech investments are set to soar to accommodate this greater flexibility.

A McKinsey report states Covid-19 has accelerated digital transformation by seven years, yet we’re only really seeing the start of it. Gartner predicts global IT spend will increase by 9% in 2021, driven by companies' needs to accelerate their digital transformation as businesses switch from survival to growth mode. Everything from data centres and software systems to new hardware and IT services will grow exponentially as businesses top up investments already made to support staff during office closures. Priorities have shifted. Increasing productivity, internal communication and financial control are second to putting in place the technologies that keep us operational. Being able to shape the future of the business around this new environment is an issue which could spiral out of control if not dealt with quickly.

Two-thirds of businesses already don’t believe they’re ready for another major business disruption, with many citing a lack of new technology holding them back. Those that stick with inadequate tech infrastructure will inevitably witness further disruption down the line, something that businesses simply cannot afford in a time of financial uncertainty. Many have swept the problem underneath a rug in the meantime, hoping it will disappear if they hide it for long enough. But eventually it will all come back to haunt them, with the threat of operational disruption, staff abandonments and damaged client relationships too much to gamble on.

Dealing with digital transformation post-Covid

The future of work With the majority of staff planning to work from home for at least two or three days during the week, this delivers its own challenges for businesses now having to provide digital solutions to at least two separate working locations, potentially more. A recent survey of nearly 9,000 business leaders and employees, 75% said flexible work was a must-have, while 65% said they would change jobs if it meant greater long-term flexibility. As transitioning to remote working or a hybrid setup, businesses need to explore the new tech options available to them. Companies are responding to this by looking at digital solutions that provide better agility and flexibility, such as Cloud technology and Software as-a-Service (SaaS) solutions. The likes of Microsoft Teams and Google Docs have become indispensable over the past year, but a new look remote workforce will need tools that go beyond this. Financial platforms that integrate artificial intelligence, email systems that automate workflows, and even

virtual training sessions via augmented reality are becoming part of a new-look working environment. But cybersecurity is an increasing concern and priority, as this new remote workforce will need secure access to files and data wherever they are. Providing staff with easy, consistent and secure access to systems wherever they work in the future is easier than it seems. Technologies that enable two-factor authentication, encryption and VPNs will help, as will cloud systems that provide you with the sense of security and peace of mind that cyber attacks won’t cause long-term disruption. Prioritising digital transformation and cybersecurity will map out what the future of work looks like. Say goodbye to ‘business as usual’, and hello to ‘business wherever, whenever’.

Businesses can’t gamble on further disruption Businesses were unprepared to deal with the disruption caused by the global pandemic. Will they be ready for the next wave, created by these changing priorities?

The game has changed. Staying competitive in this new business and economic environment requires new strategies and practices. Change, either in digital transformation or in the type of working environment, is being demanded by employees, but it’s still very much driven by the C-suite. Listen to your employees. As the life and soul of the business, and the ones who have maintained smooth operations during the pandemic, they deserve to be rewarded for their efforts. Flexible working and providing technology that enables them to get the job done, no matter where they’re physically located, is a start - but there’s more to it than that. Business leaders need to sit up and take notice of the importance of technology and its role as a vital component within the business, not just as a cost. Technology adoption and digital transformation have accelerated, keeping business afloat, minimising disruption and optimising mobile workforces. But the pace of change will need to continue if businesses wish to stay on a path towards growth. It’s time to explore, refine and enhance the way we use technology to reach new opportunities and a better future. europeanbusinessmagazine.com 43

UK CALLS FOR INDEPENDENT CONSULTANTS TO HELP DRIVE PANDEMIC RECOVERY

usinesses are turning to independent consultants as they look to recover from the pandemic. That’s the view of COMATCH, the curated marketplace for independent management consultants and industry experts, which is reporting a boom in the UK. According to its own data, COMATCH has seen project demand from its UK clients increase over 65% in the first half of 2021, compared to the second half of 2020. The UK market particularly stands out as it is leading the substantive company global growth of 44% over the same period . Further, company revenues in the UK are up 92% for the first half of 2021, compared to 56% globally. But, it’s not just COMATCH reporting a significant rise in the popularity of consultancy services. According to data from the Management Consulting Association, despite COVID,

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the UK consulting market grew +4.5% in 2020, seeing revenues surpass the £12 billion mark for the first time. In accordance with these figures, COMATCH UK reported comparative growth of 100% over the same period. “We’ve seen a very favourable environment created for independent consultants,” said Charlotte Gregson, MD UK & US, COMATCH. “People have demonstrated they can work remotely with the tools and technology to do so effectively. This means that geography is no longer a barrier when it comes to fulfilling projects. As the economic recovery continues, businesses are looking to partner with individuals flexibly to help them bounce back from the past 18 months, and the consultants can take the roles that suit their situation and lifestyle - it’s a win-win.” It’s not just a UK-based trend. COMATCH is helping more clients

globally - and in quicker time - than ever before. This year it reached the 500-projects milestone in April, four months earlier than in the crisis year 2020 and two months earlier than in pre-pandemic times of 2019. The company is also reporting the share of projects matched with female consultants increased by nearly 18% during the crisis compared to pre-pandemic levels. Gregson concluded, “The trend for using consultancy services, and independent consultants especially, is only going to increase. We may have just emerged from the biggest challenge of our time, but we’re about to enter a new test to find talent. Businesses adapting to the new normal are going to need the right person, skills and experience for the job.” For more information on COMATCH, please visit https://www.comatch.com/

BIG TECH GETS BIGGER

ot all business suffered in the pandemic. The coronavirus crisis wreaked economic havoc on a global scale, but one sector bloomed in the chaos. Big tech just got bigger. The tech industry’s major players like Amazon, Apple, Facebook, Google and Microsoft hold huge amounts of data on international businesses and people’s lives, and their combined value exceeds $9tn. Regulating these digital platforms was never going to be easy, and governments on both sides of the Atlantic are considering the growing power of Big Tech. Apple became the world’s first trillion-dollar company in 2018; and all the top five have now exceeded that figure. They currently earn so much, that together the big five make virtually the same revenue as Spain - the world’s 14th richest economy. We depend on technology to live, work and study, and the power of a few of companies is ever-growing. While Facebook facilitates the social lives and personal messages of more than three billion people, Google controls mobile devices, email inboxes and search inquiries. Delivery companies use algorithms to communicate with their drivers and Amazon centralises

most of the world’s cloud-computing capacity. These companies are so big and influential, and they are getting even more powerful. Assembly Research says that of approximately 30 global competition cases launched against Big Tech since 2010, 33% were opened in 2020, and many of the cases were based in Europe. About five cases have been launched in Europe since the start of 2020 alone against Google, Amazon, Facebook and Apple. Big Tech touches every aspect of our lives, and decisions made by a few Silicon Valley CEOs has oftentimes a bigger impact on billions of people than their own governments. The EU aims to alter this status quo by introducing new laws. These laws intend to firstly reform the way in which online platforms can be held responsible and secondly to enforce more vigorous guidelines on platforms that use their status to cut competition. Society needs new approaches to govern Big Tech because it is dominant in ways we haven’t encountered before. While the EU may lack native tech giants, it is not short on strict regulation for the sector. In the UK, a regulator called the Digital Markets Unit (DMU) is creating

new codes of conduct for tech firms and their relationship with content providers and advertisers. The DMU will target digital firms with market power, introducing a compulsory code to boost competition. Also, the Digital Services Act and the Digital Markets Act aim to revamp the way Big Tech companies and digital services operate, from controlling damaging content to addressing lapses in competition guidelines. The Digital Services Act’s remit is broad, and includes the online ad industry, how companies are expected to moderate their platforms for harmful and illegal content and the policing the sale of counterfeit goods online. The Digital Markets Act focuses on the regulation of those behind engrained services that other businesses use to provide their own products. This includes the operators of search engines, social networks, chat apps, cloud computing services and operating systems. The rules are a huge opportunity to reshape the digital world. They encompass a single set of rules applicable across the EU to create a safer and more open digital space. The Digital Services Act package will steer the unruly digital ship back onto a more regulated, structured course. But the commitment for tougher regulation doesn’t end there. The European Commission is also drawing up plans on how to regulate artificial intelligence. This is becoming increasingly important as more digital giants develop and incorporate new AI. These rules are a good start, but they do not go far enough to curb the threats posed by Big Tech. If the EU really wants to tackle the power of Big Tech and end its human-rights abuses, it must strike at the core of its business model. The power struggle is set to continue. While currently there is strong political momentum for new regulations, the policies may not be approved for years, with many stages of negotiations still to be discussed. europeanbusinessmagazine.com 45

Is The Future Of Currency Centralised Or Decentralised?

centralised currency refers to the traditional idea of centralisation where any transaction goes through an intermediary, whether that be a middle man or an advisor who helps to conduct the process. This is commonly understood in the way we traditionally bank as the person trusts the bank to be this central figure who holds on to their money, mainly to offer levels of support, protection and monitoring that cannot be offered by the owner alone. Centralised Cryptocurrency also works by the same kinds of principles, with their use of an exchange trusted to find trading partners and safely complete trades. Their protection is vital, as should an owner forget the key to their wallet they would lose thousands if they did not have the support to prevent that from happening. Decentralised currency is the opposite with the transfer of funds and assets completed without any need of a third party being present, giving complete control and responsibility to the holder. While some will use physical money, the vast majority elect to use primarily virtual markets with Bitcoin and Ethereum being prime examples of such currencies used. This works by representing value as ‘coin’, a small amount of encrypted computer code that is linked to both a public key that connects it to a blockchain and a private key which proves ownership by tying it to the owner’s digital wallet. Transactions are therefore

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simple as the only requirement is that the other party has a compatible wallet to receive the transaction. Value of the currency is dictated by its own increase in demand rather than being at the risk of the instability provided by an individual nation. Currently, the success of each method differs between different countries and the needs of their governments. In response to having the highest number of bitcoin miners, China has very publicly sought to fight against the use of cryptocurrency with limiting its scope where possible, looking to keep its well-known control over its citizens by preventing the use of funds and value systems that would prevent those in charge tracking their financial developments. In response, they have made many strides to establish a central digital version of the yuan, invalidating the need to use decentralised cryptocurrencies and providing more effective solutions. The shift away from national currencies would also greatly impact the individual value within their economies and cause financial difficulties by limiting the values of goods and services. In contrast, the American market has seen key business figures support crypto as an investment prospect that can survive in a long-term market. Leading tech companies, investment firms and other financial services have slowly begun to turn towards a more supportive offering in such coins as Bitcoin, with trust and stability slowly

becoming more viable as these more traditionally centralised systems now offer clients access to decentralised opportunities. The government is also looking at a centralised currency to combat the threat posed, however as they push for a more worldwide digital offering and merely investigate the ‘digital dollar’, Bitcoin continues to grow and could easily be well established and trusted in the international business community before centralised products are able to be offered by the US government. On a global scale, the needs of the market are likely to dictate which variant leads the future of finance. The continuation and modernisation of a centralised currency provides the user with a highly popular and well proven system that has a variety of features, easily liquid cash to be used quickly and the speed to instantly react to any situation. Risks of this

however include the ease of hacking, costly fees for the privilege and legally enforced regulation. This is a contrast to the trends in the market looking for more freedom and control, such as that offered by a decentralised system. The user has autonomous control of their assets without paying costs or being held accountable to regulations, which provide greater flexibility to conduct business internationally. This is also beneficial in terms of the provisions of anonymity when trading, allowing users to avoid sharing data that can be tracked or monitored by different governments. Difficulty in moving money, effective popularity and actual features to the system are issues in the method being as effective as needed. These trade-offs do not appear to be detracting investors, with the ability to overcome governmental control

making the opportunity much more palatable. Rather than being dictated to, the democratic ability to operate by creating user control and raise prices purely based on demand with a purely global reach that does not need to consider any international legislation. Even with new developments, any currency developed by individual nations will be restricted outside their own country. It does not seem possible to favour one approach more than the other. Markets need the ability to stay responsive and to deliver competitive offerings in the public sphere. Cryptocurrency has clear growth prospects in more liberal countries where their attitudes towards the decentralised structure are providing new opportunities for people to invest with clear signs that it holds enough interest to remain a major player in financial interests.

Despite this, current forms of currency and transaction will never be fully replaced and form key components that are making large steps into providing their own digital competition to the threat of cryptocurrency. The future is not based on choosing but instead adapting and delivering to provide the best possible outcome. Technological developments occur so fast that the only way to capitalise on the next trend is to constantly innovate and continue to provide as many services as possible and allow things to unfold with the needs sure to dictate the path that the world will take in regard to its currency. In fact, the future of currency may not be as simple as the type to use, but instead mean giving every opportunity possible to allow markets and methods to consistently develop and provide solutions that revolutionise how we see finance. europeanbusinessmagazine.com 47

DRIVING SALES IN A TRANSFORMED

BUSINESS WORLD New approaches to actively generate sales could make the difference in achieving our goals in this changing business environment. (Lothar Stadler, August 2021)

e have learned how to do business without traveling, without attending physical events, and with far fewer face-toface meetings. While the pandemic has not affected all industries equally, the major disruptions it has triggered in markets, customer behavior, and ways of working and living, mark a historic turning point. Digital tools have helped us navigate this changing world, and many of them will continue to stay with us in the future. It has also changed the way we will work in B2B sales for years to come. The history of modern sales goes back to the 1950s, where salespeople sold products out of the back of their car. Every sales rep became their own mini business, and had to manage their own inventory, logistics and finance. That worked because they covered a dedicated market, but it did not maximize the efficiency of the sales teams. Starting in the 1980s, with the beginning of business technology coming to the fore, the role of sales people started to evolve. While people were still out driving around, they were not carrying all the products in their bags anymore. Sales reps got out to sell more unique products to different customer bases, making them more productive. In addition, they were able to leverage order management technology to handle the logistics and financial components, which sales reps were usually doing in their cars on the way from one customer to another. The 2000s marked the beginning of digital transformation. The promise of new technologies should help salespeople spend more time in the field and with

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customers. With the use of software systems, productivity of sales teams was also increasing. Until recently, B2B sales involved hordes of vendors travelling on planes to their customers, doing classic personal selling, looking for partners, engaging with users, and trying to convince potential customers.

Changes in the business environment are pushing sales transformation From one day to the other, travels to customers and conferences, where we used to personally connect with prospect customers, were cancelled. Many companies reported not finding potential customers anymore in the usual way. Today, meeting customers in video conferences has become the new normal and also interaction with customers in B2B has changed tremendously. We have started to work with chats and collaboration tools. Many of these tools came from B2C sales and marketing, where faster and more transparent customer interactions had already been developed. With the lockdowns, B2B customers were also sitting in their home offices

Figure 1: History of sales roles (Source: captivateiq.com)

and suddenly confronted with new challenges. At the same time, they enjoyed the convenience of e-commerce in consumer markets, with the mindset of “If I want and buy a product today, I want it to be delivered tomorrow”. So it was only natural that, based on the consumer markets, B2B customers’ expectations were also applied to their own business. Today, B2B customers want to enjoy a customer experience similar to that on the popular e-marketplaces such as Amazon, Zalando, Ebay, etc. Thus, new issues suddenly emerged in B2B, such as being seen in a digital world, immediate accessibility and quick responses. Today, in B2B sales, we need to be quick with answering questions from potential customers. For answers that used to take us several days, we now need immediate responses. This changes entire workflows in sales teams and organizations. Preparations of standard product answers, templates and clarification procedures have to be restructured and rethought. Today, it is all about availability and rapid response. Today’s industrial customers learn about products on the web, in videos,

to improve performance, or HR-topics to strengthen team collaboration in this new world. At the end of the day, it is a matter of navigating the interplay between innovation, customer value and sales performance in the best possible way and achieving the optimum sales impact.

Structured marketing initiatives are attracting prospects

Figure 2: Sales generation plan tutorials, forums, and from reference customers long before they interact directly with salespeople. We therefore need to play on these channels to strengthen proactive sales. As a result, workflows in new customer acquisition and business development are changing. Even though selling large-scale plants or industrial products is not something that can be done by mouse click only, all these new demands triggered a pressure for transformation in B2B sales. This new sales environment needs a mix of traditional personal selling with new digital tools. We certainly need a redesigned structure for sales initiatives as part of this process.

Ingredients of a sales generation plan When we talk about a sales generation plan, we are referring to a structured plan of initiatives that actively drive sales. The five stages in Figure 2 describe the playground of initiatives we can use to maximize sales impact. Every customer interaction starts with the right sales arguments. It is important to analyze the value you want to bring to your customers. We start with differentiators that include USPs, product characteristics and new features. While earlier marketing literature mainly focused on value-in-exchange, more recent developments have focused on relationship value and value-in-use (Kleinaltenkamp,

2015). This addresses the real situation in which a customer uses a product. Marketing and sales arguments gain relevance when they refer to specific customer situations. Customer benefits and monetization can be derived from them. Using these arguments, aligned with your business strategy, we build marketing initiatives. The focus is on generating sales, and differs from marketing initiatives that are image building or directed at stakeholders. By doing so, we focus on customers and how to attract them to initiate purchases. We create sources of leads and targeted marketing initiatives to increase sales opportunities until an order is placed. In sales operations, new developments emerge every day, whether it is the use of data to better understand customer needs, forecasting and analytic tools

Figure 3 shows the different areas of marketing initiatives and their target activities. Industrial product marketing typically consists of outbound-oriented activities. This is about finding prospects by segmenting a market, defining target customers, and then actively trying to reach them. When selling solutions, you build a business development process that may customize products or ingredients to meet customer needs. Outbound activities are very typical in B2B sales and supported by personal selling initiatives and advertising to target focus segments. While typical outbound initiatives were limited during the pandemic, people had a look to B2C marketing and discovered inbound marketing. Inbound marketing is about attracting potential customers to a company with relevant and helpful content, and providing them with value across the entire customer journey through a website, blogs, social media, etc. Meanwhile, potential customers have the option to interact with the company via email, chat, and other channels.

Figure 3: Marketing initiatives driving sales europeanbusinessmagazine.com 49

Inbound marketing brings together teams from all business functions that are involved in customer interactions to attract potential customers. Whether it is in the form of strategic content marketing with blog posts and e-books, or video tutorials from customer service representatives, social media posts from sales teams, or by running targeted paid advertising. All that content can be optimized with the help of an SEO strategy. Search engine optimization targets content to specific keywords and search terms related to products or services, or the problems they are intended to solve. Inbound campaigns currently represent the growing share of B2B sales and marketing initiatives. Even events are now linked to inbound campaigns. Especially during the past year of the pandemic, virtual events and virtual product tours have proven to be very useful initiatives in B2B sales. These offensives are likely to migrate into hybrid events into the future. A large part of B2B sales takes place with existing customers. A customer 50 europeanbusinessmagazine.com

service strategy that keeps existing customers happy while using their products, retains them for future investments. Service prescription models that come from the software industry are finding their market more and more in the traditional industry. Create monthly prescriptions, annual prescriptions, or service level models to keep customers happy. Once a customer is satisfied, you can work on upselling, cross-selling and reselling. The right customer service strategy can be an interesting centerpiece to drive growth for a business. Many companies reported difficulties in getting in touch with potential customers during the pandemic. Partner and referral programs open doors to new markets and definitely promote sales generation. Companies can sell their products through e-commerce, find an agent in a specific country, and have a marketing partner for a region at the same time. Managing multiple channels is becoming more complex, but customer demand is driving multi-channel strategies (Stadler, 2020). Referral partners, such as influencers

or ambassadors, may be more familiar from B2C markets, but are finding higher popularity in B2B as well. In software sales, referral programs are a common concept to drive growth. Matt Haller of CaptivateIQ, a Silicon Valley company that develops a sales team incentivization software, stresses the importance of a referral program: “The modern B2B buyer wants to both be able to research their prospective purchases before engaging in a sales process and requires social proof of product success in orders to set the deal up for success. Our referral partners enable our prospects to do just that - get an unbiased education about the products they wish to purchase, leading to a smoother sales process for both the customer and our sales team.” Combining the previous marketing initiatives gives us a keyboard with which we can actively play sales generation - be that a combination of service initiatives with outbound marketing, or inbound initiatives with events and partner multipliers. Marketing is a lot about creating emotions, so we should also use it to sell

industrial products better. It is about interacting with customers and inspiring them. In this new business world, a structured plan for active sales initiatives will be the key to success. In addition, working with customer relationship data will increasingly serve as a basis for sales initiatives and sales performance.

Customer relationship data – the basis of any future customer interaction Once marketing initiatives are set, it is important that they serve as a source of leads. A lead is generated as soon as a potential prospect leaves his contact details. Online, for example, this happens through newsletter registration, downloading whitepapers, to comments on social media. Traditionally, this happens by handing over a business card at a trade fair. Leads develop different qualities depending on the content they are sourcing. Based on that, you can estimate the chances of closing a deal. Today, all prospect touchpoints can be tracked by modern CRM systems and stored centrally in a common customer relationship database. See Figure 4 for the many different sources of customer interaction, such as sales, marketing, service, IoT, e-commerce, even physical store visits, etc. Let’s take the case of In-Vision, a small high-tech manufacturer of core components for 3D printing and light projection. An inbound marketing strategy was set up and connected with a CRM system. Any time a prospect

goes on their website, signs in for a white paper, an event or requests a product information, those touchpoints are registered in the CRM and go through special segmentation criteria. The system even tracks how much time prospects have spent on sites and capture the content they liked. In-Vision had about 50 existing customers accounting for 80% of the turnover. This might not be so different for many other B2B companies. The fact making these features so interesting for B2B sales is that the preparation for future customer meetings and of sales initiatives is facilitated simply by using technology. If you are a salesperson and you have a customer who is responsible for 15% of your revenue, you can look closely at the interaction with all customer touchpoints of your company before contacting them. These useful tools come from customer interaction from the world’s top B2C players like Amazon, Zalando, AliExpress, Mercado Libre, etc. (Merton, 2020). They change sales and drive sales generation because the customers’ interests can be estimated more precisely. The way companies can prioritize their sales activities has changed!

Prepare for sales automation In B2B, a lot of company resources often flow into the process in-between a customer expressing interest, responding to customer inquiries, and considering a product customization. Therefore, leads need to be selected and it needs to be figured out which

Figure 4: Customer touchpoints as sources for new sales initiatives (Source: salesforce.com)

ones are worth working on and will make it to a sales opportunity. For this, you can define the process and selection criteria in your own sales generation plan first. When leads originate from inbound initiatives, they can be screened relatively easily according to selection criteria. Leads can also be provided with pre-built product information to save resources. You can create inquiry forms or ask queries for pre-filtering. Depending on the product and business, you can use automation for the selection process through workflows or lead scoring models. When a qualified lead reaches the sales department, in the first sales stage of a CRM system, qualification criteria are checked. For example, you have a list of 10 criteria that you clarify with the potential customer and must be met prior to the case being processed further. If a certain product is requested, for example, the prospect will already receive a template email with certain information and queries. Questionnaires of criteria can also be linked to a CRM system by means of product inquiry forms. By asking customers to provide specific data about the problem or the desired product features, faster and more precise suggestions for product solutions can be offered without exchanging several e-mails. In the 3D printing case from In-Vision, for example, it was possible to assign specific requests from the medical industry directly to bio-printing specialists. Of course, you can also dive much deeper into sales and marketing automation, and even use artificial intelligence software to leverage systems. It also depends on the type of business, whether you offer standard products or product solutions, or whether you have 50 or 1000 customer contacts per month. In the next sales stage, the specification for a customer solution has to be clarified more precisely, either on the basis of an existing product portfolio or on the basis of inquiry sheets. It also makes sense to involve R&D and engineering in technical RFQ meetings only after the qualification criteria have been clarified. In a sales generation plan, you can determine how many resources you can allocate to europeanbusinessmagazine.com 51

specific sales stages. CRM systems provide an overview of the deals with their likelihood in the sales stages. Once an opportunity enters the quoting phase, you can divide the quoting process into finished products, product adaptations of less than 20%, new developments, up-selling, service models, etc. Preparing quotation documents for these different groups in advance can help save resources and send quotes to customers faster. Proper opportunity management maximizes sales impact and saves internal resources. In your plan, you need to create structures to find out if there are promising customer interests, where it makes sense to deploy your sales team, and whether product customizations are promising. These are all important issues in B2B, when it comes to customer-specific challenges and scarce resources.

New approaches for sales operations Digital tools are driving sales today, but many people and organizations are struggling with their data work and a certain digital stagnation has been perceived. You know how hard it is to keep data fresh and clean. Often, specific information resides in different systems. With current technological developments, there is hope to create a comprehensive view of customer interaction and to use data as a basis for future sales initiatives in B2B. 52 europeanbusinessmagazine.com

Everyone in sales wants to close orders. Companies need orders constantly to support the flow of business. As a sales executive, you are always getting questions from production or purchasing about how much incoming orders they should plan for the next three months, six months, and so on. Production planning is preceded by purchasing departments that need to pre-plan strategic long-run parts. This process ensures availability of products and results in product delivery times for customers. In strategic planning and forecasting, digital tools such as CRM systems and forecasting models in conjunction with ERP systems can help. There is always the big question - in large or small companies - which data is available for predicting orders. You can use hands-on or highly sophisticated methods for forecasting. They range from tagging strategic opportunities in the CRM system to AI-powered analytics, which

make predictions based on external and internal influencing factors and learn optimizing forecast models (salesmatic.ai shows novel tools). Ultimately, it is still a matter of human interaction between the various corporate functions, when strategic decisions are made and information needs to be passed around the company. Digital sales tools have significantly transformed the way sales people and leaders work. Executives recognize that managing remotely differs from when all employees are on-site. Leading sales teams effectively means giving them objectives and regularly reviewing key results. Shorter contacts require subtle shifts in how leaders work. Among other things, leaders are becoming aware of the positive and negative impact they have on employees and the impact of soft skills, such as giving and receiving feedback. “I think the hardest part of anyone’s leadership management job is the people part, and so I spend an extraordinary amount of time thinking about how to retain.”, says Sara Archer from ChartMogul. Figure 5 shows three essentials for motivating sales teams. The playfields of motivation are a pay and performance review guide, definition of your sales culture, and establishing a sales career ladder. Organizations with the biggest productivity increases during the pandemic have supported and encouraged “small moments of engagement” among their employees, moments in which coaching, mentorship, idea sharing, and coworking take place (Alexander, 2021). Many organizations are preparing for hybrid work in the future, in which

Figure 4: Essentials for motivating sales teams (Source: @SaraMcArcher)

AUTHOR Dr. Lothar Stadler, 45, is an interim manager and provides services in global sales and business innovation for technology-driven customers. He is a former sales executive from the machinery and transport industry, mentor for startups and lecturer. Lothar.stadler@explorvent.com www.explorvent.com employees work both remotely and in the office. This environment is also changing sales force profiles. In the search for top sales talent, character traits are shifting to social skills and greater emphasis is being placed on teamwork. The top reasons that individual contributors join and stay with a company are, first, the opportunity to make an impact on workplace culture and, second, that salespeople expect exciting compensation plans. Compensation plans must represent the fruits of their labor and contributions, not just within the sales team, but within the company as a whole. Leaders need to think about how to help sales people understand their impact and provide a culture in which they want to be a part of. Typically, each sales person is paid differently depending on the market, customer structure, and prioritization through objectives. They are put

on a quota plan and given different metrics to incentivize them and give them a chance to earn good money. Matt Haller stated that “… the biggest challenge that we recognize is that the core issue of motivating sales reps wasn’t the pay, wasn’t the plan design, it was the data”. CaptivateIQ’s data management allows companies to connect their data systems with compensation plans. By using forward looking statements and pulling in pipeline metrics into the commission program, dashboards can help sales people and managers predict pipeline quality and to ensure to hit their quota. Elisabeth Krennhuber, leadership expert from peopleexcellence, is convinced that “… the sales role will change in the next couple of years“, and that it is a question of how to build up strong teams. Sales transformation starts at the top of a company. It is the business leaders’ responsibility

to set the course, speed, and tone of the pivot that will deliver innovation (Furstenthal, 2021). It is important to know that retention and sales culture is not just a soft skill, as the cost of losing sales people is high. Motivating your sales team to go above and beyond is what makes the difference between companies.

CONCLUSION This article provides insight into the changes in the business environment that are driving sales transformation. At the same time, it highlights new ways to actively leverage sales initiatives to drive sales generation. Structured marketing initiatives attract prospects and generate touchpoints with customers to plan more targeted sales initiatives. It also shows that inbound marketing has recently gained much higher relevance in B2B. By combining the right digital tools, a comprehensive view of customers can be achieved, thus improving sales planning and increasing sales opportunities. At the same time, daily sales work and leadership challenges are changing. In today’s business environment, a structured sales generation plan can make the difference in maximizing sales impact, saving internal resources and driving growth.

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

hile the economic consequence of COVID-19 continues to unveil itself, we can’t help but watch the transformation of consumer confidence. Consumer confidence denotes positivity towards the economy and personal financial situation. It is the driving force behind all economic activity. However, in the aftermath of a global pandemic, when

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consumer confidence is at its lowest, digital confidence becomes equally as critical. The widespread call for public social distancing impacted every aspect of daily life. From hospitality, retail and food businesses to medical and banking services, the coronavirus transformed virtually every business into a digital one. As a result, digital confidence will play a critical role in allowing businesses to bounce-back post-COVID 19.

What Is Digital Confidence? Digital confidence refers to both businesses and customers having highly positive attitudes towards engaging through web pages and mobile applications. For businesses, this means trusting that your digital platforms will provide flawless user experience every time. Customers too want to share in that confidence. They want to have full faith in the ability of organisations to deliver services via digital

to say this is why you can’t trust digital applications for important things like voting. In reality, the exact opposite is true. Digital applications hold great promise as a means to improve the way we do things in the public sphere, and that includes making it easier for more people to vote. Since the onset of the pandemic, we’ve seen that extended to equally critical causes like food delivery, telemedicine, and distance learning. The more confidence we have in organisations’ collective ability to deliver services via digital platforms, the more apt we are to take advantage of them. But when you have experiences like the one in Iowa, that confidence is eroded. Instead of using the mobile voting app, maybe you don’t vote at all next time. If you have a poor experience with a telehealth platform, maybe you ignore a symptom and don’t call the doctor next time. If your child has trouble logging in to the e-learning module, maybe they just skip school altogether the next day. In the absence of digital confidence, progress gets stalled. That’s why it’s so important to ensure every company can deliver it.”

How Can Businesses Build Digital Confidence?

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

Why Is Digital Confidence Important? When your business provides poor digital experiences, it undermines the validity of your products or services. On the other hand, digital confidence can even enhance an otherwise average product. Aled Miles, CEO of Sauce Labs, discusses the importance of digital confidence in our society. He states: “Let’s think back to the early stages of the 2020 U.S. Democratic primary election. You had a hastily assembled and even more hastily rolled out digital voting application delay and quite nearly undermine the results of the Iowa caucus. The immediate reaction from both political organisers and voters alike was

To create digital confidence within your business, you want to be sure that your customers trust the web and mobile applications you are providing. Consider the risks a company might face in the post-COVID world if they are not providing a strong user experience. Digital confidence starts from the top. Business leaders need to recognise the importance of instilling digital confidence in both their team and their customers. The resolution to put user experience at the forefront must first be made before digital trust can begin to be built. The paradigm shift caused by the COVID pandemic means that digital change has had to happen at a rapid pace. It is now necessary to place quality user experience above functionality when it comes to creating a great digital experience. In order to build digital confidence, businesses must encourage team members to step out of their silos

and work together to create quality digital capabilities. When teams can work side-by-side, and developers, engineers, product designers commit to building that quality, the silo mentality is broken down. Everyone should be ready to take responsibility for moving toward being a digital business. When developing digital confidence within your business, you must focus on agility and modernisation. Continuously monitoring customer experience and application performance will ensure that quality is always improving. And digital confidence will follow closely behind. And finally, always remember to take feedback into account. A business should work with the mindset of delivering the best possible user experience for its’ customers. Take their opinions above your own and value how your customers feel about your application and digital presence. You should create a process of continuous feedback which is available to everyone in the business.

Why Is Digital Confidence Critical Post-Coronavirus? As we begin to bring ourselves out from the plummeting lows of the pandemic that shook the world, it is essential to recognise the changes to business and the consumer. The importance of digital confidence has extended itself further toward critical causes like food delivery, digital medicine, and distance learning. The more confidence we have in organisations’ collective ability to deliver services via digital platforms, the more apt we are to take advantage of them. Our reality has transformed, and the push for businesses to engage with customers via digital platforms has become a requirement for the restoration of consumer confidence. In an unprecedented economic scene, businesses and consumers alike will use digital confidence in a critical role to propel us out of instability. Digital confidence is crucial in allowing enterprises to bounce-back postCOVID 19. europeanbusinessmagazine.com 55

ood financial management is critical to the success of any business. Yet small business owners often handle their own bookkeeping for reasons ranging from fear of sharing sensitive financial information, keeping staff costs in check, or wanting complete control. These reasons, while undoubtedly valid for start-ups and smaller operations, grow increasingly impractical as your business grows, explains Carlo Gualandri, Founder and CEO, Soldo. The most successful entrepreneurs learn quickly that accounting and finances are the lifeblood of business and deserve to be treated as such. Setting up a finance function is therefore critical for planning, especially forecasting on financial matters and predicting cashflow – an indispensable requirement to remain profitable. But when is the right time and where do you start, especially if you’re a start-up about to enter a growth phase?

Do the basics first The three essential building blocks for an emerging finance function are a bank account, payroll and accounting software. They will form the foundation for the subsequent work your finance department will build upon and should, therefore, cater for your business’ current and anticipated future needs. Apart from being a legal requirement, a dedicated business bank account makes it easier to manage cash flow, pay suppliers, sort out taxes, and calculate profits. It’s therefore sensible to use it to its fullest potential. However, before setting up your financial function, determine whether your current business account is compatible with the technology you want to use, offers the services and integrations you need, and whether the banking fees are competitive. 56 europeanbusinessmagazine.com

Treat finding a business bank in the same way as you would any other business supplier. Research the market and shop around for the best price, service, and benefits for your business. To supplement your business cash account to help you do more, consider additional tools such as software for payroll and accounting. Take the time to examine the various software offerings to find a solution that best aligns with your needs. Cloud platforms, for instance, make it easy to collaborate online with your team from anywhere, while staying on top of your business’s cash flow in realtime.

Small business, big data Mining the trove of financial data your firm generates daily can yield useful information for managing your business more effectively. Ensuring your finance team has accurate, and even real-time data at its disposal will enable them to identify opportunities or inaccuracies and act on it quickly. Reliable data is also a prerequisite to attract potential investment. Having an accurate picture of the money flowing in and out of the business can be the key to demonstrating financial health and organisation, often making it easier to convince investors of the viability of your proposition. Investors will be more willing to part with their cash if the business has an efficient and prepared finance department.

Managing spend A way to track and regulate expenditure is the next item the fledgling finance department would need. Many start-ups overlook spend management early on and track expenses through employees only, which could

quickly spin out of control as the company spends more and employs more staff. Operating without an efficient spend management solution is a setup for failure and can severely hamper decision making. Research by Soldo found that nearly a third (29%) of growing businesses in the UK and Ireland struggle when choosing what business priorities to spend on. Almost a fifth (18%) said that they didn’t have

enough financial insight to make effective spending decisions. Setting up the finance department presents the ideal opportunity to address spend management and get complete financial visibility. Forward-looking businesses should also consider spend automation, since automating repetitive tasks will free up time for the finance department to focus on more complex, analytical tasks.

It’s all about scalability Although it feels challenging to predict what’s coming next in the current climate, businesses can still make decisions while setting up a finance department to ensure it can scale alongside a growing business. The first point is to select software that is likely to be supported for the foreseeable future. Cloud-based platforms present a big advantage here since they are much

more likely to receive ongoing attention and even regular updates. Automation is another necessity for scalability as it takes care of many of the tasks that scale linearly with a growing workforce, such as data input and receipt tracking. Without an effective finance function, a business is much more at risk of failure. A slick finance department running at full tilt can increase profitability, streamline processes, spur growth, and ensure long-term sustainability. europeanbusinessmagazine.com 57

HOW SEARCH ENGINES REALLY WORK By Jeff Ferguson

he Internet and the World Wide Web we know today would be utterly unnavigable without search engines. But how do Google, Bing, and the other search engines really work? The short answer: Search engines work by filling a database, or index, of billions of web pages through crawling. During the crawling process, computer programs called web crawlers, also known as bots or spiders, download the content and the links to other web pages found on these pages. Search engines analyze these web pages using algorithms for factors such a topicality, quality, speed, mobile-friendliness, and more to determine the position, or rank, in the search engine results presented to users.

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But let’s dive a little deeper. In this study , you will learn: • About Machine Learning • What is a Search Engine? • How Do Search Engines Obtain Their Results? • How Do Search Engines Understand Your Query? • How Do Search Engines Rank Web Pages? • Pulling It All Together: How Google Really Ranks Web Pages • Summary

FIRST LET’S TALK ABOUT MACHINE LEARNING Before we discuss how search engines work, you should understand a little about Machine Learning. According to Jim Stern, author of Artificial

Intelligence for Marketing, “Machine Learning is the automated creation of predictive models based on the structure of the given data.” To say that Machine Learning is a computer teaching itself how to do something is an oversimplification, but it’s an excellent place to start for this discussion. While Machine Learning lives under the Artificial Intelligence (AI) canopy, it should not be confused as being the same thing. Machine Learning is already in use daily in a myriad of computer systems; AI is the name given to a variety of technologies, some of which are still the stuff of science-fiction. Some Machine Learning systems can run on an Unsupervised basis, still requiring data to get started to find patterns in data and reveal correlations. There is also Supervised Machine Learning, whereby we

ensure the algorithms are doing their jobs properly like a teacher grading a student’s homework. Lastly, there is what is known as “Reinforcement Learning,” automated systems that optimize marketing campaigns, such as Google Ads optimizing a handful of variables to get as many conversions as possible at the right price. The big takeaway here is that these systems, while fixed in their purpose, are not fixed in their modeling, and evolve as they consume more data. Know that modern search engines are using Machine Learning systems of all three types in their attempts to organize the world’s knowledge.

WHAT IS A SEARCH ENGINE? At this point in history, I’m sure just about everyone knows what a search engine is in theory; however, let’s talk a little about what a search engine is from a technical standpoint. The concept of a database, that is, a structured collection of information stored in a computer, has been around since the 1960s. That’s basically what a search engine is, a vast database of web pages combined with a set of algorithms, that is, a collection of computer instructions, that decide which web pages to return and in what order they should appear when someone asks that database a question, or query.

HOW DO SEARCH ENGINES OBTAIN THEIR RESULTS? That database is filled through the process of crawling, whereby a computer program visits a known web page and downloads the information found on that web page, a process known as parsing, into the database. The data collected during this process is not only the contents of the web page itself but also the links found on that page, which point to other web pages. The links found on that web page get added to a list of web pages for the crawler to visit at another time. Despite the name, crawlers, also known as bots or spiders, do not move from page to page by way of the links

found there; instead, it’s more like the parser adds the newly discovered pages to a sort of “to-do list” to visit later. This to-do list is what’s known as a scheduler, and itself is an algorithm that determines how vital those newly discovered web pages are in comparison to all the other web pages on the internet the crawler knows about already. The parser then sends the information it obtained from the web page to what is known as an index (a process known as, well, indexing), which itself is a kind of database. However, an index is more a database of locations (or citations) of information along with brief descriptions of that information (called abstracts). These citations and brief descriptions are basically what search engines provide to you when you query them for information about a given topic.

that you should ask is, “Is our web page even indexed?”, that is, is the web page in question even in the search engine at all. If it’s not, then either the search engine crawlers simply haven’t reached your website yet, or there is something technical in nature keeping your web page from being crawled or indexed. Once included in a search engine’s index, the search engine must then determine when and where that web page will appear to its users when they search for something. That is, the search engine needs to decide which keywords and in what position your web page will appear, or rank, in a search result. This process is where a search engine’s ranking algorithms come into play. Every search engine’s ranking algorithm works a little differently; however, since Google dominates the search engine market in most of the English-speaking world (and beyond), we’ll focus on its ranking process for this discussion.

HOW DO SEARCH ENGINES UNDERSTAND YOUR QUERY? If you would like to learn more about this process, I suggest Andrew Hogue’s excellent tech talk at Google from 2011 called, The Structured Search Engine. Just getting your web page into a search engine’s index is a substantial process, and search engines perform this action thousands and thousands of times a day for new and old web pages alike. Google and the other search engines have made this job of discovery a bit easier for themselves by allowing website owners to provide a list of web pages to them, a file known as a sitemap. Additionally, you can submit new individual pages to both Google and Bing via the Google Search Console and Bing Webmaster Tools websites, respectively. As a website owner, it’s essential to understand this process. When the time comes to determine why your website may or may not receive any attention from the Organic search channel, one of the first questions

Before Google can show you any results for your query, it must first determine what your question is about, that is, not only understanding the words in the query but the intent of those words as well. According to Google, “This involves steps as seemingly simple as interpreting spelling mistakes and extends to trying to understand the type of query you’ve entered by applying some of the latest research on natural language understanding.” This task is more complicated than you may think. The English language is, frankly, a mess, and Google’s ability to decipher that mess has improved steadily over the years. Google continues, “For example, our synonym system helps Search know what you mean by establishing that multiple words mean the same thing. This capability allows Search to match the query ‘How to change a light bulb’ with pages describing how to replace a light bulb.” europeanbusinessmagazine.com 59

During the process, Google attempts to determine if the information you are looking for is broad, or very specific, or if the query is about a local business. Google also tries its best to determine if your question requires more recent, or fresh, information. “If you search for trending keywords, our freshness algorithms will interpret that as a signal that up-to-date information might be more useful than older pages,” Google continues. “This means that when you’re searching for the latest’ premiership scores’, ‘Strictly Come Dancing’ results or ‘BP earnings’, you’ll see the latest information.” And you thought Google just read your question as entered, didn’t you? Now that Google has figured out what you’re asking, it needs to determine which web pages answer that question the best, a process known as ranking. Again, this is no simple matter.

HOW DO SEARCH ENGINES RANK WEB PAGES? Google reviews hundreds of traits, or signals, of a web page to determine when and where it should appear in its index. Despite what anyone might tell you, no one outside of Google knows all these signals, nor do they know if any signal has a higher priority or importance than another. Although, when Google introduced RankBrain, one of their engineers admitted that it was the third most important ranking signal, but, as you’ll see, that isn’t all that helpful. Google has been kind enough to define some of the groups of signals, which in and of themselves are algorithms dedicated to specific areas of interest by Google.

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The groups of signals in the above image were shown to me and a small group of SEO professionals by Google spokesperson, Gary Illyes, at the Search Marketing Summit in Sydney, Australia, in early 2019 in what was supposed to be a closed-door session. Gary’s one request was that we didn’t share this information, which is supposedly taught to Google’s engineers “on day one,” on Twitter or any other social media platform. However, this request was honored until just slightly after the session was completed, so I assume it is safe to share it here as well. Not shown in this collection of algorithms is Personalization and Localization, which Google sometimes calls “Context and Settings.” Personalization is the dynamic adjustments to the search engine results page (SERP) based on your Google usage history. Similarly, Localization is the proactive adjustments to the SERP based on, well, your location. These two factors alone are enough to make tracking your web pages’ positions on Google frustrating. Let’s look at the individual algorithms that make up Google’s ranking process.

for years, it’s essential to understand this next sentence. Google’s modern Machine Learning based algorithms use a variety of signals beyond just a word’s appearance in a piece of content to determine if a web page is a relevant answer to a question. Thanks to this collection of signals, the concept of “keyword density” no longer matters, if it ever did at all. Counter to what some SEO bloggers have published, this does not mean that Google looks at engagement metrics such as click-through rate or bounce rate for every page to help determine its rank. Instead, Google’s Machine Learning system has used similar information for thousands of web pages in aggregate over time and then looks for similarities in other content. While this doesn’t mean you shouldn’t concern yourself with metrics such as click-through rate and bounce rate for your content, it does mean that Google isn’t tracking these metrics for every web page in its index to determine that web page’s rank. Instead, focus on these metrics because it is a good indication that the readers of that content find it useful.

TOPICALITY Sometimes also referred to as “topical relevance,” this algorithm group’s function is perhaps the most crucial concepts you must understand in Search Engine Optimization. If you, as the creator of a web page, want your content to appear for a given search result, then your web page must be about the topic searched for in the first place. This concept, for some, is Earth-shattering news. Again, Google tells us precisely what they mean here, “The most basic signal that information is relevant is when a webpage contains the same keywords as your search query. If those keywords appear on the page, or if they appear in the headings or body of the text, the information is more likely to be relevant.” However, before you run out and start stuffing your content with the same words repeatedly, which was, honest to goodness, an SEO strategy

QUALITY When I took some of my first computer science classes in high school, one of my teachers attempted to demonstrate the complexities of a computer program by having her students tell her, acting as a computer, how to make a peanut butter and jelly sandwich. The teacher would sit at the front of the class with jars of peanut butter and jelly, a knife, and a bag of sandwich bread, and say, “Where do I start? Tell me, the computer, what to do.” The first student to take on this challenge would usually say something like, “Ok, first put the peanut butter on the bread,” only to have the teacher grab the entire jar of peanut butter and place it on the bag of bread. After a few giggles, the students would understand that they first needed to tell the computer to open the bag of bread, take a slice of bread from the bag, open the jar of peanut butter, use the knife to obtain some peanut butter, and so on. Even now, I’m

simplifying these instructions, as she would sometimes get hung up on using the twist tie on the bread bag. My point here is that getting a computer program to replicate human activity is incredibly complex. So, you can imagine how difficult it is to try and teach an algorithm the definition of something so multifaceted as quality. Google’s Machine Learning systems are once again used to bridge the gap between our human opinions on the subject of quality and a machine’s interpretation of that opinion. After it was leaked onto the web in late 2015, Google released its Search Quality Evaluator Guidelines to the public in its entirety. Leaks of this document had occurred a few times since 2008. In 2013, Google even released an abridged version in response to the continued leaks; however, this was the first time that Google responded by publishing the entire 160-page guide to the public. When the Guidelines were released, some SEO professionals treated them like the Dead Sea Scrolls. To calm the SEO community down a bit, Google’s Ben Gomes stated in a 2018 interview with CNBC, “You can view the rater guidelines as where we want the search algorithm to go. They don’t

tell you how the algorithm is ranking results, but they fundamentally show what the algorithm should do.” It is incredibly important here to point out that the Search Quality Evaluator Guidelines are not ranking signals. Instead, these guidelines are used by actual humans to check the accuracy of Google’s algorithms so that the Machine Learning systems used to assess the complicated concept of quality can continue to learn and improve their results. Once again, does this mean you shouldn’t concern yourself with the matters we’re about to discuss? Of course not. As you will see, what Google is looking for here is solid advice for anyone trying to create quality content. You, as a web page creator, may try your best to follow all the guidance provided in those quality guidelines, like you were checking items on a to-do list, and still not end up on the first page of results. Google’s Machine Learning algorithm doesn’t have a specific way to track all these elements; however, it can find similarities in other measurable areas and rank that content accordingly. Let’s discuss what those elements are in more detail.

Beneficial Purpose – Although not added to the guidelines until 2018, this aspect has become the top priority in the process of determining quality content at Google. It specifically states that “websites and pages should be created to help users.” If your page is trying to harm or deceive Google’s users or to make money with no effort to help users, then Google’s quality raters are not going to rate your content well. Chances are Google’s algorithms wouldn’t like it much either. Google is not against your website selling products or services; it’s just that you need to be helpful in the process. As Google’s John Mueller stated in a 2011 Webmaster Central blog post, content creators should focus on providing “the best possible user experience” rather than treating the various aspects of Google’s algorithms as a checklist. Your Money or Your Life (YMYL) – Google has stated in its guidelines that the accuracy of some content must be judged more critically than other content. This type of material, which they refer to as “Your Money or Your Life” pages, can “impact a person’s future happiness, health, financial stability, or safety.” Quoting directly from Google’s guidelines, this content takes the form of the following: • News and current events: news about important topics such as international events, business, politics, science, technology, etc. Keep in mind that not all news articles are necessarily considered YMYL (e.g., sports, entertainment, and everyday lifestyle topics are generally not YMYL). Please use your judgment and knowledge of your locale. • Civics, government, and law: information important to maintaining an informed citizenry, such as information about voting, government agencies, public institutions, social services, and legal issues (e.g., divorce, child custody, adoption, creating a will, etc.). • Finance: financial advice or information regarding investments, europeanbusinessmagazine.com 61

taxes, retirement planning, loans, banking, or insurance, particularly webpages that allow people to make purchases or transfer money online. • Shopping: information about or services related to research or purchase of goods/services, particularly webpages that allow people to make purchases online. • Health and safety: advice or information about medical issues, drugs, hospitals, emergency preparedness, how dangerous an activity is, etc. • Groups of people: information about or claims related to groups of people, including but not limited to those grouped on the basis of race or ethnic origin, religion, disability, age, nationality, veteran status, sexual orientation, gender or gender identity. • Other: there are many other topics related to big decisions or important aspects of people’s lives which thus may be considered YMYL, such as fitness and nutrition, housing information, choosing a college, finding a job, etc. Please use your judgment. To sum this up, if you’re trying to share facts, not opinions, about a topic, Google is going to take the evaluation of this content seriously, and so should you. Expertise, Authoritativeness, Trustworthiness (E-A-T) – A close, yet less uptight cousin to the YMYL content mentioned above, the concept of E-A-T has become a source of considerable discussion in the SEO community since its release. Research on the matter will reveal numerous explanations of the idea along with a few well-meaning articles on “How to Write E-A-T Content for Google” and the like. If you don’t understand the words “expertise,” “authoritativeness,” and “trustworthiness,” feel free to seek these blog posts out as defining (and redefining) the words themselves seem to be their favorite pastimes. That said, the lesson you should learn from Google’s inclusion of these terms in their Guidelines is that Google is looking at more than your ability to construct a proper 62 europeanbusinessmagazine.com

sentence when it comes to the concept of quality. Therefore, your content must then prove that you have a respectable level of understanding of a given topic (Expertise), that others in your industry or community agree with your understanding by citing you as an expert (Authoritativeness), and that few disagree with that authority (Trustworthiness). E-A-T is a dynamic concept. Someone writing a guide on foods you can grill during BBQ season doesn’t need to meet the same content standards as someone writing about cancer research. As Google states in their Guidelines, “Keep in mind that there are high E-A-T pages and websites of all types, even gossip websites, fashion websites, humor websites, forum and Q&A pages, etc.”

As I stated earlier, there are numerous blogs and slide presentations that try and turn E-A-T into a checklist of tactics (SEO professionals love a good list); however, the best way to learn about this concept is through example. Luckily, you can read the same standards that Google provides to its quality raters in the Guidelines itself (specifically, section 4.6, “Examples of High Quality Pages” in the 2019 edition of Search Quality Evaluator Guidelines). Just remember that these examples were written by humans, for humans, who are attempting to teach a computer to do their job. Avoid getting overly fixated on certain details or try to attach a specific quantity to the quality rates actions. For example, when some SEOs read the section header, “A Satisfying Amount of High-Quality Main Content” from these Guidelines, they try to assign

a specific number of words that need to be written or prove that “longer is better,” but that is simply not the case. As Google’s John Mueller and a bevy of other Google employees will tell you, “Write for the readers, not us.” PAGERANK One of Google’s oldest algorithms, PageRank, is charged with evaluating the quality of inbound links to a website. Google’s long-held idea that “if other prominent websites link to the [web] page, that has proven to be a good sign that the information is well trusted,” is one of the things that has set the search engine apart from its competitors. While many SEO tools and bloggers love to question the importance of links in Google’s algorithms, according to Google, it is still very much a part of the equation. Occasionally, in

blog posts on the matter, an SEO will state that links have a “high correlation” to ranking, which is kind of a silly statement when Google has already indicated that they use inbound links in their algorithm since 1998. Claiming you confirmed this is like saying you figured out a Manhattan cocktail uses bourbon when there are recipes readily available. RANKBRAIN Introduced in 2015, RankBrain is, well, complicated. According to Danny Sullivan, when he still worked for Search Engine Land (he works for Google now), RankBrain is “mainly used as a way to interpret the searches that people submit to find pages that might not have the exact words that were searched for.” Every day, Google processes something like three billion searches. Of

those searches, anywhere from fifteen to twenty-five percent have never been done before. Let that sink in a little. That means that every day, there are 450 million to 750 million searches done every day that Google sees for the first time. While that may seem daunting, many of those previously unknown searches are close to inquiries made before. That’s where RankBrain gets involved. Google had systems in place before to help with this sort of thing. Early in its history, it was able to start understanding the similarities between words like “bird” and “birds” through a process called stemming, that is, reducing a word down to their word stem, or root form. Additionally, in 2012 Google introduced the Knowledge Graph, which is a database of known facts like, “Who was the third President of the United States?” (Thomas Jefferson) that it could quickly answer without having to refer you to a website. The Knowledge Graph also allowed Google to understand the connections to other facts. For instance, as Sullivan illustrated, “you can do a search like ‘when was the wife of Obama born’ and get an answer about Michelle Obama… without ever using her name.” RankBrain was designed to take these concepts even further by looking for similarities between new and old searches, or, as Greg Corrado, a senior search scientist at Google, put it, “That phrase seems like something I’ve seen in the past, so I’m going to assume that you meant this.” Some SEO bloggers claim that the introduction of RankBrain to the algorithm set was the point when Google first started understanding what SEO professionals call “search intent,” that is, Google’s alignment of search results with users’ purpose for searching. However, nothing that was ever officially reported by Google upon the release of RankBrain confirms this theory. There is also a lot of conjecture in the SEO community if you could really “optimize” for this algorithm or not. Additionally, many SEO professionals focused on this algorithm’s importance in the overall collection of algorithms. A quoted Google representative said it was the third most europeanbusinessmagazine.com 63

important after “links” and “words,” as Sullivan put it, which we can safely assume to be PageRank and Topicality, accordingly. I wouldn’t concern yourself as much with these theories, and instead, just be thankful that you don’t need to write content with every possible variation of a word to appear for relevant searches. SITE SPEED/CORE WEB VITALS In 2010, Google first started using how quickly a web page loads on a desktop computer as a ranking signal. Why? Because slow loading web pages are bad for business for both Google and the web page owners. In 2018, Google expanded this focus on site speed to include mobile web pages as well, further proving that they are not messing around in this area. In early 2020, Google introduced a new set of tools to its Google Search Console, called the Core Web Vitals, and stated explicitly that the metrics found there would become ranking signals starting in 2021. Core Web Vitals absorbed the site speed metrics looked at previously and expanded into new areas that thankfully needed to be addressed (such as the sloppy way some web pages load advertisements and other images). MOBILE Depending on which study you read, anywhere from 60%-70% of all searches start on a mobile device. Google has been pushing mobile-friendliness as a ranking signal since at least 2015; however, in 2018, they made it official by focusing on what they call the “Mobile-First Index” process. “Mobile-First” does not mean “mobile-only,” but instead that Google now looks at the mobile version of your website first during the process of evaluating your website. After the introduction of this algorithm, the days of website owners not concerning themselves with mobile-friendliness were officially over. While the “Mobilegeddon” update wasn’t the bloodbath that the SEO press made it out to be, the importance of mobile cannot be undersold here. There have been numerous articles written on the subject on mobile optimization, most of 64 europeanbusinessmagazine.com

them by the legendary Cindy Krum, who literally wrote the book on the subject, so I won’t spend any time on what to do here. Just know that it needs to be done. Google’s focus on Site Speed and Mobile are great examples of the search engine forcing website owners to do what they should have been doing for years, making their websites easier to use. This requirement is kind of like the government telling you to wear a seat belt when riding in an automobile – you should do it because it keeps you safe and is a smart thing to do, but sometimes, people just want their “freedom” (to be ejected through the windshield of their car). As a website owner, you should want to make your website fast loading and functional on mobile devices because your customers want that, but that wasn’t happening as much as it should. So, Google said, “if you want to show up in organic search results, you should do these things,” so now more website owners concern themselves with these matters.

PULLING IT ALL TOGETHER: HOW GOOGLE REALLY RANKS WEB PAGES Now that you know all the various aspects of Google’s ranking system, here’s the most important lesson: How Google combines these multiple algorithms to determine the rank of a given web page. While most would assume that Google assigns a score for each of these areas then simply adds them up for a total score that equates to rank for a given query, they

would be using the incorrect arithmetic operator. In fact, according to Gary Illyes, on that beautiful day in Sydney, Google assigns a score for each of these areas then multiplies those scores for a total score that determines the rank for a web page in the results for a given query. To see why this is important, one has only to remember the difference in outcomes for 1 plus 0.1 versus 1 multiplied by 0.1, which is 1.1 and 0.1, respectively. This mind-blowing news means that there is no specific priority for these various algorithms in the grand scheme of things. One could spend all their time making sure that their website was the fastest amongst their competitors but get dragged down by low-quality content. You could spend all your marketing budget on the best writers for your content only to be ranked lower because your website wasn’t optimized for mobile devices. There is no silver bullet when it comes to Search Engine Optimization. In summary , If you learn anything from this discussion of how search engines work, remember this: Search Engine Optimization is about doing all the marketing, website design, and public relations tactics that roll up to form SEO. These tactics aren’t about writing a specific number of words in an article or attempting to trick Google by abusing canonical tags, but about creating excellent content for your target audience on a properly built website. Search Engines are incredibly complex systems, but they are systems designed to bring out our best efforts. SEO is work and lots of it.

nflation has risen recently in Europe. Increasing from 2.1% to 2.5% in the last month, its at its highest level for nearly three years. Is the economy running into trouble or is it starting to grow again? Evidence is mounting that the recovery is strong. The result should be a significant reopening of businesses and a potential boom. However, public debt is at record levels and low interest rates may rise. The pandemic-induced demand shock and the lockdown-induced supply shock are temporary, but the re-opening of the economy raises concerns that long dormant inflation will soon resurface. Once the pandemic has ended, households will travel, go to concerts and eat in restaurants, and companies will supply goods and services again. Will there be inflation or deflation in the post-Covid-19 world? Business investment plunged in early 2020, causing a sudden shutdown of most sectors of the economy, including travel, food and accommodation, and the economy is still recovering. Will the surge in government spending, combined with higher growth and lower unemployment lead to inflation? Much may depend on coronavirus

in Europe and whether a new wave arrives, since this could potentially choke off the recovery and keep inflation under wraps. In the UK alone, two million people have registered for benefits, a figure we will see across Europe. Experts point to employment eventually recovering to its previous levels once the pandemic has passed, but a virtual economy may well be cheaper and less labour-intensive than the old, traditional economy. As new business models are adopted, old jobs are destroyed. Labour markets will be divided between those workers who have reskilled for the jobs that have been created by the pandemic, and those who are not. As economies recover, people will get back to work but the very gradual lifting of the lockdown means the recovery will gradual too, so inflationary pressures may remain subdued. Uncertainties are likely to remain raised, which will discourage investment, but demand is collapsing because of the lockdowns, causing prices to come down rather than go up. The argument for inflation: Having seen prices climb higher, workers demand higher wages which causes an increase in both wages and then

prices. Debt and quantitative easing on the economy will inject money into the marketplace and stimulate spending. Another reason for potential inflation is lower interest rates. Money is affordable to borrow, typically leading to more of it making its way into the economy. As unemployment begins to fall and consumer confidence recovers, this stifled demand should boost spending and feed into higher inflation. The no-expense-spared fight against Covid-19 has put developed economies on course for rising prices on a scale they haven’t seen in decades. When an economy is shut down and reopened, supply will not be ready to meet demand. We shouldn’t be surprised to see a spike in prices. The argument for deflation: While prices are certainly accelerating faster than expected, the pressure will soon subside. Unemployment may lower consumer demand for goods and services because people can’t afford them. There may also be an unwillingness to return to normal until there’s more data supporting the vaccine’s effectiveness. The virus is aggravating the conditions of the past decade—when deflation, rather than overheating, has been the big threat. Inflation was low before the pandemic and this will not change once life returns to normal. Experts on both sides of the Atlantic say that these price rises are a temporary consequence of the whiplash effect of the COVID-19 pandemic on demand. Supply chains have been disturbed by demand first collapsing and then surging back, making prices very volatile. On this basis, inflation will settle down once the pandemic abates. Conditions like economic and financial crises, wars, increasing geopolitical risks and pandemics directly affect investor choices, and thus the market. And while global growth is fast returning, a quick and sustained recovery may well be accompanied by a pick-up of inflation. europeanbusinessmagazine.com 65

Why Is BIG DATA

So Important?

ig Data is the term that explains the large volume of both stable and unstable data that inundates the business on a daily basis. In order to qualify as such, the data involved must exhibit categories known as the four V’s: By Matthew Meehan VOLUME - The amount of created data is considered vast in relation to traditional data VARIETY - Data comes from all different types of sources and is therefore also created by machines and processes as well as people VELOCITY - Data gets produced extremely fast, with this process continuing even as we sleep VERACITY - Big Data is sourced from many different places and therefore the quality and veracity of such data must be tested. This concept has existed for many years and it is understood by most organisations that capturing all data leads to significant potential value for the company. Even before Big Data became a concept in the 1950s, businesses were using basic analytics like spreadsheets and calculations to monitor developing trends and insights before developing the initial Big Data concept. While an increase in speed and efficiency was created by this concept, the time taken did not allow for anything more than future predictions. In comparison to now, trends are now instantly identifiable, allowing immediate strategic development that facilitates faster workstreams, staying agile to your environment and being constantly competitive. However, the main factor in utilising such data is also reliant on understanding why Big Data is actually so important for businesses in the first

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place, especially considering it is not actually the amount that matters, but instead what the organisations do with it. The importance of such can mainly be understood by the development of three core categories that have been decided over time to give the greatest overview of the inherent benefits of Big Data.

Cost Reduction The reduction of cost is achieved by the new technological developments of Big Data, such as cloudbased analytics and the reduction in necessary hardware, meaning that there are significant cost advantages when it comes to both the ability and expense involved in storing large quantities of data. The ability to now take information into a more digital storage mechanism has allowed for large improvements into data driven processes such as quality standardisation and general testing. This is due to their needs for constant access to numerous complex sets of data that are especially important in industries where mistakes are critical, such as pharmacological investigation, technology and national defence. Big data is able to formulate in-depth insight that provides detailed feedback and the storage of identified issues that inform the process of assessing variables. This allows much quicker, clearer and well-informed decisions for all affected industries.

Improved Decision Making Due to the greatly advanced speeds of the data mining processes and the memorisation of analytical data, this allows new sources of information to

be speedily investigated, so that all businesses immediately understand both the state of competitors and the overall condition of their industries. This equips them with the tools to make constantly evolving decisionsdue to the speed in which these companies can now learn and internalise this information. This also allows for much further future projection, as the accuracy and consistency allows businesses to create their own agile framework which is able to handle the involved risks, while constantly updating and re-evaluating responsible memory banks in order to effectively influence every necessary decision.

operate. Such developing needs in a technologically driven and advancing world means that everything from transport to personalised advertising, politics to weather and even health monitorisation of ourselves and the world around us requires constant data. This is even the case with oceanographical and geographical coverage for agencies such as NASA, which requires an unimaginable amount of constantly changing data processes. The issues involved with this stem from this are the miniscule details that are needed to create the individual DIY architecture of a specialised database just to handle simple processing, and to achieve this through a cloud storage access that is affordable to the individual organisations. There are also great challenges due to the mix of data that is needed by analysts and computer scientists, as the mix of platforms and data stores used can often make compatibility between them difficult. Therefore, the need for greater data catalogues occur which require subsequent governance and quality assurance.

New Products and Services With research methods such as polls, surveys and intelligent algorithms calculating and predicting future human behaviour, the data therefore has the ability to gauge all of the customers’ wants, needs and desires while combining these with resulting satisfaction levels that inform the analytics so that the customer receives exactly the right product. Thanks to Big Data, more companies are able to innovate and develop new products or variations on a consistent basis. This kind of data can also be informed by later situations such as product launches or long-term customer feedback to further the positive exchange,

while also realising how the balance of demand then affects their own purchasing process so that they may save any wasted spend or attempted purchase misinformation from wholesalers. As a result, the focus then shifts through the data onto customer-centric marketing that allows accurate purchase prediction, where customer investment (that may rise due to satisfaction) will therefore require a more personalised and data-driven specialisation. While this is hard to predict, it can instead be informed through these subsequent buying behaviours. The issue behind this that contributes to the necessity of big data is the modern society in which we live and

This issue shows one of the most crucial factors as to why big data is so important now lies in its own design: ethical practices and regulations. Collection practices and regulations must be clear and abided by in order to ensure that Big Data actually achieves what it needs to without impeding on personal freedoms. Increased usage, alongside few restrictions, leads to higher misuse, and the loss or theft of personal or sensitive consumer data becomes a significant possibility. This led to the creation of GDPR which limits and regulates Big Data. However, in order to ensure success and restriction are not opposing forces, there must be a balance struck that creates an environment that prevents the loss of efficiency and advancement. Much of this success is dependent on the human ability to handle small data, while making sure computers can effectively handle the data to ensure its ultimate success through the implementation of infrastructure that can allow such vital information as Big Data to continue to revolutionise our lives. europeanbusinessmagazine.com 67

GLOBAL DEBT AT RISK OF "QUALITATIVE CHANGE"

lobal markets, spurred by policies, have emerged from the March panic during the spread of the COVID-19 pandemic. For now, all major economies, including Europe and the United States, are at the crossroads of a new direction. Although the U.S. stock market experienced a certain degree of correction in October and began to hover around high levels, it is still far from the alltime high it reached in early September. In the current stock market, the global market is still plagued by two factors, i.e., the recurring COVID-19 pandemic and a new round of stimulus

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policy changes. In fact, in the case of the second outbreak of the pandemic, there was no obvious fluctuation in the market, which meant that the capital market stimulated by the policy could hardly get rid of its dependence on the policy. This kind of policy risk that accumulates ceaselessly in the long run also implies the possibility of "qualitative change". In the bond market, there have been signs of a pullback as the dollar index has been flooded with dollar liquidity. In the United States, investment-grade corporate bonds with maturities of more than 10

years underperformed short-term bonds last month and fell the most in August of all maturities, according to Bloomberg Barclays Indices. In the options market, the cost of hedging against inflation of more than 2% over the next five years has more than doubled since February. In Asia, dollar-denominated corporate securities with maturities of more than 10 years performed worst in the two months to September. Some bond markets around the world have begun to signal long-term inflation risks, reflecting growing concern that a prolonged flood of liquidity might drive up future inflation, with the resulting change in interest rates that could be potentially disastrous for capital markets. Reports from international rating agencies have further heightened concerns about the future situation. S&P Global warned that the second

wave of sovereign downgrades could come in the coming months as a result of the new wave of the pandemic, with some of the world's top economies likely to suffer credit downgrades or downgrade warnings. S&P has already downgraded the ratings or outlooks of nearly 60 countries this year. Some of the world's developed economies, including the European Union, Japan, the United Kingdom, and the United States, are also at risk from a new wave of the pandemic. S&P has revised its outlook for

Japan from positive to stable. Canada's rating was also downgraded to AA by Fitch. These changes suggest that while countries are expanding their fiscal deficits to cope with the pandemic, the long-term sovereign debt problem is worsening. In particular, the size of the U.S. debt has ballooned to more than USD 20 trillion from about USD 13 trillion five years ago, and the nation's latest annual fiscal deficit has hit a record USD 3.1 trillion. The economic impact of COVID19 implies that the scale will inevitably

Founder of Anbound Think Tank in 1993, Chan Kung is now ANBOUND Chief Researcher. Chan Kung is one of China’s renowned experts in information analysis. Most of Chan Kung‘s outstanding academic research activities are in economic information analysis, particularly in the area of public policy. Wei Hongxu, graduated from the School of Mathematics of Peking University with a Ph.D. in Economics from the University of Birmingham, UK in 2010 and is a researcher at Anbound Consulting, an independent think tank with headquarters in Beijing.

be further expanded. In recent days, Randal Quarles, the Fed's Vice Chair for Supervision, said the Treasury market is so large that the Fed may have to stay involved to keep it functioning. Quarles also said that the Treasury market’s scale has grown so large that it may have outpaced the ability of the private sector to cope during periods of stress. This means there is an “open question” about whether there will be an indefinite need for the Fed to participate as a purchaser to support market functioning, a question that according to Quarles, has yet to arrive at an answer on. The Fed is also stressing that the future of the U.S. economy depends on another round of fiscal stimulus. The Federal Reserve and the U.S. government are likely to continue their massive easing policies in the face of rapidly ballooning U.S. government deficits. In Europe, the European Central Bank (ECB) has begun to note the threat posed by the build-up of corporate debt risks in the future and has stressed the ECB's policy role, hoping to allay market fears. For the financial market, although continuous easing policies are conducive to maintaining market stability, it also means that the capital market is increasingly dependent on policies, and it is difficult for the capital market to form its own endogenous growth momentum. The continued spread of the pandemic will further aggravate this "vicious circle". If capital markets are losing their function, policymakers need to consider the possibility of a future qualitative change in growing government and corporate debt that could cause markets to stall and the global economy to reboot. The only hope for governments and regulators is that the economy recovers its momentum before the crisis occurs. Final analysis conclusion: At present, the massive stimulus policies adopted by countries in response to the pandemic and economic recovery will continue to strengthen in the short term, making the capital market increasingly dependent on policies. As emergency policies continue to trend towards the long-term, the capital markets are facing the threat of losing their function, raising the risk of a "qualitative change" in the overall debt problem. europeanbusinessmagazine.com 69

How the Union is stifling economic development and why Europe will never flourish under the EU

ith the UK’s impending exit from the European Union, there is more focus than ever on the state in which the current 28-member organisation exists and what really are the benefits and drawback of being involved has, especially with other countries considering their future status. The EU’s main roots of conception have always been based around the idea of providing more accessible free trade and a customs agreement focusing on improving the economic conditions. However over time this ideal has changed into a reductionist system where a single state mentality exists, with a governing bureaucracy that no longer serves the intended purpose, instead simply causing mass overregulation that devalues each nation’s own sovereignty and economic flexibility whilst taking away much of its perceived individual control. An economy cannot develop under these kinds of stringent conditions. The EU itself has always been considered to be resistant to positive change that would actually allow for

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economic growth. Its founding was for the purpose of prosperity and free trade at a time when Europe was looking to come together after years of war and conflict, creating common markets in industries such as coal and steel before leading to the first concept of an economic community known as the Treaty of Rome in 1957. Countries such as France, Italy and West Germany began this as a way to increase the amount of trade and build bridges, yet that kind of isolationism no longer exists in the modern day meaning that the need for such agreement is much lower, yet rather than understand this, the European Union instead has become an entity governing with an aim on securing more power over its members with notions to become one – there already exists a flag, anthem, five presidents and its own currency aimed at gaining financial control. Such structure causes great regulatory distress with issues like the overlooked tax structure limiting business prospects. There is no encouragement towards business development, with the outdated system expecting

increased contributions despite the constant decline in economic opportunity. The lack of progress is felt through the development restraints as while long established companies like Volvo continue to thrive, there is no European innovation to provide alternatives to Facebook, Amazon or Google due to the conditions needed to support such ventures simply not existing in a European Union framework. Not only is this detrimental to the individual governments, but they are actually failing in their trading endeavours. Economies work off of the ability to increase trade as no country can be self-sufficient, and the global market has grown exponentially with its utilisation incredibly lucrative, yet these opportunities are limited as the EU tries to enforce the maximisation of trading within its own borders. This is a severe drawback when considering the potential that may be possible for the states to revolutionise their exports at a time when the market clearly indicates that Europe has actually stopped growing in many major areas.

Some countries joined the Union with the explicit intention to adopt the Euro currency and provide financial stability by entering a market with promises of growth, lower unemployment through free movement and increased access to favourable trading partnerships that would lead to their own individual boom period. Instead the Euro has underperformed bitterly, instead of increasing the economic performance of such nations it has simply become a divisive issue that causes debate and tension between nations who did and did not adopt it as well as eroding the confidence of member states in the future both internally and also from global partners who sense instability they would suffer from. This loss of opportunity has also meant that the larger and greater contributing states have been left paying for the failures and mistakes made by nations in financial distress such as Greece and Italy. Countries like the UK, France and Germany are responsible for providing large amounts of bailout funding for such southern European countries who have lost

money and expected to be saved if they were to go bust at the expense of other’s economic success. The financial crash of Greece was a prime example of this with the support package arranged considered faulty and poorly designed, especially as if they defaulted and became unable to make repayments, this would have adversely damaged the economies they were relying on due to a large increase in national debt, with Italy too large of an economy and lacking enough financial stability to actually survive should this happen. These causes continue to be further weakened by the lack of actual enforcement that is possible, the EU has tried to make demands but due to their needing to be a ratification by a majority, there is no scope to make widescale changes such as they tried to do on the matter of austerity which would have actually been counterproductive due to the struggling economies actually needing investment rather than enforced regulation. Even the commitments that were agreed to with 60% GDP levels of debt established as a benchmark are consistently breached by the likes of France and Germany, as such is their position and Influence that there exists no real of way to effectively punish them whilst they would have seen great economic damage had they followed the rules. The EU fails to provide effective governance when it expects economies of greater potential to follow stricter rules and pay larger compensation which limit its ability for success, all for the benefit of less able nations. Such unequal contribution is a crucial factor behind Brexit, the result of which brings many more questions to the economic viability of the Union. The EU only survives based on individual contribution and the UK’s economy is equivalent to that of 18 other member states, with this kind of extreme financial loss fracturing finances it only serves to show that those still trapped in this agreement will only suffer as they lose both money and trade opportunity should the current sanctions be enforced. There are also weakened

economical protections with Britain as one of the largest proponents of a liberal free trade market leaving, it makes it much more possible to revert to a reductionist, continentally restricted trade policy that will contribute to the already expected job losses, anti-federalism and unstable political environment due to be created as other major EU powers look to take over Britain’s power positions. The UK is also America’s gateway and so the special relationship may not translate over into the EU, causing even greater losses from one of the only non-EU trade agreements. Eurosceptics have been looking for a time to try and launch their own methods of escape, and political parties in countries such as Poland and Italy are slowly gaining more power to leverage their own possible referendums and subsequent withdrawals, or as a minimum to change the group in a way that would undermine the principles and basic ideals that it intends to represent. If more and more action is taken, the economic outlook will be so unstable that member nations could find themselves considered too risky to trade with and could result in serious depression like states, which would only fuel a greater power push from the EU as it reacts to keep control. The EU no longer has the same understood function that it was founded to provide, with it serving now as a bureaucratic and isolationist body that seeks to use its own members to ensure personal success despite obvious detriment. The loss of the UK is a signal of how the promise of free trade and economic prosperity has been replaced with doubts and rebellion against overly controlling policy that causes more harm to a country than good. The longer the EU exists in its current form, and the longer it insists on trying to control and manage the trading and economical position of its members, the much lower opportunities there will be to gain economic success. If prospect and hope is the vision for a nation, then they simply will not find it within the European Union. europeanbusinessmagazine.com 71

AI In Banking

Hype Or Revolution

everal years ago, the CEO of Deutschebank stated in an interview that he thought AI would replace up to half of its staff. The prediction sent shockwaves through the industry and made a lot of employees feel uncomfortable about the longevity of their roles. The bank soon fired him and replaced him with somebody else, so he won’t be responsible for the organization’s sweeping changes. But it did reveal just how much hype there is in financial circles about the promise of AI. Other people have joined the fray, calling for the end many routine jobs in the banking industry. Citigroup executives believe they will say goodbye to around a third of workers. Japanese financial group Mizuho says that it is looking to replace more than 19,000 by the end of the present decade. But whether the digital transformation in banking will bear fruit remains to be seen. Currently, there’s a problem right at the core of AI research. The people at the forefront of the movement know that the technology is very good when it has an objective function - something to optimize - but it isn’t so good in other situations. So, for example, it can maximize the probability that an image shows a cat. Still, it can’t engage very well in regular conversation - the sort of thing you need for healthy client relationships.

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Artificial intelligence is also a long way from becoming what you might call “general intelligence.” The software is good at performing cognitive tasks, but it has no subjective experience of them. It doesn’t know what it is doing - it just goes through the motions. This fact of the matter means that some of the more outlandish predictions probably won’t come true. What we seem to be looking at is something that will allow software to perform a subset of cognitive tasks. However, it is doubtful we will see programs with subjective agency any time soon. When you tell them what to do, they’ll do it well. But they won’t be running their own companies just yet. That’s very futuristic. AI, however, is a wishy-washy concept. Unlike the tech revolutions of the last decade - like the cloud - you can’t easily pin it down. AI doesn’t just do one thing - it is a solution for a whole bunch of tasks. The banking sector, therefore, is going to have to figure out how to deploy it sensibly. For now, it won’t replace people. Instead, it’ll be more like a tool that makes them more valuable. It is, in a sense, a form of cognitive assistance, just like machines are assistance for manual labor. Robots can’t do all the work themselves, but they can dramatically increase the output per worker. The same may

now be coming to the banking industry. You’ll still need officers to process business banking customers manually, but AI could speed up aspects of the process, like credit checking. The banking sector needs to be careful not to set unrealistic expectations of AI. The people at the forefront of the field are more than willing to point out that the science isn’t done yet. They can replicate some aspects of intelligence, but they can’t fabricate it wholesale. Researchers still need to make fundamental breakthroughs to usher in that exciting and giddy new world. To call AI in banking pure hype, though, is taking it too far. There are n umerous examples of AI in banking already, and the technology only continues to improve.

Biometrics For Added Security We first saw biometrics in banking in the film Blade Runner. But advances in technology and AI have made it to make it a reality. And it’s already been done. British bank Natwest, for instance, now allows customers to open accounts with a selfie. It then stores their data securely, linking their biological profile to their financial information. The security benefits of AI could be quite extraordinary. It might sound unsafe, but it is actually a massive improvement over the current system of using government-mandated IDs like passports and driving licenses. Biometric forms of identification are much more challenging to forge and, generally, safer than their paperbacked rivals.

Investment Trading Currently, bankers rely on seasoned traders’ quick wits to make investment decisions in the equity markets on behalf of their clients. Movements, however, are often so fast-paced and unpredictable, that many traders struggle to equal the market, let alone beat it.

Banks and other financial institutions, therefore, are wondering whether there is a way to use the data-crunching abilities of AI to make better split-second decisions. Artificial intelligence could theoretically evaluate firms based on publicly available data, establish fair value, and then conduct trades based on those insights. By using data better than any human could, it might be better at determining value - at least in the short-term.

(consistent with fraud), it can put a block on it, protecting money until the owner confirms that it made the transactions.

Better KYD Checks The Patriot Act introduced a bunch of new security requirements for online transactions. But ensuring that all these are being met is difficult, even

for experienced banking professionals. The idea now is to use AI to check a range of data, from a customer’s social security to their social media, to determine whether fraud or money laundering is taking place. The technology should reduce the amount of time that it takes to assess an applicant. And that might bring banking fees down and make the process more efficient.

Fraud Protection Banking fraud is currently a massive issue for the banking sector. Every day, thousands of people lose money from their accounts because of fraudsters usually operating over the internet. AI tech, however, offers a potential solution. Because AI can connect the dots between vast troves of customer information, it can often spot potentially fraudulent activity quickly. Fraudsters trying to access accounts from an unknown IP or location, for instance, could trigger a denial of service. Similarly, if an AI suddenly detects unusual account activity europeanbusinessmagazine.com 73

Does Central Bank Currency Spell The End For Crypto?

s central banks seek to adopt a more digital form of currency, their ability to monopolise the market fairly easily is causing concerns for the millions currently investing in alternative money methods such as cryptocurrency. The cause of this central currency has come from the industry panic due to the instability of the global financial system, with the launch of alternative digital currency leaving banking vulnerable to the adoption of a single global form of payment that could spread exponentially at unimaginable speeds. This is the idea of cryptocurrency, and as it continues to grow, there is becoming a much greater need for the current system to modernise and adapt to the modern consumer need. Banking systems may struggle greatly without adopting such new means, and the industry is now fully aware of the need to innovate and develop.

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This damages the viability of crypto because while the current system of being able to secure money online that works in a much more convenient way is appealing, the majority would much rather trust the Bank of England to handle their finances versus the less trusted exchanges online that have seen multiple hacks since their inception with fraud and money losses tainting their appeal. Such cryptocurrencies as Bitcoin are also not purely investable in their current state, but instead are seen as a large growth market that will make their currency today worth so much more in the future, with their value secured due to this expected mass global popularity. This prospect is much more promising when considering the fact that it prevents the devaluation process that effects common currencies like the pound and the dollar, yet a central bank currency would now have the same

ability to protect and provide the same levels of efficiency. In fact, the introduction of a central bank currency means that cryptocurrency will no longer have the possibility of appealing as an alternative to cash, as they actually act more like an asset than a currency, meaning that there is no value in their use unless people can make profits. The space will become much more saturated, leading to a much harder ability to convince people that crypto exists as anything more than a digital product. However, there is much debate in the space to contend that Bitcoin and other coins like Ethereum are purely an alternative format which provides an independence from any kind of monetary authority, giving the owner complete control to manage and utilise the value stored in their wallets in any way they wish, whereas by being a controlled central product, central bank currency will still leave it subject to unwanted outside control. Their success in this format means that their ability to be both anonymous and create their own price growth could continue to present a clear need for investors to continue to support their development. Every country would also be required to have their own kind of central monetary system, and whilst countries such as China, The Bahamas and India are very determined to keep developing these financial systems, America and the EU still struggle to see the imminent need to create them until they experience a stronger level of demand. The longer that it takes for their development, the longer the cryptocurrencies have to grow and develop to a point where their sustainability would become much greater, leading to a much tougher task for the banks to establish and gain users to their platforms.

They also present solutions to current banking issues that may still exist when considering a central digital currency. The strong belief in the market is that existing risks of hacking can be considerably reduced when accounts are dispersed versus existing within a single mainframe, providing much greater security to higher net worth clients. Other fraud such as theft or mismanagement are also reduced when there are no third-party handlers interacting with any assets. Such figures being removed also provides a financial advantage to the investor, with no additional fees or transaction costs being required to pay for regulation or management. This would come with a very difficult risk, as while a lack of regulation provides freedom and control, there is no legal enforcement to protect the investors making these deposits. Any financial irregularities fall

outside of a nation’s jurisdiction if there is a global transaction with difficulties tracking and tracing anonymous recipients as well as actually having any legal precedents to recover anything that is lost. Therefore, a big hurdle for many businesses to overcome will be trusting that they can effectively trade with clients if they do not have the safety and security to support them. This will be a key consideration when considering if there is any real reward to such risk, especially if a central currency offers many of the same services with the guarantees that they will need to trade responsibly. The core issue with cryptocurrency is that to actually provide value to its owners, demand again must stay at its current level and continue to grow in demand. This may be possible if there were minimal numbers of options in the crypto space, yet as the

credibility of the platform has grown, so has the number of derivatives available in different formats of payment. There is no limit on the number of alternative forms of bitcoin available, and the prospects of any existing are slim because financial control is part of why cryptocurrency is so popular. Therefore the common business ratio between supply and demand is not there to support crypto growth, which is why so many have tried and failed to create their own form of digital currency, whilst costing their many hopeful investors a lot of money that also erodes the trust people have in the market. By providing a secure system that is both reliable and accountable when handling money and providing the same kinds of digital ease as cryptocurrency, there is a clear and present lack of viability for it to continue to grow in the global mass financial market. europeanbusinessmagazine.com 75

overning Smart Cities, a report released today by the World Economic Forum, provides a benchmark for the ethical and responsible use of smart city technologies by looking into the inner workings of 36 Pioneer Cities. The authors of the report seek to help city leaders identify gaps, protect long-term interests and keep up with the pace of technology. According to the report, cities of all sizes, geographies and levels of development have serious governance gaps, such as the failure to designate a person accountable for cybersecurity or to assess privacy risks when procuring new technology systems. However, leaders can close these gaps and protect long-term interests by acting now. Written in partnership with Deloitte, the report follows the call to action from G20 ministers in 2019 that resulted in the creation of the G20 Global Smart Cities Alliance. The Alliance and its partners represent over 200,000 cities, local governments, leading companies, start-ups, research institutions and civil society communities. It acts as a platform to help cities strengthen their knowledge, expertise and governance of smart city technologies. The Forum is its secretariat. The 36 Pioneer Cities surveyed span six continents and 22 countries, and have populations ranging from 70,000 to over 15 million. Policy experts and government officials were interviewed from January to March 2021 to assess the implementation of a set of five essential policies identified by the G20 Alliance last year.

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Key findings • Nearly all the cities surveyed – including those that are generally regarded as leading global cities – have critical policy gaps related to their governance of smart city technologies • D e s p i t e a n u n p r e c e d e n t e d increase in global cybersecurity attacks, most cities have not designated a specific government official as ultimately accountable for cybersecurity. • While the majority of cities recognize the importance of protecting the privacy of their citizens, only 17% of cities surveyed carry out privacy impact assessments before deploying new technologies. • Less than half of the cities surveyed have processes in place to ensure that technologies they procure are accessible to elderly residents or individuals with limited physical abilities. • Open data policy is perhaps the only area in which most cities in the sample have achieved a level of basic implementation. Even here, only 15% of the Pioneer Cities have integrated their open data portals with their wider city data infrastructure, which is a necessary step towards making a city “open by default”. “Cities are continuing to invest heavily in new technologies to automate and improve city services and urban life. Yet our findings validate our fears that most cities are falling behind when it comes to ensuring effective oversight

and governance of these technologies,” said Jeff Merritt, Head of Internet of Things and Urban Transformation, World Economic Forum. “The G20 Global Smart Cities Alliance is working with cities across the globe to address this gap, beginning with more than 15 policy workshops with city officials this summer.” “Cities have an array of opportunities to become more resilient and sustainable. Technology is an enabler but, to fulfill its full potential, Cities need to revise their governance, operational, and financing models. Here lies the biggest challenge Cities face. Deloitte is proud to have worked with the Forum in this initiative. It is fundamental for us all to gain consciousness of the complexity of the issues and focus on how the moment we are all living can be a key opportunity”,

said Miguel Eiras Antunes, Global Smart Cities Leader, Deloitte Global. “Now is the moment for a great urban transformation. Addressing urban challenges through the lenses of sustainability, inclusion, and technology is critical to develop and implement a roadmap to guide cities with their governance of smart technology and make an impact that matters.”

overcoming these challenges. Inclusion, data privacy and cybersecurity attacks are top concerns and the G20 Global Smart Cities Alliance has a mandate to help cities close the governance gaps that this report has uncovered. Cities looking for assistance in identifying and addressing their policy gaps are encouraged to contact the Alliance via their website.

How to take action

About Deloitte

The report concludes that city leaders and officials need to take action before these governance gaps become material risk and affect residents. The report’s authors also call for national policymakers, civil society and the business community to help support local governments in

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”), its global network of member firms, and their related entities (collectively, the “Deloitte organization”). DTTL (also referred to as “Deloitte Global”) and each of its member firms and related entities

are legally separate and independent entities, which cannot obligate or bind each other in respect of third parties. DTTL and each DTTL member firm and related entity is liable only for its own acts and omissions, and not those of each other. DTTL does not provide services to clients. Please see www. deloitte.com/about to learn more. Deloitte is a leading global provider of audit and assurance, consulting, financial advisory, risk advisory, tax and related services. Our global network of member firms and related entities in more than 150 countries and territories (collectively, the “Deloitte organization”) serves four out of five Fortune Global 500® companies. Learn how Deloitte’s more than 330,000 people make an impact that matters at www.deloitte.com. europeanbusinessmagazine.com 77

Almost half of consumers are

‘SCARED’ OF OPEN BANKING By Elliott Limb, Chief Customer Officer at Mambu

he last 18 months have supercharged the digital banking movement. As physical branches closed for business and public anxiety around cash handling reached fever pitch, the pandemic saw digital banking services go from nice-to-have to necessity.

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But banks shouldn’t assume their customers are comfortable with this rapid shift in the way we manage our money. And there’s work to be done if the industry wants to prevent a return to pre-pandemic habits. According to a recent Mambu report, nearly half (48%) of 2,000 consumers surveyed are ‘scared’ of open banking. That is, the principles that enable third-party providers access to

customer data to deliver a range of digital and online financial services.

The data conscious consumer Nearly three in five customers think open banking is a dangerous use of data sharing, while more than two fifths (43%) point to data sharing as their biggest concern regarding the banking practice.

Much of this anxiety stems from the very driver behind its increased adoption. While Covid-19 has accelerated the use of open banking services, it’s also led to the rise of the ‘data conscious’ consumer. The pandemic has fundamentally impacted public opinions around privacy, with 40% reporting it had changed their attitudes toward data sharing. As consumers become more aware of the data they share with financial services providers, it’s never been more important for banks to engage with their customers on these issues - and spend more effort on education.

The open banking opportunity But it’s not all doom and gloom. At a time when job security and certainty

about the future is in short supply, over half (52%) of consumers report wanting more control over their finances. As a result, demand for open banking services is growing exponentially. Nearly half of consumers (48%) want instant digital money transfers and more than a third (38%) want aggregated bank balances to get a 360-degree view of their spending. Budgeting and savings have also moved up the priority list, with a third (34%) of consumers wanting tips on better money management and a quarter (26%) seeking money-saving suggestions for their bills. This presents a huge opportunity for banks to talk to their customers about how digital and online banking services can help them. Now is the time for open banking to deliver on its promise: to improve the way customers move, manage and make the most of their money. So what’s holding it back?

Fear of the unknown If banks want to reassure customers on data sharing and dispel damaging myths around privacy, they have to do a better job of explaining these services. Part of the problem is customers don’t understand what open banking is. And people fear what they don’t know. A staggering 52% of consumers have never heard of open banking and nearly two thirds (61%) claim never

to have used it - despite 80% using one or more mobile finance apps. It’s hardly surprising. As a term, open banking is banal and jargon-esque. To be truly customer-centric, banks need to stop talking about ‘open banking’ and start showing people that it’s simply ‘smart banking’. After all, customers don’t need to know what open banking is. They want to know what it does for them and how it’s going to help improve their lives. Whether that’s viewing all of their financial information in one place, securing speedier loan approvals or getting their invoices paid faster, and more securely. This is the information consumers want, and the stats bear it out. Mambu’s survey data shows that 57% would be more likely to use open banking, if their banks had more successfully implemented and promoted it. A further 49% said their bank hadn’t explained what it was, while nearly a quarter (24%) said they could have explained it better. If banks are failing to educate customers on the benefits of open banking, how can they expect to reassure them that it’s safe?

Banks as gatekeepers This is the kind of question banks need to start asking themselves. The industry is yet to realise the full potential of open banking - and banks themselves are the gatekeepers. A lack of understanding has allowed for a plethora of privacy concerns to take root among an increasingly data-conscious public. But it’s not too late for banks to turn the tide in the battle for the customer. The industry can address this knowledge gap by stepping up education and promotional efforts, and working with partners to better inform consumers on the benefits of ‘smart’ banking. It’s important these efforts not only highlight the simplicity of open banking but security and safety as well. Executed successfully, this will help banks build customer loyalty and provide genuinely innovative, revenue-generating services that drive post-pandemic growth. europeanbusinessmagazine.com 79

Why manufacturers should now plan their Covid exit strategy, and what to consider By Eric Stoop CEO of EASE, Inc and Murray Sittsamer, President of Luminous Group

he light at the end of the pandemic tunnel is coming into view for all businesses and sectors. And just like many industries, manufacturing now has the chance to take a considered approach towards its post-pandemic future, and evaluate the lessons learned since lockdown was announced in March 2020, to ensure it comes out the other side stronger. Manufacturers should now be turning their attention to developing a Covid-19 exit strategy to adapt to a new way of working in a post-pandemic world. If they’re not, they risk falling behind. There are different facets to this of course, but the major factors manufacturers must consider when planning their Covid exit strategy and returning to ‘normal’ are people, process and of course technology. These fundamental pillars should be a key focus for manufacturers re-aligning their strategies.

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A greater focus on staff wellbeing and development The pandemic’s impact on the manufacturing sector has been huge, and had led to the key question being asked by leaders in the sector: How do we keep staff safe and supported? Putting in place processes and measures to ensure physical and mental health wellbeing will have to be a key strategy for manufacturers moving forward if they are to retain and attract the best talent. The manufacturing sector has, in the past, at times adopted a ‘leave your problems at the door when you come in’ kind of attitude, but now, greater HR support will be seen across the industry. In fact, in the US, some companies are even hiring external support, such as outside counsellors, to maintain good support levels for staff members. Communication will certainly improve between senior

leaders and plant floor workers moving forward, and staff members will expect it to, more importantly. Regular catch ups with line managers, messages of support and ‘checking in’ on workforces to ensure they are well will become the norm. Safety measures, such as cordoned places of work to physical distance, one-way systems, hand sanitising stations and others, will likely all remain in place and need to be incorporated into exit strategies. In addition to support, manufacturers also need to ensure they are developing staff with training and upskilling opportunities too. Flexible working will remain in the sector, and must be a major consideration for manufacturers, but it does create a possibility of skills gaps being present on the plant floor. If, for example, a particular staff member is the only person who knows how to carry out an audit, but they are working remotely,

then it’s important that other members of staff can carry out this function in their absence. Greater levels of cross-training across processes and technologies must be carried out to mediate against the knowledge gaps being present on a plant floor at any one time.

Risk assessments and contingency planning The pandemic came out of the blue and hit the manufacturing sector hard – we simply didn’t see it coming, just like every industry. Risk assessment should certainly form part of a business’s strategy, so companies can better control the aspects that are in their control. Quarterly, or even monthly, drills will likely become common place to prepare against such unexpected events, should they occur again. The pandemic has shown the industry where it needs to improve in light of such a seismic impact. Ultimately, manufacturers survived the pandemic by fighting fires where they arose, but this isn’t sustainable moving forward. Indeed, a requirement of ISO 9001 & IATF 16949 now is the carrying out of contingency planning, thus many potential scenarios will continue to be mapped out so a business can better predict the impact of a major event impacting the industry.

Strengthening of supply chains Probably more than any other area of the manufacturing industry, the pandemic highlighted how delicate supply chains are. As a result, there will be more scrutiny on the whole supply chain. Such scrutiny is already in place in the automotive and aerospace industries in particular, in line with the applicable Supplier Quality Management system. This system provides a guide for companies to focus on their suppliers’ ability meet the specifications of the company’s product, be they performance or cosmetic related. But this will extend to overseeing a supplier’s method of transportation, their suppliers’ own contingency plans and how product

shortages can be combatted – and this should absolutely form part of an exit strategy. Manufacturing companies should seek assurances that their supply chains are robust throughout. But it’s important to look further ahead into the future to strengthen supply chains. Education programmes on the study of supply chains have grown in number over the last few decades, and this trend will continue to grow in light of the pandemic. Manufacturers would be well placed to look ahead at the training programmes they are running and jobs they are creating that are related to procurement, supply chain management and supply chain risk assessment as part of their ongoing strategies.

Improving auditing measures When the pandemic gripped the industry, many manufacturers jumped to remote quality system audits. It showed it could be done, with some imaginative innovations along the way, such as feeds between laptops

and a head camera, to see a worker or process on the plant floor. While this is only a baby step, it is a sign that audits are being carried out through a mix of on-site and off-site methods – and this will continue. For safety and cost savings, it is likely that a trend will be created where reviewing documents will be done off-site, while the physical audit itself will be carried out on-site. Manufacturers must ensure their future auditing processes and supporting systems are developed with this trend in mind. Digitising audits with a solution like EASE is going to be a key goal for manufacturers if they are to ensure plants are operating efficiently and productively. Industry 4.0 has been somewhat sped up by the pandemic, and if plant floors are to continue becoming digitally transformed, then strategies must be instilled to continue the technological advancements of factories. Flexible working is here to stay, and so is the need for digital transformation, therefore we encourage manufacturers to react. europeanbusinessmagazine.com 81

18 thousand people in the world have left extreme poverty thanks to impact Market, a new blockchain startup for social impact

he poverty alleviation blockchain platform was developed from Portugal to the world - a world where extreme poverty is extinguished in 2030. In only nine months of existence, one million dollars have been delivered to 100 vulnerable communities, reaching a total of 18,000 people in 20 countries. By the end of the year, impactMarket hopes to lift up 100,000 people out of extreme poverty. “We are bringing social solidarity to the 21st century where blockchain technology plays a central role in achieving a more ethical and fair world, through the concept of Unconditional Basic Income (UBI), which entails that all people should have access to a certain monetary value that guarantees their dignified survival. The pandemic has also accelerated this process, with the spike in awareness of inequality and a growing empathy for others. Social justice and

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equal opportunities are in focus and we all stand to gain from this,” explains Marco Barbosa, co-founder and CEO of impactMarket. Refugee communities, family rehabilitation, educational projects for children, agricultural and farming communities and women’s groups threatened by domestic violence are some of the examples of projects supported through impactMarket. “We feel like we are making a difference when we see communities such as the Women Rights initiative, in Uganda, housing one hundred people, stepping up and overcoming adversity with the help of our solution. impactMarket has helped donate one million dollars (US) up to this day”, adds Marco. ImpactMarket has reached 0,0023% of the world’s population living in extreme poverty. Marco Barbosa explains that “UBI is an effective solution for these populations. The

problem these vulnerable communities face is not only the lack of available jobs or opportunities, but also the lack of skills. With the necessary amount needed to survive, these people can have better living conditions, invest in their education and that of their offsprings, and look for dignified work. While achieving this, crime and unemployment rates naturally decrease”. Donations can be made by companies, philanthropists or anyone who downloads the mobile application where they can get to know the list of supported communities and transfer the intended value directly. This way donors and backers can engage directly with the communities they care about, learn about them and follow their progression out of poverty closely. The system, based on Blockchain technology, creates smart contracts where a set amount of money is previously defined for beneficiaries to withdraw daily or weekly. Thus, beneficiaries are able to claim their daily UBI, receiving the amount directly into their Valora Wallet. In order to cash out celo dollars into local currency, beneficiaries can use mobile phones, exchange offices or any places accepting cryptocurrencies as a way of payment. According to Marco, “The power of technology, especially used for the greater good, hasn’t yet reached its full potential”. ImpactMarket is expanding quickly through the world, already reaching beneficiaries in Argentina, Brazil, Cape Verde, the Philippines, Ghana, Honduras, Mozambique, Malawi, Nigeria, Kenya, Uganda, Venezuela, South Sudan, Cameroon, Palestine, Colombia, Peru, India and Zimbabwe. It will soon reach communities in Syria, Yemen, Somalia, Angola and Afghanistan.

Global Digital Business Identity Initiative Launches to Boost Financial Inclusion for African Businesses 10 August 2021 - Basel An international flagship project designed to expand financial inclusion among small to medium sized enterprises (SMEs) especially on the African continent has launched today. The project has been realized with the support of the German Federal Government through the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH. The collaborative initiative is equipping SMEs across Africa with globally recognized business identities, in the form of Legal Entity Identifiers (LEIs). The LEI is comparable to an international company ID card; it contains good quality business card and ownership structure information

about a legal entity which can be verified quickly and efficiently by anyone, anywhere, enabling organizations to know precisely with whom they are doing business. The verifiable company data results in transparency in the marketplace and builds greater trust between market participants. Supplying LEIs to African SMEs aims to strengthen financial inclusion in the region by enabling them to apply for trade finance and establish contractual, regulated agreements with banks, payment networks and trading partners, leading to broader access to financial services and greater participation in both domestic and international markets. Ultimately, the intention of the initiative is to strengthen

Africa’s SME base and increase the flow of inbound capital needed to fuel the continent’s economic development. Today, Africa’s heterogeneous economies suffer from a severe trade finance gap, which is currently estimated to be more than US$81bn. [1] The limited availability of transparent key reference information for African businesses, together with the perceived risk of trading with them, is a major challenge both to banks seeking to expanding trade finance portfolios on the continent and to international business partners seeking to engage this underutilized, but nascent sector.

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By working with African banks to enable them to issue LEIs, the initiative not only addresses this challenge, but also aims to dramatically reduce the compliance burden associated with stringent anti-money laundering (AML) and know your customer (KYC) regulations. Today, this overhead routinely prevents banks from lending to new African SMEs due, in large part, to ID validation and verification difficulties. Over the 2013-14 period, less than one per cent of African banks cited regulatory compliance as the primary reason for rejecting trade finance applications. Between 2015 and 2019, however, as compliance requirements have increased, this figure has grown to circa 16 per cent.[2] Using the LEI for identifying legal entities in cross-border trade could also enable banks to significantly reduce both cost and effort in data reconciliation.

Who is involved? The LEI initiative is a collaborative effort between: - The Global Legal Entity Identifier Foundation (GLEIF), a notfor-profit founded by the G20 and Financial Stability Board which manages the global network of LEI issuing organizations and supports the availability of the Global LEI System; - LSEG (London Stock Exchange Group), which is the initiative’s LEI issuing organization; - Zimbabwe’s NMB Bank Limited, which is equipping local SME customers with LEIs; - The Centre for Financial Regulation and Inclusion (Cenfri), an independent, not-for-profit think tank which works on African financial sector development; - Cornerstone Advisory, which specializes in financial sector advisory and training services.

Scope of opportunity To gain insights into the accessibility and potential benefits of introducing LEIs in African markets, the 84 europeanbusinessmagazine.com

Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) conducted a survey between April and June 2020.[3] The survey showed that LEIs are attractive for companies of all sizes and types in the region and led to the development of the initiative. “By acting as a reliable‚ proof of existence to business partners in their value chain, the LEI can support companies in engaging in trading activities for cross-border commerce. Given the global nature of the LEI, the greatest benefit may appear in cross-border transactions. […] LEIs may improve companies’ access to financial services by enabling previously un(der)served clients such as SMEs to make their ownership structure and credible identity accessible to banks,” the authors concluded.

The Validation Agent (VA): A new operating model for LEI issuance / NMB Bank Limited first VA in Africa This global digital business identity initiative has been made possible thanks to the introduction of a new LEI operating model for banks known as the Validation Agent.[4] NMB Bank Limited serves as the first Validation Agent in Africa. By leveraging their KYC, AML and other regulated ‘business-as-usual’ onboarding processes, NMB bank can now obtain LEIs for its customers when verifying their identity during initial onboarding. This enables the bank to improve its customer experience, facilitate digital transformation and reduce client lifecycle management costs, while opening the door to the development of new identity-based services.

Alberta Abbey, LEI Analyst, Data & Analytics, LSEG: “LSEG joined this initiative to facilitate wider LEI adoption across Africa. By demonstrating the uses and benefits of Legal Entity Identifiers, our aim is that this project will encourage more entities across Africa to obtain LEIs. We started the project with a partnership approach, which we intend to continue beyond the pilot.”

Stephan Wolf, CEO, GLEIF: “The LEI has the potential to create a more transparent, efficient cross-border exchange of goods and data under the African Continental Free Trade Area. This is the first step toward greater financial inclusion and overcoming the challenges associated with access to trade finance in Africa. Considering the high pace of digitization and regulatory development across the African continent, the LEI is a great natural fit. It is a compelling, ready-to-go cross-border solution for entity identification that is open, reliable and easily integrated into regulatory frameworks.” Second Muguyo, Finance and Admin Manager at Copperwares, a Zimbabwean copper and silver giftware manufactuer, participating in this initiative: “We face trade financing challenges not only because we are a small company, but because we are unknown from Zimbabwe. While we are not directly excluded from trade finance, we often receive unfavourable repayment terms which result in indirect

exclusion. The LEI, as a globally recognized form of business ID, will give us greater credibility when we apply for finance, engage in international trade and establish new supplier relationships for our manufacturing process.”

Viola Pamela Ndlovu, Head of Compliance, NMB Bank Limited: “In view of the emergence of a digital era and the rapid increase in demand for greater transparency by all organisations including regulators across the World, securing a LEI has become a powerful tool that organisations can rely on in fulfilment of know your customer/business principles.” Sarah Weiss, Financial Sector Development Advisor, Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, and Hugues Kamewe Tsafack, Financial Sector Advisor, Making Finance Work for Africa: “Having more African-based LEI issuers would contribute to promoting the LEI concept and facilitate LEI applications for Africa-based entities.

Forging strategic partnerships could also bolster awareness raising efforts among African FIs, real sector companies, national supervisory and regulatory authorities about the LEI, its potential benefits and the application process. Finally, it is worthwhile to explore the potential synergies between African initiatives that facilitate client due diligence and promote market transparency.”

Barry Cooper, Technical Director, Cenfri: “The LEI is one of the few initiatives with real potential to meaningfully address the challenges of de-risking in developing markets. The high costs of institutional due diligence and information asymmetries is a core element of the exclusion of small and medium enterprises, and even some corporates, from regional and international markets. A robust global enterprise identity opens up an under-represented large base of SMEs and women-owned businesses to trade across Africa as well as across the global markets. Cenfri looks forward to the

deepening of LEI usage across Africa and the inclusion of SME and women-owned enterprises in the global economy.”

Yann Desclercs, Managing Director, Cornerstone Advisory+: “The increasingly stringent customer due diligence requirements of the evolving international regulatory environment has, over the past years, contributed to an increase in SME trade finance rejections by banks. This is an important limitation to the growth potential and global outreach of African SMEs. The LEI can significantly contribute to reversing this trend by decreasing the cost of compliance and reshaping international trade and growth for African SMEs.” GLEIF welcomes dialogue with governments, NGOs, banks and other stakeholders interested in either expanding the LEI initiative in Africa or in replicating the model in other developing economies. Please email info@ gleif.org for more information. europeanbusinessmagazine.com 85

Money Talks:

The Rise of The Female Fin-fluencer

number of social media accounts curated by women that offer financial advice to women have cropped up in recent years, according to a study by Xendpay, The most popular accounts boast a large fan base, with follower counts reaching well into the hundred thousands. Women talking about money has never been more lucrative, as the owners of these accounts are able to earn via sponsored posts on the platform. While all these accounts focus on demystifying finance for women, by women, there is great variety in the individual topics covered, with advice being offered on an array of topics from money “adulting” skills for millennials in the form of jokes and

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memes to investing and budgeting hacks for all ages. The most popular UK female fin-fluencer on Instagram is Gemma Bird, a 39-year-old mother of two from Essex. She shares her money saving tips to her 190k Instagram followers via her account @moneymumofficial and earns up to £630.91 per sponsored post. Mrs Bird who began her account in 2014 has expanded her brand to add columnist and owner of a lingerie business to her list of accomplishments. In second place of most popular female fin-fluencers on Instagram in the UK is Clare Seal who created her account @myfrugalyear to document her journey out of £27,000 worth of debt in 2019. She now has

77.5k followers which allows her to charge £224.51 - £374.13 per sponsored post. She is also a columnist for Glamour magazine as well as author of the book ‘Real Life Money’ Emma of @the.brokengeneration rounds up the top three UK female fin-fluencers on Instagram with 49.5k followers. Her account focuses on changing the way women think and feel about money. A self-described recovering spendaholic, she focuses on financial optimisation not frugality, and earns £179.18 - £298.64 per sponsored post on Instagram. Alice Tapper with her account @ gofundyourself places fourth in the top UK female fin-fluencers on Instagram list. With 45.3k followers she is able to charge £94.44 - £162.90 per

TOP FEMALE FIN-FLUENCERS ON INSTAGRAM UK Name of influencer

Instagram handle

Follower count

Earnings per post

Gemma Bird

@moneymumofficial

190k

£ 391.70 - £ 652.82

Clare Seal

@myfrugalyear

77.5k

£ 224.51 - £374.13

Emma

@the.brokegeneration

49.5k

£179.18 - £298.64

Alice Tapper

@gofundyourself

45.3k

£94.44 - £162.90

Emilie Bellet

@vestpod

22.5k

£ 97.47 - £162.46

Kia Commodore

@penniestopoundspod

16.5k

£74.60 - £124.34

Elwlie

@thisgirltalksmoney

14.6k

£ 63.71 - £106.18

Lynn Beattie

@mrsmummypennyuk

14.2k

£60.99 - £101.65

Davinia Tomlinson

@rainchq

10.2k

£47.26 - £80.71

The Money Whisperer

@moneywhisperer_

8.7k

£41.44 - £71.26

sponsored post on the platform. She is a financial columnist and campaigner, having made #regulateBuyNowPayLater happen. In fifth place is Emilie Bellet, author, podcast host and Forbes contributor with her account @vestpod. Bellet earns £97.47 £162.46 per sponsored post thanks to her 22.5k followers. Top Female Fin-fluencers on Instagram UK It’s not all Instagram when it comes to fin-fluencers though. There are a number of young women offering financial advice on TikTok or MoneyTok as the financial corner of the video sharing service has been dubbed. The top TikTok female fin-fluencers are US-based such as 26-year-old Tori Dunlap, creator of the enormously popular account @herfirst100k. With 1.6 M followers on the platform, she is able to charge £697.07 - £1,161 per sponsored post. A small number of UK women are also starting to make a name for themselves on the platform. For instance, the account Financielle run by 33-year-old Laura Pomfret and sister Holly Holland, 31, has racked up an impressive 22k followers. To be eligible to earn money from sponsored posts TikTok requires a minimum of 10k followers, unlike Instagram and YouTube where you can start earning with just 1000 followers. The sister duo are able to charge £9.80 - £16.33 per sponsored post. Together they created

The Financielle Playbook, a digital step-by-step guide to help women find financial wellness. YouTube is another platform where women can make money talking about money. Like with TikTok some of the top female fin-fluencers are also American such as Chelsea Fagan of The Financial Diet. With 878k subscribers she is able to charge £297.14 per sponsored post. In the UK the top YouTube female fin-fluencer is Emma Drew, and by leveraging the power of her 16.7k subscribers she is able to charge £10.1 per sponsored post. Commenting on the study a spokesperson for Xendpay said, “Like many industries, the financial world has

traditionally been a boys club. But women are starting to push through the glass ceiling. This is in no small part a result of the great equalizer, the internet. With social media, information and self-education is available to those who seek it”. The research was conducted by Xendpay, which aims to reduce the cost of international money transfer while maintaining the best possible customer service. It provides a no-fee international money transfer service to bank accounts, offering exchange rates usually only available to multinational corporations, without compromising on transfer times or reliability.

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How to design and build a ‘sticky’ app Ritam Gandhi, Founder and Director, Studio Graphene

pp downloads, usage, and engagement has exploded over the past year, as the pandemic saw general user activity skyrocket, with apps capitalising strongly on the increased share of attention. This is nothing new; indeed, for the past decade the inexorable growth in popularity of mobile applications has been impossible to ignore. The reasons for this are clear; a well-designed app provides a content platform for businesses and creatives which offers a more engaged, personalised and dependable user experience than traditional CRM such as email, while eschewing dependency on social media platforms affords

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direct content with freedom from the algorithmic ebbs and flows associated. The efficacy of applications for a variety of purposes is well-established, as is their increasing market edge over other forms of customer or client communication. The real question is why apps have spiked so dramatically in use in recent years, and how this phenomenon can be capitalised upon. A recent study conducted by App Annie suggests that the average global user now clocks 4.2 hours each day just using apps on smartphones. This is up 30% when compared with only two years prior. This is not solely a question of the market penetration of high-performance smartphones reaching the threshold required to see significant user focus for any contained

platform – indeed, further research has found that most users spend the vast majority (87%) of their screen time using apps. This points towards the innate worth of app development as a means of reaching a significant user base, and servicing an existing audience. As such, an unavoidable design preoccupation is ‘stickiness’. It is clear that there is a healthy appetite among users for more and better applications, in a saturated market that appears to be growing sustainably. Accordingly, developers and clients should look to affirm a core set of foundational principles to guide the delivery of the application and ensure it is able to onboard and retain users more effectively than others offering similar functions.

Set the right foundations An engaged user base is the name of the game when building a sticky app. As such, the starting point should always be user experience (UX). Well-designed UX will make the app intuitive to use, guide users seamlessly through the core functions and utility, and can indicate both visually and kinaesthetically that the app is easy to use. In most cases, this will be a user’s first contact with the brand or content, so a strong first impression is crucial. UX which is unintuitive is likely to frustrate users, and result in hasty exits from the app. After onboarding, it is important to plan strategically to keep users returning. With access to huge amounts of ongoing user data, the temptation for developers will always be to troubleshoot all issues as they arise to tweak their app to perfection. This should be handled delicately, with updates carefully considered for instinctiveness and proximity. Overwhelming users with consistent fixes and overhauls is likely to confuse and disengage users – a long-term growth strategy may prioritise tuning the user interface (UI) and UX to appeal to new users, but existing users should not be ignored.

Next steps Once these fundamental approaches are in place, developers should consider what the app itself will do. It is important, in such a crowded marketplace, to strike the right balance between innovation and familiarity. For instance, while leaning on the established zeitgeist visual language of apps is a good shortcut to an intuitive app, an over-familiar app will appear obsolete and outdated to a user. The most important aspect of creating ‘stickiness’ is to avoid crowding the app with ideas and content. Apps have overtaken browser platforms for a number of reasons, but the key ones to bear in mind are accessibility, simplicity, and convenience – smartphone operating systems are almost unfailingly designed with seamless interfaces with little clutter, so it holds that apps should look to follow suit. Developers should ensure

they avoid distracting users from the core function they visit the app for, or complicating the UI resulting in disordered user journeys and confusion. The hypercompetitive app market can be intimidating for those launching products – but sticking to these fundamental principles will go a long way in gaining a competitive edge. App stores across mobile systems are overwhelmed with low-quality and needlessly complex platforms, with

unfocussed design process and minimal consideration for user retention. In a fast-paced mobile digital landscape, holding user attention will be critical in getting the most out of an application. Those who concentrate on considerately tweaking their primary function, and consider the app experience as a whole from the user side, will be well-placed to capitalise as app usage continues to propagate in the years to come. Ritam Gandhi, is the Founder and Director of Studio Graphene – a London-based company that specialises in the development of blank canvas tech products including apps, websites, AR, IoT and more. The company has completed over 100 projects since first being started in 2014, working with both new entrepreneurs and product development teams within larger companies.

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Cambridge Judge Business School Collaborates with Esme Learning to Launch Executive Education Online Programmes in Startup Funding, RegTech

The first presentation of RegTech, run with the Cambridge Centre for Alternative Finance (CCAF), begins 20 October, 2021. Registration for both programmes will close one week after they begin. Esme Learning will offer additional presentations for both programmes in 2022. “We are delighted that the Cambridge Judge Business School has joined our growing family of university partners to deliver critical knowledge and skills to build the workforce of tomorrow,” said David Shrier, CEO and co-founder at Esme Learning. “Our suite of programmes with Cambridge Judge Business School integrate Esme Learning’s measurable, collaborative approach in online learning with the School’s internationally renowned tradition of research and action. The result is two programmes offering actionable insights for business leaders that advance the state of the art of digital learning.”

LONDON and CAMBRIDGE (10 Aug., 2021) —Cambridge Judge Business School and Esme Learning, the AI-powered digital learning platform, have announced a collaboration to empower working professionals’ career development across frontier fields. The multi-year collaboration commences with two inaugural sixweek online executive education programmes: • Startup Funding: From Pre-Seed to Exit, which will help entrepreneurs overcome the trickiest funding challenges facing startups. 90 europeanbusinessmagazine.com

• RegTech: AI for Financial Regulation, Risk, and Compliance, which will prepare risk, compliance, innovation, and data sector business leaders to navigate the complexities of the industry, including technologies such as AI and machine learning that support automated regulation. Successful programme participants will receive a certificate issued by the Cambridge Judge Business School. The first presentation of Startup Funding, run with the Entrepreneurship Centre, begins 13 October, 2021.

About the Regtech: AI for Financial Regulation, Risk, and Compliance Programme The RegTech programme will provide critical insights and hands-on tools for working professionals in government and industry to address an increasingly complex regulatory environment. In this programme, professionals will: • Identify new applications and revenue opportunities for RegTech solutions – including technologies such as big data, cloud computing, and AI • U n d e r s t a n d m o d e l - d r i v e n , machine-readable and executable regulations to scale a business

• Learn from leaders who created the Regulatory Genome Project, a transformational initiative launched in part by the CCAF to sequence an open-source repository of machine-readable regulatory information • Run RegSimple, a tool developed from the Regulatory Genome Project to simplify and accelerate the process of regulatory compliance for corporations and facilitating new regulation and policy for governments Leading luminaries in regulation and risk from CCAF at the Cambridge Judge Business School will teach the programme, including: • Programme Director, Robert (Bob) Wardrop: Management Practice Professor and Director of CCAF • Faculty, Emmanuel (Manos) Schizas: Research Associate & Lead in Regulation and RegTech • Faculty, Simone di Castri: Senior Lecturer at Centre for Finance, Technology and Entrepreneurship

About the Startup Funding: From Pre-Seed to Exit Programme Cambridge Judge Business School’s course Startup Funding: From PreSeed to Exit goes beyond what firsttime entrepreneurs to seasoned founders must understand when raising capital – especially at a venture’s earliest funding stages (seed to Series B). The programme will cover exactly how to launch a venture and navigate critical inflection points along a company’s growth trajectory to achieve either a successful exit, or long-term operational viability. University of Cambridge has been responsible for over 140 startups since 2011, and these companies have raised over £1.9b in equity investment across more than 400 rounds. Notable spin-outs include gene therapy company Quethera, voice-controlled AI platform VocalIQ, and AI cyber defense company Darktrace. Designed to empower entrepreneurs, the Startup Funding programme provides the tools and insights to:

• Structure a new venture so it is more appealing to investors • Effectively position companies and pitch potential investors, by communicating product value to drive investment • Increase efficiency in the fundraising process • Optimize the negotiated terms of the funding obtained • Develop and harness a distinctive entrepreneurial mindset In addition to leading the Cambridge RegTech programme, Robert Wardrop will also serve as Programme Director for the Cambridge Startup Funding programme. Participants will learn from other industry leaders, including: • Faculty, Stylianos (Stelios) Kavadias: Margaret Thatcher Professor of Enterprise Studies in Innovation and Growth; Co-Director of Entrepreneurship Centre, CJBS; Academic Director, Advanced Leadership Programme.

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• Guide, Ariane de Bonvoisin: startup leader and advisor for Union Square Ventures, Twitter, and Google.

Programmes Powered by Esme Learning Both programmes, produced by Esme Learning in collaboration with Cambridge Judge Business School faculty and staff, will feature high-quality video instruction; interactive, timely media such as podcasts and articles; and correlating formative assessments that test knowledge retention. Programmes on Esme Learning are thoughtfully crafted with learning design principles that emphasise measurement and feedback. Learners have numerous opportunities to immediately apply programme knowledge via live simulations and small group exercises that emulate work scenarios. Esme Learning’s AI coach leverages 15 years of cognitive science research to intelligently analyse small group peer interactions and suggest individual feedback per learner to ensure productive and rewarding group collaboration. To register and learn more, visit the RegTech: AI for Financial Regulation, Risk, and Compliance and Startup Funding: From Pre-Seed to Exit programme sites, powered by Esme Learning.

About Esme Learning Esme Learning is transforming the future of digital learning through AI. Leveraging over 15 years of research on group collaboration, Esme Learning courses deliver an immersive and collaborative executive learning experience with some of the best universities in the world. Each course blends high-quality video, live simulations, interactive media, and small group exercises with top learning design principles. Through Esme Learning‘s rapidly growing portfolio of courses, executives gain technical skills and learn business best practices from experts across a wide range of frontier fields such as fintech, cybersecurity, AI leadership, and health tech. Esme Learning is backed by Adit Ventures. For more information, visit our website at: http://esmelearning.com. 92 europeanbusinessmagazine.com

About the Cambridge Judge Business School Cambridge Judge Business School leverages the power of academia for real world impact to transform individuals, organisations and society. Since 1990, Cambridge Judge has forged a reputation as a centre of rigorous thinking and high-impact transformative education, situated within one of the world’s most prestigious research universities, and in the heart of the Cambridge Cluster, the most successful technology entrepreneurship cluster in Europe. The School works with every student and partner or client organisation at a deep level, identifying important problems

and questions, challenging and coaching people to find answers, and creating new knowledge. Cambridge Judge pursues innovation through inter-disciplinary insight, entrepreneurial spirit and collaboration. Cutting edge research is rooted in real-world challenges and students and clients are encouraged to ask excellent questions to create real-world change. Undergraduate, graduate and executive programmes attract innovators, creative thinkers, thoughtful and collaborative problem-solvers, and current and future leaders, drawn from a huge diversity of backgrounds and countries. Visit www.jbs.cam.ac.uk for more information.

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The city of Durban (eThekwini Municipality) is South Africa’s second most important economic region

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Extensive first-world road, rail, sea and air

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CITY THAT’S

GEARED FOR GROWTH A truly smart city, Durban, KZN, South Africa seamlessly combines an innovative business environment with an exciting, contemporary lifestyle. Connecting continents, here you will find Africa’s busiest port, the top ranking conferencing city and the home to the continent’s very first Aerotropolis. Boasting world-class infrastructure, manufacturing and industrial concentration that is constantly evolving, isn’t it time to join this progressive society rich in investment opportunities? …We can help you make it happen, now.

Tel: +27 31 311 4227 Email: invest@durban.gov.za web: invest.durban

Dube TradePort and King Shaka International Airport - 60year Master Plan - driving growth of aerotropolis, or airport city 0 01 00 1

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Rated in top 5 ‘Quality of Living’ cities in Africa and Middle East by Mercer Consulting in 2015

Named one of the New 7 Wonders Cities by the Swiss-based New 7 Wonders Foundation in 2014 1 01 00 1